Pat Deering (Carlow-Kilkenny, Fine Gael)
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I remind members and delegates to ensure their mobile phones are turned off completely as they interfere with the broadcasting and transmission and of the proceedings.

From Iasc Mara Teoranta I welcome Mr. Cathal Gronnell, manager; Mr. Tom Kane, sales director, and Mr. Don Hoctor, financial controller, to discuss issues related to mackerel quota allocations.

Witnesses are protected by absolute privilege in respect of the evidence they are to give to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

I invite Mr. Groonell to make his opening statement, following which members will ask questions.

Mr. Cathal Groonell:

Táimid an-bhuíoch as ucht an cuireadh seo teacht os comhair an choiste chun fadhbanna na monarchana próiseála in iarthar agus deisceart na tíre a phlé.

We appreciate the opportunity to address the joint committee on the difficulties experienced by fish processing factories on the south and west coast in obtaining access to a fair share of the national mackerel quota. We are concerned that a blind eye is being turned to the employment implications of recent developments which will be devastating, given the nature of the coastal communities in which the factories are located. The mackerel quota is the State's most valuable quota.

There are 12 registered pelagic processing factories in the country - eight in County Donegal and one each in Rossaveal, Baltimore, Dingle and Castletownbere. These factories mainly process mackerel, herring, horse mackerel, sprat and blue whiting.

There are 50 boats in the fleet with a pelagic quota entitlement. There are 23 in the refrigerated sea water, RSW, sector which are currently allocated 87% of the mackerel quota. A total of 21 of the 23 are Killybegs based. There are 27 boats in the polyvalent fleet, based mainly on the south coast. They are allocated the remaining 13% of the mackerel quota.

The difficulty with supply for some factories arises because of a major difference between the Department of Agriculture, Food and the Marine’s stated policy on quota allocation and the policy actually practised on the ground. The Department's policy document, Fisheries Quota Management in Ireland, April 2016, statest:

In Ireland quota is a public resource and is managed to ensure property rights are not granted to individual operators. This is seen as a critical policy in order to ensure that quotas are not concentrated into the hands of large fishing companies whose owners have the financial resources to buy up such rights. In Ireland, any movement towards privatization and concentration of rights into the hands of large companies would seriously risk fishing vessels losing an economic link with Ireland’s coastal communities and undermining the socio economic importance of the fishing industry in coastal communities dependent on fishing.

This is the stated policy, but it is not happening on the ground. Large Killybegs based companies which already control much of the quota are actively encouraging fishermen whose boats have licences with a pelagic quota entitlement to sell their boats, offering prices well in excess of their economic value. This trend has serious implications for fishing ports in the south and west. In Rossaveal three boats have been sold to Killybegs based companies in the past year. These boats were the main suppliers to Iasc Mara Teoranta for decades and accounted for over 60% of the fish supply to the factory. The reported prices paid for the boats were €5 million, €6 million and €8 million. Of these prices about 20% relates to the actual cost of the boats and 80% to the licences and the pelagic quota entitlements. All of the fish from them is now processed in Killybegs or outside the country. This has put the future of Iasc Mara Teoranta in jeopardy. It is also a major blow to the local fisherman’s co-op that handled their fish and all of the service providers and small businesses in the Rossaveal area. In total, five Rossaveal based boats have been bought by companies in Killybegs in recent years. There are now no active pelagic boats based in Rossaveal.

The Department’s stated policy had absolutely no effect in preventing these purchases of quotas and vessels. In effect, the Department is refusing to police its own policy. This trend is continuing and other factories are concerned that, in time, their suppliers will also be bought up. Four companies in Killybegs handle over 80% of the pelagic quota through boats that they own or boats that they control and which land exclusively for them. Unless the Department takes immediate action to change the way the mackerel quota is allocated and take vessels and factories into account, the number of pelagic factories in the country will reduce from 12 to five or six in the short term.

This will result in a loss of 300 to 400 jobs around the coast and would leave many ports with little or no fishing activity as all of the activity will be concentrated in one port.

For many years we have regularly raised the issue of supply difficulties with the Department officials and with the then Minister. More recently we wrote to the Minister for Agriculture, Food and the Marine, Deputy Creed in November 2016 with a proposal to secure the supply of mackerel for the 12 factories and to save the jobs in fish processing and related services around the coast. I will come to the detail of the proposal shortly. In January 2017, the Minister, Deputy Creed announced a Consultation Paper on a Review of Mackerel Allocation Policy between the Fleet Segments. The letter announcing the consultation process made reference to a request made by the Irish South and West Fish Producers Organisation Ltd, but, made no reference to our proposal. After considering the submissions received, the Minister will decide whether to change the percentage allocation between the polyvalent and the RSW fleet. This consultation process applies to the 10,600 tonne increase in the 2017 mackerel quota only and does not address access by processors to the resource in different regions.

At present, the national mackerel quota for 2017 is 86,426 tonnes. This is allocated 87% or 75,190 tonnes to the vessels in the RSW sector and 13% or 11,235 tonnes to the vessels in the polyvalent sector. However, this may change when the Minister has completed his review.

To put these figures in perspective, the four factories in the south processed a total of 3,000 tonnes out of a total quota of 76,000 tonnes in 2016. This amounts to 4%, an average of 1% per factory of the total mackerel quota. Factories cannot survive on these volumes and these four factories, employing more than 240 people directly and indirectly are particularly at risk.

Our proposal is that in view of the urgency of the crisis confronting the smaller processors, it is proposed that on a pilot basis 12,000 tonnes, or approximately 14% of the quota, should be allocated to processors in 2018 - 1,000 tonnes to each of the 12 registered pelagic factories in the State. The remaining quota would then be allocated to the RSW sector and to the polyvalent sector.

It is envisaged that the factories will then allocate this quota on a tonne for tonne basis to the boats and pay the market price for the fish. In this way, each factory would receive a minimum of 2,000 tonnes of mackerel per annum. Of the 12,000 tonnes, 8,000 tonnes would be allocated to factories in Donegal. It is envisaged that the quota allocated to the smaller factories will be applied to the polyvalent fleet. This proposal is a step towards aligning the current practice on the ground with the Department’s stated policy. This proposal will also provide an incentive for boats to land their quota in the State, increase employment and value added in the State and promote a more even distribution of activity by region.

We realise that this represents a change from the traditional way the quota has been allocated. If the Department comes up with an alternative proposal that ensures a fair distribution of fish to all factories, we are willing to listen. The present regime ensures that we do not have access to purchase 90% of the fish.

It is very important to note that factory employees, fish processors, service providers, crewmen, fishermen and local communities are all stakeholders in this industry and all deserve to be considered when the quota is being allocated. This issue is not new to the Department and has been flagged long before the present Minister, Deputy Creed, was appointed.

I am asking the Chairman and committee members to take this matter up with the Minister and his officials in the Department to find a way to implement our proposal or, an acceptable alternative. Our proposal will not cost the State any money, but will ensure the continuation of employment in coastal communities and help to keep these communities alive.

Go raibh maith agaibh.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I thank Mr. Groonell. I will call members in this order, Senator Mac Lochlainn, Deputy Martin Kenny and Deputy McConalogue.

Pádraig Mac Lochlainn (Sinn Fein)
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Having read the proposal, it is true to say that it is aligned to what the Department for Agriculture, Food and the Marine states to be its policy. That point was well made. The screening of an excellent documentary, "Atlantic", highlighted the sense of anger about the extent of our waters that we have given away and the loss of this immense resource.

It is particularly frustrating that the distribution appears to be unfair to Irish fishermen, particularly if we are serious about coastal communities getting the benefit of the resource. The witnesses made a well presented case in terms of a balanced allocation of resources along the coast of Ireland.

My question relates to the fishing organisations, and what has been the approach of Killybegs Fishermen's Organisation, KFO, and so on to its proposal? What is the level of dialogue among the fish producer organisation and Iasc Mara Teoranta? Has there been a forum to thrash out the issues? Has the Department of Agriculture, Food and the Marine tried to facilitate discussion on this issue or has it been a matter of individual organisations doing their own thing which is not working fairly for everybody?

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I will take the contributions from members before I revert to Mr. Groonell.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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I welcome the witnesses from Iasc Mara Teoranta and thank them for their presentation. What is at issue is that the big guy should not be able to do this, if the rules are implemented in the way the rules are supposed to be. Clearly that is the problem. What the Department is saying in its mission statement is that this should not happen, that the rules state it should not happen. Yet it is happening. It is a very basic principal and we must hold the Department to account. On the broader issue, most people are clearly of the view that the problem we have in the fishing industry is around the distribution of the quota system. The system needs to be overhauled following a review.

Brexit will also impact on it as well. The problem that Mr. Groonell highlighted to the committee is uniquely internal to the Irish fleet. Normally we are considering problems created by foreign factory ships and boats taking a huge amount of our resource. We should be able to do something fairly swiftly and with a level of success if we put our minds to it. In truth, the Department simply has to come up to the mark and do what it states on the tin. The Department has to do what it is supposed to do. The sooner we can get to that point the better.

Charlie McConalogue (Donegal, Fianna Fail)
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I welcome the witnesses to the committee. In regard to the legality of the Iasc Mara Teoranta proposal, is it legitimate that the Department would be able to direct where the quota would go? I presume the witnesses have checked that out and I would appreciate if they would flesh out how that works in particular.

In regard to the mackerel catch, will they explain where the catch is landed and where it is sold to? I presume that it is sold at the world price. How is it that Iasc Mara Teoranta is not able to purchase the catch from the Irish boats that are landing the mackerel? Where is the catch going and why is it going elsewhere?

Thomas Pringle (Donegal, Independent)
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I thank the witnesses for their presentation. I have a certain sympathy with their position in respect of the availability of fish and it is something that small processors in County Donegal have difficulty with as well, although that would seem to be lost in some of the cases that are made, which is that basically Killybegs is hoovering up everything.

I have a question on whether the fish producers and exporters association would be supportive of the Iasc Mara Teoranta's proposal and the legality of it.

I am not sure but I would imagine that only those boats that have licences to catch mackerel can actually receive the quota. I do not know how factories could be given a licence to catch or whether or not the Government could change the process to licence factories to allow them to receive a quota. I understand fully what the witnesses are saying about Iasc Mara Teoranta's factories managing to get product to process and the knock-on effect that has on jobs but if this measure was to be implemented then the converse would have the same effect. Killybegs, and the work in the factories, has been decimated over the years through the modernisation programme within the factories. The working season has collapsed for most working people in Killybegs who depend on the factories for a livelihood. This proposal would have a further impact on those people and this is not reflected in the submission. This should be taken into account. I do not know what the solution to that could be. The Department says that it is progress but I do not know - it depends on one's definition of progress.

I will now turn to the figures in the presentation. The witnesses have said that the four factories process 3,000 tonnes and that the current regime ensures that they do not have access to purchase 90% of the fish. By that token, does this mean the company has access to purchase 10%? This would be 8,500 tonnes, which would actually meet the targets the witness have referenced in their proposal.

Mr. Cathal Groonell:

Others have access also to that 10%.

Thomas Pringle (Donegal, Independent)
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So it is based on price.

Mr. Cathal Groonell:

Yes. That is the only pot from which we are allowed to buy.

Thomas Pringle (Donegal, Independent)
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If there was a proposal whereby a pot was made available on a market price that was bigger, would this meet some of the company's needs around being able to compete? Obviously Iasc Mara Teoranta is going to have to compete on price. For a long time in Killlybegs we had a problem whereby fish being landed in Scotland and Norway was being processed there. We were constantly told by the Department that it was the market and that boats are entitled to go wherever the market takes them in respect of processing. This was the difficulty for many years. Is there a form of proposal that could meet Iasc Mara Teoranta's needs other than an allocation of quota and around the amount that would have to go onto the open market so it would actually meet the company's needs?

Tim Lombard (Fine Gael)
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I welcome the witnesses here today and thank them for raising this interesting item for discussion. I want to ask about the public consultation period which is happening now. This is being looked at. Has Iasc Mara Teoranta made a submission to that consultation and fitted into the actual process itself? Is this a part of the witnesses submission and is this what they propose by public consultation? It seems like a radical change in policy to put it bluntly. If I get what the company is trying to do, in a nutshell it is trying to move the quota from the boats to the processors. If this is being proposed it would be a drastic change, naturally, to the policy itself. I wonder if there is support in the community for that. The witnesses have said that 90% of the market is tied up but others would say that 10% is not tied up and that it is based on price. In my part of the world if one was to equate that to the milk quota - from back in the day - it was attached to the land and the farm. It was not attached to the co-operatives. Are we now proposing that the mackerel quota would be attached to the processors? What would the feeling be in the community itself in that regard? On the other side, if we were to go along with this proposal, would there be a backlash from communities over who had ownership of these quotas? They are a great commodity and it is a bit like everything else in that people have banked on these quotas. It is one of the key things on which the Chairman might get clarity for me. If we are going to have situation where the quota regime is going to move drastically from the fishermen onto the manufacturer it would be helpful, in order to progress, to see what the community's views are on what would be a major, grave step.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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We will now come back to Mr. Groonell. There is a vote in the Seanad so two members will leave for a while. Senator Mac Lochlainn had to leave and he gave his apologies. He will pick up the answer to the question later on.

Mr. Cathal Groonell:

Okay. Shall we answer all of the questions?

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Yes, as the questions appear before you. The members who are not here will be able to pick up their answers later. Is this alright?

Mr. Cathal Groonell:

Yes. We will answer them between us as they are different. I will take the queries raised by Senator Mac Lochlainn about the position of the fishing organisations. Part of the question goes directly to part of our problem - that in our opinion the Department focuses on the boats and the fishermen entirely in the allocation of quotas and it does not look to see what the impacts are on employment and processing. The quota is a national resource and this is well spelled out in the Department's policy. The State gets value from that quota when it is actually processed in Ireland. If the fish is landed abroad, for example, it is lost to us and there is very little gain for the State from it. If the fish is landed in Ireland and processed here then there is a value to the State. In fact, the more processing and the more value added here then the more value is gained by the State from the resource. The fishing organisations dominate the quota management committees. Even within our own processors' organisation many of the members are boat owners also. We would be a bit unique in the 12 factories. Not many of the 12 registered pelagic factories would not be owned by boat owners. There is a very dominant position by fishermen and boats in the decision making and the Department seems to only confer with the fishermen in making the decisions. For example, we-----

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Is Mr. Groonell saying there is a divergence of view between Iasc Mara Teoranta and the views of the producers and organisations? Are they on different wavelengths?

Mr. Cathal Groonell:

They are entirely focused on what is good for the boat. What is good for the boat is that they get their quota, they take it and they land it wherever the best price is available, be it in Norway or Shetland or wherever. There is no tie-in to getting value for the State in this whole process. That is lacking. For many years the boats were not as big as they are now, we had a fair enough fleet in Rossaveal and it all worked reasonably well. There has been a dramatic change, however, in the last five years in particular. There is a huge change in the way the business has gone. We would consider ourselves to be a small operation in the whole thing, but as has been said there smaller companies in Killybegs who are also feeling the very cold wind of what is happening now. It is time for the Department to take another look at the way it makes the decisions and to see if four or five companies owning and processing the whole lot is a good result. This is the question. In our opinion the State is a lot better off with 12 factories around the coast where employment can be created. Employment such as we give in Rossaveal is so important. Údarás na Gaeltachta may not readily admit it but it is very hard to get any company to move west of Spidall. People want to be in Galway. Barna is fine but Spidall is about the limit. Coming further west is just hard. We are there and people are very happy working where we are. Businesses such as lorry drivers and engineering companies are all getting a turn out. It is a very important part of their job and it is important that this business remains in place. As far as the organisations are concerned we would not have great support from the fishing organisations for our proposal.

We did submit this proposal to the Minister and the Department and we got an acknowledgement. We looked for a meeting but we got no reply. This is not what we do. We are very happy with this opportunity to make our case here.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Is Mr. Groonell saying the organisations would not be in agreement with his proposal? Why does he believe that is the case?

Mr. Don Hoctor:

The organisations are dominated by the big players. The big players have the boats and they have processing operations. They control the organisations. Basically, that group is opposed to what we are talking about here. The rest, comprising approximately eight of the processors, would have a different view because they have the same problems we have. Four of them are based up in Donegal and four are down south. There are two different groups with different views but the dominant group is the group that has the power. Therefore, there is a mixture.

Mr. Tom Kane:

I would like to clarify something about what we are looking for. We are not looking for a quota grab for the factories in the same way as the quota is allocated to the boats. We do not want a quota that we can sell on afterwards. What we are looking for is for the fish to be landed to us at market price. The quota is actually going back again to the boat and we are paying the price. This is not a quota grab; it is a reallocation and redistribution of the way the fish is landed.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Could Mr. Groonell proceed on the legality issue?

Mr. Cathal Groonell:

Deputy Martin Kenny asked whether the Department can solve our problem, namely, that we have lost five boats in Rossaveel and pretty much most of our supply. We are asking the Department to find a way. We have put this proposal forward. It is the only one we can think of that would mean processors would survive. We have thought long and hard about this. We were involved in many campaigns down through the years to get more fish for the polyvalent sector, namely the small boats and those located in Rossaveel, Dingle and Baltimore. We were reasonably successful. When Mr. Tony Killeen was Minister of State, he changed the allocation. That was the last time. He got a fairly substantial increase for the polyvalent sector at that time. At the end of the day, what did it do for us? It made those boats more valuable and now they are suddenly the target of the bigger operators. The latter are saying those boats have a bigger quota now and are worth buying. One can see the prices paid for them. We have looked at every side of this. We really cannot see any proposal other than the one we have here. However, if the Department comes up with a better way that is different, we will consider it. We are not precious about it as long as it works.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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What about the legality of it?

Mr. Cathal Groonell:

That was Deputy McConalogue's question. It is a valid question. The first thing that has to be established is who owns the quota. It is very clear in the Department's policy statement who owns it. When one sees the big prices people are prepared to pay for boats with quota entitlements, one must ask what they are buying. They are happy in the knowledge that they are actually buying the quota entitlement. That is a question. It is in the policy document also that the Minister decides how the quota is allocated. We envisage, for example, that the 1,000 tonnes would be allocated to the factory but that the factory would then have to allocate perhaps 100 tonnes at a time to ten boats or 200 tonnes at a time to five boats. That quota would be attached to the boats' licences for 2018. From the factory's point of view, in order to be policed or whatever, that amount of quota would actually have to be on the boats' licences. It is like everything else in that if the Department wants to do it, it can find a way. There are approximately 20 people working in the fish policy section of the Department. If they have the will to do it, it will not be beyond their means to find a way to do it. We only have what we have from our side of the house but they would have access to a lot more. That is a question for the officials. Let me give a very simple analogy. An analogy was made to the milk quota. If a corner shop owner has a lotto licence and is the selling shop, the next owner does not necessarily get the licence. He has to go through the whole rigmarole of applying. I know this from the experience of a friend of mine. There is no guarantee that the new owner of the shop will get the licence. In Rossaveel, however, all the boats were bought. There was no question. A licence that is worth a multiple of the value of a lotto licence seems to be just rubber-stamped and it is said one has everything. There seems to be no real care taken to account for the socio-economic link with the boat and the question of whether it should be allowed go willy-nilly to another area.

There are many ways of looking at this. For the past three years, we have lost substantial money as a company. We we are trying to hang on and we are fighting our corner. We believe we are obliged to fight on behalf of the company. We fight for our own jobs and for our staff's jobs. We are fighting also for the port of Rossaveel. If we walk away, the port will be in a bad way. It will be a marina. That is not good enough. We are fighting on. We are losing money so we cannot hang on indefinitely. If there is no result or change, it will not make sense to repeat it for a number of years.

Charlie McConalogue (Donegal, Fianna Fail)
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The objective is absolutely laudable in terms of making sure as much processing as possible can happen on the island. The jobs and the added value come from that. The objective is one that we have to be pursuing. We must try to exploit the opportunity that exists in this regard.

If I heard Mr. Groonell clearly, he is saying that up to 12,000 tonnes of the quota to which different fisherman would have purchased an entitlement over the years should be allocated, without charge, to the 12 factories and that each of those factories would then have its own separate agreement with fishermen, whereby the 1,000 tonnes per factory would be allocated to the fishermen. Mr. Groonell's organisation and the fishermen would then agree a price for the fish. Mr. Groonell is saying the market price. One can always argue about the market price. The market price is the price for which one can purchase on the open market. It basically means that the processor gets the quota. It can then do the deal on the price. It has the potential to agree a price with fishermen. With regard to the legalities, that strikes me as interference in the market. I do not know whether the delegation has explored this. The interference would have all sorts of implications in terms of State aid and in respect of two companies. That is what strikes me about this.

I asked a question about current access to fish. Is it the case that for some of the processing companies to be able to operate and make a profit, they need to be able to get fish at a price lower than what is available on the open market or is it the case that there is no fish on the open market and they have nowhere to go to get that fish? Am I right in saying that because the polyvalent boats that were bought up are smaller and would have been based locally, they would have been delivering the catch only into the local ports? Am I wrong in saying that they would not have had the capacity to go internationally, whereas the bigger boats can land in different countries depending on the price available? Is that the case? The larger boats have to pay a higher price because they have a wider market in terms of choosing where they go to get the best price for their catch.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Which witness would like to deal with those questions?

Mr. Don Hoctor:

I will deal with the earlier part. The 12,000 tonnes we are talking about is mainly coming out of the increase in quota. We are not taking quota off somebody who has bought quota already.

In terms of interference, the Minister is currently deciding how to allocate that quota so he is getting involved in the market situation. We are just saying that he should consider this way of allocation as opposed to the split he is looking at between the refrigerated seawater, RSW, vessels and the polyvalent vessels.

Charlie McConalogue (Donegal, Fianna Fail)
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I take Mr. Hoctor's point but we are talking about competition on open markets where one company has to compete against another, and we see that with state aid rules across all sectors and businesses. If a company in France, Spain or wherever has to buy fish on the open market and another company in Ireland gets quota, which comes from the State, that has the potential to be considered a state aid under European law and therefore blocked from being considered by the Government. That is the first thing that strikes me.

In terms of being able to access mackerel, is there an open market where someone can purchase mackerel? What is the issue around that? Is there no avenue for actually getting it or is it the case that the price is too high?

Mr. Don Hoctor:

I might start with that.

Mr. Tom Kane:

The vast majority of the fish is not offered for sale because either the boats own the factories or the factories own the boats and in those cases we have no access to that fish, no matter what we offer for it.

Mr. Cathal Groonell:

In addition to that, the Deputy is saying quota is allocated to factories and that might be a competition issue but all these fishing companies are companies. It is not like the old days when there was a skipper-owner and a sole trader. These are companies, and that quota is allocated to the companies. In that respect and in terms of competition, there is no difference between what is happening and what we are proposing. I do not see an issue in terms of competition or otherwise because that quota is being allocated to companies year in, year out. It is just to allocate it in a way that will help to maintain jobs in coastal communities as opposed to simply handing it to companies that will go wherever they want with it. If we are serious about regional development and keeping jobs in these communities, we have to look more closely at how we do the business. The Deputy said that these guys pay big money for a quota with entitlement. Many of these are the original boats that were there when quotas came in. They got tonnage on the boats and so on so. They own the tonnage and kilowatts but if they went out afterwards and paid €5 million or €6 million for a boat with an entitlement, for example, it comes back to the question as to who owns that quota. It always comes back to that question, and it needs to be clarified.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I will come back to Deputy Pringle in a second but this seems to be a grey area now that probably requires clarification. I refer to the legality of what the witnesses are proposing. I take on board what they are saying but it is something on which we need clarification. Perhaps we can clarify it for them later.

Thomas Pringle (Donegal, Independent)
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My colleagues have hit the nail on the head. The problem is that factories own the boats and that has created this situation. It is the same in Killybegs as well. For many years, factories owned boats that landed the fish in Norway and Scotland. The factories still made money although the workers got no work, and that was part of the problem.

If there was a system where 24,000 tonnes was put on the market every year and it went on price, could the witnesses compete to be able to buy enough fish to keep them going? Also, would a guaranteed supply of 2,000 tonnes to each of their factories be enough to keep them viable into the future? There may be a mechanism where a certain amount of fish would have to go on the market but the problem then is that the bigger players will be able to price the witnesses out of the market. I do not know how that would ever be dealt with.

Mr. Don Hoctor:

That would definitely be a problem because they have far greater resources.

In terms of the 2,000 tonnes, that is a figure that would make the majority of the plants down south and the other plants in Donegal viable. We were operating at those type of levels five or six years ago and we were reasonably profitable, but the levels have come down dramatically. In terms of volume, we are probably down 40% on where we were three or four years ago.

Thomas Pringle (Donegal, Independent)
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On the system the witnesses are proposing, if the factory had 2,000 tonnes, what would stop them giving 1,000 tonnes to one of the other eight and not processing the 2,000 tonnes themselves?

Mr. Cathal Groonell:

That is where the Department and the officials come in. When one sees the actual licences they issue to the boats and the terms and conditions attached, it is very easy to sort out that situation with terms and conditions. In fairness, they are quite efficient in doing that. If there is a will to do it, it can be done. If there is not, it is quite easy to say it cannot be done legally but the public and coastal communities are the losers in that situation.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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The big contradiction here is between what the Department's policy document, Fisheries Quota Management in Ireland, states it has to do and free market enterprise, which flies in the face of it. The problem is that the bigger factories, which are also the bigger owners of boats - they are both the same thing - can create a monopoly and squeeze everybody else out. That flies in the face of the stated policy of the Department. I was in Europe recently and one of the major topics being discussed in terms of all of this was the artisan fisheries, how the small coastal communities need to be protected and the need to ensure they can continue to operate. That is the least wasteful way of catching fish because the big fisheries waste more than they use. Part of this is also about society, as well as about the fish. The witnesses make their point well. The Department will have to make a choice as to whether it is for free market enterprise to run amok, to take off the brakes and away it goes, where the market will always be king. If that is to be the way, the witnesses can forget about the policy outlined in the start of their statement to the effect that any movement towards privatisation and concentration of rights into the hands of large companies would seriously risk fishing vessels. That will no longer count. I do not know where we can get a sense of what side the Department is on.

Surely, you have come to some assessment here. One would be very despondent at the lack of response from the Department. Is it saying that it will not do anything at all?

Mr. Cathal Groonell:

There has been no response at all. Just an acknowledgement, no reply.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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If the Department has not given a reply maybe we could invite some officials in and try to get that reply. That would probably be the way forward.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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There is a review going on at the moment, is that correct?

Mr. Cathal Groonell:

It only applies to the increase in 2017, to the 10,600 tonnes.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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It is part of the issue, is it not?

Mr. Cathal Groonell:

It is not really. We would say that our allocation applies to 2018 and beyond. It may be a pilot basis for 2018 to see how it works out. Sometimes these things have to be implemented to see how they work in practice. The actual review is very precise. There was a 10,600 tonne increase for 2017 over and above 2016. It is the dividing up of that pot and it is specifically looking at how it was divided between the RSW and the polyvalent fleets, in other words, are they going to change the percentage of 87% and give a bit more to the polyvalent fleet or will they leave it alone.

Someone asked had we made a submission. We did although it did not really deal with what we are looking at here. In it, we favoured giving it to polyvalent fleet because most of the boats that we get the fish from now are in that sector. We did say that if they give more fish to the polyvalent fleet there would need to be an accompanying management regime to do something about stretching out the number of weeks of processing, for instance. There are a lot of management tools they could use to make it better for creating jobs rather than giving it to them and letting it go to the four winds.

Mr. Don Hoctor:

To add a point on the consultation process, if the policy continues as it is they can reallocate a bigger chunk of the quota from the big boats back to the smaller boats. If the bigger boats and companies continue to buy the smaller boats, that slows up to process slightly but it ends with the same result.

Thomas Pringle (Donegal, Independent)
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Were the boats in Killybegs all polyvalent as well?

Mr. Cathal Groonell:

No, two of them were RSW and three were polyvalent.

Mr. Tom Kane:

The crux of this question is this policy document. Its first line states, "In Ireland quota is a public resource and is managed to ensure that property rights are not granted to individual operators".

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Thank you. As a result of what we have heard today, the committee will contact the Department. We will send them a transcript of today's meeting and seek clarification on the legality Iasc Mara's proposal which we will also send to them. We will look for clarification on that and hopefully get a reply on the matter very shortly. The representatives of Iasc Mara have made their point well today and Members have taken it on board.

Mr. Cathal Groonell:

We appreciate that since we do not seem to have great success in getting through to them ourselves.

Mr. Tom Kane:

We welcome the opportunity to make our case and are very grateful for that.