Martin Kenny (Sligo-Leitrim, Sinn Fein)
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I thank the representatives of the IFA for their presentation and report. I am very conscious of the importance of the suckler cow sector. Leitrim has five marts whose staple is selling weanling calves with farmers coming from other parts of the country to buy them and bring them away because our land generally is not good enough to finish the cattle.

While there may be suckler enterprises in many areas, many suckler farmers in other counties also finish as well as suckle, whereas that possibility is not there in Leitrim and many western counties.

Page 16 of the report deals with family farm income on cattle rearing farms, in particular the income from the market as well as from subsidies. From 2000 to 2016, one can see the income is around the €10,000 to €12,000 mark but, in fact, it is practically zero from the market. Therefore, if the subsidies were not there, there would be no money at all, which is one of the big issues. We need to recognise this is an enterprise that is making no money apart from direct payments and payments from other schemes, given nearly all suckler farmers are also involved in GLAS and other environmental schemes, because that is the nature of their farming. I see pressure coming all the time from the dairy sector to switch over to dairy where the land is good enough, and more and more farmers are getting out of suckler farming and going into dairy because that is where the money is. That will put pressure on the number of weanling calves and, therefore, the number of beef cattle coming into the marts and going on to be finished.

I want to tease out with the witnesses the issue of the proposed payment of €200 per cow. I agree we have to come up with some sort of solution. The fear I have, and some farmers have said this to me, is that the targeted payment of €200 per cow will simply go to the factories and the price will start to slip back. We could end up in a situation where farmers get the €200 per cow but, because the subsidy is in place, production will go up and that will be an excuse to push prices down, and the farmer will end up not gaining very much. That seems to be the trend when we look at the family farm income on the charts, given it has changed very little through all the years, no matter what scheme came or went and no matter how high or low the payments. It is almost as if it was decided, "We will keep farmers at a certain level so they will survive, we will always get the cheap raw material from them and we will make the money on it." Every few years the farmer gets a middling good year and it gives them the confidence to stick at it but they then get three or four bad years. One would think there was some master puppeteer in the background playing this game with the Irish suckler sector in particular.

I am somewhat cynical about all of this. I know the farm organisations are lobbied by the farmers and the pressure is coming on from all angles to try to find a solution. However, the big point is that the suckler sector creates huge economic activity in the micro-economy of the region where it exists, as is the case in Country Leitrim and many other areas. When the cow calves, a vet is needed, meal is needed and there are all the various inputs. In addition, there is good husbandry and the farmers are involved in GLAS because it suits their style of farming. The report recognises that suckler farming has this multiplier effect in rural areas where there is very low income.

While I did not read every word of the report, I searched it to find the level of single farm payment to suckler farmers in the west compared with other areas. I expect it is much lower in the west and, with all due respect to suckler farmers in Westmeath, I suspect many of them finish the cattle and that the farming is a little more intensive. This meant that, back in 2000 or 2001, they got a better basic payment based on that style of farming than the payment to the fellow outside of Ballinaglera who has 60 acres on the side of a mountain and is trying to rear a couple of cows and a few calves. Such farmers got a raw deal 20 years ago and they are still getting that raw deal today, which needs to be recognised. I take the point that the IFA does not want to see any farmer lose money. However, there has to be recognition somewhere that there was a raw deal for those farmers.

That is the reason many are leaving the sector. When farmers on better land want to buy decent weanlings in two or three years, they will not be able to do so because the farmers supplying them will be gone. Then we will see what is going to happen. This whole sector will disappear. We will arrive at a crucial tipping point if there is a further reduction of 15% to 20%. That seems likely to happen in the next few years. At that stage, the sector will be beyond recovery. There will then be an emphasis on examining the possibility of getting beef cattle from the dairy sector. I do not think that is going to happen or that it is possible. There may be some movements in that direction and perhaps some improvements in breeding and genetics. However, I do not see how dairy cows can produce the kind of beef cattle needed to retain the quality of the meat Ireland produces.

This is all about price. Figure 2 on page 16 highlights that the big problem in this regard relates to the price the farmer gets. I am referring to the price farmers get at the factory and, therefore, the price they get for weanlings produced down the line. This is the elephant in the room with which we must deal I have raised this matter with the Minister on several occasions and he always comes back with the same mantra to the effect that he cannot interfere in pricing. We know that and that there are various rules. At the same time, however, the Exchequer and the taxpayer are paying a great deal of money to market this beef all over the world.

We send representatives from An Bord Bia here, there and everywhere in order to find new markets. Who benefits from such activity? There is certainly no benefit to the farmer in Ballinaglera to whom I refer who is rearing a few cows and selling a few weanlings. That individual is getting very little out of it. If the taxpayer is going to put money into marketing this product, which has major potential and no one is denying that aspect, there needs to be recognition of the need for some way of ensuring that primary producers get a decent return for their efforts. That seems to be missing in all of this.

Reference was made to a payment of €200 per cow as being the golden bullock that is going to solve all of these problems. I hope this turns out to be the case but I am cynical about it. I have seen what happened in the context of every previous scheme. There was always a way in which the taxpayers' money or the European money ended up in the hands of the same people. Somehow or other it ended up back with the big guys. I am talking mainly about the processors and the supermarkets. They end up with all of the money and the producers end up being squeezed. This is all about achieving balance in the sector and how that can be done. How can a scheme be introduced that will be ensured to have the impact sought without unintended consequences? I will work with anyone to do that and make it happen.

The report, however, is really a cry stating the sector is going down the Swanee if something is not done soon. There has to be some way of ensuring that pricing is central. We can talk about subsidising as long as we like and we will need to subsidise. I understand that concept and there has to be a way of doing it. The problem we have, however, is that the European consumer is paying a dear price for an excellent quality product but the European producer, here in Ireland, is not getting the return for it. That disconnect is the big problem. It will be excellent if the €200 per cow works but please show me how it will work without having unintended consequences.