Paul Daly (Fianna Fail)
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I welcome the representatives from Kepak and Glanbia. I also welcome the initiative. We all know the crisis facing our beef industry. It is welcome that somebody is taking an initiative. This initiative in its fruition is very much in its infancy. I find it difficult to see how it will take off or be successful or make any solid improvement for beef farmers in the sector. My reservations are similar to those mentioned by the Chairman and Deputies Penrose and Martin Kenny regarding the closed loop concept. I do not see the need for such a closed loop. If this initiative is supposed be to the advantage of the beef sector and the beef farmer, the only winner from the closed loop concept, as documented in the presentation, will be Glanbia. I can understand why one would want to closely monitor feed inputs with respect to traceability and the turnout of the finished animal but I do not believe the fertiliser spread on the grass that the animal eats has any bearing on the outcome of the quality of the beef, the age at which the animal will be slaughtered or the final carcass weight. That is purely materialistic and commercially aimed towards Glanbia.

I would like the representatives to tell us - I doubt that they will - the arrangement they have among themselves behind the scenes. I cannot see the beef farmer winning. As Deputy Cahill and the Chairman said, with the greatest inputs of genetics and genomics, there is a vast range of Friesian cross animals, especially heifers, that will not be in the 280 to 360 kg category. To get the majority of the rest to that point, it will require massive inputs, which is another plus for Glanbia. Would a farmer who does everything by the book and whose animal, because of its breed, does not make the cut-off point not be far better off paddling his or her own canoe, taking the average quota price and possibly buying his fertiliser and all of his or her inputs a little cheaper elsewhere? Financially, without the bonuses, he or she may possibly have paid top price for all inputs because he or she does not have any say in the matter and is still only getting what he or she would have got from any other meat processor in the particular week. In that scenario the farmer will lose and Glanbia will win. If the farmer does not hit his or her targets - he or she will be advised by Glanbia personnel and employees on what concentrates and their quantities he or she should be using - he or she will probably have massive input costs that he or she might not have had if he or she had been left to make his or her own decisions on inputs. However, if he or she hits the targets and receives the bonus, I do not believe he or she will be winning because of the extra input costs involved. Kepak will not be winning either because it will be paying more than any other meat factory in the same meat market for the same animals in the given week. How are the organisations balancing it between them? Kepak cannot take all of the hit for the love of Glanbia? There must be some arrangement behind the scenes in the operation of the Twenty20 club such that one of organisations is funding the other. I do not know if the representatives are in a position to advise us of that arrangement or give us the information that lies behind the setting up of the club from the two companies’ perspectives, but I would like to hear it to gauge how they are managing it.

I was going to mention the point made by Deputy Penrose about the Competition and Consumer Protection Commission as I agree with him. I would like it to examine the Twenty20 club initiative. I strongly believe it will find it difficult to consider the initiative to be legal in the Irish agricultural market.

It is welcome that the organisations are taking an initiative, but it needs to be done on a larger scale to help to rescue the beef sector. However, in the context of the closed loop concept, this initiative will not be the answer as there is only one winner.

I asked two questions. In the operation of the scheme is there any age limit in the movement of calves? Will there be a fixed price for a calf or will the organisations have an input into the price between the two farmers performing the transaction?