Aindrias Moynihan (Cork North-West, Fianna Fail)
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I draw witnesses' attention to the fact that witnesses giving evidence from within the parliamentary precincts are protected by absolute privilege in respect of the evidence they give to a committee. This means a witness has a full defence in any defamation action for anything said at a committee meeting. However, witnesses are expected not to abuse this privilege and may be directed to cease giving evidence on an issue at the Chair's discretion. Witnesses should follow the direction of the Chair in this regard and are reminded of the long-standing parliamentary practice to the effect that, as is reasonable, no adverse commentary should be made against any identifiable third person or entity. Witnesses who are to give evidence from a location outside the parliamentary precincts are asked to note that they may not benefit from the same level of immunity from legal proceedings as witnesses giving evidence from within the parliamentary precincts and may consider it appropriate to take legal advice on the matter. Privilege against defamation does not apply to the publication by witnesses outside of the proceedings held by the committee of any matters arising from the proceedings.

The agenda for the second session is to focus on two legislative proposals. The first is COM (2024) 576, proposal for a regulation of the European Parliament and of the Council on co-operation among enforcement authorities responsible for the enforcement of EU Directive No. 2019/633 on unfair trading practices, UTPs, in business-to-business relationships in the agricultural and food supply chain. The second is COM (2024) 577, proposal for a regulation of the European Parliament and of the Council amending EU Regulations Nos. 1308/2013, 2021/2115 and 2021/2116 as regards the strengthening of the position of farmers in the food supply chain.

The committee will now hear from officials from the Department of Agriculture, Food and the Marine as follows: Ms Maria Dunne, assistant secretary general; Ms Angela Robinson, principal officer; Mr. Ultan Waldron, principal officer; and Mr. Damien Ward, assistant principal officer. Tá fáilte romhaibh. I will give you five minutes to present the details and then we will have a-----

Paraic Brady (Fine Gael)
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Chair, will we give them ten minutes?

Aindrias Moynihan (Cork North-West, Fianna Fail)
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We will give them five minutes to do their presentation on these proposals and we will have an opportunity then to ask about them. We need to be out by 6 p.m., so we are constrained on time.

Ms Maria Dunne:

I thank the members of the committee for the opportunity to appear before them to discuss the European Commission's proposal for a regulation on co-operation among enforcement authorities responsible for the UTP directive, and the European Commission's proposal to amend the CMO regulation with regard to strengthening the position of farmers in the food supply chain. I welcome the committee's engagement on these two important matters.

I am the assistant secretary general in the Department with responsibility for agrifood sectoral policy and strategy development. Mr. Waldron is the principal officer in the meat and milk policy division with responsibility for policy relating to the livestock sector, which includes relevant elements of the CMO regulation, and Mr. Ward works with Mr. Waldron. Ms Robinson is principal officer in the food industry development division with responsibility for the UTP directive.

I wish to give the committee a very brief overview of the current position of both proposals. Starting with proposed regulation No. 576 of 2024 concerning a proposal on co-operation among enforcement authorities responsible for the enforcement of the UTP directive, the UTP directive covers unfair trading practices in business-to-business relationships in the agricultural and food supply chain. This legislation has been in place in Ireland since 2021, and since 2023, the UTP enforcement authority function is performed by the Agri-Food Regulator. The UTP directive required the enforcement authorities to co-operate effectively with one another and the Commission and to provide one another with mutual assistance in investigations that had a cross-border dimension. Following consultation by the European Commission, however, it was found that the experience of enforcement authorities was that gathering information, finding infringements and imposing and enforcing penalties could be difficult when the buyer was in another member state.

The proposed regulation aims to improve and increase co-operation between enforcement authorities. Specifically, the proposed rules aim to ensure that a legal basis is provided to enable exchanges of information and requests for enforcement measures between member states. By providing tools to enable enforcement authorities to gather information and investigate non-compliances against buyers located in another member state, the proposed powers will help to further protect suppliers in the agricultural and food supply chain against unfair trading practices.

The Department, in close consultation with the Agri-Food Regulator, engaged with the EU Presidency, the European Commission and other member states on the draft text of the proposals to ensure that the provisions would work well, from an Irish perspective. On 7 April 2025, the special committee on agriculture approved the Council's negotiating mandate for negotiations with the European Parliament. The negotiations are expected to commence the plenary stage in September 2025.

Turning to the proposal to amend the CMO regulation, Regulation 1308/2013, in December 2024 the Commission published a proposal to amend this regulation. The proposal responds to the Commission's March 2024 non-paper and recommendations from the strategic dialogue on the future on EU agriculture, published in September 2024. The Commission proposal and subsequent amendments are aimed at strengthening the position of farmers in the food supply chain. The key elements include strengthening EU-level provisions on contracts involving farmers with other actors in the supply chain, including food industry and retail, across all sectors covered by the CMO and strengthening producer organisations to allow farmers to co-operate and act collectively in a more effective way. The Department also consulted key stakeholders on the proposals, following which it engaged with the EU Presidency, the European Commission and other member states on the draft text of the proposal. The Council is now ready to start negotiations with the European Parliament, once the latter adopts its position. The Committee on Agriculture and Rural Development is expected to vote on its report in September, while approval of the mandate and plenary session is expected to take place in October.

I conclude by stressing that the Department is focused on ensuring that Ireland's position is reflected in EU legislation, while acknowledging that generally, a compromise text will emerge. We start that process by consulting key stakeholders to ensure a cohesive, informed position. We have done that in relation to both the proposals being discussed today. We are happy to take any questions on the details of the two proposals.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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The witnesses probably recognise as well that the regulator has stated that it does not have enough teeth or enough power. Would that be fair to say?

Ms Maria Dunne:

To clarify, the regulation relates to the unfair trading practices powers of the Agri-Food Regulator.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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I have heard Joe Healy say that he would like more powers. Is that recognised by the Department?

Ms Maria Dunne:

I will explain a little bit of the background. The independent Agri-Food Regulator was established under the Agricultural and Food Supply Chain Act 2023. It performs two key functions. It enforces the law on unfair trading practices and it performs a price and market analysis and reporting function. The Commission proposal being discussed today specifically relates to the first of those, namely, the law on unfair trading practices and the ability to share information across member States. On the price and market analysis function, over the last year, the regulator has published welcome analysis on the egg and horticulture sectors. Such reports are important to assist food suppliers in their decision-making. However, while there has been much positive engagement with the regulator from operators that have voluntarily responded to request for information, a few operators did not provide the requested data. As a result, the two reports concerned were published using only publicly available data. In light of its experience with these reports, the regulator has reported to the Minister that it requires enhanced powers to compel businesses to provide financial information that is not in the public domain. The Act itself does not permit the regulator to compel such data. However, the Act provides that the Minister may make regulations on price and market information. I want to stress that there are very strong powers regarding the unfair trading practices regulation. The price and market analysis and reporting function is separate and is not covered by the legislation being discussed.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Is Ms Dunne saying that, for the regulator, the Minister can put in more regulations and is the Minister looking at that to help it?

Ms Maria Dunne:

The Minister, Deputy Heydon, has clearly stated that he is fully committed to ensuring that the regulator is equipped with the necessary powers to fulfil its statutory function, subject to the necessary consultative and legislative process. That is necessary to ensure that the additional powers granted are proportionate. This process is under way in the Department.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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While what we are on about is in relation to European legislation, when a company is outside, say in Brazil or another country that sends beef to us, do they come under this in any way or are they totally separate once they are outside the EU?

Ms Maria Dunne:

I will ask my colleague, Ms Robinson to respond to this question.

Ms Angela Robinson:

The UTP directive applies to suppliers and buyers, where at least one of them is located in the European Union. In practice, the intention of the directive is that if there is a supplier in the European Union selling to a buyer outside of the European Union, it is open to the enforcement authority-----

Michael Fitzmaurice (Roscommon-Galway, Independent)
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What if it is vice versa?

Ms Angela Robinson:

If the buyer is in the European Union and the supplier is outside, yes, it equally applies that the enforcement authority has powers. The supplier could make a complaint-----

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Has there been any case opened on that yet?

Ms Angela Robinson:

Across Europe, I stand to be corrected but as regards the Agri-Food Regulator, no query or complaint has come in respect of any outside-of-Ireland UTP issue arising.

Paraic Brady (Fine Gael)
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As was said, the regulator has dealt with the egg and the horticulture sectors to date. When do the witnesses see the regulator having the teeth to deal with the beef sector? In this sector, we have a fifth quarter, regarding the offal and the tongue, that is sold into Asian markets that a farmer in this country does not actually get paid for. There are unfair practices within the beef sector, when we see the fifth quarter being sold globally and yet the farmer in this country has not been paid for it. Do the witnesses see the regulator engaging with Meat Industry Ireland, MII, and processors regarding the meat sector in the future?

Ms Maria Dunne:

To be clear, there are two functions. One is the UTP legislation and the other is market transparency and price reporting. Under the unfair trading practices legislation, which the regulation being discussed relates to, there is not an unfair trading practice relating to price. There are 16 unfair trading practices but they do not relate to price. If we are talking about the other function, which is about market transparency and reporting, I refer to my previous answer that the Minister has stated that it is a priority for the Department but I cannot give timelines on when we will have concluded the consultative and legislative consultation processes.

Paraic Brady (Fine Gael)
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Will it be in the lifetime of this Government?

Ms Maria Dunne:

There is a commitment under the programme for Government to give the Agri-Food Regulator additional powers.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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I thank the witnesses and Ms Dunne for her presentation. What we are talking about is a directive that gives a little more method for the regulator in this State to work with regulators in other states, mainly within the EU, in respect of how they can co-operate better to ensure a level playing field for the farmer and, we hope, the consumer at the other end. An issue that comes to mind in that regard is that regulators in other states in the EU have been much longer in existence and have in many cases done a lot more work in this field. I met the food regulator recently and it is taking baby steps. It has only been in place for a short while and has a lot of work to do. It has done a couple of reports into the poultry sector and eggs. It has looked at other sectors but has not done reports. It probably needs more resources to do that. Will the regulator's co-operation with regulators in other states mean that it will require more resources to be able to work in that context? That is one of the big problems it has. There are approximately 16 staff members and the regulator has a lot of work to do domestically. When its remit is broadened internationally, it will put more strain on the regulator. Perhaps that is not a question related directly to the directive but would be an impact of it.

Ms Maria Dunne:

Within the existing UTP directive, there is provision for co-operation between enforcement authorities. This directive is to provide a legal basis for that co-operation.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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Pardon?

Ms Maria Dunne:

The directive provides a legal basis for that co-operation because enforcement authorities were finding it difficult.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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Ms Dunne mentioned in her opening remarks that the food regulator has stated that one of its issues relates to compellability, particularly with regard to information it wants to get from various players in the field. When the regulator asks for information, many of the players co-operate but if a couple of the big players do not co-operate, it skews the whole thing and makes it very hard to do an accurate report. The regulator would like a situation whereby it could compel these people to give them the information it requires. Many are hesitant because of competition, etc. We understand that and there must be a level of guarantee that any information that flows is going to be handled in a sensitive and proper manner, as would be necessary. Does this directive give the Minister the ability to put in place compellability to allow the food regulator to get the information it requires?

Ms Maria Dunne:

No. The regulation we are discussing refers to the unfair trading practices. It does not refer to the market transparency and price reporting function of the Agri-Food Regulator, which is entirely different from its unfair trading practices function. This legislation in Europe only refers to its unfair trading practices function. The function the Deputy is talking about came out of primary legislation in Ireland.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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Is there any part of the legislation in Europe that deals with the pricing aspect of the market?

Ms Maria Dunne:

There are market transparency regulations in Europe. Under that market transparency function, the Central Statistics Office, CSO, and the Department report into Europe on an ongoing basis on a number of different prices at a number of different points in the supply chain for a whole range of commodities. There is regulation in place but the Agri-Food Regulator does not have a role within those regulations.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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I know I am drifting slightly off target here, but do the regulators in other states have that power of compellability to require players to give them the information they require? The regulator here does not have that power yet.

Ms Maria Dunne:

I do not have information on that.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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That is fine. I understand.

Ms Maria Dunne:

I can say that the Department has powers to compel under the market transparency regulations.

Paul Lawless (Mayo, Aontú)
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I want to talk about the Agri-Food Regulator. One of the key tasks for it is that there is a significant mark-up on the price of beef in supermarkets. The farmer keeps the animal for over three years, or thereabouts. He receives €7.50 per kilo. Supermarkets at the moment are selling at a price in the region of €23 per kilo. What role does the Agri-Food Regulator have in respect of identifying the significant mark-up and producing data or a report in respect of the profits taken from a slice of that particular pie?

Ms Maria Dunne:

To be clear, the regulator has two functions. One is enforcing the law on unfair trading practices. That is not relevant to the scenario the Deputy raised because it is not an unfair trading practice. The other function is that it performs a price and market analysis and reporting function. As I said, it has reported it does not feel it has enough powers to conduct that function completely at the moment. The Minister has stated he is fully committed to ensuring the regulator is equipped with the necessary powers to fulfil its statutory function.

Paul Lawless (Mayo, Aontú)
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In its current form, it is a charade. It does not have the ability to quantify or extract that data from the companies in its current form.

Ms Maria Dunne:

It has access to all the publicly available data and the data that is given to it voluntarily under the Act. That is what the Act currently provides for.

Paul Lawless (Mayo, Aontú)
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If the companies tell the Agri-Food Regulator that their data are none of its business, the regulator says "Okay".

Ms Maria Dunne:

As it stands, the regulator is entitled to the information on a voluntary basis. That is what the Act provides for. It also has the information on market transparency, as I outlined, that the Department can compel under the legislation. That is published by the EU market observatories and the Department in its weekly meat market reports and on its meat and dairy dashboards. Bord Bia does a market tracker that came out of the beef task force agreement. There is a lot of publicly available data to which the regulator has access.

Paul Lawless (Mayo, Aontú)
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The regulator has two functions. One is around unfair trading practices and the other relates to transparency. It is ironic that those are its core functions but it does not have any teeth to address transparency and the slice of that pie. It is a major oversight. Would Ms Dunne agree?

Ms Maria Dunne:

All I can say is that it has two key functions. It enforces the law on unfair trading practices and performs a price and market analysis and reporting function. It is able to carry out analysis and reporting on a vast range. There is a lot of publicly available data on the markets.

Paul Lawless (Mayo, Aontú)
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The other function is around unfair trading practices. As Senator Brady alluded to earlier, there is a fifth quarter of offal that is sold by meat factories but the farmer receives nothing. How is that not an unfair trading practice?

Ms Maria Dunne:

For clarity, I can tell the Deputy what the unfair trading practices are. They include: payments later than 30 days for perishable agricultural and food products, payment later than 60 days for other agrifood products, short notice cancellations of perishable agrifood products, unilateral contract changes by the buyer, payments not related to a specific transaction, the risk of loss and deterioration being transferred to the supplier, the refusal of written confirmation of a supply agreement by a buyer despite requests from the supplier, misuse of trade secrets by the buyer, commercial retaliation by the buyer and transferring the costs of examining customer complaints to the supplier. There are six further unfair practices that only come into-----

Aindrias Moynihan (Cork North-West, Fianna Fail)
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Could Ms Dunne send those to the committee?

Ms Maria Dunne:

Yes.

Paul Lawless (Mayo, Aontú)
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The Agri-Food Regulator has two core functions in relation to unfair trading practices and transparency. It cannot achieve either. How is it the case that for a valuable commodity such as offal, the farmer cannot receive anything? The Agri-Food Regulator says, "There is nothing to see here."

Aindrias Moynihan (Cork North-West, Fianna Fail)
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We need to get Deputy Aird-----

Paul Lawless (Mayo, Aontú)
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The other point-----

Aindrias Moynihan (Cork North-West, Fianna Fail)
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No, Deputy Lawless.

Paul Lawless (Mayo, Aontú)
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-----is around the fact that transparency without the power to compel is a major oversight.

Aindrias Moynihan (Cork North-West, Fianna Fail)
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Deputy Aird should be allowed an opportunity.

Paul Lawless (Mayo, Aontú)
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We as a committee need to write to the Minister about these key points.

Aindrias Moynihan (Cork North-West, Fianna Fail)
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No, Deputy. I call Deputy Aird.

William Aird (Laois, Fine Gael)
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I thank the officials for attending and clearing up our concerns. I very much welcome food regulation. It is something that we all sought for many years.

I wish Mr. Joe Healy well and he is Chair of the board. The office of the Agri-Food Regulator is only in its infancy and getting off the ground. There is a lot more legislation to be put in place so that the people with the responsibility can carry out their duties. I have no doubt that once the legislation is passed and the Minister confers responsibilities upon them then we will be able to get exactly what everybody has talked about here today because at the moment it can only ask and if you voluntarily do not contribute the information to the regulator then it cannot actually get it out of them.

The situation will change rapidly because the Minister has given a commitment that he is going to do that and we will see huge change, and rightly so. Prices have escalated for beef and butter, which is what we are all talking about at the moment, but there are reasons and blame cannot be pinned on farmers. Until we can see exactly where supermarkets, etc., make their profits then we will not have a true answer. The Minister has promised that change will happen. In the meantime, we must address all of the associated issues.

We are talking about the offal from cattle. There was a time when pigs were killed and the owner was not paid for the pig's head and crubeens but an Act or whatever was passed which meant that payment for both items had to be made because the pigs' heads and crubeens were for sale to the public. I hope this is what all the regulator is about.

The Agri-Food Regulator will have a wide brief. I look forward to when the regulator gets down into the nuts and bolts of it and sees what has happened, the profits, and where profits were made and where they went. On the other hand, it is regrettable that there is so few cattle. I am sure Deputy Fitzmaurice will agree with me because he can see the same in Roscommon and several counties. Without question, everywhere one drives it is obvious because one sees an ever decreasing number of cattle, which I think will be a huge problem down the line. I am sure everyone will agree with me that it would have been preferable if all these regulations had been put in place because we would not have nearly 200,000 suckler cows gone out of the national herd. We will not have them back, which is shameful and terrible. It really hits me, as a farmer, to see all the finest of stockmen having had to let go all their good cattle because they could not make a profit. One generation after the other saw that a farmer's life is not for them because there is no profit to be made. That is what happened and is why a lot of people changed market and went into milk production.

I ask the officials to help us by telling us what extra powers the regulator should get than what has been proposed by the Minister. I ask because I do not know but the officials will know because of their years of experience working in the Department. I would love if that information could be sent to the clerk to the committee as it would benefit us all.

I am not saying that we just get one bite of the cherry. When the Minister does sit down to look at what he can do to strengthen the power of the regulator we need to be able to say please include A, B, C and D. I know that he will include the pricing provision so the regulator will be able to say, "We want to know how much you are charging for a product and how much was paid for it," which will be eye-opening information.

Eileen Lynch (Fine Gael)
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I thank the officials for their attendance and their briefing. Has the 2023 Act been commenced in its entirety?

Ms Maria Dunne:

Yes, absolutely.

Eileen Lynch (Fine Gael)
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On unfair trading practices, I understand that this is a regulation to enforce the existing directive to allow greater co-operation between enforcement bodies within the various member states. What actual power will the regulator have when it comes to legal cases being taken? I appreciate that co-operation exists and information is shared. Also, if a general unfair trading practice emerges at a Union level, the Department looks at different elements such as conformity of language, etc. in terms of notification and highlighting these things. If there is an unfair trading legal case at either a national or European level then what are the powers of compulsion here from one enforcement to another? In particular I mean from the country where the enforcement Act originates.

Ms Angela Robinson:

The Senator has asked a very relevant question. She has also outlined the core functions provided in the regulation that we are discussing today and it was following consultation by the European Commission with the enforcement authorities. The directive does provide for co-operation on enforcement authorities across Europe but what its experience was, in talking to the enforcement authorities, was that it was difficult to get some engagement on that and the enforcement authorities themselves were not sure what information they could share in respect of certain activities within their area. So if there was a supplier based in Ireland, for example, that had a difficulty with a buyer in another member state then there were questions about what information could be taken or what activity should be taken. The regulation sets out the parameters for the enforcement authorities and for the member states to be able to say, "These are the things that we can do." That includes the sharing of information, requesting another enforcement authority in another member state to investigate a suspected UTP that involves, perhaps, a supplier in one member state and a buyer in another member state. So we might call that a cross-border type of UTP.

On the Senator's question on the legal powers for enforcement, the regulation provides for the enforcement by one member state at the request of an enforcement authority in another member state of a fine, a decision or a penalty that has been imposed in that requesting member state. There is also provision for co-ordinated actions where there is a cross-border UTP that involves at least three member states.

It still is not been finalised and has to go to the European Parliament. The Council's mandate is to make sure that there are very strong powers to allow enforcement authorities to co-operate across that, and that includes the legal basis for those interventions and investigations. It also includes, for example, that authorised officers of an enforcement authority in one member state can accompany an investigation in respect of an enforcement in another member state. That is the current proposal.

Eileen Lynch (Fine Gael)
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So the regulation would allow for obligatory enforcement if, say, an Irish buyer takes an action against a French suppler and the decision is made here but the two enforcement authorities work together to enforce that in the second country.

On the other COM proposal, I note that the Department's briefing on the implications for Ireland sets out that the Department is concerned about any potential increased administrative burden on farmers as a result of these new rules in relation to the contracts. What administrative burden is foreseen? What is the extent of that?

Ms Maria Dunne:

Mr. Waldron will reply.

Mr. Ultan Waldron:

At the time when the regulations came out it could have been around having to engage and having written contracts in advance. That would have been the concern about the administrative burden and that is the way the regulations are currently phrased at the moment.

Eileen Lynch (Fine Gael)
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Do the officials think that issue will be resolved, as negotiations are ongoing?

Mr. Ultan Waldron:

The way the legislation is at the moment, the Council has adopted their general approach. As Ms Dunne outlined in her opening statement, the European Parliament's Committee on Agriculture and Rural Development, or the AGRI committee, is due to vote on its position in September, the plenary will take place in October and then trilogues will commence thereafter. We do not have the final set of regulations and there is a transition phase. Again, it has not been set but it normally takes two years between the time the regulations are adopted and published in the journal and entering into force.

Aindrias Moynihan (Cork North-West, Fianna Fail)
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I have one very quick question on COM (2024) 576. There is consultation being conducted with the Agri-Food Regulator. Has the consultation concluded? Has the Agri-Food Regulator made any recommendations on that COM proposal?

Ms Maria Dunne:

This is on the unfair trading practices. Yes, we have worked closely with it all the time. The regulation has now been agreed by Council and will be subject to agreement by Parliament and then trilogue discussions. So, yes.

Aindrias Moynihan (Cork North-West, Fianna Fail)
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There has been quite a bit of conversation about the Agri-Food Regulator. While our focus today is on the COM proposal, it is a topic the committee should look further towards and possibly put it on our programme of work.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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I propose we bring in the Agri-Food Regulator in the future. It is not something for today.

The second proposal, COM (2024) 577, concerns the protection of the primary producer. Reference is made to farmer co-operatives or producer groups. Is there more protection for producer groups or is there anything to ensure they have a greater status? That would be important as we move forward.

Ms Maria Dunne:

There are a couple of things in the CMO. It is about strengthening EU level provisions on contracts, strengthening the economic producer organisations and a framework for fair trading voluntary schemes. Specifically on producer organisations, it is about trying to simplify the process for registration. There is increased financial support for producer organisations where they are implementing operational programmes under the strategic plans regulation. There is some increased co-financing. It is about making things simpler for them and there are more finances under the CAP strategic plan.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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At the moment, where they would bite the hand off you for cattle or sheep because they are stuck for them, producer organisations do not really hold sway. Is it a requirement for factories to deal with producer organisations under any of the legislation? More paperwork for a farmer was mentioned. Under this COM proposal, will a farmer have to have a contract with someone or is that up in the air at the moment? If we start implementing a system whereby someone with ten cattle has to have a contract, that would bring us into fairly difficult water.

Ms Maria Dunne:

On the first question, it is primarily about encouraging producer organisations. The real advantage is collective bargaining in terms of price and imports. What we have done and have been asked to do is to make it easier for them to set up and give them more financial support. There is financial support under the current CAP strategic plan for the first three years of a producer organisation, as well as some administrative support. As it stands, the CMO regulation provides for compulsory written contracts for each delivery of agricultural products, with certain exemptions. A range of derogations can be availed of by member states or a member state can put in place in its own system. That is what the CMO is aimed at.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Is the Department fighting that? It is crazy to have to have documentation if you, as a small operator, are buying fertiliser or selling sheep or cattle. The paperwork involved in this will be horrendous.

Ms Maria Dunne:

It is for written contracts between the farmer and their buyer.

Aindrias Moynihan (Cork North-West, Fianna Fail)
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Would the officials be able to forward us on those derogations?

William Aird (Laois, Fine Gael)
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Chair, you have opened up an awful can of worms, if you do not mind me saying that.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Is the Department concerned about potential problems with the COM? A large producer group will have a contract or whatever. I am referring to farmers who sell ten or 15 cattle or 40 or 50 sheep. How will such contracts work? Does this refer to merchants selling farmers fertiliser or meal? Does that have to be a contract under all of this?

Ms Maria Dunne:

No, it is the farmer when the farmer is selling it. There is a list of processors, including processors, wholesalers or retailers-----

Michael Fitzmaurice (Roscommon-Galway, Independent)
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There will have to be a written contract.

Ms Maria Dunne:

When he is selling it, subject to a number of derogations which member states can put in place.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Do we know what they are yet?

Ms Maria Dunne:

There is a range of derogations referring to existing co-operative structures, producer organisations and the size of the buyer-----

Michael Fitzmaurice (Roscommon-Galway, Independent)
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An ordinary farmer------

Ms Maria Dunne:

-----and the financial level of the transaction.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Are we not going down a certain road with the word "derogation"? I have read about derogations for years. Sooner or later, a derogation comes along and there is a battle with Europe. We have seen that happen with animal medicines, the dairy side and many other derogations. There were so-called derogations for bogs. Are we kicking the can down the road in respect of derogations? In five, six or ten years' time will some Minister, through no fault of his or her own, have to say we are no longer getting a derogation, meaning the whole job is up in a heap? Are we walking ourselves into things that we should not agree to now? Should we instead put the boot in? Should we instead contact our MEPs? What is the advice from the Department? Can the Council of Ministers block some of the contracts to which the officials have referred? I am worried about ordinary farmers who will have to become involved in this. Farmers are not accountants; they try to farm the best they can. I do not want to put more stuff on top of them.

Ms Maria Dunne:

To clarify, we are talking about contracts between farmers and processor, distributor or retailer organisations across all of the sectors covered by the CMO. It covers beef, most of the meats, dairy, etc., subject to exemptions that are specified in the regulation. We consulted on this with farm bodies and stakeholders. The key thing stakeholders wanted was an assurance that any legislation would not inhibit their ability to negotiate the best price. In our discussions at European level, we sought to have as many exemptions as possible which Ireland can avail of.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Can Ms Dunne answer one question I am trying to get to grips with. Maybe she has said it and I did not hear it right. Will an ordinary farmer selling 20 cattle or 40 or 50 sheep have an exemption whereby they do not need to have this contract? Are farmers bound by the regulation if they are not a purchasing group?

Ms Maria Dunne:

The initial regulation proposed that it not apply to contracts of less than €10,000. That figure has now increased to €20,000, if I am correct.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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That is only seven or eight cattle.

Aindrias Moynihan (Cork North-West, Fianna Fail)
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The officials will send us on a list of exemptions or derogations. We are over time and need to wrap up.

Ms Maria Dunne:

I can send the Cathaoirleach the links to the draft regulation, which will list the exemptions and Council mandate.

Aindrias Moynihan (Cork North-West, Fianna Fail)
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Thank you.

Paraic Brady (Fine Gael)
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It is stated that this refers to a contract of the duration of no longer than six months.

Aindrias Moynihan (Cork North-West, Fianna Fail)
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It was in the briefing document circulated earlier.

Mr. Ultan Waldron:

We can send on the link to the latest text. The six months referred to is for a revision clause. In the latest draft, that is out to 12 months.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Can we block this if we are not happy? Can the Minister block this? I have concerns about some of this. I am worried about derogations.

Mr. Ultan Waldron:

The way the regulation is currently written means that the member state in question, depending on the sector or commodity concerned, can avail of the derogation. We have to notify the Commission if we are availing of a derogation.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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How long is the derogation for?

Mr. Ultan Waldron:

I presume it would be exercised for the lifetime of the legislation or until such time as that might be changed. The list is available. For example, there are traditional and customary practices in respect of contracts under €20,000, as Ms Dunne said, relating to co-ops etc. They are listed in the regulation. One is for the milk sector and the other is for all other sectors.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Could we get more information on that? The committee would be interested in examining this. The value of €20,000 today might include seven cattle if they are fit for killing. Could that be increased to €100,000 or whatever?

Aindrias Moynihan (Cork North-West, Fianna Fail)
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We do not have to close off the conversation today. Once the officials send the details to us, we will be able to discuss this.

Ms Maria Dunne:

We sent a briefing note before Christmas on it and we can update it.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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I thank the Chair.

Aindrias Moynihan (Cork North-West, Fianna Fail)
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We can come back on it.

As there are no further matters for discussion, the meeting stands adjourned.