Mary Coughlan (Donegal South West, Fianna Fail)

Ba mhaith liom, ar dtús báire, mo bhuíochas a ghabháil don Teachta as ucht ócáid a thabhairt dom cur in iúil don Dáil cad atá ag dul ar aghaidh. The decision by Dairygold Co-Operative Society Limited to close its pig slaughter line was a commercial one for the society, made in the wider context of Dairygold operations and in accordance with broader rationalisation objectives. I fully understand the huge level of disappointment for any employees and their families affected by this issue. I also understand and share the concerns of pig suppliers and producers to Galtee Foods who have traditionally supplied pigs to Galtee processing plants but are now faced with the prospect of finding alternative outlets for their animals.

Since the announcement of the Galtee closure, my Department has maintained regular contact with IFA, Enterprise Ireland and other pig processors, with a view to ensuring that a seamless and streamlined transition of the producer-processing supply chain would be established. There is agreement among the main processing entities and by Enterprise Ireland that sufficient processing capacity is available in the country to absorb the surplus that will arise from this closure.

I have been assured that the 9,000 or so pigs that were processed in Galtee on a weekly basis can be satisfactorily accommodated in other plants within the country. This means that there should be no disruption to processing nor to trade and that farmers will have a ready-made outlet to which pigs may be sold, resulting in different processing outlets but no restriction in processing options nor in marketing outlets. I am encouraged by the considerable efforts being made by Galtee, the IFA and other processors to ensure a smooth and orderly transition of the Galtee supply base. This is critical to the future profitability of the entire pig processing chain and will ensure that the transition is managed in the shortest possible timescale and with the best possible outcome for all concerned. It is also critical to the maintenance and continuity of supply to the retail sector and will demonstrate the capacity of the Irish pigmeat industry to respond effectively and constructively to a challenge such as this. I am encouraged that Galtee has indicated its intention to continue to process pigmeat in Mitchelstown, using the valuable Galtee brand name and utilising Irish raw materials.

There is never a good moment to announce a restructuring that causes either market disruption or job losses. However, decisions that have broader strategic aims are often critical to maintaining and expanding markets and jobs in other areas. One of the strategic aspects of this closure concerns the national structure of pig processing in Ireland, which, according to the Prospectus study on the pig industry published in 2000, concluded that there was serious over-capacity in the pig slaughter sector and that this burden of capacity was causing inefficiencies.

It recommended that rationalisation of existing slaughter capacity must be undertaken if primary processing in Ireland is to remain competitive. This would mean that excess capacity must be removed by plant closures with a commensurate increase in capacity utilisation of the remaining plants.

One effect of the Galtee closure is that there should be greater utilisation of slaughter capacity elsewhere, as recommended by Prospectus, which, in turn, should provide a better platform for the Irish pigmeat industry to tackle competition head on from abroad. Anything short of best competitive structures to deal with competition on the home and export markets will deprive our primary production sector of viable and profitable outlets for its produce and reduce Ireland's capacity to maximise the production of top quality products at competitive prices. The decision has been taken for Galtee's own commercial reasons. At this juncture, it is in the interest of all concerned in the sector to ensure there is no resultant disruption in the slaughter of pigs as a whole and that the important producer-processor chain continues to be treated as a fundamental element in the future success of the industry.

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