Brendan Smith (Cavan-Monaghan, Fianna Fail)

The value of Irish beef exports in 2008 reached almost €1.7 billion and accounted for almost one fifth of total Irish agrifood exports. The beef industry remains very important in our international trade balance, but also to the rural economy as its contribution is widely dispersed.

Notwithstanding this, and in common with many other sectors of the economy, beef is experiencing difficult times. As consumers and economies have come under pressure, there has been a noticeable shift in spending patterns with a discernible move towards cheaper meats and lower value cuts. This is evident in all of our key markets and is consequently impacting on producer returns. In addition, the strengthening of the euro against sterling presents another challenge to beef exporters, given the importance of the British market.

In 2008, average prices in all beef categories increased significantly, in some cases by almost 20%, and reached record levels. Given that prices are a function of the returns available in the marketplace, the lower prices experienced during 2009, while unwelcome, are not entirely unexpected. The decline in prices to date in 2009 is around 12%. However, prices still remain significantly ahead of both medium and long-term averages for all categories. I am aware of the difficulties falling prices present to both producers and processors alike. The Department and relevant agencies are taking several appropriate steps to address these.

While conditions remain challenging in both our domestic and international markets, our beef exports have remained remarkably resilient. Shipments to both Britain and our main continental markets have held up very well with Bord Bia reporting only slight declines in the year to date. Producers and processors have responded to the changing marketplace and are maintaining their presence in the face of considerable difficulties.

The live export trade is also an important element of our meat and livestock industry and provides a complement to the beef trade. To date this year, this trade has been exceptionally strong with exports almost doubling compared to 2008. Bord Bia continues to work closely with the industry in monitoring and developing emerging opportunities for Irish livestock in the British, continental and international markets. This includes contacts with leading retailers in Britain to establish their interest in cattle born in Ireland and finished in Britain.

The Government, the Department and its support agencies, including Enterprise Ireland, Teagasc and Bord Bia, have developed a variety of non-price strategies to deal with evolving market challenges. Among these are the capital investment aid scheme for the beef and sheepmeat sectors, breed improvement programmes being progressed by the Irish Cattle Breeding Federation and the animal welfare scheme for suckler herds. These schemes concentrate on using the best available scientific and genetic data to further improve the cattle herd and ultimately improve returns to the producer.

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The beef quality assurance scheme, administered by Bord Bia is crucial in reassuring consumers that the beef they purchase from Ireland meets the highest standards of quality, safety and traceability.

In tandem with these initiatives Bord Bia is implementing an enhanced Irish beef promotion strategy for the period 2008-13 in conjunction with key continental retail outlets. Previous efforts to differentiate and reposition Irish beef, concentrating as they have on the key characteristics of Irish beef – traditional grass-based production, full traceability and quality assurance - have proved extremely successful. It is crucial that we continue to target our marketing efforts and promotional strategies on consolidating our place in the valuable European market. Bord Bia is undertaking a 2009 autumn beef promotion campaign aimed at 40 million Europeans in ten major markets.

I am acutely aware of the importance of direct payments to farmers, particularly when market returns are at low levels. In 2008, these payments represented almost one third of total farm revenue, the most important being the single farm payment. I am pleased to remind Deputies that, following my request to the European Commission earlier in the summer, advance payment of some 70% of the single farm payment will commence tomorrow. This payment, in the region of €800 million, is unprecedented and will assist farmers greatly in dealing with cash flow difficulties. I also intend to maximise the balance of payments due before Christmas.

It is true that 2009 has been a difficult year for all sectors of farming with beef producers especially affected. A number of factors have combined to deliver a series of challenges which have had a significant impact on the livelihood of many in the sector. However, I am confident that, thanks to the undoubted quality and uniqueness of our product, together with the range of initiatives I have mentioned, the sector will be well positioned to take advantage of the evolving prospects that recovery will bring. Indeed, European Commission projections of a continued decline in beef production on the Continent over the medium term, thus widening the supply gap already in existence, may even serve to provide further opportunities for Irish producers to fill.

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