Willie Penrose (Longford-Westmeath, Labour)

Beef is almost back to the price it was when I was a student. If farmers cannot buy silage cheaper than €35 per bale then purchasing meat or feed will be the only real option for them to maintain stock against a poor market for sales. I acknowledge and welcome the move of the Minister to front-load payment. It is extremely important and I have noted it because it will help to address animal welfare concerns and it will allow cattle to be fed adequately. However, much of that money will be subsumed by the very banks to which I have referred to try to meet other areas of payment. Given the weather of the past week, the remainder of the country is in a similar situation to the area covered by the study, that is, north west Cork, west Limerick, north-west Galway and Cavan. Most farmers will encounter a fodder shortage.

Farmers can only replace fodder by using meal and this presents a major cost input that cannot be met because of falling incomes.

The REPS payments have been cut and changed, the disadvantaged area payments under the social welfare scheme have been significantly cut, the early retirement scheme has been turned upside down and the isolation scheme has been emasculated. All of this has meant incomes have dropped by 28% according to the CSO and over two years this will become very significant.

I spoke to a number of beef farmers and discovered they are depressed and in dire straits. It may be stated that we have heard all this before. However, on this occasion there has been a major impact on beef farming. Many people are considering leaving beef farming. I know people who stuck with the industry in the past, in good and bad times. In addition, everyone is aware of the situation for dairy farmers. In that context, bringing forward payments or trying to secure payments is extremely important. I hope the Minister will meet the relevant farm interest groups, discover what are their needs and put in place a plan of action.

I wish to address some of the issues relating to the McCarthy report. Today's Teagasc bulletin highlights the importance of research in assisting farmers to maximise their potential through using evidence-based models to maintain yields against falling incomes. Teagasc is an essential component in maintaining and increasing our comparative advantage in agribusiness and agrifood production. We retain that advantage and we should never resile from expounding on our clean, green image. However, we must penetrate the high-value markets. It took some time to change our production systems in the past in the context of moving from Holstein breeds and half-breeds to pure beef breeds. Some 80% of our production should be concentrated on pure beef breeds and good beef cross-breeds in order that we might penetrate the markets to which I refer. At one stage, we could not get even one in five of our cattle onto high-quality European markets. I accept that the position has changed dramatically in the interim but there is a need for further action.

Jim Power of Teagasc recently stated that Ireland could become the Silicon Valley of agrifood production, particularly if it takes serious steps to penetrate the sector. I wholeheartedly agree with this analysis. We must do what those in Silicon Valley did in respect of IT and high technology, namely, sustain and develop this natural resource. In addition, when the agrifood production sector experiences difficulties we must not abandon it.

The McCarthy report recommends that some €14 million could be saved through a restructuring of how research funding is awarded. It also recommends the establishment of a single funding stream for research in respect of which each entity could compete. This could work, in theory, if it were done fairly. However, I have major reservations as to whether that would be the case. I am sceptical with regard to cutting the research of an entity such as Teagasc, which is driving higher rates of output in our basic productive sector, which will drive economic growth in the future and which is intent on retaining the maximum number of farmers on the land.

The McCarthy report recommends that a total of €100 million be cut from the overall research budget. On a pro rata basis, this means funding for agricultural research would be reduced by €14 million. The implied assumption in the report is that Teagasc and other agencies are given just that for which they ask. In reality, however, the Department of Agriculture, Fisheries and Food is, like all other Departments, obliged to make its case for funding to the Minister for Finance at budget time.

The agriculture industry is at a crossroads and farm families are struggling to survive. Is the Government serious about this indigenous industry which accounts for more than 25% of economic activity in the rural economy? Given that this week's extreme weather has led to hardship for farmers and rural dwellers — residents in particular urban areas were also affected — it is important that we should do everything possible to secure the agriculture brief when appointments are made to the European Commission. We must not pass up the opportunity to have an Irish Commissioner in charge of matters during the run-up to the CAP negotiations in 2013. Every effort should be made to secure this brief. If implemented, the proposals in the McCarthy report would decimate rural areas. The halving of payments, from €80 to €40, under the suckler cow welfare scheme in the most recent budget was cruel in its own right. However, the abolition of the scheme, as recommended in the McCarthy report, would be detrimental to the 50,000 people who avail of it. Up to 10,000 farmers will leave REPS 4 during the next 12 months.

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