Jan O'Sullivan (Limerick City, Labour) | Oireachtas source

I thank Deputy Humphreys for raising this issue. I am taking this matter on behalf of the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney. I will convey to him the issues raised by the Deputy. The issue of labelling is of particular concern to her.

The Minister is aware of the importance of the pigmeat and poultry sectors to the Irish economy. Together, these sectors have a farm gate value of almost €500 million and support over 13,000 jobs directly and in ancillary services. These sectors account for more than 70% of the meat consumed in Ireland and have a presence in all areas of the country.

The Minister and his Department are also aware of the concerns currently being expressed by the sector, particularly with regard to feed costs. High costs, most notably for cereals and compound feed, remain an issue. Producers are especially affected by the increase in cereal prices since June 2009, given that cereals account for approximately 70% of feed.

Market prices for cereal-based animal feed and soya are a function of global supply and demand dynamics, currency relativities, weather conditions and other external factors.

Increasing feed prices in 2012 have arisen, primarily due to poor weather conditions in the USA, Brazil, Argentina, Russia and the Ukraine. The expected shortage in cereals comes on top of relatively poor harvests in recent years, a growing world population and a rising middle class in China. Thus there is a rising demand for animal feed and animal feed-based products at a time when supplies are short. Given that Ireland imports much of the feed used in both the pigmeat and poultry sectors, the impact of price increases in these commodities is acute in these sectors.

Against this background, producers have in recent years taken measures to increase feed efficiency and output per unit. Furthermore, while input costs have increased significantly in recent years, the returns available to producers have also risen sharply. This has helped ameliorate the situation to some extent.

At the end of October, pigmeat prices were almost 24 cent per kilo ahead, year on year, which equates to an increase of more than 16%. Compared to the same week in 2010, per kilo prices have risen by over 40 cent per kilo, or almost 31%. The forecast decline in the European sow population and consequent lower production and ongoing high demand for European pigmeat internationally should lead to even higher prices in the coming months.

The production model in the poultry meat sector in Ireland is quite different from that in the pigmeat sector, with a high degree of vertical integration between processors, who supply stock, feed and other inputs, and growers, who typically provide housing and capital equipment and who rear the stock to slaughter age. In this sector the prices paid to growers depend on contractual arrangements with the processors. EU market statistics published last month suggest that broiler prices across the EU are marginally higher than in 2011, while CSO statistics for July suggest that output prices are 20.6% higher than last year.

The Deputy will be aware that, due to Ireland's membership of the Single Market, unilateral actions or interventions to support individual sectors is not permitted. For his part, however, the Minister and his officials will continue to press the European Commission to make use of all the available market supports when circumstances require it, to ameliorate the worst effects of price volatility. Indeed, the aids to private storage scheme introduced for pigmeat in 2011 played a significant role in putting a floor under pigmeat prices at that time. This, together with release of cereal stocks from intervention, improved the situation somewhat at that time.

In the context of CAP post 2013, the Minister will continue to press for the retention of flexible market support schemes which can be deployed as a safety net when circumstances require, with a view to ameliorating the worst effects of price volatility.

Domestically, a number of initiatives have been explored and developed. For example, Teagasc, through its Moorepark pig research facility and the provision of FETAC courses in pig production and benchmarking pig herd performance, plays a critically important role in improving productive capacity at farm level. Teagasc has also circulated producers with a number of the options available to them to reduce feed costs and improve feed efficiency.

The Department of Agriculture, Food and the Marine and its agencies have supported both the pigmeat and poultry sectors through the provision of capital investment grants to assist in compliance with welfare regulations, through Bord Bia's promotional campaigns and through the development and operation of the Bord Bia Pigmeat and Poultry Quality Assurance Programmes, PQAS, which are a critical component in consolidating the position of Irish product on the domestic market.

With regard to upcoming animal welfare changes in the pig sector, the Department introduced a targeted agricultural modernisation scheme, TAMS, for sow welfare in June 2010. Grant aid is available at a rate of 40% to eligible producers. The provisions of the scheme were modified earlier this year to allow multiple applications from pig farmers with more than one sow house, together with an increase in the ceiling to €500,000 for the first house and €300,000 for each of the next three. Furthermore, in order to ensure that as many pig producers as possible would be in a position to comply with the new EU animal welfare rules, the Minister extended the closing date for applications to the end of January 2013. All applications received during the period of this extension would now be included in a new final tranche for which a sum of €3 million has been made available. The final date for completion of work and the lodgment of payment claims is 30 September 2013. This will bring to €16 million the funding made available to pig producers under the sow welfare scheme.

In the poultry sector, the Department also operated a scheme to assist egg producers in complying with the conversion to enriched cage production systems in 2011. A total of €16 million was made available and a subsequent Food and Veterinary Office, FVO, audit in February of this year confirmed that Ireland had complied fully with the requirements.

In so far as international trade is concerned, the Minister has been extremely active in developing relationships in new and expanding markets in order to build the kind of confidence in Irish production and control systems that provide a platform for long term trading relationships in the future. During his trade mission to China earlier this year, the Minister raised the issue of market access for both pigmeat and poultry, and hopes that this engagement will ultimately deliver a considerable return for the Irish pig and poultry sectors.

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