Thomas Pringle (Donegal South West, Independent) | Oireachtas source

I welcome the opportunity to contribute to the debate in respect of the crisis in the beef industry. This crisis affects 100,000 farms across the country. The most recent figures on farm income have shown that the average farm income in the beef sector is around €11,000 and when one compares that to the average income in the dairy sector of somewhere near €64,000, it highlights the extent of the crisis in the beef sector. Beef farmers are left at the mercy of the processors for their income who through the marts keep the price at the levels that suit them. I wonder whether an actual "market" is in existence in this country at all. The Minister of State said last night in his contribution that the relationship between processors and farmers is an interdependent one and farmers and processors always fight their own corners to get the best prices. I do not know where he gets this view of the relationship. I am not from a farming background but I do know that the relationship is far from interdependent. It is one where the processors dominate and dictate the price that farmers can achieve for their cattle. Measures spoken about by the Minister of State such as the Beef Pricewatch online tool do very little to help farmers improve the value of their cattle because the price variation appears to be limited and the additional cost involved in getting cattle to the location where they can get the best price could undo any of the value achieved.

Farmers always cite the example of the price of meat in the multiple retailers in the country to highlight how they are being short changed on their cattle but we export 90% of the beef produced in this country and focusing on the retailers does not really address that issue. Even if the retailers paid a realistic price for cattle, it would only affect 10% of the beef produced here. The focus must be on the processors and factories in respect of the price for farmers. When we have a situation in this country where the entire market is dominated by very few players with one dominant player, there will not be competition in respect of prices for the primary producer. We will continue to see a situation where primary producers will see a loss of up to €300 per head when they sell their stock. Small producers will never be able to secure fair prices from dominant processors. That is the simple fact of how a market economy works, especially one that is dominated by very few operators. It is interesting that the Competition Authority has never looked into the beef industry and how the pricing system operates. I think it is about time that it did so. Although the authority is quite toothless, it may find within itself a way to look into the operation of the beef market in this country.

Over the last 15 years or so, many small abattoirs have been hounded out of business by the enforcement of stricter and stricter standards on them that have left them unable to continue to operate. In one case that I know of personally, a small butcher who had an abattoir where he used to slaughter his own cattle was forced to spend over £30,000 as it was at the time to upgrade his facilities. Within months of reopening, he was visited again and told that he would have to spend an additional £20,000 and at that stage, he decided to give up and close his abattoir. It was not financially viable for him to continue. This has happened to hundreds of small processors around the country and, significantly, the effect of this was that it has removed them from the marts bidding against the large processors for cattle. It was a convenient way of getting rid of competition.

The motion calls for the introduction of a beef regulator and I would support this call. The Minister has convened a round table to discuss recent challenges but I wonder why such a "softly, softly" course of action is being taken. The beef sector needs determined action. If the processors do not want a regulator, let them open their books to the Competition Authority to examine and let us see how the market is working.

Live exports could help with boosting competition for animals in the State. I have heard anecdotal evidence that independent processors in the UK are wary of buying live cattle from Ireland because large processors control the offal rendering business in the UK and they are afraid that they would not be able to have their meat and bone meal dealt with if they entered into the market for live cattle from here. Finally, I urge the Minister to work harder to resolve the labelling difficulty that has closed off the sale of cattle into the Six Counties because farmers need access to whatever markets they can get, however limited, to ensure the market is not totally operating against them. I urge the Minister to take action on that as quickly as possible.

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