Ann Phelan (Carlow-Kilkenny, Labour) | Oireachtas source

The Deputy is right when he says I spoke on this issue in the other House yesterday. It is important for me to reiterate what I said on that occasion. The Deputy will appreciate that I am responding on behalf of the Minister, Deputy Coveney, who is in Galway today for bilateral meetings with the EU Fisheries Commissioner, Karmenu Vella. The Deputy has spoken about market developments in the sheep and dairy sectors, which are two of the most important elements of our agri-food industry. I will deal with the sheep sector first.

Primary output from the sheep industry is worth approximately €230 million. This value has grown significantly in recent years. More than two thirds of our output is exported. In 2014, exports totalled almost 48,000 tonnes, with a value of €218 million. The sheep sector in Ireland is heavily dependent on the export market because domestic consumption is approximately 30% of overall production. France and the UK continue to be our core markets. The French market is usually represents twice the size of the UK market. This reflects the strong demand and reputation in France for Irish lamb and the consumer preference in the UK for the British product. I am aware that the sheep farmers are vulnerable to price fluctuations. While prices are subject to the normal dynamics of the marketplace, the Government has provided a range of financial and structural supports to the sector that can help to make it more resilient and position it to avail of development opportunities.

On the issue of sheep prices, my Department monitors average sheep prices and sheep slaughtering figures on a weekly basis because the two are clearly inter-linked. While the recent movement on prices has been disappointing, it is not out of line with the trend experienced in other countries and there have been some signs of recovery this week. I am satisfied that recent movements do not point to a structural difficulty within the overall sheepmeat sector, but instead reflect the fluctuations that can happen at this time of year. The latest available figures show that after a strong first quarter in 2015, when the average Irish price was approximately 11% more than in the same period in 2014, prices have fallen back. This change in price in recent weeks is probably due to a combination of various factors. Supplies are in full flow at present due to seasonal factors. At the same time, there are poor market conditions. This is believed to be driving down average prices as measured on a weekly basis.

While this recent dip in prices is disappointing, it remains the case that at the end of June the average year-to-date price was running at approximately 4% ahead of the price for the same period last year. This week prices have started to rise sharply again, and demand for sheep and lamb from factories is very strong.

In recognising the vulnerability of sheep farmers, the Minister has introduced a number of measures to help drive on-farm viability. These include the sheep technology adoption programme, STAP, which was introduced in 2013 and has played a major role encouraging technology adoption on farms, while also requiring participants to undertake a number of farm tasks. These farm tasks make use of the best technologies available to sheep farmers in Ireland while also encouraging improved breeding. STAP is currently in its third and final year. An average of approximately 4,000 farmers have participated in the scheme each year, and total funding of more than €6.5 million was spent in 2013 and 2014.

Various other schemes in the rural development programme, RDP, are also of direct relevance to the sheep sector. For example, the green low-carbon agri-environment scheme, GLAS, will benefit sheep farmers, and they will continue to be significant beneficiaries from the areas of natural constraint scheme. A series of capital investment schemes is being introduced under the TAMS II scheme. It must also be remembered that the sheep grassland scheme, under which more than €65 million was invested in Irish sheep farms during its lifetime, has now been included in the direct payment of each sheep farmer under revised CAP arrangements. The Food Wise 2025 report launched last week also includes included a number of recommendations relating to the sheep sector, and the Minister will put in place a robust implementation process to monitor progress on implementation.

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