Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I have made it abundantly clear, as have all of those who were party to the negotiations, that it is not legally possible to discuss fixing a base price; that is contrary to competition law. One of the leading organisations at the heart of this problem has officially communicated to us that it recognises that base price cannot be part of the negotiations. It has been to the forefront in establishing producer organisations, which it recognises as the vehicle through which talks on base price can be progressed.

Deputy Penrose is dead right in the context of producer organisations. They thrive on the loyalty of those who are members not to be peeled off individually by sweetheart deals. The strength comes in numbers in negotiating specification, in forward pricing, input costs and so on. They can deliver in so many ways for farmers and we have one up and running. It is a credit to those who seized that initiative. They are part of the landscape in most other European countries, where farmers come together. They address the issue that they are price-takers as individuals and group together to negotiate on the basis that "we will provide you with what you want but you must share the risk with us." That is how base prices are addressed and improved. The bonus structure is on top of that. I encourage farmers to take that issue up. I do not know the figures the Deputy is talking about. They sound wide of the mark but I am not going to comment on them. Producer organisations will enable farmers to get a fairer share of the returns.

Deputy Harty asked about the commitment in page 1 of the agreement to the establishment of a beef market price index. This will operate in the same way as Ornua's purchase price index, PPI, for the dairy sector. Its gives an idea of the international benchmark in any given week for the price of the product. Farmers can use that to compare the price being paid here with the average European price. It will probably be based on the top six or seven markets to which we export, including the returns and the volume going into each of those markets. It should also be able to factor in offal prices abroad and indicate what they should be to the primary producer here. It will be another instrument to bring greater transparency to the price model and it is a welcome development. The task force that is being established is to oversee the provisions of the agreement but also, in a number of areas where there is contention or where there are to be further studies, to take on board outcome of the studies and what next steps may be taken.

The taskforce will comprise all the stakeholders. It will be independently chaired. All of this is contingent on getting this deal over the line. There are things that can be delivered immediately and they have been front-loaded in terms of the first page of the agreement. There are other issues where there is a difference of opinion and there are commitments to have those matters investigated. I refer to alleged anti-competitiveness practices, greater price transparency, directors and a regulator for the sector. They are all things the taskforce will oversee and drive and it will set its own agenda because the agenda will change as well. That is what the taskforce is about.

The review of the grid is a source of contention. The grid is not the property or the invention of the Department. It is a formula for paying that was negotiated between the processors and farm organisations some years ago and it is overdue a review.

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