Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I welcome the Ceann Comhairle, all the Members of the House, the Press Gallery, and the staff of Leinster House back for what will be an eventful session. We have much to do.

On the Deputy's question, I acknowledge the extraordinarily difficult times beef farmers are facing. For more than a year, prices paid to beef farmers at the factory gate have been very low at approximately €3.50 per kilogram, which is less than the cost of production. Many farmers are at their wits' end because these prices have persisted for so long. There are many reasons that prices are low. Consumption and demand are flat, production is up, and sterling is weak. The price that Irish farmers get, however, is roughly the European average. It is set by the market, not by the Government or anyone in this House. It is largely a function of supply and demand.

The Government is certainly trying to help and has done a lot to assist farmers in the last year or so. For example, it is opening new markets in China and across Asia. There has been a 60% increase in Bord Bia's budget to open new markets around the world to Irish beef. Some €40 million was provided in the last budget for areas of natural constraint payments and for the beef environmental programme. In recent weeks, €100 million was made available to support farm incomes. Approximately €80 million of that €100 million has been allocated. There is still €20 million available. These are very significant supports. They are much greater than the supports that would be offered to any other loss-making sector. They have been provided for a reason, however, which is that we care about family farms, the livelihoods of our beef farmers and the future of the beef industry and its wider value to the rural economy.

Producer organisations have now been recognised for the first time. This could potentially change things significantly. At the moment farmers are price takers. The establishment of producer organisations for the first time allows farmers to come together as a group to negotiate proper contracts and proper prices with the factories. That can and should help to increase the prices paid to farmers but it must be allowed time to operate and function.

On the questions the Deputy raised, the Common Agricultural Policy will be reformed as part of the new EU budget. It is the position of the Irish Government that the CAP budget should be protected in full. We do not agree with, nor will we accept, the 5% cut proposed by the European Commission. If we are to convince European taxpayers and our European partners to defend and protect the CAP budget, however, the CAP will need to be reformed and modernised to take account of matters such as the environment and animal welfare, even more so than it does at the moment.

The Mercosur agreement is not yet signed. That is not correct. That deal may be put to member states for ratification in approximately two years' time. As I have said before, we will not support a trade agreement that damages the environment or exposes our industry to unfair competition.

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