Charlie McConalogue (Donegal, Fianna Fail) | Oireachtas source

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following: "notes that:

— the annual rate of consumer price inflation, as measured by the European Union's (EU) harmonised index of consumer prices, has picked up sharply in recent months, reaching a multi-decade high of 5.7 per cent in December before moderating somewhat to 5 per cent in January;

— the recent increase in inflation is partly a result of temporary factors related to the pandemic, which are expected to ease gradually over time;

— the key drivers of inflation in recent months are 'base effects', the imbalance between global demand and supply that has emerged as economies re-opened, and increases in global energy prices;

— Budget 2022 contained a large range of measures to protect households from the rising cost of living, including a personal income tax package worth €520 million next year and a social welfare package of over €550 million;

— the fuel allowance was increased by €5 per week to compensate lower income households for the additional energy costs they are likely to incur;

— in addition to the Budget 2022 measures announced in October last, the Government has this month approved a further package of measures to the value of €505 million to mitigate the cost of living including an increase in the energy credit to €200 including VAT, estimated to impact just over 2 million households;

— a lump sum payment of €125 on the fuel allowance will be paid to 390,000 recipients;

— there will be a temporary reduction in public transport fares of 20 per cent from the end of April to the end of the year;

— the reduction of the Drugs Payment Scheme from €144 to €80 will benefit just over 70,000 families;

— the Budget increase to the Working Family Payment will be brought forward from 1st June to 1st April;

— there are reduced caps for multiple children on school transport fees to €500 per family post primary and €150 for primary school children;

— Ireland is a small, open economy, where wage growth in excess of other economies erodes our competitiveness and puts future jobs and economic growth at risk;

— Budget 2022 provided a gross vote of €1.858 billion for the Department of Agriculture, Food and the Marine, and this is in addition to almost €1.2 billion in EU funded direct payments received annually to support farm incomes;

— in October 2021, the Minister for Agriculture, Food and the Marine tasked Teagasc to lay out a credible roadmap to assist farmers in the short-term with the rise in fertiliser prices as well as offering a long-term solution in the move to reduce dependency on chemical fertiliser;

— the Minister launched the soils, nutrients and fertiliser campaign on 26th January last, a strategy that can ease the price pressure on farmers and will be good for the environment and for farmers' pockets, particularly in seeking to address the challenge of increased fertiliser prices;

— in January 2022, the Minister for Agriculture, Food and the Marine met with the main banks to discuss the current challenges in the pig sector and the importance of their ongoing support, with the key message that farmers experiencing cash flow difficulties should engage with the banks as soon as possible to discuss options and that the banks remain committed to supporting their customers in the period ahead;

— the Brexit Impact Loan Scheme and the Covid-19 Credit Guarantee Scheme, both of which are financed by the Department of Agriculture, Food and the Marine in partnership with the Department of Enterprise, Trade and Employment, can be used for working capital and include features which will assist the current financial needs of pig farmers;

— Bord Bia has intensified its efforts to promote quality assured Irish pig meat in the domestic and export markets with dedicated TV, radio and national print media advertising campaigns planned for Q1 2022, and also has two EU programmes that have significant funding allocated towards pig meat promotional activity currently running in China, Mexico, South Korea, Vietnam and the Philippines; and

— Teagasc has intensified its dedicated, ongoing advisory supports being provided to pig farmers and is actively engaging with pig farmers to explore financial options potentially available to them and to assist in discussions with financial institutions; and

recognises that:

— the Government has been pro-active in limiting the fall-out from higher rates of inflation;

— to support households and firms, the Government has made available €48 billion of fiscal support during the pandemic, one of the most significant policy responses of any country in the world;

— this has led to a significant increase in the general Government debt of around 11 per cent of national income; and

— Ireland's public debt is almost a quarter of a trillion euros as a result, and among the highest in the developed world on a per capita basis."

On behalf of the Minister, Deputy Donohoe, and Government colleagues, I thank the Deputies for bringing forward the motion. As they will be aware, the Irish agrifood sector is our largest indigenous industry and of enormous importance right across the country and in rural Ireland in particular. It is a sector that touches off every rural parish in the country and supports a balanced regional economy that drives €13.5 billion in exports. It is truly an exceptional sector with excellent farmers, food producers and processors at its core. Whether it is through the Common Agricultural Policy, CAP, or direct Exchequer supports, this Government stands full square behind our farm families and food producers. That has been our form and track record at all times since this Government came to office. Despite many of the markets for Irish produce remaining relatively strong over the past 12 months, bringing solid returns to farmers, input costs have increased for all farmers, be that for feed, fertiliser or fuel. In some cases, the increase in output prices has been eroding market returns and that is clear.

Specifically, the pig sector has been at the centre of the challenges of these input price challenges while also suffering a considerable dip in the market. Coming as it did from a base of €330 million export value in 2010, the pig sector has shown exceptional growth over the last decade. It is the third largest of our livestock sectors now after dairy and beef, accounting for 6.3% of our output value or more than €930 million in 2021 in exports, supporting approximately 8,000 jobs. As well as this valuable contribution to our national economy, it is also a key contributor to our rural economy and communities. As we know, Irish pig farmers are currently facing exceptional challenges due to a combination of extremely low prices and extraordinarily high input costs. Mirroring the situation that has been presented across the EU over recent months, Irish pig farmers have seen their margins decimated. I know this is an issue on which Deputies have focused very significantly in their Private Members' motion today.

As Deputies will know, the Minister of State, Deputy Heydon, and I have engaged at length with the stakeholders in this sector and through the Irish Farmers Association, IFA, national pig committee, very much in understanding and working with them knowing the challenges they are under at the moment. While input costs present an issue for all sectors and will continue to do so during 2022, the pig sector has been particularly impacted. Production is very dependent on the use of compound feeds and it is thus more exposed than other sectors to fluctuations in feed prices. For the sector, this price cost squeeze is being felt acutely already and the sector has not shared the positive prices context of other sectors over the course of the last few months. Rather, it is caught now in a low point in the price cycle with global market disturbance and worsening price cost squeeze.

With many farmers reporting that credit lines extended to them for feed are being curtailed, the cash reserves built up over the better 2019-20 period will deplete accordingly. I know feed mills are working with their customers but they are also under pressure. Feed prices have risen consistently since the beginning of 2020. The world consumed more grain in the last year than it produced and world grain demand is growing at a rate of 1.8% annually. These factors influencing the increase are twofold both in global demand and increased input costs. Along with other agriculture ministers, I have called for an integrated EU-wide approach and for the European Commission to deploy appropriate solutions to both the concerns around input cost and current severe market disturbance in the pig sector. I continue to raise these issues at EU level. Like ministers in many other states, I have needed to assess what national support we could put in place within our own capacity. I raised this matter again with colleagues and with the Commissioner as recently as Monday at the European Council meeting.

A series of measures have been brought forward to support the Irish pig sector, including intensification of promotion activity by Bord Bia and advisory support from Teagasc. There is also financial support, which is important here as well, through the Brexit impact loan scheme and Covid-19 credit guarantee scheme, both of which are financed by the Department of Agriculture, Food and the Marine in partnership with the Department of Enterprise, Trade and Employment and can be used for working capital. They are important supports at the moment. The Minister of State, Deputy Heydon, and I also recently met with the main banks and the Strategic Banking Corporation of Ireland, SBCI, specifically to discuss the crisis. The banks have outlined their continued commitment to supporting their customers and I know farmers are engaging with them.

Importantly, in terms of taking action at national level, I was pleased yesterday to announce a support scheme with a fund of €7 million, which will allow for partial compensation payments in the region of €20,000 to pig farmers. I delivered this package following thorough engagement with the IFA and its national pig committee. I am grateful for the support of my Cabinet colleagues in approving this support package yesterday. It is an emergency response as an urgent short-term solution to assist producers that will be viable for the current extreme market circumstances. I believe it is the biggest package there has been for the sector at any stage over the country's history and is a reflection of the challenge the sector is under at the moment. It is also at the maximum level of €20,000 that can be awarded to any one farm under the state aid de minimisrules. That is the mechanism we are using to introduce this scheme to ensure it can be brought to farmers as quickly as possible at a time when they are under immense pressure. I believe this support scheme reflects the challenge farmers are under. I assure Deputies that my Department and the agencies will continue to do all they can to support pig farmers through the difficult period ahead.

As we are all aware, farmers are facing increased fertiliser prices due to factors outside of their control. In a broader sense, energy prices remain well above 2021 levels and increased global demand continues, particularly from the big grain-producing nations. Increased transport costs and EU-imposed tariffs and duties on certain third-country imports also add to these prices. Again, it is an issue I have raised consistently at European Council level.

The spike in prices will have an impact on farm margins in 2022, but farmers led by advice from my Department and from Teagasc are taking steps to reduce use and mitigate where possible the worst effects of the increases. Last year, I tasked Teagasc with laying out a credible roadmap to help farmers reduce their dependency on chemical fertiliser in the short and medium term. Last month, I launched the 2022 soils, nutrients and fertiliser campaign at Teagasc Ballyhaise College in response to the unprecedented fertiliser price levels. This roadmap can be good for the environment but, particularly important, it will be good for the pocket at the moment. We all know that there is undoubtedly much more that we can get out of the effective use of organic fertiliser in terms of how it is applied, when it is applied and in maximising its capacity to reduce costs and to grow grass.

I have also written to the European Commissioner, examining the effect of the European market of removing anti-dumping measures. A decision is expected shortly on this. Notwithstanding all of this, I am acutely aware of the challenges that many farmers will face this year. We are working hard to offset these increases. As Deputies will know, since I was appointed as Minister for Agriculture, Food and the Marine, I have sought to use the Exchequer funding in the most effective way possible to support our farmers. Working with Cabinet colleagues, including the Minister for Finance, Deputy Donohoe, and the Minister for Public Expenditure and Reform, Deputy Michael McGrath, we delivered an 11% increase in the Department’s budget for last year, which was followed up by a 2% increase on top of that for this year. This funding is being used to support farmers to underpin incomes through the continuation of key schemes, including the green low-carbon agri-environment scheme, GLAS, and the beef data and genomics programme, as well as creating new measures, such as the straw incorporation scheme, which can deliver for example €10,000 to a 100 acre tillage farm.

We are also seeking new and innovative ways of protecting farm incomes and ensuring their long-term viability for the sector. As the Deputies will know, in the past, often between CAP programmes, there have been gaps in schemes where they did not exist. That did not happen this time because the Government has made a massive commitment to ensure that we support farm incomes and that we support farmers. We have continued all of those schemes.

On behalf of the Minister, Deputy Donohoe, I thank the Deputies for bringing forward the motion today. As they can see, we are taking a whole-of-government approach in supporting farmers and farm families. Our farm families, our rural communities and our food producers are the backbone of this world-class sector. We are taking every step to support them at this challenging time. Through the incoming CAP strategic plan, which will run from next year until 2027, I secured an extra €1 billion for various farm scheme supports. That is a 50% increase on the previous CAP programme. Again, it is unprecedented in the history of CAP in this country that we could deliver a 50% increase in funding from one CAP period to the next. The figure is a full €1 billion. It is a reflection of how this Government, by being in office, by being in government, by delivering, by working hard day-to-day and by not necessarily talking on the sidelines, but by getting in, rolling up its sleeves, putting farm families at the centre of what it does, is delivering for them every week, every month and every year while it is in office. That is what we are doing. That 50% increase of €1 billion will enable us to do that by improving many of those schemes next year. For example, the new flagship agri-environment scheme will see up to a maximum payment of €10,500 to farmers taking part in the co-operative measures. This is real money to real farm families. We are making a real difference to them by being in government, by working hard for them day-by-day and by delivering.

We are, therefore, taking an approach to address short-term challenges now, while laying foundations to ensure the long-term viability and success of our agrifood sector, as well as the viability, success and profitability of our farm families. This Government is doing everything in its power to back families and our farmers and it will continue to do so.

See this speech in context