Thursday, 19 January 2023
Agricultural and Food Supply Chain Bill 2022: Second Stage
Matt Carthy (Cavan-Monaghan, Sinn Fein)
I welcome the Minister and his officials. The establishment of a food regulator has been a long-standing demand of Sinn Féin and many farm organisations. I have regularly stated that an enforcement authority that protects farmers and communities against the stranglehold of dominant processors, particularly meat factories and multinational retailers, must be a central plank in delivering a fair price to Irish farmers for their quality product. Farmers have been at the mercy of processors and retailers for too long. They are price-takers in every sense. Farmers do not get, and traditionally have not got, a fair share of the profits from their produce. A big part of the problem is the lack of transparency in the sector. We know how much farmers receive for their product either at the factory or in the mart and how much consumers pay for the end product. The problem is that in between, we do not know what margins are made. What I have described as the greatest secret of Irish agriculture still holds true. There are huge profits in beef, for example. The problem persists that those profits are not going to the people who are doing the bulk of the work, namely, our primary producers and family farmers.
We need a regulator with real teeth to ensure fairness and transparency. The EU unfair trading practices, UTP, directive did not go far enough to rebalance the scales for primary producers in the market chain. That is why I voted against it while I was a Member of the European Parliament. I was particularly disappointed that we were not able to secure EU-wide agreement at that level to ban below-cost purchase of agricultural goods. While the directive allows for member states, on an individual basis, to strengthen provisions as well as to add new UTPs, I expressed a fear in the European Parliament that some governments, particularly an Irish Government made up of Fianna Fáil or Fine Gael, would fail to utilise this flexibility ambitiously enough. This fear was based on the historical legacy of these parties protecting the interests of meat factories above those of farmers. I was concerned that an Irish Government would suggest that if we were to act unilaterally to protect farmers' interests, it would place processors here at a disadvantage. Too often, my fears have been compounded.
To date, the Government has taken a minimalist approach to the implementation of the UTP directive, transposing it virtually at the last minute, unedited, as a statutory instrument. The resulting unit in the Department of Agriculture, Food and the Marine did not actually hear a single case for nearly two years after it came into operation, expending none of its budget on anything other than the salaries of officials in the first year. When we were later promised legislation on the establishment of the office of the regulator by the end of 2021, we were faced with repeated delays. The original heads of Bill were widely acknowledged to be incredibly weak, so much so that the committee on agriculture described them as not fit for purpose.
All of that said, on behalf of Sinn Féin, I welcome that we are finally having the opportunity to debate this crucial legislation in the Chamber. I also welcome the Minister's decision to accept a number of the recommendations of the pre-legislative scrutiny report of the Joint Committee on Agriculture, Food and the Marine, including amendments that were tabled by Sinn Féin. I acknowledge that in some areas at least, the Minister has listened.
While farmers have long demanded a sectoral regulator, they were initially offered a food ombudsman, which then that became an office for fairness and transparency in the agrifood chain. I am glad the Minister has finally landed where farmers and Sinn Féin started by titling the new body as the food regulator, an rialálaí agraibhia.
The Minister has accepted Sinn Féin's assertion that the proposed sanction of a maximum fine for breach of the unfair trading practices regulations was insufficient. It was rather bizarre that the Department proposed a simple fine of €500,000 rather than a percentage of global turnover, as modern best practice dictates and as has been brought forward by Cabinet colleagues in recent times with regard to other regulators and required under the ECN+ directive.
While all of that is welcome, Sinn Féin remains concerned with fundamental aspects of the Bill. Put simply, I do not believe the regulator has been given either the necessary legislative basis to discover if our primary producers are being treated unfairly or the appropriate powers to take action when they are found to have been unfairly treated. Sinn Féin stands ready to work with the Minister to address the Bill's remaining deficiencies and ensure we deliver to farmers a truly independent sectoral regulator with the teeth to tackle unfair trading practices and, crucially, cartel-like behaviour in the sector. We will bring forward amendments on Committee Stage to do just that.
Two of our primary concerns are that what the Minister has effectively done in the Bill can amount to hamstringing the regulator before it has even been formed, first, through limiting its remit to business-to-business relationships and, second, by clearly stating to the Joint Committee on Agriculture, Food and the Marine that he does not see a role for the regulator in terms of competition concerns or investigating cartel-like behaviour, an assertion he repeated today. Sinn Féin believes that to be effective, the regulator must have a view of the full breadth of the agrifood supply chain. That means it must include business-to-consumer relationships and, in the same vein, it must have a role regarding competition complaints and, especially, regarding cartel-like behaviour.
Based on engagement with the Minister and all stakeholders, it is also a significant concern that the regulator's activity in the area of price reporting and enhancing transparency effectively amounts to the collation of all existing reporting within its office. That will deliver a net total of zero additional transparency. Common sense dictates that a sectoral regulator of this nature must be empowered to gather non-publicly available data related to the agrifood supply chain and also to regularly contrast such prices with relevant international counterparts.
There are also a number of more administrative aspects of the Bill that require further consideration, engagement and amendment. It is welcome that the Minister accepted the recommendation of the agriculture committee to increase the board's size. However, increasing the number of ordinary members from five to seven without increasing the farmer representation goes against the spirit of the committee's recommendation to the Minister and our engagement with him. I invite him to review that.
Equally, while I welcome that the language in the Bill in regard to ensuring the confidentiality of complainants' identities has been improved, I am aware that this is a particular area of concern for farmers. I believe it would benefit from further engagement with farm organisations in advance of Committee Stage. It is important to note that farmers have virtually no confidence in the CCPC given its failure to investigate ongoing allegations of cartel-like behaviour, particularly in the meat sector. In creating a new regulator, we want to avoid such a relationship and we need to provide guarantees regarding confidentiality as an absolute prerequisite.
On the commissioning of reports, the Minister will recall that I have been requesting, since he assumed office, that he commission a report on the social and environmental impact of factory-controlled feedlots. In 2022, there was a throughput of 400,000 cattle in the controlled finishing units the Department uses as a proxy for these feedlots. That represents a 52% increase on 2017 figures during a period in which tuberculosis reactor rates were largely stagnant.
While the Bill empowers the regulator to make recommendations regarding proposals for legislation relating to any aspect of fairness and transparency in the agrifood supply chain, it is important that we explicitly state that such proposals be disclosed and published in the regulator's annual reports. I have noted on a number of occasions that the Minister and Government have taken a minimalist approach to implementing the UTP directive. An evaluation of that directive at an EU level is due at the end of 2025 and I also expect there will be further interim analysis of implementation on a member state level. If the Minister is willing to work with the Opposition on Committee Stage and address some of the deficiencies I have mentioned, there is real potential for this to be an area in which Ireland leads across the European Union, and even globally. That would be no more than our farmers deserve as they rally to face down the challenges of climate change and to feed this nation and many beyond, all the while being the bedrock upon which our local rural economies are based.
I remind the House that in 2019, beef farmers across the State gathered together outside factory gates, often in inclement weather, to demand action in delivering fairness and transparency in their sector. They were legally threatened for their efforts and vilified in some circles. Among their chief demands was the establishment of a food regulator. We now have that in name. Those farmers who took a stand deserve to be commended and recognised during this debate. Now, though, we must deliver a regulator that has the teeth necessary to mark a real sea change that rebalances the power towards our family farmers and away from the factories and large retailers. I pledge that I and my party will work with the Minister to achieve just that. I hope and trust that he will agree to work with us and all Members of the Opposition, in particular, members of the Joint Committee on Agriculture, Food and the Marine, in that vein.