Ned O'Keeffe (Cork East, Fianna Fail)
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I thank you, a Leas-Cheann Comhairle, for allowing me raise the important issue of the difficulties arising in the pig industry. I welcome the Minister to the House. I am delighted that she is a Cabinet Minister who is prepared to face her responsibilities in the House. I wish to raise a matter of national importance, the closure of the pig slaughter line at the Galtee Foods Division of Dairygold Co-operative Society Limited in Mitchelstown, County Cork. Galtee Foods has a killing capacity of 10,000 pigs per week. The national kill of pigs is approximately 56,000 per week. The national breeding herd is 160,000 and 60% of the pigs slaughtered in Galtee Foods are produced locally. Its closure will create a national disaster for the industry, similar to what occurred in 1998 which did not affect the Cork area at that time. In 1998, when I was Minister of State, the Minister, Deputy Coughlan and her colleague, Deputy Keaveney, made many representations to me about the difficulties facing small pig producers in the Donegal area. The decision to close the kill line in one of Ireland's largest co-operatives, which is fully owned by farmers, will ensure the demise of many producers around the country and is a wild west decision taken in conjunction with Enterprise Ireland.

I am annoyed at the failure of the Government as the regulatory authority to intervene in this decision. Substantial grant aid has been paid to Dairygold over the years, thus creating further wastage of taxpayers' money. I have requested the Comptroller and Auditor General to investigate Enterprise Ireland and carry out a forensic audit of its food division. This organisation suffers from the corporate box syndrome for the big boys, especially the plcs, private limited companies, who like to import against Irish producers. The island of Ireland will have no pig industry five years from now if this decision is followed through.

The sugar beet industry and the poultry industry are all heading in the same direction. The Minister has a tough task ahead of her. This organisation in Mitchelstown was the only processor in the country with a USDA licence for pigmeat. These processing industries are all peripheral farming activities giving large incomes to farmers and substantial jobs in rural areas across this island. These activities and developments were supported by the Fianna Fáil policy makers for decades. The plant was built in the 1960s with money given by a Fianna Fáil Government under the then Taoiseach, the late Jack Lynch. In the last few decades the ground has been allowed to shift from these commodities, which are being replaced by imports of an inferior nature. Ireland has the lowest priced pigs in Europe but inferior cuts are being imported. This is what is about to happen in the case of Galtee Foods and other plants, with the encouragement of Enterprise Ireland. I ask that the people in the food division of Enterprise Ireland be transferred to other activities and fresh ideas and imagination be recruited.

Galtee Foods and Dairygold participated in a food fair abroad recently. The products they displayed were not of Irish origin. For example, Tipperary cheese is German-produced and I ask the Minister to investigate this further. It is claimed in theory that Ireland has a slaughter capacity of 58,000 pigs per week. However, a disaster occurred this week in Galway where Duffy's of Gort was destroyed by fire. It can be seen how marginal the slaughter capacity is at between 55,000 and 58,000. Taking holiday time and all the other down time of the daily work day into account, being practical and using common sense there is not sufficient capacity to slaughter the national kill. This argument was rehearsed many times in 1998 when pigs could not be killed and yet it was claimed the capacity was there. I was Minister of State at the Department of Agriculture and Food at the time. As the Government of the day, we were seriously embarrassed when hundreds of small producers in the Border counties left the industry, having been forced out and totally disillusioned as they could not get their pigs slaughtered.

I wish to thank the Taoiseach for meeting with a group in Clonakilty recently to discuss this matter. However, since this meeting no action has been taken. I again appeal to the Taoiseach and the Government not to allow farmers and workers in this region to be sold out.

The Government is the regulatory authority of the food industry. The Minister has the power in her hands to regulate this industry. She controls the grants and pays the money to organisations. I ask her to withhold payments until this plant is put back in place. There is no financial need and no justification for its closure. The Department's officials will say that it will continue to process bacon and pigmeat but that is a nonsense. There is no guarantee they will be pigs of Irish origin.

I will list the slaughter capacities for the Minister's information. Glanbia slaughters 24,000 pigs at peak; Queally's slaughters 9,000; Galtee Foods, 10,000, and they are on the way out. McCarron's slaughters 3,000; Dromone, 2,000; Ballon, 1,400; Drumlish, 2,200; Duffy's, 1,300; Green Pastures, 1,700; O'Connor's, 448; Cuniffe's, 150. Kyle's in Dublin is about to close and slaughters 300. That is a total of only 51,000 pigs. Some of our pigs are killed in Northern Ireland. We never talk in an all-Ireland context about anything except when it suits us and we are now talking in that context. Subtracting 10,000 pigs from 56,000 leaves 46,000 pigs.

Many peripheral plants have no guarantee they will be operating tomorrow or the day after and they account for another 10,000 pigs. It is becoming a crisis. I ask the Minister to contact the chief executive of Dairygold as a matter of urgency. I ask her to get a commitment from him to reopen this plant, work in conjunction with producers and not to take decisions that are not in the best interest of the Irish industry. There is no justification, financial or otherwise, for this wild west decision. There will be more said about this matter in the House before 1 November. I await the Minister's reply.

Mary Coughlan (Donegal South West, Fianna Fail)
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Ba mhaith liom, ar dtús báire, mo bhuíochas a ghabháil don Teachta as ucht ócáid a thabhairt dom cur in iúil don Dáil cad atá ag dul ar aghaidh. The decision by Dairygold Co-Operative Society Limited to close its pig slaughter line was a commercial one for the society, made in the wider context of Dairygold operations and in accordance with broader rationalisation objectives. I fully understand the huge level of disappointment for any employees and their families affected by this issue. I also understand and share the concerns of pig suppliers and producers to Galtee Foods who have traditionally supplied pigs to Galtee processing plants but are now faced with the prospect of finding alternative outlets for their animals.

Since the announcement of the Galtee closure, my Department has maintained regular contact with IFA, Enterprise Ireland and other pig processors, with a view to ensuring that a seamless and streamlined transition of the producer-processing supply chain would be established. There is agreement among the main processing entities and by Enterprise Ireland that sufficient processing capacity is available in the country to absorb the surplus that will arise from this closure.

I have been assured that the 9,000 or so pigs that were processed in Galtee on a weekly basis can be satisfactorily accommodated in other plants within the country. This means that there should be no disruption to processing nor to trade and that farmers will have a ready-made outlet to which pigs may be sold, resulting in different processing outlets but no restriction in processing options nor in marketing outlets. I am encouraged by the considerable efforts being made by Galtee, the IFA and other processors to ensure a smooth and orderly transition of the Galtee supply base. This is critical to the future profitability of the entire pig processing chain and will ensure that the transition is managed in the shortest possible timescale and with the best possible outcome for all concerned. It is also critical to the maintenance and continuity of supply to the retail sector and will demonstrate the capacity of the Irish pigmeat industry to respond effectively and constructively to a challenge such as this. I am encouraged that Galtee has indicated its intention to continue to process pigmeat in Mitchelstown, using the valuable Galtee brand name and utilising Irish raw materials.

There is never a good moment to announce a restructuring that causes either market disruption or job losses. However, decisions that have broader strategic aims are often critical to maintaining and expanding markets and jobs in other areas. One of the strategic aspects of this closure concerns the national structure of pig processing in Ireland, which, according to the Prospectus study on the pig industry published in 2000, concluded that there was serious over-capacity in the pig slaughter sector and that this burden of capacity was causing inefficiencies.

It recommended that rationalisation of existing slaughter capacity must be undertaken if primary processing in Ireland is to remain competitive. This would mean that excess capacity must be removed by plant closures with a commensurate increase in capacity utilisation of the remaining plants.

One effect of the Galtee closure is that there should be greater utilisation of slaughter capacity elsewhere, as recommended by Prospectus, which, in turn, should provide a better platform for the Irish pigmeat industry to tackle competition head on from abroad. Anything short of best competitive structures to deal with competition on the home and export markets will deprive our primary production sector of viable and profitable outlets for its produce and reduce Ireland's capacity to maximise the production of top quality products at competitive prices. The decision has been taken for Galtee's own commercial reasons. At this juncture, it is in the interest of all concerned in the sector to ensure there is no resultant disruption in the slaughter of pigs as a whole and that the important producer-processor chain continues to be treated as a fundamental element in the future success of the industry.