Michael Creed (Cork North West, Fine Gael)
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Question 3: To ask the Minister for Agriculture, Fisheries and Food the initiatives he plans to introduce to deal with the income collapse of beef farmers in view of the collapse in the price of store and finished beef cattle; his plans to assist with live exports of cattle to the UK; and if he will make a statement on the matter. [36517/09]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The value of Irish beef exports in 2008 reached almost €1.7 billion and accounted for almost one fifth of total Irish agrifood exports. The beef industry remains very important in our international trade balance, but also to the rural economy as its contribution is widely dispersed.

Notwithstanding this, and in common with many other sectors of the economy, beef is experiencing difficult times. As consumers and economies have come under pressure, there has been a noticeable shift in spending patterns with a discernible move towards cheaper meats and lower value cuts. This is evident in all of our key markets and is consequently impacting on producer returns. In addition, the strengthening of the euro against sterling presents another challenge to beef exporters, given the importance of the British market.

In 2008, average prices in all beef categories increased significantly, in some cases by almost 20%, and reached record levels. Given that prices are a function of the returns available in the marketplace, the lower prices experienced during 2009, while unwelcome, are not entirely unexpected. The decline in prices to date in 2009 is around 12%. However, prices still remain significantly ahead of both medium and long-term averages for all categories. I am aware of the difficulties falling prices present to both producers and processors alike. The Department and relevant agencies are taking several appropriate steps to address these.

While conditions remain challenging in both our domestic and international markets, our beef exports have remained remarkably resilient. Shipments to both Britain and our main continental markets have held up very well with Bord Bia reporting only slight declines in the year to date. Producers and processors have responded to the changing marketplace and are maintaining their presence in the face of considerable difficulties.

The live export trade is also an important element of our meat and livestock industry and provides a complement to the beef trade. To date this year, this trade has been exceptionally strong with exports almost doubling compared to 2008. Bord Bia continues to work closely with the industry in monitoring and developing emerging opportunities for Irish livestock in the British, continental and international markets. This includes contacts with leading retailers in Britain to establish their interest in cattle born in Ireland and finished in Britain.

The Government, the Department and its support agencies, including Enterprise Ireland, Teagasc and Bord Bia, have developed a variety of non-price strategies to deal with evolving market challenges. Among these are the capital investment aid scheme for the beef and sheepmeat sectors, breed improvement programmes being progressed by the Irish Cattle Breeding Federation and the animal welfare scheme for suckler herds. These schemes concentrate on using the best available scientific and genetic data to further improve the cattle herd and ultimately improve returns to the producer.

Additional information not given on the floor of the House.

The beef quality assurance scheme, administered by Bord Bia is crucial in reassuring consumers that the beef they purchase from Ireland meets the highest standards of quality, safety and traceability.

In tandem with these initiatives Bord Bia is implementing an enhanced Irish beef promotion strategy for the period 2008-13 in conjunction with key continental retail outlets. Previous efforts to differentiate and reposition Irish beef, concentrating as they have on the key characteristics of Irish beef – traditional grass-based production, full traceability and quality assurance - have proved extremely successful. It is crucial that we continue to target our marketing efforts and promotional strategies on consolidating our place in the valuable European market. Bord Bia is undertaking a 2009 autumn beef promotion campaign aimed at 40 million Europeans in ten major markets.

I am acutely aware of the importance of direct payments to farmers, particularly when market returns are at low levels. In 2008, these payments represented almost one third of total farm revenue, the most important being the single farm payment. I am pleased to remind Deputies that, following my request to the European Commission earlier in the summer, advance payment of some 70% of the single farm payment will commence tomorrow. This payment, in the region of €800 million, is unprecedented and will assist farmers greatly in dealing with cash flow difficulties. I also intend to maximise the balance of payments due before Christmas.

It is true that 2009 has been a difficult year for all sectors of farming with beef producers especially affected. A number of factors have combined to deliver a series of challenges which have had a significant impact on the livelihood of many in the sector. However, I am confident that, thanks to the undoubted quality and uniqueness of our product, together with the range of initiatives I have mentioned, the sector will be well positioned to take advantage of the evolving prospects that recovery will bring. Indeed, European Commission projections of a continued decline in beef production on the Continent over the medium term, thus widening the supply gap already in existence, may even serve to provide further opportunities for Irish producers to fill.

Michael Creed (Cork North West, Fine Gael)
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Does the Minister support live exports?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Absolutely.

Michael Creed (Cork North West, Fine Gael)
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The critical issue for returns to Irish beef farmers from live exports is that the live cattle exported to the United Kingdom can be slaughtered there. Over the years this State, through its various agencies, has delivered substantial grant aid to Irish meat processors and is delivering in the region of €50 million in grant aid under the meat investment fund to the main players who are active in the Irish meat processing market and in the UK. It is also giving work permits although there are 400,000 unemployed here. I do not understand the logic of that.

The Ministers for Agriculture, Fisheries and Food and Enterprise, Trade and Employment have leverage on this issue. This House was recalled in the late 1980s to bail out the Goodman group when it threatened to go under but it and others, Kepak, and Dawn, are active in the UK and collude to prevent the slaughter of Irish exported live cattle in their plants in England. They are also putting pressure on other small abattoirs to refuse to slaughter cattle. That costs Irish beef producers in the region of €150 a head. Will the Ministers continue to sit on their hands and pay €50 million in grant aid to close down the beef industry here? Beef farmers will not continue to dip into their single farm payment to subsidise beef production. The consequences of that will be job losses in processing and in the food industry downstream. If the Minister supports live exports what will he do about the problem of slaughtering live exported animals in the UK?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I fully support the export of live cattle but we need a balance between the cattle for slaughter here and the competition from live exports. The number of cattle exported to Britain up to 4 October last represents an increase of 613% over the comparable period in 2008, and the number exported to Northern Ireland represents an increase of 286% a year on.

I am aware of the difficulties and was working on this prior to any media commentary. I met the farming groups and individual farmers.

Michael Creed (Cork North West, Fine Gael)
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Did the Minister meet the Goodman group?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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No, I meet representative groups.

Michael Creed (Cork North West, Fine Gael)
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The Minister will go on paying the grants until he gets a bit of cop on.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I met farmers and people involved in all the farming organisations who told me that there are buyers in Britain anxious to purchase Irish cattle. We have taken up the various issues raised. Bord Bia and our veterinary services have been in contact with the Chief Veterinary Officer in Britain.

Irish exporters encounter two difficulties in Britain, the veterinary issues concerning the post-import conditions imposed by the Department of the Environment, Food and Rural Development, and technical beef labelling issues surrounding the finished beef product and other beef industry complications. Over the past few weeks and earlier I met ICOS in its capacity as the umbrella body for the marts organisations and outlined what we had been doing to remove the blockages from the system. My officials have worked actively with the representative groups here and with the veterinary people in Britain.

We have involved Bord Bia on the beef labelling scheme and I have asked it to offer advice and to find out how we can overcome the labelling difficulty for cattle born in Ireland but fattened and slaughtered in the UK. They will not get a British quality assurance mark. Bord Bia has worked with the industry and has put a proposal for a beef quality assurance scheme to include cattle for export. The scheme would draw on data from the beef quality assurance and the beef suckler welfare schemes and other requirements at export level and incorporate auditing of participants including unannounced audits to verify compliance. Such a scheme could enable Irish born animals to access higher value market channels in the destination country. Bord Bia has communicated this proposal to the industry. The initial feedback from the industry and from a live exporter has been positive. The scheme would have to meet with the approval of buyers in the British market. We need access to that market without confusion about the labelling of the product.

Michael Creed (Cork North West, Fine Gael)
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Has the Minister met with the meat plants? They are the problem. His Department and the Department of Enterprise, Trade and Employment will pay them €50 million in grant aid and give them work permits. This is nothing short of national sabotage by the meat plants that operate in Ireland and the UK. We have no problem exporting live bull beef to Italy, or calves to Holland but we have a problem getting our animals into the UK where the market is worth €1.7 billion. Is the Minister going to sit on his hands and talk to everybody but those responsible, the meat plants, the Goodman group, Dawn and Kepak, in particular? Will he meet the meat plants and tell them he will not pay the money they are getting under the meat investment-----

Brendan Howlin (Wexford, Labour)
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The Deputy has asked that question three times.

Michael Creed (Cork North West, Fine Gael)
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I have not got an answer yet.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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We conveyed to Meat Industry Ireland, MII, the representative organisation for the producers very clearly the concerns expressed to us by the exporters and farmers.

Michael Creed (Cork North West, Fine Gael)
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What did they say?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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We have put particular queries to the Chief Veterinary Officer in Britain and await a response. We have been told about the difficulties and have said that we want to work to eliminate them. We are waiting for the Chief Veterinary Officer to reply and tell us if there is anything we need to address.