Éamon Ó Cuív (Galway West, Fianna Fail)
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85. To ask the Minister for Agriculture, Food and the Marine the steps he has taken to deal with the low price of young bulls for slaughter at present; the further steps he has taken to deal with the price differential between the price of beef in the factories here and in Britain; and if he will make a statement on the matter. [6498/14]

Éamon Ó Cuív (Galway West, Fianna Fail)
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85. To ask the Minister for Agriculture, Food and the Marine the steps he has taken to deal with the low price of young bulls for slaughter at present; the further steps he has taken to deal with the price differential between the price of beef in the factories here and in Britain; and if he will make a statement on the matter. [6498/14]

Éamon Ó Cuív (Galway West, Fianna Fail)
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As the Minister is aware, there is a major crisis in the beef industry, particularly as it relates to bull beef. Young bulls are either unsaleable, cannot be got into the factories or are being sold way below their economic cost and bull beef is a very important component of our farming industry. What has the Minister been doing in the past two months to deal with this crisis?

Simon Coveney (Cork South Central, Fine Gael)
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I propose to take Questions Nos. 85 and 89 together.

Aggregate cattle supplies at Department-approved meat plants to the end of January 2014 are up almost 10% on the corresponding period in 2012 with strong increases recorded in the steer, heifer and cull cow categories. This higher throughput has led to factories giving preference to certain types of stock that are better suited to the requirements of their retail customers. Prices for prime steers and heifers have remained relatively stable but the young bull trade is challenging at present as age and weight issues continue to affect demand. However, I note that the young bull kill has increased by 50% between week 1 and week 5 of 2014. The Irish beef industry is hugely dependent on exports and the need to ensure that it is producing efficiently for overseas markets cannot be ignored.

Delays in young bull slaughtering is undoubtedly putting pressure on producer profit margins but neither I nor any Minister for Agriculture can interfere in a trade that is cyclical in nature and prone to short-term price fluctuations. I am entirely sympathetic to all those farmers facing difficulties in getting their cattle slaughtered but cattle prices are determined by the interplay between supply and demand and I have no function in regard to commercial transactions between meat factories and their suppliers.

It is the responsibility of the industry - in this instance, processors and farmers working together - to manage the type and volume of cattle being brought to market in order that the supply chain operates for the benefit of both parties and does not undermine the viability of bull beef production systems for either winter finishers or suckler farmers. I understand that producer and meat processor representatives have recently engaged in dialogue with a view to resolving the short-term oversupply of young bulls. I would encourage the various bodies to continue this discussion and I have called for this on many occasions.

With regard to the price differential between Irish and UK cattle, a number of factors have been identified to explain why Irish born cattle command lower prices than their British equivalents. These include a British consumer preference for indigenous product, as well as an additional transport and processing cost in supplying that market. Ireland's trade with Britain accounts for 53% of our beef export volumes and, at around 250,000 tonnes in 2013, is equivalent to 750,000 cattle, with a high level of penetration in the multiple retail sector.

One of the main difficulties in marketing young bulls older than 16 months is that these animals are outside the specifications preferred by the UK market. This is a major disadvantage at present because the UK market has effectively become the highest priced beef market in the EU. The potential to grow the live trade to Britain is also constrained by the labelling system operated by the retail chains in regard to cattle born in this country and exported live for finishing and processing in the UK. The retailers' long-standing policy is to market British and Irish beef separately. This means that beef must be sourced from animals originating in one country, that is, born, reared and slaughtered in the same country. In addition, logistical difficulties arise when a small number of Irish born animals are slaughtered in a UK meat plant. Under mandatory EU labelling rules, these carcases have to be deboned in a separate batch and packaged and labelled accordingly, thereby incurring additional cost for the processor.

While Bord Bia has repeatedly raised the labelling issue with British retailers over the years, there is no indication that its marketing policy is likely to be reversed soon. Nevertheless, in its ongoing interaction with British consumers, Bord Bia will continue to pursue all opportunities, including any change in labelling policies, to maximise the full potential of the beef and livestock trade with our largest trading partner. In regard to allegations of anti-competitive practices by meat plants, if Deputies have information to substantiate such charges, I would like to know about it, and the Competition Authority ought to know about it also, if that is the case.

For non-bull beef that was sold last year, we are in the unusual position of having the average price paid for this beef here in Ireland at about 106% of the EU average, whereas historically that figure would have been in the low 90s. We have a particular problem with the UK market, which is where most of our beef goes, because UK consumers have a very strong demand for British-sourced beef and retailers have a particular specification issue with bull beef that is over 16 months of age. These are issues the market will have to resolve.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I thank the Minister for his very comprehensive reply. However, throughout the long and involved reply, he did not mention any action taken by him. He seems happy to have a laissez-faire attitude towards the market, that everything is okay so let us not interfere in any way.

Is the Minister satisfied there is no difficulty in putting live cattle on boats in Dublin and transporting them by lorry to the United Kingdom? Is he happy that no barriers are being put in the way of that type of free trade? Is he happy this is not an issue in the difficulty Irish farmers find in accessing British factories and getting the higher price? At the end of the day, we were told one of the advantages of the EU was free trade.

What the Minister seems to be saying smacks of something less than free trade. Has the Minister had discussions with his counterparts in Great Britain and Northern Ireland in respect of labelling and how it seems to seriously discriminate against Irish beef?

Simon Coveney (Cork South Central, Fine Gael)
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I understand that Deputy Ferris was also part of these two questions.

Michael Kitt (Galway East, Fianna Fail)
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I will call him after the Minister speaks.

Simon Coveney (Cork South Central, Fine Gael)
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I will answer these two questions and then, hopefully, come back to the Deputy's questions. I assure Deputy Ó Cuív that there is no laissez-faire attitude coming from me. We are continuing to work as hard as we can to get the best possible price for Irish beef by building its reputation all over the world, particularly in the UK and further afield. Outside of the bull beef story which has specific problems that I have just outlined, the evidence shows that we are doing a good job. The brand of Irish beef is stronger than it has ever been. For a prolonged period of time, we have been getting higher prices compared to the rest of the EU than ever before.

We have a specific problem with the UK because British consumers and retailers have a preference and will pay more for British-reared, slaughtered and finished beef. However, we are still selling the equivalent of 750,000 animals slaughtered into the UK. There is a free market. Yes, we can take live animals to the UK. It is not as easy as perhaps it could be because some of the roll-on, roll-off ferries do not want to facilitate that and that is their commercial decision. The truth is that even if we could take large volumes of live cattle to the UK, we still have the problems I outlined before. My understanding is that factories and processors in the UK are not looking for live Irish cattle because they must separate them from the British cattle they are slaughtering and label them separately because, at Ireland's insistence, we have country of origin labelling in respect of beef, which is a good thing for us because the brand of Irish beef is on the rise. The fact that British consumers want a certain type of product and are willing to pay more for it is part of the explanation as to why we have a price differential between Irish and British beef in the UK market.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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I thank the Minister for his reply. There is a perception, which is well-founded at times, in the wider farming community and all farming organisations that there is a cartel in the beef processing sector. I can remember Government Deputies making the same argument I am making here when they were on this side of the House. It has been stated by farm leaders that Teagasc was implicated in this and that it encouraged farmers to keep bulls and go into the bull market. Can the Minister confirm whether that decision to allow Teagasc to encourage people to do that was taken at Department level?

Beef from cattle in the Six Counties is regarded as British beef and sold accordingly. They are getting the prices. One draws a hairline across part of our country and cattle on one side of the Border get British prices while cattle on this side do not. Can anything be done about that?

Simon Coveney (Cork South Central, Fine Gael)
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I, like the Deputy, wish there was no Border but there is and while there is, we have labelling requirements that inform consumers and buyers of Irish and British beef as to where those cattle have been reared, slaughtered and so on. At the moment, there is a very strong market for British-reared and slaughtered beef. There is also a strong market for Irish beef but it is not quite as strong in Great Britain.

With regard to the cartel accusations, I am aware of the fears that have been expressed and I speak to farmers on a regular basis about this. Farmers are frustrated that they are not getting more money for their beef, particularly when they look at prices in the UK. We need to look at this in a broader context.

The UK is our largest market, but we also sell beef across the rest of Europe. We are getting a premium for it in markets such as Germany and France, where restaurants and retailers are willing to ask for that premium price because we have built our product's reputation.

Michael Kitt (Galway East, Fianna Fail)
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I thank the Minister.

Simon Coveney (Cork South Central, Fine Gael)
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If I might, I will be fair to the Deputy, as he has not received an answer to his final question.

Michael Kitt (Galway East, Fianna Fail)
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I will call him again.

Simon Coveney (Cork South Central, Fine Gael)
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Regarding bull beef and Teagasc, there is a market for bull beef, but it is for young animals that are slaughtered at 15, 16 or 17 months. They are younger, smaller and lighter animals. Our problem is that many farmers have animals that are 23, 24, 27 or 28 months old. They are large animals and do not meet the bull beef specs sought by the supermarkets. I do not blame those farmers for being frustrated. In their minds, they have a valuable animal for which the market is not willing to pay much money.

Michael Kitt (Galway East, Fianna Fail)
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I thank the Minister, but I must call the two Deputies.

Simon Coveney (Cork South Central, Fine Gael)
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For that reason, farming organisations and the industry have tried to work through it.

Michael Kitt (Galway East, Fianna Fail)
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We are short on time and I need the Minister's co-operation. Deputies Ó Cuív and Martin Ferris may ask brief questions.

Éamon Ó Cuív (Galway West, Fianna Fail)
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The Minister mentioned the word "cartel" and referred to some people's belief that there was one.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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There is.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Is he saying definitively that is he satisfied that there is no manipulation or cartel operating in the beef industry?

What discussions has the Minister had with his British and Northern counterparts on the labelling issue? It is extraordinary how fond the British are getting of British beef, in that its price keeps increasing compared with beef's price in Ireland.

What advice would the Minister give farmers who cannot sell the cattle he just mentioned to the factories? What should they do now, having taken the original advice that they should raise that type of bull? Has the Minister held discussions with the roll on, roll off companies to try to ensure that they accept trucks carrying live animals across the Irish Sea?

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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There is a belief among farming organisations that Teagasc played a part in the manipulation of the market. Is the Minister satisfied that this is not the case? I have read in newspaper print accusations made by farming organisations, which are quite powerful, against Teagasc as regards developments in the bull market.

Simon Coveney (Cork South Central, Fine Gael)
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I reject any accusation that Teagasc was a part of manipulating anyone. I do not believe that it was. I recall cautioning people two years ago about the bull beef market. There is a role and a market for bull beef. It is an intensive form of beef production, where animals are slaughtered much younger and fed more intensively. This is what the market wants. In general, however, the market outside of Ireland is looking for us to produce steer and heifer beef. We are getting strong prices for those.

Due to, for example, some farmers' farm or business structures, they have decided to go down the bull beef route. That is a legitimate way of making money and Teagasc has been involved in offering advice, but they must produce that product to the specs demanded by the marketplace. For this reason, there has been a dramatic increase in the number of young animals slaughtered at the start of this year. As to farmers who have older animals that they need to get rid of and for which they do not want to accept the lower price, there is an ongoing negotiation, as is always the case, between farming organisations and the processing sector.

I have spoken to Mr. Owen Paterson, my counterpart in the UK, and to Ms Michelle O'Neill in Northern Ireland on labelling issues about which they contacted me. Many Irish farmers and food producers in Northern Ireland want to label their product as Irish while others want to label it as British depending on from where they are coming. Obviously, this would have advantages when selling into the Irish or British market, depending on where one wants to maximise returns.

We are working with our counterparts in Northern Ireland to look at ways in which we might be able to facilitate that. However, it is not as straightforward as one might think, because if we allow that, I must be able to stand over the integrity of food being produced in Northern Ireland, and I must have the access to ensure that is in place. We are working on that issue.