Thomas Pringle (Donegal South West, Independent)
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3. To ask the Minister for Agriculture, Food and the Marine the way he sees the formation of beef producer groups benefiting farmers dealing with the meat processors in view of the limited number of operators in the beef sector; and if he will make a statement on the matter. [43099/14]

Thomas Pringle (Donegal South West, Independent)
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My question concerns beef producer groups, about which the Minister has made many claims in the negotiations with beef sector and farmers. How will things work in practice, given the lack of competition in the beef sector?

Simon Coveney (Cork South Central, Fine Gael)
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I thank the Deputy for asking this question and I am very pleased to have an opportunity to outline what I think beef producers in Ireland can do. As the Deputy knows, as Minister I cannot get involved in influencing price directly. I have received two letters from the Competition Authority, which made very clear how far the beef forum can go on a series of issues and where it cannot go in regard to trying to influence price directly. We can, however, try to restructure the beef industry in a manner that ensures farmers increase their negotiating capacity in areas such as price, specifications, conditions in the market and the information flow between processor and farmer on what the market needs, when it needs it and so on.

Producer organisations in other parts of Europe represent large numbers of farmers collectively and negotiate on their behalf, which leads to better outcomes than we have here. One of the major weaknesses in the beef sector, which is not found in the dairy sector, is that farmers, in effect, are price takers when they bring cattle to factories. No negotiation takes place. Farming organisations need to apply a lot of pressure through protest and so on if they are unhappy with prices.

There is a better way of doing things, whereby 1,000, 2,000 or 3,000 farmers who are producing beef would be represented by a farmer-owned producer organisation which would negotiate on their behalf. It would be responsible for communication between the marketplace, represented by processors or retailers, and the primary producers, that is, farmers, to make sure they were getting the fairest deal possible from the marketplace. That would fundamentally change the balance of negotiating power between farmers and factories, something which is currently being expressed through protest.

There has been a public consultation process on how the different stakeholders would like to see producer organisations working. It is also in the interests of processors, because they will have a much more professional negotiating system with primary producers in terms of ensuring quality, specifications and all the other elements. We intend to push on with this and have approval from all of the stakeholders in the beef forum to do that.

Thomas Pringle (Donegal South West, Independent)
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It is true to say that farmers are price takers because they have no choice. There is no competition in the beef sector in this country. There are three major players, one of which is dominant. Over the past 20 years many small abattoirs have been put out of business as a result of increasing regulation. They have been taken out of the buying market for beef, which leaves only three factories remaining.

If a farm producer organisation pulls together 1,000 farmers and negotiates a deal which necessitates the transport of cattle, what use is it to them? The fundamental problem is that we do not have competition in the factory sector and farmers are forced to be price takers. The proposed solution is just papering over the cracks. It will probably streamline the process for the factories, remove the threat of protest and allow them to continue as normal.

Simon Coveney (Cork South Central, Fine Gael)
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I and others totally disagree with the assessment of the Deputy. That is why everybody in the sector, including farming organisations, is willing to facilitate the introduction of producer organisations. The processing industry is willing to consider the proposal. It has no choice, because we are going ahead with it. The process is about increasing and improving farmer representation. It is true to say that there are three large players in the market, but there are many other processors. It is not true to say that only three processors are killing cattle. There are also live cattle exports, which have been used to introduce competition into the market for cattle. Such exports include cross-Border live cattle exports, as well as to places like north Africa and other parts of Europe. Live cattle exports increased significantly this year.

I do not accept the accuracy of the Deputy's assessment of the marketplace. Producer organisations work well in other countries which also have large processors. We should not forget that 90% of our beef has to find a home, consumer, buyer and client outside Ireland. To facilitate that trade, we need processors which have scale. The Competition Authority makes sure they are not abusing that position, but we can restructure the marketplace to increase the negotiating power of farmers through POs which will be owned by farmers. That is a good thing, and the Deputy should welcome it.

Thomas Pringle (Donegal South West, Independent)
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Time will tell. We will see in a couple of years' time whether farmers will be protesting again. The fundamental problem is that the market is controlled by too few operators. I am sure international markets have competition authorities which have the teeth to be able to investigate markets which are not functioning correctly. It is not that long ago that the Competition Authority made public statements to the effect that it could not carry out any investigations because of staffing issues. Would the Minister be willing to call in the Competition Authority and ask it to investigate the beef sector if producer groups do not achieve the goals set for them by the Minister?

Simon Coveney (Cork South Central, Fine Gael)
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There is no need for me to call the Competition Authority, although we have spoken to it, because it contacted us about the beef forum to understand what is going on. It is very plugged in and engaged on beef issues and has examined the beef market. I could quote statistics on beef prices all day in terms of average EU prices, EU 15 prices, the comparison between Ireland and Britain and so on, but the Competition Authority is an independent statutory body, as it should be. If there is evidence that inappropriate behaviour is occurring in the beef sector, I am confident it will intervene, but it has not done so.

My job is to try to ensure a beef forum works in all of the areas where I should be influencing and developing policy, and that is what we are attempting to do today. We will get a lot done today at the beef forum on a series of areas such as weights, age, base price, increased transparency in receipt dockets and other areas about which farmers have expressed concern to me over the past 12 months. That is what it should be doing.