Dáil debates

Thursday, 3 December 2015

Topical Issue Debate (Resumed)

Beef Industry

12:45 pm

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am disappointed the Minister of State at the Department of Agriculture, Food and the Marine is not here. I understand the Minister is in Africa but I am surprised the Minister of State is not here. We were told that one of the reforms of the Dáil which would take place would be that Ministers or Ministers of State, where relevant, would be present in the House.

A year ago, there was huge concern in the beef industry about the price differential being achieved between British and Irish cattle on the British market. We had farmers outside the factory gates. Eventually, in response to this, the Minister set up the beef forum. A year on, to use an appropriate metaphor considering the Minister is in Africa, the beef forum has turned out to be a toothless tiger. It has had no significant effect on the massive problems that beset the beef trade.

Significant allegations were made by a significant farming organisation during the week. It believes there is a conscious policy by one of the major meat groups that operates not only in this country but also in Britain to try to block the sale of young cattle for finishing in Britain by saying they could not be marketed in Britain as British and would, therefore, have to be significantly discounted. When we look at the price comparisons between this year and last year, it is significant that the price of beef has increased by approximately 70 cents per kilo while the equivalent Irish price has only increased by approximately 10 cents to 15 cents. Last autumn, the price differential was 70 cents. This year it is 110 cents.

The second part to this matter is the total failure of the Department to deal with the price issue relating to vegetables. I thought the Minister of State with responsibility for horticulture, a colleague of the Minister of State, Deputy Coffey, would be here today. I have been calling on him to stop standing back and allowing the supermarkets force the horticulture industry into a precarious situation. The supermarkets are, effectively, dumping food onto the market by selling it at absolutely ridiculous prices, prices at which no farmer can produce the produce. This happened in 2013.

There was some co-operation by the Minister's party and the Government last year to try to persuade the various parties that it should not happen again. Will the Minister of State make a public statement today that the Government believes it is unacceptable for any supermarket chain to engage in a similar practice again this year? Will the Government state that the horticulture industry is in important one not only to those involved in it but to Irish people in general because they want an Irish horticulture industry? Will the Government state that it believes it would be wrong of the supermarkets to try to destroy the industry through totally uneconomic pricing?

Will the Minister of State address these issues? I thank the Leas-Cheann Comhairle for affording me the opportunity to speak on them today.

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I apologise on behalf of both Ministers who, unfortunately, are unavailable as they are away on State business. As a former Minister, Deputy Ó Cuív will understand there are times when they cannot be here personally. However, I am here to take the Topical Issue and am happy to do so on their behalf.

As Deputy Ó Cuív is well aware, beef prices are matters to be determined between the purchasers and sellers of cattle. Prices are determined by supply and demand dynamics and by a range of different factors, such as consumer preferences, distance to market, consumer confidence, retail promotions, competition with other meats and the overall macroeconomic situation. The Minister, Deputy Coveney, like any other agriculture Minister in the EU, can have no role in influencing commodity prices paid to farmers. I note, however, that 2015 has been a relatively positive year for beef prices in Ireland with the yearly average to date up 8% on last year. Irish beef prices are also 105% of the EU15 average price for 2015.

The divergence in price between Ireland and Britain is a result of the exceptionally strong sterling exchange rates that have been in place for most of the year. It should be noted that, in sterling terms, prices paid to British farmers so far this year are broadly the same as previous years. In other words, British beef farmers are not gaining any more for their output than last year. However, as already noted, Irish farmers are receiving prices on average 8% higher than last year and, therefore, the price difference has narrowed and not widened, if one removes the influence of currency fluctuations.

It must always be remembered that comparisons between Irish and British beef prices have to take into account that we are both primarily selling into the British market where there is a consumer preference for their own British product. This preference for local product is true of almost every beef market in the world. This also means that there is pressure from the British beef sector on their retailers to prioritise their produce over imports from abroad, including our Irish beef. This is a significant competitiveness challenge for Irish beef which cannot be overlooked when comparing prices.

Notwithstanding these challenges, the most up-to-date figures from the CSO show that this year, we have exported more than €100 million more beef to Great Britain compared to the same period last year. This is a prime example of the high esteem that Irish beef is held in and I would be confident that in the coming weeks, considering the seasonal trend, we will see sustained trade of beef to Britain.

This has also been a good year for the mart trade as prices for calves are up 20% in the year compared to 2014. Beef breed calves are up 15% alone on 2014 prices and, again, this is a result of Northern Irish buyers using the strong exchange rate to purchase stock from the Republic.

The Minister, Deputy Coveney, has also made provision for a package of support measures for the beef sector in 2015 worth more than €70 million. This includes the beef data and genomics programme which forms part of Ireland's draft rural development programme. The proposed programme will have a budget of €300 million over a period of six years and is intended to deliver an accelerated improvement in the environmental sustainability of the herd through the application of genomic technology. It will also position Ireland at the global forefront in the application of genomics technology and cement our place as one of the most important export-focused beef producing nations in the world.

As Ireland exports 90% of the beef that it produces, it is vital that we have many diverse markets to sell our product into in order to ensure primary producers here receive the best prices available.

The Department engages on an ongoing basis with many third countries, in collaboration with Bord Bia, the Department of Foreign Affairs and Trade, Irish Embassy staff, the meat industry and the European Commission on various market access issues. In fact, the Minister is not present today because he is in Ghana at a promotion event for Irish beef as we speak.

12:55 pm

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I ask the Minister of State to also explain the absence of the Ministers of State at the Department of Agriculture, Food and the Marine. It is extraordinary that they would plan their diaries so that they would all be away when the Dáil is sitting.

I do not even know where to start in response to the reply given by the Minister of State because not taking currency fluctuations into account is ridiculous. We know when a currency loses value, as the euro has done, that should be to the advantage of exporters. Therefore, comparing both prices in either euro or sterling shows exactly what I have said, namely, that the differential has widened from 70 cent last year to 110 cent this year. There is a constant mantra from this Government, which I know is right-wing and laissez-faire, that we cannot interfere. In Britain, there is a grocery code adjudicator in place. Will the Minister of State outline to the House the regulations that the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, intends to introduce in that regard?

It is very interesting to note that the EU Commissioner, Mr. Phil Hogan, a former Fine Gael Deputy who served in the Department to which Deputy Coffey is now attached, does not think the EU should stand back and allow a small number of supermarkets to rule the roost. He is keen on European intervention and regulation, if necessary, to bring the supermarkets to heel. This brings me to my next point. I am flabbergasted the Minister of State made no mention of the horticulture industry in his reply. I call on the Government to urge the supermarkets not to repeat what happened in 2013 and to ensure that both green grocers and those in the horticulture industry are not decimated by the reckless practices and over-weaning dominance of the supermarket chains. If the Minister of State is worried about the lawfulness of this, he should refer to Article 45 of the Constitution which requires the Government to ensure that big business does not abuse dominance in the market to the detriment of the common good.

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Regarding the Deputy's queries on horticulture, the Topical Issue tabled by Deputy Ó Cuív makes no mention of horticulture.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It does.

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy is just raising it now.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Topical Issue I tabled mentioned horticulture.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Deputy, the Minister of State has the floor.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Somebody obviously cut it down. I will read out the Topical Issue, as originally tabled.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am sorry, Deputy-----

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It read as follows: "... the need for the Minister for Agriculture, Food and the Marine to protect farmers, to address the increased price differential between Irish beef and British beef in British supermarkets, contrary to the single market and the steps he is taken to ensure that horticulture farmers get a fair price for their produce this Christmas". That is what I submitted.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is not what is in front of me or the Minister of State.

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I assure the Deputy that neither I nor the Minister for Agriculture, Food and the Marine cut down the Topical Issue.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Someone did.

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am sure the Minister will be more than happy, through direct correspondence, to address the concerns of the Deputy. I undertake to pass on those concerns to the Minister.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I ask the Acting Chairman-----

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I want to let the Minister of State finish and then I will allow the Deputy to come back in.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Would it be possible for the Acting Chairman to inquire if the Ceann Comhairle's office cut down the Topical Issue? Certainly no one contacted me about it.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It would be normal-----

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The allegation has been made by the Minister of State that-----

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

With all due respect to the Deputy, I have the floor.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We are out of time.

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

With all due respect, no allegation was made. I have reassured the Deputy that horticulture is being given the highest priority by this Government and the Minister for Agriculture, Food and the Marine. As I have just said, the Minister would be more than happy to respond in more detail to the Deputy with regard the concerns he raises relating to horticulture. I am making no allegations but am simply reassuring the Deputy that horticulture is an issue of high priority.

I am addressing the beef related issues raised in the Deputy's Topical Issue which is before me. Irish beef is now listed with more than 75 high-end retail chains across the EU. This wide portfolio of customers has contributed significantly to higher returns for Irish beef in recent years and reflects the success of Bord Bia's differentiation strategy, which focuses on the main attributes of Irish beef, namely, environmental sustainability, grass-based production systems, full traceability, quality assurance at all stages and superior eating quality.

Since taking office, the Minister for Agriculture, Food and the Marine has led trade missions to a wide variety of destinations including China, the United States, Algeria, Japan, the Gulf States and west Africa, where he is today, to promote Irish food and beverages, including meat exports. These initiatives have led to several notable successes in securing agreement to export Irish beef to Japan, Singapore, Egypt, Iran, the US, Canada and Oman. The ban in China on boneless beef from Ireland has been lifted for animals under 30 months, thus making Ireland the first and only EU member state to reach this stage. Further work is required before trade will commence and the Department is currently engaging with the Chinese authorities on the technical details.

The beef market in the US was opened in January 2015 and as of the start of November 2015, an estimated 1,300 tonnes valued at €9 million has already been exported. This is a strong start to this trade considering that the first exports only began in March 2015 and some of the plants were only approved for export as recently as September. Ireland has now become the second largest supplier of beef to the Philippines and supplied around 20% of its beef imports during the first quarter of 2015.

The Minister has invited stakeholders to the next round table which will take place on 16 December. The Minister established the round table last year for the purpose of bringing all sectoral stakeholders together and facilitating open discussion between industry, farming organisations and others on the strategic path forward for the beef sector. There have been a number of notable successes from the round table already and the next meeting will see further progress including on establishing producer organisations in the beef sector for the first time.