Éamon Ó Cuív (Galway West, Fianna Fail)
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4. To ask the Minister for Agriculture, Food and the Marine to set out the steps he is taking to protect farmers and address the increased price differential between Irish and British beef in British supermarkets, contrary to the Single Market; and if he will make a statement on the matter. [2367/16]

Éamon Ó Cuív (Galway West, Fianna Fail)
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As the Minister is aware, there is great concern in the beef industry about the widening gap between the price paid to Irish farmers, as against British farmers, in the British market. The beef forum confirmed that the gap had widened to 82 cent per kilogram or €293 a head last year. I understand at the moment it is €1 per kilogram. What steps is the Minister going to take to deal with this issue? We have been pursuing the Minister on it for a long time but we have not had any action.

Simon Coveney (Cork South Central, Fine Gael)
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The Deputy will know that any Minister in any EU member state has limited scope to influence price one way or the other. The market determines the price for beef. Let us consider the performance in price in the past five years and compare Irish beef prices versus the EU 15 countries or 28 countries. We have seen that in the past five years for the first time we have pushed on past 100% of the average price of the EU 15 and EU 28 countries. In previous periods under previous Ministers, the figures were far lower. In 2009, we were at 90% of the EU average and in 2010, we were at 91% of the EU average, whereas in 2012, 2013 and 2015, we were well above the average. We need to put this into context in terms of how Irish beef is seen. I am keen for it to be seen as a premium product and for it to be higher priced than the average across the European Union.

Obviously, we have an important relationship with the United Kingdom because more than half of our beef exports now go to the UK. I am keen to see the gap closing rather than opening up but there is a series of reasons there is a price gap. The main reason is that British consumers want British beef first. After that, they are happy to take Irish beef, which they see as very good. All of the research shows this. As a result, most of the retailers want to buy British beef first. Then they will buy Irish beef to meet the extra demand that exists. Therefore, there is a higher percentage of British beef going onto the shelves of supermarkets in Britain and that is the highest price segment for beef. The higher the percentage that goes into that higher price segment, the higher the price those involved can pay for British cattle versus Irish cattle. It does not take a genius to figure that out. Given the country of origin labelling rules, this is the reason all British supermarkets want to sell British beef first. Only three of them actually stock Irish beef but they are the big three and that is why we have huge volumes going in there. Exchange rates have added significantly to this in the past 12 months but the main reason is that there is a far higher percentage of British beef going into the higher value markets in Britain, which is the highest value market for beef in the world, than the percentage of Irish beef. We will continue to market and work to get more Irish beef into that higher value market.

Éamon Ó Cuív (Galway West, Fianna Fail)
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It is funny that others in the European Union are not half as sanguine as the Minister about the dominance in the market of a small number of retailers and processors. Every time I have gone over there, they have shared my great concern that there is what we call the hourglass effect. In other words, there is dominance in the centre and basically beef farmers are price takers not price makers.

Other than what is turning out to be a rather toothless beef forum, what steps is the Minister going to take here? There is a grocery price adjudicator in England, for example. Moreover, what is the Minister going to do at EU level, where there is total willingness to try to deal with this matter? What steps will the Minister take to address a fundamental undermining of the free market?

Furthermore, is the Minister concerned, beidir, about the move by ABP Foods to take over 50% of Slaney Foods? That would further concentrate ownership of beef processing in a small number of hands?

Simon Coveney (Cork South Central, Fine Gael)
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I share the concern that the margin available to primary producers from the final sale price of food has been getting slimmer. That is a concern I share with Phil Hogan and I have spoken about it many times. However, I have also been honest with people, unlike other people. I have said that this issue has to be dealt with at a European level. If Ireland starts introducing heavy-handed laws in Ireland alone, retailers will simply source produce somewhere else - that is the reality. Therefore, at a European level, we need to try to ensure that primary producers get a fairer share of the final price in terms of the margin. That would be good across all sectors, not only the beef sector, and I am fully supportive of the Commission efforts to do that.

I do not accept Deputy Ó Cuív's accusation that the beef reform is toothless. The beef forum was never supposed to negotiate price. Legally, it is not allowed to negotiate price but Deputy Ó Cuív seems to ignore legality when it suits him politically to do so.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Thank you.

Simon Coveney (Cork South Central, Fine Gael)
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No, sorry, a Cheann Comhairle. What we are doing directly is-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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No. I have to watch the clock because of the time limits.

Simon Coveney (Cork South Central, Fine Gael)
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What we are doing directly is setting up a new negotiating structure that will strengthen the hand of farmers by setting up new legal entities, known as producer organisations, for beef farmers. They will be able to negotiate and operate with economies of scale because they will represent a large number of farmers.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I will let you back in presently.

Simon Coveney (Cork South Central, Fine Gael)
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They will negotiate directly with factories to get better prices.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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It is a question of the clock. There are limits on this and I am only applying the rules. Otherwise, other Deputies down the line will not get to their questions.

Éamon Ó Cuív (Galway West, Fianna Fail)
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There has been a major failure to develop the live trade in recent years and the percentage of cattle exports fell last year by 25%. Does the Minister now accept that beef farmers are likely to come under tremendous pressure in the second half of this year - there could be between 50,000 and 80,000 extra cattle coming out - because of the lack of live exports last year?

Is the Minister going to address this with the same vigour as he addressed difficulties in the dairy industry? Is he considering the introduction of a direct payment for farmers in the beef industry, like the payment he brought in to dairy farmers when there were difficulties in that trade? Beef farmers are facing a serious situation at the moment because of the extra cattle and the failure to create competition through a robust live trade out of this country that would serve as competition with the factories. These factories are squeezing the life-blood out of farmers by not paying them fair prices.

Simon Coveney (Cork South Central, Fine Gael)
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One can tell there is an election coming up with this stuff - God Almighty.

Mick Wallace (Wexford, Independent)
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One can tell that on both sides.

Simon Coveney (Cork South Central, Fine Gael)
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Anyone who understands the beef industry understands the reason there was not as big a live export last year as the year before. It was because there was a better price to be got in Ireland. That was the reason. There was not the same demand for live cattle exports as there was previously. Actually, we have facilitated the live export trade in recent years. I have said consistently - I will always say it - that live cattle exports have an important role to play in the Irish beef industry. The option keeps factories honest and ensures there is a competitive pricing option for farmers if they wish to export animals live rather than going to the factory or the mart.

However, the truth is that when we have years when prices are on the up, farmers hold on to their animals because they believe they can get a better price. They are paying more in marts because they believe prices are strong. The price of store animals last year was at an all-time high.

We face some challenges, obviously, in terms of live exports. In particular, we were sending a large number of animals to Libya in north Africa. Obviously, that country has problems at the moment and, therefore, there are difficulties for us. However, we will continue to support the live trade, especially when there is increasing supply, which is the case at the moment, to ensure we get as much competition into the market as we can.