Tuesday, 22 March 2016
Agriculture and Fisheries Council Meeting: Statements
Before I speak about agriculture, I wish to express my solidarity and my revulsion at what has unfolded in Brussels today. It has been reported that up to 34 people, maybe more, have lost their lives in a metro station and at the airport there. From our point of view, today is about solidarity. Ireland and Europe collectively need to find ways to respond to try to guarantee the security of our citizens and prevent the kinds of atrocities that we have seen in multiple European cities at different times in recent years, the latest being in Brussels. These issues are not easy to address. I believe the House should and will spend many hours debating broader security issues and the consequences of deep conflict in different parts of the world now impacting on security within the European Union. The solutions are incredibly complex. They require collaboration, partnership and support within the European Union and further afield. Undoubtedly, there are links between the extremism, conflict and division in other parts of the world and what is happening now in the European Union. Today is a day for solidarity, sympathy and support for a city that most of us know well. Certainly, I know it well, having lived there. Indeed, more than 10,000 Irish people live and work in Brussels. I hope none of them has been directly affected by this but I imagine many of them will know people who have been. It puts many of the other issues we are discussing today into a sobering context and light.
I am glad to have the opportunity to update the Dáil on discussions that took place last week at the AGRIFISH Council of Ministers in Brussels. Proceedings were dominated by the debate on the continuing difficulties being experienced in dairy and pigmeat markets. My opening remarks will concentrate on these issues, but I will also give the House a brief synopsis of some of the other things discussed.
I welcome the new Members, several of whom have a great deal of experience with agricultural issues. That is welcome and I look forward to the debates we will have in future in respect of agricultural issues, regardless of which side of the House we are on.
Agricultural markets, in particular the dairy and pigmeat markets, have been under sustained pressure for a considerable period due to factors such as the slowdown in the Chinese economy, the Russian ban on EU food imports, increased EU and global production, low oil prices and especially sustained low grain prices during the past four years. Although price volatility has been a feature of commodity markets for some years, the latest downward pressure on prices has continued for a longer period than expected and has caused real difficulties for producers in Ireland and throughout the European Union.
Member states and the Commission have been monitoring the situation closely since difficulties first started to emerge. The emergency meeting of the AGRIFISH Council in September led to agreement on a €500 million package of measures designed to help farmers to overcome the crisis. This came on top of measures that had already been in place in response to the Russian ban and included a targeted aid fund of €420 million allocated to member states in national envelopes, with the option of a 100% top-up using national funds, an enhanced private storage aid scheme for skimmed milk powder, a further private storage aid scheme for cheese, increased rates of advanced payments under the direct payment scheme and rural development programmes and increased funds for food promotion programmes. It was also agreed that efforts to tackle non-trade barriers in third countries should be intensified. Efforts to further develop third country markets should also have been intensified. The monitoring of the dairy market should be and has been strengthened. A task force on agricultural markets should be established.
Ireland's share of the targeted aid fund came to €13.7 million and in December I announced my intention to match this EU fund with a further €13.7 million in Exchequer financing. This allowed me to allocate a total of €26.4 million to dairy farmers in the form of flat payments of just under €1,400 per farmer, a top-up for young farmers and a further €1 million in flat rate payments to pig farmers.
Other member states have also been implementing the September package, to varying degrees, in recent months. However, the continuing difficulties and the general pessimistic outlook for the rest of 2016 prompted a further discussion of the situation at the AGRIFISH Council in February. Member states were asked by the Commission to submit proposals for consideration and these were discussed at our meeting last week. We also had a dairy forum meeting to make sure there was a broad input into the package of measures we would put to the Commission.
The Council's discussion was generally very constructive, helped in large part by the Presidency's distillation of the many suggestions received by member states into a coherent overall presentation and by the willingness of the Commissioner, Mr. Phil Hogan, to respond positively by coming forward with concrete proposals. For my part, I fully shared my colleague's concerns about the way the market situation had developed. I agreed that, despite the range of measures put in place under the September package, the price pressures being endured by dairy and pigmeat producers had not abated and that it had also become clear that the global downturn in commodity prices would be more prolonged than originally anticipated. However, I also emphasised that markets were affected by many factors at any given time and that the ones I mentioned, which are influencing the situation, were temporary in nature. We need to ensure the demographic and other demand factors that underpin agrifood markets in the medium and long term will remain fundamentally sound. We also have to bear in mind that farmers and processors need policy certainty and stability. It is, therefore, critically important to avoid doing anything that would undermine confidence in the policy framework. It is also critically important to avoid any action that would distort the Single Market, particularly from an Irish perspective. While, of course, we need to deal urgently and effectively with this temporary problem and ensure Irish and EU farmers will be protected from the worst impacts of the fall in prices in the short term, we must also ensure they will be remain well placed to avail of emerging opportunities when markets recover, as they will.
I was broadly happy with the conclusions of the Presidency following the Council meeting which addressed most of the demands set out in the ten-point plan Ireland had presented to the Commission. They acknowledged the depth and duration of the crisis and called on the Commission to take a number of initiatives, including the activation of all available and appropriate measures and the doubling of the intervention ceilings for skimmed milk powder and butter to 218,000 tonnes and 100,000 tonnes, respectively, and to consider further support for the pigmeat sector through a new private storage scheme and greater flexibility in the implementation of the enhanced private storage scheme for skimmed powder in order that it would be more attractive to operators. We will reduce the length of time required to keep skimmed milk powder in storage in order to avail of the advanced storage aid package that will cover the full cost. Previously, producers were required to hold onto it for a full 12 months and would have been subject to penalties if they had brought product back into the market before then. Ireland also called on the Commission to consider further flexibilities in the operation of the state aid regime.
I have also called on the Commission to further consider the temporary suspension of EU import tariffs on fertilisers in order to reduce import costs for farmers in Ireland and the rest of the European Union. The idea that we are charging a tariff on fertilisers imported into the European Union and, therefore, increasing prices when farmers are operating within very tight margins, if there are margins at all, is totally unacceptable. The Commissioner supports that position, but other Commissioners are involved in the decision.
The conclusions also provide for a temporary facility, allowing producer organisations, inter-branch organisations and co-ops in the dairy and pigmeat sectors to control supply among their members on a voluntary basis, in response to very strong lobbying on the issue from France and other member states. In the lead-up to the Council I expressed my total opposition to supply controls and last week reiterated Ireland's view that constraining EU production would amount to a free gift to our global competitors, as well as slowing recovery in the European Union when markets improved. I also voiced our opposition to the allocation of any new EU funding to incentivise such reductions. These arguments found favour with many of my colleagues around the Council table.
While I remain concerned about the inclusion of supply control provisions in the Presidency conclusions, the measures are voluntary and limited and actions taken by producer organisations and other first purchasers of milk are of a temporary nature. They do not and will not constitute a return to quotas. It is very important that we emphasise that point, something we made very clear at the Council and which was confirmed in its conclusions. We are responding using all of the tools available to us.
Others have sought an increase in the intervention price. The Commission is fundamentally opposed to this because it would encourage some countries to produce more milk, which is not what it wants. However, on balance, the actions taken to date constitute a reasonable response. We need to keep the issue under review and will return to it again at the June Council.
I welcome the opportunity to say a few words about the outcome of last week's Council of Agriculture Ministers meeting. It is fair to say we are at a crossroads as regards farm incomes and, in particular, the continued viability of the family farm model. A few years ago we were told that dairy farming was the new gold, ór nua, and that if people invested large sums in expansion, it was a good bet. The reality is that 17,000 farmers are facing very precarious times, with an average milk price of approximately 25 cent per litre, including the VAT rebate. This is below the cost of production. Ornua, the Irish Dairy Board, has forecast an average price of about 24 cent per litre for 2016. The reality is that farm incomes were down by 9% in 2015 compared to the figure for 2014, while average dairy farm income dropped from about €68,000 in 2014 to €48,000 in 2015, according to the Teagasc Outlook 2016 report.
There is a perfect storm. Difficulties in the Chinese market, a Russian ban and a high tax bill in 2014 have all contributed to the current situation. As I said, when the Minister was constantly referring to expansion, I warned that it would be particularly precarious for young farmers with limited experience and high borrowings if there was a downturn in the market. I did not realise it would be so severe and rapid.
I refer the European Council meeting last week.
There were some welcome measures but we need more concrete measures, and we are particularly worried about milk supply management measures. The problem is that if the crisis continues, the supply that comes in voluntarily today could become mandatory in the future. A reality reduced production will not solve the crisis. I understand that France was heavily demanding that the Commission would introduce supply management measures by invoking Article 222 of the Common Market Organisation Regulation. The French position is very different from ours because they have a large internal market of 60 million people. However, if we were to go down the supply reduction route, it would hugely affect exporting countries such as Ireland and those in which milk exports are a major revenue earner. Some 90% of our milk is exported, and we produce 5.5 billion litres per annum. Dairy exports are worth approximately €4 billion. Therefore, supply measures, as the Minister stated, do not make sense because when an upturn happens we will be behind the curve with respect to world competition. Also, as the Minister has continually pointed out, year on year over the longer term the world market for dairy increases by 15 billion litres per annum, which is approximately three times our production.
Our concern is not about the voluntary measures but that this is a step-by-step approach because that is normally the way Europe works. We are concerned that if the market deterioration continues, what is voluntary today will become compulsory or they would levy over-production in Ireland, as they would see it, to pay or compensate continental farmers for reduced production. The Minister might say that is not in the conclusions. I know that, but this is only one round of what might be a number of rounds, and once we start giving in on the approach of supply reduction rather than other methods, we will be going down a slippery slope.
We welcome the measures agreed at last week's EU Council, including the increase in intervention quantities for skimmed milk powder and butter, a new private storage aid scheme for pigmeat, financial tools to support farmers and a new model of export credit insurance. We very much welcome the increase in state aid ceilings. I have felt for many years that state aid ceilings and various de minimisrules are way too restrictive. The increase of €15,000 per farmer per annum, compared with €15,000 over three years, which is €5,000 per annum, is certainly welcome. That will allow us to come up with flexible solutions such as farm taxation methods to allow for income averaging without breaching European Union laws.
I do not agree with the Minister, or Europe, that the lack of an increase in intervention price is a good idea. Intervention in terms of world prices is a contradiction because if we get the product at a world price, we get it anyway. The product is quite saleable at that price. Intervention prices should reflect basic production costs. We are not and have not been looking for any more. We should continue to seek a review, and the French approach should not dominate all the time.
We must also convince our European counterparts to introduce measures to ensure market stability. We believe the basic support should be increased from 21 cent to approximately 26 cent per litre.
An issue of major concern to us is the failure once again to get a deferral of the superlevy. One would have thought that would have been an easy win, but rather than collecting the superlevy that arose in the final year of milk quotas, the European Union is insisting on this levy being collected in the current crisis. I regret very much there was no consensus to remove fertiliser tariffs, which would have benefited all farmers.
I welcome that the Agricultural Markets Task Force will deliver conclusions and legislative recommendations in autumn to improve the balance in the food supply chain. In fairness, the Joint Committee on Agriculture, Food and the Marine in the previous Dáil did a great deal of work on this issue. I have done a lot of work on this issue as well, and I believe it is one that must be tackled urgently at a European level. We need first to find out who is getting what in the food chain. Is it the farmer, the distributor, the processor or the retailer, and how does that change over time? There would appear to be strong evidence in the liquid milk trade, according to the market agencies' figures, that the percentage the farmer is getting has dropped dramatically. The price of a litre of milk has dropped dramatically since 1995.
We believe also that EU legislation should make it mandatory on food retailing firms that exceed certain thresholds to supply information and data on the gross margins. If we had that information, it would allow us take subsequent corrective action. A major deficiency is that this country has been slow to deal with this issue. Britain, France and many other European countries have moved ahead in getting information on who is getting what from every euro the consumer spends in the supermarket.
I add my voice to the voices of those who spoke about what happened in Brussels this morning. As the Minister stated, it is alarming that the death toll has risen greatly.
To return to the issue of the EU agriculture Ministers meeting, to tell the truth, that seems a long way off from the place I come from, namely, the west, and especially the constituency of Sligo-Leitrim. Many farmers and non-farming rural dwellers are not seeing any recovery and believe they are being forgotten not only by the EU but by Dublin. The question they ask is whether the EU is listening to them.
Many sectors of the farming community are in crisis, and even the European Commissioner, Phil Hogan, recognises that. He began to take measures last week which dairy farmers had been calling for since last summer. Perhaps it took criticism from the French and other quarters in the EU for him to take notice and take action.
Commissioner Hogan and the Minister, Deputy Coveney, have not yet taken any action in regard to the banking sector. Banks are putting serious pressure on farmers who were encouraged by the Department, Teagasc and the banks themselves to borrow and invest in dairying. These producers are now in crisis, with the price of milk showing no sign of increasing. Farmers were convinced that the ending of milk quotas was the equivalent for the dairy sector of winning the lotto, but now those same farmers are being incentivised to reduce production. The intervention price remains too low to make the sector viable in terms of making ends meet, never mind paying off the large debts many of them have incurred.
There is a great deal of dissatisfaction among farmers. They believe they have been ignored by the European Union, and it is difficult not to agree with them when they cite the rules, regulations and directives that make it very difficult to farm their land.
In my region farmers also raise the serious issue of hydraulic fracturing or fracking. They have major concerns about the devastating impact this dirty industry would have on agriculture in the area. The use of fracking is highly likely to wreak havoc on Leitrim farms due to the destructive nature of gas extraction.
Farmers in Leitrim wish to see a total ban on fracking, but the EU and the Government do not seem to be listening.
Flooding is another serious issue in the part of the world where I come from, and many farmers have been seriously impacted in recent months. I am aware of horticultural providers with tunnels on the Roscommon border which were flooded. Their livelihoods were destroyed but they do not qualify under the schemes put in place. There are many such instances throughout the country.
Another scheme which is an absolute disaster is the beef data genomics scheme which seems designed to be the least farmer-friendly scheme in existence. It has made access so difficult that many farmers are in despair and many who are part of it want out of it. Now there is talk about the sheep sector and introducing a €20 premium per ewe, which seems to be equally unfriendly to the farming sector. The suggestion to model it on the beef data genomics scheme is an example of copying failure.
There is a lot of worry in the suckler and beef sector about what may happen in the future, and the big question being asked is who is supporting the farmers. It seems as if beef processors and supermarket chains call all the shots and farmers are left with no control over anything. All cattle farmers need better prices, and this starts with the factories being pulled into line and being forced to pay proper prices for finished animals. If this were to happen, it would trickle down to the producers of these animals. In Leitrim we have five cattle markets, and many buyers come from the midlands to buy weanlings in Carrigallen and Manorhamilton. These farmers need to get a better price for their product but they will not get it if the finishers do not get a proper price at the other end.
Another issue very much related to this, particularly with regard to the rural area I represent, is cross-Border penalties. Farmers depend on buyers coming from the North and taking the cattle back across the Border, but the processors have put in place penalties so those farmers will not get the same price for the cattle. The factories are always talking about consumer demand but, in truth, the consumer is nothing but an excuse for the processors to limit prices. What the consumer wants is grass-fed Irish beef that is free from hormones and antibiotics. The consumer does not care if an animal is 36 months old or 48 months old, what weight it was when it was killed or how many movements it had. These specifications were put in place by meat processors so they can penalise farmers and make more profit. Someone needs to stand up for the farmer against this excessive profiteering. There also has to be proper transparency and fair competition in the industry. There is great concern throughout the country at the taking over of 50% of Slaney Foods by ABP. A monopoly is not good for anyone except the company operating it. This is certainly not good for the consumer, the producer at the other end or the industry as a whole.
Is the EU listening when it comes to forestry? It seems to be the super-incentivised sector at the moment, but while it may seem like an attractive prospect for some farmers, especially those with poorer quality land who are trying to be part-time farmers to make a living, what is it doing to farming in the country as a whole? Large areas are now devoid of active farming and are covered in forestry. I see this in my neighbouring parish where land has been planted which isolates communities, and before long people will not be able to see daylight in their homes.
Despite all the talk and the heralding of recovery in Ireland, the people of rural Ireland see no recovery. Austerity has devastated the west, from where our young people still emigrate. They are not returning and there is no stream of them coming back.
There was very little listening to the reasonable objections of fishermen to the way the penalty points system was being run. My colleague, Deputy Pearse Doherty, will address this. Fishermen had to go to court to get a hearing on it. Despite promises they would be listened to as stakeholders, the Minister reinstated the system without any consultation.
Farmers ask me who is looking after them. It is very hard to answer this question when several sectors are in severe difficulty, and the pigmeat, dairy and other sectors have been mentioned. The overall agenda needs to change and become focused on making the family farm a profitable enterprise. When small farmers are making money, the rural economy is vibrant because they spend all their money in the local economy. The EU and Ministers with responsibility for agriculture throughout Europe and here must recognise the vital stimulation that a profitable food production sector can offer to deprived rural communities and they must support the family farm. Last week, I met a young man in my area who farms approximately 40 acres and has 22 cows. He is rearing three children and sends them to our local national school. He told me his lament is he did not do what his brother did seven or eight years ago, which was to leave and go to the United States. This is an indictment on where small farmers and smallholdings in the west have been left. This needs to change. We need to protect the people at the bottom to ensure everyone can make a profit and have a decent income for themselves and their families and keep rural Ireland alive. The Minister for Agriculture, Food and the Marine in particular, and his colleagues throughout Europe, have a role in ensuring this happens. It is the same throughout Europe. Recently I met farmers from deprived areas of Europe who also deal with smallholdings on marginal land. They have the very same issues as we do. We need to ensure farming is made profitable for smallholders because if it is then rural Ireland will become vibrant again.
I join colleagues in offering my sympathy to the families of everyone injured and bereaved in the horrendous acts of terrorism in Brussels this morning. I hope the perpetrators are brought to justice as quickly as possible.
As far back as we can go in our history, this country has been a farming nation. It has a very proud tradition of people making a living from the land, of families continuing the work of their parents and of a rich rural community based on the vital work of farmers. Action on agriculture has been a consistent feature of our economy, and the Labour Party wants to ensure it stays this way. Many challenges face our farmers and producers. Global forces demand change from us all, whether we have a volatile global market place, the need to tackle climate change or simply the demographic pressures which are changing how our society works. Irish people are emerging from a long and difficult downturn, and every group has made real sacrifices to get to this point.
An issue which has been very important for farming is volatility in the milk market and the outlook for same. Volatility has increased in the dairy sector for various reasons. Generally it is a question of mismanagement between supply and demand, but other factors are at play. Dairy and food in general are unusual because minor changes in supply and demand, scarcity or oversupply can lead to major changes in price. The reason for this is the time lag involved, which is generally one to three years, unlike other industries which can be changed overnight and turned off.
Since 2007, the frequency and magnitude of change has increased quite dramatically. There are a number of reasons for this volatility. We have moved from a regulated dairy market to a free market with very little product subsidisation and no refunds. Intervention, at 21 cent, is well below market levels, with the cost of production at 27 cent, and this will be a huge shock. Weather shocks are also having a major impact. A further complication in the Irish context is the seasonality or grass-based nature of our milk production. We have a peak to trough ratio of 7:1 whereas the rest of Europe is quite flat. Somebody pointed out to us one time that if 75% of milk is produced over a short period, perhaps 50% of the year, and the market is very firm, much of the milk will be bought at that price, but if the market is very weak, it compounds the volatility. The flat curve which occurs in the rest of Europe almost has a natural hedge built into it. An issue is that European production has been very strong. EU milk production increased by 4.5% in 2014 and 1.6% in 2015. This is a 6.1% cumulative increase in two years. We must remember that Europe is seven times the size of New Zealand when it comes to milk output, so what happens in Europe is key.
There are also a number of issues on the demand side. The Russian ban has had a huge impact on EU exports, especially cheese. Russia imported approximately 30% of EU cheese and butter, or 240,000 tonnes per annum. This is huge and accounted for 15% of EU exports. The second big demand player was China. In 2014, when it imported a large volume of powder, the equivalent to an additional 2.2 billion litres of milk over 2013, everyone thought it was genuine demand, but it was not. Approximately 1.5 billion litres had to be taken out because of foot and mouth disease, poor weather conditions and stricter farm regulations. Since 2014, this has been corrected and domestic supply has recovered. Imports in 2015 reflected this. A number of issues have affected where we are in the milk trade in terms of the world market, and we must be cognisant of this.
What is very important, but very unusual in terms of milk, is that overall Europe exports approximately 10% of its milk but closer to 40% of Ireland's volume is exported outside Europe, so there is a high dependency outside Europe and these are the markets that we will grow and focus on from now on. Daily consumption, especially of butterfat, is increasing in the US. That is a bit of positive news. Ten years ago, butter was the villain in respect of health but now it is seen positively, which shows how things can change.
I notice what has happened with Commissioner Hogan. States are now being allowed to subsidise agriculture which will put a significant strain on us. It is an important deviation from the Common Agricultural Policy, CAP, that we are now moving to state-backed subsidisation, which would mean that very wealthy states are in a position to do that as opposed to Europe taking the role itself. That may be the first step to something that may come back to haunt us, so we have to be very careful. What we wish for might happen.
I wish to talk about beef, which is a very important, but first I will discuss an issue regarding the failure to meet commitments agreed on for farmers in the farmers' charter in respect of no-notice inspections and so on. It is time interest was payable to farmers for the failure of the Department to make timely payments because that applies for small businesses and so on. There must be tolerance regarding cross-compliance. We cannot have huge penalties for small inadvertent breaches. One of the things I noticed in terms of the Bord Bia quality assurance scheme was that trivial reasons were cited. I know it is being reviewed but a bit of common sense must be introduced and farmers must be given time to address minor omissions or failures rather than being locked out for three months. Approximately 7% of those who failed beef quality assurance did so because of record-keeping issues. Farmers used to get a month to correct the oversight in cases of non-compliance and the same should apply for the revised beef scheme. That can lead to a loss of 12 cent on cattle, so it is extremely important.
The mid-term review of CAP will offer opportunities to build and expand some of the existing schemes. We certainly need a new scheme for sheep. If I do not mention this, Eunan Bannon will give out to me. The €20 was agreed many years ago by a committee chaired by Deputy Bobby Aylward's brother, Liam. That €20 has been hanging around since being recommended by a cross-party committee. It is about time that Europe stepped up to the plate and honoured the commitment that was given many years ago in this regard. It is extremely important.
In regard to beef, Ireland's livestock sector plays a key role in the national economy and there are more than 100,000 farmers involved in cattle production. From a supply base of more than 1 million sucklers and 1.3 million dairy cows, the industry produces more than 550,000 tonnes of beef annually, of which almost 90% is exported, so there is a 9:1 ratio of export to domestic consumption. As a result, Ireland is the largest net exporter of beef in the northern hemisphere and the fourth largest in the world. Irish beef exports exceeded 500,000 tonnes last year and according to Bord Bia, it is valued at €2.4 billion. Following a difficult back end for cattle prices, market conditions since the beginning of 2016 have been poor. That can happen for various reasons, such as changes in consumer preferences and patterns of purchasing behaviour. Recent analysis of the Department's agriculture and animal identification and movement database suggests that during the first half of 2016, prime cattle availability will be the same as 2015 but recovery of supplies will materialise in the latter half. We will have approximately 60,000 to 80,000 additional head of cattle for slaughter and the impact that will have on the price must be factored in. It should be noted that the European cow herd has increased by 0.5 million cows since 2012; there are now 32 million cows right across the European economy. We have to be very cautious in that regard.
We have Bord Bia's quality assurance scheme but I cannot but note - I am not a bit surprised at the recent statement from the Irish Co-operative Organisation Society ICOS - that the beef grid as currently constituted is anti-trade and urgently needs to be reviewed. The beef forum discussions have clearly failed to address this and it is a long-standing and thorny issue - the quality payment system, where penalties are significant at farm level, losing up to €75 or €80 per head, with a strict 420 kg carcass weight limit. It is clear there are issues with weight limits and age and quality assurance restrictions. The 70-day pre-slaughter movement restriction can impact on price achieved and the 12 cent bonus can be wiped out. I know from where I come that it is clear that the vast majority of cattle from the suckler cow herd would exceed the 420 kg carcass weight limit and it would be impossible to achieve this restriction on a grass-based system. We will end up losing the competitive advantage we have always enjoyed through grass-based production. We have now arrived at a situation where, as Edmund Phelan from the ICSA said recently, the weight limit of 420 kg hits hardest on the better U-grade carcasses, with a bonus of up to 20 cent per kilogram being lost. One was of the view that the quality payments system, QPS, rewarded quality. It is time the beef forum facilitated a full review. The Minister should ensure Teagasc has a significant input into that. We need a full and thorough independent investigation of the type and level of competition across the sector and to continue the availability of markets for live exports. There is an important role in sustaining competition. I know the Minister has fought hard to get the north African markets open and like us, all beef imports must meet the same safety, traceability, animal health and welfare and environmental standards as applies to all beef produced within the EU. There can be no concession for any trading bloc in this area; we are entitled to the same standards that apply everywhere else.
We have looked at the disproportionate power of the retail corporations and it is of major concern. We need legislation at EU level to curb the power of the multiple retailers and corporations in order to improve the lot of primary producers, so they can get a fair return from the marketplace. We need to ban below-cost selling of food produced by farmers. I believe it is going on this week, with carrots and so on. How can we expect farmers to continue to survive in a climate that is undermining their efforts and why should they be expected to survive in markets where there is obviously a distortion of that nature?
A debate like this can often be taken up by the minutiae of subsidy regimes, quotas and CAP reform but a bigger picture can be lost if a debate like this is confined to such narrow terms. The Department of Social Protection reported in 2013 that one in ten persons in this State was experiencing food poverty. The European Federation of Food Banks likewise reported food poverty rates of 9.6% across the European Union in 2014 and they were applying the same definition as the Department of Social Protection. In addition, the European Federation of Food Banks states that a further 14.8% of the EU's population is at risk of food poverty. I need not illustrate the point further by venturing into the global south, where the rates of food poverty and starvation are far greater again. In spite of this, the main crisis occupying the agriculture Ministers across the EU happens to be a crisis of overproduction, particularly in the dairy and pigmeat sectors.
To focus on the dairy sector specifically, former Minister for the Environment, Community and Local Government, Phil Hogan, who now occupies the position of EU Agriculture and Rural Development Commissioner of Agriculture, promoted with some fanfare last year the lifting of milk quotas and put forward a perspective that small and medium-sized dairy farms in Ireland could now upscale in an era where the sky would be the limit. However, the weak predictive powers he had on display when he was Minister responsible for water charges are now fully on display in the European arena. Hardly a few months had passed from the lifting of the quotas when the Putin regime in Russia announced its embargo on EU dairy products, leaving those farmers who borrowed to expand their dairy farms high and dry. Without a hint of humility, Commissioner Hogan, in his address to the EU agriculture Ministers last week, said that the lifting of the quotas was always going to lead to volatility in the market.
Rather than admit defeat and return to the quota system, the Commission has announced a series of supports and exceptional measures for storage of surpluses.
The very desirability of expanding dairy and meat production with a view to encouraging exports outside of the EU has to be challenged from an environmental perspective. The active encouragement by the Minister, Deputy Coveney, and the Commissioner, Mr. Hogan, of dairy farmers in this country to expand their production flew in the face of the necessity for Ireland, like every advanced country, to lower its greenhouse gas emissions - something from which the Taoiseach disgracefully sought to exempt Ireland at the Paris conference last December. Trade agreements such as the Transatlantic Trade and Investment Partnership, TTIP, which, if passed, will have a major bearing on agribusiness, will likewise serve to encourage a global increase in air miles and the ludicrous situation of identical food products crossing each other's paths on the high seas and in the skies, contributing to the wrecking of the planet. Yet such an intensification of global competition is underpinned by an obscene EU agricultural promotional budget of €111 million.
We need an absolute break from the capitalist mode of agriculture, which benefits big business the most. The website farmsubsidy.ieprovides the startling figure that the main beneficiaries of the current subsidy system are not the small farmers who are most vulnerable to the chaos of the market. Rather, it is the multinational giant Greencore that has gained the most - €88 million to date. In fact, all of the largest beneficiaries are in the big business sector. What is needed is a national, Europe-wide and global plan for food and timber production that puts people and the environment first. It is entirely technically feasible to rationally plan agriculture, fishing and timber production in a manner that can eliminate food poverty and provide a decent diet for all as well as a living income for small family-based farms and for workers engaged in primary economic activity the world over. However, while food production remains concentrated in the hands of agribusinesses, which benefit most from the current dispensation, and while the political establishment in Europe remains wedded to supporting what is a fundamentally capitalist model of food production, with a system of subsidies that does not guarantee a living income for farmers with small or medium-sized holdings, we will continue to have the perversion of food poverty co-existing with overproduction, alongside the destruction of the environment, which hurts most those countries that already experience the worst in food poverty.
The Anti-Austerity Alliance rejects the stereotype that places the radical left in opposition to the farming community. We support a living and secure income for those with small and medium-sized farms, and the type of socialist planning that I describe is the best way to achieve that. However, at the top of food production, agribusiness has fused entirely with the capitalist mode of production and, here and the world over, has to be taken into democratic public ownership as an essential service to the public.
The Minister's attitude to the latest EU meeting, in celebrating the failure of the EU to agree a system in which we would be incentivising a reduction in milk supply, is a little like the fellow who is laughing at the funeral and crying at the wedding. While there are many circumstances in which such a reaction might be appropriate, it is not the norm.
The Minister's reaction is out of kilter. While we can look at the overall issue - the rights and wrongs of quotas and of incentivising people not to produce something, and the madness of that-----
If we park that for now and look at what is going on in the world, and consider a holistic approach to agriculture, factoring in the environmental costs, then the only conclusion that could be drawn is that we need to take an entirely different approach, instead of responding systematically to short-term interests and being motivated by farmers' incomes - which are important but are not the only issue - regardless of the environmental costs. We have a serious problem, because what is necessary in this country is quite a radical restructuring of the way in which we farm.
The outcomes of the latest meeting include Ireland's being allowed to continue to ramp up its milk production, which the Minister is obviously delighted about, but it fails to take into account that ramping up beef and milk production has serious consequences for the climate. Milk output is expected to increase from 5 billion litres to 8.5 billion litres by 2020. The Minister is on the record as saying that this means exporting an extra €1 billion worth of milk. It means increasing the herd size by between 300,000 and 400,000 cows, which, Deputy Coveney stated, will make Ireland the fastest-growing dairy producer on the planet for the next five years and, he went on to state, probably the next ten years. This is not good, and I do not say that lightly. I say it, actually, in a thoughtful manner. Ireland's 1.1 million cows produce huge amounts of methane, as well as nitrous oxide, another powerful greenhouse gas. Methane, as the Minister will be aware, is 20 times worse, as a driver of climate change, than carbon dioxide over 100 years. Ireland's agricultural sector accounts for one third of national greenhouse gas emissions. That is three times the EU average, or, in the words of the Department, the highest proportion of any country in the developed world. It is simply unsustainable.
The Minister told us in November 2014 that planning a boom in dairy and beef exports by increasing the size of the herd could be done while maintaining the existing carbon footprint of the agricultural sector. He was wrong in that regard. It is not true. That is not what happened. Agricultural emissions, which already make up 30% of Ireland's total, are expected to grow by a further 12%, according to the EPA, thanks to the impact of Food Harvest 2020 and the removal of milk quotas. That is an unthinkable increase in the context of the Paris agreement and the absolutely dire need that Ireland has now to cut its emissions. We have spoken about it here previously.
Ireland is an emissions disaster. On a per capitabasis, we currently emit 75% more greenhouse gases than China. We are the second worst per capitapolluter in Europe, after Poland. The total greenhouse emissions from Ireland-----
That is my next point. I find it intriguing that I am the only Deputy the Minister has chosen to interrupt. I am glad to see the Minister is continuing in this Dáil as he left off in the previous one. If the Minister does not mind, I will address the point in a minute.
It is unacceptable that total greenhouse gas emissions from Ireland, with a population of 4.5 million, are greater than those of 400 million of the poorest people on the planet, and policies of the Minister and others have contributed to that. John Sweeney, professor of geography at NUI Maynooth, has pointed out the hypocrisy of Ireland's approach on this, stating in a letter to The Irish Times: "[W]e look to China to reduce its emissions while feeding our demand for manufactured goods, but facilitate Irish agriculture via Harvest 2020 to increase its emissions in order to supply powdered milk to meet the demand from middle-class Chinese consumers." We have to stop dancing around this issue. If we are to have any hope of doing our bit to avert climate catastrophe and if we are really interested in food security, we have to radically restructure how we do farming here, and the sooner we do so the better.
No, we are not.
Ramping up production of dairy and beef and arguing at EU level for the right to continue to do so, as the Minister did last week, is incredibly shortsighted and will drive us into further costs, environmentally and financially. One of the key actions we must take is to turn away from beef and dairy towards more sustainable agriculture, and changing our diet is a key part of it. We should eat far less red meat and dairy, and it must be among our Government health promotion initiatives. The UK's Chatham House has pointed out that, despite their vast contribution to climate change, beef and dairy production attract very little policy attention. We must change this. One can make a compelling case that without dietary change at a global level, the 2° Celsius global warming goal is pretty much off the table. As a means of converting calories into food, red meat production is staggeringly inefficient. Recent research has found that producing one calorie of beef requires 160 times more land and produces 11 to 48 times more greenhouse gases than producing food such as potatoes or rice.
One of the most significant changes we could make to effect climate mitigation would be to eat less meat. It would also do our cancer rates no end of good and, probably, contribute to the rising battle against obesity. The Minister should persuade the Government of the benefits of this as well as pursue serious changes in the structure of agriculture. However, the Minister is doing the opposite. Justin Kilcullen of Trócaire has rightly said the policies the Minister is pursuing regarding beef and dairy production have nothing to contribute to world food security. If anything, they will achieve the opposite in the long run. They are inefficient.
The Minister is fond saying we are the most sustainable, and he piped up with it a minute ago. It is arguable. I would not say we are the most sustainable. While we are not the least sustainable, but the fact that we are not the worst of a bad lot is not something we should crow about. Not only are Irish beef and dairy farming unsustainable for the environment, they are economically unviable. The Irish beef sector survives only thanks to generous EU subsidies. Without EU subsidies, averaging approximately €400 per hectare, many Irish beef farms could not survive. As we fail to reach our emissions target, thanks to Government policies such as Harvest 2020, we will be hit by massive fines of up to approximately €500 million per year. These fines will land on the shoulders of the Irish taxpayer, making cattle farming even less sustainable, never mind the cost of climate change and the impact it will have. Dr. Stephen Flood of NUI Maynooth has estimated losses of up to €2 billion per year linked to agriculture and climate change costs. It is huge.
We must step back from how we have done things, relentlessly driving beef and dairy farming forward. There must be a shift in policy, such as switching cattle farms to alternative land uses such as bioenergy crops or forestry, which could ultimately lead to a more secure and balanced income outcome for farmers. A shift to forestry would, ironically, help with the flood situation which has become a permanent feature. If we do not do it, there will be a catastrophic outcome for all Irish citizens, including Irish farmers. We cannot focus only on short-term income.
Large vested interests stand in the way of any such change and they must be tackled. Glanbia, which in 2014 routed its €40 million profits through a brass plate company with no employees in Luxembourg to cut its tax bill to only 0.5%, is happy to lump Ireland with these costs. However, the Minister should not be happy regarding the welfare of the nation including farmers.
There is nothing like "just-in-time speaking". I am very proud to be able to make a short contribution on behalf of the Green Party. I will broaden the debate from the immediate outcome of the European Council meeting and provide a reflection from our experience during the election campaign. As a south County Dublin Deputy running a national party, it was a chance to review what is happening around the country in a way that one rarely gets to do. We ran candidates in all 40 constituencies and in a large number of them, agricultural policy was centre stage regarding what our party stood for.
It was a very energising experience. Far from the farming community and the green community being at odds, in meeting after meeting we found ourselves agreeing with the farmers and we found them coming to us afterwards and saying that, at last, they were meeting members of a party that understands something of what is happening. This happened because we have a broad, fundamental understanding of the powerlessness into which we have led the farming community under the structures we are applying in the Common Agricultural Policy and in the broad agricultural strategy we follow. The lack of direct contact between farmers and their consumers has led to a significant transfer of power to the processing and large retail sectors. I will cite some examples of people who are engaged in an alternative approach.
Our candidate in Clare, Fergal Smith, runs a community supported agriculture project and was meeting farmers who recognised that he was trying to break the lack of connection between consumer and farmer. He is trying to provide an alternative approach that may lead to a better and more secure price for the farmer, which is not reliant solely on international markets, with what happens in China or New Zealand undermining what one can do here. I recently heard the Minister say international markets may change and the factors regarding how one is paid vary, depending not only on the international bulk price for milk but quality and other factors. However, there is an underlying problem. In Tipperary, one of the finest areas for dairy farming, farmers told me they could not make it work at the current price. Farmers who have some of the best land in the country and the best dairy conditions on the planet told me it was not viable. They, too, recognised that what is happening is not working.
As a Deputy representing the great agriculture community of Dublin Bay South, I do not claim to be an expert. However, I am a business man, and there is a need for us to re-examine the agribusiness sector. Going green is not against technological improvement. At a recent National Ploughing Championships I spent the entire day asking questions of farmers as they passed by. I asked what were the main changes they had seen during the past ten years, what changes they expected in the next ten years and what advice they would have for the Green Party. I was amazed at how many said the biggest change they had seen was automation. They said the use of technology in farming had changed the nature of farming and how it worked. They anticipate it will continue in the future. There is a connection between going green and a future for farming. We also see the case for using new digital technologies that can measure water quality and analyse soil samples using new technology on one's phone. The use of this very highly advanced technology to give a real understanding of what is happening in land, to look after soil and manage the basic raw materials we have in farming is an area in which the business and farming communities have a common cause.
During the election campaign, every part of the country was suffering from flooding. Again, I am not an expert. I met a farmer in Donegal who had a simple sense that he could no longer use a field that had been flooded for sheep, given that the watery environment would cause the fluke to return. A fundamental shift in thinking happened this year in the nature of the storms and flooding. Farmers have started to realise that they are at the front line of the climate change challenge we face.
As we are increasingly realising, the response to this must involve managing our land from the mountaintop right down to the sea in a way that looks after the natural systems and ecosystems that are provided on our land. It is not just about agricultural output. There is a value in having uplands with forests or with certain other conditions. They should not be shorn. Flood prevention measures should be provided. Farmers and the farms we have need to play a part in flood prevention. We need to help farmers to deal with floods, so that they start to become part of the solution. As we manage our land in an integrated way, we must look after water quality, flooding and the farm outputs in a co-ordinated way.
We need a national spatial strategy to examine how we develop housing in this country and where economic development occurs. Such a strategy should include a land use strategy that integrates the entire ecosystem, looks after the areas of wilderness that we need to provide biological and ecological services and proposes changes in the way we do forestry. We need to do what we have to do to switch how certain areas of farmland are used. As a Teagasc climate advisor, Dr. Rogier Schulte, has said, if one can manage the land in a way that optimises the environment, one will optimise one's profit. Environmental thinking and good agricultural management go hand in hand. This must be done as part of a co-ordinated national plan that manages and protects against climate change risk.
These issues have arisen time and again over the last six months, for example as we have faced the flooding risk associated with climate change. We have met farmers and heard about the latest technologies, such as the use of automation, that allow the use of land to be optimised. We have looked at new business models that reduce our reliance on international markets and start to bring back a connection with the consumer here at home. This connects with our tourism industry, facilitates the provision of healthier food and leads to more secure incomes for farmers. Time and again, I have helped farmers to realise that what the Green Party has to say on farming makes sense. If we are going to be "origin green" and if we are genuine about our intention to sell this country in the expectation of getting a premium as a land that looks after its natural systems and provides healthy and safe food, we will have a better agricultural future.
I think that is something we can get agreement on, but we have to do it in reality. We must make sure it is actually delivered. We need to get people on board. We have to effect a real change in land use. This should not just be about doubling output, reducing water quality and eroding the natural systems on which we all depend. I look forward to such an agricultural future. I look forward to further debates in this House, when the representatives of Dublin Bay South will stand up for the farming community once more.
I wish the Ceann Comhairle the best of luck in his new role. I wish everyone in the House well in the coming week. I am pleased to have an opportunity to speak on this issue. As the Minister knows and as Europe knows, many sectors of the agriculture industry are in trouble at the moment. We are well aware that the dairy sector was put out as the new Santy that was coming right across Europe as quotas disappeared. I warned many people that this would rebound back. Many people who borrowed money are suffering. They will probably go through a rough year this year. With luck, things will progress a bit for next year and should be better.
The sheep sector has toddled along for the last few years. Prices have been somewhat better over the last year. There is no doubt that we have to give the people involved in this sector some help. I am not saying we can give them everything they want, but I emphasise that they need a certain degree of help. We have lost things at the moment. This is clear when one goes to the mountains. I think we should have concentrated on the likes of organic lamb. The animals living on any of our mountains are basically organic. We should be selling them to Europe. We should not be making excuses for why the animals above on the mountain are not organic.
I think we have a tough back-end coming with the beef sector. The number of cattle exported in 2015 was 65,000 less than the equivalent number in 2010. That is a phenomenal number of cattle. If we do not export them on the hoof, our good old friends in the factories will make sure to drop prices every week when they see the glut of cattle coming out. I think we have to be ready for this. Manners have to be put on the factories that are screwing farmers year in, year out. The feed lots that those factories have at the moment are questionable. If they are feeding a large number of cattle in those feed lots, they can distort the numbers that are coming out each week. I suggest that we hit trouble any time the weekly cattle kill exceeds 27,000 or 28,000. This has to be tackled. Europe has to come on board, even if intervention has to open for a while.
We cannot have a situation where farmers who are fattening cattle are losing money. If this is happening, they will eventually go away. In fairness, I understand that Egypt is going to open. I know there are new markets on the horizon. We have to do whatever is necessary to entice the animal on foot out of the country. This will put manners on the factory system. Obviously, there will be more Friesians coming from the dairy herd. As I have said previously, I encourage the Minister to bring forward an initiative that would allow calves under the age of four, five or six weeks to be taken out of this country rapidly. Holland, Spain and other countries are pretty good at driving such calves on and killing them as veal. I think we need to do this.
I would like to mention something that is within the Minister's grasp at the moment and needs to be done. Some 14 or 15 months ago, not long after I was first elected to this House, the European Investment Bank and Commissioner Hogan announced that low funding would be made available to the dairy sector and indeed all farmers. When I was at the transport committee in Europe, I quizzed the head of the European Investment Bank on this matter. He got pretty upset when he was told he had not delivered everything he had said he would deliver, not to mind talking about giving the same thing to the transport industry. He said it was coming. I accept that an announcement was made by Glanbia and the dairy guys last week or the week before, but where is the announcement for the west of Ireland? Not one dairy co-op has taken it up. I have rang them, but they do not seem to be worried or bothered about it.
With all due respect to farmers down in the south - Glanbia might be on its game and fair play to it if it is - they can get the low money down there. However, farmers in the west of Ireland, above in Donegal or in Leinster for that matter might not be able to get it. A system needs to be rammed through a bank or something - we could even put it through a credit union - to make sure this funding is made available to beef farmers and farmers in the other sectors, some of whom are struggling. I ask the Minister to make sure the scheme mentioned by Commissioner Hogan and the head of the European Investment Bank is adhered to because this low money needs to be provided if we are to talk about recovery in rural Ireland. I will give the Minister an example. A credit union in a local area near me at home brought out a loan at a rate of something like 5%. Between €2.5 million and €3 million was borrowed in that area. This generated an unbelievable amount of revenue in a small community.
I heard people saying earlier in the debate on this topic that we need to make sure we sow more forestry. I can tell Deputies about how forestry has changed in case they do not know. It is no longer sown on boggy ground because that is not allowed. Now it is being sown on land that is a bit better. The west of Ireland was earmarked for much of this forestry. I want to make it clear that if this great idea of sowing forestry almost exclusively in a certain part of the country is adhered to, we will have to consider what to do with the people of that region. Should we run them out of it? What will we do with the local communities, schools and shops? Are we going to decide to close one section of Ireland because the land there might not be of the same quality as the land elsewhere? The people of the area might not have the dairy cows or the tillage ground like the rest of the country. We have to make sure we do not go down a road we might regret. We cannot shove everyone into the towns because we do not have the facilities there.
I know the Minister is aware that the pig sector is in trouble at the moment. If we keep going down a road that makes farmers hit a stop-gap every few years, they will have no certainty or consistency with regard to prices. I know the Minister has spoken about producer groups and all of that. That is fine and okay, but we need to make sure the cartels - the shops and the factories - are not constantly driving the agenda for farmers.
I urge the Minister, with his inspectors and the appeals board, to ensure farmers are treated fairly. The introduction of the yellow card system is to be welcomed. The relationship with farmers should be such that the objective is to help them rather than take money from them. As I have stated many times over the past year, when it comes to the Common Agricultural Policy, CAP, the objective must be to protect the family farm. Any increased use of Pillar 2 must be directed towards small family farms. It must be remembered that 95% of money invested in a family farm is reaped locally. This is evident from all the relevant statistics. Any reduction in that investment will impact negatively on local shops, local schools and local communities. I would ask the Minister to consider that.
GLAS has been changed a few times. I do not know what is going on in Europe or in Ireland that a scheme can be changed three times in one year. I cannot understand how one day low input permanent pastures in the meadows on a half and half basis was acceptable only for this to be changed to a requirement to all of one or none of the other. In regard to marginal land, one cannot use a dribble bar in Leitrim, or even in my area, because the quality of land cannot support the tanker. What about the farmer who has sheep from which no slurry is derived? The response is usually that one can sow wild bird cover. One can sow wild bird cover in the Golden Vale but one cannot sow it in marginal land, particularly in west Cork and Kerry. There are parts of Ireland to which this is not suited. We need to tailor schemes to resolve these issues if farming is to be viable into the future.
On land use, many of the farms currently coming up for sale are being bought up by vulture funds. These vulture funds are working for the banks and are buying up land, often comprising 40 to 50 acres, adjacent to working farms. The former Land Commission while not perfect ensured that land was retained within communities. What is happening now is that outside interests, often American vulture funds, are investing money and local farmers are losing out. This issue needs to be tackled.
The issue of farm debt also needs to be addressed. With the funding from the European Investment Bank, EIB, longer term loans may be possible. If we do not keep people in their communities or keep farmers in operation our exports will decline, as will other sectors of the food chain. As a country Ireland produces better food than any other country in Europe. I have no doubt about that. Ireland can compete with the best. Let us stick our chests out and when Europe raises issues such as carbon emissions and killing off the national herd, we should quickly point out that we can produce meat or any other type of agriculture product more efficiently than any of our European counterparts. For once, let them take the heat and leave the Irish people alone, bearing in mind the recent crisis they have come through.
This is my first time to speak in the House since the Ceann Comhairle assumed his new position. As a constituency colleague, I wish him well in his new role.
I would like to touch on a couple of the contributions made earlier. In response to the Sinn Féin representative who referred to the relationship with the banks, it is important to put on the record that the Minister has had numerous meetings with the banks. The banks are a key part of the dairy forum, which regularly discusses the pressure on farmers and solutions to ease the short-term pressures. Only recently Glanbia, Rabo Bank and Finance Ireland launched a new partnership approach which allows for repayment plans to be linked directly to the price per litre of milk, which is a sensible approach in these difficult times.
Deputy Clare Daly has a frightening perspective on the world. She would turn us all into vegetarians, return us to famine times where we are dependent on the potato and then take all of our good agricultural land and plant trees on it, which, personally, I think is unethical never mind ludicrous. The Deputy failed in her contribution to acknowledge that our grass-based system is one of the most environmentally friendly in the world.
On the EU agricultural Ministers meeting, I have concerns about the voluntary supply control measures permitting producer organisations and co-operatives to compensate their suppliers for reductions in supply. At home in south Kildare, I am surrounded by neighbours who have invested massively in their dairy farms to ramp up supply in this post-quota era. Commodity prices are cyclical. Notwithstanding the sustained period of low prices, they will rise again. Farmers must be able to make money on the up-swing when prices increase. It is vital that voluntary supply control measures remain voluntary and that there is no row back on quota times.
I would like to speak a little about the Glanbia plant in Ballitore in south Kildare. Ballitore is a small rural village with a population of 685 people. The Glanbia plant in Ballitore employs 250 people. Only last week the company held a jobs fair and is currently taking on an additional 25 people because for the first time, it will produce bottles at the plant. This is an example of the impact expansion in the dairy sector has on rural Ireland and rural Ireland life. For this reason, it is crucial there are no barriers to expansion. The difficulties being experienced are not only in the dairy and pigmeat sector - the tillage sector has also experienced three very difficult years. As a mixed enterprise farmer, I know that the Teagasc cereal crop margin calculator is not pleasant reading as it does not allow for a person with conacre. The removal of import tariffs on fertiliser in the EU is crucial to a reduction in costs. We also need to strive to ensure the availability of cheaper finance, including by allowing provision by the European Investment Bank of low interest rate loans to tillage farmers. Also, aid to a private storage scheme for barley would provide some short-term relief. These three measures, in particular, are desperately needed if our tillage sector is to be progressed. I know the Minister, Deputy Coveney, will in Europe strive to achieve them.
I, too, wish the Ceann Comhairle well in his new position. I am sure he will find his new role enjoyable and fulfilling.
I welcome the opportunity to speak on this important issue. In my opinion, agriculture is an issue that does not get the credit it deserves. It has been the driving force behind the economy of this country getting to where it is currently. It has been a key driver in the economy over the past number of years. Unfortunately, as has been mentioned by a number of speakers, it did not receive the respect it deserved during the recent general election campaign. As a dairy farmer in my spare time, I am only too well aware of the difficulties being experienced by this sector. I am also aware of the impact which increases in the dairy sector can have on the rural economy.
Deputy Heydon referenced the Ballitore plant in his constituency. I would like to speak a little about the Ballyragget plant in south Kilkenny in my constituency. Any increased production in this area, in terms of the 75 mixed dairy producers in the Ballyragget area, will result in an additional €10 million being spent in the rural economy of Ballyragget over the next five years. Agriculture is crucial to the development of rural Ireland. Once a farmer has money, it will be re-invested in the economy. From a dairy sector point of view, we are experiencing many difficulties. I returned to farming approximately 20 years, when the price of a litre of milk to the farmer was 28 cent per litre. Today, the price per litre is 24 cent while at the same time the cost of production has increased by 50%. This is not sustainable into the future. It is important this issue is addressed.
I welcome some of the packages that have been introduced recently, including the €500 million package from Europe in September last, which was topped up by national government and the package introduced last week. However, these packages, while important and helpful, are only short-term measures. We need to re-examine the intervention price for milk. Many people believe we need to put in place a floor in relation to milk prices. The 28 cent per litre price needs to be re-examined over time. It is also important that the top-up payment for young farmers is reintroduced if they are to remain sustainable into the future.
The beef issue has been articulated by many people in recent times. Additional cattle will come on to the market given the increase in the number of dairy cows over the past year or so. By this time next year, there will be a perfect storm from a beef point of view and we need to plan for that. The only way to address this is to increase exports.
As we approach the mid-term review of the CAP, it is important that there be significant consultation regarding all the issues. For example, the sheep industry was mentioned earlier. The simplification of the CAP needs to be addressed as we move forward.
I thank the Minister for his comments at the beginning of his contribution. A number of Members who have contributed do not realise the pressure on farm incomes currently. All sectors of farming are under huge income pressure, including the dairy, grain and pig sectors. The beef sector is heading down the same road with increased production and no plans to rectify the imminent income crisis. The beef forum has failed miserably to deliver for us with no improvements coming out of it. Last week, the tariff on fertilisers was not removed, which was very disappointing. We as farmers are producing food to the highest standards and we have made huge investments to do that but now we are being asked to produce food under the cost of production. That is not sustainable and has to change.
Reference was made to banks earlier. A structure must be put in place under which banks must wait for repayments due from farmers in 2016 without penalty, otherwise many farmers will go bankrupt. A number of countries have introduced supply controls. That is a dangerous precedent for Ireland as an exporting country, and we have to guard against that. It could undermine the Single Market, which is important to us. The increase in volumes that can go into intervention and how quickly they have been taken up shows how long the distressed state of our dairy market will last. Something must be done and I was disappointed to hear the Council of Ministers will not meet again until June because additional measures must be put in place to ensure something is done to alleviate the crisis that is coming towards us like a juggernaut.
To balance the debate, I would like to highlight the importance of agriculture. Sometimes, I have sympathy for the Minister because I am sure when the record is read later, people will wonder about the balance of the debate in regard to the current agricultural crisis. There is a major crisis, as previous speakers said, across every agricultural sector, be it beef, dairy, tillage or suckler. My background is in the pig sector and the situation is serious at the moment. All these sectors create invaluable employment. Reference was made to the number of jobs created in the dairy sector but significant jobs have been created in the pig and beef sectors and through related services. I brought a long document but as I have only have a few seconds left, I would like to draw the Minister's attention to farmers facing a double crisis following the flood damage caused by recent storms. A cohort of tillage farmers in east Cork whose land has been affected by salt drift from sea mist caused by the storms should be looked after. It is important that they are addressed in the context of compensation and I ask the Minister to give this attention.
I hope agriculture will be given more recognition in the House. I can see why Dáil reform is needed, as some Members do not realise that the agriculture industry is the backbone of this economy.
I wish the Ceann Comhairle the best in his deliberations over the next few weeks.
I am glad to have the opportunity to address a few issues in respect of farming in the north west. I come from an area in which there is not much dairying but there are beef farmers who produce top quality store cattle. I refer to the issue of nomad cattle. Cattle are being produced but because they are moved from one side of a field to the other, this can mean they move from the Republic of Ireland to Northern Ireland and then their price is cut by €150 or €200, which is unfair. When we joined the EU, we joined as an equal member state. Every EU citizen has equal rights, except when it comes to cattle. These cattle are classed as exports but they are only being moved from one side of the road to the other. This is wrong and unfair. I plead with the Minister to address this issue, which has serious consequences for the area I come from.
With regard to GLAS, I understand 13,000 places on the scheme were intended for farmers. This number was then cut to 11,000. Many farmers spent between €450 and €500 on their applications for GLAS funding only to discover they have been refused. It is unfair to put people to that cost and to encourage them to apply for the scheme before cutting the number of places by 2,000. That needs to be addressed.
The third issue I would like to raise relates to a co-operative in my area. Deputy McLoughlin will be very much aware of it. The co-operative was established more than 100 years ago to help and support small farmers in this rural area. A product is manufactured in Achonry Creamery for the market worldwide - Connacht Gold butter. It is one of only three plants of its kind in the world. The technique used to produce the butter was established in the State. A total of 25 people are employed in the creamery and they work around the clock to produce this butter but they have discovered their jobs are being moved to Cork. These jobs are being taken from a rural area that badly needs them to sustain the area. It is unfortunate that this will happen. Is State funding being used to subsidise the plant in Cork or a plant elsewhere in the country, which has received State grants, to take jobs from another area? It is wrong that this should happen.
One of the most important outcomes of the Council's latest meeting related to the pig sector. The sector has reduced dramatically in recent decades with only 1,500 holdings remaining last year. Even the nature of pig farming has changed, as it has become a much more intensive operation. IFA pig prices are currently more than 20 cent per kg below the cost of production, meaning a loss to the average pig farmer of €5,000 per week. In response to a disastrous price year, pig farmers were promised a portion of the aid package announced by the Commission in September 2015. This promise, however, remains undelivered. The delay is increasing the significant hardship being experienced by these farmers and I call on the Minister to take immediate and urgent action to ensure these payments are processed without further delay.
I also welcome the opportunity to address the fisheries element of the Council. As important as agriculture is to our economy, I cannot help but feel that fisheries will always be the poor relative in such a configuration. There is no telling how much longer the Minister, Deputy Coveney, will represent Ireland at these meetings but he seems determined to go out on the offensive against our fishermen to the very end. By signing SI 125 of 2016, he has ridden roughshod over the rights of fishermen and, indeed, over the High Court.
Fishermen are used to Governments introducing new regulations and blaming the EU, but it is a new low for a Government that was kicked out of power to bring in an instrument and refuse to allow any debate on it. This instrument was signed into law by the Minister on 1 March while some count centres were still counting the votes in the general election. It was brought in because the previous statutory instrument was struck down by the High Court, which was a vindication of what the fishermen were saying. My Sinn Féin colleagues and I have tabled a motion annulling the instrument and I hope the Dáil can do its job and permit time for the motion to be taken. It is one of the issues I raised this morning. We have an obligation in that regard because a statutory instrument can be annulled by either House of the Oireachtas within 28 sitting days by a simple majority vote. I ask that this motion be tabled for the next sitting of the Dáil to facilitate a transparent debate. If the Dáil wishes to introduce this type of penalty system for our fishermen, so be it, but if it decides otherwise, we should annul it.
Fishermen from Killybegs, the Rosses and other areas in Donegal have contacted me expressing their anger at what they see as the criminalisation of their livelihoods, and it strikes me as unprecedented for a statutory instrument to be introduced which flies in the face of not one but two High Court judgments. The High Court ruled that the provisions of a penalty point system for fishermen who engage in illegal, unreported or unregulated fishing were unconstitutional and therefore not fit for purpose. The Minister had to revoke the 2014 statutory instrument because the courts had struck it down. However, without any reference to the House, he has introduced a statutory instrument to bring in these regulations. Notwithstanding all we will hear about political reform in the weeks and months ahead, the new statutory instrument for which the Minister, Deputy Coveney, is responsible proceeded without any consultation with the industry or Opposition spokespersons and without any involvement by Oireachtas committees or other stakeholders. There are major questions about the legality of an instrument which states that regardless of the outcome of criminal proceedings and the acquittal of a fisherman in a court of law, penalty points will still be assigned to his or her licence. This instrument must be the subject of a full debate and a vote to annul it. Time is required for real discussion on how we treat our fishermen. I am calling for a stop to this process and the annulment of the statutory instrument. I am asking the Minister to agree to talk to the fishermen, to listen to the outcome and to suspend, annul or revoke the instrument, or at least allow us to debate the issue so that the Parliament can decide if it is the right course of action. It sticks in the craw of fishermen. People have been asking me-----
The Minister can respond in his own time. Hopefully, he will allow everybody to respond by allowing a debate on this when we come back on 6 April. Fishermen are really annoyed that while here in Ireland the penalty points system is applied to a T, the Danish authorities refused to apply points to a Danish vessel found guilty of fishing in our seas without a quota by the Sea Fisheries Protection Agency. While the courts struck down the penalty points system and said to the Minister, Deputy Coveney, and his Government that what they did in 2014 was unconstitutional, days after the general election and without a sitting of the House, he signed on 1 March a statutory instrument introducing nearly the same law as was struck down by the courts.
I thank the Ceann Comhairle. I will try not to interrupt myself. I congratulate the Ceann Comhairle, as have other speakers, on his historic election. I was interested in Deputy Eamon Scanlon's comments earlier when he wished the Ceann Comhairle the best of luck in his deliberations over the next few weeks. I presume he was referring to the committee and not having a premonition about the term of office of the Ceann Comhairle, although he may have more information than I have.
I agree with previous speakers who mentioned the importance of agriculture as a sector of the economy, particularly in the recessionary period that the country has been in for the last seven or eight years. It has not received the recognition in the broader media that it deserves as a significant component in the improving economic situation of the country. That is important to state. For the first time in my life, I find myself in agreement with Deputy Pearse Doherty, which may be a sign of the new consensus politics that may be forced to emerge, on the pig sector. I confess that I come from a farming background, but there are not that many pig producers in south County Kilkenny, although there are some. I recently spoke to a significant producer who outlined to me the issues affecting his particular sector of agriculture, particularly in terms of labelling. While the Minister has made some inroads in that area, the case was put strongly to me that despite the expectation of shoppers and consumers that the pigmeat products of significant well-known Irish brands are actually Irish, the majority of what those companies are putting on shelves is not of Irish origin. I understand the purpose the green mark that goes on those products is meant to serve, but it does not outline clearly enough the fact that so much of the pigmeat sold on shelves in this country is not from here. The shopper and the general public would be shocked at the level of imports in that particular sector. Deputy Doherty is right that the production of pigmeat is not sustainable when the price is 20 cent per kilogram below the cost of production. There might be a job of work to be done in that particular area.
Others have spoken about intervention prices in the dairy sector, and I concur with the points that have been made. I note that in the lifetime of the last Dáil, a number of new taxation measures were introduced for the agriculture sector, including with regard to partnerships and companies and different measures that made it easier for new people to come in and for young people to partner with their parents on the family farm. There is significant opportunity now to look at what happens in other countries in terms of income-averaging over a number of years. I note that there have been some measures introduced in that regard here, but I am thinking in particular of an Australian scheme which was advocated for over a number of years by the IFA, although it seems to have dropped off its radar in the last 12 months. In terms of the dairy sector in particular, something like that, which is a little bit creative and different, would assist dairy farmers, many of whom are exposed to significant borrowings and cannot sustain a long period of depressed prices. Let us be honest: there is not much light at the end of the tunnel at the moment in terms of milk prices. Intervention is significant and important but it is not removing the problem. Rather, it is just postponing it. There are other measures which should be considered also.
Things are pretty much the same in the beef sector. A significant overhang is going to hit the beef sector in the next 12 months with the huge increase in the number of dairy cows across the country. That is going to result in the production of a lot of plainer cattle. The Minister has made significant strides with regard to reintroducing live shipping, and there was an announcement not so long ago. I hope the Minister can progress that further, because if the overhang hits in full it will further depress the price of beef and cause a significant shock in the sector.
That is great. I am glad I have the first two and half minutes and that Deputy Mattie McGrath is coming after me rather than the other way around. I thank the Ceann Comhairle for giving me that big break. I welcome the opportunity to speak on this issue. It is a pity we do not have more debates on agriculture on the floor of the House.
It was the one element that maintained the economy during the darkest years of the past decade.
I wish to raise a couple of issues, the perennial one being that of on-farm inspections. As the Minister knows, there is a mechanism for CAP simplification as a result of Commission Phil Hogan's announcements. It is imperative that they be implemented in respect of the basic payment scheme this year and not be kicked out until 2017. There is a major problem with the variation in randomised on-farm inspections across counties. Bizarrely, the penalty rate in County Roscommon and east Galway is 20 times that across the River Shannon in County Longford. At the end of each year after on-farm inspections are completed, will the Department hold a series of regional meetings to explain to farmers where common mistakes have been made and how they can avoid repeats? The Department's objective should be to try to keep the penalty rate down, not to drive farmers out of agriculture and reduce incomes.
Will the Minister adopt another suggestion? Each basic payment scheme map has a date at its bottom. That is the date on which the map was printed, which is of no use to anyone. Could the map state the dates on which the remote picture was taken and last amended?
I wish to raise two further issues, the first of which relates to the beef sector. We need additional direct payments for the suckler herd. Will the Minister immediately commence the review of the beef data and genomics scheme instead of dragging it down the road? It is vital that a targeted payment of €20 per ewe in the national sheep flock be put in place and that sheep farmers have direct access to the knowledge transfer, TAMS, GLAS and areas of natural constraint programmes.
I concur with many of the previous speakers, and Deputy Naughten in particular, about specific payments for sheep farmers. It is a difficult area. The beef and milk sectors also need supports. As Deputy Naughten stated, farmers kept the economy going in the recession. The Government claims that we have recovered from it but we have not. Farming kept rural Ireland alive, as it did in many other dark recessions down the years. When farmers do well, they spend that money locally.
When they must apply for GLAS, they must pay a certain amount to get a qualified person, yet they might not even get onto the scheme. We have too many announcements and not enough substance behind them. The delay in payments for the partnership scheme that people entered into in good faith, the single farm payment and not being able to get in contact with the Department are frustrating and annoying. This is a major issue. When I raised this, the Minister told me that we were one of the best in Europe, but if we are, then they must be very bad in Europe, and I do not believe that.
People are looking for gardaí in rural Ireland and there is one garda for every 370 people, but there is one agricultural inspector for every 30 or 35 people. What is going on? Why is there not more efficiency and why do we not have more time to deal with issues?
I appeal to the Minister to re-establish the Land Commission or some form of land agency to stop the swallowing up of farms in Tipperary, east Cork, west Waterford and everywhere else by certain large racing syndicates. It is terrible that small farmers are being bought out and bulldozed out of the way. The Land Commission was introduced to disseminate large estates in the 1940s. It did a good job. Now, a conglomerate wants to invest in every five or ten acres that are going. This is unpalatable, unfair and morally wrong and needs to be addressed. People are afraid to discuss it because the organisation is so powerful, but it is not good for the future of farming.
I salute the organisation's powers over the stud book. What it does with racehorses is wonderful but now is the time to let the farmers live, not to drive peasant farmers off the land or make them unsustainable. We need an agency, for example, a reinstated Land Commission, to consider what amount of land any one group can own and fence off to the point that not even a snipe can get through. This relates to hunting, fishing rights, etc. It is wrong. I appeal to the Minister and the Department to sit up and listen before it is too late. This issue not only affects south Tipperary, but north Tipperary, west Waterford, east Cork and beyond. Thousands of acres have been amassed. This is not acceptable to young farmers who want to buy ten, 15 or 20 acres to make their farms viable and expand. It is not acceptable that farming organisations and everyone else is turning a blind eye. We have seen enough of big business ruining our country in many respects. We do not want that to happen to the good farmers in Tipperary and elsewhere. I am speaking for Tipperary. This situation is too much. I appeal to the Minister to examine it and set up a body to consider land usage policy.
The Minister has five minutes to respond. I am conscious that it will be inordinately difficult to address all of those issues in five minutes but perhaps we could examine that matter when we consider the Standing Orders.
I hope so. I thank and congratulate a number of Deputies who made their maiden speeches on this debate. I agree with some Deputies who stated that we needed longer debates on agriculture and all matters linked to it. I hope that we will have an opportunity to do so in future. Regardless of what part of this Chamber I will be standing on, I would welcome that.
Many issues have been touched on and I would like to answer them in detail. Deputy Pearse Doherty asked specific questions. We did not deal with fishing at the Council meeting last week because it focused on milk prices but the issue that he raised is one of concern for the fishing industry. We changed a statutory instrument significantly to take account of the industry's concerns about the previous statutory instrument but we will have a long opportunity to debate the issue because whoever will be the future Minister in my Department will be required to introduce primary legislation to deal with the question of penalty points thoroughly. At that point, there will be a full opportunity to tease through the issue, as part of which there will be full consultation. I will be starting that consultation in the coming weeks. There will be an opportunity for debate and we will not have to rush it on 6 April or whenever. We will go though the full legislative process.
Regarding pigs, there is a payment of €3,000 per farm. The closing date for applications for that payment was 9 March. We will get that payment out as quickly as we can for pigmeat farmers who are facing difficulties.
Regarding some of the broad principles, I encourage those who are criticising Ireland's current agriculture strategy from the point of view of sustainability or climate change to read Food Wise 2025, in which we make clear that sustainability is just as important as productivity in terms for planning, policy and financing the modernisation, change and technological advancements that are happening, and need to happen, in agriculture. I am in the business of ensuring that family farms can stay on the land, be they small, medium or large, and that we help farmers in disadvantaged areas as well as those who are lucky enough to have fertile land. Consider my decisions on how to allocate resources. We have prioritised farmers in disadvantaged areas. We have changed the criteria for entrance into GLAS across two application phases so as to ensure a broad response in terms of environmental measures, which we are using EU and national funds to pay for as part of the rural development programme. We are required to do that. This is a significant scheme.
There was criticism of the beef genomics scheme but we will spend €300 million supporting suckler beef farmers through it. We will help them to put better breeding programmes in place so as to produce animals that grow faster, are more efficient and produce less methane in their lifetimes. The €300 million spend, more than half of which comprises EU funds, is a climate change measure for the beef industry. When people discuss agriculture as if it is doing nothing for the climate change challenge, I say that we are arguably doing more in agriculture in Ireland than any other country in the world.
The majority of the funds we are spending under the rural development programme are actually devoted to the environment and climate change. Some 46,000 beef farmers in Ireland are currently measuring the carbon footprint of their herds on their farms. No other country in the world is even talking about doing that, yet we are doing it. All 17,000 dairy farmers in the country have, through their farming organisations, signed up to sustainability audits that will measure emissions and feed conversion efficiency and ensure animal husbandry is of an acceptable standard.
Since 1990, Irish agriculture emissions have actually reduced by 10% while transport emissions have increased by 119%. That said, we need to do more to meet climate change and environmental challenges in agriculture and we must constantly ensure we are setting standards and doing more. However, we also need to recognise the progress that is being made in this area. We can do a lot through technology and we can show other parts of the world how to produce food in a much more efficient way. That is why we have spoken to the World Bank about what Ireland is doing and how we can transfer knowledge to other parts of the world. We have spoken to the World Wildlife Fund for the same reason.
I am protective of our industry when people criticise farmers for not doing enough for the environment or to meet the climate change challenge Ireland must face along with every other developed country. We are doing a lot in this area but we need to and will do more, but let us recognise the progress that has been made over the past five years in particular.
There are sectors under real pressure at present. I look forward to the opportunity to have more debates on agriculture and more time to debate many of these issues. The food industry, the agri-food industry and agriculture comprise the most important sector of the Irish economy. It provides livelihoods in every parish, from Donegal to Cork and everywhere between. We need to protect that and invest in it, and we need policies that are progressive. We need to challenge farmers when they need to be challenged but we also need to support them and keep them in business. Over the past five years, we have had a reasonable balance in ensuring that what we are doing is progressive and taking opportunities that exist, but also ensuring a change in attitude to sustainability, the protection of the environment and meeting the climate change challenges. Who would have thought that farmers would be actively measuring the carbon footprint of their own herds on their own land regularly and inviting audit teams to assess independently and certify internationally, through the UK Carbon Trust, the efficiency of their meat and dairy production from an emissions perspective? Who would have thought that ten years ago or even seven years ago? Now we are doing it. We need to protect these sectors. We are spending approximately €12.5 billion doing so under the new Common Agricultural Policy. We need to ensure the money is well spent and well focused, keeps people on the land and in business, and protects family farming, not large corporations.
As long as I am Minister, my main priority will be to keep rural Ireland alive, vibrant and sustainable while protecting the environment that allows us to farm in the first place and keeping farming families in their communities. I look forward to taking on these challenges. We will have challenges. This is a huge sector and has a turnover of approximately €26 billion per year. Since it is huge, there will always be sub-sectors within it facing challenges that will need policy change and support to ensure people and their livelihoods can be protected. We also need to change agriculture and keep moving it in the right direction in response to global, food security and environmental challenges as they emerge.
I thank the Deputies for their input today and look forward to more detailed debate in the not-too-distant future.