Charlie McConalogue (Donegal, Fianna Fail)
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46. To ask the Minister for Agriculture, Food and the Marine the urgent measures he will take to tackle the crisis in farm incomes and severe market volatility across most sectors; and if he will make a statement on the matter. [14834/16]

Michael Creed (Cork North West, Fine Gael)
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As a small open economy which exports the vast bulk of its main agricultural commodities, Ireland will always feel the effects of volatility on world markets. However, there are some measures in place to help Irish farmers through these periods. Indeed, one of my highest priorities under the programme for Government is to develop an effective response to price volatility, including through initiatives with regard to access to finance and taxation.

I believe that moving up the value chain where possible, in terms of the type of products sold and how they are produced, is an important insulation against volatility. The Food Wise strategy for the sector contains detailed recommendations aimed at improving value added and productivity at farm and food industry level through a focus on sustainability, efficiency, knowledge transfer and innovation. I will chair the next meeting of the Food Wise high-level implementation group next week, focusing on the important topics of market development and access to finance.

Direct payments estimated by Teagasc at an average of more than €17,000 per farm in 2015 provide a valuable source of farm income support and act as a hedge against price volatility.

With regard to farm borrowings, I will meet the CEOs of the main banks this month, all of whom, I know, are aware of price volatility issues. I will be pressing them for details on how they are handling current difficulties and their plans for the medium to longer term when liquidity difficulties may become more evident. Another important topic for discussion will be the cost of credit for lending to farmers.

My Department has also engaged actively with other financial institutions with regard to the development of innovative new lending products for the sector and is preparing to procure an ex anteevaluation for the introduction of financial instruments under the rural development programme. The Department will continue to engage with the Department of Finance on key agri-taxation policy objectives, including responses to income and price volatility.

At EU level, I have met Commissioner Hogan on several occasions recently and have proposed a plan of action to him for an EU response to the current market difficulties, including increasing the percentage of the €1.2 billion in Irish direct payments that can be paid in advance; the introduction of a targeted aid package similar to that provided last September; the removal of customs tariffs and anti-dumping duties on the importation of fertilisers, which issue comes within the remit of the trade Commissioner, Mr. Moscovici; a substantial increase in the volume limit for fixed price intervention for skimmed milk powder, which the Commission has now agreed; and the renewal of efforts to resolve the veterinary issues that have blocked exports to Russia. I intend to remain in close contact with Commissioner Hogan on these proposals over the coming weeks.

I also plan to chair an early meeting of the dairy forum to progress a number of specific initiatives in that sector.

Charlie McConalogue (Donegal, Fianna Fail)
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I congratulate Deputy Creed on his appointment as Minister for Agriculture, Food and the Marine and wish him well in that role. I also congratulate Deputy Andrew Doyle on his appointment as Minister of State at that Department. The Department of Agriculture, Food and the Marine is a crucial Department, dealing with a sector that is important to our economy and to many working families. I wish the Minister and Minister of State well in their endeavours. As Fianna Fáil spokesperson on agriculture, food and the marine, I look forward to working closely with them to try to ensure agricultural incomes are protected and the sector thrives.

The question deals with income volatility, decreasing prices and the expectation in too many farming sectors of producing at below the cost of production, which issues are the cause of growing concern for farmers. The Teagasc annual farm survey, which is valuable in the significant contribution it makes every year to the debate on the state of the farming sector, showed an average increase in farm income last year of 6%, albeit from a very low base. I know the Minister, Deputy Creed, and the Minister of State, Deputy Doyle, are aware of the difficulties facing the dairy, beef and tillage sectors, among others.

I welcome the Minister's statement that he proposes to meet the CEOs of the financial institutions. Will he comment on the proposed establishment of a national food ombudsman to ensure a mechanism is in place through which primary food producers can get a fair price for the food they produce? Will the Minister also comment on convening a joint meeting of the existing beef and dairy forums and other sector representatives to discuss solutions to the current farm income crisis?

Michael Creed (Cork North West, Fine Gael)
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I thank Deputy McConalogue for his kind remarks. I look forward to working with him and his colleagues during my tenure as Minister for Agriculture, Food and the Marine.

The Deputy referred to the recent Teagasc farm survey, which is a useful barometer but is somewhat behind the curve in so far as it deals with farm incomes for 2015. We are all aware that incomes in 2016 will be substantially different.

It may not be widely understood outside the farming community that average farm incomes are still substantially below the average industrial wage. That should be borne in mind in the context of the broader debate on the economy. The Deputy said that the primary producer receives very little, and raised the prospect of a food ombudsman to address that issue. In the dying months of the last Administration the Government introduced a series of initiatives through the Department of Jobs, Enterprise and Innovation which brought greater clarity to the treatment of food producers by the multiples with regard to the inclusion of everything in the contract. We wait to see how effective that will be. It will require ongoing vigilance.

The Deputy may also be aware of an EU initiative under which Commissioner Phil Hogan expects a report before the end of the year on the supply chain and measures to improve the position of the primary producer. While I am open-minded about a food ombudsman, it would be useful to have information that is current and up to date to feed into a process before we make any commitments on that. I will be convening meetings this month of the dairy forum and, I hope, the beef forum to discuss the income crisis.

Charlie McConalogue (Donegal, Fianna Fail)
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The Minister pointed out that the average farm wage is a good bit lower than the average industrial wage of €27,000 a year; it is €10,000 less, particularly in the beef and sheep sectors. The average income is approximately €16,000 per annum for sheep and €13,000 per annum for beef, which means that many farm families are struggling to make a real income from farming. A total of 40% of all farms in the country have an annual income of less than €10,000. Direct payments last year were down 10%. That is a particular difficulty facing those farms because of the reduced CAP pot, which impinges significantly on them as well.

Would the Minister meet the dairy forum and beef forum together and bring other actors and interests in the agricultural sector, such as those in industry and the financial sector, together at one meeting? That would be very useful and would reflect the fact that the Government understands the crisis facing farming, if indeed it does. It would also provide reassurance that it will look for solutions.

Michael Creed (Cork North West, Fine Gael)
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Since my appointment I have been actively engaged in meeting all stakeholders in agriculture, primarily those inside the farm gate. I have met with the Irish Farmers' Association, IFA, the Irish Creamery Milk Suppliers' Association, ICMSA, and the Irish Cattle and Sheep Farmers' Association, ICSA, and I propose to meet soon with the Irish Natura and Hill Farmers' Association, INHFA. I am acutely aware of the income crisis inside the farm gate and the fact that in many respects it is out of kilter with what is happening for those employed in the food industry generally, where returns are still quite handsome and profitable. I do not propose to convene a joint meeting. I do not see a useful purpose in meeting the dairy forum and the beef forum jointly, because the way they are constituted is to represent the issues in each of those sectors, which in many instances are separate and different issues. I propose to have a meeting of those forums very early this month.

The Deputy rightly identifies the sheep and beef sectors as being at the lower end of the farm survey by Teagasc. The Government is rolling out and hopes to finalise a submission on a €25 million sheep scheme to the European Commission. I would welcome the Deputy’s input and that of other interested parties in the ongoing consultation.