Dáil debates
Thursday, 11 October 2018
Ceisteanna - Questions - Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Beef Industry
10:30 am
Charlie McConalogue (Donegal, Fianna Fail)
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3. To ask the Minister for Agriculture, Food and the Marine his views on the price beef farmers are receiving for their produce from factories; the details of the discussions at the recent beef forum meeting; the actions and deadlines agreed; and if he will make a statement on the matter. [41647/18]
Charlie McConalogue (Donegal, Fianna Fail)
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I wish to ask the Minister to discuss the price of beef farmers are receiving currently from the factories, to give an overview of discussions at the recent beef forum meeting and to give an update on the actions and deadlines agreed at it. As the Minister is aware, beef farmers are under immense pressure at present due to the factories taking advantage of them. Farmers have to release additional cattle into the system. As a result, we are seeing pressure on prices at a time that farmers cannot afford to bear it. We need an update from the Minister on actions taken to address this, particularly actions agreed at the beef forum.
Michael Creed (Cork North West, Fine Gael)
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As the Deputy will be aware and as I have mentioned to Deputy Martin Kenny, in accordance with competition law neither I nor my Department have any role in determining market prices for any commodity, nor can I intervene in this process. I am conscious that this has been a difficult year for the sector due to weather and the range of challenges associated with it. We have to acknowledge that input costs at farm level will be unexpectedly high this year as a result of fodder shortages.
At the recent meeting of the beef round table on 3 October, I highlighted the need for stakeholders to recognise their interdependency. I urged processors to engage positively with their farmer suppliers to build the sustainability of the sector as a whole and to ensure a reasonable return for the farmers upon whom the sector relies for its development. It is essential that the position of the primary producer in the supply chain be improved if the industry wishes to build a sustainable future for itself. The beef round table also included discussions on the potential for producer organisations and the development of new technologies as a way of adding value along the whole supply chain through increased engagement in the bioeconomy. These discussions were aimed at highlighting available tools to build resilience in the sector.
I noted that a commitment was made at the beef round table in 2015 to legislate for the recognition of producer organisations, POs, in the beef sector. This initiative was supported by all sectoral stakeholders and in February 2016, a statutory instrument was signed into law to give a legal basis for my Department to maintain a register of recognised POs in the beef sector. The recognition of POs will encourage primary beef producers to form producer organisations and allow farmers to engage collectively with processors. The ultimate aim is to ensure the viable development of production by strengthening farmers' bargaining power with downstream operators. At the round table on 3 October, I also asked Bord Bia to conduct a detailed examination of market dynamics with the co-operation of the industry, taking into account sales of particular cuts into particular segments of the market, to improve price transparency.
One of the unique strengths of the agricultural sector is our shared vision for the sustainable development of the sector in the Food Wise 2025 strategy. I hope that this positive engagement will continue.
Additional information not given on the floor of the House
In regard to the beef sector more generally, I was pleased to secure €20 million in the recent budget for a new pilot scheme targeted at suckler farmers and specifically aimed at further improving the carbon efficiency of beef production. The pilot will build on existing work in this area and inform the development of future policy direction.
My Department is examining all appropriate measures to support the different agrifood sectors, including the suckler sector, in preparation for the next iteration of the Common Agricultural Policy, CAP. I will continue to argue for as strong a CAP budget as possible post 2020. In particular, I am committed to ensuring that suckler farmers continue to receive strong support in the next CAP. My view is that such payments should support and encourage suckler farmers to make the best decisions possible to improve the profitability and economic and environmental efficiency of their farming system.
Charlie McConalogue (Donegal, Fianna Fail)
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I thank the Minister for his response. The unfortunate reality is that he has allowed the beef forum to become little more than a talking shop. That is reflected by the fact that instead of being at the beef forum, around the table with the Minister and the factories, the farming organisations were outside protesting at how they are being squeezed, pressurised and taken advantage of through the price they are getting at the factory. While prices have increased across the Irish Sea in recent weeks, they have been decreasing here, to the extent that prices are now dropping below €3.80 and €3.75 per kilogram, with further downward pressure on them. That is simply unacceptable. The last time this beef forum met was in February 2017. The Minister was not planning on having the meeting until the end of this month. Three weeks ago, I called for it to be brought forward and dealt with immediately. Thankfully, the Minister decided to do that it was but too late. Why did the Minister not meet representatives of the meat factories during the summer drought to ensure they would not take advantage of it? Unfortunately we have seen talks, discussions and considerations but no real action or delivery for the farmers. I ask the Minister to clarify the particular actions that were agreed. Moreover, how did he hold the factories to account for the fact that they are offering lower prices to farmers at a time when they simply cannot afford it?
Michael Creed (Cork North West, Fine Gael)
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I find it slightly confusing that the Deputy says the beef forum is only a talking shop on one hand, and on the other makes great play of calling for that talking shop to convene. I repeat what I said to Deputy Martin Kenny. By law, neither I nor the forum has any role in respect of price. I have taken initiatives to give the primary producer, the beef and suckler farmers whom we discussed earlier, greater clout. We have tried to promote producer organisations to avoid a situation where a farmer drives up and delivers cattle as a price taker. Through organisation, a large number of farmers are able to engage with the processing sector from a position of strength. That is the advantage of producer organisations. In other big beef economies such as France, producer organisations are a key part of the architecture and enable farmers to engage from a position of greater strength than they can as single farmers. We need to develop that further. We have the legislative framework for them. We have approved facilitators which have not yet been activated. There is a role there that needs to be exploited. As for price, the Deputy knows there is nothing the forum can do about price.
Charlie McConalogue (Donegal, Fianna Fail)
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We understand that the Minister cannot dictate the price. It is not something that a Government can control or decide, but what the Minister can do is hold the meat factories to account. He can also ensure that there is transparency in the pricing system and the price that farmers are getting. Unfortunately he has been doing neither of those things. He is simply throwing his hands in the air, not using his position to maximum capacity by holding the meat factories to account and ensuring a light is shone on their treatment of farmers and the prices they offer. Why is there a significant price gap with the UK which has been increasing in recent months? Why is it that in recent weeks, the gap between European prices and Irish prices has diverged so much? These are issues on which the Minister has failed to hold the factories to account. When the drought was impacting during the summer, the Minister failed to maximise his influence to tell the factories that under no circumstances could they take advantage of farmers and profiteer on the pressure they were under. It is time for the Minister to take more control of this interaction and ensure transparency. In light of the explanations he has been given, what has he decided to do and what actions will he take in his engagement with the factories in the coming weeks?
Michael Creed (Cork North West, Fine Gael)
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The engagement at the forum was quite useful in addressing all the factors that influence the market, such as the impact of the weather, as I discussed with Deputy Mattie McGrath. The weather phenomenon had an impact right across Europe. On any analysis of the number of cattle slaughtered, the weather resulted in a downward pressure on price because of the increase in slaughter. For example, we would normally have a market for cow beef in Scandinavian countries during the summer, particularly in Sweden. That did not materialise to any great extent this year because of significant cattle slaughter in that country due to fodder issues.
The market is complex and dynamic. We engaged on this at the forum. As I repeated earlier, neither I nor the forum has a role in telling the factories that they must pay a certain price. I did encourage them to engage. The forum is usually a place where farm organisations and factories engage intensively on these matters. At the forum, processors made a commitment to be open to further engagement, whether at the forum or bilaterally between farm organisations and meat processors.