Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I welcome the fact that the Minister for Agriculture, Food and the Marine is here. It is good to see a senior Minister taking a Topical Issue matter. I hope his presence is a recognition of the importance of the pig sector and the crisis it faces. The pig sector in Ireland is a vital component of our rural economy, albeit one that is often under-recognised. Almost 10,000 jobs are directly and indirectly supported by the sector. There are 1,675 pig farms across the State, 1,108 of which have five pigs or fewer. The pig sector is the third largest agrifood sector in the country and exports of pigmeat alone were worth over €893 million in 2020. The industry is concentrated in particular parts of the country, my constituency of Cavan-Monaghan being a prime example, and it is an integral part of the local economy in those regions. Put simply, if the pig sector is in trouble so too are those rural economies, and the sector is in big trouble. It has been hit hard by what I have heard described as a perfect storm of crises. Any one of those crises would have been a calamity but together they represent an existential threat, unless real action is forthcoming.

In the first instance, Brexit has had a devastating impact. Britain is the industry's most important export market and exports there are down 14% since Brexit. Transport costs have militated against any real prospect of sourcing alternative markets. Input costs have also gone through the roof. The cost of feeds such as barley and wheat has increased by 50% and increases in energy costs have hit hard. I spoke to one pig farmer today whose gas bill has increased from €10,000 a month to €40,000 per month, while electricity price hikes are also having a severe impact. Input costs are going up and factory prices are falling. To compound the situation, the capacity of processing plants is at a crisis point due to staff shortages. This results in delays in getting pigs to factories and every day delayed means further increased costs. If those delays result in pigs becoming out of specification there is a further cost of up to €50 per animal. In essence, we have insufficient slaughter capacity, which means farmers are paying more to feed pigs for which they receive less. There is an immediate cash flow crisis but it did not happen overnight.

Many Deputies have been raising this not only here but also in the Assembly because there is a North-South aspect to this issue. I acknowledge that the Department established a pig sector round table early last year. Clearly there has been plenty of talk about the crisis the sector is facing but action is now required because we simply cannot wait for transport costs to decrease or for the new deadline for veterinary alignment with Britain. We need action in the first instance on the staffing crisis in the processing plants. The Minister previously referenced his engagements with the Department of Enterprise, Trade and Employment regarding permits and reported progress but pig farmers are telling me they have not seen evidence of that progress. I ask the Minister to outline what is causing that delay. Can he assure us that there will be physical evidence of an increased workforce in the coming days? I also note that the Minister has engaged with banks and the Strategic Banking Corporation of Ireland, SBCI. I ask him to explain what the outcomes of that will be. Will there be increased funding to the SBCI ring-fenced for the pig sector? Will there be relaxed conditions in order that farmers who have already been denied finance by their banks will be supported?

Farmers tell me they are being refused finance, especially due to the volatility, for the alleviation of which we are encouraging them to take the loans in the first place. Will the Department ensure all levies being imposed on these farmers are suspended for the duration of this crisis?

Considering the impact of Brexit, will the Government deliver direct supports via the Brexit adjustment reserve? If the reserve cannot be used for this sector at this time, it is difficult to see how any farmer will ever be able to secure funding from it.

Charlie McConalogue (Donegal, Fianna Fail)
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I thank Deputy Carthy for raising this important and immediate issue. The continued development of the pig meat sector is a real priority for me, given the pivotal role the industry plays in the national economic context, which the Deputy outlined in terms of it being the third-largest grossing sector in the agrifood sector. It supports approximately 8,000 jobs which span production, slaughter, processing, feed manufacture and services.

Our pig farmers have always been remarkably resilient but I am acutely aware of the challenges they face at present. The sector throughout the EU has faced significant challenges in 2021 including the impact of African swine fever in a number of member states and consequential loss of third-country markets. Obviously, this has had a knock-on effect on supply and prices within the Single Market.

The average price paid for pigs in Ireland has fallen in recent months, in line with trends throughout the EU. The 2021 average price was more than 8% lower than that of 2020 and as of 23 January, the average price for grade E pigs came in at €140 per 100 kg, which is more than 8% lower than the same week last year. However, this is still well above the EU average price.

At the recent AGRIFISH Council, I clearly expressed my concerns about the difficulties facing the Irish pig meat sector both in terms of the ongoing impact of increases in fuel, fertiliser and energy prices over recent times, which put margins under further significant pressure, and the sustained nature of the difficulties experienced on the pig meat market. I sought the rapid deployment by the Commission of appropriate solutions on both issues.

I recently met with farmers from the Irish Farmers Association, IFA, pig committee to discuss these concerns. Following this, the Minister of State, Deputy Heydon, and I met the main banks to discuss the current challenges in the pig meat sector and the importance of their ongoing support. The importance of the sector and its overall resilience were emphasised, as well as the importance of the banks' support to their customers through the current downturn in the business cycle. The key message was that farmers experiencing cash flow difficulties should engage with the banks as soon as possible in order to discuss options. The banks made it clear that they remain committed to supporting their customers in the period ahead.

Separately, the Minister of State, Deputy Heydon, and I met with the Strategic Banking Corporation of Ireland to discuss the Brexit impact loan scheme and the Covid-19 credit guarantee scheme, both of which are financed by the Department of Agriculture, Food and the Marine, in partnership with the Department of Enterprise, Trade and Employment. These finance schemes can be used for working capital finance and include features which address the current financial needs of pig farmers.

We are all aware of the cyclical nature of the commodity markets which for the pig sector at this time is compounded by rising input costs. Pig farmers are being squeezed at both ends. During this period, maximum flexibility of financial matters is central to ensure the ongoing viability in the pig sector. I will also shortly engage with and discuss the matter with members of the feed industry as well.

The Minister of State, Deputy Heydon, chaired the pig round table last week and had a further detailed discussion with all the stakeholders, including farm representatives, banks and the processing and feed industries on the current difficulties facing pig farmers, arising both from the lower market prices and the significant increase in input costs, which are likely to continue for at least the first half of this year.

In terms of State supports, Bord Bia outlined the significant efforts being made to promote quality-assured Irish pig meat in the domestic and export markets and Teagasc outlined the dedicated advisory supports being provided to pig farmers. My Department and I continue to monitor the market situation very closely and are examining possible measures to assist in supporting farmers through the significant market disturbance.

I deeply understand the considerable challenges faced by our pig farmers and the significant stress they are under. I will continue to engage with them over what I know will be a challenging period ahead and seek to support them through that.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I saw reported in one media outlet that in 1986, what pig farmers were receiving equated to €1.40 per kilo. Today, 36 years later, they get €1.42, which puts in very stark terms the broader challenge faced by this sector, like many of our other agricultural sectors. I welcome the initiatives the Minister has taken to date, but we now require clear resolve in terms of how we can allow our farmers to get over this crisis and flourish into the future.

The Minister did not mention the issues pertaining to the workforce in the processing sector. He has outlined that 2,000 staff will come into the sector. The big question is when that will happen. It will make a difference but it needs to happen quickly.

The second point is on the SBCI. Will measures be put in place for those farmers who have already been in contact with their banks but have been shown the door in order that they have a realistic prospect of returning there? What measures has the Minister discussed with them?

The Minister spoke about what he raised at the AGRIFISH Council. Can we point to anything productive coming from that which says this will allow the situation to be resolved?

I will return to the point I made about the Brexit reserve fund. It was the story of Irish agriculture, by and large, that allowed us to be successful in making the case for the fund in the first place and for Ireland to have a significant portion of it. To date, farmers have not received any direct supports. This is a clear example of a sector that has been impacted by Brexit and would benefit from that fund. Is the Minister open to examining whether the Brexit reserve fund can be used in this instance? Will he expedite efforts to secure and deliver funding from that mechanism?

Charlie McConalogue (Donegal, Fianna Fail)
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I thank Deputy Carthy for the constructive way he has raised this issue with the focus being on how we can support pig farmers at a very difficult time. I have been engaging with the Department of Enterprise, Trade and Employment and the Minister of State, Deputy English, in particular, about the workforce. We will work to try to expedite the capacity for workforce permits for the processing sector, which is very important and has been under pressure.

With regard to the SBCI and loans, I explored the option of a potential separate pig fund or a new scheme for pigs. However, from meeting with banks and the SBCI, it is clear that the Brexit loan scheme is in place and the Covid credit guarantee scheme is available and they apply to pig farmers here. They provide an 80% State-backed guarantee of the loan funding and therefore, lower interest rates and unsecured credit of up to €500,000. Those schemes are very much in place and there is no limit to the amount of funding available through them. Both of them are open for pig farmers to apply and the banks are being very clear with farmers on that. Lower interest rates and unsecured credit are provided. That support mechanism is there.

With regard to the Brexit adjustment reserve or other measures, I will explore all options. Obviously, there is the issue of state aid. Capacity for any schemes would have to be led and provided for at European level for anything of significance to be available to the sector. I will continue to raise it and engage with the Commissioner and the Commission on that. They committed to exploring it and closely monitoring the situation, but I will be raising it again. I will be in Strasbourg for the EU Council meeting this weekend and will raise it once more.

Like Deputy Carthy, I am very much aware of the pressure and stress facing farmers here. Agriculture is a difficult industry, but of all the sectors within it, I often look at the pig sector and wonder at the stresses and strains associated with its cyclical nature. This is an example of a significant cyclical impact. When one is at the low end, it is very unclear when one will come out of it. I want to work with farmers to support them through this period.