Jackie Cahill (Tipperary, Fianna Fail)
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The pig sector is in crisis and there is a support package urgently needed for the pig sector.

Since mid-2021, pig farms have been under serious pressure. Losses are escalating by the day. There are a number of circumstances. There is a perfect storm there at present for pig farmers. Whether it is Covid disruption, Brexit or the Ukraine dispute, it is all having a severe impact on pig farms.

The first impact of Covid was to reduce the number of staff in processing facilities. In particular, where pig farmers are sending their pigs north of the Border, given a substantial number of our pigs were going north of the Border, they are finding it hard to get these pigs killed. That has had a twin impact in that the pigs are being kept long on the farm and costing more money to feed them, and the carcase weight is increasing as well and the pig makes less money at the end of the day when it is slaughtered. There is also the threat of African swine fever, which now has advanced as far as Germany as it crosses Europe. This is a serious threat to the pig industry as well and is having a negative impact on pricing throughout Europe. The impact of Brexit has been sorely felt by the pig industry. Prior to Brexit, 50% of all our pig produce was going to the UK. It was a lucrative market and those exports have dropped 50% since the Brexit agreement. Our bacon has had to go to less attractive markets, obviously making a poorer price.

Price inflation has impacted significantly on farmers. Grain prices and feed prices have risen dramatically in the past couple of months. Feed has gone up by 24%, energy has risen by 100% and transport costs have risen by 43%.

I was talking to a normal-size pig farmer - a man with 1,000 sows, in the modern concept in this country, is an average-size farmer. Feed per month is costing €32,300 extra; energy, €5,298 extra; and transport, €862 extra.

The price has collapsed. The price, in early 2021, was at €1.90 per kg. Today, that has gone under €1.40, at €1.38 per kg.

Unless this industry gets support, we will have serious losses. We have only 300 pig farmers left in the country. It is a specialised industry, but it is our third most important sector. It is worth €1 billion to the economy.

These farmers are now under considerable financial pressure and a package has to be put in place. Other countries in the EU have stepped in to help their pig farmers and we cannot quote EU state aid rules as being a barrier to this. Poland, France and the Netherlands have stepped in with a temporary state aid framework that allows farmers in these countries to access funding of up to €290,000 per farmer, which is far in excess of the current de minimisstate aid ceiling of €25,000. There is a mechanism within EU regulations to help this sector.

At present, it is estimated that pigs are losing on average €35 a head leaving the farm. That farmer I talking about lately said he is losing €8,000 a week. That is an unsustainable situation. Many of these farmers have invested heavily in their infrastructure in recent years to ensure they have a sustainable method of production and that any risk of pollution is removed. This sector, if it does not get help immediately, will not survive.

Pippa Hackett (Green Party)
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On behalf of the Minister, Deputy McConalogue, I thank the Deputy for raising this issue. I am certainly happy to bring the following to the attention of the House: the continued development of the pigmeat sector is a priority for my Department, given the pivotal role the industry plays in the national economic context. It is a large agrifood sector and has shown remarkable growth in recent years. The sector supports approximately 8,000 jobs spanning production, slaughter, processing, feed manufacture and services.

Our pig farmers have always been remarkably resilient but my Department is acutely aware of the challenges they are facing. The pigmeat sector across 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. This has had a knock-on effect on supply and price within the Single Market.

The average price paid for pigs in Ireland has fallen in recent months, in line with trends across the EU. The 2021 average price was more than 8% lower than that of 2020. As of 6 February, the average grade E pig price came in at €141 per 100 kg, that is, just over 7% lower than the same week last year. This is still well above the EU average price, but in the current circumstances is creating a significant price-cost squeeze.

At the recent European Council of Agriculture Ministers, the Minister, Deputy McConalogue, clearly expressed his concerns regarding the difficulties facing the Irish pigmeat sector, both in respect of the ongoing impact of increases in fuel, fertiliser, feed and energy prices over recent times that are putting farmer margins under significant pressure, and the sustained nature of the difficulties being experienced on the pigmeat market. The Minister sought the rapid deployment of appropriate solutions on both issues.

The Minister of State, Deputy Heydon, and the Minister, Deputy McConalogue, met with the main banks to discuss the current challenges in the pigmeat sector and the importance of their ongoing support. At this meeting it was emphasised the importance of the pig sector, its overall resilience and the importance of their 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 to discuss options and that the banks remain committed to supporting their customers in the period ahead.

Separately, they met with the Strategic Banking Corporation of Ireland, SBCI, 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 that 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.

During this period, maximum flexibility of financial matters is needed to ensure the ongoing viability of those in the pig sector.

The Minister of State, Deputy Heydon, chaired the recent pig round table and had a further detailed discussion on the current difficulties with all stakeholders, including farm representatives, the banks, the processing industry and the feed industry. The increase in input costs is 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 pigmeat on the domestic and export markets and Teagasc outlined the dedicated advisory supports being provided to pig farmers. The Minister, Deputy McConalogue, also attended a meeting with the IFA president and IFA pig committee members to discuss concerns. At this meeting, the Minister reiterated the Government's commitment to supporting the sector, including through the previously mentioned advisory supports provided by Teagasc and Bord Bia. Deputy Cahill can rest assured that the Department will continue to monitor the market situation closely. We are examining all possible measures to assist in supporting farmers through this significant market disturbance.

Seán Ó Fearghaíl (Kildare South, Ceann Comhairle)
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I am fascinated by the idea of a pig round table.

Jackie Cahill (Tipperary, Fianna Fail)
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I thank the Minister of State for her reply. I accept that the Minister met the stakeholders in the past week and promised to reply to them next week on what he can do for the industry.

Maximum pressure must be put on the financial institutions to give extra overdraft facilities to help pig farmers with their cash flow. That will not be enough, however. A package must be provided for the sector. Feed costs are expected to rise by another €30 a tonne in the next month to six weeks. Unfortunately, energy costs still look to be moving in one direction only and labour costs are rising significantly as well. I hope pig markets will start to recover but it is going to be a very long haul to get back to a break-even situation. We must do what other EU countries are doing. A package must be put in place. I urge the Minister of State to provide for a certain period a direct subsidy for each pig slaughtered to try to reduce losses, help cash flow on farms and allow this vital industry to survive.

Swine flu must be monitored. We must increase security to ensure it does not enter the country. It has damaged export markets across Europe and there is no doubt it has exacerbated the problem. I urge the Minister of State to ensure resources are put in place to keep swine flu out of this country.

The Minister of State said the pig sector is resilient. I fully accept that, but any sector can only take so many sucker punches. I do not think the pig sector has ever been in the loss-making situation it is in currently. Small, medium and big pig producers are under significant pressure. There are only 300 pig farmers left, yet it is the third largest sector in the agrifood industry and is worth €1 billion to this country. It would be a disaster if, for want of short-term aid, we did not help the sector to survive this crisis, which is outside its control.

Minister of State at the Department of Agriculture, Food and the Marine (Senator Pippa Hackett):

I accept the points made by Deputy Cahill. He is correct that this is one of the worst crises we have seen in the pig sector here. It appears that there is a cyclical nature to the commodity markets, but it is compounded by the increased input costs and fragility of the marketplace for pigmeat. It is important to get on top of African swine flu, which is affecting markets across Europe and also export markets out of Europe. That is having a major additional impact on Irish pork and pigmeat products.

The Department is examining all possible avenues to assist pig farmers during this time of market disturbance. As I outlined, it will continue the significant engagement to date. The Department encourages farmers to engage with Teagasc advisers and bank representatives to explore the options available to them. Whether it is financial assistance or cost-reduction measures they can implement on their farms, they must take the advice that is available. Pig farmers can rest assured that officials in the Department are examining all possible measures to assist.