Brendan Smith (Cavan-Monaghan, Fianna Fail)
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It is good to see Deputy Verona Murphy in the Chair. It may be a sign of things to come in the future.

I appreciate the Ceann Comhairle's decision to allow this subject to be taken this evening. Following a number of parliamentary questions to the Minister for Agriculture, Food and the Marine during January, I also raised directly with An Taoiseach in this House through questions the urgent need to provide adequate Government support to the crisis-hit pigmeat sector.

I welcomed the introduction in early March of the €7 million support scheme for commercial pig farmers. This sector has been suffering significant losses for some time and we know the very viability of some pig units and farms throughout the country is now threatened. Sadly, in recent times, 7% of pig farmers have exited this sector.

Some 10,135 sows are gone from production, which equates to a loss of €66 million in exports on an annual basis. Teagasc has estimated that for every 1,000 sows de-stocked, there is a total loss of employment of 60 people, a loss of payroll of €2.42 million and €6.5 million in export losses. These are substantial losses in any rural community and already we have witnessed many multiples of those losses in employment and generation of revenue.

A number of factors have contributed to this crisis. During the early days of the Covid pandemic, there were staff shortages, which led to a backlog in processing and substantial market disruption, which lowered returns for pigmeat. Brexit impacted very severely on the value and volume of pigmeat exports to Britain, which is by far our most valued and valuable market. Since the start of 2021, the value and volume of those exports fell my 50%, obviously causing a severe adverse effect on the sector. African swine fever had a negative impact on the pig market. Coupled with reduced farm gate prices, there has been a massive increase in feed prices. The war inflicted on Ukraine by the brutal Putin regime has also impacted very severely on supply of feedstuff, alike to other disruptions in global trade in recent times.

This sector is worth €1 billion to the economy on an annual basis and is the third largest sector within agriculture. It also supports approximately 8,000 people in employment and makes a very substantial contribution to the rural and national economy. Teagasc estimates that approximately 30% of farm pig units are at risk of closure. This is very concerning and measures must be implemented by Government, with immediate effect, to deal effectively with this crisis.

A very detailed and well-researched proposal has been submitted to the Department by the Irish Grain & Feed Association, Meat Industry Ireland and the Irish Farmers' Association. This pig stability fund contains a number of proposals containing substantial financial contributions by pig farmers, plus immediate Government help. France, Belgium, the Netherlands, Poland and Slovenia have introduced direct aid for this sector.

Our sector, which is haemorrhaging significant losses, needs an immediate package of financial measures. There has been a major rationalisation of the sector over the years. We do not want to see a further reduction in producer numbers, which would be damaging to our overall agrifood industry. This sector is very efficient and it is a modern industry. It does not receive any support through the Common Agricultural Policy.

I fear that a major de-stocking could create animal welfare issues. It would also be very damaging to the image of our agrifood sector which has been painstakingly built up over many years with major EU and Government support and major investment directly by farmers and others in the sector. I appeal again to the Government to introduce, without delay, an immediate package of measures to ensure that the sector is supported through these very difficult times and that the crisis hitting it for some time is tackled head on.

Malcolm Noonan (Carlow-Kilkenny, Green Party)
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On behalf of the Minister, Deputy McConalogue, I thank Deputy Smith for raising this issue. It is agreed that it is a key priority for the Minister and the Department and a vital sector for the Irish economy. Our pig farmers have always been remarkably resilient but the Minister is acutely aware of the unprecedented set of challenges, as outlined by the Deputy, they are facing at present. The Minister has been in regular and close engagement with all stakeholders on this matter over recent weeks. The Department is monitoring the market situation closely and is examining all possible measures to assist in supporting farmers through this significant market disturbance.

The continued development of the pigmeat sector is a priority for the Government, given the pivotal role the industry plays in the national economic context. It is the fourth-largest 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.

The pigmeat sector across the EU has faced significant challenges recently, including the impact of African swine fever in several member states and consequential loss of third-country markets. This has had a knock-on effect on supply within the Single Market. We are all aware of the cyclical nature of commodities markets. For the pigmeat sector, this is now compounded by rising input costs. The situation in Ukraine, as the Deputy stated, has also exacerbated these challenges.

The Minister has had ongoing discussions in recent weeks with the main banks to discuss the current challenges in the pigmeat sector and the importance of ongoing support. He has emphasised the importance of the sector and of banks supporting their customers throughout the current downturn in the business cycle. The key message was that farmers experiencing cash flow difficulties should engage with banks as soon as possible to discuss options and that the banks should remain committed to supporting their customers. Separately, the Minister met with the Strategic Banking Corporation of Ireland, SBCI, to discuss the Brexit impact loans scheme and the Covid-19 credit guarantee scheme, 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 to address the current financial needs of pig farmers.

Last month, the Minister announced the pig exceptional payments scheme, PEPS, with a fund of up to €7 million for commercial pig farmers. This is an urgent short-term response to assist producers who would be viable but for the extreme circumstances being experienced now. It is intended to allow space for a more medium-term adjustment to market signals. Applications for the PEPS closed on 20 March 2022. The first tranche of payments has issued, with the remaining applications due for processing as soon as possible.

This scheme is part of a wider package of measures to support the pigmeat sector, including intensified efforts by Bord Bia to promote quality-assured Irish pigmeat in the domestic and export markets, with dedicated media advertising campaigns underway nationally and EU-funded pigmeat promotion programmes running in key export markets. Teagasc has also intensified its dedicated ongoing advisory supports being provided to pig farmers and it is actively engaging with pig farmers to explore the options potentially available to them.

Furthermore, the Department continues to engage at EU level to ensure there is a joined-up EU approach to the challenges arising from Russia's illegal invasion of Ukraine, including through the European food security crisis preparedness response mechanism. Last week, the European Commission announced the adoption of exceptional support measures across the agricultural sector, along with a communication on food security. Additionally, the European Commission, in view of the particularly difficult situation in the pigmeat sector, has opened a new private storage aid scheme to assist in stabilising the sector. The Department is examining the detailed requirements and conditionality attached to the exceptional aid allocation to Ireland of €15.8 million in EU funding.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The Minister for Agriculture, Food and the Marine, Deputy McConalogue, contacted me directly to let me know he is attending a Council of Ministers meeting in Europe and that he could not be here this evening. I appreciate that. Only last night, I engaged with the Taoiseach and the Minister for Public Expenditure and Reform, Deputy Michael McGrath, to emphasise again that the proposal submitted by the IFA, the meat processors and the Irish Grain and Feed Association, IGFA, must be considered, finalised and implemented by the Department. The sector's proposal has well outlined the difficulties, which have been well researched, and where Government funding could be provided. Equally importantly, the proposal outlines the contribution these stakeholders themselves will make.

This is an immediate crisis. The Department may refer to facilities within the banks, through the different Brexit-related funds etc. but the banks are not entertaining some pig producers. I fear the smaller-scale producers will get less of a hearing from our financial institutions than bigger producers. The sector has seen major rationalisation over the years and we do not want to lose any more producers. This is a sophisticated sector. The Minister of State referred to it as being a resilient sector, and it has been. We are all aware that different sectors in farming face cyclical problems over the years arising from the weather and market distortions or disturbances. The pigmeat sector specifically, however, has always ensured more cyclical problems than any other sector in farming or the agrifood industry.

When I was in government and dealing with the pork dioxin issue in 2008, the public finances faced particular challenges but we put a significant amount of funding into dealing with that issue to ensure we continued to have a pigmeat sector here. It was a good investment by the Government. We did not delay in making that decision. We decided quickly, we put the financial support in place and we saved that sector. In the meantime, there has been a great return on that investment made by the Government in 2008. Equally importantly, we ensured that the good name of the Irish agrifood sector internationally was maintained. We must ensure that continues now and that we do not run into any animal welfare issues.

Malcolm Noonan (Carlow-Kilkenny, Green Party)
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To address the specific issue of the IFA's proposal for a pig stability fund, this is being considered by the Department in conjunction with key stakeholders. It is being requested that a €100 million fund be made available to pig farmers by the Department, with €50 million to be repaid over a 14-year term through a statutory levy on pigs slaughtered or exported live. This proposal would have significant Exchequer implications as well as State aid implications regarding the Exchequer funding element and at a statutory level. The Minister has engaged with the Ireland Strategic Investment Fund, ISIF, to ask that urgent consideration be given to developing a suitable instrument to manage market volatility for the pig sector. Discussions are ongoing regarding developing a financial instrument as a medium-term solution to help address volatility. As I said, these are cyclical issues, and this cycle might be a protracted one.

Nationally as well, the pig roundtable, chaired by the Minister of State, Deputy Heydon, meets quarterly with a focus on key strategic developments in the sector, with reference to the relevant actions set out in key strategy documents. These include the programme for Government and Food Vision 2030. The next roundtable meeting is in early May. A new pigmeat reflection group has also been established at EU level, comprising representatives from member states and key stakeholders, to examine, through civil dialogue, the structural challenges facing the sector, because these issues are impacting across Europe and worldwide. The group has already met twice and it is scheduled to produce a report in the first quarter of 2023.

I reiterate the support of the Minister for Agriculture, Food and the Marine and the Department in trying to resolve the challenges facing this vital sector of the Irish economy and agrifood businesses. We all want to seek a solution that is equitable and fair to the producers and to ensure the sector not only survives but thrives in future.