Brendan Griffin (Kerry, Fine Gael)
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127. To ask the Minister for Agriculture, Food and the Marine the ongoing impacts of the war in Ukraine on Irish agriculture; the latest Government actions to mitigate negative impacts on Irish farmers; and if he will make a statement on the matter. [26908/22]

Brendan Griffin (Kerry, Fine Gael)
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My question relates to the war in Ukraine and the impacts it is having on Irish agriculture. Will the Minister discuss what is being done to try to assist Irish farmers at this very difficult time?

Charlie McConalogue (Donegal, Fianna Fail)
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In the context of the Ukrainian crisis, significant implications are being seen across all sectors, particularly the agrifood sector. I assure the Deputy that the illegal invasion of Ukraine and its impacts on our farm families continue to be the number one priority for me and the Department since the invasion occurred.

At farm level, the crisis has been impacting significantly on the price of fertiliser and animal feed, as we have discussed. Following a strong year for farm family income in 2021, Teagasc has forecast that a decline in 2022 is now likely as output price increases have, until recently, been failing to offset the rise in production costs. Significantly higher production costs will be a feature across all sectors this year, with higher fertiliser, feed and fuel prices. The current market outlook for output prices is uncertain. We cannot be sure of it but upward pressure has been seen. There is no guarantee that this will cover the additional input costs.

The Deputy will be aware that I have set up a rapid response team in the Department and, at national level, the national fodder and food security committee under the chairmanship of Mr. Mike Magan. Under the leadership of Dr. Frank O'Mara and the Teagasc team, the committee is working very closely with farm organisation representatives to manage the challenges in this area.

With regard to supporting farm families, we have introduced a number of packages. We provided €12 million to incentivise increased tillage and grain production, which is very important. Working with the Minister of State, Senator Hackett, we are providing €3 million in support for the horticulture sector. Working closely with the Minister of State, Deputy Martin Heydon, who is chair of the pig roundtable on this issue, we have introduced €20 million to support the pig sector at a time when it is under massive pressure. More recently, the fodder incentive scheme was introduced to incentivise Irish families to do what we do tremendously well, namely, to grow grass, while recognising this is costing more this year and to support farmers with that cost challenge.

Brendan Griffin (Kerry, Fine Gael)
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I thank the Minister and I appreciate the efforts that have been made to date. They are all very helpful and make a difference on the ground for individual farmers and farm families. I encourage the Minister to keep trying to do more and find more resources to assist our farming communities. The situation for farmers is akin to the situation for the tourism and hospitality sector during Covid-19. They face a major challenge and there has been an enormous increase in production costs.

I raise the particular case of farmers in milk production who are on fixed-price contracts, especially in the north Kerry area. I thank the Minister of State, Deputy Heydon, for meeting yesterday with some councillors and farmers in Moyvane, County Kerry, and the north Cork area. They are having serious difficulties because of huge production costs. I call out Ornua, which will not engage in the process. These farmers are suffering and need help.

Charlie McConalogue (Donegal, Fianna Fail)
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I am aware that Deputy Griffin has advocated strongly on this issue. On the need to support farmers with costs, the €1,000 we have provided for fodder production costs over the summer will be important in that regard. We did not apply that payment to the dairy sector in general because, thankfully, we are seeing record prices for milk. Teagasc figures will show that the increase in the milk price is exceeding the increase in costs. As such, profits should be strong and the evidence show that activity at farm level in saving fodder has also been strong.

There is a challenge facing those on fixed-price milk contracts. The Joint Committee on Agriculture, Food and the Marine has considered this matter. It is very important that the co-operatives also give it serious consideration. A number of them have moved to provide some support to those on fixed-price milk contracts. I encourage them to consider the issue further because undoubtedly there is considerable pressure on those locked into fixed-price milk contracts, despite the very strong prices in the general market.

Brendan Griffin (Kerry, Fine Gael)
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It is welcome that milk prices are rising, but those who are locked in to prices face an enormous challenge. The stress and fear these people are facing are very worrying. I again call out Ornua. It is my understanding that the company was asked to appear before the Joint Committee on Agriculture, Food and the Marine and has not yet agreed to do so. That is unacceptable at this point. This issue is causing enormous stress and worry. The Minister of State, Deputy Heydon, listened to the farmers yesterday. I thank him for his time and effort. He saw at first-hand the huge impact this is having and the massive amounts of money involved. I acknowledge those companies that have done the right thing in the circumstances, but they all need to do that.

Charlie McConalogue (Donegal, Fianna Fail)
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There is a very important role for milk contracts, including fixed-price milk contracts going forward. In general, these contracts provide support for farmers given the fluctuations in markets. It is also important that there are safeguards in place for farmers around that. Lessons need to be learned from the experience in that regard in recent months. It is a matter for the co-operatives and the processors, working with Ornua, to assess. A number of the co-operatives have examined the matter and delivered increased prices for the farmers in question. This is a difficult and challenging issue. Nobody predicted the unprecedented increase in costs over the past while or the increase in milk prices that has occurred at the same time. Farmers in fixed-price milk contracts are not able to avail of the higher prices but they are certainly subject to the higher costs. That is a very difficult situation to be in. It is important, therefore, that the processors and industry work together to see how they can support these farmers in the time ahead. We also need to learn the lessons in order that we future-proof this option in a way that safeguards farmers. The Minister of State, Deputy Heydon, has engaged closely with Deputy Griffin on this matter.

Catherine Connolly (Galway West, Independent)
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As we are running out of time, I ask Deputy Leddin to skip the introduction to the next question and we will try to get a reply from the Minister followed by a response from the Deputy.