Dáil debates

Thursday, 19 January 2023

Agricultural and Food Supply Chain Bill 2022: Second Stage

 

1:30 pm

Photo of Charlie McConalogueCharlie McConalogue (Donegal, Fianna Fail)
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I move: "That the Bill be now read a Second Time."

As Deputies will be aware, the programme for Government included a commitment to ensure fairness, equity and transparency in the food chain by establishing a new authority to enforce the unfair trading practices directive. The commitment was also that the new office would have a specific role in analysing and reporting on price and market data in Ireland. I am pleased to present the legislation that delivers on that commitment. I thank the stakeholders who contributed to the public consultation on the Bill held by my Department in 2021 and those who made helpful contributions to the pre-legislative scrutiny process in 2022. I also thank the members of the Joint Committee on Agriculture, Food and the Marine for their valuable work on the pre-legislative scrutiny report. I believe the report’s recommendations that have been incorporated into the Bill have helped to strengthen the Bill to achieve its objectives.

The Government fully supports the need to enhance fairness, equity and transparency in the agricultural and food supply chain, particularly in strengthening the position of our farmers, growers, fishers and small food producers. The agrifood sector is our largest indigenous sector, playing a vital role in the economy and in our rural and coastal communities. The sector accounts for almost 7% of gross national income and more than 9% of exports in value terms.

It employs over 170,000 people, representing over 7% of total employment. Total exports of agrifood products last year were estimated by my Department at €18.7 billion.

The economic viability of our farmers, growers, fishers and small food producers who contribute to our largest indigenous sector is essential for the continued success of the sector and our rural communities. It is, therefore, important that they can be assured that there are adequate protections in place to ensure they are treated fairly in their business dealings along the agrifood supply chain. This Bill provides that protection. For the first time, we are establishing, on a statutory basis, an independent office which will promote fairness and transparency in the agricultural and food supply chain and must have regard to the circumstances and needs of the agricultural and food sector.

This new office, an rialálaí agraibhia, or the agri food regulator, will have two key functions. First, it will deliver a price and market analysis and reporting function. In doing so, the new body will facilitate timely access to information about price and market trends, which should help bring greater transparency to the agrifood supply chain. This function should help food businesses, including primary producers, to compete effectively and take well-informed production and marketing decisions. Second, the agri food regulator will also become the designated national enforcement authority for the unfair trading practices, UTPs, directive and any additional unfair trading regulations introduced under this Bill. Deputies will be aware of the deadline of 1 May 2021 for the transposition of the EU directive on unfair trading practices. At that time, I transposed the directive by statutory instrument and, at the same time, as an interim measure, I established the unfair trading practices enforcement authority in my Department. The Bill provides that all powers of enforcement of unfair trading practices will transfer to the new authority. On governance matters, the Bill provides that the regulator will be led by a board, will have a chief executive officer and will operate as a separate State body funded by my Department.

Turning to the structure of the Bill and the related provisions, I refer to the name of the new authority. It became clear, following the public consultation that the inclusion of the term "Ombudsman" in the name was not appropriate. A recommendation of the pre-legislative scrutiny report recommended that the name should include the term "regulator" and I have taken this on board. The new body will be known as an rialálaí agraibhia or the agri food regulator. This name adequately reflects the purpose of the new office.

Part 1, sections 1 to 6, inclusive, sets out the preliminary and general provisions, including definitions of terms used in the Bill. Part 2, which encompasses sections 7 to 54, inclusive, deals with many of the operational arrangements of the regulator, including establishment provisions; key functions to be delivered by the regulator; governance and related proceedings; appointment and functions of the chief executive officer; attendance before Oireachtas committees; staffing, planning and reporting; finance; and standard provisions for prohibited disclosures and membership of other bodies. The key functions are covered in sections 11 to 16, inclusive, and these include promoting fairness and transparency in the agricultural and food supply chain, which is section 11; and providing information on price and market data, including publishing such information.

Taking account of one of the pre-legislative scrutiny report recommendations, recommendation No. 3 from the Joint Committee on Agriculture, Food and the Marine, the reference to the term “publicly available” information, which was included in the general scheme of the Bill, has been deleted. Also in line with another pre-legislative scrutiny recommendation from the committee, No. 5, the text has been clarified to ensure that the regulator may consider matters outside the State, as required, under section 12. Another function is enhancing the understanding of and compliance with agrifood unfair trading law. I am pleased that the pre-legislative scrutiny report recommendation No. 6 welcomed that the regulator will promote awareness and conduct public information campaigns. Another key function will be the important role of the enforcement of unfair trading law, which includes investigating and initiating legal proceedings for offences where the regulator believes an offence has been committed. Another key role is that the regulator will issue guidelines and review codes of practice. This should help to increase awareness of the need to enhance fairness and transparency in the agrifood supply chain, as well as consistency across the business dealings, which are covered in sections 15 and 16.

The Bill provides that the regulator shall provide advice and information to the Minister about matters relating to the agricultural and food sector. I will refer to one of the pre-legislative scrutiny report recommendations, No. 18, that the regulator should be obliged to examine, with a view to proposing, mechanisms by which the purchase of foodstuffs below the cost of production can be introduced. I am satisfied that there are appropriate mechanisms in the Bill to allow the regulator to examine and report on any relevant matters impacting the agrifood supply chain.

On the governance arrangements, taking into account the pre-legislative scrutiny recommendation No. 7 to increase the number of board members, the number has been increased from six to eight, including the chairperson. In order to reflect the importance of the primary producer in the agrifood supply chain, the Bill also provides that the board members must include at least two primary producers. An objective to have an equal number of men and women on the board is also included in section 21. There are standard requirements provided in the Bill for proceedings and meetings of the board, including the quorum for meetings. Following on from recommendation No. 7 in the pre-legislative scrutiny report, the quorum has been increased from three to five. To advise and assist it, there is provision in the Bill for the regulator to establish committees, if required, under section 28.

On the appointment, functions and status of the CEO, the CEO will manage the office and report to the board. A competition for the CEO has been held recently and the recruitment process is currently being finalised by my Department. The Bill provides that both the CEO and chairperson of the board will appear before Oireachtas committees. One of the pre-legislative scrutiny report recommendations, No. 8, was that, before commencing the role, the CEO-designate should appear before the relevant sectoral committee to discuss their strategic priorities for the role. However, this would not be appropriate as it is the board that is responsible for the strategic direction of the office, not the CEO, who will report to the board. The CEO will be required to appear before relevant Oireachtas committees once he or she has commenced the role, which is provided for under section 36(1). Another pre-legislative scrutiny report recommendation, No. 9, was that there should be specific reference to the Oireachtas Select Committee on Agriculture, Food and the Marine. This is now mentioned in Section 36(11), following on from acceptance of that recommendation.

The Bill provides that the agri food regulator will prepare a strategy statement, an annual work programme, an annual report and reports on complaints and investigations and decisions. Concerning the annual report, I have implemented two separate recommendations of the pre-legislative scrutiny report. First, recommendation No. 10 is that the remuneration of the CEO will be published. I have provided that this will be included in the annual report. Second, recommendation No. 15 is that any recommendations to the Minister in respect of legislation will also be published in the annual report.

I move to Part 3, which is covered under sections 55 to 70, inclusive. This Part deals with unfair trading practices, including the scope of enforcement; the powers to make regulations; the prohibition of unfair trading practices; offences of unfair trading practices; complaints; fees; investigations; and alternative dispute resolution. The scope of the unfair trading practices concerns business-to-business relationships. The pre-legislative scrutiny report recommendation No. 1 recommended that the scope be broadened to business-to-consumer relationships and that the Competition and Consumer Protection Commission, CCPC, competency for all functions relating to the sale of foodstuffs be transferred to the regulator. The pre-legislative scrutiny report also recommended in recommendation No. 19 that the regulator have full enforcement powers, including confiscation of any evidence in a case where it believes or suspects a processor or processors are collaborating in price.

I gave these recommendations much consideration and I have concluded that it would not be appropriate to transfer competition-related powers from the CCPC as this approach would result in two competition and consumer protection authorities, with the potential for duplication and overlap. As it stands, the Bill provides for strong powers of enforcement regarding unfair trading practices and will allow for additional UTPs to be introduced. In addition, while the CCPC was previously responsible for the enforcement of the grocery goods regulations 2016, which included foodstuffs, this is no longer the case since April 2022, when those regulations were revoked. The regulator will liaise with the CCPC and other authorities on relevant issues, and the regulator may bring to the attention of the CCPC any matters it considers to be relevant to competition law that arise in the course of its investigations or analysis. This would be considered normal practice between enforcement bodies.

The Bill provides the Minister with the power to make regulations about business-to-business relationships. It details items the Minister must take under consideration and have due regard for before issuing such regulations, which will be known as the agrifood unfair trading regulations. The unfair trading practices included in SI 198 of 2021 have been provided for in the regulation-making powers in section 57.

The Bill provides for types of unfair trading practices specifically relating to payments, including late payments; payments not related to the sale of the agricultural and food products; payment for deterioration or loss of products; charges for stocking, displaying or listing products, or fitting out; charges for making products available on the market; the cost of any discounts sold by the buyer as part of a promotion; a charge for advertising or marketing by the buyer; and payment of compensation for the cost of examining customer complaints. The Bill also provides for the regulation of changes of supply terms, including short-notice cancellations of orders of perishable products. It also provides that regulations may prohibit a unilateral change to certain terms of a supply agreement in section 59. The regulation of contract arrangements are also provided for in the Bill in section 60, while in section 61 the Bill also provides for the regulation of supply conditions. Section 62 deals with rules on malpractice concerning misuse of trade secrets, and acts of commercial retaliation against the supplier are also included. In section 65 there is provision for new regulations to be made to supplement the current UTPs.

Recommendation No. 20 of the pre-legislative scrutiny report was that the new body should have powers "to see all documentation of processor and retailer of prices achieved for product so as to ascertain the margins in all parts of market". I am satisfied that the price and market analysis and reporting function in the Bill will provide information on the market from which costs and margins should be capable of being estimated, for example, following analysis of seller and buyer prices. In the context of an investigation of suspected or alleged unfair trading practice, the regulator will have access to all papers and documentation relating to the suspected or alleged UTP, including contract arrangements with suppliers.

With regard to the enforcement of UTPs, I consider that a number of the pre-legislative scrutiny report’s recommendations are provided for, including the following. The fines for indictable offences have been increased to not exceeding the greater of €10 million or 10% of the aggregate turnover of the operator in the financial year in which the offence was committed. The Bill now clearly provides for farming organisations to make complaints to the office of their own volition under section 67(2). I have also removed the requirement for complainants to request that their information be kept confidential. It is now specifically required that the regulator must respond to complainants in writing under section 67(5). I have clarified that where alternative dispute resolution mechanisms fail, the regulator shall resume the investigation or consideration of the complaint, as suggested in recommendation No. 14 of the pre-legislative scrutiny report. While I have no intention to introduce a charge for complaints in the short term, I considered that, based on the experience of other complaints and appeal procedures, it was prudent to provide for this under section 68.

Turning to Part 4, which covers sections 71 to 86, inclusive, this deals mainly with the enforcement powers assigned to the regulator and criminal proceedings. I consider that the Bill provides significant investigative powers to the regulator including to enter premises and seize evidence where it believes a breach of the UTPs has occurred. The regulator is also empowered to carry out inspections where a complaint has not been received. This takes account of a recommendation No. 4 of the Oireachtas committee's pre-legislative scrutiny report. The Bill provides a time period for the institution of summary proceedings for an offence from the date on which the offence was alleged to have been committed. The deadline that was set out in the general scheme has been extended from two years to three years to take account of recommendation of the pre-legislative scrutiny report. While the Bill provides for significant penalties for indictable offences, there is also a provision for a fixed payment notice. This is an option that can be used depending on the gravity of the alleged or suspected offence in certain circumstances. It is envisaged that this provision would be used only in very limited circumstances.

In conclusion, the events of last year have shown that it is now more important than ever to have a resilient and sustainable agrifood sector which produces the best food in the world. The Bill aims to ensure there is protection for all farmers, fishers, growers and small business operating in the agrifood sector against unfair trading practices and that the availability of market and price information brings greater market transparency. It is my sincerest hope that we can progress the enactment of this Bill without undue delay and establish this much-needed agrifood regulator. I commend the Bill to the House.

I look forward to the Second Stage debate, as well as Committee and further Stages. As has been the case previously, I look forward to hearing Members' views and perspectives on it. My sole objective here, having campaigned and pushed for an agrifood regulator for many years, is to ensure we introduce an office which brings real transparency to the food supply chain and serves our primary producers effectively in the years ahead. I look forward to the debate and the other Stages of the Bill as it progresses through both the Dáil and the Seanad.

I thank my team, Angela Robinson and assistant secretary Sinéad McPhillips, who have done a huge amount of work in driving this on and leading on it. It is a significant change in our agrifood legislative environment. It is a most important step and one which has taken a lot of time in the Department. I recognise the work of the Department in getting the legislation this far and that of the wider team which supported Ms McPhllips and Ms Robinson in that process.

1:45 pm

Photo of Matt CarthyMatt Carthy (Cavan-Monaghan, Sinn Fein)
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I welcome the Minister and his officials. The establishment of a food regulator has been a long-standing demand of Sinn Féin and many farm organisations. I have regularly stated that an enforcement authority that protects farmers and communities against the stranglehold of dominant processors, particularly meat factories and multinational retailers, must be a central plank in delivering a fair price to Irish farmers for their quality product. Farmers have been at the mercy of processors and retailers for too long. They are price-takers in every sense. Farmers do not get, and traditionally have not got, a fair share of the profits from their produce. A big part of the problem is the lack of transparency in the sector. We know how much farmers receive for their product either at the factory or in the mart and how much consumers pay for the end product. The problem is that in between, we do not know what margins are made. What I have described as the greatest secret of Irish agriculture still holds true. There are huge profits in beef, for example. The problem persists that those profits are not going to the people who are doing the bulk of the work, namely, our primary producers and family farmers.

We need a regulator with real teeth to ensure fairness and transparency. The EU unfair trading practices, UTP, directive did not go far enough to rebalance the scales for primary producers in the market chain. That is why I voted against it while I was a Member of the European Parliament. I was particularly disappointed that we were not able to secure EU-wide agreement at that level to ban below-cost purchase of agricultural goods. While the directive allows for member states, on an individual basis, to strengthen provisions as well as to add new UTPs, I expressed a fear in the European Parliament that some governments, particularly an Irish Government made up of Fianna Fáil or Fine Gael, would fail to utilise this flexibility ambitiously enough. This fear was based on the historical legacy of these parties protecting the interests of meat factories above those of farmers. I was concerned that an Irish Government would suggest that if we were to act unilaterally to protect farmers' interests, it would place processors here at a disadvantage. Too often, my fears have been compounded.

To date, the Government has taken a minimalist approach to the implementation of the UTP directive, transposing it virtually at the last minute, unedited, as a statutory instrument. The resulting unit in the Department of Agriculture, Food and the Marine did not actually hear a single case for nearly two years after it came into operation, expending none of its budget on anything other than the salaries of officials in the first year. When we were later promised legislation on the establishment of the office of the regulator by the end of 2021, we were faced with repeated delays. The original heads of Bill were widely acknowledged to be incredibly weak, so much so that the committee on agriculture described them as not fit for purpose.

All of that said, on behalf of Sinn Féin, I welcome that we are finally having the opportunity to debate this crucial legislation in the Chamber. I also welcome the Minister's decision to accept a number of the recommendations of the pre-legislative scrutiny report of the Joint Committee on Agriculture, Food and the Marine, including amendments that were tabled by Sinn Féin. I acknowledge that in some areas at least, the Minister has listened.

While farmers have long demanded a sectoral regulator, they were initially offered a food ombudsman, which then that became an office for fairness and transparency in the agrifood chain. I am glad the Minister has finally landed where farmers and Sinn Féin started by titling the new body as the food regulator, an rialálaí agraibhia.

The Minister has accepted Sinn Féin's assertion that the proposed sanction of a maximum fine for breach of the unfair trading practices regulations was insufficient. It was rather bizarre that the Department proposed a simple fine of €500,000 rather than a percentage of global turnover, as modern best practice dictates and as has been brought forward by Cabinet colleagues in recent times with regard to other regulators and required under the ECN+ directive.

While all of that is welcome, Sinn Féin remains concerned with fundamental aspects of the Bill. Put simply, I do not believe the regulator has been given either the necessary legislative basis to discover if our primary producers are being treated unfairly or the appropriate powers to take action when they are found to have been unfairly treated. Sinn Féin stands ready to work with the Minister to address the Bill's remaining deficiencies and ensure we deliver to farmers a truly independent sectoral regulator with the teeth to tackle unfair trading practices and, crucially, cartel-like behaviour in the sector. We will bring forward amendments on Committee Stage to do just that.

Two of our primary concerns are that what the Minister has effectively done in the Bill can amount to hamstringing the regulator before it has even been formed, first, through limiting its remit to business-to-business relationships and, second, by clearly stating to the Joint Committee on Agriculture, Food and the Marine that he does not see a role for the regulator in terms of competition concerns or investigating cartel-like behaviour, an assertion he repeated today. Sinn Féin believes that to be effective, the regulator must have a view of the full breadth of the agrifood supply chain. That means it must include business-to-consumer relationships and, in the same vein, it must have a role regarding competition complaints and, especially, regarding cartel-like behaviour.

Based on engagement with the Minister and all stakeholders, it is also a significant concern that the regulator's activity in the area of price reporting and enhancing transparency effectively amounts to the collation of all existing reporting within its office. That will deliver a net total of zero additional transparency. Common sense dictates that a sectoral regulator of this nature must be empowered to gather non-publicly available data related to the agrifood supply chain and also to regularly contrast such prices with relevant international counterparts.

There are also a number of more administrative aspects of the Bill that require further consideration, engagement and amendment. It is welcome that the Minister accepted the recommendation of the agriculture committee to increase the board's size. However, increasing the number of ordinary members from five to seven without increasing the farmer representation goes against the spirit of the committee's recommendation to the Minister and our engagement with him. I invite him to review that.

Equally, while I welcome that the language in the Bill in regard to ensuring the confidentiality of complainants' identities has been improved, I am aware that this is a particular area of concern for farmers. I believe it would benefit from further engagement with farm organisations in advance of Committee Stage. It is important to note that farmers have virtually no confidence in the CCPC given its failure to investigate ongoing allegations of cartel-like behaviour, particularly in the meat sector. In creating a new regulator, we want to avoid such a relationship and we need to provide guarantees regarding confidentiality as an absolute prerequisite.

On the commissioning of reports, the Minister will recall that I have been requesting, since he assumed office, that he commission a report on the social and environmental impact of factory-controlled feedlots. In 2022, there was a throughput of 400,000 cattle in the controlled finishing units the Department uses as a proxy for these feedlots. That represents a 52% increase on 2017 figures during a period in which tuberculosis reactor rates were largely stagnant.

While the Bill empowers the regulator to make recommendations regarding proposals for legislation relating to any aspect of fairness and transparency in the agrifood supply chain, it is important that we explicitly state that such proposals be disclosed and published in the regulator's annual reports. I have noted on a number of occasions that the Minister and Government have taken a minimalist approach to implementing the UTP directive. An evaluation of that directive at an EU level is due at the end of 2025 and I also expect there will be further interim analysis of implementation on a member state level. If the Minister is willing to work with the Opposition on Committee Stage and address some of the deficiencies I have mentioned, there is real potential for this to be an area in which Ireland leads across the European Union, and even globally. That would be no more than our farmers deserve as they rally to face down the challenges of climate change and to feed this nation and many beyond, all the while being the bedrock upon which our local rural economies are based.

I remind the House that in 2019, beef farmers across the State gathered together outside factory gates, often in inclement weather, to demand action in delivering fairness and transparency in their sector. They were legally threatened for their efforts and vilified in some circles. Among their chief demands was the establishment of a food regulator. We now have that in name. Those farmers who took a stand deserve to be commended and recognised during this debate. Now, though, we must deliver a regulator that has the teeth necessary to mark a real sea change that rebalances the power towards our family farmers and away from the factories and large retailers. I pledge that I and my party will work with the Minister to achieve just that. I hope and trust that he will agree to work with us and all Members of the Opposition, in particular, members of the Joint Committee on Agriculture, Food and the Marine, in that vein.

1:55 pm

Photo of Martin BrowneMartin Browne (Tipperary, Sinn Fein)
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I appreciate the opportunity to discuss this Bill. The general scheme was discussed in some detail at the Joint Committee on Agriculture, Food and the Marine. As such, the needs of the various organisations have been expressed and discussed. For too long, our farmers have had to navigate a market in which they have been expected to accept the prices they receive and the conditions to which they are subject. The purpose of the Bill is to address that and give producers of agricultural products the certainty they need that they are protected in the marketplace.

I welcome the changes made since the joint committee discussed the general scheme and that the Minister took on board some of the proposals made by Sinn Féin, the committee and the farming bodies. While some of these changes, such as larger fines and an increased time limit for prosecution for an offence, are welcome, much more needs to be done to make the regulator as effective as possible. I ask the Minister to give due consideration to these concerns as the Bill progresses, and I trust he will do so.

I will first address the issue of transparency and the power of the regulator to publish analysis of information about price and market data in the agriculture and food supply chain. The general scheme referred to "publicly available" data. It was pointed out to the Minister at the committee that this was far too limiting to be effective in any way in tackling cartel-like behaviour or similar abuses. The Minister has since dropped the term "publicly available". What is that meant to achieve? The words may have been dropped but the intent remains unchanged. There is no explicit reference to allowing the regulator a mechanism to require market data that is not publicly available. Therefore, any hopes that this will give agricultural producers the confidence that cartel-like behaviour is being pursued, as they would like to see, have been shelved. This is a fundamental issue, not a small matter, as the Minister has heard time and again. The stranglehold over our farmers needs to be addressed through a regulator that is effective. The Minister has seen intricate corporate structures that have been designed to conceal. If we cannot have a regulator with the basic powers of investigation, that is, the power to request information that may not be in the public domain, we are in a very sorry place and little will change for producers. I ask the Minister to comment on whether he supports the notion of the regulator being able to access information needed to clearly identify cartel-like behaviour. This Bill does not read like he does.

On the issue of the effectiveness of the regulator, another stumbling block is that the Bill does not span the full supply chain. In Sinn Féin’s submission to the consultation on the legislation, we stated that the regulator must be empowered to address issues across the supply chain, from producers through to consumers, with a particular emphasis on addressing the dominance of large processors and retailers. However, the Minister has chosen to confine the scope of the regulator to business-to-business relationships. For the regulator to be more effective and, ultimately, to be able to analyse market data precisely in the interests of producers and ensure they get a fair price, its remit must include business-to-consumer relationships.

Without this ability, coupled with being able to do little more than collect public market data, the office will not be taken seriously.

Let us talk about confidence. Consider the work of the office as it is right now: not a single case has been examined by it in almost two years. First, it is because the Minister transposed an EU directive with as little input as possible, so it was not tailored to Irish needs. The Minister will get no confidence from the agriculture sector with that kind of approach. Second, the Minister's vision of a regulator is what the farming organisations had feared. He is stopping short of giving it real powers that matter, powers that would benefit the producer, which would in turn benefit their communities and the customers who support them.

Another factor is trust. Individuals or groups need to know that when they make a complaint to the regulator, they will be afforded the confidentiality they need. I note the Minister has made some effort to address this, but I believe he needs to look at this Bill again and make it more convincing. This has been pointed out to him, and I fail to understand why it has not been addressed.

I urge the Minister not to be rigid in his approach to the Bill as it makes its way through the Oireachtas. It has great potential, but only if it is designed to address the key obstacles the sector unfortunately encounters all too frequently.

There are other elements that need to be addressed. The Minister increased the board and the quorum, which was called for, but sectoral representation has not increased.

The wording of parts of this Bill are too vague. No detail is given on what constitutes "too long ago to justify investigation", for example. As I mentioned earlier, removing words rather than making changes will come back to bite the regulator and ultimately the Minister who has given it its terms of reference. A Bill like this cannot be left open to interpretation, especially regarding the regulator’s remit and power. We need specifics, real enforcement capabilities and a regulator that will inspire the faith and trust of the sector. We are not there yet.

While Sinn Féin will support this Bill, we will table amendments to various aspects that have been left unaddressed, are watered-down interpretations of recommendations from the committee or are too vague to inspire the confidence needed.

2:05 pm

Photo of Martin KennyMartin Kenny (Sligo-Leitrim, Sinn Fein)
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It is quite a number of years since the Minister and I were on the agriculture committee together. This was an issue then and we once made a visit to north county Dublin with the IFA in regard to it. One of the primary demands made was for a food regulator. We all recognise the production of food in this and many countries is a highly profitable enterprise, but the market model does not work for the primary producer. The primary producer is always squeezed, and, having made the greatest effort, put in all the work and taken all the risk, he or she gets the least from it. Everyone else in the middle seems to get most of the profit. That has been long recognised.

I welcome what is proposed here. The Minister said this was a legislative change that could make a huge difference. It has the potential to be that and we need to ensure we can deliver that. Adam Smith, one of the heroes of capitalism, in his book The Wealth of Nationsfamously said two or more merchants never come together for the most casual conversation but it quickly turns to how they can fix the market in their favour. He was making a strong argument for the strong hand of regulation and for Government to come in, regulate the market and ensure there is a fair and balanced playing field for everyone. We need to ensure this does that.

Up to now, there has been much talk about what could happen. We have a long history in this country of large corporate interests being able to dominate the markets, particularly in our beef sector, but also in dairy and other sectors. The beef sector is probably the biggest one where we have had these problems in the past. The efforts of many farm organisations to shine a spotlight on this over the years have been worthy but have not produced results. This is an opportunity, hopefully, to produce them. While I recognise the Minister has taken on some of the recommendations of the committee, I hope he will work with the committee and everyone inside and outside the Chamber, including the farm bodies who have serious issues in regard to ensuring this regulator will have the teeth required to make a difference. That is the big problem.

I understand the Minister is meeting with Coillte today, if he has not already done so. One of the primary things farmers need to produce food is land. Now we see corporate interests are reaching in there to take hold of that and create an uneven playing field where many farmers, particularly in marginal land, would not be able to compete and it would be bought out from under them. That is a serious problem that much of the farming community is seeing as one of the signals of this Government’s intentions. It is an alarming situation if the Government is going down the road of allowing major corporate interests to interfere in the land market to the detriment of the farm community.

The advantage Ireland has globally as an international food producer is not often recognised. We have family farms, free-roaming animals and farm-to-fork traceability. We have all the components consumers want yet we do not produce the level of quality marketing required to get the best price for the farmer. That needs to change. We need the strong hand of the regulator to ensure the small farmer and the farm family that the consumer wants to work with and buy their produce from get a fair price, enabling them to be not just viable, but prosperous. When the farmer is prosperous, rural Ireland is vibrant. That is what we need to see happen.

Photo of Richard BrutonRichard Bruton (Dublin Bay North, Fine Gael)
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I am grateful for the opportunity to speak on this Bill. I did not think I would get in so early in the debate.

I welcome the Minister’s initiative in this area. A supply chain that is fair to primary producers is essential. This has dogged the sector for a long period with the sense of unfairness, rapid changes and an imbalance of power out there. The Minister is taking the necessary powers and setting up an agency with teeth, which is welcome and will be welcomed across the farming community. However, a robust supply chain requires much more than this element. While I understand the Minister is looking at different pieces of the supply chain separately, we should be taking a broader view of what a robust supply chain will mean for the future.

Among the issues I thought the Minister would have regard to in the Bill is what is often called circular economy practices, in other words looking at the damage done anywhere along the supply chain. That should be taken into account in any regulatory powers in the future. We should look to a time when price premiums will be paid to farmers for sustainable production. That should be considered in this Bill. Traceability of production will be an important element in the relationship between suppliers and primary producers. I expected more reference to and understanding of the importance of that.

Optimal use of food surpluses is a key element in the supply chain. If we want to be robust we need to see the 1.1 million tonnes of food waste we put into landfill used more productively. That does not count the food waste that occurs before the farm gate.

All of these are important elements of a long-term robust supply chain. The profitability of the family farm depends on all these elements being in place so Ireland can, along with our Origin Green ambitions, be shown to be sustainable throughout the supply chain. Unfortunately, as the Minister knows, that is not the case at the moment. We are not rewarding carbon farming. The Minister needs to address how we can reward primary producers for making the sort of changes we all know have to happen around land use, fertiliser use and so on. I know it is on the Minister’s radar to see such changes but we do not yet have payment for carbon farming activities. We should and I believe will in the future see earnings coming not only from the food cheque but also from environmental service management in its widest sense.

We should address waste minimisation at every point along the chain. Levels of waste, running at 30% to 40% worldwide and not dramatically lower here, are a blot on how we manage an important resource. We need to think how that can be done. On optimum use, we have seen fantastic innovation by organisations like FoodCloud in developing that.

Another area where the food sector needs to improve is in its excessive dependence on non-recyclable plastic. Two thirds of plastic comes from the food sector.

In looking at the food supply chain, while this piece of the jigsaw that the Minister is looking at is important, so are many others. We need to see a broad-based approach. I know the Minister has committed, along with other sectors, to have a circular economy strategy developed. We are awaiting the annex of the climate plan to see exactly what that will mean in the food sector. If we want to secure the future profitability of the family farm, not just in five years’ time but in ten, 15, 20, 30, 40 and 50 years’ time, we have to address much more robustly the sorts of changes that have to happen to ensure that profitability in the long term. I strongly urge the Minister to do this. If we lose our reputation for being a highly sustainable producer and if we do not become early movers in some of these changes that need to be made all along the supply chain, we will miss the boat.

I feel badly for farmers for how they tend to be singled out in the debate about climate change as though they are like data centres. We typically hear of farmers being fingered as if they are responsible for this. We need to take a different view of sectors. All of us along the supply chain, including shoppers looking for food products with zero packaging, or whatever it is we are looking for, have a shared responsibility. There could be much more momentum for change if we start to develop a circular strategy for the food sector from the farm right through to the retailer. I urge the Minister to embrace this with two hands. It will mean changes in the types of policies he promotes, and he will be paying for different things that happen on the farm. He will be disincentivising different things right along the food chain. It will be a changed environment, but I strongly believe that if Ireland moves early, we will be doing an immense service to the long-term future of the family farm in Ireland. It is an objective that I feel remains a high priority even among nominally urban representatives like myself. I come from a farming background, as the Minister probably knows. I understand that change is needed to build momentum not just in the farming community but right along the supply chain. Processors need to reward the sort of quality farming that will be a mark of Ireland if we want to have a long-term high reputation.

2:15 pm

Photo of Patricia RyanPatricia Ryan (Kildare South, Sinn Fein)
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The establishment of a food regulator has been a long-standing demand of Sinn Féin. We must ensure that farmers and consumers are protected against the stranglehold of dominant players such as multinational retailers and meat processing plants. Our farmers must be rewarded with a fair price for what is recognised around the world as a top-quality product.

In 2019, I stood with farmers on picket lines which were organised by the Beef Plan Movement. I remember some of the slogans on the placards, such as “Stop farmer exploitation” and “No handouts, just fair trade”. Farmers have been at the mercy of processors and retailers for far too long. They do not get a fair share of the profits from their produce, and this must change. In 2019, when someone spent €10 on beef, the retailer was getting €5.10 for three days’ work; the processor was getting €2.90 for three days’ work; and the farmer was getting €2 for two years’ work. There do not seem to be more up-to-date figures because of the lack of transparency in this sector. We know how much farmers receive at the factory and at the mart and we know how much beef costs in a local butcher, but we do not know the margins that are made in between. We need a regulator with strong powers to ensure there is transparency.

The Government directly transposed the EU directive on unfair trading practices, which did not go far enough to ensure farmers, as the primary producer, get a fair share. The directive allowed for member states to strengthen provisions as well as to add new unfair trading practices. With proper legislative scrutiny, we could have constructed a Bill that was fit for purpose. Instead, the Minister took the lazy way out. The unit that has been created in the Department of Agriculture, Food and the Marine on foot of the directive did not hear a single case in nearly its first two years. Its only expenditure in the first year was on the salaries of Department officials: more waste from this Government. Thankfully, we have this new Bill, which will establish the long-awaited unfair trading practices enforcement authority.

I am glad the Minister has accepted some of the recommendations that Sinn Féin proposed in the report by the Oireachtas agriculture committee. We all saw the importance of food supply security during the pandemic. We need to ensure farmers are rewarded so they can reduce food miles and the resulting carbon footprint. Suckler farmers want support, not an exit scheme. It makes more sense than importing South American food under the Mercosur deal. Our farming, horticultural and local food producers are up for the challenge, and we must ensure they are protected by getting their fair share.

Photo of Holly CairnsHolly Cairns (Cork South West, Social Democrats)
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Farmers, fishers and food producers have the most important roles in our society. Without them, we would have no food. Basically, everything begins with their vital work. Despite their significance, the primary producers and workers in this area, namely, the people who grow crops, rear animals, catch fish and make food, are often treated extremely poorly. While the Government pays lip service to them, the reality is that successive Governments have allowed and facilitated a massively inequitable system for decades that has seen a few big players become incredibly rich off the backs of family farmers, inshore fishers, meat factory workers and small producers.

The most common feature across all production in this country is inequality. There is a startling asymmetry of power. In the meat sector, we all know about the cartel-like practices that leave farmers completely vulnerable to the industry, while factory workers do extremely dangerous work in poor and underpaid conditions. Similarly, small-scale producers are exposed to the tendering process set by large wholesalers and retailers. Inshore fishers are only permitted to avail of a tiny proportion of some fishing quotas by the Government. The primary workers in all these areas face the same challenges. This status quohas been maintained for years by lobbying from the industry and retailers. The only reason there is some change is because of EU law.

This Bill brings EU Directive 2019/633 into Irish law and that has been the impetus for this change. This legislation contains many long overdue changes and transparencies. However, it falls short of the much-needed reforms that would see a properly resourced, independent regulator with the powers to implement genuinely fair practices. The Government parties’ predisposition to light-touch regulation in the finance and construction sectors, which has spelt disaster for ordinary people, is now being applied to the food sector. This is a half-done job that still favours the big players at the expense of small farmers, food producers and inshore fishers. The fundamental flaw at the centre of this Bill is the failure to establish an independent regulator. The Bill claims that it is what it is doing, but it clearly is not. It lacks the powers of a genuine regulator. The Minister for Agriculture, Food and the Marine has too much influence on this body, and it will be too closely linked to the sector.

Crucially, this new body will be a regulator in name only. Regulators must have the capacity to develop and implement regulations without restriction, as well as commensurate powers to investigate potential violations and implement the law. The new office needs to have - in the words of Pat McCormack, president of the Irish Creamery Milk Suppliers Association, ICMSA - “the ability and power to go in and examine exactly what is happening along the food chain”. That is currently not the case. The new office proposed by the Government will only be able to access publicly available information, rather than crucial information on practices in these areas, on costs and margins in the supply chain and on unpublished market data.

The agriculture committee’s pre-legislative scrutiny report draws attention to this issue and recommends that the office "should also have the power to require market data that isn’t publicly published”, with due regard to the sensitivity of such data. Without this capacity, all the office can do is collate existing information, basically for glossy reports and nice graphs on social media, but none of this will make any difference to farmers struggling to get by in west Cork, Donegal or anywhere else in rural Ireland.

There needs to be access to information from the whole supply chain. Anything else will fail primary producers and we all know that. Another matter which needs to be developed is the conducting of inspections. The agriculture committee rightly called for “random inspections on suppliers and buyers to ensure continued compliance with the rules on unfair trading practices”.

The power to conduct unannounced inspections is absolutely essential to any form of credible regulation.

While the Bill will confer powers to examine records and seize evidence, explicit recognition of the capability to carry out unannounced inspections is necessary. This would both clarify this point and strengthen the office’s role in monitoring the entire food chain. Under section 4, the Minister will retain the powers to make and change regulations. This means many of the key decisions will remain political, not independent. During pre-legislative scrutiny, concerns were raised about this area of the Bill and the ongoing lack of transparency. This new office needs to have the capacity to create regulations. This point relates to the larger lack of independence. When I think of a regulator, I think of an individual officeholder with expertise and staff to support his or her work in upholding the law and acting in the public interest. Instead, there will be a board of eight people, all appointed by the Minister, with at least two being primary producers. This is not a regulator; it is another quango.

The only other criterion outlined in section 21 is for board members to "have experience of, and to have shown capacity in, matters relevant to the regulator’s functions." From what I know about how these things work, it is very likely people who have worked for or closely with the food processing industry and larger retailers will be appointed.

For this to be a real regulator that will fulfil its mandate and have the confidence of food producers, it needs to be fully unbiased and disconnected from the big players in the agri-food sector. That is just common sense. The Bill does not have those safeguards. It does not propose an insulated system. Instead, the board could be populated by people associated with the same companies they are supposed to be monitoring. The Bill has learned nothing from previous and current scandals when cosy relationships and jobs for the boys have facilitated all manner of failures. Section 9 claims that this new office will be independent but that is blatantly untrue. The Bill will continue to give the Minister too much influence and will not create barriers between the sector and those appointed to oversee it. On paper, many of the aspects of the Bill are impressive and it technically fulfils many of the functions of a regulator, but when we look at it in detail, core principles and the practice of independence and regulation are breached.

One of the most glaringly unfair trading practices that has to be addressed is the below-cost procurement of food. It is simply wrong, not to mention unsustainable, that farmers and small-scale producers end up receiving less than the cost of their livestock or produce from retailers and food processors. This is the definition of an unfair practice. Farmers spend months rearing animals, and it is not just about the material costs of feeding and caring but the hours of work that go into bringing up an animal. Then, when it comes to selling, with the price and all the additional costs combined, they make a loss. No wonder there are fewer and fewer family farms.

The same thing happens with small-scale producers that in good faith enter into contracts with larger retailers and for which business becomes their main source of income. Then, the retailers change the conditions, demanding they do more for less. The small-scale producers have no choice but to comply, regardless of how it affects their bottom line. We all know examples of this and similar cases. Those who do the hardest and most specialised work often end up receiving the least.

The horticulture sector has been hit particularly hard by these unfair trading practices, leading to many farmers leaving that subsector. These farmers are vulnerable to the price variations and asymmetrical tendering process of large retailers and wholesalers. The national field vegetable census shows that between 1999 and 2014, the number of field vegetable growers fell from 377 to 165. No wonder it is increasingly hard to find Irish-grown fruit and vegetables on the shelves. Even though we have an ideal climate to grow many species, market practices mean this is simply unviable.

This is worrying for our food sovereignty. It has been allowed to happen under the current and previous Governments. The only thing that will address this major issue is a proper regulator that can examine the food supply chain and set minimum procurement costs. The current system is simply bad economics. It is pushing farmers and producers out of the market and forcing those who remain into more intensive models, which leaves them dependent on other factors such as imported fertiliser. We saw the impact of that this time last year, with sky-rocketing production costs.

Farmers are being squeezed by two contradictory forces. On the one hand, the Government and society are, rightly, looking for greater environmental sustainability, but on the other, the Government is facilitating processes that force farmers into unsustainable practices just to get by. Farmers cannot win; the system is rigged. The only reason many farmers are still in business relates to the State payments they receive. Public money is being used to subsidise retailers and food processors, not the people. This system has slowly emerged and developed and is now so ingrained that it is difficult to see a way out. All farmers, fishers and producers want is a fair and reliable price to know they can make a livelihood and support their families. The public wants decent food at a reasonable price and there is still plenty of room for retailers, wholesalers and processors to make a profit.

All this can be achieved with proper regulation. Not only is that a win-win situation but it is a more ethical and sustainable system that will provide a viable future for rural Ireland and Ireland’s food security. If the Bill is about valuing and protecting farmers, fishers and small producers, it needs to address the below-cost procurement of food. This point was heavily emphasised by representatives of the Irish Farming Association, IFA, at a meeting of the Joint Committee on Agriculture, Food and the Marine, who highlighted the need to "prohibit the buying of food below the cost of production by food procurement managers in dominant positions." This would be a game changer for the food sector that would enable farmers and other producers to receive fair prices. It would not only help to keep people farming but also encourage others to enter this area. This should be a key function of the new body. It will support and protect ordinary farmers and producers and go some way to confronting the systemic inequities in our food chain supplies.

Transparency is the key to this function. This new office needs to be able to examine, and independently publish information on, the cost of production and the prices producers receive. This can then be aggregated to set minimum sums buyers can pay producers and suppliers of food. Many segments of the food chain remain worryingly obscure. At one end, farmers, fishers and producers can tell us their production costs per unit and we know the prices on the shop shelves, but the pricing between these points remains unclear and is damaging to the viability of this sector.

Various stakeholders have suggested approaches and models the Government should examine. Macra na Feirme, for example, discussed the importance of creating an index of the costs of production for the farm systems in each sector, which could be used to outline the definition of "farm economic viability". With this evidence-based overview, fair pricing in food procurement could be established transparently. The absence of a cost of production price for farmers and producers is simply wrong. It is bad economics and it is eroding rural communities, not to mention the environment. Without proper provisions to examine these practices and enforce minimum procurement levels, this legislation will maintain thestatus quoand, regrettably, it seems as though that is precisely what it was designed to do. It looks good on paper but falls so far short of what is needed and of what farming organisations are seeking. The Bill will make little difference to farmers, fishers and small-scale producers that are barely getting by.

There has been insufficient discussion of fisheries in the Bill. The inshore sector, in particular, is subject to limitations that restrict livelihoods and the viability of our coastal and island communities. I was disappointed at the lack of reference to fisheries in the pre-legislative process and the committee’s report. Inshore fishers have continually drawn attention to the inequitable distribution of our national quotas. In this case, it is the Government that is to blame. It is always pointing the finger at the EU, but it has given vastly disproportionate quotas to a small few large players at the expense of thousands of inshore fishers.

I reiterate that our fishing quota is a public resource. It has to be distributed equally among fishers. The example of the mackerel quota illustrates the appalling disparity in the Government’s allocations.

Currently, only 2% of this quota is assigned to all vessels under 15 m, while 98% is given to a small few, much larger boats. Inshore fishers make up the majority of the fishing sector and represent the most sustainable type of fishing which has been practised in our island and coastal communities for centuries, yet they are receiving a tiny portion of this resource, at 2%. This amounts to a breach of fairness in the food supply chain, the very thing this Bill is meant to address. Given that the Government has refused to change its position on this matter, will the new office have the powers to hold the Minister and Department to account for this blatantly unfair practice? Inshore fishers have been seeking a more even-handed approach. I have raised this matter repeatedly. The only way I can see any change is if an independent regulator were to force it but as this Bill does not allow for that type of regulator, this looks like another case of maintaining the status quo.

There are a number of particular matters raised by stakeholders which the Bill needs to fully incorporate. The Irish Grain Growers group has asked for the specific inclusion of feed alongside food products to reflect growers' role in the food supply chain. The Irish Natura and Hill Farmers Association, INHFA, rightly highlights that the new office should have the capacity to look at all input costs for primary producers, including insurance. The IFA raised important points around supporting branded food products, regulating the use of logos to guarantee the Irish origin of produce and prohibiting the creation of fake farms for retailers to sell their own-brand foodstuffs. These are just some of the practical and extremely significant issues raised, which the Minister needs to ensure are addressed in the Bill.

This Bill proposes a light-touch regulation model with an office that will not be able to carry out the necessary monitoring and enforcement work to reform the sector. Our food supply chains have systematic inequalities with a small number of processors, wholesalers and retailers in significantly stronger positions than the average farmer or fisher. The only way this will change is with robust legislation designed to establish a full independent regulator who is a single officeholder with expert staff focused on holding all actors to account. This Bill falls so far short of this standard it will make no real difference to the unfair operating practices our food producers face every day. At least the Government had the honesty not to refer to the new quango as a regulator in the Bill Title. This is just a box-ticking exercise, providing for a new office that will supposedly oversee trading practices while the ingrained structural problems will continue to put farmers and fishers out of business. This Bill is a wasted opportunity to reform our agrifood sector to ensure the sustainable future of all our rural and coastal communities. Farmers, fishers and food producers will continue to face the same issues and unfair practices unless the legislation is changed now.

Debate adjourned.