Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

With all due respect, this is not a done deal. We are in the middle of negotiating the shape and design of GLAS with the Commission. That is what I said to the people I met last week. They made a presentation to me, I listened to them, we discussed it and I said I would try to accommodate their concerns as best as I could in our negotiations with the Commission, which is exactly what is happening. They wanted me to change everything there and then, and announce it, but that was not possible because if I had done it I would have been totally dishonest with them. I do not know what I can finally sign off on unless and until we get an agreement with the Commission on what we can do in GLAS in terms of flexibilities, towards commonage, in particular.

As late as today, we have a team of people going to Brussels to negotiate on GLAS with the Commission tomorrow. People need to be patient. I am on their side. We are trying to get a flexible scheme that will work for everybody, such as a large dairy farmer in east Cork, a small commonage farmer in west Connemara or a farmer on an island. I have shown a commitment to those communities which they have not seen before, in terms of top-up payments for islands.

We are considering trying to allow farmers who have the capacity to grow and expand on the back of market expansion to do that and we are also trying to keep farmers in farming and on the land who might not have the same opportunities in the marketplace by supporting them with strong schemes and supports. That is what a €4 billion rural development programme is primarily about, namely, trying to achieve that balance as well as ensuring that we do everything sustainably.

In terms of the new strategy for 2025, it has nothing to do with Europe. We signed it. I have asked John Moloney, the former CEO of Glanbia, to chair it. He has another 27 or so people on the committee, all of whom are Irish stakeholders representing farmers, processors, food business interests, environmental NGOs and so on and who are designing an Irish strategy. The CAP we have signed off on complements Food Harvest 2020 which, to be fair, was put in place by the previous Government, and on which we have built. The idea that we are somehow being told what to do by the European Union in terms of 2025 is a total nonsense. It has no input. We have to be consistent with the standards that are required under CAP in terms of how we produce food, but we design what we do and how we do it on top of that.

On areas which have been designated on the back of a hen harrier protection programme - some land has been sterilised on the back of that - I am examining the issue and we will try to develop a support structure which will be acceptable to farmers and landowners dealing with that.

I can assure Senator Mullen that I have no intention, on my watch, of allowing Ireland to move from being a predominately grass-fed family farm system to some kind of Wisconsin factory farm structure. That will not happen under future Governments either. Family farm structures are very strong in Ireland. Land is not often sold outside of the family; on average a field is sold outside of a family once every 400 years in Ireland. There is a very strong attachment to land ownership and family farm ownership in Ireland, and that will remain the case. We are encouraging the maintenance of family farm ownership, but with a much more collaborative base for farming. Neighbours would co-operate with each other. Partnerships would be considered. There could be purchasing and producer groups which would collectively represent family farms to make sure they get a better deal in the marketplace and so on.

We can modernise farming in Ireland, get economies of scale into the system, within reason, and also maintain family farm ownership, which is hugely important in terms of rural society. I am not sure who said sustainability is also about viability in terms of rural communities, but that is very important in places like west Cork, Galway, the midlands and many other areas, irrespective of whether land is very fertile. I can assure the Deputy that family farm structures are the basis and heartbeat of rural Ireland as far as I am concerned, and we will maintain and support that.

On the expand or die statement, there will be plenty of dairy farmers who will decide that expansion is not for them. Such farmers have 60, 70 or 80 milking cows and want to stick with that, which makes sense as a business model for them because of the land and labour available to them, the cost base under which they want to operate and the lack of capital investment they want to make. That is fine, but the idea that globalisation means lower prices is not true. We have been operating in a global market for dairy products for the past two years and have had two of the highest years ever recorded in terms of milk prices.

What will be a feature in the future and what has been a feature for the past number of years is price volatility. We have seen the upside of price volatility for the past two years and now we are starting to see the downside. We cannot have it every which way. We need to insulate, hedge and protect farmers from the peaks and, in particular, the troughs of price volatility. There are ways we can do that, in terms of longer-term pricing contracts between farmers and their co-ops for a portion of their milk, which makes a lot of sense. We could set up futures markets for dairy products for co-ops to hedge against price falls. We have a series of market tools we can use at a European level to intervene when prices are falling rapidly and we need to put a floor on that.

We can also ask for and insist on a more tailored and improved response from banks to deal with significant price volatility in the context of the repayment of loans and so on. We are working on things to that effect. We can do a lot to try to insulate farmers. It just so happens that this is happening at the same time as we are about to abolish milk quotas. People who draw parallels between the two happening at the same time misread and misunderstand the market.

Milk prices have been falling for a number of months not because quotas are going next April, but because we had two bumper harvests internationally and a closure of the Russian market.

As a result there is a great deal of extra milk in Europe. We need to understand what is driving the oversupply if we are to arrive at solutions to solve the problem.
I take on board some of Senator Marc MacSharry's comments. I understand the point he makes about Russia, but there is a political judgment call to be made as to whether we should ignore the spirit of the sanctions imposed collectively by the European Union on Russia or to try to do deals. In terms of activity to find new markets, beef from Ireland is likely to get into the US market in the coming weeks, if not days. Ours will be the first European beef producers to sell into the United States for 16 years. Ours is likely to be only European beef in that market for the foreseeable future. It so happens that for the first time ever beef prices in the United States are actually higher than those in the European Union. Today, we have a team of scientists and veterinarians coming from China to inspect the beef industry, with a view to allowing Irish beef into the Chinese market, the first time European beef would be allowed into that market. I hope this will happen in the first half of next year. The two big target markets for us in the past two years have been the United States and China and we are really active in that regard. Senator Marc MacSharry is knowledgeable when it comes to this area. There is an offal issue also and I met the Russian ambassador three weeks ago to discuss it. In seeking new markets generally, we are extremely active and will continue to be because it makes sense to spread risk. I will take criticism in many areas, but it is unfair to accuse me of not being active in seeking new markets.
I take on board Senator Pat O'Neill's comments on GLAS. We need to get it open as soon as we can, but we cannot do so until we get the RDP over the line, or we obtain an assurance from the Commission that we can open a scheme while the programme is still being formally approved. We are working hard to do this, but it will be the new year at this stage before it happens.
I take on board many of Senator Feargal Quinn's comments. He talks a great deal about the Netherlands which in my view is a world leader in linking commercial research, agriculture and food production, but so are we. In the past three years my Department has sanctioned research programmes to a value of €85 million on the basis of a competitive tendering process to find the best projects across all of the universities and institutes of technology, linking with Teagasc and other organisations. If one looks at what Science Foundation Ireland is doing, it is putting tens of millions of euro into agriculture and marine projects which are being given greater priority than ever before. If one looks at the number of courses available in the universities, institutes of technology and agricultural colleges and the quality of the students taking them, men and women, one will see a transformation in the application of science and innovation and new thinking to food production and nutrition and dealing with all of the challenges we face. That will impact not only on Ireland but also on other parts of the world. I agree, however, that the Netherlands is a real competitor in this space ad that we can learn a great deal from it. Fonterra, a company in New Zealand, is hugely impressive in the volume of milk it exports, but in terms of sustainability, Ireland is ahead of New Zealand and I would argue the case with anybody.
Senator Susan O'Keeffe raised the question of rural communities remaining sustainable. That is very much part of the broader rural development programme and its objectives.
Senator Mary Ann O'Brien raised the issue of fluoridation, one about which I have spoken to her before. We have made decisions on the fluoridation of public water supplies on the basis of advice from the Department of Health. It dates back to the 1970s and started as an oral health initiative to prevent tooth decay. Many families across Ireland have their own wells and it is not a requirement under law to have fluoride in water, but in the public provision of water - a topical issue - the decision has been made on health grounds to apply certain treatments to water to make sure it is safe to consume. We should assess this issue and look for international experts to assess whether it is still appropriate for us to continue to do this. I have said this to the Department of Health. My understanding is that we will look at this issue and seek independent international experts to make recommendations which we will obviously consider carefully.
I thank Senator Michael Comiskey for his comments on the importance of the beef market and getting new schemes up and running soon.
Senator Denis O'Donovan called for the establishment of a beef regulator. With the exception of the ICSA, farming organisations are not looking for this structure to be put in place. Establishing a new regulator would cost money, money that would otherwise go to support farmers and we would be sending a signal that we had a problem with regulation in Ireland and I am not sure we do. We have a very active competition authority which is now called the Competition Commission. It has written to me twice in recent months. There is a fractious and difficult relationship between farmers and processors and we are doing what we can to try to improve it through the beef forum, but what is much more important in my view is that we plan to set up professional producer organisations to represent farmers collectively. These producer organisations would have the legal right to negotiate on behalf of farmers on price. That would be much more focused and a much more successful way to improve farmers' negotiating capacity with the factories, rather than establishing another regulator. I am not sure what needs to be regulated in terms of the information the regulation would legally be able to access.
We are trying to convince the Commission that the current beef genomics proposals are acceptable and represent value for money as a climate change measure in herd management. That one can pick a figure and suggest it be €200 per head on the basis of wanting to support the income of beef farmers, with respect is a little naïve and opportunistic, given that it was announced, from a Fianna Fail perspective, in the week of the ploughing championships. Nobody has taken it seriously since because people realise that when the suckler cow welfare scheme was started, the figure was €40 a head, which we doubled to €80 based on beef genomics, and a figure of €100 per head has now been set for the first ten animals. I would love to be able to have a figure of €200 per head, but we could not do it through a beef genomics scheme; we would have to do it through a coupled payment or other such measures, which means that we would have to take money from another sector, which would not go down too well.