Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I thank Senators for their contributions. They were, in many respects, a revisitation of many issues that we discussed with regard to the Backweston talks and, more recently, in the Department in an effort to conclude the most recent difficult chapter in the beef sector.I will give an overview of some of the issues because there was a common thread running through many of the contributions. I will try to cover most of the points that were raised.

We cannot divorce ourselves from the reality that a country that exports a high percentage of all the food it produces is at the mercy of EU and global markets. In public policy over many years we have moved away from a position where the State supports the price of product. We support incomes. That is why we have recognised the difficulty in the beef sector in the last 12 months and responded with €120 million in extra payments directly targeted at the sector through the beef environmental efficiency programme and the beef exceptional aid measure, along with additional effort in the context of market access. Hence the visit by the Chinese delegation and ongoing efforts in terms of live export markets, new market opportunities, funding to Bord Bia and so forth.

The market situation is exceptionally difficult. There is an oversupply in the European Union, and we can discuss the context for that. Consumption flatlining and imports from outside the EU are contributory factors. Looking at the price we receive relative to what the price is across Europe shows that we are within a band that is not widely varied in terms of what we produce, bearing in mind that we must export nine out of ten of the cattle we produce. The challenge in the beef industry is to continue the endeavour to move up the value added chain, to sell the product that is high quality in taste, carcass formation and low carbon footprint. The danger in some of the commentary on the beef difficulties recently was that we would lump all the beef we produce into the one basket, as it were, and lose the capacity to differentiate between efforts that had been made by farmers over many years to improve the genetic merit and quality of the animals they produce and to reward them for that. Whereas the base price is critical, it was equally important that we did not dismantle the bonuses that are paid for products that are responsive to market demands and consumer tastes and preference in terms of welfare, age and so forth and revert to a situation where we were treating all beef producers as the same. That is very important. I hope that in the context of the beef market task force which will be up and running shortly - I cannot give a specific date but I expect it will meet in the next two weeks - we can get a collaborative endeavour on these issues and ensure we have a roadmap for the future that everybody can sign up to.

I have commented previously on the toxicity of the relationship between the primary producer and the processor. Simply put, if that is not addressed, neither of them has a future. One needs the other. A genuine partnership must be forged. They could take a leaf out of the copybook of the dairy industry in that regard, albeit there is a different ownership model. Nonetheless, a proper engagement takes place on a regular and ongoing basis. It is not always a comfortable relationship but there is ongoing engagement. That must happen at every level in the beef processing sector, from local plants to groups and companies, throughout the country. That is important.

There is another point on which we would do well to reflect and which was mentioned by some Members. Food is cheap, perhaps too cheap. That is something we must address globally. One third of all the food produced in the world is wasted. The developed world is the main culprit for the levels of food waste. The carbon footprint of that wasted food is the equivalent of almost 10% of total greenhouse gas emissions globally each year. That is an issue we must tackle. People listening to this debate will say that I want to increase the price of food, but I want to find the right balance because we are paying an enormous price for the greenhouse gases that are emitted in producing that food. We must look at the policy instruments we have, including the CAP, and how they interact with our climate change objectives to ensure that, on the one hand, we do not have a policy instrument that is fuelling food production while, on the other hand, we are paying the price for that in the consequent greenhouse gas emissions and so forth. We must find the appropriate interaction of policy instruments to ensure we are properly synchronised on those issues.

One of the ways we will make progress on that is by shining a light on the supply chain and who is getting what out of it. Reference has been made to one view on what some parties are getting out of it but there is a myriad of views. We must get proper information on who is getting what along the supply chain in the beef industry, ranging from producers to processors, retailers and distributors, and ensure that those at both ends of the spectrum, producers and consumers, get a fair deal. Greater transparency in the middle is what is lacking. There is also the unfair trading practices regulation. It was said previously that there is no single bullet here, but transposing that into law will help. That effort is under way between my Department and the Department of Business, Enterprise and Innovation. It will help to shine a light on who is getting what.

I do not intend to trespass on the debate about the CCPC. I have heard some of its public commentary about what it perceives to be its role. I want a regulator for the sector, but some of the things I have heard it say do not enthuse me. The Government will make decisions on where this issue will go. The unfair trading practices, UTP, directive and a regulator for the sector will be part of the public consultation process that will happen shortly. It is an important confidence-building step that if there are any issues or uisce faoi thalamh here in terms of skulduggery or otherwise, they are exposed. I am not alleging that they exist but we need the reassurance and the appropriate agencies with the appropriate powers to ensure that can happen. Transposing the unfair trading practices regulation into law and bolting additional measures onto it, including a regulator, will be important. The beef market task force is an important first step. Obviously, it will engage with retailers. It will also engage with the market observatory in Brussels to be updated on the additional progress it is making in shining a further light on who is getting what in the supply chain.

The beef exceptional aid measure was mentioned in the context of the €100 million. These are demand-led schemes. They are designed on the basis of the quantifiable losses that were incurred in the sector from September 2018 to May 2019 and approved by the Commission on the basis of those losses. The submissions made the Department relative to those of other bodies that were engaged with the Commission on the matter were similar in terms of quantifying them. Then we had to prepare a scheme, on the basis of the data we have, that would cover every potential applicant, and hope that everybody applied. I believe some of the negative commentary on the scheme dissuaded people from applying. That is regrettable.

It is similar to other such schemes. If one considers the sheep welfare scheme introduced by the Government, at €10 per ewe for 2.5 million ewes, it was anticipated it would cost approximately €25 million. Farmers made applications for approximately 80% of eligible ewes so it ended up costing approximately €20 million. It is approximately 80% again, which is normally the case. However, one cannot got back to the Commission and say: "These were the quantifiable losses but because there is only 80% of those eligible to apply we want to increase the payment for the losses we quantified". The scheme is the scheme.