Charlie McConalogue (Donegal, Fianna Fail) | Oireachtas source

I thank the Members for this opportunity to discuss this important issue today. It is something that has been raised on the floor of this House by colleagues from all sides. I welcome the representatives of farming organisations who are present in the Visitors Gallery.

We all recognise the challenges faced by our sheep farmers over the past winter. I have spoken previously about the significant contribution sheep farming makes to rural Ireland. Beef and sheep farming account for most farm enterprises, and they are very much at the heart of social and economic sustainability in rural areas where other economic activity can often be more limited. They are also the systems most reliant on direct payments and where economic viability is often challenging. Sheep production is a vital source of income for many farmers and provides the raw material for the export of more than 66,000 tonnes of meat worth €453 million last year.

Whether one is a part-time or full-time farmer, and regardless of the size or scale of their holding, no one can question the commitment, dedication, resilience and importance of sheep farmers to our country. From lambing ewes to keeping the flock healthy, it is hard work often done in inclement weather on tough terrain. As any sheep farmer will tell you, it is a labour-intensive job and help can often be difficult to source as it is only available at certain times of the year or week. Overall, though, the sheep sector is a rewarding one, and the demand for Irish product in many overseas markets highlights the importance of what is done inside the farm gate. A viable sheep sector is an integral element of a balanced regional economy. I know this first hand from growing up on my own family farm in the part of Donegal where I come from. The best evidence of the sector’s importance is not in a farm census or export data but in our rural towns, villages and parishes across the country. Whether it is mart day in Carndonagh, Carrigallen or Tullow, these towns and others like them all benefit from a vibrant sheep sector. The money spent by farmers stays in the local economy and generates multiples in economic activity.

Whether it is upland or lowland farming, I am committed to ensuring our sheep sector is protected for current and future generations. In the medium to long term, we need a sector that is an attractive proposition for young people. The maintenance of current hill and mountain landscapes is important from an environmental sustainability perspective, as well as from rural community and tourism perspectives. It is acknowledged that hill and mountain sheep farming can contribute significantly to maintaining high-quality habitats and species-rich diversity.

Food Vision 2030 is our shared strategy for the sustainable development of the agrifood sector until the end of the decade. Farmers are central to that strategy. The economic viability of our sheep farmers is crucial, not just in terms of their ability to earn a decent livelihood and return on their hard work but also in helping to deliver on environmental and social sustainability. With that in mind, the Food Vision 2030 strategy focuses on the areas that offer the best tools for improving economic viability and resilience, areas that are within the control of primary producers themselves. It also provides an overarching framework for policies, approaches and technologies that farmers and others in the agrifood chain can implement to improve their overall economic standing.

As regards exports, we exported sheep meat to more than 30 markets last year, which is a mark of the world-class product produced on our farms. I recognise that margins in sheep farming have been under pressure, particularly over recent months, as a result of increased input costs as well as lower prices which are below the record levels achieved in recent years. As we all know, market prices are a commercial matter and not set by the Government, and the Government does not have a role in determining commodity prices in the sheep sector or in any other sector. However, it is heartening to see that the live and finished trades have improved somewhat in recent weeks in terms of the prices, and I am closely monitoring the market situation.

Approximately 15% of the lamb produced in Ireland is consumed domestically, with the balance being exported. I have requested Bord Bia to intensify its marketing and promotion of Irish lamb this year through its activities in domestic and export markets. Bord Bia has just finished an additional lamb campaign in the domestic market, which focused in particular on attracting younger consumers to eating lamb. Television advertising campaigns will also run in June and from September to October to coincide with peak supply months ahead. However, we must continue to look at the global picture, with sheep export markets remaining critical to us. Over the past decade, the Department has agreed bilateral sheep meat export certificates for many international markets, more recently with Japan in 2019 and the US in 2022.

If we want to maintain flock numbers, we need continued targeting farm income supports while increasing the return from the marketplace. What every farmer wants is a fair price for their product. We play our part in that by delivering more export opportunities for sheep farmers, like we did in Japan in 2019 and in the US last year, where we have some more work to do in times ahead in developing the potential of that market.

The basis on which we grow the value of our sheep meat exports, like we have done in each of the past three years, is by continuing to promote Irish grass-fed lamb as a premium product nationally and internationally and targeting high-value markets. Our success in gaining and retaining access to international markets is directly related to our excellent reputation for food safety and a high-quality product. That, of course, is one side of the equation. The other side is ensuring these gains are passed back to the farm gate. Alongside creating the office of openness and transparency, which will be the new regulatory office, we are also advanced in drafting legislation to give legal recognition to sheep producer organisations, which can strengthen farmers’ positions in the food supply chain. This will bring benefits around collectively negotiating on price and inputs as well as payments of €3,000 to cover set-up costs and €30,000 over three years to help with administration fees.

Teagasc estimates that, although output increased by 7% in 2022, the increase in output and price was not sufficient to negate an increase in input costs of approximately 40%. The rapid escalation of costs last year dramatically reduced the margins per hectare and per ewe. Over the course of the past year, I have moved to support livestock and sheep farmers in dealing with increased costs through various measures, such as the €56 million investment into the fodder incentive scheme, which Senators will be aware provided last year and will provide again this year up to €1,000 per sheep farm. This is to cover the additional costs involved in making fodder, especially around fertiliser prices. I also recently launched an €8 million national liming programme, which is aimed at all farmers who want to reduce their fertiliser bills. I also provided a €2.5 million to grant towards a multi-species sward.

Teagasc forecasts that the 2023 income outlook on predominantly sheep enterprises is likely to be in line with what 2022 levels were. Its forecast in relation to that does not take into account, for example, the higher payment rates under many schemes I have introduced under the new Common Agricultural Policy, CAP, strategic plan, which will start this year. These include the organics scheme and the agri-climate rural environment scheme, ACRES, which has had a very high uptake among the sheep sector. I worked hard over the past couple of months to make sure every sheep farmer that has applied for ACRES will get access to it and a payment from it. It is estimated that there will be approximately €5,500, with a maximum of €7,000 for the general ACRES scheme. The certainty that sheep farmers have achieved from that in the past month or so that will be available to them is very important.

Also this year, we have received 19,000 applications for the new sheep improvement scheme, which will pay at a rate of €12 per ewe. The Common Agricultural Policy will provide almost €10 billion in supports for up to five years from now. Sheep farmers are eligible for many schemes within that.That is important. This is the first year of the new CAP. While there are differentials in each sector, the sheep sector will see the most improvement under the new CAP's supports and payments in light of convergence, front-loading, environmental schemes, organic schemes and so forth.

Regarding wool production, the Minister of State, Senator Hackett, and I have allocated funding for the establishment of a stakeholder forum to develop and promote the industry. An independent review of the wool market was published in July. It contained multiple findings and recommendations, including potential funding streams and market opportunities for wool, and identified areas for further research and development. With the establishment of the wool council, we will continue working closely with farm representatives on trying to identify new markets and add value. I have been closely monitoring the market situation. The significant improvement in it in recent weeks, particularly this past week, is welcome. According to the market reports for hoggets, we have seen increases of up to 60 cent at some factories in the past week. There has also been an improvement in the spring lamb rates, with hoggets crossing the €7 per kilo mark and spring lamb crossing the €8 per kilo mark. I hope we will see more improvements. It is important that the market is returning to farmers and fully justifies their work and recognises their need for profit. I will continue to monitor the situation closely as we proceed in implementing the schemes, ensuring that sheep farmers can avail of them fully. I will do all I can to ensure that we underpin a successful and strong sheep sector.