Seanad debates

Wednesday, 26 March 2014

12:55 pm

Photo of Paddy BurkePaddy Burke (Cathaoirleach of Seanad; Fine Gael)
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I welcome the Minister for Agriculture, Food and the Marine to the House.

Photo of Thomas ByrneThomas Byrne (Fianna Fail)
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I move:

That Seanad Éireann--notes:
- the collapse in beef prices over the past number of months;
- the refusal of processors to slaughter bulls throughout the country;
- the changing of carcass specifications by processors mid-way through the production cycle;
- the use of labelling issues as a barrier to free trade between the Republic of Ireland and the UK;
- the severe impact the crisis is having on beef producers and on suckler cow farmers in particular; and
- the actions of beef processors and retailers in driving down prices to a completely unsustainable level for farmers; and
- the lack of Government action on the issue and complete failure to address farmers’ concerns; and
calls for:
- a new beef regulator to provide oversight to the industry; and
- co-operation with the UK Government and Northern Ireland Executive to overcome labelling restrictions that are acting as a barrier to free trade in exports”.
This is an important motion and I am delighted that my colleagues have decided to move it. There is a depression among farmers in the beef industry. That is the best way to describe it. The collapse in prices is pushing many people over the edge financially. Everyone is struggling. I know from the beef farmers whom I meet or know that they are in bad form. In recent times, they have been attending my clinic due to social welfare issues because of the collapse in beef prices. It is sad to see farmers in that type of humour. We hear much about how the agricultural sector will bring us out of the depths of recession, but the bad humour that has become noticeable has touched me.

Two major issues have led to the current crisis. The Minister must get a grip on it instead of relying on the usual platitudes of the market. The agricultural sector should not be treated the same as any other market sector. Beef processors have changed the game, altering age and weight criteria for the bulls to be slaughtered, resulting in the price collapse. As regards the UK market, there are difficulties with labelling, communications and the marketing of Irish and British beef, resulting in a decrease in demand. These issues place pressure on farm incomes and threaten exports and employment in the sector. According to the CSO figures, half of the new jobs being created are in agriculture. They are certainly not in the beef sector.

The Government has been slow in recognising the gravity of the situation and has done little to handle it. We propose the establishment of an independent regulator with decision making powers to oversee the industry, reduce some of the powers of and domination by processors and enable all farmers to make a living producing beef for export and the domestic market. The UK labelling issue could be addressed by our Government through increased co-operation with the UK Government and the Northern Ireland Executive, but not much has been done. This issue is causing a major crisis, yet when a consumer goes to a supermarket or restaurant, the price collapse is not evident. In fact, beef has almost become a luxury product domestically. This is not the fault of farmers.

In the past 12 months, there has been a collapse in bull beef prices, with factories altering the age and weight specifications required to slaughter cattle. Producers have been forced to accept losses of €200 to €300 per head. Processors claim that adjusting the criteria in this manner is a response to the market, but the reality is that domestic demand for the Irish product is limited and we are heavily reliant on exports. We are subject to international fluctuations.

The Competition Authority must investigate the relationship between beef processors and large retail multiples in the UK. It is about time that the Government considered this issue seriously and referred it to the authority or the European Commission, given the cross-Border dimension. In the national interest, all Ministers can be guilty of listening to the big boys in industry while omitting the key person at the bottom of the chain. It is imperative that the Minister listen to farmers and heed the IFA's call for an emergency summit between all stakeholders. In our motion and as a matter of policy, we advocate for an impartial regulator with decision making powers to oversee the industry coupled with a Competition Authority or European Commission investigation into the relationship between processors and the large multiples that control much of the market.

The Government has claimed that one half of all new jobs created are in the agriculture sector, but farmers cannot be left exposed to and unprotected from swings in demand. They will simply stop, as they cannot keep sustaining such losses, and an important export industry will quickly become a drag on the economy rather than something that can help to rebuild it. The processors must provide clear signals to farmers to allow the latter to plan ahead. Due to fluctuations in the market, one can do well for a time, make necessary investments and so on, but such factors are beyond one's control. They may be under the influence of the Government, but they certainly would be under the control of an independent regulator were one to exist. Without farmers, the business model could collapse, contributing to the country being unable to progress as planned.

Beef processors must be held to account by the Government for providing a fair solution to farmers, who are key to all of the Minister's targets. I am glad that he has adopted Deputy Smith's document as part of Food Harvest 2020. The mood among farmers is so bad that people are giving up. It is terrible. I know of four individuals over whom there is a depression because of this situation.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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More people are entering farming now than has been the case for 20 years.

Photo of Thomas ByrneThomas Byrne (Fianna Fail)
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I am referring to farmers who I have met or know and who are suffering because of these issues. The Minister made a rebuttal on a specific farming issue, but I am not making a point about agriculture in general. The Minister keeps citing the CSO statistics - we would like them to be verified - on 30,000 new jobs being created in the sector, but there is a major crisis and the Minister's intervention shows that it is not being taken as seriously as it should be.

We want this motion to be adopted. I thank the Minister for attending, as his presence is important. I thank my colleagues for raising this matter. I hope that some action will follow and that farmers in this part of the market will receive Government encouragement and action.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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I formally second the motion and welcome the Minister to the House. While it is easy to criticise Ministers, some matters are outside their control. As the Opposition, however, it is our duty to highlight the problems facing farmers. To be positive, I acknowledge the Minister's work in trying to open up international markets, etc. It is a pity that such work is impacting on those who are trying to finish cattle, particularly those in the bull beef market where there seems to be an impasse and a poor price return.

A key element of Food Harvest 2020 is the target of increasing beef kill from 30,000 per week to 40,000 per week. However, this target is not being met. It cannot be achieved overnight, but the current kill rate appears to be between 31,000 and 32,000. Factories are telling farmers to delay the introduction of cattle by four or six weeks, placing an extra strain on farmers and creating extra costs. As the Minister is aware, the window of opportunity for processing bull beef is between 14 and 16 months.

The steer and heifer prices, which have been reasonably stable since Christmas, have fallen in the factories. Is there anything the Minister can do at factory level to ensure consistency of prices? At present, there is a fall back. I know a young farmer who took part in an initiative. He had held on to 30 bull calves, as he was in a project which was promoted by Teagasc and the IFA. They are now 18 months old and he is having difficulty getting rid of them. The trouble at that stage is that it is not good protocol to castrate these yearling bull calves or weanlings, so he is waiting. As it was an initial project that he commenced, if he cannot offload these cattle promptly and quickly, he will be at a huge loss because it costs money to hold on to them each day.

Last year we were in the House discussing the appalling winter we had experienced and particularly the spring of 2013. For the farming community, although the past winter has not been as severe and there is enough fodder available, it has been the wettest winter since records began.

I am also concerned that some factories are introducing a penalty of 20 cent per kilo on animals over 100 kg. Winter finishers cannot endure that loss. In Italy, R grade male animals are making the equivalent of €4.24 per kg, including VAT, which is down 1.5% on last year. It is marginal. In France, the R grade males are basically making the same price as last year, while in Germany there is a slight decrease. In Spain, the price is the same as last year. It is important the Minister challenges the factories on their commitment to paying a viable cattle price to farmers. There appears to be a monopoly in respect of the factory outlets. They seem to be calling the shots and are not listening to farmers. I am not sure if they are even listening to the Minister at this stage. It is important to highlight that.

The Minister should bring Teagasc, Bord Bia, the Irish Cattle Breeding Federation, ICBF, the factories and, most important, farmers around the negotiating table on this issue. Perhaps by knocking heads together he will be able to overcome this impasse.

The agrifood industry is very successful and the Minister has done many positive things in that area. This motion is not tabled to criticise the Minister for everything that has gone wrong, but there is a crisis at present with the beef cattle price. This will have a knock-on effect down the line, whether it is on suckler cows or the price of calves, if it is not resolved.

There is another concern which farmers have raised with me. An allegation has been made, and the Minister might be able to confirm if it is true or otherwise, that the Department of Agriculture, Food and the Marine AIM - animal identification and movement - database is being used by the factories to monitor the livestock numbers on individual farms. If that is happening, it would be a serious breach of both protocol and of the database.

The Minister made a positive investment of €52 million per annum through the new €80 per cow beef genomics scheme for sucklers. I welcomed it previously in the House, although I am not too sure how it will operate on the ground. There are some questions about it. However, the fact the money is available is a positive step. Will the Minister ensure the benefits of this investment will not be wiped out by the fact there appears to be an impasse at present with the current price of beef, the price at the factories and the difficulty for farmers in getting rid of beef cattle?

I acknowledge that the Minister has travelled widely, to China and other far-flung countries, in an effort to open up markets. However, it is critical that the Minister take the bull by the horns, if he will excuse the pun, and tackle this issue head-on. If it is left to stagnate, there will be a ripple effect apart from the problem at present. Beef farmers and farmers who have put a great deal of money into finishing cattle are feeling the pinch. It is extremely worrying for them. I hope the Minister will have positive news for us in his response. We have not raised this issue willy-nilly. It is a concern that has been brought to us by virtually all the farming organisations and individual farmers. It is a matter of deep concern. Regardless of whether the Government side of the House agrees with the motion, I believe the merits and sincerity of the motion must be acknowledged.

1:05 pm

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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I thank the Senators for raising this issue. I accept it is a genuine issue. Some of the things said by Senator Byrne are not borne out in the marketplace, but I accept there is a significant issue that the industry must tackle, particularly with regard to bull beef. There is an over-supply of animals that are outside the specification that is predominantly sought by retail supermarkets in the UK. The animals are, in most cases, over 20 months. The market is seeking smaller animals but it is very hard to produce 16 month beef in Ireland on the back of a grass-based system. In fact, it is practically impossible to do it. It requires a much more intensive indoor system, with intensive feeding and high protein diets, to achieve the turnaround in 16 months of an animal that is ready for the factory.

Bull beef of around 16 months is the system that operates in the UK, and there are some people in Ireland who do it, but predominantly the bull beef in Ireland, which is approximately 20% of the overall beef output, is on the back of a grass-based system that is supplemented by protein feeds. As a result, farmers are producing animals which the marketplace is not looking for at present, certainly not to the extent that will give farmers the price they deserve for those animals, because they are good animals. I have a great deal of sympathy for farmers who find themselves in that position, but it is important that we all have an understanding of what the marketplace is seeking, as opposed to trying to force the issue.

I will outline some more general information on the beef sector, because it is important to have it on the record. The beef sector is a key component not only of our agrifood industry but of our economy generally. More than 100,000 farmers are involved in keeping cattle and sheep and approximately 65,000 farmers are engaged in specialist beef farming. Developing this sector has been a clear priority for me since taking office.

Food Harvest 2020 outlines a strategy for the development of Ireland's agrifood industry, including the beef sector. It is the result of a collaborative approach to policy-making and includes a vision for the beef sector developed and agreed by stakeholders, including farm bodies and processors. Subsequently, the beef activation group, chaired by a former Secretary General of my Department, outlined the actions needed to deliver on this vision and outlined a more ambitious target of a 40% increase in the value of beef output, up from the previous 20% in terms of targets. That report makes a number of recommendations relating to improving supply chain relationships, the adoption of genomic technology, improving the calving rate, addressing animal health issues and other initiatives designed to deliver on the Food Harvest 2020 targets.

My clear focus has been and will remain on delivering on the actions necessary to allow the beef sector to deliver on the targets it set for itself in the plan. These actions must be progressive, forward looking and market orientated, building the potential of the sector and improving productivity, profitability and environmental sustainability. I wish to use research, innovation, knowledge transfer and investment capital to improve productivity and profitability in the sector. Using Ireland's clean, green environment and reputation for high standards of quality and safety to build a strong point of differentiation for Irish food on international markets is also a priority. Raising the profile of Ireland as a food island and a supplier of the highest quality beef in new and emerging markets has been a successful policy over the past three years.

It was never the case that the any of targets envisaged in Food Harvest 2020 would remain unchallenged by market or other developments. However, neither is it valid to view the potential to develop the beef sector solely through the prism of current difficulties being experienced by some farmers producing particular categories of stock.

Any objective assessment of the potential of the sector requires consideration of market dynamics over time, and one must also take into account what can be done to provide the kind of public infrastructure that can support the development of the sector into the future. The beef activation group process that I have referred to allowed for a review of progress in regard to the development of the sector, and the chairman of the group is engaged in that process in terms of looking at what we can do to overcome some of the current problems.

Against that background it is worth focusing for a moment on the actions taken by Government to build on the vision in Food Harvest 2020 which, to its credit, was put in place by the previous Government in terms of the start of that process. In January 2014, I announced operational details of an investment package worth up to €40 million for beef farmers. Among the measures in this investment are packages around a €23 million beef genomics scheme, a €10 million beef data transfer programme; €5 million for the beef technology adoption programme, that is, discussion groups, and €2 million that is still being paid related to the previous suckler cow welfare scheme. These announcements are additional to the testing of more than 450,000 calves under the voluntary phase of the BVD programme delivered by Animal Health Ireland, the launch by Bord Bia of the Origin Green programme to develop a brand image for Ireland's food industry and a significant increase in the number of participants in the beef quality assurance programme, a trebling of the number of farmers in the Irish Cattle Breeding Federation, ICBF, HerdPlus programme,; the introduction of a national weight recording service by ICBF in conjunction with the beef technology adoption programme, BTAP, and the extension of the Teagasc-Irish Farmers' Journalbetter farm programme to cover every county in Ireland.

In addition, my Department has published a draft rural development programme for 2014 to 2020 which is under discussion with the European Commission. This will build upon the supports announced in 2014, and I am proposing a number of measures of interest to suckler farmers which include a beef data and genomics measure worth up to €52 million per year for this sector, a substantial new agri-environment-climate scheme, GLAS, which will build on the progress made under the rural environment protection scheme, REPS, and the agri-environment options scheme, AEOS, and will provide significant increased income for up to 50,000 farmers, continued strong support for disadvantaged areas with spending of approximately €195 million per year, incentives for on-farm capital investment for the beef sector as well as other sectors, and a continuation and an addition to the knowledge transfer and innovation measures that have been developed in recent years for the beef sector as well as the sheep and dairy sectors. Suckler farmers will be able to apply for any or all of these measures over the lifetime of the programme as suits their particular enterprises.

I will refer briefly to market developments. As I have mentioned, our beef exports reached €2.1 billion in 2013, which is a great success story from an Irish perspective. Since my appointment as Minister I have been very active in developing relationships in new and expanding international markets for dairy, beef and lamb, raising the profile of Ireland and increasing international confidence in Irish production and control systems. My aim is to provide a platform for long-term trading relationships into the future in these sectors, particularly in new and emerging markets.

Since taking office, I have led trade missions to China, Japan, the United States, Algeria, the Gulf states and countries in the Middle East. My Department engages daily with many countries, in collaboration with Bord Bia and the Irish diplomatic service, on market access issues. These initiatives have led to a number of notable successes in securing agreement on imports from authorities in Japan, Singapore, Egypt and Iran, which provide more options for exporters of Irish beef. As recently as January this year, Lebanon agreed to reopen its market to Irish beef, sheepmeat and cooked meats.

We are making very good progress in regard to the US market also. I was in the US last year meeting the Department of Agriculture Secretary of State, Tom Vilsack. That was a very positive engagement and I hope that in the not too distant future we will be able officially to open beef exports to the US again. Likewise, I am making good progress with China. We are the only country in the world that has a formal working group with China on beef access, and we will continue to push that significantly. We have an ongoing programme in conjunction with and led by Bord Bia around the Origin Green initiative, which again raises the profile and the perceived quality of Irish food.

With regard to the price differential between Irish and UK cattle, which has been a major issue for farmers, a number of factors have been identified to explain why Irish-born cattle command lower prices than their British equivalents. These include a British consumer preference for indigenous product as well as additional transport and processing costs in supplying that market.

I want to refer also to EU beef labelling rules, which require the place of birth, rearing and slaughter to be displayed on consumer packaging. These are well-established, long-standing rules introduced to address consumer demands for transparency regarding the origin of beef. Trade with the UK in beef born, reared and slaughtered in Ireland is strong, and I have not heard any suggestion that rules requiring such beef to be labelled as Irish are regarded as a disadvantage. However, British retailers prefer to market Irish beef separately, that is, as either British or Irish. That is entirely a matter of commercial preference based on their perception of consumer choice. This purchasing strategy clearly means that beef must be sourced from animals originating in one country, that is, born, reared and slaughtered in the same country, and is a disadvantage for farmers rearing animals in Ireland and sending them live to the UK for fattening and-or slaughter.

In addition, logistical difficulties arise when a small number of Irish-born animals are slaughtered in a UK meat plant. Under mandatory EU labelling rules, these carcases have to be deboned in a separate batch, packaged and labelled accordingly, thereby incurring additional costs for the processor. While Bord Bia has repeatedly raised this issue with British retailers over the years, the response from British retailers has been firm and unequivocal. Nevertheless, Bord Bia, in its ongoing interactions with British customers, will continue to pursue all opportunities to maximise the full potential of the beef and livestock trade with our largest trading partner by far when it comes to beef.

In regard to the current difficulties between farmers and processors, the Senators will appreciate that, ultimately, questions of price and market specification are matters to be determined between the purchasers and the sellers of cattle and it is neither appropriate nor possible for me to intervene directly on pricing issues. None the less, I recently met farmer representatives and processors to discuss the current situation. Following that interaction, I have called on factories, in collaboration with the farming bodies, to engage to resolve various issues that have lately caused difficulties for many producers.

At my request, Meat Industry Ireland member companies have kept their livestock offices open to deal with farmers with any particular queries or concerns on the marketing of their stock. Meat Industry Ireland member companies have made available contact details for each of their main plants to enable farmers to contact them directly. I want to make it clear, however, that the days of market intervention are gone. My focus is on developing the potential of the beef industry, and expectations that any Minister with responsibility for agriculture can intervene on price are misplaced. I would not be allowed to do it anyway, even if I wanted to. None the less, the relationship between processors and farmers is a very important one, and obviously I have a role to play in that relationship. Ultimately, both sides must work together to manage the type and volume of cattle being brought to market to ensure the supply chain does not undermine the viability of beef production systems for either winter finishers or suckler farmers.

The current situation clearly underlines the need for industry operators to improve communication on market trends and signals throughout the supply chain and to address supply chain issues in such a context. An industry-led solution to the current uncertainty is essential to restoring confidence in the sector, and I would encourage the various stakeholders to continue their efforts to reach a mutually acceptable outcome.

It is important also to acknowledge market evolution in recent years.

In 2013, the performance of the beef sector in 2013 was strong, with output of over 518,000 tonnes, which was an increase of 5% over 2012. The value of beef exports increased by 10% in the same year. Irish beef prices were 106% of the EU average in 2013 and notwithstanding recent fluctuations remain, on average, relatively strong. The average price change in the first ten weeks of this year is a reduction of approximately 1.8%, which Opposition Senators have described as a market collapse, which is simply not accurate. It must be remembered that this is a common price across many sectors. I acknowledge that we have a fundamental problem in the bull beef market. However, beef across other sectors has seen a slight price reduction, but not a price collapse. That slight price reduction is reflected in other markets across the European Union. There is a specific issue with the price differential between Ireland and the UK and I have explained why that is the case.

I note also that slaughtering of bull beef in the first 11 weeks of 2014 up to the week ending 16 March stood at almost 65,000 head which represented an increased kill of almost 2,000 animals, 3%, over the same period in 2013. The idea that bull animals are not being killed is also not true. While farmers are not getting the price they want for them, approximately 6,000 bulls a week are being slaughtered. I have an assurance that the factories will continue to slaughter bull beef while we deal with the oversupply issues.

In addition, the number of live cattle exported to the end of the week ending 9 March is approximately 42,000 head, an increase of 6% over the same period last year. Farmers have been calling on me to increase live cattle exports to give farmers an option other than selling to the factories because they are not getting a good enough price as they see it from the factories, and we are delivering on that. We have seen live cattle exports increase again this year. Last week, 2,500 bulls were sent to Libya, again trying to deal with the bull beef issue. While undoubtedly there were problems in January when bull beef slaughterings were down 25% on last year, it appears that there has been some progress since then, and currently bull slaughterings are up 3% on the same time last year.

I restate my strong commitment to the development of the beef sector in line with the vision outlined in Food Harvest 2020. It is important to acknowledge the difficulties for some operators, particularly in the early part of this year as well as the vulnerabilities in the sector. Ultimately, the future of the sector will depend on recognition by operators along the supply chain of their mutual interdependence. Clear and early communication of market and specification requirements must be matched by an engagement from primary producers on these issues, but equally there must be recognition that the primary production sector inevitably has a lag between market signals and production response. There are no simple solutions but positive engagement is essential to begin to solve these problems.

In plain English we need to ensure there is an ongoing conversation between farmers, the primary producers of quality product, and the processors who have to find a market for all this product. It must be remembered that we need to export and find a consumer in a market outside Ireland for nearly 90% of our beef. As we face intense competition in many of those markets, we need a processing sector that is active and successful in doing that on the back of the reputation of the Irish beef industry. Farmers need to understand the specifications those markets want. At the moment those markets are steers and heifers, and not bull beef even though it may suit many farmers because of their production facilities to produce bull beef. If farmers are to produce bull beef they need to have an early conversation with factories as to the specification the market requires so that when they deliver them they get the price they expect, as opposed to turning up in the factory with an animal that is 23 or 24 months old and does not meet the specification.

This is not a blame issue and we need to work together. There is a role for me and my Department in ensuring there are a relationship and understanding between farmers and processors so that the market gets what it wants from Ireland and farmers get what they deserve they get in terms of the best prices in Europe because we produce the best beef in Europe, but we need to be producing the best beef to a specification that the market requires.

I obviously cannot support the motion. I do not accept that there has been a collapse in beef prices over the past month. I accept there is a particular problem with bull beef that we are trying to address and will continue to work to try to address through live cattle exports, through working with factories to ensure we get the numbers through, and through working with farmers to try to learn lessons in terms of specifications, etc. I do not agree that processors are refusing to slaughter bulls given that approximately 6,000 bulls a week are being slaughtered. I accept that farmers are not getting the prices that they want, and deserve, having produced very good quality beef. However, there is a genuine market problem with that and we need to learn that lesson.

There is a series of other issues regarding labelling and so on that I simply cannot support. I accept the thrust of the motion that the Opposition wants me, as Minister with political responsibility for this sector, to do everything I can to assist an element within the beef sector - the bull beef sector - that is really feeling the pinch at the moment. I am trying to do everything I can within reason to help those farmers whose income is affected by a marketplace that is not rewarding them for producing the animals they have on farm ready for sale at the moment.

I believe having a beef regulator would send out a terrible signal internationally. If I were to announce that I had so little faith in the beef sector in Ireland that I had to introduce an independent regulator because of some kind of perceived monopolistic situation in the beef sector, it would do enormous damage to the reputation of our industry. It is totally unwarranted and unneeded. We have a great reputation at the moment.

Last year, the price of Irish beef was at 106% of the European average. That means consumers are willing to pay a premium for Irish beef. Five or ten years ago - perhaps even more recently - the average price of Irish beef would certainly have been less than 95% of the EU average; in other words, we were not in the premium category. We have worked hard to get into that category.

We have specific issues we need to address with the UK market and UK retailers. However, the reputation and quality of Irish beef is better than they have ever been. We need to continue on that road rather than second-guessing ourselves by putting in place an independent regulator.

If anybody has any evidence to suggest that cartels are operating in this industry, I want to hear about it and I will act on it. We will send that information to the Competition Authority and it will act on it. Companies such as Kepak, Dawn Meats and ABP operate in a very competitive world with each other and against each other in markets throughout Europe and the world. I encourage anybody with evidence to the contrary to send it on to me and we will act on it. Let us not act on the basis of assumptions because it is popular to kick the factories or whatever.

The industry here is interdependent. Without processing, factories and meat companies, farmers would have no outlet for food they are producing, 90% of which needs to be exported. Without farmers and quality primary producers of beef those companies have no future either. There is an interdependence here where everybody, if one likes, needs to get their pound of flesh in terms of acceptable and reasonable margins. To do that we need to be producing what the market wants and we need to maintain and increase the reputation of the Irish beef sector, which is what I am trying to do.

1:25 pm

Photo of Michael ComiskeyMichael Comiskey (Fine Gael)
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I move amendment No. 1:

To delete all words after “That” and substitute the following:
“Seanad Éireann –
- the importance of the beef sector to Irish agriculture;
- the ambitious development strategy for the sector set out in Food Harvest 2020 and the Government’s commitment to the full implementation of the strategy;
- the Government’s drive to place innovation and technology adoption at the heart of the growth strategy for the sector;
- the Government’s €40 million investment package for the suckler sector at farm level as part of the 2014 budget and the further supports proposed for the beef sector in the draft rural development programme, 2015-2020;
- the excellent export performance by the sector in 2013;
- the significant efforts by Bord Bia and the Minister for Agriculture, Food and the Marine to enhance the reputation of Irish beef internationally as a premium high-value product; and
- the opening of new markets for Irish beef in 2013 including Iran, UAE and Japan and ongoing intensive efforts to gain access to China, US, Canada and Korea;
- the importance of clear and timely communication between beef processors and producers in relation to market specification; and
- the importance of having alternative markets for Irish beef and live animals;
- the requirement of EU labelling regulations to include country of origin labelling specifications for beef;
- that slaughtering of bull beef in the first 11 weeks of 2014 stood at almost 65,000 head – an increased kill of almost 3% over the same period in 2013;
- the number of live cattle exported to the end of the first ten weeks this year is up 6% over the same period in 2013;
- beef prices in 2013 were 106% of the EU average-prices for 2013;
- the Minister for Agriculture, Food and Marine recently met with both farming organisations and representatives of the meat industry to encourage both sides to find an acceptable situation to the oversupply of beef product and product specification issues; and
calls for:
- a renewed effort by all sides in the beef sector to work together to continue the development of the sector;
- agrifood industry stakeholders to reaffirm their commitment to meeting the targets for the beef sector in Food Harvest 2020.”
I welcome the Minister to the House and thank him for taking the time to debate this important issue. The beef industry has long played a major part in our agrifood production sector. The quality of our beef is renowned worldwide. There has been a drop in beef prices in recent months largely caused by the refusal of processors to slaughter bulls.

Given the drop in the market, it can be said that the Government has not failed to act on the issue or address the concerns of farmers across the country.

Let us first highlight the importance of the beef industry to the country. Specialised beef production is a dominant type of farming in Ireland, with 56% of Irish farmers engaged in beef production. The value of Irish food and drink exports reached €10 billion in 2013 and beef accounted for €2.1 billion of this, representing 10% of the increase in value compared with previous years. Following a 5% rise in output and a similar increase in price since 2007, steer prices as a percentage of the European average have risen from 92% to 99% to date in 2014. In 2013, the Irish price was equivalent to 104% of the EU average price. On average, finished cattle prices recorded a 5.5% increase in 2013. While all of this is very positive, it does not serve to detract from the situation in which we now find ourselves.

In order to understand the current situation, it is important to look at the mitigating market factors. In recent times, beef production across Europe has declined consecutively each year. The volume produced by the EU is estimated to have fallen by 2.2% in 2013, which followed a 4.8% drop in 2012. As a result, the Irish steer price exceeded the equivalent young bull price in France, Germany, Spain and Italy for the majority of the year. In contrast, the UK price for beef has effectively become the highest price beef market in the EU. The UK market accounted for 53% of Irish beef exports in 2013. This was mainly purchased by large supermarkets such as Tesco and Asda. These retail purchasers have very strict specifications on the beef which they purchase. Typically, they seek steers or heifers of less than 30 months of age, or alternatively, young bulls of less than 16 months.

As well as finished cattle, we also export an important amount of live cattle each year. Cattle exports increased by more than 30% in 2013, with an overall value of €157 million. Major factors for this increase were that Irish calf prices became more competitive than previous years, and exports to Libya commenced for the first time since 1996. So far this year, live exports have increased by a further 7%. Weekly shipments go to the Netherlands, Belgium and Spain. However, we also export live animals to the UK. Exports to Northern Ireland declined by 13% in 2013, while just over 11,000 Irish cattle were exported to Britain. The practical reason for this significant decline is that it is no longer viable to export live cattle to the UK for the large retail markets. These purchasers want beef that is deemed British, which means born, reared and slaughtered in the UK, or Irish, which means born, reared and slaughtered in the Republic of Ireland, rather than beef cattle from Ireland that were reared in Ireland and slaughtered in the UK. We should be trying to slaughter as many animals here as possible to keep with our own processors. It is clear from this that there are floundering continental markets in young steers, while the prosperous UK market is seeking bull beef under 16 months.

The Government is trying to work with processors to increase the number of animals slaughtered here. Currently, up to 600 bulls are slaughtered weekly in Ireland, and we face problems while the market is not currently seeking bulls over 20 months. The market demands bulls that are less than 16 months, and when the bulls cross that age, we have a difficulty. The Government is supporting the bull beef industry in acting on farmers' concerns. The Food Harvest 2020 strategy sets out a vision for the future development of the beef sector that was agreed by stakeholders, including farm bodies and processors. The original target of the beef sector was to increase the value of exports by 20% by 2020. This target is achievable, depending on increased communication, collaboration and consolidation across the supply chain. Food Harvest 2020 initiatives have had a positive impact on the beef sector. These initiatives include the targeting of more than 450,000 calves under the voluntary phase of the BVD programme and the increase in the number of advisers dedicated to beef in Teagasc.

The Government has also invested largely in the beef sector. The Minister recently announced an investment package worth up to €40 million to beef farmers in 2014. This includes investment in areas such as genomics. This will transform cattle breeding. The rural development programme will be a key factor in maintaining and enhancing the competitiveness of the Irish food sector. Much effort has been made by the Government to enhance the international reputation of Irish beef. Since his appointment, the Minister has been very successful in developing and enhancing the trading links of this country. We have once again started exporting to Libya. The US lifted its ban on the importation of beef from the European Union. The Minister is hopeful that the BSE ban in China will be lifted soon.

It is important to note that ultimately, the market price is determined by the sellers, purchasers and processors. While the Government is in constant communication with all members of these sectors, we cannot directly interfere with the function of the market. The average beef price change this year so far is a 1.8% reduction. We have an oversupply of a product at the moment, namely, bull beef over 16 months. Market demand for this product has collapsed and we need to learn more from the market in looking for it.

1:35 pm

Photo of Fidelma Healy EamesFidelma Healy Eames (Fine Gael)
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I am sorry I missed the first part of the Minister's speech. I was taken by this motion and given that I have strong links to this industry, I spoke to a few farmers and buyers. On checking the recommendation of the motion that a new beef regulator would be set up, it was felt that this was completely unworkable from the point of view of both farmers and buyers. The fundamental point is in the following question. How can one tell a supermarket or a factory how much they should pay for meat? That constitutes interference in the market. Ultimately it is up to farmers to say what they will sell for. That is dependent on farmers to hold a line unless they get X amount per kilo. We know from experience that this never happens and someone always breaks. The only thing that has ever worked is scarcity, and the Minister has largely said this. For example, at the moment hoggets are very scarce and now their prices are at an all time high. The other thing that will create a need is when the Minister is out there creating new markets, which I understand he constantly working on. The bottom line, unfortunately, is that there is no such thing as a social conscience between factories, supermarkets and farmers. It is business.

I agree with the Minister that this relationship is important. It is an inter-dependent relationship. We do not wish to see farmers boycotting a certain factory because that factory is always offering prices that are too low. The point ultimately came across that the farmer is always the fall guy. This is probably the bit that is tough. How do we ensure that the farmer is getting an adequate price? The farmer puts in all the effort. The farmer takes care of the animal over the years, including the birthing process, the rearing process and so on. Therefore, it is not fundamentally right that the farmer is always the fall guy.

Even the co-operatives, which were set up in the 1970s with the farmer or producer in mind, have failed the farmer as well. They are now more interested in their shareholders. Many of these co-operatives have gone on to be big and great, like Glanbia, Dairygold and Kerry Group, whereas they were originally about suppliers. The point was made to me that we could look at a model of new co-operatives that would have the ethos of the producer in mind, and I would like to hear the Minister's views on that.

As the Minister said, where there are concerns about price fixing, that has to be resisted. I do not think we have proof of that even though I have heard it discussed in the Chamber recently. There is no doubt that the factories and the supermarkets have the upper hand. Many people have spoken about the crisis in the bull beef sector. Information has come to me to the effect that many farmers got caught up in this because there was a promise in regard to need by factories but then the supermarkets changed their specifications and as a result farmers have been let down.

I ask the Minister to think about the following proposal, although it is probably one that would suit him. I was asked why farmers do not make better use of the single farm payment by keeping the minimum stocking density to qualify for payments and thus create scarcity. If they were to do that, the flip side is that it would affect production which is ultimately what farmers are there for and it would affect our targets for Food Harvest 2020. We must find ways to strengthen the farmers' hand and obviously new markets would do that.

I support the general thrust of what the Minister has said about positive engagement, ongoing relationships and the farmer being aware of where there is a niche but it is not always easy to predict that. As I have said, there is a great demand at present for hoggets but not everyone could know that in advance. If the Minister is responding I would be keen to hear his replies.

Another suggestion for improvement that was made to me by a farmer was that if there were more controls and checks on the weighing system, it would lead to greater fairness in prices.

1:45 pm

Photo of Susan O'KeeffeSusan O'Keeffe (Labour)
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I second the amendment.

I thank the Minister for coming to the House. I accept his views in regard to a regulator and appreciate that would not send the right signals at a time when much work has been done by many, not least the Minister, in respect of the beef industry. I am aware that his main concern is that we protect and continue to grow the beef industry in Ireland. The number of retail customers for Irish beef now as against 2001 has grown considerably, due to hard work by many people, particularly farmers who have risen to the opportunity. All of us are here today because of the concerns expressed by farmers in the recent past. I am not a farmer and rather than me expressing my concerns I shall draw attention to a couple of remarks which, perhaps, the Minister would clarify. I am aware the Minister has invested a great deal and I am aware of the additional benefit to the economy from the beef industry. I understand and appreciate the genetic advances that are being made. I note the beef activation group has been working hard and that more ambitious growth in the sector is planned up to 2020. I know those things because the Minister has been busy on that front and he has come to the House frequently and told us about them.

Let us have a look at a couple of the observations made on behalf of those farmers organisations whom the Minister met in February. They also appeared before the Joint Committee on Agriculture, Food and the Marine. They met the Minister on Thursday, 20 February and four days later the factories reduced the price for steers, heifers, bulls and cows. On the issue of the cartel across the industry, people have telephoned me to say there is a cartel. I take what the Minister has said here that, if there is evidence of a cartel, it should be brought to his office and he will deal with it. I would have thought that if there was evidence the farming organisations are the ones who would bring it to his attention. I can only assume, therefore, that they did not bring such evidence to him and in that case we should put aside any conversation about cartels. The farming organisations are nothing if not organised or in touch with their farmers. They have all come forward and expressed their grave concerns about what is happening. I assume they had that opportunity on 20 February to raise that matter and if they did not do it, I do not understand what is going on because people like me are being told that there is evidence of cartels. I have not gone out and consulted with the factories but there appears to be a gap between what is being said and the information that I assume was brought to the Minister at that meeting and, perhaps, at other meetings.

Farmers have raised other issues. They say they are concerned that factories are being allowed to use the Department of Agriculture, Food and the Marine's animal identification and movement, AIM, system database to monitor livestock numbers for individual farmers. They asked for a guarantee from the Minister's office that AIM is absolutely confidential and that factories do not have access to those herd profiles. They asked also that the Minister strongly defend the beef sector in the Transatlantic Trade and Investment Partnership and Mercosur trade negotiations with the US and Brazil. As that is on the Minister's agenda, perhaps he would mention it in his response. They speak about the average price of bull beef being down 21% since last September. I took from the Minister's observations that he is trying to encourage farmers, if I understood him correctly, to be more specific and to plan more. Gone are the days when it was a bit of a laissez-faire at the factory gate and one could come with whatever one had and take whatever one got. If people are to specialise in bull beef, they cannot blame the free market if they are let down.

Organisations such as the ICMSA say that farmers are sick of uncertainty and talk about people getting out of beef. They talk about the substantial loss of hundreds of euro per animal and having to feed animals they can neither sell nor kill and they do not know what to do with them. We have seen a litany of observations about what is going on that suggest a real crisis. I wonder whether that is being inflated to some extent. While there are farmers who are seriously losing, is it down to the fact that we need better planning and better specification in the beef bull area? What did the Minister say to the meat industry representatives and to the farming organisations when he met them? Is he satisfied that a cartel is not at work in this area? Can he put up his hand and say that so that everybody might understand? What is at the heart of the matter is that people believe the farmers are ultimately being let down, despite their own enthusiasm and investment in Food Harvest 2020. At this moment they feel they are being fought against by the meat industry.

I accept that much hard work has been done. I note that Irish beef is highly valued and is important in the economy and in the export trade. I am aware the Minister has worked hard to contribute to that. I would appreciate clarity on the issue I have raised. I have had several telephone calls about Polish meat being imported and relabelled as Irish meat and being sent out as Irish meat. As this is not the first time I have raised that matter, perhaps the Minister would comment.

Photo of Trevor Ó ClochartaighTrevor Ó Clochartaigh (Sinn Fein)
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Cuirim fáilte roimh an Aire agus gabhaim leithscéal as gan a bheith anseo agus é ag caint. I apologise for not being present for the Minister's contribution as I was attending a meeting downstairs.

The points raised by Senator Susan O'Keeffe on the cartel are interesting. Certainly a statement on that issue would be useful because there has been a sense that a cartel type arrangement could be in place between the factories dealing with beef processing. Sinn Féin supports the motion. The collapse in beef prices in the past few months has been led by the factories and has caused terrible hardship and desperation around the State.

The crisis is having a severe impact on beef producers, particularly suckler cow farmers. Since the start of the crisis and as far back as when farmers protested outside the gates of Leinster House, the chorus of calls for the establishment of an independent regulator for the beef industry has grown larger and louder.

The meat factories are calling the shots to such an extent that beef producers can no longer be sure that the work plan on which they embarked at the commencement of a particular year will yield a profit at the end of it. The message, which some farm organisations have been putting out for some time, is that the beef processors are too powerful. The latest crisis brings this into sharp focus. An independent regulator with real power to impose a code of practice and with real workable powers of investigation is urgently needed.

The beef industry has become anti-competitive as the beef processors are allowed to call the shots, change their specifications at will and penalise farmers, right, left and centre and so keep prices unsustainably low. Where is the legislation and regulation to control this practice? There are all sorts of regulations in other industries to prevent anti-competitive conduct but there is little to prevent a monopoly or cartel in the beef industry.

1:55 pm

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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That is the function of the Competition Authority. It applies to this sector the same as to any other sector.

Photo of Trevor Ó ClochartaighTrevor Ó Clochartaigh (Sinn Fein)
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People on the ground would question whether that is the case in reality. This is the reason issues raised previously are being raised again. The result this year has been a disaster for farmers. These are farmers who have done everything asked of them to ensure quality and traceability in the industry. Irish beef is the most traceable. Farmers have been equally compliant at every turn. What was the point of all of this if they cannot now get their bulls killed?

The Government needs to take action. The Minister has claimed that our Food Harvest 2020 targets will be met. However, farmers will not continue to expand production from now until 2020 if they are going to have to do so at a loss. Farmers are using their single farm payments to subsidise their production this year but will not be anxious to do so again. Perhaps the factories will change their attitudes when supply begins to shrink because farmers have decided they will not remain in the beef industry when they are operating at a loss, are not treated with respect and have no guarantee of what is coming down the road for them.

As regards labelling of beef, Sinn Féin in the South and the Sinn Féin Minister for Agriculture and Rural Development in the North, Michelle O'Neill, is in favour of Irish beef North and South being labelled Irish beef and encourages the Minister to work towards this end in co-operation with the British and Northern Ireland Ministries. There is no point or benefit in Irish farmers competing with each other for the foreign beef market. They should instead be co-operating with each other against the rest of the world for the lucrative markets that exist for Irish beef products. Is ar an mbunús sin agus mar gheall ar an ngéarchéim a léirigh na feirmeoirí a bhí taobh amuigh de na geataí anseo cúpla seachtain ó shin go bhfuil muid ag tacú leis an rún seo atá dhá chur chun cinn. Ní bheidh muid ag tacú leis an leasú atá an Rialtas ag cur chun cinn.

Photo of Pat O'NeillPat O'Neill (Fine Gael)
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I welcome the Minister to the House. I agree with many of the sentiments of this Fianna Fáil Private Members' motion. However, I do not support the two paragraphs which refer to a lack of Government action on the issue and complete failure to address farmers' concerns and the need for a beef regulator in terms of oversight of the industry. Despite the many good things said about the Minister by Members of the Opposition, including that he is doing a great job, this opportunistic motion has been tabled. We did not hear much from Fianna Fáil in 2008 when milk prices collapsed to 18 cent per litre. As I said, this is an opportunistic motion.

I listened to what Senator Ó Clochartaigh had to say. He believes that the Minister should every week set the price of beef to be paid by the factories.

Photo of Trevor Ó ClochartaighTrevor Ó Clochartaigh (Sinn Fein)
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That is not what I said.

Photo of Pat O'NeillPat O'Neill (Fine Gael)
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Unfortunately, we live in a world market, by which prices are dictated. It is unfortunate that bull beef prices are low. I have marched with the farmers who have protested about this. I am an active beef producer and as such know what I am talking about in the context of beef prices. The problem is the change in the specification in relation to bull beef. We need to focus on who controls the specification, namely, the multiples and the factories. Currently, there are three key players in the beef industry in this country killing cattle. These three major multiples are controlling the market. An Irish factory controls the market, in particular the offal market, in Northern Ireland and the United Kingdom. This is where our focus needs to be. There are suspicions in relation to the operation of a cartel in this area. The Minister cannot micro-manage that. It is a matter for the Competition Authority to address this issue. That is by whom this matter will, it is hoped, be solved.

The Minister, Deputy Coveney, has been the most proactive of any Minister for Agriculture, Food and the Marine in terms of agriculture. Currently, beef exports are worth €10 billion. This is because the Minister has promoted beef and secured new markets. The previous Government promoted construction. Agriculture has always been important for this country and is, in the opinion of the Minister, Deputy Coveney, the future of the country. As stated, he has invested €52 million in suckler herds in terms of genomics and discussions groups. He is encouraging young farmers, through the Common Agricultural Policy and the 25% top-ups, to get involved in the industry. Young people are our future. If this matter is not addressed, farmers will not be able to remain involved in the beef industry.

During a meeting yesterday of the Joint Committee on Agriculture, Food and the Marine, we heard a fantastic presentation from Professor Gerry Boyle of Teagasc. As stated by him in his presentation: "At present, 16 month beef is not viable in this country because we are a grass-based system." Our niche markets are grass-based, quality assured and require traceability. It is not economically possible to produce 16 month beef in this country at the prices currently being paid. According to data from Teagasc, a farmer who produces 16 month old beef would at current prices lose €362 per head. People will not produce that beef if it is not viable to do so.

I acknowledge that people have been misled. I attended many of the meetings at which the factories were encouraging people to produce bull beef because there was a future in it. The specification was then suddenly changed by the factories and the multiples in the UK and they wanted 16 month old beef. I produced bull beef for three years. Luckily enough, I am not producing it this year. I decided not to do so this year because I found it hard last year to get rid of the animals following the change in the specification from 24 months to 20 months and then 18 months. It is now down to 16 months.

Professor Boyle also set out at the committee meeting yesterday the advice of Teagasc in regard to bull beef production, as set out at a Teagasc seminar held in Kilkenny in 2013 and attended by the Minister. Many farmers have adopted an 18 to 20 month finishing system for bulls. However, this system is coming under increasing pressure, with some factories no longer accepting bulls over 16 months. That information was put in the public domain in November 2013. Unfortunately, farmers did not heed the advice. However, I support farmers because I am aware of the pressure they are under in this regard.

As I stated earlier, we export 80% of our agricultural products. Some 53% of our beef goes to the England. That is where our problem arises in terms of the supermarkets' control. I will give an example. The labelling for Irish and British beef is similar, with one label displaying a Union Jack and the other simply stating that the beef is Irish. The Irish Co-operative Organisation Society, ICOS, said two weeks ago when it appeared before the committee that cuts of Irish and British beef on the supermarket shelf in Britain are priced the same, even though Irish beef is being discounted when exported to the UK. This relates to a live Irish animal exported to and killed in a UK factory. Sinn Féin needs to engage with the Minister for Agriculture and Rural Development in the North, Michelle O'Neill, in relation to what is happening. Northern Ireland has always been a great market for the South, in particular the west of Ireland where Senator Ó Clochartaigh lives, with many travelling South to buy weanlings and bring them back to Northern Ireland to fatten. Specifications are now being laid down in regard to the movement of animals. In other words, to be quality assured an animal must be 70 days old and an animal with an Irish passport-blue card is being discounted in Northern Ireland factories. The Senator needs to speak to the Minister, Michelle O'Neill, about that matter.

The Minister has been doing great work in terms of opening up new markets, including in Libya, Japan and the USA. These markets must be pursued but the Minister needs the support of An Bord Bia and the factories to do so. If the Minister secures agreement in relation to the opening up of a market, this must be followed up by the factories and so on. The Minister cannot dictate whether 10,000 or 50,000 tonnes of beef should be purchased. This must be done by the factories. The only other avenue open to us in this regard is live exports. If the factories in this country are not prepared to pay a fair price and continue to give the wrong advice to farmers in relation to bull beef, live exports is not the answer. There has always been live export of cattle from Waterford and so on. Stena Line has consistently refused to carry livestock on the routes from Rosslare to Fishguard and from Dublin to Holyhead. This is one area in which the Minister could intervene. P&O sold its business to Celtic Link, which had a larger ship that could cater for 20 units of live cattle exports on three sailings per week.

Celtic Link Ferries was subsequently sold to Stena Line, which refuses to carry livestock via the shortest route out of Holyhead. The Rosslare route has been reopened but it costs €900 to bring a 16 ft. truck to Fishguard, whereas the cost of bringing cattle through Larne is €350. That is a difference of €550 on two routes operated by the same company. Moreover, having to go through Larne means animals are on a truck for an additional ten hours as they are transited to their destination elsewhere in Britain.

A problem underlying all of this is that Irish regulations in regard to the export of livestock are the most stringent in the EU. This is an issue the Minister must review. Some companies are refusing to send ships here because the regulations are so strict. Senator Healy Eames observed that following depressed prices for sheep in recent months, suddenly there is a scarcity and sheepmeat is now being sold at record prices. It is all about supply and demand. We must have people being proactive and working together - farmers, factories, retailers and the Minister. Traceability and quality is where our future lies and is what will allow the Minister to say with confidence that we have the finest beef in the world. We must work together to achieve that. The Opposition should refrain from bringing opportunistic motions before the House to try to embarrass the Government.

2:05 pm

Photo of Jim WalshJim Walsh (Fianna Fail)
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Members opposite are doing a good job of that themselves.

Photo of Pat O'NeillPat O'Neill (Fine Gael)
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It is not achieving anything.

Photo of Jim WalshJim Walsh (Fianna Fail)
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With regard to Senator O'Neill's concluding comment, we do not need to give him and his colleagues any assistance when it comes to embarrassing the Government. They are quite adept at that. On his charge of opportunism, my party is a complete amateur compared with the two Government parties.

Photo of Pat O'NeillPat O'Neill (Fine Gael)
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A leopard does not change its spots.

Photo of Jim WalshJim Walsh (Fianna Fail)
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Having said that, I agree with many of Senator O'Neill's observations. His involvement in the industry gives him a level of knowledge and expertise which makes his views worthy of attention. This issue is far too serious for party politics. Prior to Senator O'Neill's contribution, the debate was reasoned, measured and constructive. While we might not agree with the Minister on everything, the intent of everybody here is to seek to address what is undoubtedly a serious problem for a significant number of farmers.

The question of who controls the specification is at the nub of this matter and there has been a continuing issue with the multiples in this regard. It is an area that deserves some focus to see how it can be addressed. I accept that the market must be respected, but it has to be done in a way that also respects all stakeholders. Producers are a very important element of that. The Minister indicated that the number of farmers involved directly in the bull beef sector is 65,000, with many others involved in livestock generally. That is a very significant number of people. If an industry employing those numbers had a serious issue, we would be concentrating on it very significantly. That is the level of engagement I urge in this instance.

There are two aspects to the motion that is before us today. What we note and what we condemn are not really the most significant parts. The two main elements are the actions we call for to address these issues. One of these is co-operation with the British authorities and the Northern Ireland Executive to overcome the labelling restrictions that are acting as a barrier. I missed the Minister's response to that point. We all see how effectively the French have been able to use technicalities over the years to protect not just their farming sector but other sectors.

The British market is very important to us. We are almost totally reliant on it at this time because of the significant fall-off in domestic consumption. A previous speaker - it might have been the Minister - noted that 75% of the British market is supported by its own livestock. We try to provide as much as possible of the remainder and, as such, it is of vital importance to the sector here.

There is a slowdown in international demand which is coupled with changing tastes for different types of beef products. To what extent are we endeavouring to track the trends in this regard and who is responsible for that task? I did not get any sense of that from the Minister's speech. This pertains to the issue of a regulator, which I will deal with presently, but whether that is the correct nomination for the type of role we are discussing, I am not sure. Cattle reared in this country and finished in Northern Ireland are disadvantaged within the British market because of that. Is there any way we might develop a different approach which would assist the bull market in that regard? We are always talking about an all-island economy and, to be fair, it is evolving in some areas, particularly in the tourism area. It would be useful to take that approach in this area by seeking some type of preferential treatment within the British market. Perhaps our product could operate pari passu with British beef. After all, whether the beef is reared in Fermanagh, say, or it is reared in Leitrim or Donegal, there really is no difference in the livestock itself. Is there some avenue that could be explored in this regard?

The fall in beef prices has consequences for our export trade and for farmers, but it also has consequences for employment. That is a very significant factor that needs to be homed in on in the context of the high rate of unemployment pertaining in this country. In referring to trends in the market, the Minister seemed to be putting the responsibility on farmers themselves to follow the sudden changes that can take place. Sometimes these changes may not be consumer-driven but rather driven by other vested interests within the food chain, be it the multiples, the processor or whoever else. There seems to be no accountability within that. A small farmer operating in this market and concentrating on what he or she is doing is not in a position to determine what the trends are going to be next year or the year after. As Senator O'Neill said, one might make a decision on gut instinct and it could turn out to be the right one. Equally, however - we have seen this in other areas of agriculture and other industries - where one makes a decision on instinct or even makes what one assumes is an informed decision based on research, it might not prove to be the right one. It is not adequate to pass the responsibility back to farmers in this regard.

The Minister mentioned that the Competition Authority has a role in all of this. We should bear in mind that the authority has had failures in many areas, a very significant one being in respect of the legal profession. The latter is a gigantic cartel, particularly when it comes to barristers. I do not say that lightly.

The Law Library is supposed to have an oversupply of barristers, yet when one looks for a barrister one cannot get one at what one would consider a competitive or reasonable rate. In that regard, the State has been the biggest culprit as it has for many years overpaid members of the legal profession for work that should have commanded much lower rates. I am not sure I would like to rely specifically on that.

Teagasc, an arm of the State, promoted the bull beef sector. What role does the Department of Agriculture, Food and the Marine have in this area, including on the issue of making predictions? The Minister stated that farmers must plan better. How can they do that? What mechanism or system of supports should be provided? Who should determine what are likely to be the market trends or should farmers be left at the mercy of the market? My party has made a proposal, one which the Minister has dismissed, to establish a beef regulator. While this country's history of regulation is not good, does the Minister have a better suggestion? Should more than 65,000 farmers be left to the vagaries of the market?

I urge the Department to take a more hands-on approach. I acknowledge, as other Senators have done, that the Minister has applied himself well and, unlike some of his colleagues, he has avoided pitfalls. I ask him to take an initiative to assist bull beef farmers. I have not heard anything that will give these farmers comfort that there is a solution on the horizon or that the matter will be addressed. I urge the Minister to take seriously the suggestions we have made. It is fine if others make better suggestions but the Minister should not dismiss Fianna Fáil Party proposals simply on the basis of their origin. I do not fully subscribe to the Minister's view that establishing a regulator would send out all the wrong signals. The new mechanism would not have to be known as a regulator as the Minister is aware of the intent, function and job specification we are seeking to assist the sector. If successful, this mechanism could provide a template for addressing other issues in agriculture. I ask the Minister to examine the proposal constructively.

2:15 pm

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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I welcome the Minister and his official. It is important that Senators are given an opportunity to raise this matter as it allows the Minister to take note of the many views on the issue being expressed in the House. Beef producers find themselves in a very difficult position. I live on an organic farm producing beef and lamb, which is run by my wife, Mary, and son, Conor. The difficulty with producing organic beef is that we rely entirely on grass and having a good quality product. The Department does not place much emphasis on promoting organic farming, an important, if expensive, side of farming. Changes are needed to address the cost of registration and various other aspects of organic farming. We rear beef and lamb to the finished product on the farm. It is a quality product on which we must secure a return. We do not buy in calves but keep maiden calves and heifers from which we breed. From first-hand experience, I assure the Minister that the costs involved are substantial. He must examine this issue and take whatever steps are required, including engaging with his counterparts in Northern Ireland and Britain.

On the issue of markets, when I was the Minister of State with responsibility for trade I was frequently assigned the task of working with Bord Bia. I recall a particular visit to the Islamic Republic of Iran where I ensured that the Iranian Minister sent veterinary surgeons to Ireland. They visited the Kepak company in Clonee, which coincidentally has a factory in Athleague in County Roscommon. I assured them about the quality of Irish beef because our competitors elsewhere in the European Union, including in France, were arguing that Ireland shared a border with Britain, which was experiencing many animal health problems, including mad cow disease, at the time. I emphasised that we produced the best quality beef in the world.

It is unfortunate that the Minister cannot reply.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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I understand I can reply.

Photo of Marie MoloneyMarie Moloney (Labour)
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The proposer, that is, the Fianna Fáil Party, replies.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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Other countries which ruled the waves now waive the rules. I presume the House can also waive a minor rule to allow me to hear the Minister's views on this matter.

We should not rush into a trade dispute with Russia over developments in Crimea. Ireland is a small country and such matters are addressed by major players such as the United States. The position in Ukraine was inflamed by the European Union, which antagonised the Russian bear on this issue. I am neither condoning nor condemning on this issue as I do not propose to get involved in the matter. Ireland must preserve its neutrality.

When I visited the Islamic Republic of Iran I did not preach to the Iranians as my priority was to sell Irish products, including beef. The Minister should bear in mind that we will suffer most from any trade embargo because Russia is an important trading partner. I accept that we cannot ignore world issues. When the Minister met the current leader of China in County Clare, he did not lecture him on civil or human rights issues because it would not be appropriate to do so. It is a matter for the Department of Foreign Affairs to engage in that type of diplomacy. As the Minister with responsibility for food and agriculture, Deputy Coveney was correct to meet and greet the Chinese leader. It was a useful exercise and I presume the lovely calf that featured on the day has since died.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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The heifer has just given birth.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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I am sure the new calf is called Simon if it is a male. I hope this important news has been conveyed to the Chinese leader.

I ask the Minister to make this matter a priority because beef will not be produced if it does not make a profit. Ultimately, that would be bad for Ireland and exports.

The Minister should acknowledge that the Food Harvest 2020 strategy was devised during the Fianna Fáil Party's time in government.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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I did that.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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I was not present when the Minister spoke as I was otherwise engaged. I thank him for doing so. Everyone is playing a role in this matter. I was dismayed to learn that the Irish embassy in the Islamic Republic of Iran has been closed down. This was a vital embassy, which I used to meet and greet the relevant Iranian ayatollahs and ministers. I ask the Minister to intervene to ensure the embassy is reopened because it is very important for trade with that region.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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I thank all speakers from all sides. It is important to have debates on agriculture and fisheries. While I acknowledge some of the positive aspects of the Minister's reply, I propose to press the motion to a vote.

Whereas the Minister pointed out strongly in his response that there is no real crisis in beef apart from the bull beef issue, if one had looked at this in January and February, one would have envisaged a crisis. If we had had an opportunity to have tabled this motion four weeks ago, the Minister's replies would have been less emphatic. Senator Thomas Byrne spoke about the need to establish a beef regulator. I listened to the Minister's response. I would not dismiss the idea out of hand. It is a door that should be kept open and looked at again.

The IFA and other farm organisations have done good work in conjunction with the Minister, Bord Bia and the meat factories to achieve a proper balance on the issue. Many farmers who rear bull beef are not grass-based but use intensive protein feeding with a view to having the animals ready at 16 months. Even they have found difficulties. I accept there is not a lot of demand in the market for bulls who, having been initially grass fed and finished on protein, run on to 20 or 22 months. Encouragement was given, particularly to younger farmers, to go down that road as there was a niche market. They now find themselves in some difficulty. Where that encouragement came from, I am not sure. Young farmers in their 30s who embarked on these projects and find themselves in serious difficulty have outlined to me that they were encouraged, if not necessarily by the Minister.

2:25 pm

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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It was for under 20 month beef, though. No one was encouraged to produce 22 or 24 month beef.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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While I accept that, one of these farmers had his bull beef ready at approximately 17 months, or close to the margin, in late January but had severe difficulty finding an outlet. It is perhaps a month since I spoke to that young man and the animals may now have been sold. Once one goes beyond 16 months, the demand is less. One goes over 20 months and the price drops. It is a double-edged sword.

I accept that there is no utopian solution and acknowledge that significant strides have been made in the Minister's portfolio covering agriculture and the agrifood industry. Some of this was started by the previous administration but the Minister has been very outgoing on world markets and made contacts in America and China, which I acknowledge. I urge him to continue those contacts in case a nervousness develops in the beef industry which affects the sale of beef, particularly having regard to climate change. We had an appalling spring last year, for which we cannot blame the Minister. We have had a very wet winter and those producing beef are nervous. The difficulty is that there is a knock-on effect on the suckler cow farmer and the sale of calves at marts.

There is merit to our motion, which the Minister acknowledged, and I will call a division on it. I acknowledge the Minister has made progress and I wish him well in his brief. I hope solutions will be found to some of the difficulties farmers face.

Amendment put:

The Seanad divided: Tá, 30; Níl, 17.

Tellers: Tá, Senators Paul Coghlan and Aideen Hayden; Níl, Senators Jim Walsh and Diarmuid Wilson.

Amendment declared carried.

Question put: "That the motion, as amended, be agreed to."

The Seanad divided: Tá, 30; Níl, 17.

Tellers: Tá, Senators Paul Coghlan and Aideen Hayden; Níl, Senators Jim Walsh and Diarmuid Wilson.

Question declared carried.

2:35 pm

Photo of Paddy BurkePaddy Burke (Cathaoirleach of Seanad; Fine Gael)
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When is it proposed to sit again?

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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At 2.30 p.m. on Tuesday next.