Seanad debates
Wednesday, 8 July 2015
Commencement Matters
Sheepmeat Sector
10:30 am
Brian Ó Domhnaill (Fianna Fail)
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I welcome the Minister of State to the House for a debate about the sheep sector which is one of our domestic agricultural sectors. This sector is of vital significance to many parts of rural Ireland. In her brief as Minister of State with responsibility for rural development and rural affairs, she will be very aware of the sheep sector's importance in many rural parts of the country where the land may not be as good as in the major agricultural areas.
According to the national sheep register there are more than 3.5 million sheep in the country. Most sheep flocks are located along the western seaboard. My county has 12.5% of the national sheep stock with approximately 450,000 sheep in County Donegal - more sheep than people. For example, there are 387,000 sheep in County Galway; 369,000 in County Mayo; and 308,000 in County Kerry.
I have highlighted those numbers because they illustrate that the vast majority of those involved in the sheep sector are along the western seaboard which has seen significant rural decline over many years with young people leaving, for example. Therefore, the sheep sector is very important as a means of keeping young people on the land. Sixty per cent of the farm holdings in County Donegal represent sheep farmers. I am raising this issue which was highlighted by my colleague, Councillor James Pat McDaid, who is a sheep farmer in County Donegal. He spoke last week about the decrease of up to €20 a head in lamb prices over the past fortnight or two and a half weeks alone. This is having a drastic effect on many sheep farmers who are having difficulties finishing lambs earlier this year due to the fact that the weather was very bad and wet and there was slow grass growth. They were forced to feed sheep later in the year and the increased feed prices means that they are being hit hard. According to some of the farming organisations the factories are controlling the prices. There is also price volatility in the UK and sheep prices are at their lowest point in the past five years.
It is not an issue confined to this country but it needs Government intervention to support the sheep sector. This support could be supplied by an attempt to bolster the export market. Ireland exports most of its lamb and sheep meat. We produce approximately 55,000 tonnes of sheep meat a year. Last year, 45,000 tonnes was exported to France, the UK, Belgium, Germany and Scandinavia. The French market has fallen. There was a great demand this time last year from the French market but this has dwindled somewhat this year. The Government response to support the sheep sector needs to be fast and drastic because sheep farmers will be driven out of existence given that the price has fallen below €5 per kilo and according to some of the farming organisations it could fall to close to €4 per kilo. The farmers say that their floor price is around €5 per kilo and when the price falls below this level they are producing and working in the negative, in the red. That cannot be allowed to continue. Farmers are primary producers and they need support. The sector has 3.5 million sheep and farmers are willing to stay on the land which is marginal in many cases being commonage or poor land which is not of much use for any other farming. I ask for a twofold response to this issue, first, that we go after those markets aggressively and try to open up the markets to new Irish lamb, that we promote lamb within the country; second, that a subsidy is provided to sheep farmers either from the Exchequer or through pillar 2 funding which is the €580 million available annually under the CAP rural development programme. That needs to happen. The sheep sector is vital to the economy and it is particularly important to the western seaboard regions from Donegal down to Cork and Kerry.
Ann Phelan (Carlow-Kilkenny, Labour)
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I thank the Senator for raising this very important issue. I am replying on behalf of the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, who is in Strasbourg attending a European Parliament plenary session.
This is a hugely important element of our agri-food sector and one which is a priority for the Minister. Primary output from the sheep industry is currently worth about €230 million, a value which has grown significantly in recent years. Over two thirds of output is exported. Exports in 2014 totalled 44,759 tonnes, with a value of €218 million. The sheep sector in Ireland is heavily dependent on the export market as the domestic consumption is usually only about 30% of overall production. The core markets remain France and the UK with the French market usually representing double that of the UK. This reflects the strong demand and reputation in France for Irish lamb and also the consumer preference in the UK for British product. The growth markets in Europe are Sweden, Germany and Belgium with Sweden, for example, now representing our third most important market.
I am also aware that the sheep farmers are vulnerable to price fluctuations. While price is something that is subject to the normal dynamics of the market place the Minister has provided a range of financial and structural supports to the sector that can help to make the sector more resilient and position it to avail of development opportunities.
The application of the latest scientific knowledge to the business of sheep breeding in Ireland is only in its infancy in comparison to programmes for beef and dairy. However, the establishment of Sheep Ireland and the buy-in from stakeholders is improving matters considerably and proving to be of significant benefit.
The sheep technology adoption programme which was introduced in 2013, has played a major role encouraging technology adoption at farms while also requiring participants to undertake a number of farm tasks. These farm tasks make use of the best technologies available to sheep farmers in Ireland while also encouraging improved breeding through the use of a Sheep Ireland performance-recorded ram.
The programme is currently in its third and final year. On average, around 4,000 farmers have participated in the programme in each year and total funding of more than €6.5 million was provided in 2013 and 2014. Under the Rural Development Programme 2014-20, the Minister has made provision for further improving efficiency and profitability in sheep production through the knowledge transfer groups measure. The experience in the sheep technology adaption programme has informed the development of this measure. In addition to profitability, the emphasis will be on the key issues of business skills, environmental sustainability and herd health, with increased interaction between individual farmers and facilitators in order to customise information exchange. Approximately 300 potential facilitators recently expressed interest in running knowledge transfer groups for the sheep sector.
Various other schemes in RDP are also of direct relevance to the sheep sector. For example, the green low carbon agri-environment scheme will benefit sheep farmers and they will continue to be significant beneficiaries from the areas of natural constraints scheme. A series of capital investment schemes are being introduced under the TAMS II scheme, several of which will provide for sheep farmers. It must also be remembered that the sheep grassland scheme, which invested over €65 million in Irish sheep farms during its lifetime, has now been included in the direct payment of each sheep farmer under revised CAP arrangements.
Last week a new ten year strategy for the agri-food sector, Food Wise 2025, was launched with the key theme of local roots, global reach. The agri-food sector is a sector unlike any other given its strategic importance to the Irish economy, its roots in local communities throughout the country and its rapidly increasing global reach. Food Wise 2025 sets out a comprehensive plan for the development of Ireland's agri-food sector over the next decade. It predicts that over the next decade Ireland can increase the value of agri-food exports by 85% to €19 billion, increase value added to the sector by 70% to €13 billion and increase the value of primary production by 65% to €10 billion. This should deliver a further 23,000 jobs in the agri-food sector by 2025. With over 350 recommendations, Food Wise 2025 is very detailed but that detail is vital. Many of these recommendations relate to the sheep sector.
The report acknowledges the importance of the sheep sector and notes that growth in the sector will come from improved technical efficiencies, as well as growth opportunities from an increase in consumer demand and export market opportunities. Important actions identified for the sector include: genetic improvement of the sheep herd with a focus on ewe fertility and breeding resilience and resistance to diseases; working collaboratively with processors, Bord Bia, Teagasc and Sheep Ireland to modify the seasonal nature of our sheepmeat supply and maintaining presence; increasing farmer participation in the beef and lamb quality assurance scheme to 90% in terms of proportion of output by 2025; adding value to exports by further moving up the value chain from exporting entire carcasses to pre-packaged boneless cuts through wider market access; increasing sheep farmer participation in knowledge transfer programmes; and developing a carbon navigator tool for sheep producers. The Minister will put in place a robust implementation process to monitor progress and deliver on the ambitious projections in the report.
My Department monitors average sheep prices and sheep slaughtering figures on a weekly basis because the two are clearly interlinked. A national average sheep price is also submitted to the European Commission once a week. While the recent movement on prices has been disappointing, it is not out of line with the trend in other countries. I am satisfied that it does not point to a structural difficulty within the overall sheepmeat sector but rather reflects the fluctuations which can occur at this time of year. The latest available figures show that after a strong first quarter in 2015, when the average Irish price was approximately 11% up on the same period in 2014, prices have fallen back. This change in price in recent weeks is likely due to a combination of factors. Supplies are in full flow at present due to seasonal factors. At the same time, poor market conditions are believed to be driving down average prices as measured on a weekly basis. While this recent dip in prices is disappointing, it remains the case that at the end of June, the average year to date price was running at approximately 4% ahead of the same period last year. Just this week, I understand that prices have started to rise again and that demand for sheep and lamb by factories is rising.
Brian Ó Domhnaill (Fianna Fail)
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I thank the Minister of State for her reply and I appreciate that prices are fluctuating but the reality is that the costs are much higher this year compared to last year and prices have dipped. In my neck of the woods in the north west region, prices are significantly below the figures for this time last year. The fluctuations appear shallower than is actually the case because the Department is using generic figures across the country.
A mechanism needs to be found to support sheep farmers. I note that the Minister of State used the phrase "technical efficiencies". For many sheep farmers, technical efficiencies are probably not possible. We cannot continue to develop technical efficiencies in a sector that is already at break-even point. We must assist sheep farmers either by finding new markets or providing a top-up subsidy.
Ann Phelan (Carlow-Kilkenny, Labour)
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I have asked my officials to prepare background information for the Senator on sheep prices. I ask him to let me know if he does not receive the information.