Wednesday, 23 November 2016
Before I proceed with Senator Mullen's Commencement matter, I note that it deals with a sensitive subject matter which has the potential to affect adversely the reputations of individuals. I remind all present of the long-standing rule that Members should not comment on, criticise or make charges against a person outside the House either by name or in such a manner as to make them identifiable. I am sure Senator Mullen will be able to address the concerns he has raised adequately within the bounds of that rule. I have every confidence in the Senator. He has the floor.
I thank the Leas-Chathaoirleach for his confidence. I will certainly try to do that. I welcome the Minister to the House and thank him for taking this matter. Last week in the Seanad, I drew attention to reports that a Cavan-based poultry farmer, Alo Mohan, a man who had declined to take part in certain-----
I apologise. The farmer in question declined to take part in certain VAT avoidance arrangements and, as I put it, was forced out of business because he was no longer in a position to deal with local processors. The man in question is a respected farmer in County Cavan. He is a former chairperson of the Irish Farmers Association poultry committee and an FBD Nuffield scholar who completed a study, Thinking Different - Encouraging the Transfer of Knowledge in the Poultry Sector. He is also a member of the Irish Poultry Council and a chair and founder of Taste of Cavan food festival.
The gentleman is married with four children and he was producing more than 1 million chickens a year on a family farm as well as cattle and sheep. The issue is that because he declined to take part in certain VAT avoidance arrangements, he is no longer trading, according to the Irish Independent. He is no longer in a position to earn a livelihood from what is a very well-kept and high quality family farm.
The issue I have had all along is there is a need for the Department of Agriculture, Food and the Marine to be extremely vigilant about whether there is any unfolding scandal here of an abuse of power in the poultry industry. If a farmer is not able to sell his milk to one co-op, he can go to another one, but what happens when a farmer finds he is not in a position to sell his poultry because he has done due diligence and checked whether he can act in a particular way according to the requirements of Revenue and so on? If that farmer found he was not in a position to take part in certain arrangements and was blackballed as a result, either or indirectly, is it a matter that would be of concern to the Department of Agriculture, Food and the Marine? It certainly should be and one does not have to be, as I am, from a small farming background to be concerned that small farmers are entitled to make a livelihood. I would not fault any farmer for entering into an arrangement to make a livelihood but a small farmer, or even not such a small farmer, who wants to, as it were, follow his conscience or take the route of good citizenship should never be victimised. There is a real danger in our world today internationally that the big corporations have their way with the small guy. That should not happen in Ireland, in Cavan or anywhere else. I want the Minister and his Department to take an active interests in this case because it seems to me there is not a whole lot of competition among processors in the poultry sector and that creates particular dangers.
In the news report, the farmer said he had lost out on an additional €25,000 a year because he had not participated in certain arrangements. A processor, such as Carton Brothers Manor Farm, is entitled to source produce from whomever it likes, but if there is a question of a supplier getting penalised because he took the route of good citizenship, then an important public issue arises. That is the issue I want the Minister to address. We cannot stand back and say it is a private arrangement between a processor and a supplier. It is an issue if somebody took the route of good citizenship and finds themselves cut out. This farmer is no longer in business. Sheds are lying idle which is a change from a situation where a guy was producing 1 million chickens a year.
It is very much in the Minister's interest to find out what went on regardless of whatever issues arise on the VAT issue in future and whatever the tax arrangements were. The State has an interest in ensuring the people who take the route of good citizenship are protected, whether that means informal or formal activity by the Department of Agriculture, Food and the Marine. There is an issue here. It is an issue I will not let lie. I will return to it again and again until I am satisfied the State is doing everything necessary to investigate whether people have acted properly. Whether it is the big processor, Carton Brothers Manor Farm, Mr. Mohan or others, it is important that the State ensures the small guy does not get victimised, particularly if he is acting according to his own lights and doing what he believes to be the right thing having exercised the necessary due diligence.
I do not know what response the Minister will give today but there are options. This issue can trundle on and become more of a controversy while an individual seeks justice. It is perfectly within the gift of the Department to appoint a mediator to try to bring the sides together to try to get to some kind of understanding and to ensure in any case that justice is done in the final analysis.
I thank Senator Mullen for raising this matter. While I have overall responsibility for the regulation and development of the Irish poultry sector, the specific matter raised by the Senator is solely under the remit of the Minister for Finance. The matters raised are being dealt with through an amendment to the Finance Bill which the Minister for Finance is currently bringing through the Oireachtas legislative procedures. I have, however, indicated my support to the Minister, Deputy Noonan, for the initiative in the Finance Bill to ensure there is no abuse of the flat-rate VAT system, thereby ensuring the integrity of the system and its continued availability to farmers. The flat-rate system generally works well and is an established element in agri-taxation policy.
On the particular circumstances in which this producer is currently operating, the Senator will agree it would be inappropriate for me to comment directly on the detail of it. The issue of where and to whom suppliers send their produce and the nature of their relationship with their processor is a commercial arrangement in which no Minister for Agriculture, Food and the Marine can have any role. That said, it would be a matter of some concern if any supplier suffered adverse consequences solely as a result of drawing attention to alleged wrongdoing in any part of the agrifood sector.
On the wider issues, the poultry sector is an integral element within the agricultural economy accounting for approximately 3% of the gross agricultural output and proudly supports around 6,000 jobs, most of these in rural areas. Output at producer prices in 2015 amounted to €190 million and the value of poultry meat exports amounted to €320 million. On the back of increasing demand for poultry protein and low feed costs, the outlook for the sector is positive for the remainder of 2016 and into next year.
As part of my Department’s contribution to the development of the poultry sector, we have a range of supports currently in place. Last year we announced the opening of the new pig and poultry investment scheme under the targeted agricultural modernisation scheme, TAMS II, helping to underpin economic growth and development throughout rural Ireland. This investment reflects our ongoing commitment to the growth potential of this important sector and to the modernisation of farming in Ireland. There is also additional funding under the young farmer capital investment scheme and the organic scheme for the poultry sector. Poultry producers are also eligible to apply under the animal welfare safety and nutrient storage scheme.
Earlier this year, my Department launched the €100 million knowledge transfer group as part of Ireland’s €4 billion rural development programme. Knowledge transfer groups will be implemented for some 27,000 farmers across six sectors, including poultry. These groups will provide a key support to the agrifood sector in building its knowledge and skills base to underpin continued growth and competitiveness.The scheme builds significantly on the previous discussion group model and is designed in such a way as to ensure the farmer and adviser engage in one-to-one discussions on key aspects of a farmer’s business such as controlling input costs, environmental sustainability, breeding and herd health. This one-to-one engagement will be complemented by group-based discussion and the sharing of experience and information between farmers. I am satisfied that these various measures will greatly assist the ongoing development of the poultry industry. Food Wise 2025, the ten-year strategy for the agrifood sector published in July last year, identifies the opportunities and challenges facing the sector and sets out an enabling strategy that will allow the sector to grow and prosper. Food Wise 2025 includes over 400 recommendations on cross-cutting themes of sustainability, innovation, human capital, market development and competitiveness, as well as specific sectoral recommendations.
Food Wise 2025 foresees the creation of 23,000 additional jobs in the agrifood sector all along the supply chain from primary production to high-value added product development. The implementation process for any strategy is vital for its success. I chair the Food Wise high-level implementation committee, with high-level representatives from all the relevant Departments and State agencies. The committee reviews progress on detailed actions on a quarterly basis in order to identify and solve problems quickly. Stakeholders regularly present to the committee on priorities for particular sectors or themes in enabling and delivering sustainable growth in investment and employment to benefit the agrifood sector.
Opening markets is a priority, particularly in the context of Brexit to further increase the market opportunities for Irish food and drink internationally. We are after all an exporting nation with 90% of our food produce leaving the island. It is for this reason that we have undertaken major trade missions to Asia and Africa in recent times. In summary, the success of the Irish poultry sector, as with other elements of our agrifood sector, rests on the relationship between farmers and their processors in the first instance and further up the chain between the retailers and consumers. It is imperative that there is equal opportunity for all concerned to make a sustainable margin and I trust in the poultry sector as with others that the opportunity exists for the producer to undertake its business in such a manner.
I thank the Minister for his response which certainly increased my store of knowledge on many different issues. When he says that it would be a matter of some concern if any supplier suffered adverse consequences solely as a result of drawing attention to alleged wrongdoing, I presume he does not mean that it would not be a matter of some concern if, for example, he were to suffer consequences for going on not to participate in certain arrangements. What does the Minister mean when he says it would be a matter of some concern? Does he mean that he would make it his concern and the concern of the Department? I think I have said enough to show that there is a case here for the Department to look into a matter because a significant public interest issue arises if somebody is victimised because in some way he or she did not want to get involved in something he or she believed was illegal. That is the issue before us and it is one we are going to have to return to. I think the Minister will agree with me that the State should ensure that the system should not be rigged against small farmers or against individuals who do not play ball with big corporates. That is what this issue is about and I think we might have further conversations on this in the future but I very much thank the Minister for the attention he has given it to date and for coming in this morning.
I appreciate the Senator's comments but it is also appropriate to reflect on my opening paragraph where I say it is not really the responsibility of the Minister to get involved in the detailed commercial arrangements that exist between a dairy farmer and his processor, a beef farmer and his beef processing plant or indeed in this instance between a grower and a processor in the poultry sector. It would be of concern to me if I felt somebody was being victimised. There are many avenues that may lead to a resolution of this. I am sure there is hardly a county in the country that does not have a story about some farmer in some enterprise who has a difficulty with his processing outlet. If the Department was to become engaged in trying to find a resolution to each of those individual problems it would be overwhelmed. In many respects even the Competition Authority has made it abundantly clear to us that we have no role to play, for example, with regard to the arrangements that exist between farmers who are constantly in difficulties with the meat processing plants. We are told strictly that is not a function for us. I do not have the detail of the case the Senator alludes to. I have read the media comments on it etc. and, as I said in my response, I would be concerned if I felt that a grower in the poultry industry was being victimised solely on the grounds of raising an issue which the Senator has alluded to. I would like to think that this issue could be resolved. I am not saying that is a role I or the Department can play but there are many people out there, stakeholders and representative bodies, who may feel, as the Senator strongly does, that this is a case of large versus small and I am aware that in terms of the poultry industry, there are not many outlets where one can go if one has a falling out with a major processor. I would like to think that this issue could be resolved but I am of the opinion that it is not an area where the Department or I can usefully play a role.