Erin McGreehan (Fianna Fail)
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The Minister of State is welcome. I have a question for him and his Department. I am seeking an update on the Department's plan for the viability of the sheep sector, along with an update on the wool feasibility study. As the Minister of State knows, sheep farming is a sustainable sector. I hope the Department will pay more attention to it and see it is a strong, sustainable sector. It has demonstrated time and again that it plays an integral role in protecting and enhancing the diverse habitats that are commonly found on marginalised farmland and lowland farms. With the correct supports, this livestock can coexist with fragile conservation sites, areas of scientific research and breeding sites for endangered wildlife.

I welcome many of the proposals in the Common Agricultural Policy, CAP, but many in the sheep sector are disappointed with the new sheep scheme. The next CAP will only deliver €2 for the sheep welfare scheme. I have generations of sheep farmers behind me. I am a sheep farmer's daughter so I know the importance of the sheep sector and the importance of this funding to farming families. I come from north Louth and I remember the devastation in the farming and sheep sectors that we love when we lost all our stock to foot-and-mouth disease many years ago.

Like every market, the sheep sector experiences fluctuations. We saw some very high prices this year, although they have now dipped. The cost of production has gone up dramatically. Sheep farming is labour intensive and sheep require a lot of attention. The age cohort of farmers is increasing and due to the work involved, older farmers are finding it difficult. Herding sheep, dipping, clipping, feet maintenance and dagging to prevent maggots are all required. Much work needs to be done to look after sheep. The Government and the Department must support the sheep sector to make it more attractive to young farmers.

Despite the intensity of the work required, the sheep sector delivers a low income for those involved in it. From talking to sheep farmers, many of whom are elderly, I know that this new sheep improvement scheme is important. I wish to highlight a matriculation when it comes to payments on livestock. One livestock unit equates to one cow or 6.6 ewes. Cattle farmers will receive €150 for their first ten cows and €120 for each cow thereafter. Sheep farmers are paid €79.20 per livestock unit. That is a sizeable discrepancy. Sheep farmers have a significant role to play in the agricultural sector and industry.

There is an issue around the lack of movement from the Department on creating markets for our wool. A sheep must be clipped every year. It costs €3 to clip a sheep and a farmer gets a return of 25 cent. Many farmers are putting their wool into storage and holding it. There is so much that the Government can do. I am asking for a research fund and I encourage the Government to put that out to tender. It should facilitate companies. There is much that companies and the Government can do to facilitate an increase in the size of the market for traditional wool for clothing and new products for insulation. Far better and brighter people than me can find creative ways to use our wool and to give farmers a proper payment for it.

Martin Heydon (Kildare South, Fine Gael)
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I thank the Senator for raising the important issue of the viability of the sheep sector and its importance to our overall agricultural and rural economies, and our food production and exports.

I am pleased to see that the strong performance of the sheep sector in 2020 has continued into 2021 in terms of overall prices. It is good to see the market providing returns which goes some way to rewarding farmers for their hard work, commitment and dedication to producing a world-class product, as the Senator has outlined. Global production patterns and increased demand are expected to support this continued strong performance. The current average price is €6.54 per kg, which is 33% above the same period last year. This is impressive, given that the year-to-date figure for sheep slaughtering is only slightly behind that for the same period last year.

Bord Bia analysis suggests that retail demand for sheep meat increased over the last year, as consumers invested more time in preparing home-cooked meals. In addition, data from the Central Statistics Office shows that 2020 was a strong year for Ireland's overseas sheep meat trade, with 64,000 tonnes exported to 38 international markets at a value of nearly €356 million. This represents an increase of 12% in value terms on 2019. In 2020, 73% of sheep meat products in value terms were exported to the EU, 12% to the UK and 15% to other third-country markets. France remains the single most important export destination, accounting for a third of Irish sheep meat exports in 2020. The future prospects for Irish sheep meat exports remain positive.

As Minister of State with responsibility in the Department of Agriculture, Food and the Marine for new market development, I and my officials continue to work on seeking new outlets for sheep meat, as well as enhancing existing access to as many markets as possible. The sheep meat protocol with China was signed recently. There are a number of steps still to be taken in that regard, but it is another sign of progress in the work the Department is carrying out. We are well positioned to benefit from the opportunities presented by an expanding global demand for high-quality Irish lamb.

Notwithstanding the strong market prices, I am acutely aware of the need to provide support to sheep farmers who are the cornerstone of the sector. Provision for over €1.8 billion of funding was made in budget 2022 for the overall agriculture sector. This is in addition to almost €1.2 billion in EU-funded direct payments received annually to support farm incomes and reward good agricultural and environmental practices. This year's budget provision included funding to allow continuation of the sheep welfare scheme in the transition period until the new CAP. The scheme is an important support for sheep farmers, as it assists them to undertake important management practices such as scanning or mineral supplementation.

The Minister, Deputy McConalogue, has, subject to approval from the Department of Public Expenditure and Reform, updated the reference year for the scheme to 2017 from 2014-2015, as the Senator will know. That will allow for a greater number of ewes to be made eligible for the scheme.

When considering the overall scheme and the new CAP, we cannot look at each scheme in isolation. We must also look at all of the other measures in place. The new CAP will include the agri-environmental scheme, which will build on the green, low-carbon,agri-environment scheme, GLAS, but pay more. Those supports are important.

I can expand on the general points about the sheep welfare scheme in my supplementary reply but I wish to move to the Senator's point about wool, the production of which is an important component of the agricultural industry. Unfortunately, as the Senator outlined, I am aware that the wool industry has been under pressure for some time. I have met with merchants, farmers' representative organisations and directly with sheep farmers. Wool is a sustainable, organic, renewable and natural material that can be used in a wide range of products, such as textiles, fertilizers, insulation and packaging. It fits closely with the goals of the climate action plan to develop a circular and bio-economy.One of the actions in the programme for Government is to undertake a review of the potential demand in domestic and international markets for wool-based products such as insulation and fertilizers. We allocated €100,000 in the budget for this review. A public consultation process was initiated to determine the terms of reference. I can outline the terms of reference in my supplementary reply.

Erin McGreehan (Fianna Fail)
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I thank the Minister of State for his response. The Government has been doing a lot of work on finding markets for sheepmeat. With regard to the sheep improvement scheme and the €2 increase, agricultural schemes are open to every farmer but the sheep improvement scheme is specifically for sheep farmers. I am glad to hear that there will be some movement on the wool feasibility study. Instead of studies, pilots and reviews I would rather see some action very soon. Because it is so far back, the reference year often penalises and restricts younger farmers and ambitious farmers trying to get into the sector. On behalf of young farmers I ask that the reference year be looked at.

Martin Heydon (Kildare South, Fine Gael)
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The Senator is right. The role of the Government is to support sheep farmers in the very important work they do. With every reference year there are hard cases and challenges. It is definitely to the benefit of farmers that we move the reference year from 2014-15 to 2017 because it will bring in more ewes.

The terms of reference for the wool feasibility study involve the identification of market opportunities domestically and internationally for wool-based products, carrying out economic feasibility and cost-benefit analysis on proposed market opportunities, determining mechanisms that can be used to support industry initiatives and the identification of potential research projects available to support the identified market opportunities. This is important work and it will be followed through.

We are building on the dedicated work of the country's sheep farmers through a number of avenues, which I have already outlined. We continue to support farmers through the new CAP transition period. There will be further support in the new CAP to build on these schemes. While market prices are strong at present we will continue efforts to open up new markets for sheepmeat as well as to enhance the value of existing markets. We are seeking to restore the value of wool as a byproduct. Our work is ongoing and we recognise the very important role played by sheep farmers. We will continue to support them.