Seanad debates

Thursday, 3 February 2022

Nithe i dtosach suíonna - Commencement Matters

Pigmeat Sector

10:30 am

Photo of Mark WallMark Wall (Labour)
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I welcome the Minister, Deputy McConalogue, to the House.

Photo of Joe O'ReillyJoe O'Reilly (Fine Gael)
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Just as an aside at the outset, my good friend Senator Boyhan is actively listening. We have many people who are listening, but not actively listening, so that is good.

I welcome the Minister for Agriculture, Food and the Marine, Deputy McConalogue, and thank him for personally taking this matter. By coming in here as a senior Minister to take the issue, it is an indication that he is taking it seriously and not attempting to fob it off. This is a very serious matter.

I will try to give some figures because there has to be a factual basis. There is an income crisis in the pig sector in agriculture at the moment. It is a chronic income crisis. It is well known but I wish to give it chapter and verse, if you like. Factory prices, at the moment, are €1.42 per kg deadweight. The production cost is €1.75 deadweight. One can see the bind already. The average loss on a pig is €33. Feedstuff has increased by €120 per tonne. There is every prospect that raw materials will not get cheaper. The average sow unit is 500 sows, and it is currently losing €8,000 per week.There are welfare issues on farms because they are not able to pay for feed. Factories are struggling to clear the backlog of slaughter from Christmas. Northern plants have reduced kill from the South because Covid has taken away workers and some have not returned from abroad, which has resulted in staffing issues. I presume there is also a market issue as the market has contracted.

There are between 8,500 to 9,000 people employed in the pig sector nationally. They are employed in places where jobs cannot be readily replaced. I note the Minister is nodding and he understands this point as a Donegal man. People work in places where we cannot ask the IDA to develop a factory in the morning. This is a very serious matter. The people have to be sustained. There are nearly 2,000 workers in Cavan-Monaghan and the next big centre is Cork. Cavan has a significant concentration of the pig sector, comprising small and large units. There are huge losses pro rata.

There are Brexit loans for SMEs, but there is a slowness in the response from the banks. The Minister had a conference with the banks, but farmers are not getting definite word back. Some farmers refurbished their sheds with cash flow and are not able to show good cash flow from olden times as a result, which creates an issue with banks. The Minister might bear that in mind. Some 10% will not benefit.

I am sure the Minister is aware that the French and Polish have been successful in getting approval from Europe for packages of support for their pig farmers. I have great respect for the Minister, who is very effective. He is meeting pig farmers today in Naas, which is an important meeting. I know enough about politics to know the Minister will not announce everything to me here, but I appeal to him to go to the meeting with options and money for those farmers. They need a support package.

There have been emergency supports for everyone over recent years, which was right in the context of Covid. I now appeal to the Minister to come up to the plate for pig farmers. This is about the jobs of up to 9,000 people and individual families who run large farms in places where people could not get other jobs. These people have done a lot in their local communities. I could go through chapter and verse on that for another ten minutes, but I will finish. This needs an emergency response and people in the sector need hard cash.

Photo of Charlie McConalogueCharlie McConalogue (Donegal, Fianna Fail)
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I thank Senator O'Reilly for raising this very important issue, and for having raised it with me since it has emerged and become more acute. The continued development of the pigmeat sector, as the Senator knows, is a priority for me, given the pivotal role the industry plays in the national economic context, which he clearly outlined in his contribution. It is one of the largest agrifood sectors and has shown remarkable growth in recent years. The sector supports approximately 8,000 jobs, as the Senator pointed out, spanning production, slaughter, processing, feed manufacturing and services. It is an intense, focused and commercially driven sector.

Our pig farmers have always been remarkably resilient and I am acutely aware of the challenges they face. The pigmeat sector across the EU has faced significant challenges in 2021, including the impact of African swine fever in a number of member states and, as a consequence, the loss of third country markets. This has had a knock-on effect on supply and prices within the Single Market. The average price paid for pigs in Ireland has fallen as a result in recent months, in line with trends across the EU. The 2021 average price was over 8% lower than that of 2020. As of 30 January, the average grade E pig price came in at €141 per 100 kg, just under 7% lower than the same week last year. However, this is still above the EU average price.

At the recent European Council of agriculture ministers, I clearly expressed my concerns regarding the difficulties facing our Irish pigmeat sector, including the ongoing impact of increases in fuel, fertiliser, feed and energy prices over recent times, which are putting real pressure on margins, and the sustained nature of the difficulties being experienced on the pigmeat market. I sought a rapid deployment from the European Commission of appropriate solutions on both issues. I also met members of the IFA national pig committee last week to discuss concerns.

Following this, the Minister of State, Deputy Heydon, and I met the banks to discuss the current challenges in the pigmeat sector and the importance of their ongoing financial support. At this meeting the importance of the sector was emphasised as well as its overall resilience and the importance of the banks' supports for their customers through the current downturn in the business cycle. The key message was that farmers experiencing cash flow difficulties should engage with banks as soon as possible to discuss options and that the banks remain committed to supporting their customers in the period ahead. I am also engaging with the feed industry to determine what it can do for farmers and customers.

Separately, the Minister of State, Deputy Heydon, and I met the Strategic Banking Corporation of Ireland, SBCI, to discuss the Brexit impact loan scheme and Covid-19 credit guarantee scheme, both of which are financed by the Department of Agriculture, Food and the Marine, in partnership with the Department of Enterprise, Trade and Employment. These finance schemes can be used for working capital and include features that address the current financial challenges facing pig farmers.

We are all aware of the cyclical nature of the commodity markets which, for the pig sector at this time, is very much compounded by the rising input cost of feed and energy. During this period, maximum flexibility of financial matters is needed to ensure the ongoing viability of those in the sector.

The Minister of State, Deputy Heydon, last week chaired the round table on the pigmeat sector and had a further detailed discussion with stakeholders, including farming representatives and the processing and feed industries on the current difficulties. In terms of State supports, at the round table Bord Bia outlined the significant efforts being made to promote quality assured Irish pigmeat in the domestic and export markets - 50% of our pigmeat goes to the domestic market. Teagasc also outlined the dedicated advisory supports available.

I and my Department continue to monitor the market situation closely and are examining possible measures to assist in supporting farmers through what is a very challenging time. It is a truly unprecedented time for the pig sector and I very much stand with farmers at this time, as does the Minister of State, Deputy Heydon, and we are working hard to find workable solutions. We will meet many pig farmers from throughout the country later this afternoon.

Photo of Joe O'ReillyJoe O'Reilly (Fine Gael)
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I thank the Minister for his positive response. I appreciate that, refreshingly, he did not attempt any evasive nonsense and did not say there was not a problem. He has accepted there is a real problem and is on top of and dealing with it. I also pay tribute to my party colleague, the Minister of State, Deputy Heydon, for his role in this, as cited by the Minister.

I am glad the Minister is meeting farmers again today. My final word to him is to ask him to please present them with a package. At the end of his contribution, he said he is working on efforts to do that. If he does not intervene with hard cash, there will be devastation. I thank the Minister for his positive response, but I would like to think that in a day or two we will be talking figures.

Photo of Charlie McConalogueCharlie McConalogue (Donegal, Fianna Fail)
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I again thank Senator O'Reilly for putting this issue on the agenda. The sector is very strong in his home county of Cavan and the constituency of Cavan-Monaghan, as is the poultry sector. Those two counties are shining lights in terms of driving forward the opportunities in the agrifood sector and are leaders regarding poultry and pigs. I am very much aware of the pressures farmers in his county are under, as well as in my county and throughout the country. We will monitor the situation closely and seek to support farmers through this period. I look forward to continuing to discuss the challenges in the sector with the Senator offline, as he has engaged with me since the issue began to emerge.