Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Question 47: To ask the Minister for Agriculture, Fisheries and Food the position regarding his recent meeting in Brussels, including the conclusions of an EU Advisory Group on Pigmeat; and if he will make a statement on the matter. [12592/11]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Question 71: To ask the Minister for Agriculture, Fisheries and Food the position regarding his recent meeting in Brussels with particular reference to the pigmeat industry; and if he will make a statement on the matter. [12593/11]

Simon Coveney (Cork South Central, Fine Gael)
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I propose to take Questions Nos. 47 and 71 together.

As the Deputies will be aware the pigmeat sector has been experiencing a severe reduction in its margins brought about by the large increase in feed prices since the middle of 2010. Feed makes up some 70% of the cost of rearing a pig.

Since the middle of 2010 my Department has been urging the European Commission to take action in order to ensure that producers are assisted in obtaining a margin which would allow them to stay in business. At present producers are losing on average €15 on each pig they produce and this is not sustainable.

Earlier this year (February) the Commission introduced an "Aid to Private Storage" scheme which took 145,000 tonnes off the market. However this product is due to some back into the market over the next three months. We have also asked the Commission to consider the introduction of export refunds to assist with the export to third countries but world market conditions do not appear to allow these refunds to be put in place at present.

In addition, at the request of Belgium supported by Ireland, the Commission organised over the past months four meetings of an Enlarged Advisory Group on Pigmeat which included representatives of all the various sectors in the industry and environmentalists as well as all Member States.

The meetings of the Enlarged Advisory Group reviewed all aspects of the industry from the cost and availability of animal feed, the impact of GMOs, and the level and type of assistance that should be made available to the industry. In addition, issues such as competitiveness, marketing initiatives, environmental concerns, the structure and organisation of the pig sector, risk management, income stabilisation tools pressure from third countries, opportunities in developing Asian markets etc. were also considered.

The group agreed that there was no "magic solution" to competitiveness issues but it did identify areas to be addressed including innovation, structural adjustment and the operation of the supply chain. The pigmeat sector should be considered when drawing up new rural development programmes and risk management instruments should also be used. The green paper on promotion policy to be published in July should be of value to the pig sector. In this context the Commission said that the role of producer and inter-professional organisations will be considered. The Commission concluded by saying it was no longer sufficient to monitor prices in the sector and it will be considering how best to also monitor input costs and margins.

At the Council of Ministers meeting I said that the Commission's report and its recommendations are a useful basis for discussion. However, the pigmeat industry was under severe stress and prices are not sufficient to provide producers with an acceptable margin. I pointed out that we need to retain market management instruments such as aid to private storage and export refunds.

In response the Commission indicated that they will be coming up with a number of proposals within the process of CAP reform. The Commission added that the promotion of exports would be more valuable than export refunds in the future and it will come forward with a variety of proposals in due course.