Michael Healy-Rae (Kerry South, Independent)
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To ask the Minister for Agriculture, Food and the Marine his views on pig and poultry producers (details supplied); and if he will make a statement on the matter. [37916/12]

Simon Coveney (Cork South Central, Fine Gael)
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Market prices for cereal-based animal feed and soya are a function of global supply and demand dynamics, currency relativities, weather conditions and other external factors. Increasing feed prices in 2012 are primarily a function of poor weather conditions in the USA, Brazil, Argentina, Russia and the Ukraine. The expected shortage in cereals comes on top of relatively poor harvests in recent years, a growing world population and a rising middle class in China. Thus there is a rising demand for animal feed and animal feed based products at a time when supplies are short.

Increasing feed prices are an issue for all meat sectors, but in Ireland are felt most acutely in the pig and poultry sectors, where feed costs represent some 70% of the overall cost of production. Against this background, producers have in recent years taken measures to increase feed efficiency and output per unit. In the pig sector, increases in feed prices are partly offset by high pigmeat prices. For the week ending 9th September the Irish average price per 100kgs was €166.02, compared to €147.63 in the same week in 2011. This represents a 12.46% increase.

The production model in the poultry meat sector in Ireland is quite different to that in the pigmeat sector, with a high degree of vertical integration between processors, who supply stock, feed and other inputs, and growers, who typically provide housing and capital equipment and who rear the stock to slaughter age. In this sector the prices paid to growers depend on contractual arrangements with the processors. EU market statistics published last month suggest that broiler prices across the EU are marginally higher than in 2011, while CSO statistics for July suggest that output prices are 20.6% higher than last year.

My Department and its agencies have supported both the pigmeat and poultry sectors through the provision of capital investment grants to assist in compliance with welfare regulations, through Bord Bia’s promotional campaigns and through the development and operation of the Bord Bia Pigmeat and Poultry Quality Assurance Programmes (PQAS), which are a critical component in consolidating the position of Irish product on the domestic market.

In so far as international trade is concerned, I have been extremely active in developing relationships in new and expanding markets in order to build the kind of confidence in Irish production and control systems that provide a platform for long term trading relationships in the future. For example, during my trade mission to China earlier this year I raised the issue of market access for both pigmeat and poultry, and I hope that this engagement will ultimately deliver a considerable return for the Irish pig and poultry sectors.

In the context of CAP post 2013, I will continue to press for the retention of flexible market support schemes which can be deployed as a safety net when circumstances require, to ameliorate the worst effects of price volatility. Indeed the Aid to Private Storage Scheme introduced for pigmeat in 2011 played a significant role in putting a floor under pigmeat prices at that time. This, together with the release of cereal stocks from intervention, improved the situation somewhat last year.

In addition, Teagasc, through its Moorepark Pig Research facility and the provision of FETAC courses in pig production and benchmarking pig herd performance, has played a critically important role in improving productive performance at farm level.

Furthermore, my Department has hosted inspection visits from a number of other countries and negotiations are continuing with a view to opening new markets and expanding the presence of Irish pigmeat in existing markets. And of course, Bord Bia continues, through its marketing and promotional activities, and through the PQAS, to consolidate the position of Irish pigmeat on the domestic market and to expand its presence on EU and Third Country markets.

While I recognise that these are difficult times for these sectors, I am confident that, if all stakeholders work together, their long-term future will be secure.