Michael Healy-Rae (Kerry South, Independent)
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202. To ask the Minister for Agriculture, Food and the Marine his views on the economics of Irish farmers producing beef all year round (details supplied); and if he will make a statement on the matter. [3355/14]

Simon Coveney (Cork South Central, Fine Gael)
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The national suckler herd provides the raw material for our quality beef industry and underpins an export trade estimated to worth over €2 billion in 2013. While improved farm efficiencies and productivity are essential to producer profitability, price is a major contributor in increasing returns to beef farmers. Cattle prices have reached historically high levels in recent years because of supply shortages in the domestic and export markets.

However, because of the country’s dependence on beef exports, cattle prices are largely determined by the industry’s export performance. With the assistance of Bord Bia, the industry been very successful in positioning Irish beef in key European markets with almost 66% of export volumes now destined for the higher value standard retail, premium foodservice and retail or quick service sectors. Maintaining this export performance in a competitive environment requires a continuous focus on satisfying customer demands and adding value to our unique grass-fed beef product through improving its animal welfare, sustainability and carbon footprint credentials on the basis of Teagasc R&D activities.

Neither I nor my Department can exert any control over the prices obtained by producers for their livestock but I have put in place a number of support measures to underpin the viability of primary production. These include the Beef Genomics Scheme (BGS) for which €23 million has been set aside in this year’s budget. The BGS which will begin the process of building a genetic database for the beef sector that will position Ireland as a global leader in beef genetics and ultimately lead to a more efficient and profitable farm sector.

In addition to the BGS, €9 million in funding will be disbursed under the Beef Data Programme (BDP) in 2014. The objectives of the BDP are to improve the genetic quality of the national beef herd through the collection of essential breeding and production information and to stimulate improvements in the competitiveness and output quality of the Irish beef industry.

Apart from the BGS and the BDP, a further allocation of €5 million has been earmarked for the continuation of the Beef Technology Adoption Programme (BTAP) in 2014. Some 6,200 farmers received an annual payment of €825 in relation to their participation in the second year of the BTAP. In total, these supports, added to residual payments under the Suckler Cow Welfare Scheme, amount to an investment of almost €40m in this strategically important sector in 2014.

With regard to the economics of beef production, the particular difficulties experienced by producers who market cattle over the winter period were considered by the industry-led Beef 2020 Activation Group, which was established to set out the actions necessary to achieve Food Harvest 2020 targets. The Group’s report noted that a more widespread use of contracts would provide price certainty for winter finishers but acknowledged the problems faced by the processing industry in moving to a generalised contract system.

The solution proposed by the Group is a winter finishing minimum price negotiated annually between the individual processor and the individual farmer for spring marketed animals taking account of over-wintering costs. This arrangement would aim to protect those farmers who bought-in or valued on-farm cattle at a price consistent with the actual beef price in the Autumn against serious loss. It would not protect those who overvalued their own stock or overpaid for bought-in cattle. Such an arrangement would assist producers and processors who wished to enter into mutually beneficial commitments based on market realities and would undoubtedly remove a substantial proportion of the farmer’s financial exposure. These recommendations refer to the nature of the contractual agreements between farmers and producers and are of course a matter for industry.