(Limerick West): I should like to support the Minister's call on those involved in the pigmeat sector to tackle the urgent tasks now facing the industry so as to ensure that it retains its valuable place in the Irish economy in the years ahead. The Minister has the full support of our party in his efforts in regard to that. There should be more positive action from the Department and there is a need for the pig industry to be given leadership. I agree that the industry must face up to its responsibilities but the Minister, and his Department, must ensure that the industry is helped in every way. In the course of my contribution I intend to suggest ways the Minister and the industry can live up to their responsibilities. The Minister told us that the pigmeat plants agreed to commence payment of the new fees and added that he was sorry to have to report that following an initial resumption of fee payment the majority of curers have now once again discontinued payment, leaving an amount of £1.3 million outstanding since April 1985. I hope the Minister will tell us how this has arisen. What action does he intend taking to ensure that there will be a resumption of the payment of fees? It may be that this has arisen because, as the Minister said, legislation is needed to modernise the pig industry with particular emphasis on slaughtering. I hope the Minister will deal with that point in his reply.
I appreeciate the contribution by the Minister, and the Department, in helping the industry in this difficult period. The Minister said:
Deputies will, I think, appreciate that the reduction I am now proposing which, coupled with the previous reduction, amounts to a total reduction of over 50 per cent since April 1985, represents a very significant gesture on my part.
It was a significant gesture. The Minister added that the industry must now act responsibly and honour its agreement on this matter. He hoped it would be done voluntarily. He said that he will have no hesitation in taking very firm action against defaulters, action which could result in firms losing their export licences.
The Minister should spell out clearly what action he has in mind to deal with defaulters. Will the Minister say if the whole industry is in default or if we are concerned with the majority of those in it? Is there a concerted effort by the industry not to make a contribution? If that is the case how will the Minister deal with those defaulters? How many are involved? I accept that the extension to pig producers of the scope of the recent exchange rate guarantee scheme for short term working capital for farmers and, indeed, the lifting of the ceiling £50,000 for pig producers goes some way to relieving the position but it is not sufficient. I should like to commend the Minister on negotiating the extension to the rest of the country of the 50 per cent FEOGA grants currently available to pigmeat projects in the disadvantaged areas. The Minister, and the Department, deserve our praise for negotiating that deal.
The necessary financial incentives are now available but one must ask why they have not proved attractive enough to the industry. Some weeks ago I pointed out to the Minister that a Limerick processing firm had to import bacon from Denmark in order to meet an export commitment to the USA because we do not have a processing plant that is up to the standards of the US Department of Agriculture. That is a sad reflection on our industry. We need leadership in that area from the Minister and his Department.
Time and again the Minister told us of the planned legislation on domestic slaughterhouses. We have heard about this many times. Is the delay caused by a legal problem or is it a lack of willingness on the part of the Department to bring slaughterhouse legislation up to date? How seen can we expect this legislation?
I expect that if firms modernise their plants to a higher standard new markets will be open to them. The US market is closed to us at the moment because our processing plants are not up to the standard required by the Department of Agriculture in the United States. Firms need to place more emphasis on developing their range of products and marketing them aggressively. There is little point in having a good product unless we are in a position to market it.
There is also a need to meet the changing demands of the consumer. In this area we have fallen down very badly. Product quality and consistency are important if we are to compete effectively. I hope the Department are working towards having the recently agreed EC pig grading scheme introduced here as soon as possible. This will certainly help the industry and the effectiveness of the product on the domestic and export markets. How soon can we expect to have this scheme implemented?
While the aids the Minister has given are welcome, they are all very small, although together they can be recognised as something tangible. But in addition we need a pig grading scheme and perhaps the Minister would outline what is involved, what it will mean to the producer and what it will contribute to our competitiveness in the market.
I am happy to have the opportunity to agree to this resolution now before the House. We would welcome the speedy implementation of these new regulations. The reduced rate of fees for veterinary examinations will be at the rate of 50p per pig, and will be effective from 1 July this year and will continue until the end of July 1987.
The pig industry has been going through a very difficult period in recent times. The scheme now proposed will give some relief to the industry and to the factories processing the pigs. It is important that this relief is passed on to the producer, as the Minister intends, because this area is badly hit at present. As the relief is effective since the beginning of July there should be a build up of a small reserve to enable processing factories to encourage processors at home on whom they depend for their raw material.
The pig industry has been going through a bad time, particularly at producer level. The processing sector have also experienced some serious difficulties. Here I join with the Minister in congratulating everybody concerned in the rationalisation of the industry in the west. This is a step in the right direction. I hope the project will be a huge success and that it will be copied throughout the country.
The pig industry must be built up. Pig rearing has changed remarkably since we joined the EC. The small sow units of the past have been replaced by very large and specialised rearing units. Practically the whole of the pig rearing industry is now concentrated in the hands of a very small number of producers who have made very heavy investments in their business. This is all the more reason the industry should get special attention from the Department.
We are also at a disadvantage here in that feed costs for pigs tend to be higher than elsewhere. This impedes the competitiveness of the industry and our ability not only to maintain supplies for the home market but, above all, to increase our export trade.
We must look very carefully at the pig processing industry. Our pig producers have deservedly got a reputation, in recent years, for being very efficient. Unfortunately developments in the processing sector have fallen very far behind. I do not at this stage wish to analyse why this is so except to say that a certain artificiality was maintained in that sector for some years and that did not help the industry. That artificiality cost the taxpayers some millions of pounds a few years ago in connection with the Pigs and Bacon Commission, but that is post, over and done with and we hope there will be no repetition of it.
There is now great and urgent need for the retionalisation of the industry and for the building as soon as possible of a small number of factories which will be up to international standards. The Minister in reply to a parliamentary question I put to him in the past week said there was some hope of progress. I encourage the Minister and the industry to do everything possible to speed up that progress.
One could say that the pigmeat industry here is at risk. We must face up to that fact. We all know that about four fifths or more of the output is sold on the home market. There is as yet no great evidence of imports making inroads but indeed it would be a sad day for the whole industry if that should begin to happen. Therefore, the quality of the finished product for the consumer is all-important. We have been for four or five years a very prominent food display centre in the centre of the city of Dublin using certain quantities of pigmeat imported from the northern part of this country.
As with all other agricultural products, everybody from the producer to the processor must keep the ultimate consumer. in mind. I am not going to deviate into the milk industry, but let me give as an example the fact that in the past year or so we had in the milk industry evidence of the power of the consumer within our country. The Minister knows well that there has been a remarkable change in the amount of butter consumed on the domestic market. There has been a fall of some 20 or 25 per cent in that regard in the past 12 months, and the Minister knows that the gap has been filled by spreads which, unfortunately, use a considerable amount of imported raw material. I give this example to outline and indicate the power of the consumer and how necessary it is for concerns processing agricultural products to keep the interest of the consumer in mind. I would be very concerned indeed if imports began to take over any part of our markets. Already we have far too many imported foodstuffs of various kinds. A few years ago we began to depend on imports for a considerable portion of our flour for bread making. We had large imports of potatoes, mainly in the form of frozen chips, carrying in some cases brand names indicating that they have some Irish connection which, of course, we all know they have not. All of this is very worrying, especially when one thinks of the amount of foreign exchange which must have been spent on these imports and above all the amount of employment which is being lost to the country.
In the pigmeat industry income generated through agricultural production here and through the processing of that production can do nothing but benefit the economy. No black hole in our economy can be created by agriculture. This is a message which, with great emphasis, I would like to place firmly on the record of this House.
I was somewhat upset in recent times when I learned from a food processing concern in my county of Limerick that they were unable to find within our country pigmeat suitable for export to the US market. The food processing concern in question, which I have visited and inspected, has built up very good contacts and has the possibility of exporting to the US but find that we have not one pigmeat processing factory acceptable to the US Department of Agriculture. What are we going to do about it? What are the plans in the Department of Agriculture to remedy that? Must we continue to import bacon from another country in order to meet the market commitments of this firm and their export trade to the US?
The Minister in his reply to the question I have just referred to stated that perhaps in the next year this deficiency will be made up. That is a ray of hope. He might outline and elucidate in detail where he can see this ray of hope developing. It would be very welcome news particularly to the industry. I hope that the Minister in his reply will allay any fears there may be about this and that this firm in my county will have the opportunity of using bacon produced and processed in this country, from animals slaughtered here, in some of the modern factories we hope will be built. Maybe that is where the Minister sees the ray of hope, so I ask him to outline more clearly what he has in mind.
A country which falls down in maintaining a high standard for its exports leaves itself wide open to imports, and again I emphasise the importance of having regard to the consumer. The consumer is all important. Maybe in the pigmeat industry as with other agricultural products we do not take into consideration the changing needs of the consumer. We should recognise that consumer needs change daily and that we are not producing the product required. Research and development is needed in this area. I appeal to An Foras Talúntais to initiate that research and I hope there will be no further cutbacks in funding to An Foras Talúntais.
The cost of foodstuffs is a problem in pig production. There have been substantial benefits to the industry recenty from the milk sector but the milk sector is now facing major difficulties and there is a crisis in that area. The Minister should do his utmost to ensure that the benefit, to pig producers from the dairy sector are maintained. We should ensure that we have a high quality product from pig production to meet the needs of consumers. Along with investment in new processing. Machinery form pigmeat the IDA and the Department of Agriculture should ensure that factories who benefit from the grants are marketing their products properly so as to provide the home market with a high class product and to supply the export trade. Our marketing of pigmeat in Britain has not been as good as it should have been. Irish bacon was constantly discribed on the British market by comparison with Danish bacon and the artificiality to which I referred a few minutes ago had this something to do with that. I hope this will never happen again. We should turn out a first class product capable of competing with the best. At the moment some producers seem to have possibilities, through better management, of reducing costs in pig production. In the processing sector there is a scope for improvement as there is in the marketing sector. The industry has a good future but it is up to the people involved to make the fortune that can be made from pig production. The State can help and the motion before us is evidence of that but greater that the IDA and FEOGA grants are the efforts of the people in the industry. I welcome the motion and I wish the industry the success it deserves. This is a traditional industry which has provided worthwhile income to the members of the farming community down through the years. Now there are changes in pig production, from the smaller to the bigger units, but the industry can be further developed so as to produce a better quality product for the consumer. This motion helps in some small way towards that end.