Private Members' Business. - Beef Intervention System: Motion (Resumed)

The following motion was moved by Deputy Bruton on 11 November 1980:
That Dáil Éireann regrets the Government's decision to withdraw intervention for heifers, requests its reintroduction and affirms the importance of avoiding any weakening of the solid foundation provided for Irish agriculture by the intervention system.
Debate resumed on amendment No. 1.
To delete all words after "Dáil Éireann" and substitue the following:—"welcomes the changes in the intervention arrangements for beef, which were announced by the Minister for Agriculture on 5 October and 3 November 1980 and affirms the importance of intervention to the price support system for beef under the Common Agricultural Policy."
—(Minister for Agriculture.)

If we are to make full use of the common agricultural policy we must make a united effort to maintain that policy. The policy of intervention was introduced to protect the cattle trade, which we do not want to decline. It is through intervention that we can make a positive impact on market prices. We must not forget that on many occasions people in meat factories and elsewhere have not abided by the intervention prices fixed by the Community. Measures must be taken to ensure that this does not continue. On many occasions when there has been a recession in the trade it has come to the notice of people in the cattle trade that there have been abuses of the system by those who did not maintain the proper price level.

The importance of the cattle trade must be recognised. We must hold on to the advantages that we have. In recent years there have been efforts by the Commission and others to create a very uncertain market. Recently the French refused to support some of our demands in order that they would get a better price for their veal. This is an abuse of membership. This kind of selfish action that has been practised by some countries must end. Approximately 6.9 million tonnes are in intervention in the EEC, but our contribution is only 8 per cent of the total. We export 85 per cent of our total production. This motion will assist the Minister to make a stronger case for the restoration of intervention for heifer buying. We know it is vital that we maintain intervention buying for next year because, while the trade will not collapse, prices will be much lower if we do not take some action.

In my county we have 64,000 dairy cows, 32,000 beef cows and more than 7,000 heifers. It is obvious that the contribution of my county to the trade is very significant. In fact, we contribute practically 5 per cent of the total cattle population, and this is in an area where the land is not as fertile as that of the midlands. People in my county who sell heifers in the marts suffer a loss because they are not admitted to intervention. We are getting only 63 per cent of the guide price set by the Community while other states are getting 80 per cent. This is a rather unusual situation when one considers that Britain, Luxembourg, Denmark and other countries have the advantage of intervention for their markets. It is clear we must strengthen the Minister's hand.

The IFA have repeatedly asked the Minister to re-introduce intervention; in fact the previous Minister promised he would do so when the market warranted it. Since May 1978 we have claimed on many occasions that such a re-introduction has been warranted. Both the IFA and the ICMSA have also made representations regarding the matter. In March 1979 they asked that it be restored in the off-breeding season. The Minister may claim that by preventing heifers going into intervention in certain periods he was helping to increase the cow herd, but I would point out that we have always requested that intervention purchasing should take place in the off-breeding season.

In January the Minister met the IFA and I think he had a rather positive approach. He also met Mr. Gundelach, but he was not successful in his discussions with him. I accept he made a serious effort to have heifers included when the increase in the quota was adjusted. We can determine our own course to some extent. I should like to get a definite commitment from the Minister with regard to the marketing of heifers next year. It is vital that there be an increase. Last year there was only a 4 per cent increase in farm commodity prices and this was totally inadequate.

Economists have told us that since 1978 farmers' costs have gone up by 50 per cent. There cannot be an indefinite continuation of production if there is an irregular, erratic and unstable market. It is important that the Government should consider making arrangements with the ACC and the banks to subsidise loans in some way. Can we afford to have the farmers in the position where they must off-load on the market cows which would be productive of milk next year? This is what they must do at present in order to meet their commitments. I hope the Minister and his Department will play a more active role in bringing about a definite price improvement and the re-introduction of intervention for heifers in 1981.

I should like to say a few words in support of the Minister's amendment in regard to intervention arrangements for beef. From the comments of the proposers of the original motion it is quite clear that there is a large measure of agreement on both sides of the House on the many aspects of the system as it operates at present. We are all concerned that the cattle industry should be protected and that our producers should get the best possible price for their cattle. We are also concerned that employment in the meat trade should be maintained. There are many ways in which this could be done. We have one of the finest countries in the world for the production of beef and all of us involved in the business who have the best interests of the industry at heart have an obligation to make this fact known to the world.

Recently I had the pleasure of heading a promotional group organised by the Irish Agricultural Export Co-ordinating Committee for the purpose of selling Irish beef to the Germans and I was amazed at the interest they expressed in Irish meat. There is great potential for the expansion of sales of vacuum-packed meats. Top quality products are, of course, demanded and there must also be efficient delivery. I know that our factories are capable and there is absolutely no reason why we should not be able to meet in full the demand which exists. In the interest of job creation and so on, that is the best way to get rid of our beef mountain. Convenience food is the "in" thing in Germany and we should exploit the market in full. In the first half of 1980 the German market increased its purchases from us by over 26 per cent compared with the corresponding period in 1979. I have no doubt that if we can establish a firm market there the contacts we have already made will be maintained, provided we deliver good quality produce on time. The Germans are noted for their efficiency in this area and there is no reason why our factories should not be able to meet the demand. The Germans have a very favourable picture of our country as being the place where we have lush fields producing top quality cattle and I am happy to say that this assumption is not too far from reality. We should exploit such markets to the best advantage of the industry and the country in general.

Deputy Bruton referred to the intervention system as providing a solid foundation for Irish agriculture, and so it does. He is anxious that nothing should be done to erode the value of the system and we share that anxiety to the full. He referred to serious problems in Brussels during the coming months and suggested that the intervention system must be defended. Let me assure him and the House that we will do that in the same way that we tackled speedily and decisively problems which emerged from the Commission's recent alterations to the support system. The Minister has already mentioned that earlier this year he stood alone in the Council of Ministers in resisting measures which would have seriously eroded the value of the system. We will, of course, continue in the difficult months ahead to be steadfast in protecting the interests of Irish producers and ensuring the maintenance of the essential aspects of the CAP.

It seems that the main emphasis of the original motion was on the fact that the removal of heifers in 1978 was made voluntarily, that we were under no pressure to do it and that we find it impossible to reverse the decision. The Minister has dealt with the first issue: it was a voluntary decision taken calculatedly after due deliberation for the sole purpose of protecting the breeding herd——

And it was a mistake.

——at a time when market prices were not likely to be disrupted. So it turned out, but I would not wish Deputies to go away with the idea that the door is now closed permanently to heifers. This is not the case. The Commission recognise that we have a case on price grounds for the inclusion of heifers in the system. The Minister has raised this issue with them on a number of occasions, even as late as yesterday in the Council of Ministers. We still believe that we can make positive progress on this issue in the coming months.

I welcome the positive approach of some of the previous speakers in regard to the relatively low prices paid to beef producers in Ireland and their counterparts on the European mainland. Of course, our prices at 63 per cent of the guide price are far too low and it is precisely for this reason that we attach so much importance to the intervention system. However, I should not like previous speakers to think that I agree with everything they said and I will mention a few of the areas where I would take issue with them. A number of speakers referred to excessive culling and de-stocking and suggested that in some way, which is a total mystery to me, this is due to a lack of confidence in the intervention system. This is untrue. Certainly the 1980 cullings are rather high but this is due to considerations other than the intervention system, especially the intensification of the bovine tuberculosis and brucellosis eradication measures.

We all agree on the importance of the disease eradication scheme. Again and again on all sides of the House we have expressed the wish that in the very near future we would see our national herd clear of these twin diseases, tuberculosis and brucellosis. But unfortunately we still have a long way to go and we are living on borrowed time as far as the eradication of these diseases is concerned. It is up to each and every one of us to encourage our farmers to tackle this problem now and so guarantee the safety of our national herd and the markets which we have established on the mainland of Europe. It would be a very sad day for our farmers if because we failed in our duty in regard to the eradication of these diseases we lost the markets that we have established. All of us realise that. I would certainly encourage farmers to participate in this scheme and to make sure that disease is got rid of as fast as possible.

Yesterday the Minister had figures to show that there has been no erosion whatsoever in intervention. The opposite has been the case. He also outlined a range of measures taken already by the Government to help farmers. These measures are absolutely necessary at this time when farmers are going through such a difficult period. One Deputy asked a most interesting question. He may have noticed at the time that I smiled when he posed it. He wondered when we could expect a rise in cattle numbers again. I cannot help but reflect that if the offspring of the large number of pregnant cows slaughtered in 1974 and 1975 were on Irish farms today the question would hardly arise. But I would not wish to dwell on those dark days in our agricultural history.

The Minister of State should be on the stage, not in the Dáil.

I thank the Deputy very much. I might be making a lot more money on the stage.

The Minister is really a character actor, talking about dark days.

We are in a storm now.

I am glad that a reminder of the dark and evil days of 1974 is bringing a smile to the faces of the Deputies opposite because there were a lot of farmers in the country at that time who were not smiling.

They are not smiling now.

If they have problems today — and I admit they have many problems — the Government have come to their assistance in many ways.

(Interruptions.)

Let us finish with that little interlude. Left us get off the stage and back to the House. The Minister of State is in possession.

There were changes made in the intervention system: there was an increase in headage payments: the rates on valuations from £40 to £60 were cancelled. Those are just a few of the items I can remember off the top of my head which the Government introduced to help farmers. But if one thinks back to 1974 — and I know the Deputies do not like to think of it — there was very little help.

There was £36 on every bullock.

Cattle were being sold at that time for £6 per hundredweight.

That is not the case.

I sold them. Maybe the cattle in the east were bigger and stronger and the Deputy was probably getting £10 per hundredweight.

We all know now where to go to buy cattle.

We are dealing with cattle, beef and intervention.

£10 per hundredweight is a far cry from £40 to £42 per hundredweight which one gets at present.

(Interruptions.)

This is not an auction.

The store cattle in the west, and Deputy Taylor knows about this as well as I do——

Let the Minister tell us the next time he is selling.

Deputy Bruton has bought hundreds of them in the marts in Athenry and Roscommon and every other place. I envy him and Deputy Crinnion all the fine cattle they get in the west.

Another issue also confused me somewhat. One Opposition Deputy referred in a critical manner to the volume of live exports of cows and lighter animals but another extolled the virtues of this trade, pointing out its value in the balance of payments situation. This led me to wonder whether the other side of the House is for or against live cattle exports. There is certainly no ambivalence on this side of the House on this matter. It is our wish to see the maximum slaughtering and processing of cattle in this country but at the same time it has always been our policy to foster a healthy competition between the live and the dead meat trade and we want no monopolies on either side. Indeed, one might ask how producer prices would have gone earlier this year if there had been no outlets for live cattle. Fortunately there were such outlets but at the same time the meat factories had been slaughtering very high numbers and indeed are well above last year's level. It is clear that both trades can flourish simultaneously. So it can be seen from the few remarks that I have made in answer to some of the criticisms offered by the Fine Gael speakers last night and again tonight that the Government are fully conscious of the problems facing our cattle and meat trade. The House can rest assured that every step will be taken in these difficult times to ensure that protection is given to our producers and to our meat trade. It is a very important industry for our country; it is one of the most important and it is up to all of us to ensure that it is given full support. The measures taken by the Government in recent times will help in providing the type of support that is so necessary at this time.

I wish to add my voice to the speakers on this side of the House in support of the restoration of intervention for heifers. History is now on our side in this. What the Minister allegedly set out to do has not been done. Deputy Bruton has already pointed out to the House that cattle numbers have come down drastically. The point cannot be made often enough that it was a voluntary decision. The EEC had absolutely nothing to do with it. I see no reason why if we withdrew from intervention we cannot undo that without reference to anybody; the coefficient is a managerial problem that can surely be sorted out and should be sorted out.

I am amused at the Minister talking about the dark days. They are black now. It is night in farming, and a bleak, grim night. In our own area at the moment we have healthy cows being slaughtered to pay the bank manager. That is the position in one of the better parts of the country. Confidence has gone out of farming, and for good reason.

The beef trade and cattle trade generally would benefit considerably by having this intervention safety valve applied to heifers. This whole business of intervention was a feature of the common agricultural policy and there is a lot of logic in it. The secret of intervention is that when one has over-supply, instead of dumping one has intervention. It is an essential safety valve in agriculture. While it might be easy to up egg numbers, pig numbers or even quantities of grain, everybody is aware that once a dairy herd on a farm is destroyed the chances of its being restored in the lifetime of that farmer are remote. At present it is completely out of the question. Anybody approaching a lending agency to replace stock at present is aware of the problems they face in this regard, the problem of getting the money in the first instance and, then if lucky enough to get it, the difficulty of repayment in a situation in which they are getting less for their product. As Deputy Taylor rightly pointed out, if this is what the IFA leaders and other people involved in agriculture really want, then they should get it. Surely the people on the ground are the best judges of what is good for them, not somebody in the civil service, not the Minister, but those people who deal with the cattle situation now and will in the future.

Certainly what the Minister set out to do, to prevent the slaughter of heifers, has not had the desired effect. After all, a beef heifer is a beef heifer, totally unsuited to dairying or milk production. The Minister seems to have forgotten completely that 50 per cent of animals born are heifers. Therefore what the Minister is doing is cutting back on half a farmer's income in any particular year. That point throws up how ridiculous is his action at a time when that farmer is finding it difficult to meet his commitments. It should be remembered, as Deputy Bruton correctly pointed out, that that beef farmer is creating much valuable employment. In my area at present were it not for jobs created in agriculture workers would be on the streets. These now appear to be the industries not laying people off, that are not on three-day weeks but rather those that seem to be able to pull through in these difficult times.

If this were taken a stage further one would see what this would mean to a place like Midleton where they have the Irish Meat Producers' plant. If intervention was introduced for heifers in the morning, one can see the advantage it would prove to these producers. Look at the advantage it would be in providing employment and to the farmer who has spent a lot of money building up an efficient beef enterprise in buildings and so on. One must realise what a shot in the farm it would be to such a farmer to be told by the Minister tomorrow morning; "Intervention is now back for heifers. We tried cutting it out. It was a voluntary decision but it did not have the desired effect."

Were we to do something like that the Government would be seen to be helping in an area in which, even at the best of times — and the Minister of State knows this as well as I do — the margins were never great. Beef margins always are tight but now, with inflation, high interest rates and so on, they are tighter still. These are frightening prospects for farming at present. It must be frightening also for the Minister and the Government to realise that this is an industry in very real danger because of the inability of the Government to control inflation. French and German farmers were quite happy this year with their 5 per cent, because of course inflation is kept under control in such countries. But where shall we end up with inflation of 20 per cent, when next year inputs will be nearly double those of last year, when the cost of seed grain, feed for cattle, fertilisers, oil, machinery and equipment will be nearly double? How will these people survive if they are coping with prices for their produce which, at the very best, are equal to those of last year and, at worst, very much less, because that is how it is beginning to look?

If the Minister is serious about his job and the people depending on him the first thing he should endeavour to do is to control inflation. He should also point out at the Council of Ministers the problems of Irish farmers before it is too late. He should point out that we are probably in a unique position in the EEC, that probably we are the only country in the EEC, the only farming group, who have to deal now with higher and higher input costs while accepting last year's prices for our produce. One does not have to be a mathematician to realise that this cannot be allowed to continue. One does not have to be very clever to realise that if one is to continue farming with present high overheads one must continue to make a profit.

As I see the situation in the future in regard to crops like sugar beet, grain, even dairying, and bearing in mind the static type of price situation obtaining, with massive increases in costs, farmers cannot survive unless drastic action is taken. That must be the first step. Then the beef farmer will take heart and continue to expand. It would be a large boost to the purchase of heifer calves and the tendency will be — here I go along with the Minister of State — for the Irish farmer to finish the product on his farm knowing that at the end of the day he will have this definite commitment to intervention and will not be facing a dicey up and down situation. He will know that if the market is bad he will have intervention. That is the safeguard he must have. Particularly when one is talking about an animal costing approximately £250 or £300, one must have that safeguard.

Let us examine the effect of intervention right across the board, even to the man purely in dairying, to a man who has now built up his herd. The obvious thing for him to do would be to go into better bulls and the beef trade generally, knowing that whether it be a bull or a heifer he will be able to command a good price for that animal at birth.

We, on this side of the House, want the Minister to give that industry a shot in the arm which it badly needs. Even that fair and impartial man, Seamus Sheehy, tells us that there are grim times ahead. Although I am not a dairy farmer, I am convinced that our only hope of survival is through the dairy industry. The dairy industry is in dire trouble because of the handling of our situation and because of the massive slaughtering due to disease eradication. These people are trying to pull themselves together and they will have to get all the help possible from the Government. Money will have to be put into the dairy industry now before it is too late. If farmers are selling herds at present because they are finding it difficult to keep going, they will have to be told that the Government will come to their rescue. We have learned from the district planning meetings of ACOT how serious the situation is on the farm. If ACOT never accomplished anything else. I hope that at least through their planning meetings the lesson will filter through. I notice now that we are being curtailed in our district planning meetings and that is something we will have to take up with the Minister——

The Deputy should confine his remarks to cattle and beef intervention.

At those meetings we were informed by farmers of the seriousness of the situation. The problems are not insurmountable and the Opposition are offering to do something concrete about it to prove to the farming community that the Minister has had a rethink. There is nothing wrong with having a rethink, everybody makes mistakes. There would be no climb-down. It annoys me that no Government — perhaps we were as bad ourselves — can take a solid amendment from the Opposition without twisting and turning it until it means nothing. We must get together on both sides of the House. We must consider an all-party committee on the economy and on the agricultural industry in particular.

This is a good suggestion from Fine Gael. It would do the Minister untold good — it was his predecessor who made the decision — to say that his predecessor was wrong. I think the Opposition are right. It would do untold good nationally and would be very good for the industry. I do not say this for the sake of scoring political points, but for the sake of the industry. I appeal to the Minister to reconsider this and forge ahead and do what we ask him to do because it is the right thing to do. Intervention is the salvation of the farming industry and I see intervention being taken still further to cover other areas. The Minister of State knows about the problems of the horticultural industry which has not got the benefit of intervention. If the housewife is to have what she requires at a fair price, at all times of the year, then intervention is a must. If a farmer is to spend the sort of money he has to spend to be efficient then intervention is a double must, if for no other reason than to convince his lending agency that this safeguard is there if things do not go right in the market.

I appeal to the Minister and to the Minister of State, who is a practical farmer himself, to see the logic of the argument of Deputy Bruton and Deputy D'Arcy. Far from being a climb-down, it would be hailed as a victory for the Minister if he said he was wrong. I hope we will have action on this and that intervention for heifers will be restored.

We have brought this motion before the House in order to highlight the grave situation of the beef industry. Cattle numbers have declined by 2,400 head to 240,000 head in the year ending in June 1980. I am reliably informed that when the figures for January 1981 are published they will show that numbers are down by as much as 400,000-400,000 of a drop in one year. If this happens, it will amount to one of the largest ever annual drops in cattle numbers on record. In the 15 years up to the accession to Government of the present administration in June 1977, the cow herd which is a part of our total cattle herd, was increasing at an average annual rate over that 15-year period of two per cent per year. It was increasing throughout that 15-year period. Since the present Government came into office, the cow herd has been static. In 1980 we have seen large scale slaughtering of cows by farmers who have to slaughter these animals in order to obtain an income to pay their bills and to pay for the upkeep of their families. I fear that we are seeing the start of an actual decline in the cow herd and, for a country so dependent on agriculture and on livestock this is an event of unprecedented seriousness for the economy. It will immediately translate itself into lost jobs, for instance, in the meat factories. As a result of the decline in cattle numbers, it is estimated that the number of cattle being supplied to Irish meat factories in 1981 will be down by approximately 300,000 head on the amounts supplied to meat factories this year.

It is further estimated that every 250 head of cattle provided to a factory provides one job in that factory. Therefore, it is obvious that if there is a decline of 300,000 in the number of cattle supplied to factories next year, as I think all the trends indicate will be the case, it will immediately jeopardise 1,200 jobs in Irish meat factories. It reaches into the heart of our cities; it is something which affects everyone, not just the farmers. There is no greater evidence of the interdependence between town and country, of the need for people in all parts of the country to realise the importance of agriculture, than the consequences which will flow from this decline in our cattle herd which is already taking place. This drop in supply will also have a serious adverse effect on our balance of payments. Obviously it will result in reduced exports of beef and will gravely worsen our balance of trade, create problems for our currency and for our ability as an economy to import goods, whether consumer or investment goods for further production. Our ability to purchase abroad, over the entire economy, will be damaged if there is, as I believe is inevitable, a decline in beef exports in 1981. There is evidence in the form of reduced cattle numbers before our very eyes in the fields of this country at this very moment. It is for this reason — and admittedly the action we are proposing is belated — that we are seeking the restoration of intervention for heifers. It is only one of a series of measures which are necessary to combat this extremely serious situation. I shall be adverting to others in the course of my contribution.

It is worth recollecting, as Deputies on this side of the House have done — and, indeed, as the Minister has admitted — that the withdrawal of intervention for heifers was a voluntary act on the part of the present Government in 1978. Now, having voluntarily withdrawn this, the Government are finding themselves unable to reverse the position and restore intervention. Despite the fact that Belgium, the Netherlands, Luxembourg, Denmark and the United Kingdom provide the protection of heifer intervention for their beef producers at this very moment and in full compliance with EEC rules, we are not able to do what they are now doing. Yet we are supposed to be in a common market with Belgium, the Netherlands, Luxembourg, Denmark and the United Kingdom who are supplying the support to their farmers which we are not supplying to ours. Indeed, it is no coincidence that in all of these countries the price obtained by farmers for beef is much higher than it is here. The foolishness of the withdrawal of intervention for heifers here in 1978 is self-evident.

Our motion also seeks to underline the importance of intervention in general. Ireland's position in support of the principle of intervention as part of the common agricultural policy was gravely weakened by the Government's voluntary decision in 1978 to withdraw an entire category of intervention, namely intervention for heifers, in this country. This Fine Gael motion now seeks to undo the damage which that measure did, by providing an opportunity for the Dáil to reaffirm its conviction that intervention is essential for the operation of the common agricultural policy.

I shall deal now with some of the points made by the Minister here yesterday evening. He said that we could not now reintroduce intervention for heifers without EEC consent because the Commission of the Community would have to set a coefficient for the buying-in price. Why can the Minister not go ahead and use the equivalent coefficient already in use in this island — in Northern Ireland, which is operating as part of the United Kingdom?

Why can he not use the coefficients being used in the five other countries which have intervention for heifers at this very moment? Why is it necessary to obtain the consent of the European Community for this? Is it not possible for him to operate this matter himself? He will claim, of course, that the objection is being made by the Community that it could not find the money. The amount of money involved on providing intervention for heifers would be a negligible amount and would pale into insignificance in comparison with the benefits conferred by having the safeguard of intervention available to our farmers for what is, as Deputy Hegarty pointed out, 50 per cent of our cattle trade, because 50 per cent of all cattle born in this country are heifers.

The Minister mentioned the EEC decision to disqualify forequarter beef from intervention, a decision announced very recently. This is a very serious matter not only in itself but in the precedent it establishes that the European Commission can unilaterally reduce support for agricultural prices, without consulting the Council of Ministers and outside the annual price fixing negotiations. This is a highly dangerous precedent for Ireland. Deputy Clinton, when Minister for Agriculture, resisted a similar effort by the then Commissioner Lardinois to such an extent that he obtained from the Commissioner a specific and formal assurance that such an effort would not be attempted again. This is in relation to an attempt by Commissioner Lardinois to change the coefficients for beef in such a way that, without reference to the Council of Ministers and outside the price fixing negotiations, simply by changing the coefficients he reduced the price being paid to farmers. A similar attempt is now being made again and there is no sign of a similar determination or a similar resistance being shown by the present Minister to this unprecedented and dangerous measure to that shown by Deputy Clinton in a similar situation in times of much less seriousness than we now face.

I have, so far in my contribution, criticised the failures of this Government in regard to the beef industry. I outline now the approach which Fine Gael in Government would adopt to this important industry. The lifestock sector, beef and milk, represents such a large proportion of Irish farm output that special measures to promote it are necessary. Much of our tillage sector, indeed, is producing feed for livestock and it will prosper if livestock prospers. In beef, in particular, we are producing less than our potential; we are producing the wrong type of beef and marketing it badly. Messrs. Lea and Diamond in a study done for the Agricultural Institute show that our land could carry 70 per cent more cattle than it did in 1973, which was the highest level ever reached in the history of this State. We are now carrying far less on our land than we did in 1973.

We are also achieving a very low level of output of beef for the number of cattle actually on our land. We produce 55 tonnes of beef per year for every 1,000 head of cattle on our land. This is the lowest production of actual beef per 1,000 head of cattle on the land of any EEC country. This is happening because three-quarters of Irish cattle require a third winter before they reach fat stage, whereas less than one-third of cattle require a third winter before they reach that stage, reaching fat stage after merely a second winter. They are, therefore, able to turn over more cattle, producing more beef per year for a given number of cattle on their land. Indeed, it has been estimated that we could increase our beef output here by up to 40 per cent without any increase in cattle numbers if we could just eliminate that third winter necessary for three-quarters of our cattle as against nearly one quarter in the UK, which is a country with comparable climatic conditions.

That third winter could be eliminated primarily by making more and better silage in place of the hay on which we are now relying as fodder for our third winter. Our beef is not bred for consumer trade and is often wastefully over fat when sold. It is because of that that we lose out on grading with the result that our cattle are sold at a lower price than we could otherwise obtain. That is an irony because it requires more feed to put fat on an animal's back than it does to put flesh on and yet we are producing too much fat at greater proportionate expense than we would if we were producing flesh on those animals. That arises because we are keeping our animals beyond the stage that we should.

The marketing of our beef leaves much to be desired. It has been estimated that there is a 2p per lb. discount on Irish beef on the United Kingdom market because Irish beef has a bad reputation. That clearly indicates the failing in our marketing efforts by comparison with other countries. If we could establish a good reputation and still produce the same product we could get 2p per lb. extra. There are many instances of people buying Irish beef and putting a label on it marked "Scotch beef" before selling it on the UK market. Those people get 2p per lb. more because it is accepted as Scotch beef and people have confidence in Scotch beef. That situation is unwarranted by the facts and can be overcome if we put more effort into marketing. The key to growth of production in the beef industry is the elimination of the third winter by the provision of enough good quality fodder in the first two winters so that the animals do not lose condition during those first two winters thereby being able to reach the fat stage in the third rather than the fourth summer.

A joint submission to the Minister by the Killeshandra Co-op, the IFA and the ICMSA pointed out that most of the crises which have occurred in the cattle industry here could more appropriately be described as fodder rather than cattle crises because they always arose as a result of farmers being forced to sell animals due to the lack of fodder to feed them over the winter. That led to a collapse in prices and disaster for the farming community. If we could solve that problem of providing adequate fodder in the form of silage we are well on the way to establishing our beef industry on a new solid foundation. It is ironic that the reliance on hay is highest in the areas where it is hardest to make hay, namely in the west and north west. In March last I suggested that a special grant scheme be introduced for a two-year period for farmers to transfer from hay to silage. I suggested that it could be based on a custom-built low cost silage system suitable to small farmers. Too much of the research that has been done in this field is not directly applicable to the small farm situation in the west. Such a system, promoted as the IDA promote advance factories, could mean more silage produced.

The Killeshandra Co-op have also suggested that a payment be made on the volume of silage made by farmers for an initial period of two or three years. The Minister, when he introduced a small scheme on a temporary basis for late season silage as a response to the recent fodder crisis, introduced something which should be the basis for a permanent scheme for the next two or three years to encourage the transfer from hay to silage. If that transfer takes place we will be able to produce the beef we need to obtain the prices and output we should be getting.

However, even if we improve in the manner I have suggested we must face a further problem. Beef prices in spring are often not sufficiently high to compensate farmers for the extra cost which will inevitably be involved in carrying cattle over the winter. No matter how well organised a farmer is it still costs more to carry cattle over the winter than over the summer and no degree of efficiency in silage making will get over that financial reality. As a means to counteract that situation I suggest that the Minister seek an alteration in the EEC intervention system for beef to provide a higher guaranteed price for cattle in spring. In that way farmers will be aware that they will get a higher price in spring to compensate for the higher cost to produce animals for sale in spring.

The proposal I have outlined has been resisted by the EEC because of the cost that may be involved in it but there is evidence of long-term demand for beef and an inability by many countries to produce it. The measure I have suggested would serve a useful purpose and be accepted by the EEC in the light of long-term trends in the beef industry. There is a continuing demand for animal protein in the world and beef is one way that can be provided. We will see an increase in demand for beef and if the Community is not to have a situation where beef prices go shooting through the roof because of an insufficiency of supply it will have to take measures to encourage more winter beef production. The Community will have to increase the level of output in Ireland and other member states. Therefore, it makes sense from an Irish and Community point of view to have such a differentiation in the pricing system so as to provide a higher price in the spring which would be an incentive to winter beef production.

We must start by getting more cattle. That demands immediate action. I do not believe the action taken by the Government in providing a miserly £13 under the suckler grant scheme is sufficient for most farmers. The way the Department propose to give the additional £13 is such that it will encourage bad rather than good quality animals. It will prove an added benefit to the fly-by-night operators who will go into suckling this year because of the grant but leave it next year. They will get the full grant while the person who has been in the business all along will receive it on his additional animals only and not on the entire herd. Such a person wil be penalised relative to the other operators. We must have a suckler grant of at least £80 if farmers are to get involved in the suckler business. As Deputy D'Arcy pointed out, this is an expensive operation which is full of heartbreak and pitfalls. It will be very difficult to get farmers involved in it on a professional basis without an adequate financial incentive which must take the form of a grant of that magnitude.

I am sure the case will be made by some people: why should farmers be given grants to do something that should make sense anyway? It can be argued that it would make sense to produce calves for the beef herd if there is to be, as I have said, a market for beef in the long term. Unfortunately for the individual producer making the decision, in the short term it may not make sense and, in the long run it may not even be he who will suffer if he does not make the decision, but the entire country. It will be people in meat factories, people who are relying on supplies of store cattle to fatten, who will suffer if the farmer does not make the decision to expand the suckling herd.

The Government are justified in intervening because they are providing an incentive, a grant, to one person to do something which will benefit not only himself but other people as well. It is a classic case in justification of Government interference in the form of a grant. The Government do not give grants to people to do things which will benefit themselves only. People will or should do those things anyway, if they have sense. The Government give grants to people to do things which, while they may be of benefit to the people receiving the grants, will also be of benefit to other people to a far greater extent. That is the justification for grants. There is a classic case for a grant of approximately £80 in the national interest to get the suckler business off the ground and to reverse the disastrous decline in our cattle herd to which I have already referred.

Assurance must be provided against a decline in cattle prices in the years ahead. One of the reasons why our farmers have not been achieving their potential level of output — and I have already indicated that even in 1973 at our highest level of production we could have carried 70 per cent more cattle than we did — is that farmers have not got confidence that prices will be maintained at a steady level in the years ahead. One way in which we could provide such an assurance would be to say that the headage payment scheme will be varied in years in which prices fall, to say that if prices fall the headage payment will be increased and if prices rise the headage payment will not be increased. We should vary the headage payment in such a way that, by its variation, it will provide a floor under the beef market. I have advocated this in the past. It is a sensible and intelligent way of using the headage payment scheme to do what the community want to do, namely, to provide a floor under the cattle business, and to encourage farmers to produce animals.

Another way of ensuring that slumps do not occur in the market would be to set up a market monitoring unit to foresee supply and demand problems in the beef industry and recommend evasive action in time. Such a market monitoring unit should be managed not just by the Government but by the Government in conjunction with the producers and processors of beef.

I have already indicated that existing trends show that there will be a decline of 300,000 in the number of cattle supplied to our factories next year. That prediction is based on information which is available to us, but very few people are reflecting on that information. Very few people have that information which is important to farmers making business decisions.

The Deputy should conclude now.

I thought we were going on. We should have such a unit which would provide information to the farmers on existing trends and help them to avoid gluts in the market. This idea is not original. It was put forward in the McKinsey Report on beef marketing and dairy marketing and it should be acted upon.

I did not get a chance to finish what I wanted to say. These are some of the proposals which should be adopted to improve the beef herd. I hope I will be seen in this contribution not merely as condemning the Government's decision to do away with beef intervention for heifers but also as making positive alternative proposals to provide a better future for our beef farmers than they can be assured of under this Government.

Amendment put.
The Dáil divided: Tá, 64; Níl, 31.

  • Ahern, Bertie.
  • Aherne, Kit.
  • Andrews, David.
  • Barrett, Sylvester.
  • Brady, Gerard.
  • Brady, Vincent.
  • Briscoe, Ben.
  • Browne, Seán.
  • Burke, Raphael P.
  • Callanan, John.
  • Calleary, Seán.
  • Cogan, Barry.
  • Colley, George.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Gerard.
  • Coughlan, Clement.
  • Cowen, Bernard.
  • Crinion, Brendan.
  • Daly, Brendan.
  • Fahey, Jackie.
  • Farrell, Joe.
  • Filgate, Eddie.
  • Fitzgerald, Gene.
  • Fitzpatrick, Tom.
  • (Dublin South-Central).
  • Fitzsimons, James N.
  • Flynn, Pádraig.
  • Fox, Christopher J.
  • French, Seán.
  • Gallagher, Denis.
  • Geoghegan-Quinn, Máire.
  • Herbert, Michael.
  • Hussey, Thomas.
  • Kenneally, William.
  • Killeen, Tim.
  • Killilea, Mark.
  • Lalor, Patrick J.
  • Lawlor, Liam.
  • Lemass, Eileen.
  • Leonard, Tom.
  • Leyden, Terry.
  • Loughnane, William.
  • Lynch, Jack.
  • McEllistrim, Thomas.
  • McSharry, Ray.
  • Molloy, Robert.
  • Moore, Seán.
  • Morley, P.J.
  • Murphy, Ciarán P.
  • Nolan, Tom.
  • Noonan, Michael.
  • O'Connor, Timothy C.
  • O'Donoghue, Martin.
  • O'Hanlon, Rory.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Malley, Desmond.
  • Power, Paddy.
  • Tunney, Jim.
  • Walsh, Joe.
  • Walsh, Seán.
  • Wilson, John P.
  • Woods, Michael J.
  • Wyse, Pearse.

Níl

  • Begley, Michael.
  • Belton, Luke.
  • Boland, John.
  • Bruton, John.
  • Burke, Liam.
  • Collins, Edward.
  • Conlan, John F.
  • Cosgrave, Liam.
  • Creed, Donal.
  • D'Arcy, Michael J.
  • Deasy, Martin A.
  • Enright, Thomas W.
  • FitzGerald, Garret.
  • Fitzpatrick, Tom.
  • (Cavan-Monaghan).
  • Gilhawley, Eugene.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Kenny, Enda.
  • Lipper, Mick.
  • Mannion, John M.
  • Mitchell, Jim.
  • O'Brien, William.
  • O'Keeffe, Jim.
  • O'Toole, Paddy.
  • Pattison, Séamus.
  • Ryan, John J.
  • Spring, Dan.
  • Taylor, Frank.
  • Timmins, Godfrey.
  • Treacy, Seán.
  • Tully, James.
Tellers: Tá, Deputies Moore and Briscoe; Níl, Deputies W. O'Brien and Pattison.
Amendment declared carried.
Motion, as amended, agreed to.
The Dáil adjourned at 8.30 p.m. until 10.30 a.m. on Thursday, 13 November 1980.