That concludes Question Time. Deputy J. Leonard and Deputy O'Hanlon have been given permission to put Private Notice Questions to the Minister for Agriculture. I take it that both questions will be answered together. Will Deputy Leonard please read his question?
Private Notice Questions. - Monaghan Bacon Factories.
I want to ask the Minister for Agriculture if he proposes to provide assistance to Samuel Graham Limited, Monaghan, to ensure the continuance of pig slaughtering and processing at their plants, and if he will make a statement on the matter.
May I ask the Minister for Agriculture the steps he has taken to prevent the imminent closure of Graham's Bacon Factories, Monaghan, and Irish Pigmeats Limited?
I propose to take the two Private Notice Questions together.
At a time when the pigmeat industry is in urgent need of rationalisation and modernisation of slaughtering and processing facilities to enable firms to compete effectively on markets abroad, it is a matter of particular regret that one of the foremost exporters — Grahams of Monaghan — have signified that they will cease operations soon. My understanding is that they may resume operations if trading conditions improve.
In a situation like this I can only point to the substantial aids already available from the State and the EC to firms in the pigmeat industry. Generous investment grant aid is available from the IDA and FEOGA, training grants from AnCO, marketing assistance from CTT as well as substantial export sales tax relief. In my own area I would mention the help provided to the industry as a whole in recent years through meeting some £6 million in debts incurred by the statutory Pigs and Bacon Commission and the modification of veterinary charges and arrears, which again give substantial help to the industry.
Would the Minister agree that this export market accounts for 300,000 to 400,000, or about one-third of production, and that all this is in jeopardy, not Grahams alone? The Minister said trading conditions will improve, but would he agree that the only way this can happen is if the Irish factory is in a competitive position? They cannot compete with the Danes unless EC funds are provided, similar to those provided for the Danes, by way of housing, stocking and by way of rations. Our firms are compelled to purchase intervention grain at a higher price than the home market price.
I do not know what the Deputy was talking about when he mentioned 300,000 to 400,000. Were they pigs or what?
There is no way open to me to single out a particular company for assistance in a matter such as this or directly intervene to avert a closure. There is a specific State agency charged with the task of providing relief to firms in difficulty. I am aware of the fact that firms have been helped over temporary difficulties by assistance from Fóir Teoranta and that such help enabled a subsequent resumption of profitable trading.
Virtually all industries go through difficult phases. The recent past has been one of particular difficulty for the pigmeat industry. But that is all the more reason why the industry must now address itself most urgently to the task of modernisation because this is the only lasting way to make firms sufficiently competitive.
In the final analysis the decision on their future is a matter for the firm themselves and they are likely to be guided by their perception of the prospective returns from the market.
About 300,000 to 400,000 pigs are exported at present, 150,000 pigs from Grahams and the remaining 60 per cent from another source.
As I said in my reply, Grahams have been one of the foremost exporters of bacon and pork, but there are ways in which they can assist themselves or can get assistance from the State. I have pointed out that the State rescue body Fóir Teoranta are freely available and I feel that Grahams should should pursue that line.
Will the Minister accept that the real problem with Grahams, as with other pig producers, is the cost of production? What steps do the Government intend to take to reduce the cost of energy which is 20 per cent higher than in the Six Counties and of fuel which is 40 per cent higher than in the Six Counties? In particular, why is there a veterinary levy of 75p per pig in the Republic when the same levy is only 2p per pig in the Six Counties? Will the Minister accept that when Grahams kill 130,000 pigs per annum in their factory, this levy costs them £100,000 per annum and that this is the real cause of the difficulty? What plans has he to deal with it?
The Deputy must be aware that the costs he has referred to are coming down, particularly the fuel costs. Secondly, the original levy per pig, the veterinary fee he has referred to, was £1.10p and last year I reduced this fee to 75p because of certain difficulties in the pigmeat industry. That veterinary fee is designed to cover the cost of veterinary inspections. Nobody makes a profit out of that. We operate that scheme at a loss. As I have also stated in my reply, my Department have had to suffer a loss of £6 million over the past three years because of the collapse of the Pigs and Bacon Commission. As a result of that collapse we were not paid those fees in any form.
Deputy J. Leonard.
If this is——
I have called Deputy Leonard.
Does the Minister agree that the death of the Pigs and Bacon Commission was accounted for only very little by that plant because they sold on their own on the markets? Will he not agree — this has been brought to the notice of the Department and accepted by producers and processors — that the only positive way to become competitive in this market is to reduce the production costs of pigs by way of fees? Also the Minister has it within his power——
A question.
——to avail of EC financial assistance which the Danes are availing of to provide funding for stocking and housing.
I have already referred to reductions in cost and these are taking place. As regards moderisation and rationalisation of the industry, substantial IDA and FEOGA grants, as high as 50 per cent between the two, are available and people should avail of them. If we are not competitive, it is probably because people have not availed of these grants.
Other countries are getting them and we are not.
We can have them at 50 per cent and that is the highest possible rate.
We are not getting them for stocking.
Will the Minister not accept that the grants he referred to, training grants and IDA grants, are not the remedy for this industry, that the remedy is to bring down he costs of production and that the only way that can be done is to bring our costs of production into line with the rest of Europe by a reduction in the cost of energy and fuel and particularly a reduction in the veterinary fee which is 75p per pig compared with 2p in Northern Ireland?
No. No Government in modern times have done more to bring down costs. Inflation is running at a very low rate and interest rates are coming down considerably. As I have pointed out, quite recently we reduced the veterinary fee from £1.10 to 75p in order to help the pigmeat industry.
(Limerick West): Will the Minister agree that apart from grants, the problem for the whole pig industry is a lack of policy and direction by the Minister and his Department?
Not at all. Very generous grants are available to the pigmeat industry. Unfortunately, people have not been very quick to take advantage of those grants. A 50 per cent grant for modernisation and rationalisation is a very considerable incentive and people should set about utilising these grants.
I have been a long time waiting. First of all, let me say this is only the tip if the iceberg as far as the pigmeat and bacon industry is concerned.
I allowed a question.
That is right. It is brought about mainly by a strong IR£ against the Japanese yen and this is very much an export oriented plant. My information is that unless the Minister is prepared to tackle the problem——
The Deputy can not make a speech.
Unlicensed pork butchers have equalised the whole thing. The bacon industry will collapse. What Deputy O'Hanlon said is quite right, that 75 per cent——
If the Deputy has a question he may ask it. If not he should sit down.
The veterinary levy is 75p as against 2p in the North. The Deputy has made a further realistic point.
I am sorry. I cannot allow the Deputy to go on making a speech.
The bacon industry should be rationalised but the industry has not got the money to rationalise it.
Deputy O'Keeffe will resume his seat.
The Minister is misleading this House when he says that a 50 per cent grant will save the industry because of rationalisation.
Deputy O'Keeffe will resume his seat.
I have done so.
I am not misleading the House, nor have I attempted to do it. That allegation is totally unfair. I have pointed out that the veterinary fees are designed to cover the cost of the veterinary inspections, and they do not do that. They should be quite a bit higher. We reduced them from £1.10p to 75p in order to give some assistance to the pigmeat industry.
A Cheann Comhairle——
Deputy O'Keeffe, you abused being called to ask a question.