With the permission of the Chair I should like to share my time with Deputy McCormack. I should like to express my sincere thanks to the Chair for permitting me to raise this matter on the Adjournment. I am anxious to stress the serious problems facing the sheep industry and I should like to give some background information regarding that industry. The number of ewes here increased from 1.6 million in 1980 to 4.2 million in 1989, a rise of 160 per cent. However, the industry is now bordering on collapse and immediate action must be taken to avoid a serious disruption of it. Farmers were encouraged by the Department, the Minister and the advisory service to get involved in sheep breeding as an alternative line of farming. They borrowed money to erect special units and fencing and purchased modern equipment to help them cope in the years ahead.
The marketplace is completely overloaded with sheep meat. We have reached a peak in Ireland and Great Britain. We are the main suppliers to the French market accounting for 30 per cent of imports to that market. Almost 90 per cent of our exports of sheep meat goes to the French market. The stage has been reached where sheep meat is being dumped on the French market and I suggest that the EC prevent dumping on the only market that is available to us. The EC self-sufficiency in sheep meat currently stands at about 85 per cent and there should be no reason for a collapse in the price of that product. In 1981 the cost per ewe per annum was £11 while the gross margin in the same year was £50. In 1988 the cost per ewe was £18 and the gross margin was £63. In 1990 the cost per ewe is £19.50 and while it is impossible to say what the gross margin will be, it is estimated that it will be about £38. I have no doubt that the Minister of State will take into consideration fixed costs and borrowings for housing and other facilities. In my view the net margins in many cases will be in the region of £10 per ewe and in the case of over-borrowings it will be nil or a loss.
In 1981 40 kilo lambs sold in the third week of June in Enniscorthy fetched between £48.80 and £52 and in 1987 in the third week in June at the mart in Enniscorthy 40 kilo lambs were sold at between £44 and £47. In the third week in June this year a 40 kilo lamb fetched between £34.50 and £37. I understand there was a further reduction of £2 in the price last week. Some of the lambs were sold at the low price of £31.
The price of wool has fallen from 80p per pound three years ago to approximately 27p or 30p per pound this year. I appeal to the Minister of State to ensure that steps will be taken to rectify this imbalance. In this regard we must immediately suspend New Zealand imports to the EC for three months to allow the market to absorb the present over-supply. New Zealand are allowed to export 200,000 tonnes of sheep meat to the EC. I accept that this is a GATT agreement which cannot be broken but, at certain times of the year, we should seek derogation from this rule. The EC is merely a dumping ground for New Zealand and the only way to rectify the situation is to suspend the importation of lamb for about three months. There should be an early payment of premiums for ewes. The Department is computerised and I appeal to the Minister of State to pay the premiums now instead of over the next four to five weeks. Some of these premiums will not be paid until next December, which will cause difficulty in relation to cash flow for farmers.
We should also put the APS scheme into operation. If the scheme is not put into operation we just fill up the cold rooms which have to be emptied at a later stage with the resultant flooding of the market.
A suggestion was made that we should give aid to Iran on humanitarian grounds. It would be a very good idea to send them sheepmeat as they are short of food. The Minister should also ensure that the ewe premium for the 1991 season will compensate for the losses this year and I understand that there is provision in the regulations for this. If the marketplace deteriorates further, adequate provision will not be made for winter feed resulting in high mortality in the ewe of flock. Action must be taken in this regard.
I appeal to factory owners not to take advantage of the present situation, to share profits with the producers and to remember that they have a great interest in the sheep industry. Sharing the profits and cushioning the financial losses to the producer will benefit everyone.