Is the Minister for Agriculture and Food available?
Adjournment Debate. - Pig Production.
The Deputy's question will be answered. Normally we would not have reached an Adjournment Debate until 5 o'clock but because of the expeditious and efficient manner in which business has been discharged we are three quarters of an hour ahead of schedule. The Departments have been alerted and the Minister for Health, or his junior Minister, and the Minister for Agriculture and Food are on their way.
Is there a running order agreed? I was asked to get over here immediately as I would be first. Is that the case?
Because of circumstances in which a Deputy who shall be nameless was asked to leave the House, there was a certain rejigging necessary and in the rearranged position, the Department of Agriculture and Food took priority in the matter of questions. Because it appeared that the Minister might not be available, Deputy Rabbitte enjoyed his inconvenient promotion.
Can I safely take it that no tragedy a la Deputy Michael D. Higgins will befall me if I briefly leave the House?
I can give the Deputy an assurance that he has been given permission to raise the matter on the Adjournment and that permission will be honoured.
Deputy Paul Connaughton has been given permission to raise the matter of the immediate problems facing pig producers. The Deputy has five minutes.
I thank the Chair for giving me this opportunity. I have been contacted by pig farmers throughout the length and breadth of the country, particularly in the last 14 days. They all told me that they are about to go out of business that they are losing between £5 and £8 per pig and that if this continues, their position will be totally unsustainable and they will go out of business. These calls came primarily from young trained farmers who were rightly told at one time that pig producing was a very good line of business, which even with the advent of GATT negotiations, was likely to provide a livelihood. They borrowed very heavily and now find themselves in an extraordinarily difficult position. There are three or four aspects of this I would like to put to the Minister.
I understand that the major reasons for the worldwide downturn in prices are the problems in Eastern Europe, the volume of imports into the Community and the depressed state of the Japanese and Danish markets. However an EC aids to private storage scheme would take some of the product off the market very quickly and would halt the downward spiral in prices. I ask the Minister to comment on reports that there is still smuggling from Northern Ireland and that this is distorting the market in the north-west. Many farmers, including two young farmers who rang me today, complain of unfair competition from Paschal Phelan. That company received funds under the business expansion scheme and decided to produce "green" pigs for export. We wish them the best of luck with that but I have been informed today that because of a breakdown in marketing the company are sending their pigs to the Dublin market. They are in direct competition with ordinary pork butchers. This is causing problems for those who borrowed at high interest rates. I ask the Minister to comment on that.
Almost 800 families are affected by the sharp downturn in pig prices. Is there any possibility of exporting pigmeat to Russia? We all know the problems Russia has in relation to food shortages and it may not be any more costly to export the meat directly there than to implement some other aid schemes.
I spoke to people in the industry and to those involved in marketing and they say that the outlook for the next five or six months is extremely bleak. Someone will have to do something. As we are members of the EC perhaps the first thing would be to get the APS scheme under way or, more importantly, seek an outlet for this meat. Otherwise we will have the same problem in five months' time.
There is something very wrong when an extremely efficient owner of a 180 sow unit says that he could not buy his week's groceries out of the cheque he received but had to pay it all to the bank. He is thinking of applying for farmer's dole. I had this checked out professionally and that is the position. Are the Government in a position to put pressure on the EC to introduce aids to private storage? The Minister might give an indication of whether it would be possible to do something about sending meat to Russia.
I apologise to the House for not being here on time.
The House appreciates the position that where we finish business ahead of schedule Members are not waiting on us. Thank you for your apology.
I had a very important meeting with a delegation from Clear Island and Bere Island which is off the coast of south-west Cork. I am glad that this matter was raised by Deputy Connaughton because the pig industry and pig producers are facing an acute problem at present. It is a worrying time for producers and indeed processors too, not only in Ireland but in the EC generally. As the Deputy is no doubt aware the pigmeat market is a volatile one and prices and margins vary considerably from year to year.
Following a period of reasonable profitability throughout most of 1990 producer prices began to fall in July this year. The decline continued into September and October and prices in both Ireland and the EC generally now stand at about £103 per 100 kgs, a drop in Ireland's case of some 21 per cent on the prices applying in the corresponding period last year. Feed prices have also dropped, but not to the same extent, resulting in a reduced feed price ratio of below 5.5 to 1, which indicates that many producers are now making a loss. It is an acute problem.
The market is poor particularly in Japan and this has resulted in increased product, particularly from Denmark, appearing on the European market. This combined with increased East German product and the reappearance of increased supplies of Belgian pigmeat on the EC market, following the end of a severe outbreak of classical swine fever in that country, has also not helped the situation.
As Deputy Connaughton may be aware, there are only two market support measures available to us in the pigmeat sector, aids to private storage and export refunds. The Department have monitored the market position closely in recent months and the officials are consistently pressing the EC Commission at management committee level to increase export refunds particularly on exports to Japan, our main third-country outlet to assist in restoring this market and to ease the over-supply position on the European market. Following discussions between officials and a joint delegation representing both producers and processors on 15 November last, the Commission were again formally approached and strongly urged to introduce an immediate aids to private storage scheme combined with an immediate and substantial increase in export refunds to alleviate the worsening market situation.
Indeed as recently as Tuesday last, my colleague Deputy O'Kennedy raised the matter at the Council of Ministers. Commissioner MacSharry on behalf of the Commission while fully aware of the present poor market situation, did not propose to introduce the measures requested immediately, as prices were, he indicated, expected to stabilise shortly. The Commission will be keeping the situation under very careful review. I assure Deputy Connaughton and the House that I, too, will be keeping in close touch with the situation and should prices fail to improve I will be pressing the Commission, through all available channels, to introduce the necessary support measures, without further delay.
On a more positive note I would like to mention the progress made to date on the major development programme for the slaughtering and processing sectors of the industry which I announced in 1987. The plan envisaged that there would be about eight centralised slaughtering plants. I am glad to report that the programme is well advanced and almost completed. When the programme is fully in place it will be of immense long term benefit not only to processors but also to producers by ensuring our continued competitiveness on both EC and world markets. However, that is the long term. In the short term we are pressing very strongly for aids to private storage and third country refunds.
I take the Deputy's point in regard to the supply of meat to Russia and will take it up through the appropriate channels and with the Commission to see if something can be done.