Ceisteanna—Questions. Oral Answers. - Sheepmeat Industry.

Brian Cowen

Question:

22 Mr. Cowen asked the Minister for Agriculture, Food and Forestry the steps, if any, he intends to take to restore confidence in the sheep industry in view of Bord Bia's recent report on the sector. [1998/96]

In view of the difficulties in the sheep sector last year, I requested An Bord Bia to carry out a study of the Irish sheepmeat industry which would comprise an evaluation of market changes and provide recommendations for a response to these changes. I welcome the completion of this report which identifies clearly the main issues to be addressed, namely competitiveness, efficiency and especially the improvement of quality.

A serious effort on the part of all those involved in the industry is required to enable these changes to be introduced. Clearly, the first step is to tackle the issue of quality and to this end, I have recently secured the agreement of the processing plants to implement a lamb carcase classification scheme on a nationwide basis. Some details regarding the operation of the system have still to be finalised but there is full acceptance in the industry of the need to introduce this scheme. The aim of the scheme is to improve the quality and marketability of sheep, particularly in the latter part of the year where the report showed a serious shortfall in quality.

Breeding and ram selection are crucial contributory factors to lamb quality. The Department already operates a pedigree sheep improvement programme and I have directed both Teagasc and my Department to examine this programme with a view to improving its effectiveness.

While France will continue to be our main export market, it is important that our industry should reduce its dependence on that market in the longer term. With that in mind, an expanded marketing drive is now being embarked upon by An Bord Bia with emphasis on the German market and on moving towards consumer ready cuts.

The report also identified the need for improved efficiency and productivity. A major offensive is now required on tight cost control and productivity if competitiveness and profits are to be increased at farm level. Teagasc, as the national research, advisory and training body, has a vital role here.

The Deputy will be aware that I succeeded in negotiating a special aid package for Irish sheep farmers last month to compensate them for the low prices here in the early part of last year. The package, which, with an increase in the overall level of the ewe premium, is worth £26 million was of particular assistance to lowland early lamb producers who suffered most from the price falls last summer. For the longer term, there are aspects of the application of the sheepmeat regime which could be improved and I will be considering these in advance of reviewing the ewe quota system later this year.

In particular, I have initiated consultations with the various interests in the industry on the dry hogget rule with a view to putting forward proposals to the Commission on this issue.

Does the Minister have the full agreement of all plants on the implementation of the carcase classification scheme?

Yes. That is my understanding.

That may be the Minister's understanding but have they agreed?

That is what has been advised by my officials.

The Minister has been advised by his officials that he has full agreement from all plants. Can the Minister say whether all meat plants have agreed to the voluntary carcase classification scheme which he announced some weeks ago?

There is no mystery here. A number of principal operators, such as Irish Country Meats and KEPAK, have agreed and my understanding is that smaller meat groups, such as Slaney Meats, either have been or will operate this scheme. I do not know the level of abattoir to which the Deputy is referring but I intend that all export related plants will operate the scheme.

Can I take it from the Minister's reply that he cannot yet confirm that despite announcing the scheme is under way, he does not have full agreement from everybody? Since this is a key recommendation of a report which the Minister has promised us for months on end as a means to deal with the sheep meat crisis, can he explain why he has not insisted on a compulsory scheme?

The level of detail that has to be negotiated relates to the technical aspects of the EUROP grading and what level of fat confirmation as against the carcase confirmation would be the base price. It is not that they have not agreed to operate the scheme.

The reason I have not opted for a statutory scheme is that it would inevitably mean a levy and a large bureaucracy, which is not what I want. I want a straightforward scheme that will have quality, rather than volume by weight, as the basis of payment for sheep meat. That is in place and will move ahead. I did not want to deduct money to producers from their meat factory cheques or to look for extra inspectors for the Department of Finance. This is the best way to proceed. I am confident this scheme will, in the medium term, revolutionise the whole thinking of producers on the need to have quality in our sheepmeat sector.

This is a classic case of refusing to take a decision that might involve hardship on someone to pay for the scheme.

The Minister mentioned the £26 million special aid package he negotiated and hyped to the best of his ability before Christmas. How much of that package, if any, has been paid to farmers? Is it not the case that he awaits Parliament approval for it to be paid and that he is not likely to get it before the middle of the year?

There are three aspects to the package I secured. One was an increase in the premium — about £3 — which is due to be paid between the end of January and the beginning of February. That is the tranche of the premium.

It was coming anyway. Was that the outcome?

Deputy Cowen has asked some questions. You should be good enough to listen to the reply.

I am delighted to expand on this, Sir, because it is the best sheep deal farmers have ever received.

Absolutely.

If the Deputy feels aggrieved by the Minister's reply he has a remedy.

The Minister must be joking. We are beginning to see through him.

Irish sheep farmers are the only lowland sheep producers in the Union to get an extension of the rural world premium payment. This not only requires a regulation to go before the Council as an aid point but it is also required to go before the Parliament. I imagine this would be done in the first half of this year. I expect the Commission to initiate that technical regulation in a matter of weeks in February or March. Arrangements are being made by my Department to include headage payments, the third aspect, at the earliest possible date.

When will they be paid?

Let us proceed to Question No. 23.

On a point of order——

I am sorry, but I will not hear a point of order now. We are dealing with priority questions to which a rigorous time limit applies.

May I raise a point of order?

No. If the Deputy wishes to raise a point of order, he should do so later.