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Dáil Éireann debate -
Wednesday, 7 Feb 1996

Vol. 461 No. 2

Adjournment Debate. - Beef Industry.

Sir, I am obliged to you for allowing me to raise this matter and have the Minister for Agriculture, Food and Forestry clarify the implications of the beef management committee meeting of last Friday for the beef industry. The Minister will be aware of the widespread concern about the situation that has developed in the past number of months and which is causing a deepening crisis in the beef sector, not only for producers but for processors. He will also be aware of the implications that will have on agricultural incomes in the months ahead.

The Minister, Deputy Yates, contends that last week's decision of the beef management committee to increase a band of 5 per cent to 7 per cent to restore the level of export refunds was an interim one. Is that correct, given that the decision is final for the duration of the current price regime which expires in April? I understand that the agreement reached by the Minister's representative at that committee meeting, which he regards as inadequate, is to be extended until April, thus depriving us of the opportunity to negotiate for much needed further increases to restore export refund levels.

Any change after April will be no comfort to the many specialised winter finishers who have effectively been abandoned because of the serious reduction in export refund levels so far.

The Minister bears full responsibility for the huge mistake of allowing the beef management committee off the political leash. Coming into this round of export refund cuts the Minister held the high ground when, last April, the Council of Ministers took the decision on the guide price for beef for the coming year to next April. This is a matter of political incompetence. The Minister has failed to stop Commission officials undermining the political decision of the Council, leaving us in a much more disadvantageous position than any other EU beef producers.

Because of the appalling handling of relations with the Commission and lack of support from other Ministers, a bureaucratic committee with no political mandate has effectively slashed the price of beef as a result of the export refund cuts and the crisis of confidence it has generated in the market place. The Minister's failure to go to Brussels in advance of last Friday's decision is unpardonable, he is so preoccupied with being a big fish in a small pond at home he has not learned that in Brussels he is very small fry indeed.

His histrionic and long-distance grandstanding with the Commission has cost Irish agriculture dearly. In his statement last Friday, the Minister suggested this would have a great psychological effect on farmers. This is the first time I have ever heard a Government Minister claim that psychology will pay the bills between now and April.

The Minister must repair relations with the EU Commission and the Council. Continually finding ourselves in a minority of one, as we have with this Minister, represents a complete political failure to transact the necessary business and defend our national interests. Over 100,000 farmers are affected by these decisions which have been taken since last October. All we have had from the Minister are statements reacting to these decisions expressing his own surprise at the level of export refund cuts and suggesting there is little or nothing he can do about it.

Farmers have been the losers in this stand-off. Winter finishers, losing well over £70 a head on cattle bought last autumn, have been abandoned because there will be no further discussion on this matter until April. By then, of course, at least 50 per cent of the winter kill will have been completed. This affects cattle farmers who simply have to dispose of their cattle having bought them in the autumn for the purpose of finishing them over the winter.

A serious situation has developed and the Minister seems incapable of doing anything about it. The "too little, too late" measures adopted in Brussels last Friday, and which are acknowledged by the Minister himself as being inadequate, may have provided a psychological boost to him but they have done nothing for the beef industry. The political challenge to the Minister is to develop a cohesive Irish agenda in Brussels and build support for our position in the Council and the Commission.

I would like to know to what extent the Minister has any room to manoeuvre between now and April given that the beef management committee has suggested there will be no change in the level of export refunds until April. The Minister's failure to think beyond the next news bulletin has brought totally avoidable losses to the beef industry.

I am glad that Deputy Cowen is in his usual generous spirit in dealing with the difficulties facing me. I agree with him about the gravity of the situation. I am concerned about the specialist group of winter fatteners, numbering about 13,000 farmers who sell cattle fit to slaughter in the springtime. I reiterate that I am extremely unhappy with the EU Commission which has handled the beef regime in a ham-fisted manner. They panicked in dealing with the excessive levels of prefixation and licence that were taken out in the autumn of last year in trying to manage the GATT quota.

I do not believe, however, that there is an underlying problem. Since November we have sought to get these refunds increased and in mid-December they were increased by 14 per cent. Last week they were increased by 5 per cent to 7.5 per cent but as much again is needed to resolve the issue. An amount of prefixations are in the system.

I had meetings with all beef processors and their representatives last week and we estimate that a volume of some 85,000 cattle are prefixed at the pre-November cut rate. This means that the weekly kill at the moment is rising to about 17,000 which would get us through to the end of February at least.

Deputy Cowen referred to the fact that in making the decision the Commission said there would be no further increase. On 26 January when it made no increase it said that nothing would be done before the end of March. However, we succeeded in getting an emergency meeting — the normal meeting was not scheduled until 16 February — to deal with the issue of shorter validity periods, speculation and giving a higher level of refunds to male hind-quarter cuts on which Ireland is uniquely dependent, as it is on steers to third country markets.

I am having detailed discussions with some of my ministerial colleagues. It is a bit rich and hyprocritical of Deputy Cowen to berate the fact that I am not rallying political support in Europe and that I did not go to Brussels last week. In Fianna Fáil's tenure it was agreed at the Council of Ministers that all such decisions on sheep, arable aid, and management of the grain, dairy and beef committees, would not be handled by the most senior civil servants in each member state. There is no political context to them because the Commission has total autonomy and authority to increase or decrease refunds.

Notwithstanding the fact that I, with the German, French and Austrian Ministers, have raised this matter at every Council meeting since September — we received very strong support and I led the charge in that direction — the following week the Commission cut refunds in total disregard not only to the Irish position but also to all those countries dependent on beef and the CAP.

So there is no political accountability, is that it?

The Commission has not handled this well.

The Council does not have the power and can do nothing.

The Council does not have the power, that is correct.

They can do nothing about it.

Deputy Cowen was heard without interruption.

It is clarification.

Let us give the same courtesy to the Minister in respect of his reply.

The Council has no direct function in this and, obviously, the riding instructions each member state's representative gets on that is a political matter. At all the meetings the member states I referred to, including ourselves, have railed against proposed cuts or the inadequacies of increases. However, the Commission only needs about two or three countries to get a measure through. It does not even need a majority to get items through on the management structure.

We got some response last week but I made it clear it was inadequate. Some response is better than none. The meat factories' public relations people have been predicting an imminent collapse in prices — 10p per lb. has been mentioned but I see no justification for that. While not resolving the problem, last week's increase staves off a price decrease.

On the technical assessment we have of the level of prefixations in the system and the level of refunds that would now apply, there is no basis for paying less than the present price. In fact, we believe they should have been paid a much higher price, the way they were in December, when worked off the same prefixations. It confirms many farmers' suspicions that when the live trade does not have the same level of refunds as the beef trade, the beef trade tends to collapse the scrum, to use an analogy, in relation to trying to increase their own margins. I am less than inspired by the meat factories' response to this period of great difficulty.

I understand we will be debating this matter in Private Members' time next week when we can pick up on any other issues that cannot be dealt with in this rather truncated debate. I am committed to trying to resolve this issue. The full political, diplomatic, and administrative resources of my Department and the Government will be clearly focused on the Commission concerning this issue in the coming weeks. Next week I may be able to announce further initiatives in that regard.

The Dáil adjourned at 9.10 p.m. until 10.30 a.m. on Thursday, 8 February 1996.

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