Vol. 464 No. 2
3 Mr. O'Malley asked the Minister for Agriculture, Food and Forestry if he will make a statement on the current situation in the BSE crisis having regard to the enormous losses being suffered by Irish beef producers and processors; and the steps, if any, the Government proposes to take to alleviate the problems and reduce the losses. [7913/96]
4 Mr. Cowen asked the Minister for Agriculture, Food and Forestry the reason only 950 tonnes of beef was applied for under the beef intervention scheme agreed to by him at the last EU Council of Ministers meeting in view of the emergency that exists in the Irish beef industry. [7836/96]
8 Mr. Molloy asked the Minister for Agriculture, Food and Forestry the action, if any, he has taken or proposes to take to ensure that emergency beef intervention can effectively clear the large numbers of finished beef cattle being held on Irish farms; and the changes, if any, he has sought in respect of this scheme; and if he will make a statement on the matter. [7786/96]
36 Miss M. Wallace asked the Minister for Agriculture, Food and Forestry the efforts, if any, he has made to seek an adequate increase in export refunds for live cattle; his views on whether an adequate increase in export refunds for live cattle will encourage more competition for supplies; if his attention has been drawn to the fact that export refunds were 25 per cent higher in April 1995 and that urgent action is needed to increase export refunds in the current beef crisis; and if he will make a statement on the matter. [7832/96]
46 Mr. Clohessy asked the Minister for Agriculture, Food and Forestry if he has sought an extension of, or an increase in, the spring beef slaughter premium from the European Commission; and if he will make a statement on the matter. [7789/96]
67 Mr. M. Ahern asked the Minister for Agriculture, Food and Forestry the steps, if any, he is taking to secure a rise in export refunds on the export of Irish beef to third countries. [7577/96]
128 Mr. Nolan asked the Minister for Agriculture, Food and Forestry the proposals, if any, he has to assist transport companies who have been seriously affected by the current crisis in the beef industry; and if he will make a statement on the matter. [7873/96]
I propose to take Questions Nos. 3, 4, 8, 36, 46, 67 and 128 together.
Since last autumn when the Commission cut export refunds for live cattle and beef to control the level of subsidised exports to comply with GATT limits, the industry has gone through a difficult period. This difficulty, which manifested itself mainly in tighter margins for winter fatteners, paled in comparison with the fall-out from the BSE crisis which hit the industry at the end of last month and from which it is still trying to recover. This has been one of the most difficult periods the industry has faced in recent times.
The response and approach of the Government has been clear, sure and effective. Consumers have been reassured about the quality of Irish beef and a major diplomatic offensive has been undertaken in the last month to maintain our third country markets. In addition, the introduction of temporary intervention purchasing to cope with the market consequences of the crisis at the emergency Council of Ministers meeting in Luxembourg on 1-3 April was a major breakthrough.
The special intervention measures allow for the purchase of 50,000 tonnes of beef for the entire union under the two tenders in April. However, the restrictions in place for the first tender submitted last week limited the uptake to 10,000 tonnes in the whole European Union with 905 tonnes tendered for in Ireland. The Minister, Deputy Yates, sought a relaxation of the intervention restrictions at both the emergency Council and in direct discussions with Commissioner Fischler, pointing out that for these emergency measures to have the desired effect it was vital that all obstacles were removed. I am pleased that his efforts contributed to the desired outcome.
The concessions secured at the Beef Management Committee last week, through the removal of the weight limit restriction along with the widening of the eligible grades to include the very important 04 grade, mean that over 90 per cent of Irish steers will now be eligible for intervention. I am confident the way is now open for the industry to submit a substantial bid for the second tender on 19 April.
These intervention measures will give immediate relief to producers who have a substantial backlog of cattle built up over the past three weeks and will also strengthen the market where there is a growing level of commercial activity taking place.
However, intervention measures on their own may not provide the full solution to the problems faced by producers and, in particular, winter fatteners, at this time. The Minister will, therefore, seek other measures to address income. These include an increase in export refunds and additional premia. An important outcome of the emergency Council was that other measures would be considered should the market warrant it. The Minister will, therefore, put a strong case to the Commission for additional premia when a complete picture of the extent of the losses and the disruption incurred is available.
Export refunds need to be pitched at levels which allow Irish traders to compete successfully on international markets and give reasonable returns to all sections of the industry. In the current situation where a number of important third country outlets are closed and where EU imports are reduced because of the BSE scare, our first priority should be to secure the reopening of these markets. Once that happens the Minister will put further pressure on the Commission to increase refunds to realistic levels.
One of the first casualties of the BSE scare was the almost total cessation of live exports to third countries. Following Government and EU intervention, the Egyptian market is now open again for Irish cattle and beef and the Minister, Deputy Yates, will travel to Libya shortly to seek the reopening of the important trade with that country.
The BSE scare has been all-embracing in its effects with every sector of the beef industry and ancillary industries experiencing some difficulties. As pointed out by the Deputy, transport companies is one of the areas affected. However, the market is improving steadily and it is expected that the industry will return to normal patterns very quickly. Under the new intervention arrangements, whereby boning must be completed in a different premises that that in which the cattle were slaughtered, transport companies will be provided with additional business which should compensate for reductions in haulage activities incurred since the scare.
Will the Minister of State agree that 905 tonnes is of no use to anyone and that the measure will be of no value unless the figure is 20 times greater? Will he further agree it is totally ridiculous that the reductions in the export refunds during the latter part of last year and early this year are continuing and this is creating difficulties in the short-term disposal of the surplus cattle now available? Will he deal with the point I made last night on the orders made by the British Government limiting access to its market? Under the recent regulations made by Mr. Hogg it seems a substantial proportion of the Irish beef normally sent to Britain is precluded from entry to that market.
I agree that 950 tonnes was not sufficient and that is why the Minister went back to the Commission seeking an improvement in the conditions. Now almost all our steers will qualify because of the removal of the weight restriction. That was an important development and we should recognise the Minister's achievement.
As regards the refunds, the most important thing at this stage is to open third markets and then make a case for the refunds. Refunds are down substantially on the level this time last year, although they picked up somewhat because of pressure from the Minister. We have a battle to fight but it is important that we first open third markets. We succeeded in opening the Egyptian market.
According to my information, An Bord Bia is not yet concerned about the new regulations imposed by the British and believes they will not affect Irish beef exports to Britain. I have asked for further information on this point which the Deputy made last night because it would be very serious if exports were affected. I will seek clarification on whether what the Deputy has said is true and I will come back to him on that. From my initial inquiries today, An Bord Bia believes the regulations will not impact on beef exports at this time.
Can the Minister confirm that it is only as a result of the technical committee that what can be termed as an emergency intervention scheme has been brought forward, whereas the scheme agreed to by the Minister at the Council of Minister's meeting has proved to be of no use? As regards the 950 tonnes, can the Minister confirm that was an application for bone in meat only and not for boneless meat, mainly because the Department failed to successfully negotiate with the Department of Finance to come up with a realistic deboning allowance similar to the 15.2p per lb. available in the UK? Our processors looked for 13.2p per lb. but only 8.1p per lb. has been made available by the Department. Does that not indicate that the Department had possibilities within its remit to make even the first intervention tender more attractive but failed to do so? Will the Minister accept that some of the responsibility lies with him in ensuring that the boneless factor was not part of the tender because the deboning allowance was so unrealistic? Will the Minister indicate if meat inspection fees might be waived for processors to alleviate current problems? In view of everything that has happened so far, will the Minister indicate what the price level is likely to be? Can the Minister confirm that even if it is 97p per lb., which is the most optimistic amount in the public domain, it will still mean losses of £150 per head for the winter fatteners?
The Minister's most important task was to convince the Commission that we needed intervention, which he succeeded in doing.
The second time he asked.
If he did not get a fvourable arrangement for Ireland initially, he certainly did so the second time. Surely the Deputy would acknowledge that.
Not at these prices.
It is a very favourable deal for Ireland.
In what respect?
I will consider waiving meat inspection fees and I will put it to the Minister. It is a good proposal if it will help. The Deputy hardly expects me to pre-empt the Minister and announce the expected tender prices today since they are expected tomorrow. I hope they will be as good as possible, that it will take the surplus cattle ready for slaughter off the market and will alleviate the problem to some extent.
The Minister said his preliminary inquiries indicate there are no grounds for concern as far as our market in Britain is concerned. How can he reconcile that with the British not allowing any beef for human consumption, whether from Britain, Ireland and any other EU country, that has more than two permanent incisor teeth at the time of slaughter, which means the animal is more than two and a half years old? Will the Minister agree that the bulk of the beef we traditionally sent to Britain would have been that age or more, particularly cow beef which, by definition, would be that age? Given that meat from the countries I listed last night is exempted from that prohibition, will the Minister agree it would be a cause for concern if the bulk of our exports were blocked off from what is the most important individual export destination for our beef?
We would be concerned if we were blocked off because Britain is our main export destination. While I will investigate further, the information I have suggests that it will not affect our beef exports to Britain to a great extent. If this has major implications, I will come back to the Deputy on the matter. While we export cow beef to Britain, much of the beef we export is young beef. The quality of the beef we export is beyond question, especially to the multiples who insist on a quality Irish product and will not accept an inferior one. They are now suggesting that beef will be branded as Irish. The goodwill in the English market towards Irish beef should ensure that exports are not affected. I regard what the Deputy said as quite serious, but it has not been brought to my attention as posing another difficulty for the industry.
Does the Minister agree there are two serious problems which are consequential on each other? The first problem is price levels for cattle and the second is that cattle must be held because of the price and that feed is a problem in that regard. Does the Minister accept his Department's figures that £1.06p per lb. is a break even price for a finished steer? He will be aware that 92p per lb. is being paid at present. That means that a finisher is losing at least £100 per head. What are the favourable results to which the Minister referred? I do not know whom the Minister thinks he is fooling, but he is not fooling the primary producer who is losing heavily.
On the question of export refunds, little or no impression has been made to date. Is the Minister going to seek an increase in export refunds or a reintroduction of what we had before, in view of the terrible difficulties we are experiencing?
The question is too long.
I am coming to a conclusion. BSE is probably the biggest problem in farming circles today. As a producer I cannot say often enough that our product is clean and can be laid on any table at any time. Will the Minister agree that what contributed to our serious problems was that the Minister did not react soon enough with a statement of conviction when the scare struck? It is typical of the Minister that he waited to see which way the wind was blowing.
This is an unprecedented crisis for the beef industry and, unfortunately, it is inevitable that people will suffer, irrespective of who is Minister. We had a major task. First we had to differentiate between ourselves and the UK and demonstrate that we had better measures for controlling BSE, etc. The Minister did that. His next task was to restore consumer confidence, and recent opinion polls suggest that confidence in Irish beef is returning, that people are beginning to eat it not only at home but abroad. I went to Sweden two weeks ago. The Swedish retail and wholesale sectors openly supported the Irish product on television, and the Swedes are probably the most discerning consumers in Europe and perhaps in the world. Our beef exports to Sweden have increased from £11 million in 1994 to £19 million in 1995 and are growing. That is an endorsement of our product. It is the type of restoration of confidence in our product that we need.
Also, we had to get excess beef off the market, and we succeeded in reintroducing intervention. Now we must open up third markets and the Minister is doing that this week. Finally, we will have to introduce other measures to support farmers who are suffering. It is hoped that we can extend the DSP and there may be scope for a top-up premium or some form of aid for those farmers who are now threatened with extinction. We have to fight that battle in Europe. All the stages I have referred to had to be gone through before we could get to that point. I share the Deputy's concern. I am not trying to pretend that it will be easy, far from it.
I thank the Minister for making a point I have been making in Private Members' business over the past two nights, that it is only when someone like himself goes to Sweden to reassure people face to face that results are seen and that the consumers there realise that what he has to say stands up. The problem has been that for almost a month we, who are the biggest exporters of beef in the northern hemisphere, have not sent a political person, with the exception of the Minister's trip to Sweden, to speak to the consumers of 80 countries to tell them that our beef is clean. Prior to the recent visits the perception abroad has been that the British situation is in some way related to the Irish because of the problems between the North and South of this country. It is precisely this type of wide-ranging political initiative by the Minister that is required to shore up the beef industry. We wish him well on what is a limited tour at this stage. He would do well to go to all of those countries.
Would the Minister agree that it is not in this country's interests that some Government representatives should seek to regard one market as less important than another? Would the Minister agree that the purpose of these measures must be not only to open up markets but to make them fully functional and that that might be done more quickly by the Minister's physical presence and that of his colleague?
A number of steps, which I outlined, had to be taken. The Minister has gone out to the marketplace and will visit Spain, Italy and Libya this week. I will be going shortly to Russia, which is a very important market. Initially we took a diplomatic offensive. Our ambassadors went out and reassured not only our markets in Europe but also third countries that we have a distinctive product, and we have succeeded. The only EU beef banned within the internal market was British. Through the efforts of the Taoiseach, we have succeeded in opening up the Egyptian market, which is the most important of the third markets. There are positive signs from other third markets also. The last time the Iranian market closed to us, it took some years to open it up again. I am convinced that it will not take years on this occasion but a matter of weeks or months.
Because of the controls put in on the last occasion.
I agree with the Deputy that from now on the Minister and I will have to go out and sell the Irish product in the marketplace in co-operation with An Bord Bia. We intend to do that very aggressively. Now that the hysteria has died down we can differentiate our product from the British and aggressively sell our product. I am convinced we will be successful.
The farmers will be delighted to hear it.
