I propose to take Questions Nos. 5, 22, 23, 24, 34, 47 and 55 together.
I am pleased to inform the House that following difficult and protracted negotiations over the past three months, we have succeeded in agreeing a substantial compensation package for Irish producers at the Council of Ministers meeting in Luxembourg this week. The package, which also includes a continuation of the deseasonalisation premium in the context of the 1996-97 prices agreement, is worth more than £86 million to Irish beef producers. These measures will go a long way towards stabilising the industry by making up for losses arising from the BSE crisis and by ensuring that the more orderly slaughtering patterns brought about by the slaughter premium are maintained. Arising from the loss of confidence in beef, prices to producers have fallen though there has been some recovery in recent weeks.
The package is a significant improvement on the original proposal which was presented at the last Council of Ministers meeting. At that meeting the Commission proposed a financial package of 650 MECU for all EU producers of which 534 MECU would go towards the topping up of the suckler cow and special beef premia and 116 MECU to special national envelopes to be used for targeting those producers who would not be compensated through the increased premia. Under that package Irish producers would have received £58 million. While this was a substantial package it was inadequate to meet the losses being encountered by beef producers. Accordingly, the Government's efforts in getting additional compensation were rewarded at the Florence Summit when the Taoiseach along with Heads of other member states succeeded in getting the Commission to agree to a further increase in the ceiling of the order of 200 MECU. This brought the total value of the package to 850 MECU, or £700 million, and in the Commission's view this was the maximum available in the 1996 EU budget.
As a result of this increase the suckler cow premium top-up will now be £22.40 per cow and the special beef premium top-up for both the ten month and 22 month will be £19.08, while the special national discretionary envelope is increased to £13.3 million bringing the total to more than £70 million.
The difficulties in securing this level of funding can be appreciated when cognisance is taken of the fact that it represents approximately 10 per cent of the total package while Irish beef production is less than 7 per cent of the EU total. This represents the very best that could be achieved for Irish producers considering that producers in all member states have suffered major price reductions since the beginning of the crisis. In some cases the price reductions are greater than those experienced in Ireland.
The special envelope of £13.3 million comes with the in built flexibility to target those producers, particularly winter finishers, including vulnerable heifer producers, who have experienced the worst effects of this crisis. My Department will put a process in place to ensure that these payments are made speedily and in the case of the special envelope as equitably as possible. Effective market support measures have also been put in place at EU level to help the industry. The opening up of intervention with the lifting or easing of the weight restrictions along with the inclusion of 04 grades has been very helpful in clearing the backlog of cattle which had built up as a result of the crisis. The fact that there is no intervention tender this week from Ireland for adjudication at tomorrow's beef management committee would seem to indicate that the steer backlog has now been removed and cattle supplies are following the normal disposal pattern for this time of year.
The increase in export refunds by 12 per cent since 1 May has boosted third country trade. The major offensive at diplomatic and political level and through An Bord Bia have reassured the authorities in those markets of the safety and quality of Irish beef. Ministerial visits have been made over the past few months to our major markets in Europe including Russia, which is presently the biggest market for Irish beef. While most of our markets are now accepting Irish beef two very important ones remain closed. In the case of Libya, efforts are ongoing to finalise a ministerial visit and to arrange appointments with the appropriate Ministers there. In the case of Iran a veterinary delegation is expected in Ireland within the next week or so. I see this visit as the logical and essential next step to reopening that market. Good progress has also been made recently as regards freeing product in store which was produced for Iran prior to the BSE crisis.
Because of the fall in consumption in the EU it is recognised that the opening of vital third country markets will be a very important factor in underpinning cattle prices in the autumn. I will also be insisting on adequate market support measures being available to remove the beef surplus from the market. The continuation of the deseasonalisation premium will also be critical in encouraging an orderly disposal of cattle towards the end of the year. If these measures do not ensure an adequate return to producers and reasonable outlets for processors I will be seeking other measures later.
