Adjournment Debate. - Closure of Pig Slaughtering Plants.

I thank you, Sir, for affording me the opportunity to raise the very serious matter of the discontinuance of pig slaughtering and processing in my constituency in Counties Cavan and Monaghan. Long before such production became so intensified, with very large numbers of animals and computerised feeding systems, both counties had been the largest pig producers nationwide. Unless their slaughtering and processing industry is reinstated the potential for future production in that region will be bleak with the closure of two plants. The McCarren plant in Cavan which had been experiencing labour problems closed partially and eventually completely. That was followed by the closure of the Dawn Pork and Bacon plant in Monaghan. I was informed that its premises required substantial funding to bring it up to the standard required by the relevant EU legislation. These closures have put well in excess of 200 people out of work in addition to the spin-off effects in many other areas. There is much talk about improvements in employment generally but in that area in the period November 1994 to April 1996 there was a 12 per cent increase in the numbers of people unemployed in Monaghan alone.

When one examines the history of pig slaughtering one discovers that in 1989 there were 20 pig slaughtering units slaughtering 2.1 million pigs; in 1995 that figure had been reduced to eight slaughtering units, in line with IDA policy at that time when that agency conducted a survey based on the Danish production system. In 1996 that figure has been reduced to six plants slaughtering 2.9 million pigs.

Whether one is engaged in producing cattle, pigs or poultry, it is generally accepted that one should locate one's processing plant as close as possible to one's primary producers. That has been an accepted principle over many years since the transportation of livestock or poultry over long distances tends to affect the quality of the meat.

North of a line from Drogheda to Galway where there is much pig production no work is being done and nobody is earning money. Four companies control the slaughtering and processing of pigs, with one of those accounting for 50 per cent of total slaughtering. Prior to the setting up in Northern Ireland of the Unilver Group most of the pigs produced in Armagh, Fermanagh and Tyrone were slaughtered in plants in Monaghan. I would like to know why those plants had to close. Fewer people are now involved in pig production in the South. One month ago the price of Irish grade E pigmeat was 16.6 per cent less than the EU average, with the German producer recording 37p per kilo more than the British producer who, in turn, recorded a 23 per cent increase on the Irish producer. I ask the Minister to undertake an indepth study of pig production and processing.

I thank Deputy Leonard for raising this issue. I share his concern about the loss of jobs resulting from the closure of two pig slaughtering plants in the Cavan-Monaghan region since the beginning of this year. In each case closure came about when management took a commercial decision to cease operations. The two plants concerned are McCarrens of Cavan and Dawn Pork and Bacon, Coolshannagh, Monaghan.

In the case of McCarrens, the company had, I understand, suffered trading losses in 1995. It brought in a rationalisation programme in 1995 which improved matters temporarily. However, the arrival of a major pigmeat processing plant in Northern Ireland towards the end of last year caused a shortage of pig supplies in the South, and drove up pig prices here. The new Northern Ireland firm was sourcing some of its supplies south of the Border and was offering higher prices. Naturally pig supplies moved northwards. An indication of this movement is that pig slaughterings in Northern Ireland for the first eight months of 1996 are about 17 per cent higher than at the same point in 1995. Corresponding figures for pig slaughterings in the Republic show a decrease of about 5 per cent for the same period. Historically there has always been a two-way movement of pigs north and south of the Border, greater numbers coming southwards. This situation has now been reversed, with large numbers of pigs being lost to the processing sector in the South. Under the Single Market rules of the EU, I cannot stop the movement of pigs to Northern Ireland. Neither can I give national aid to the pig industry as the common organisation of the market in pigmeat precludes me from doing so.

This situation has meant that pig prices have remained at a high level due to curtailed supplies. McCarrens, I understand, felt unable to continue full trading because of the high pig prices and operated the business on a scaled-down level for a number of months, producing cooked meats only. Further plans for rationalisation were put by the company to the workforce in recent months, but were rejected. Consequently, the company decided to cease all operations at the plant in August last. Forbairt has been in close contact with McCarrens all through this difficult period. As recently as last week McCarrens management met Forbairt and had useful discussions. Suggestions were made by Forbairt to McCarrens with a view to the resumption of operations on a viable scale at the plant. The full resources of Forbairt have been laid at the disposal of the company to get a successful resumption of operations at the plant. My Department is liaising with Forbairt and monitoring the position. The Deputy will appreciate that I cannot intervene in what is essentially a dispute between workers and management.

With regard to the Coolshannagh plant, here again the closure was due to a commercial decision being taken by management. Dawn Pork and Bacon Company bought this plant late in 1995. At the time of purchase, management was notified by my Department that major deficiencies in the slaughtering facilities needed to be rectified, for the plant to come up to the standards set down in EU regulations. My Department's role is to ensure that these standards are met.

Officials from my Department met management of this plant about three weeks ago to discuss the impending closure. Management explained that the high cost of pigs at present did not allow it the scope for the substantial capital investment needed to bring the plant up to the required EU standards. It had decided to cease operations at this plant. The firm was not in a position to give a commitment that it would recommence operations at the plant at some stage in the future.

With the high price for pigs prevailing the processing margins in 1996 have declined. It is essential that processing plants become as competitive as possible. The immediate short-term need is for plants to increase their cost competitiveness and market performance. To this end Forbairt will actively pursue, over the medium term, initiatives to bring processing capacity in the northeast region back to a satisfactory level of production in a manner consistent with the new competitive environment.

The outlook for the industry is good. Supplies are expected to become more plentiful in the latter part of this year, and at the beginning of next year. The August 1996 pig census shows that pig numbers in Ireland have increased by 6.2 per cent compared to August 1995. Numbers of pigs are now running at 1.6 million head compared to 1.5 million head a year ago. The marketing of these additional supplies should restore balance to the market and ensure that pig prices are at competitive levels.

I assure the Deputy that I will continue to monitor the situation, and will keep in contact with Forbairt about its efforts to restore the processing capacity in the Cavan-Monaghan area to a satisfactory level.