Dáil Éireann debate -
Thursday, 17 Oct 1996

Vol. 470 No. 3

Beef Industry: Statements.

Minister for Agriculture, Food and Forestry (Mr. Yates)

Lest there be any other impression, I am anxious to facilitate a full debate on this matter. It will be taken today, the earliest opportunity, and again this day week, which will give adequate time to Deputies. I will be quite happy to answer questions on an open-ended basis at the close of business next week.

I do not wish to rehash what we have discussed in several debates since 20 March, but to concentrate particularly on the Russian situation. I will briefly outline the history of the importation of Irish beef into the former USSR and more recently Russia. The level of trade has varied substantially through the years depending mainly on production patterns in the USSR and Russia which, in turn, determined supply demands, price etc. For quite a period, sales to the USSR and Russia were sourced mainly from intervention stocks. Commercial sales took off in 1994 when the level of export refunds to Russia was increased thus making this trade economic. It also coincided with the transformation of the Russian food market following the break-up of the USSR. This fact, with a decline in Russian production following difficulties associated with privatising the agriculture sector, has resulted in a substantial steady increase in the export of Irish beef to Russia. In 1995, some 100,000 tonnes of beef was exported to Russia valued at around 325 million, making it the largest market for Irish beef outside the EU. It continues to be the most important third country market for Irish beef in 1996.

The confirmation of the first BSE cases in Ireland in 1989 caused difficulties for Irish beef sales to a number of third countries, including Russia. In the autumn of 1990, the USSR authorities raised concerns about accepting Irish intervention beef. The sale from intervention was only cleared following the visit of their chief veterinary officer to Ireland to inspect our health controls at first hand. In July 1993, the Russian authorities suspended imports of Irish beef because of BSE-related concerns. Again the ban was lifted following the visit of a high level veterinary delegation to Ireland and the negotiation of a veterinary certificate which included certain specific animal health assurances required by the Russian authorities. Therefore, BSE related concerns in Russia are not new and it is only since 1994 that a consistent commercial trade developed in that market.

The most recent and most serious BSE crisis commenced following the House of Commons statement on 20 March and we are all aware of the subsequent wave of consumer concern and market closures which followed. However, the Russian market remained open during this period because of ongoing contacts with the Russian authorities and their satisfaction with the comprehensive series of controls in place in Ireland ensured the safety and quality of beef exports. In addition, a permanent Russian veterinary official was assigned to Ireland to monitor contracts and loading ships for Russia. His presence has facilitated continuing trade with Russia at a time when difficulties are being experienced in a number of other markets. The Russian authorities have been updated on the incidence of BSE and are relatively familiar with the control system here.

During recent months, the Russian authorities expressed concern regarding the increasing level of BSE in Ireland. There have been 38 cases of BSE this year to date which is more than double the number of cases in 1995 and is higher than the level of cases in any year to date. During the visit of a trade delegation to Moscow in mid-September, the Russian veterinary authorities raised the increasing level of cases in Ireland and a ban was threatened though not implemented at that time. Despite reassurances, the issue was raised again on the margins of a veterinary conference in Malta two weeks ago. The Taoiseach contacted Prime Minister Chernomyrdin at that time, the Tánaiste spoke to the Russian Foreign Minister and I contacted the Minister for Agriculture. The chief veterinary officer was invited to come here and following a review in Moscow it was decided he would come with a delegation of experts to study the situation at first hand. This is the context in which the situation developed. There was certainly no complacency on our part and what evolved last week was the culmination of a sequence of events spanning almost two months. I monitored the position on almost a daily basis but I saw no advantage in advertising to the world that we had BSE related difficulties in Russia or in talking about a ban where none existed. I refer to my comments at the National Ploughing Championship which have been somewhat misrepresented. What I said on that day was that there was not a ban and no confirmation of a ban but there were concerns and there was continuing dialogue. I had been advised officially that to say there was a threat of a Russian ban would invite one and it would damage our market there.

Accordingly, the chief veterinary officer of the Russian Federation, Dr. Avilov, and a delegation of veterinary experts visited Ireland from 7-12 October to review the controls in place and to study the epidemiology of the disease in Ireland. The Russian team completed a comprehensive programme of visits covering meat plants, rendering plants, ports and laboratories and also visited certain farms. I met the delegation as did the Taoiseach.

At the end of the week the Russian delegation put forward a Protocol which set out the basis for the continued importation of beef from Ireland to Russia. The Protocol included the categorisation of counties and the exclusion of up to seven counties from the Russian market. They selected the counties based on their study of the figures. It was linked to the level of the disease in the counties in 1996. The Russian side made it very clear that if the Protocol was not agreed an immediate ban would be recommended and implemented on all Irish beef with effect from 1 November.

Notwithstanding the threat of a ban, the proposed categorisation was opposed very vigorously and it was argued in strong terms that there was no scientific justification for the measure. The meeting ended without any resolution of the problem. Following consultations at a high level the negotiations resumed later that evening. The Russian side continued to insist upon categorisation but agreed to drop the number of counties to be excluded to three — Cork, Tipperary and Monaghan — and that beef for Russia could be sourced from any approved plant in any county. It was not a case of swapping counties. It was also agreed that the restrictions would be temporary and would be reviewed every three months and if the incidence of the disease improved in the counties concerned the restrictions would be relaxed. These were important considerations. We continued to oppose the measure and it was only following further consultations at high level that a decision was taken very reluctantly to sign the Protocol. The Protocol was signed in the departure lounge of Dublin Airport on Saturday, 12 October, at 1 p.m. They stipulated other requirements such as age and labelling arrangements. These do not present a major problem. A member of the delegation, an epidemiologist, stayed in Ireland to study the BSE disease further.

Mr. Kirk

On a point of order, may I avail of the facility to ask a 30 second question?

An Leas-Cheann Comhairle

Perhaps at a later stage in the debate. The Deputy would be in order in accordance with the new regulations.

Mr. Yates

The decision was taken on practical grounds and with the greatest reluctance. However, the stark choice we faced was the closure of the Russian market to all Irish beef or the exclusion of three counties on a temporary basis with an agreed mechanism to relax this restriction in due course. In the circumstances, we made the only possible choice. The closure of a market of the size of Russia would have been disastrous for the beef industry at a very difficult time.

Enough thought has not been given to the reality of a ban and what it means. A ban means our trade would be excluded from a market with an import requirement of almost 500,000 tonnes of beef. Contacts would be lost and competitors would become established. We all know that trade creates more trade and that the worst scenario would be for our traders to be cut off from the contacts and buyers with whom they have built a relationship in the past two years. The loss of the Russian market would put us into safety net intervention and would mean a drop in producer prices of at least 4p per pound. The consequence of a build up of intervention stock could undermine Russia as a commercial market.

It has been argued that regionalisation will have an impact on other third country markets. I do not accept this. However, a ban in a market the size of Russia would definitely have an impact. I reject the argument that it would have been better to accept a ban than a limited form of regionalisation. The Russian market remains open and Irish traders can continue to exploit the very real opportunities in it. While I was prepared to reluctantly accept limited regionalisation in respect of Russia, as it is our most important third country market, I do not propose to accept it in relation to any other third countries. I will travel to Russia at an early date to seek relaxation of the restrictions for these counties.

I fully appreciate the concerns of the farmers in these counties and accept that these measures are not justified on scientific or other grounds. The meat from these counties is as safe to eat as from any other county. I was faced with the stark choice of protecting the beef industry and, in the circumstances, I am satisfied I took the right decision and would take the same decision again. Neither do I accept that the negotiation could have been prolonged. As I indicated earlier a ban would have been promulgated from last Monday and our beef trade needed to know its position with regard to entering into future contracts. The filling of a contract particularly the high volume type supplied to Russia takes weeks to organise. It is naive to think this could be let run up to the end of October and trade could flow from that date. Stalling the negotiations was not an option. My impression is that while the meat trade may not like the conditions or restrictions it is anxious to continue slaughtering and doing business in Russia.

Mr. H. Byrne

The Minister is the only one here.

Mr. Yates

Contrary to earlier expectations commercial sales of beef from Ireland have performed well. This can be demonstrated by the fact that our usage of intervention has been less than expected, although it is increasing. Since emergency intervention was opened we have put in 40,000 tonnes of beef which is a good deal less than original predictions when figures in excess of 100,000 tonnes had been mentioned. Two points arise from this: first, we should do everything possible to maintain the momentum of commercial sales and, second, there is no basis for the fatalistic comments as regards animals and products from Cork, Tipperary and Monaghan. We have a market in Europe for more than 200,000 tonnes of beef without any restrictions. The EU has set down the guidelines for trade and we comply with these. Other third country markets have the potential to take 100,000 tonnes and we have individual veterinary certificates and Protocols with these countries.

The cliché about talking ourselves into a crisis holds true in this case. The real culprit is BSE. Much of the comment seems to be based on the assumption that we do not have a BSE problem in Ireland and that it only exists in Britain. We do have BSE and the present predicament arises from the upsurge in the number of cases during the summer. I accept fully that the numbers are small and that it is not reasonable to draw conclusions from changes in low incidence figures. However, the discussions with third countries are held in a context that we are a country with BSE, albeit at a low level. This highlights the need to ensure we have effective controls. The Government and I will do everything in our power to ensure the controls are effective and properly enforced and I expect nothing less than full co-operation from farmers and the industry generally in their enforcement.

At this juncture we need less recrimination about how we have arrived at this situation. The Protocol is a reality but accepting a full ban is unreal. We need to move on and support the trade in seeking new contracts. I am prepared to work with the industry on the smooth implementation of these requirements. I do not see any case for regionalising cattle prices.

Mr. Browne

(Wexford): What about the farmers in the three counties?

Mr. Yates

The ultimate is to ensure that our BSE controls are effective and that we get rid of the disease. BSE has led to many unpleasant decisions. It was not easy to depopulate apparently healthy herds and valuable animals because of one case of BSE but experience has shown this to be the right decision. Banning the feeding of meat and bonemeal caused disruption but it was the right decision. In regard to the extra number of cases, there is a clear link between feeding meat and bonemeal and the incidence of BSE. It is absolutely critical that the decisions coming into effect today are implemented throughout the country. It has not been easy to accept regionalisation, even on a temporary basis, but experience will show it was the right decision. I acted in the best interests of the agricultural sector and the beef industry, including farmers, beef processors and workers.

On the question of the Iranian market, there has been some misrepresentation of the reports in this morning's newspapers. There has been no new request by the Iranians in the past few days for 12 counties to be banned. Last Tuesday week they offered me a Protocol, which excluded a province, to sign. However, I refused to sign it and said I would not enter into any regionalisation arrangements for the Iranian market. I wish to clarify that the Taoiseach was consulted at all stages and was aware of the decision before the announcement was made. This morning the Leader of the main Opposition party asked if the Protocol would be laid before the House. The Protocol is in the Russian language and it would be inadvisable to lay it before the House. Having regard to their trading nature, I do not wish to create a precedent whereby Protocols would require the approval of the House. Neither do I wish competitors to be aware of the details of Protocols signed by us. However, if the Opposition spokespersons wish to have a translation of the Protocol this can be made available. I do not wish to conceal the details of the Protocol but it would not be a good precedent to publish it.

I wish to say a good word about the beef industry.

Mr. H. Byrne

That is a change.

Mr. Yates

The intervention terms obtained by us could indicate a higher market price than the one currently prevailing. There has been an increase in the processors' margin and the weights derogation will be in place until the end of the year. This is well above the safety net level. The Russian market will provide a basis for consolidated prices not only in the three counties affected but throughout the country. Last Tuesday I received confirmation that Saudi Arabia had lifted its ban on our dairy and beef products. Given that this country is a political leader in the Gulf region this is a significant move which will hopefully lead to increased sales.

It is my intention to ensure that this temporary hiccup affects one market only. People may say a dangerous precedent has been set but I assure them a much more dangerous precedent would have been set if the Russians had imposed a ban. There are people who are afraid that our markets in Europe and elsewhere will be disrupted but I would point out to them that a decision by the Iranians, Libyans and others not to buy Irish beef does not automatically lead to a similar decision by the French, Italians, Dutch, Germans, Algerians and Egyptians. The Russians have taken their decision on the basis of their interpretation of science but this does not provide any justification to other countries to follow suit. We have a legal basis to trade in Europe and I look forward to a growth in trade.

Mr. H. Byrne

Does the Minister really believe that?

Mr. Kirk

The Minister said a member of the delegation, an epidemiologist, was staying in Ireland to study the disease further. Will he liaise with the Department or will he lean on newspaper reports in forming his opinion on the BSE crisis? I take it he will also be involved in the review. What arrangements have been agreed between the Department and the Russians in regard to this veterinary surgeon?

Mr. Yates

The precise implementation of the ban from 1 November and other issues are under active discussion with the meat industry and Russian vets. The most likely scenario is that a herd tag number from a particular county will be required to have a preceding letter and all carcases exported to Russia will require an "R" stamp. Departmental officials will be given the job of certifying that the requirements in the certificate are met. Following discussions with the meat industry, I am confident that this requirement will not cause extensive disruption as consignments to new markets have been easily accommodated in existing branding schemes.

My biggest fear is that the understandable anxiety, concern and anger in these three counties will serve to highlight this issue in the international media, a highly undesirable development. I am available to meet delegations from the three counties involved in an effort to be constructive and positive. I do not want television stations such as CNN and Sky News or press clippings sent by embassies to their home countries to exaggerate the problem, given that I am not prepared to sign further Protocols. I am not casting any aspirations but there is a question of vulnerability and people should realise exactly what is at issue. Vets, diplomatic staff and technical services staff respond to questions on an ongoing basis. The nub of the problem is——

Mr. Cowen

The Minister.

Mr. Yates

——that in July and August there were 17 confirmed cases of BSE, which is more than the total number of cases for last year. There is a number of suspect cases and I expect the number for this year to increase further.

Mr. Power

While it is understandable, nobody likes hysteria. The Minister said he was available to meet interested groups. Would it not have been better to meet them last week before the decision was announced so that the hysteria could have been prevented? The Minister should have explained the reasons for the decision before making the announcement.

Mr. Yates

Negotiations of this type are not conducted in public. From a foreign point of view, privacy is an integral part of the discussions. It must be remembered that there are consumer and other politics within Russia, Teheran, and Egypt and there is an insistence that these discussions be held in private. I did not sit in on the discussions but I understand that during the latter stages they dealt with technical, administrative, veterinary and health related matters. The Russian delegation included a senior official from the Department, an independent scientist, Dr. Avilov, and a translator. I do not wish to conceal anything but it is not possible to conduct these negotiations in public. I can make the details of all meetings available at a later date.

People from the three counties involved and other counties have made snide remarks about County Wexford. I want to make it clear that I did not at any stage say anything about County Wexford to anyone from Russia. If County Wexford was one of the three counties I would still have said it was in the national interest to sign the Protocol. I assure the House that there was no political interference in the choice of counties and that the Russian delegation alone selected the counties.

In two months' time there will be no price differential between the price of animals at Cahir, Mallow, Enniscorthy or Kilkenny marts and there will be no knock-on effect. If I am vindicated in that opinion the hysteria will not have contributed anything to the debate. I appeal to people to await developments in a cool and calm manner. I urge caution on this matter because inflammatory remarks can only cause buyers elsewhere to have deeper concerns than are justified or necessary.

Debate adjourned.