With the permission of the House, I should like to share my time with my senior colleague, Deputy Joe Walsh.
Adjournment Debate. - Beef Compensation Package.
An Leas-Cheann Comhairle
I am sure that is satisfactory and agreed.
I am very disappointed that, once again, the Minister of State at the Department of Agriculture, Food and Forestry, Deputy Deenihan is wheeled in to impart what will obviously be bad news. I have never succeeded in getting the Minister to attend and hear any of the very important issues I have raised from time to time. It appears that, whenever there is bad news to be imparted, the Minister of State must take the rap — he was good at it in his younger days — and appears to have to take it now. Yet, whenever there are protocols or anything good to be said or announced, the Minister is always out front. I am not being facetious.
Our Government sought £73 million in matching EU funds for milk, beef, cereals and sugar beet producers. Some £32 million in matching funds were sought for the beef industry to help beef farmers literally on their knees, £17 million was conceded by the Government after considerable argument. The question being asked by all farmers, particularly hard-pressed beef farmers, is how much of those £17 million will reach beef finishers.
I recollect well that, when my colleague, Deputy Joe Walsh, was in office farmers were paid £1.06 per lb whereas today they are offered a mere 76p per lb, 30p of a loss. Even then the Minister for Agriculture accepted that it took at least £1 per lb to break even. Beef farmers are going out of business and farmers who invested considerable sums in their farming enterprise, were never as badly off.
At a meeting held recently at the Red Cow one very irate farmer told the Minister that factories would take the £17 million if they could lay their hands on them, a contention repeated many times at that meeting. This week the Irish Farmers' Journal followed up with a cartoon portraying four factory owners sitting down wondering how they would divide up Ivan's £17 million. As soon as this came to the fore, factories began to talk down prices.
When export refunds were again reduced in January the Minister said he would make factories pay a higher price and would set up an interdepartmental committee to ensure factories pay a reasonable price but, to date, nothing has happened. Will the Minister of State say whether that interdepartmental committee was established and whether the Minister ever tried to establish true returns from factories or the prices they are paying?
I want an assurance from the Minister that beef farmers will receive these funds, that heifers and bullocks will be eligible at marts, which is where the ordinary farmer sells his cattle. Of course, the key factor in all this is the opening of third country markets. I am anxious to know the position in relation to them.
The Minister should not attempt to inform us of moneys he received last year, in 1995 or at the end of 1994, saying they will help in the present crisis: that was for another day and another crisis.
The £17 million compensation package announced during Question Time on Wednesday last led me to question the Minister whether he had not reflected on the possibility that this money would be gobbled up by the factories and not reach those most in need, namely, beef farmers. I pressed him to do something about paying these funds for eligible cattle being sold at marts. He refused. On Tuesday last I received a reply to a parliamentary question, the Minister again refused yet yesterday a partial concession for heifers was announced. I appeal to the Minister and his Minister of State not to discriminate on gender grounds in respect of cattle going through marts, to allow payment on bullocks and heifers, so that our hard pressed taxpayers, forking out this £17 million, can be assured it will reach its rightful beneficiaries.
I am pleased to have this opportunity to set out the background to the £17 million compensation package and state how it is proposed to disburse it to ensure it is targeted at those beef producers most deserving of aid.
This is a nationally-funded compensation package arising from the revaluation of the Irish agricultural conversion rate. Last week the Minister informed the House that this was the first occasion on which, since we joined the European Union, our taxpayers would be financing a scheme to help a very vulnerable sector of our agricultural industry. This is a clear recognition by the Government of the seriousness with which it takes the current plight of beef producers and its efforts to ensure their future viability is underpinned.
I do not need to remind the House that the current income difficulties in this sector arose from one of the worst public health scares ever encountered in the food sector. The fall in beef consumption as a consequence of that scare created major problems in the European Union beef market mainly because of the introduction of a GATT ceiling on subsidised beef exports from the European Union. Everything possible has been done to limit the damage through the various market support measures and compensatory packages we have negotiated at EU level. Unfortunately, the strengthening pound, a direct reflection of a buoyant economy, has had a downside and led to a reduction in agricultural support prices. Since November last the pound has been revalued on three occasions: when these revaluations are combined with cuts in export refunds the total reduction amounts to some 29 per cent or approximately 18p per lb on the average steer since November last.
With regard to reductions in cattle prices arising from the revaluation of the Irish agricultural conversion rate, the EU has already agreed to provide compensation to beef producers amounting to £20 million for the revaluations on 11 November 1996 and 10 January 1997. The Minister has already announced the arrangements for the payment of this aid. An additional EU-funded compensation package amounting to £11 million to compensate for the most recent revaluation on 29 March has also been approved. In addition, the Government is backing up these payments with a further £17 million from national resources.
In his initial announcement of this package last week the Minister proposed that these funds be targeted at producers who sold cattle to meat export premises and local abattoirs between 1 April and 10 June next. He has now decided to add a further category, by including heifers sold at marts in that period. As in the case of all compensation packages agreed to date, our objective is to ensure that the payments go directly to those most affected, not to dealers and middle men. The ownership condition — which means that only producers who owned the animal on or before 1 April will be eligible — will ensure that genuine producers only will benefit.
Factories also have their responsibilities: this package, with all previous and future ones, are for the benefit of producers who provide them with the raw material year in year out; they are not for adding further to factory profits by allowing prices to collapse by an equivalent amount. Lack of competition in the marketplace, due to the absence of third country live trade, leaves producers very vulnerable to such an eventuality at present. For many years we have listened to meat producers' complaints about the damage the trade was having on their efforts to develop a value-added beef industry. They now have an opportunity of demonstrating they have the interests of the development of this industry at heart.
Next week the Minister will travel to Egypt to attempt to persuade the authorities there to remove the ban on Irish cattle exports. In recent weeks a technical delegation from Libya visited Ireland to see our controls and were impressed with measures we have in place. It is hoped that these efforts will bear fruit and that the much required competition for cattle, sadly lacking from the marketplace for the past four months, will be evident again soon.
Our efforts to reopen the other few remaining markets still closed for our beef exports are continuing. Despite the absence of these third country markets, the demand for Irish beef is still very strong. Our traders should make every effort to regain our share of the EU market lost in the course of last year. Given the relatively high prices for beef on these markets and the competitive advantages now enjoyed by Irish traders because of our low prices, there must be reasonable prospects that our share of these markets can be regained. The Government is doing everything possible to ensure the future of the beef industry and protect producers from the worst effects of the difficulties on the market.
The compensation packages agreed to date since the onset of the BSE crisis represent a total of £185 million. Flexible intervention arrangements have been put in place and every effort is being made to restore export refunds to acceptable levels, but there are major obstacles in this area due to the Uruguay Round GATT limits agreed in 1994. The price paid by the processor to the producer in a market economy should be a function of market forces and I hope these forces will prevail in the future. Deputy Byrne, by his utterances this evening, shows how ignorant he is of the market conditions that prevail.
The Minister is ignorant of the poor farmers.