Ceisteanna—Questions. Priority Questions. - Intervention Tender.

Paul Connaughton


1 Mr. Connaughton asked the Minister for Agriculture and Food the steps, if any, he has taken or the representations, if any, he has made to ensure that the latest intervention tender of 12 December 1997 yielded a minimum of 85 pence per pound and a total volume of 5,930 tonnes; the representations, if any, he has made to the EU Agriculture Commissioner to have intervention sales discontinued in the current crisis; and if he will make a statement on the matter. [23560/97]

The adjudication of tenders for the sale of beef into intervention is the responsibility of the EU Commission, acting through the Beef Management Committee. At its last meeting on 12 December, the committee accepted offers from Irish processors amounting to 2,330 tonnes at prices ranging from 83p per lb to 86.5p per lb, related to R3 grade steers. Prior to the meeting of the committee, I had conveyed to the Commission that a substantial quantity of beef offered by Irish processors should be accepted in view of the difficulties being experienced by Irish beef exporters on the UK market.

I am satisfied that the sizeable quantity accepted for this time of year, involving the purchase of over 7,000 steers, will help to stabilise the market. I continued with my efforts at the Council of Ministers this week to have effective and flexible intervention arrangements in place for the spring of 1998.

I also sought a commitment from Commissioner Fischler at the Council that intervention stocks would not be put on offer for sale to third countries until the middle of 1998, when we have a better understanding of how the beef market in the EU is likely to develop. I am pleased that the Commission withdrew its proposal for the sale of intervention beef for export from the agenda of the Beef Management Committee on 12 December in response to my representations. In addition, I have secured assurances from the Commission that any export sale will be a "trial" sale only and will involve a very limited quantity in order to minimise any disruption to the market.

The Minister will acknowledge it has been a difficult year for farmers and that the past six weeks have been outrageously bad. At no time during the past five years did farmers obtain such low prices for cattle as during the last six weeks. According to the figures provided by the Department, those prices are between 3p to 5p per lb less than they were during the same period last year. At that time, the Minister and his colleagues stated that things could not get worse. However, I cannot see the type of dedication necessary to take action on behalf of farmers.

The Government made a feeble attempt to obtain a greater tonnage in respect of intervention beef. The factories sought approximately 6,000 tonnes, of which they received only 3,000 tonnes. Will the Minister guarantee that the trial sale of intervention meat to be refloated on to the market will not happen in the first six months of 1998? Is he in a position to ensure that the next tranche of intervention will be of such a sizeable quantity that we can expect to see prices in Ireland pegged at 85p to 86p? Given the introduction of the slaughter premium on 1 January and in light of the fact that there is no real competition on the market in respect of live cattle — the Minister does not appear to be disposed to the live trade — will he give a commitment to prevent meat factories further reducing their prices when farmers become eligible to claim that premium?

Beef cattle producers have had a difficult year and I have acknowledged that at all times. The Department and I have done everything possible to assist the trade, cattle producers and Bord Bia, at political and diplomatic level, in respect of access to all outlets and markets.

The reality is that, while prices have not been good in recent months, the market remained stable. We were running ahead of 1996 prices until the blockade of British ports and the recent scare regarding beef on the bone which depressed prices by 3p per lb. In the run up to the tender on 12 December, the Department made extraordinary levels of contact with the Commission to ensure that a reasonable tender would be accepted and that the threat to release intervention beef on to the market did not happen.

The volume of the tender, 2,330 tonnes, was a record high for this time of year. For example, at the November tender, no tonnage was accepted and at the previous one, only 374 tonnes was accepted. The 2,330 tonnes represents approximately 40 per cent of the tender offered which, in the nature of the way tenders are made, is the proportion accepted by the factories. If the entire tender had been accepted, the factories would have been more surprised than anyone. The level of tenders and the price at which they are pitched is a matter for the industry and the factories. In this case, the Department made the highest level of contact possible with the Commission. In my view this proved quite effective and worked out in a relatively satisfactory way in that, since 12 December, prices in marts and quotes in factories have risen by 3p to 4p per lb.

Since when did that happen?

Since last Friday.

This morning most of the factories were quoting a price of 82p per lb.

That is untrue. Quotes have risen since Monday. Copies of the Bord Bia figures can be obtained in the Farmers' Journal, the FarmingIndependent and the Farm Examiner.

What about the Department's figures?

The Department receives figures from the marts and the factories. The fact is that prices have recovered by 3p to 4p per lb. We have made the strongest possible case in relation to next year. At the Council of Ministers' meeting on Monday I said we wanted the fullest and most flexible access to intervention, particularly in the first quater of the year, and argued that a release of beef on the commercial market would be disruptive and not in the best interests of the Irish industry or the EU. I hope our representations will bear fruit and that we will have prudent and orderly intervention arrangements for 1998. Between now and then, the Department will make every possible contact to ensure that is done in the best interests of our cattle and beef industry.

The Minister did not answer my last question about the possibility that meat factories may drop their prices on 1 January. The farmers of Ireland are bemused by the Minister's activities. They believe he has taken a feeble approach and it appears he does not have the clout either at home or abroad——

This is Question Time, Deputy, please refrain from——

This is a question every farmer in Ireland wants to ask the Minister. Unless he gets his act together the first six weeks of next year will be as bad as the last six weeks have been, and farmers will have huge difficulties in 1998. What can he do to ensure the factories do not take their traditional step of dropping prices on 1 January?

I will do more than my predecessor, who did nothing. He said publicly that he had referred the matter to the Prices Commission but I would like to know if there has been an outcome since then.

The Minister said last year that things could not be worse but they are now.

Last year my predecessor talked about all sorts of things, including elephantine cattle, to get out of the disastrous position in which he put himself. Prices dropped to 76 pence per pound, which pauperised the industry.

The prices of top weights are still dropping — this Minister brought bad news on that too.

Since then, I have had a successful record in office——

If that is success, God help the farmers.

Deputy Connaughton does not even know the prices.

——in remedying the position before my appointment, when we did not even have a ship to take cattle from this island. This Government made money available to ensure the Purbeck sailed from Ireland.

We thanked the Minister for that——

Yes, I appreciate that.

——but we want it to go to Egypt.

I received a good deal of correspondence from farmers in the west because the prices of weanlings and calves were reflected in that. As to the question about meat factories, this is an ongoing problem. Beef farmers are of the view that beef factories drop prices to match variations in grant aid, deseasonalisation premia, etc. Since my appointment the Secretary General of my Department, Mr. John Malone, had a number of meetings with factory representatives and farm organisations to ensure transparency and a correlation between the return from the marketplace and the price paid to farmers; in other words, the margin between them will not be excessive but no more than adequate. I am assured by my Department officials, and by my meetings with farming organisations, that the meetings with factory representatives have been positive. I hope and expect that a mechanism or structure will be in place for 1998 to ensure the price farmers receive is reflective of the return from the marketplace.