I wish to share time with Deputy Brendan Smith?
Adjournment Debate. - Farm Produce Prices.
Is that agreed? Agreed.
The farming sector is currently experiencing considerable difficulties with the pigmeat, sheepmeat, beef and cereal sectors being most severely hit. The main issue about which primary producers and consumers feel strongly relates to the huge differentials which exist between the prices paid at the farm gate and those which are charged in retail outlets. Price differentials cannot be justified and the serious creaming off of profits is affecting individual farmers and producers and is also impacting on consumers. According to the laws of economics, when prices drop consumption increases. At a time when there is a serious overhang in the marketplace, increased consumption would be of significant benefit to the lines of production I mentioned.
We have reached a stage here where a limited number of multiples are exercising a disproportionate degree of power and control over the whole production chain. There seems to be a diminishing sense of loyalty and commitment to home producers and Irish suppliers. This House must extend consideration to everybody right across the board. If we ignore the importance of the supplier network the basic economy will suffer.
I would appreciate it if the Minister would address the points I have made, particularly on the degree of power being exercised by the multiples. There is a strong case for the Competition Authority to examine the very serious differential between the price at the farm gate and at retail outlets.
I thank my colleague, Deputy Kirk, for the opportunity to say a few words on this topic. He outlined cogently why this issue needs to be tackled. The Leas-Cheann Comhairle, I and other public representatives in the Border counties are particularly conscious of the very severe difficulties facing one particular sector, the pigmeat industry.
Pig producers in the Border region in particular are suffering huge losses. One of the difficulties is the lack of capacity in the Border region. I commend the Minister of State, Deputy Ned O'Keeffe, and his officials for their ongoing efforts to try to resolve that difficulty. I am glad some progress is being made with the reopening of the McCarrens plant in Cavan. I take the opportunity to appeal to the Minister of State, Deputy Ned O'Keeffe, and his colleague the Minister, Deputy Joe Walsh, to ensure that we make the maximum use of that facility as quickly as possible because competition is needed.
Pig producers in our area are anxious to have another slaughtering outlet to which to sell their product. It is essential that the small scale producer is protected. This is extremely urgent because of the serious losses endured by that sector for some time. Over the summer months many people asked me why the price of the finished product in the supermarkets and shops was not coming down when the price to the farmer had dropped dramatically.
I am pleased to respond to the legitimate concerns of Deputies Kirk and Smith on behalf of consumers. Unfortunately, my Government colleague, the Minister of State, Deputy Tom Kitt, who has responsibility for consumer affairs, is abroad on official business. I assure the House that he shares the Deputies' concerns about price differentials.
I am delighted to inform the House that the Minister of State, Deputy Kitt, will, on behalf of the Government, invite representatives of the supermarket multiples and RGDATA to discuss the very serious concern that is being expressed up and down the country about the huge price differential between farm gate prices and retail prices. I will also outline other action we are taking to ensure that consumers get the best possible deal for their money.
Speaking as a Member of this House representing a largely rural constituency with many farmers, I can vouch for the fact that farmers also have legitimate concerns about the price differential between what they get for their produce and for what it is subsequently sold at retail level.
Farmers are suffering badly and the Government is doing everything possible to alleviate their plight. Undoubtedly, consumers are looking at the relatively low price farmers are getting for beef, pigmeat, lamb and other produce and wondering at the prices being charged in the supermarkets and shops. Deputies and the House need be in no doubt that the Government is determined to find out why there are such big price differentials and ensure that consumers get a fair deal.
We cannot countenance a situation where, to use economic jargon, people in the value chain are rent seeking. In plain English, the Government will not have the consumer fleeced. Government would be extremely concerned if significant reductions in farm gate prices are not proportionately reflected in reduced consumer prices. Some time may be needed for price reductions to work their way to the retail outlets. Legitimate concerns are being expressed on behalf of consumers and the matter will have to be investigated further.
I have asked my officials to pursue the issue urgently. We will have meetings with representatives of supermarkets and RGDATA soon. We will also consult with the Department of Agriculture and Food to get their input. We will examine other aspects of the food value chain to see where any "creaming off" might be taking place. We will, as appropriate, meet with any other association or industry representative group to ensure that they are fully aware that this Government will not tolerate the interests of consumers being affected adversely. We will consult with the Office of the Director of Consumer Affairs to examine how his office can be of assistance.
In addition, the issues highlighted here this evening raise concerns about possible anti-competitive behaviour in the marketplace. We would be equally appalled if that were the case. I hope it is not. However, the Competition Authority has ample legal powers to investigate and prosecute as appropriate.
I am bringing the content of this timely debate to the attention of the Director of Competition Enforcement. I will ask him to follow up the issues raised and take whatever action he deems necessary in the interests of consumers and the primary producers — the farmers — on whom we are totally dependent.