Dáil Éireann debate -
Thursday, 22 Oct 1998

Vol. 495 No. 6

Adjournment Debate. - Pig Meat Industry.

Mr. Farrelly

I welcome the opportunity to raise the reason the Government has not approved the granting of an export licence to Dromone Meats and to seek an explanation why the Department has no veterinary staff. The pig meat industry is in a state of chassis and many people are losing their livelihoods as a result. Last March, the Department was asked to approve an export licence to Dromone Meats. The company received grants to upgrade its plant but the Department decided to investigate the plant to see whether it was up to standard. For the benefit of Members I wish to read a letter from government buildings in Cavan to Mr. Hanlon, the owner of Dromone Meats:

Dear Kieran,

I have spoken with P.J. Rogan and B. McInerney in Agriculture House. Your plan has passed all the requirements for export approval and the appropriate stamp. However, due to the ongoing lack of Department staff to service your operation, there will be a further delay until late autumn. Agriculture House is in the process of acquiring veterinary and technical personnel.

How can the Minister decide to open McCarrens in Cavan and provide the staff for it, yet refuse to provide staff for Dromone Meats? I believe Avonmore has a hold on this Minister and Government and that the pressure exerted by that company has prevented the Government certifying Dromone Meats to slaughter animals for export. As a result, farmers are going out of business by the new time.

Mr. Crawford

The pig industry is in a disastrous state. A total of 10,000 pigs are being held back from slaughter. The Minister, to whom I spoke recently, has refused to grant the necessary licence to Dromone Meats which would allow pigs to be slaughtered and exported. Thankfully, there have been some negotiations in recent days in regard to the reopening of McCarrens. That plant was significantly financed by successive Governments and it is a disaster it has been allowed to remain closed for so long. The main issues for the disposal of pigs relate to the APS scheme and export refunds. Unfortunately, the much needed export credit scheme was not approved and, as a result the factories have not taken up any of the APS.

Deputy McGinley told me today that pigs cannot be sold in Donegal where all that is available is 50p per lb. In Avonmore, a farmer who is a long-term supplier can get about 73p in County Cavan. If he has been put out because of the burning down of the factory in Northern Ireland he will get 63p if he is lucky. If he has to keep them an extra week he will only get 40p because they are overweight. Putting 2,000 tonnes of pigmeat into APS would mean 32,000 pigs could be taken out of the system.

The Department charges £25 to give a certificate to export pigs to Northern Ireland. This could be waived in Counties Cavan and Monaghan, something which has already been done in County Donegal. Why has the Government levy of £1.25 not been waived as a gesture? This was done by Deputy Yates when he was Minister and surely it can be done again. Small farmers are being forced out of business.

In the past few days farmers have been slaughtering baby female pigs. This shows how serious is the position. Many farmers are closing their businesses or being forced to close. Banks, millers and others have been sympathetic but what is being sought now is a little help to reopen McCarrens bacon factory and get the Minister to issue a licence for export purposes for a factory in Dromone which is already State aided and approved.

Minister for Health and Children (Mr. Cowen)

I thank Deputies Crawford and Farrelly for raising the issue and am glad to have the opportunity to respond on behalf of the Minister for Agriculture and Food who cannot be present.

As the Deputies are aware the difficulties in the pig sector throughout the EU have come about as a result of a number of factors, the chief one being over-production. In the EU consumption of pigmeat has not increased to any great extent and this has not helped matters. Added to this the markets in Japan and Russia, traditionally large outlets for EU pigmeat, have very much under-performed this year. The Russian market has in fact been closed for the past couple of months due to the turmoil in the financial markets there.

A bad situation in the pigmeat sector in Ireland was made worse by a fire at a pigmeat plant in Northern Ireland which was slaughtering about 5,000 pigs per week from pig producers based mainly in the Border regions. These producers were finding some difficulty having their pigs slaughtered, so to deal with this arrangements were put in place following agreement between the Department, the IFA and the Irish Association of Pigmeat Producers to slaughter pigs on Saturdays and on overtime during the week. As a result weekly slaughtering at EU approved plants are showing an increase of between 5,000 and 8,000 pigs per week.

Referring back to the fire at the pigmeat plant in Northern Ireland, the Minister understands the owners of that premises have since purchased Unipork, a large pigmeat premises also situated in Northern Ireland. The Minister understands that since the takeover Unipork has increased the number of pigs slaughtered and this should help pig farmers in Border regions.

With regard to McCarrens pigmeat factory in Cavan the decision to reopen or not is a commercial one for the parties involved. That said, the Minister is glad to say it is expected the plant will reopen soon for business, perhaps as early as next week. He understands negotiations in that regard are being finalised and an announcement is expected shortly. When the plant reopens, it will be able to slaughter a maximum of 6,000 pigs per week. This will undoubtedly make a large contribution towards alleviating the slaughtering problems of the Border regions.

With regard to the Dromone Meats factory in Oldcastle, it is not possible to grant an EU export licence to the factory at this time. While the factory has reached the required standard, the increased supervisory requirements involved in the changeover from domestic to EU status have immediate and considerable staff resource implications for the Department of Agriculture and Food.

Mr. Crawford

Two vets.

Mr. Cowen

An EU export licence will be granted to this company as soon as the necessary supervisory arrangements can be put in place. The Minister assures the Deputies that every effort is being made in this regard with a view to having the matter resolved in the quickest possible time.

The Minister has made every possible effort to alleviate the situation in the pigmeat market and has been successful in putting in place and improving a range of market supports. The record is there for all to see. The Commission increased export refunds last May following a request from the Minister for Agriculture and Food. With the market continuing to be weak, he followed this up at the end of July with a further request to the Commission to increase export refunds. The request got agreement from the Commission which increased export refunds with effect from 4 August.

Despite this the market continued to be weak and he, with a number of colleagues on the Council of Agriculture Ministers from a number of other member states, approached the Commission asking for the introduction of an aids to private storage scheme, or APS. Once again the Commission responded positively and an APS scheme was introduced with effect from 28 September. This is a scheme worthy of major support from processors throughout the EU. It provides for EU funding for the storage of up to 70,000 tonnes of pigmeat with the choice of leaving the product in store for four, five or six months duration. At the end of the storage period the product must be exported to third countries and will attract an export refund where appropriate. The Minister urges the Irish processing sector to make full use of the support schemes available, particularly the APS scheme now in place as a result of the Minister's efforts.

As recently as last week at the pigmeat management committee Ireland, with several other member states, successfully got Commission agreement to increase export refunds for fresh and frozen pigmeat products by 33.33 per cent. This is a major achievement, but nonetheless the Minister will continue to keep a watchful eye on the market.

Regarding disposal, Bord Bia launched a pigmeat promotion programme to encourage sales on the home market. This should play its part in increasing the level of domestic consumption.

The Minister is confident that the operation of export refunds, which have been increased substantially on three occasions in the past five months, and the fulsome participation of pigmeat traders in the aids to private storage scheme will lead to an improvement in pigmeat prices and thus help restore balance in the market and give reasonable returns to all involved in the sector.