Jim O'Keeffe
Question:9 Mr. J. O'Keeffe asked the Minister for Agriculture and Food if he has satisfied himself with current cattle prices; and, if not, the steps, if any, he proposes to deal with the situation. [23129/98]
Other Questions. - Cattle Prices.
I am disappointed with the current level of cattle prices. However, the low prices stem almost entirely from the loss of the Russian market since early autumn. This market has been the major international outlet for our beef in recent years and exports in 1998 were projected to be of the order of 70,000 tonnes. In addition, the renationalisation of the beef markets in the European Union following the BSE scares in 1996 has compounded the difficulties for Irish exporters, with the result that there is now a greater dependence on third country markets for our exports than at any time in the recent past.
I have been concerned about the implications of the loss of the Russian market for the Irish beef industry for some months, and in early September I made strong representations to the Commission on the handling of the Russian crisis from the point of view of our beef trade and/or for a range of measures to be put in place to deal with the resultant market weakness.
I am pleased the Commission has responded favourably to my request and has introduced the following measures: a 21 per cent increase in export refunds, which is worth an extra 9p per pound; a widening of the intervention support through an increase in the eligible carcase weight limit to 360 kg and the inclusion of the O4 grade, which has increased eligibility of our steers from 15 per cent to almost 50 per cent; and an increase of 40 per cent in the processors' margin for cattle going into intervention.
These market support measures have stabilised prices and, indeed, there are indications of a recovery in the market, as evidenced by the increases recorded in recent weeks. However, there is scope for much further improvement in view of the 9p per pound increase in refunds, the flexibility of the intervention arrangements and the relatively strong market prices on the EU Continent. I expect Irish beef processors to make full use of the supports available and to pass back to producers the full benefits in the prices paid for cattle.
I am disappointed that, to date, full use has not been made of the new arrangements by processors. For example, the first tender was less than 4,000 tonnes and this week the most recent tender was just over 4,000 tonnes. The processors could have done better than that in the present circumstances.
The income position of producers will also be assisted this autumn as a result of the Commission granting my request to increase the advance of the suckler cow and special beef premium payments from 60 per cent to 80 per cent, which is worth £45 million. This will help the cash flow of producers, particularly those who are experiencing fodder shortages due to the wet summer. These latter producers will also benefit from the fodder aid package which will be paid from national funds.
Has the Minister visited Bandon mart recently where 9 cwt bullocks were sold for £365 and £375 per head.
How much premia had the farmers collected in respect of those animals?
I saw that happen and I invite the Minister go to that mart. The Minister told us he got special concessions on cattle prices from Europe. Why did he not insist that the factories pass on price increases to the producers? What is he doing to insist that the factories do that? That price increase has not been evident to farmers who have gone to marts in any part of the country.
The Minister said the factories should be well able to cope with the changes he secured under the refund scheme, but they have put the additional money into their pockets. I do not want to play the innocent on this because I understand the system as well as the Minister. It is difficult to do much in terms of the factories. The Minister should have met representatives of the factories three weeks ago and explained that there will be other occasions when they will have to use the facilities of the Department of Agriculture and Food to seek refurbishment grants and so on, but he did not do that.
The Deputy should confine himself to questions.
Can the Minister put manners on the factories? They are holding back 4p or 5p per lb. which should be passed on to farmers. Is there truth in the rumour I heard today that the 360 kg limit that the Minister negotiated will be reduced to 340 kg or 345 kg?
Is the Minister aware that even the agents who normally have access to the factories have said they cannot get cattle removed for at least two weeks? The position is a disaster. The ground is wet, there is no housing for the cattle and they have to be disposed of, yet 68p per lb. upwards was the figure quoted by an agent to me this morning. When the Minister was in Opposition and the BSE crisis was at its height he had all the answers.
The Deputy must ask a question.
The Minister when in Opposition and in the run up to the last general election promised he would travel to Libya, Egypt and other markets. Why has he and the Minister for Foreign Affairs not travelled to those countries? Farmers are waiting to see the brilliant performance he promised us.
The Deputy is making a statement.
Does the Minister accept 70p per pound is sufficient without any support measures as were given in the past?
There is extreme anger among the farming community that the 9p in the lb. the Minister negotiated on behalf of farm producers has been taken by the meat factories. The farmers have not benefited by his good efforts in Brussels or by the opening up of intervention, which has not been opened to the extent it should be opened given that less than half the total tenders have been used up.
Will the Minister close the meat factories?
When the Minister negotiates with the European Commission in Brussels on behalf of the farming community to seek benefits for farm producers, can some new mechanism be introduced or some existing regulation be used to ensure such money is passed on to the primary producers who desperately need it so that it is not gobbled up by the processors? I appeal to the Minister to examine if a new or existing mechanism can be used to ensure there is fair play and that primary producers get the proper price for their product.
The position is unsatisfactory from the point of the view of the primary producers. Prices were at a reasonable level up to the end of July this year. The collapse of the political and financial systems in Russia created extreme difficulties for Irish producers and our industry. We were exporting 70,000 tonnes of beef to Russia, but suddenly that market collapsed and access to other markets had to be found.
In reply to Deputy Crawford's question, I visited Cairo on two occasions in the past seven or eight months. We are extremely extended on the Egyptian market. That market will import 90,000 or perhaps 100,000 tonnes of beef this year and it is by far our most important market.
When did the Minister visit Cairo?
I visited Cairo some time in August. I also visited Tehran a month ago.
I will show the Deputy the countries the Minister visited on a map.
The Minister should have taken the Minister of State with him.
I asked the Minister about the Libyan market.
The Deputy's colleague visited Tripoli and he announced the re-opening of that market on that occasion, but unfortunately it has not been re-opened. Regarding Europe, the Minister of the day must create the proper environment for the sector by getting secure benefits through negotiation. The benefits secured were 9p per lb. increase in export refunds bringing the total subsidy on beef up to 51p per lb. Deputy Crawford mentioned figures of 68p per lb. and 73p per lb. Beef can be sold in intervention for 19p, 20p or 25p per lb. when the subsidy of 51p per lb. is taken into account. Regarding intervention, it was put to me by the industry that if there was an increase from 350 kg to 360 kg in the weight of cattle being put into intervention — I have not heard anything about that figure being reduced — if the O4 grade was allowed into intervention and if there was an increase in the processor's margin, they would be able to tender for 30,000 tonnes of beef. Four tenders are available. Two of them have been sent out and in regard to those two tenders only 8,000 tonnes of beef has been applied for. That means that there will have to be 11,000 tonnes of beef applied for in the next two tenders, making a total of 22,000 tonnes of beef, which seems unlikely. There seems to be no explanation for this other than smaller tenders producers would have to book in their cattle and seek to get them in at a lower price in order to keep the prices down. That is most unsatisfactory. I have done everything I possibly can in this regard. I met representatives of the farming organisations and the industry in the Department and I asked them to make full use of the intervention which they sought and to pass on the price increase to the producers.
My predecessor faced a similar problem and in desperation he referred the matter to the competition authority, but it was not able to do anything more about the matter. Representatives from the Department of Agriculture and Food who attend the beef management meeting are asked what is the cry in Ireland about poor prices and poor access to markets, given that when markets — if intervention can be called a market — are made available, they are not being availed of. Our cattle herd is increasing.
It now stands at virtually eight million head, which is an all-time record. The argument is that if things are that bad why is the access available not being used and why are numbers increasing? I will continue to do everything I can.
There has been a great deal of guff about live exports. Some 129,000 head of cattle have been exported from Ireland this year to date. That is four times more than last year. The allegation is made from time to time that insufficient ferries or boats are available to carry them. We have an adequate number of boats. Any trader who approaches my Department with a boat which is up to standard and has adequate ventilation, feed and roll requirements has been approved. Cattle have been taken mainly to mainland Europe — approximately 100,000 — while the rest have gone mainly to the Lebanon. Every option open to me and my Department has been taken to help in the present situation and we will continue to operate on that basis.
Written Answers follow Adjournment Debate.