Vol. 498 No. 5
11 Ms Shortall asked the Minister for Agriculture and Food the further discussions, if any, he has had with the meat factories in relation to the price being paid for cattle; and if he will make a statement on the matter. [27861/98]
I have been disappointed with the level of cattle prices being paid by meat factories this autumn, particularly in view of the more effective intervention support arrangements which I successfully negotiated with the EU Commission last October and in view also of a 9p per lb. increase in export refunds.
Following agreement by the Commission to my request for wider and more effective intervention supports, I held a meeting with the beef processors on 14 October and followed this up with a further meeting on 15 October at which farmer representatives also attended. The objective of these meetings was to ensure that the new support measures would translate into immediate benefit for beef producers.
While I have indicated my continuing dissatisfaction through my public pronouncements with the level of prices paid by meat factories and I am disappointed that the full benefits of the concessions I negotiated are not being used in such a way as to benefit producers to the maximum degree possible, I am satisfied that without these concessions cattle prices in Ireland would be far lower than at present. The reality is that cattle prices were in virtual free-fall before these measures were introduced and a huge backlog of cattle was building up on farms. Since the introduction of the measures, cattle prices have increased by approximately 2 per cent and the backlog of cattle has been more or less removed. It is clear, therefore, that the concessions have been effective in protecting Irish farmers from the worst effects of the loss of the Russian market.
Nevertheless I accept the loss of the Russian market will continue to have a negative impact on the Irish beef market into 1999 and, in view of this, I made timely and strong representations to Commissioner Fischler for an extension of the special intervention package for a further three months. The Commission agreed last Friday to extend the special intervention arrangements up to 1 April 1999. I expect the package to be translated into realistic market prices for producers who are incurring high production costs in wintering cattle. In the context of the prices package earlier this year, I secured the extension of the deseasonalisation premium at a lower rate for 1999. This concession will be of particular assistance in the new year to winter finishers.
While I acknowledge the Minister's bona fides and the efforts he has made, nobody else in the marketplace acknowledges them. So far as I am concerned the factories have made no effort to find alternative markets. They forced the Minister to secure the various concessions which he sought. Given that the Minister has not met the factories in the past two months he should call them in because they are fobbing him off. Why does the price of cattle always fall in a coincidental fashion? Why is there no competition? The free marketeers told us that intervention by any State agency was to the detriment of an industry. Is it a coincidence or is it that a cartel is now operating? Has the Competition Authority not been able to investigate what is happening at the marts? Has any effort been made to find out what is happening? Winter fatteners have told me they are in the land of no hope.
Are they still around?
I have documents here.
The Deputy will be aware he cannot quote from documents at Question Time.
Is the Minister aware that out of 14 top class cattle from the heart of the midlands which were sold for £9,300, not one achieved the U grade, although they were hand fed for the past five weeks? Is the Minister aware that dissatisfaction with grading abroad is compounding the issue of poor prices? This is the first time a U grade was not achieved. Three months earlier, of 11 cattle sold from this land, seven were U grades.
The purpose of Question Time is to elicit information.
Is the Minister aware that part of the problem in relation to poor cattle prices is the grading issue? Have there been any reports back from the factories to suggest the standard is becoming more acute? What is the position?
Cattle prices are extremely low. The actual price is 74p to 81p or 82p per lb. which is below the cost of production for many people. Winter fatteners are particularly badly hit because in most cases they do not avail of the ten month or the 22 month premiums. They are going through a particularly bad time. The Deputy asked specifically what a Minister for Agriculture can do in relation to the factories. This is a problem because the Minister for Agriculture and Food does not fix prices. My predecessor referred this matter to the Competition Authority which did nothing about it.
On the question of grading, I am aware of dissatisfaction with grading and that it is subjective. Efforts are being made to have an objective mechanical system of grading but more research is needed. The scheme works well in Denmark but we have a different type of cattle in Ireland. I am aware from work in the dairy industry that when people had difficulties with butter fat and protein levels, automatic equipment was introduced, 20 or 25 years ago, and Teagasc did very useful work in modifying that equipment to suit Irish conditions. By and large the dairy industry is satisfied with the system in place there. Perhaps a similar system could be put in place in meat factories which would allow for an objective rather than a subjective assessment in relation to grading.
The Minister stated earlier that his predecessor referred this matter to the Competition Authority but, unfortunately, without results. I appeal to the Minister to again refer this matter to the Competition Authority because there is justified anger among members of the farming community regarding the scandalously low prices that have been paid for beef for a considerable period. There was no justification for the price of beef not being increased by at least 6p per lb. in view of the increased buoyancy in the trade throughout Europe, the introduction of export refunds and the availability of the intervention system.
I agree that in recent months certain measures were put in place and negotiations brought certain improvements. However, those improvements were not reflected in the price on offer to farmers. Members will recall that when the deseasonalisation premium was introduced on 1 January last the price to farmers immediately decreased by between 3p to 4p per lb. This amount represented the approximate value of the premium. It will be interesting to see what happens after 1 January next when the new deseasonalisation premium is introduced.
I again point out the limitations of the Minister for Agriculture and Food in respect of fixing prices. I raised this matter with the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Tom Kitt, and Members will be aware from media reports that he has met supermarket representatives and made contact with the Competition Authority. I am following up on this matter in the most strenuous manner possible because, at present, the industry, the Department, taxpayers and the factories need the industry to supply the raw material. I will make every effort to ensure transparency in terms of the pricing of the raw material by the factories.
While I appreciate the Minister's achievements in terms of intervention, I cannot be as kind to him as previous speakers. The Minister and the Government have not invested any Exchequer funding to resolve this problem. When the original BSE crisis arose, the then Minister for Agriculture, Food and Forestry was able to pay £50 for each heifer slaughtered. Faced by a worse crisis, the current Minister has not been able to do that.
The Deputy should put a question to the Minister.
Why has the Minister been so quiet in the two months since the crisis emerged? There has not been a peep out of him, he is like a church mouse. Given that they know the underlying situation is so bad, farmers are wondering what the Minister is trying to do. The Minister stated that there is no greater critic than he of the factories. However, factories will always act in the way they have and this is not the first occasion on which they have acted in this way. The Minister should not have expected that they would not do it when they got the opportunity.
What action is the Minister taking in respect of the Libyan market and will that market be reopened? We can discuss the Competition Authority until we are sick of doing so but most of us want to know when the Libyan market will be reopened.
Is the Minister in a position to indicate why the factories took up only 12,000 or 13,000 tonnes of the allowance of 44,000 tonnes he obtained in respect of intervention? What happened to the remainder? What is the European Union's policy in respect of such behaviour? Why did the factories not take up the amount to which they were entitled? What sort of case did the Minister put forward in Europe in terms of returning the winter slaughter premium to its full rate? If winter fatteners are to be given assistance, surely that was an ideal way to obtain a top up. What a time to allow the premium to be reduced.
With regard to what action was taken, I already referred to the improved intervention arrangements and the introduction of export refunds. Those matters had to be negotiated with the EU.
What about Exchequer funding?
The Minister for Finance gave £50 million to the bookies.
What about the bookmaker's office in Millstreet? The Deputy does not know anything about that.
The Minister of State does not know the location of Millstreet.
With regard to taxpayers' money, when I entered office last year headage premia were underfunded and I was obliged to introduce a Supplementary Estimate giving £23 million of taxpayers' money to farmers who needed it to supplement their incomes.
They were entitled to headage grants. That is a red herring.
This year, a Supplementary Estimate involving an additional £8 million of taxpayers' money was introduced to meet shortfalls in headage payments. When Deputy Creed's party was in office it spent moneys from the Structural Funds——
We spent money that was already there.
——because it was front-loaded.
In order that farmers would not be left without headage payments, I sought and obtained additional moneys from the Department of Finance. Members will recall, specifically in respect of beef farmers, that we advanced the rate from 60 per cent to 80 per cent which put £46 million into farmers' pockets this year rather than after Easter.
That was their own money.
This took account of the difficulties they had endured during the current year.
Deputy Connaughton inquired about the Libyan market. He will be aware that the Libyan market has been closed since 1996. Following an invitation, a high level delegation from Libya visited Ireland in July and signed a protocol to reopen the trade to that country for live cattle. That formal agreement between the Government and the Libyan authorities was subsequently endorsed by the Libyan People's Assembly in August. It was expected that the trade would reopen in October. At a meeting in the Red Cow Inn a prominent person announced the reopening of the trade from 10 or 12 October.
That is a dangerous place to make announcements.
Yes, but that is where the announcement was made. It was accompanied by a major fanfare, shown on the RTE's "6.01" news programme that evening and reported in the newspapers the following day. Regrettably, the market did not reopen.
In recent months, Ireland's Ambassador in Rome, Mr. Joe Small, visited Tripoli and spent a considerable time there making the strongest possible representations on behalf of the Libyan authorities. He insisted that they should honour the agreement they signed in Dublin.
Why did the Minister not visit Libya?
On a famous occasion a number of years ago my predecessor visited Tripoli and announced the reopening of the trade. However, it has not yet been reopened.
I accept that, but the Minister stated he would have the market reopened when he entered office.
I knew there was a reason I recalled the meeting at the Red Cow Inn in April 1997.
The Deputy was present on that occasion.
The Minister is correct. This is the second occasion on which I have heard the Red Cow mentioned.
The red herring would be more appropriate.
If I thought a visit to Libya would advance this trade, I would make such a visit. Providing competition through the live trade is the most important matter to affect prices in Ireland. The figures show that the live trade to the EU and the Lebanon — effectively our only third country market outside the EU — is extremely buoyant. However, these markets involve smaller numbers of cattle. I am doing everything possible to reopen the Libyan market.
What about the winter slaughter premium?
The position is that, because the 35 per cent level necessary to trigger the deseasonalisation premium in 1999 was not achieved in the reference period — September to November 1997 — the deseasonalisation slaughter premium should, therefore, not be made available at all. However, I secured a package at this year's prices council meeting in Brussels in June in order to have the deseasonalisation premium paid at 60 per cent of the normal rate. I consider that a valuable concession to beef farmers for the coming year.
(Carlow-Kilkenny): The Minister said he would travel abroad if it would help to have markets reopened. When on this side of the House he offered the then Minister, Deputy Yates, a screwdriver and wanted the then Taoiseach and Minister for Foreign Affairs to travel abroad. What has happened in the meantime? Do the meat factories treat the Minister as a school-boy offering him a cup of tea and a biscuit and to shake his hand? Does the Minister have any leverage?
Cattle prices are at their lowest for 25 years. Will the Minister reintroduce the £50 per head Exchequer grant for all female animals slaughtered?
The Deputy's party was in office 25 years ago.
It happened three years ago.
Yes or no?
The Government's representative in Rome, Ambassador Small, deals directly with the authorities in Tripoli to which one has to travel by land via Tunisia.
(Carlow-Kilkenny):What system was operated by Deputy Yates?
He went barefoot.
If the ambassador reports that it would be of value, I will travel to Libya. On the meat factories, the Department does not fix prices. The best way to secure an increase is competition which is best achieved by having a vibrant live trade. Direct aids are contrary to EU rules.
