Dáil Éireann debate -
Thursday, 14 Oct 1999

Vol. 509 No. 3

Adjournment Debate. - Grant Payments.

Mr. Crawford

I wish to share my time with Deputy McGinley.

There is an urgent need for the Taoiseach, the Tánaiste, the Minister for Finance and the Minister for Agriculture, Food and Rural Development to provide the necessary funds to compensate pig farmers in the Border counties for the financial losses arising from the fire disaster at the Lovell and Christmas Plant in Ballymoney on 20 June 1998 so that these farm families can avoid bankruptcy. The IFA carried out a survey of 94 farmers in Donegal, Cavan, Monaghan and Leitrim which shows clearly that the group along the Border received an average of 11.22 pence per kilo less than their counterparts not affected by the fire.

McCarron's factory in Cavan and Graham's factory in Monaghan were closed and as a result many farmers could not have their pigs killed; they had to hold them to over weight and accept as low as 30 pence per kilo for them. In the first quarter of 1999, the difference was 8.29 pence. The Minister states that no funds are available in his Department. He also states that the EU Commission could view compensation as a form of State aid. The UK Government gave aid to the Northern Ireland pig industry and received approval from the Commission because the region was affected in extraordinary circumstances, no different from an earthquake. It was a regional disaster affecting the northern counties and the Border counties. The UK found a means to fund the region of their country – Northern Ireland. This Government must act responsibly and provide the £4.78 million requested. At a time of unprecedented tax returns, the sale of Telecom Éireann and other proposed assets, this is not an impossible sum to contribute to save family farms from bankruptcy.

I am disappointed and extremely surprised that the Minister for Agriculture, Food and Rural Development, Mr. Walsh, or either of his two colleagues are not present in the House this evening. The Minister was asked to meet cross-party Oireachtas Members from Border counties. That meeting was requested by Deputy John Ellis, Chairman of the Committee on Agriculture, Food and the Marine. He was also asked for a meeting by the Monaghan-Cavan-Donegal county councils but refused. His answer, through his Private Secretary, is very negative. It states that pig prices have increased by 22 per cent since the beginning of this year and indicates that further increases are envisaged. Is the Minister and his Department in touch with the reality of the situation? Pig prices are falling, young farmers are being forced out. However, the meeting was not requested in relation to present prices; it was requested in order to seek compensation for the direct loss to the region for the period the factories were closed following the fire disaster.

Only farmers producing full accounts that can be inspected by the Department can and should be paid. The problem remains that banks and others have carried these farm families without any help from Government, not even sympathy. Tall stories regarding the commitment of factories and so on have been spun. When Graham's factory in Monaghan closed under strange circumstances and McCarron's factory in Cavan closed as a result of a strike, farmers had to find other markets. It is not true that they were going from factory to factory looking for higher prices and that they were receiving higher prices than their counterparts in the south of the country earlier in the year. The statistics drawn up by the IFA are for the full year 1998, not just for the period in question. They show clearly that there is a difference of 11.22 pence for that period. I suggest that if this sort of crisis happened in Cork or Tipperary there certainly would be a Minister in this House this evening representing the Department of Agriculture, Food and Rural Development. I do not doubt the commitment of the Minister of State, Deputy Molloy, in this matter, and I hope he will be able to have it raised at Cabinet, but we would have immediate action—

An Leas-Cheann Comhairle

The Deputy's time has concluded.

Mr. McGinley

I thank Deputy Crawford for sharing time with me and I support the case he has put so eloquently. It is almost 18 months since this crisis for pig farmers in Border areas, particularly in Counties Donegal, Cavan, Monaghan and Leitrim commenced and it is very sad. I am very disappointed that progress has not been made in addressing the difficulties. There are 93 or 94 farmers involved and if this continues much longer there will be far fewer. In County Donegal 23 farmers are affected and they are put to the pin of their collar. A precedent has been set in Northern Ireland, a region within the UK, for farmers who have been compensated. The Border counties are a region in this country and I cannot see why the precedent established in Northern Ireland cannot continue here through compensation for the farmers concerned. If this is not done most of these will get out of pig farming and the investments they have made in recent years when times were good will be lost. This would be a major blow to the economy of these families and the regions in which they live.

Minister of State at the Department of the Environment and Local Government (Mr. Molloy)

I thank Deputy Crawford for raising this issue and am glad to have the opportunity to respond on behalf of the Minister for Agriculture, Food and Rural Development.

Pig farmers in the EU as a whole have been experiencing difficulties over the past year or so. The difficulties have arisen as a result of various factors, the chief one being over production. Consumption of pigmeat in the EU has not increased at the same pace as production, and this has added to the difficult situation. Traditional markets in Asia and Russia were also very sluggish and greatly under performed. The normal market cycle in the pig sector throughout the EU was further exacerbated by a surge in output following a classical swine fever outbreak.

In Ireland the pigmeat sector was hit with the added problem of a fire at a pigmeat plant in Northern Ireland which had been slaughtering about 5,000 pigs per week from producers mainly based in the Border regions. The Minister was acutely aware at the time of the difficulties being experienced by these producers and he took action to assist them in disposing of the backlog of pigs which had temporarily built up. The Deputy will recall that the Minister for Agriculture, Food and Rural Development arranged for extra shifts to be worked at some EU export approved plants as well as giving EU export approval to an additional two plants in Counties Meath and Westmeath. This ensured that the backlog was dealt with quickly.

On the broader front, the Minister along with his colleagues in the Council of Agriculture Ministers pressed the EU Commission to take action to help the difficult pigmeat market. The Commission responded by giving generous increases in export refunds on a number of occasions in 1998 and also this year. These increases ranged from 33 per cent to 80 per cent. In addition an aids to private storage scheme was introduced. This scheme removed more than 420,000 tonnes of pigmeat from the EU market which was placed in storage. Also, a food aid programme for Russia, which included 100,000 tonnes of pigmeat, was also put into operation. To date, about 50,000 tonnes of pigmeat have been sent to Russia.

As a result of all this action, pig prices have increased substantially since the beginning of the year. Up to the week ending 9 October 1999 pig prices had increased by about 22 per cent. The EU Commission has indicated that pig supplies in the last quarter of 1999 are expected to decrease, and that would indicate that the market should improve further. Indications are that the Japanese and Russian markets are recovering and are now accepting large quantities of imported EU pigmeat.

The option of direct financial assistance to pig farmers is one which is not open to the Minister for Agriculture, Food and Rural Development.

Mr. Crawford

That is not correct.

Mr. Molloy

Under EU rules, direct aid is classed as a State aid and as such is precluded. While the Deputy may be aware that an aid scheme for pig producers in Northern Ireland was allowed, Commission decision 1999/591/EC of 9 June 1999, which contains the details of the scheme, clearly shows that it was the exceptional circumstances of the case which allowed the aid to be paid. It was limited to payment for the disposal of 15,571 overweight pigs which were slaughtered, removed from the food chain and sent for rendering. The prices paid to Northern producers for their overweight animals – 110kgs live weight and above – was set at a maximum of £30 sterling per pig which is equivalent to about IR£36. It is understood that average prices in our Border counties during this time were considerably higher.

The Minister met the banks and the pig feed suppliers to discuss the difficulties being experienced. Both organisations expressed their willingness to continue to assist pig producers in any way possible for the duration of the difficulties in the sector. An Bord Bia plans to launch a pigmeat promotion programme next week to encourage sales on the home market. The programme is scheduled to last one month and will no doubt play its part in increasing the level of pigmeat consumption.

It is clear that the action taken so far to help the pigmeat market has had some success. Clearly, there is further ground to be made up in terms of prices being paid to producers. The Minister will continue to press the EU Commission to keep the market under review and to ensure action is taken to the maximum extent possible in order to restore balance and give reasonable returns to all involved in the pigmeat sector.