Dáil Éireann debate -
Tuesday, 19 Oct 1999

Vol. 509 No. 4

Adjournment Debate. - Sheep Price Collapse.

Mr. Connaughton

I welcome the opportunity to raise this important matter in the House this evening and I do so with a great sense of urgency. I will speak about the huge problem which currently besets 34,000 sheep farmers.

This has possibly been one of the worst weeks in the sheep trade for many years. Many marts managers and farmers have told me in recent days that, because of the factories reducing their prices to almost unrealistic levels, we are now at a stage where many sheep farmers will be put out of business.

I am sorry the Minister is not here tonight, he should be. It appears he has utter contempt for sheep farmers. This week the price collapsed again and we have reached a stage where farmers have to accept prices which are almost 50 per cent below those of last Easter. That is how bad the situation is. There was sheer disbelief that the Minister would not take a more proactive role in getting a better market for Irish lamb and, above all else, initiate negotiations in Brussels to have the position of Irish sheep farmers brought into line with those in the European Union. When the Minister waved the white flag on sheep policy on the fringes of Agenda 2000 some months ago, he clearly signalled to Irish sheep farmers that they do not count. Sheep farmers are not getting fair play.

Throughout the European Union, as the Minister well knows, sheep farmers are in receipt of the same level of ewe premium. Whether one is in Germany, France, Holland or Ireland, one gets the same ewe premium, despite the fact that farmers in other countries get between £10 and £12 more each for their lambs. Obviously, the method of calculation is wrong and that has been the position for the past two or three years. For whatever reason, the Minister of State and the Minister want to turn their backs on those people. Under Agenda 2000, sheep farmers were left out again when they were excluded from extensification payments. That was the only stock on the farm which was excluded. They were counted for livestock units but excluded for payment.

Will the Minister clarify the position in relation to lambs procured outside the State and slaughtered at Irish meat factories? It is necessary that all the regulations concerning animal health are enforced. There must be a determined effort to raise the awareness of the Irish consumer as regards the relative superiority of Irish lamb products over imported products. In addition, there should be a concerted effort to ensure that the Irish housewife gets the best value in lamb, given the poor prices farmers are getting.

At a time when others outside the agriculture industry are talking about an economic miracle, it is remarkable that the Government has turned its back on farming people, but that is nothing compared to what they have done to sheep farmers. This week lambs, which would have sold for £45 to £50 six months ago, are selling for £30. Cast ewes were sold this week for prices as low as £2 to £15 and there is almost no trade for store lambs. In other words, the whole trade has collapsed. There is no confidence and unless there is an immediate intervention by the Minister to try to ensure that Irish farmers get fair play in Europe, we will have a lot fewer sheep farmers in Ireland next year.

Minister of State at the Department of Agriculture, Food and Rural Development (Mr. N. O'Keeffe)

I thank Deputy Connaughton for raising this important matter and for his concern. I hope he will listen to what I have to say. In the early part of this year Irish sheep producers enjoyed reasonably satisfactory prices and at Easter these were over 20 per cent higher than the same time last year. However, in recent weeks prices have been low. It is alarmist to say that there has been a collapse in sheep prices this week. While the Minister would like to see them well in excess of the present levels of 86p to 88p per pound, this is a higher price than had been available at some stages in the early autumn.

The present difficulties in the market stem largely from increased supplies of UK lamb which have depressed returns from the French market. We export 70 per cent of our sheepmeat and three quarters of this is marketed in France. Consequently, any changes in the French market have an impact on the Irish sheepmeat trade. Another factor is that French lamb is perceived by consumers to be superior to imported product and, as a result, they are willing to pay premium prices for domestically produced lamb. Unfortunately, we are very much at the mercy of the trade activities in the neighbouring UK market which has a lamb output six times greater than that of Ireland.

The Minister has taken a number of measures to help address the difficulties in the sector. In response to representations which the Minister made to the EU Commission, a scheme of aid for private storage was agreed at a specially convened meeting of the sheepmeat management committee on 17 September. The objective of this scheme is to take up to 130,000 lambs off the market in Ireland and the UK. The Minister is happy there has been strong interest in the scheme and Ireland's allocation under this scheme has now been fully taken up. More important from our point of view is that 115,000 lambs were taken off the UK market, which can only benefit our market. The Minister is confident that this scheme will play a part in restoring market confidence to the sector.

The Minister has also requested An Bord Bia to follow up the potential for developing new markets in southern Europe. In addition, An Bord Bia has conducted an autumn promotion campaign on the domestic market to encourage demand by informing consumers about the positive qualities of Irish lamb, about which there is no doubt and about which we all agree. The theme of this campaign was that lamb is a healthy convenient food. In addition, there has been a retail based promotion campaign of mountain lamb as a speciality food.

Payment of the second instalment of the ewe premium commenced today.

Mr. Connaughton

It is almost the same as the last one.

Mr. N. O'Keeffe

The Deputy was obviously unaware of it when he was speaking. I have a press release if he would like to hear it. This will benefit the sheepmeat sector by £25 million and comes at a useful time for hard pressed sheep producers.

The sheepmeat forum, which the Minister set up last year, has now submitted its report. Membership of the forum included representatives of all those involved in the sheepmeat sector and it was charged with assessing how best the industry can collectively address the challenges it faces in the coming years. The report contains a number of recommendations which will help to improve the overall position of the industry, including the income of sheep producers. The Minister is looking forward to working with the industry to successfully implement these recommendations.

Lower producer prices should be reflected in lower retail prices which, in turn, should boost demand. There is a need to bring pressure to bear on retailers to pass on lower prices. Meat factory owners should show solidarity with their Irish suppliers by concentrating on domestic produce, notwithstanding temporarily lower prices for other produce. The Minister is aware that the current ewe premium system can be improved and has again taken up with the Commission the issues of an adjustment to the retention period and removal of the stabiliser. There is little support from other member states or from the Commission for changes which might make the system more equitable from Ireland's point of view. The Minister will, however, continue to push for changes to the sheepmeat regime.