Dáil Éireann debate -
Wednesday, 10 Nov 1999

Vol. 510 No. 4

Adjournment Debate. - Pig Production.

Mr. B. Smith

Little did I think when Deputy Cecilia Keaveney and I raised the issue of the fire at the Lovell and Christmas plant on 20 June 1998 we would now raise the difficulties that would arise due to the reduction in the slaughtering and processing capacity for the northern half of the country. Overnight, due to that fire, 14% of the entire slaughtering capacity of this island was wiped out. Coupled with that was the reduction in the slaughtering and processing capacity due to the rationalisation proposals of Enterprise Ireland, formerly the IDA, in the northern half of the country. Unfortunately the crisis has deepened in the meantime. It is an issue in which all the Oireachtas members in the Border region have taken a keen interest and have worked together to achieve a solution. In the meantime there has been a continual downward spiral in prices. Even in recent weeks the average price of a pig has been reduced by £8 particularly in the Border region. Already we are facing over supply and lack of slaughtering capacity.

What we are talking about is the survival of the pig sector, the pig production sector and particularly the small scale producer. The people we have met and who have made a lawful and justifiable demonstration in recent days are concerned about their future and the future of pig production. It is absolutely essential that measures are taken and financial assistance is provided urgently to ensure the sector survives. The European Union, through any competition policy, cannot block the Government providing assistance because this is not about creating an uncompetitive advantage but the survival of an important employment and farming sector. Financial assistance needs to be directed to that sector urgently.

The Irish Farmers' Association in a detailed study and verifiable survey has estimated that in the latter half of 1998 plus the first quarter of 1999 the 88 pig producers in Donegal, Cavan and Monaghan have suffered losses of more £4.5 million, taking into account the differential in the price obtainable in the south compared to the northern half of the country. Those people need assistance and have a justifiable and well presented case. We are talking about huge employment, employment on the farms and downstream activity. It is an important employment sector in the Border region in general.

I ask the Minister of State who had the opportunity today to hear at first hand the concerns, the anxieties and the fears of pig producers, to bring to the Minister, the Minister for Finance and the Government the well-documented proposal for financial assistance to ensure this sector is given the opportunity to survive. Above all – and I wish to share time with Deputy Keaveney – I am anxious that the small scale producer is protected and that we do not have only a handful of largescale producers. That would be to the detriment of farming and the pig production sector. It is not something we could tolerate.

Cecilia Keaveney

I thank Deputy Smith for allowing me share time to outline my support for a sector which I cannot believe we are still discussing a year on. As a Border Deputy in an area where many pig producers have been crippled by circumstances beyond their control I ask the Minister of State, the other Minister of State, the Minister for Agriculture, Food and Rural Development and the Minister for Finance, Deputy McCreevy to ensure the situation is resolved as a matter of urgency.

The geographical location of producers in north Donegal is difficult at the best of times. They relied on the Lovell and Christmas plant until it was burned down 18 months ago. It is discriminatory that these farmers are forced to travel many miles over many hours with their animals due to the fact that there is no premises on the Border that could take them. When animals were taken to southern plants the producers were either told they were not needed and to take them home or to accept a price that was significantly lower than that enjoyed by southern producers. This opportunistic approach crippled our producers and the list of stories of the status of the pig producer is truly staggering. The Minister of State is aware of the details of what has happened and what needs to be addressed in a regional manner and that compensation must be forthcoming in what is a once-off disaster. This will not create a precedent.

In the long-term it is important that two issues be looked at: first, the over supply of animals and the reality that if some producers were made an adequate offer they might be in a position to get out of an industry that, at present, has them over a barrel and, second, the monopoly in terms of prices has to be dealt with. The Border region needs a plant that will offer competition to the producers. We are not serviced with adequate facilities. I recognise that McCarron in Cavan is operational but we need a full service.

I appreciate this matter being taken on the Adjournment tonight. I cannot over stress the problem in north Donegal and in the Border region. I hope the matter which all the Oireachtas members in the Border counties, across the political divide, have been battling with for up to 18 months will be resolved.

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

I thank Deputies Smith and Keaveney for raising this important matter. Deputies and Ministers, including the Minister for Tourism, Sport and Recreation, Dr. McDaid, Deputy O'Halon and others have all raised this matter with me and I understand their concerns.

The pigmeat market worldwide has been in difficulties over the past year or so due mainly to overproduction. In the European Union the overproduction occurred as a result of classical swine fever which necessitated the slaughter of large numbers of pigs and their withdrawal from the market. The subsequent rise in prices led producers who were not affected by the disease to increase their production. When the disease was eliminated production continued to increase and prices dropped. Other factors contributing to the difficulties were the market weaknesses in Japan and Russia which traditionally import large quantities of pigmeat.

In Ireland the difficulties were compounded by the fire at the Lovell and Christmas plant in Northern Ireland which traditionally slaughtered between 5,000 and 8,000 pigs per week from the Republic. This created a backlog of pigs awaiting slaughter on pig producers' holdings in the north-eastern part of the country. The Minister, however, arranged for extra shifts to be worked at some EU approved plants as well as giving EU export approved status to an additional two pigmeat plants in Counties Meath and Westmeath. As a result the backlog was swiftly cleared. When it was suggested this time last year that there were difficulties in processing capacity we were not convinced, but the position has changed. We are now more than convinced.

To alleviate the difficulties being experienced overall by Irish pig producers, the Minister took a number of important steps at EU level. With his colleagues in the Council of Agriculture Ministers he sought and obtained generous increases in export refunds from the European Commission on a number of occasions in 1998 and 1999. These increases ranged from 33 to 80 per cent. An aids to private storage scheme for pigmeat was also introduced. This scheme, which recently concluded, removed over 420,000 tonnes of pigmeat from the EU market. The European Commission also introduced a food aid programme for Russia which included 100,000 tonnes of pigmeat. To date about 50,000 tonnes of pigmeat have been exported from the European Union under the programme to Russia. Approximately 2,000 tonnes of Irish pigmeat was placed in private storage. We hope the food aid programme, which we support, will be reintroduced in the European Union in coming months. This would help to alleviate part of the problem.

The cumulative effect of the steps taken by the Minister is that prices obtained by Irish pigmeat producers increased by over 18% since the beginning of the year. There has, however, been a weakening of price in recent weeks. It is clear, therefore, that despite the overall rise, there is a need for further improvement in prices. There was a meeting of the pig strategy group in the Department this afternoon. I accepted an invitation from members of the group to hear the views of Border farmers with whom we had a lengthy discussion. The situation in which they find themselves is dire arising from the fall in prices and the lack of slaughtering facilities. I have discussed the matter with the Minister for Finance and will make representations to Brussels to see what can be done to alleviate their financial difficulties. We have a valuable and viable pigmeat sector with close on four million pigs. Any losses would make it unproductive and inefficient. It accounts for only 1 per cent of pig numbers in the European Union. We have to make a strong case to protect what we have. We will look after the producers concerned if at all possible. The problems of farmers in the Border region have been highlighted, not only by Deputies Smith and Keaveney tonight but also by the Leas-Cheann Comhairle and Deputy Crawford.

The Minister is taking further measures aimed at securing an increase in prices. He recently wrote to Commissioner Fischler requesting an increase in the export refunds for Russia and an early completion of the food aid programme under which a further 50,000 tonnes of pigmeat is set for delivery. He also asked him to bring forward proposals aimed at supply control in the sector. These issues were raised by senior officials of the Department at today's meeting of the Pigmeat Management Committee in Brussels. The matter will be raised again at next week's meeting of the Council of Agriculture Ministers in Brussels on Monday and Tuesday.

The Minister met representatives of the feed compounders as well as the standing committee of the banks on the issue today. They gave an undertaking that no producer will experience hardship. The Minister also had recent meetings with Enterprise Ireland and An Bord Bia and asked both organisations to examine what actions they can take to assist the pigmeat sector. Enterprise Ireland was asked for an immediate assessment of slaughtering capacity and to examine aspects of the industry which may require attention and possible investment. He specifically asked that aspects of regional capacity be addressed in view of developments in the northern part of the country. This issue is being addressed, although it cannot be solved overnight.

The long-term outlook for pig prices is favourable. The European Commission has forecast that the supply of pigs should drop in the last quarter of 1999. This should put upward pressure on prices. The increased demand during the Christmas season should also aid pig prices. I thank the Deputies for raising this serious mat terwhich is being addressed. I am aware of their concern and that of the Leas-Cheann Comhairle.

Mr. Crawford

When will they get the money?