Dáil Éireann debate -
Tuesday, 7 Dec 1999

Vol. 512 No. 3

Written Answers - Sheep Farmers.

Brian O'Shea

Question:

167 Mr. O'Shea asked the Minister for Agriculture, Food and Rural Development the proposals, if any, he has to assist sheep farmers currently under extreme pressure (details supplied); and if he will make a statement on the matter. [26047/99]

Minister for Agriculture, Food and Rural Development (Mr. Walsh)

I am aware of the income difficulties being experienced by sheep producers at the present time. These difficulties are due to the relatively low prices paid by processors for lamb for much of the year, particularly since Easter. The low prices stem largely from increased supplies of UK lamb and somewhat higher slaughterings here also. The increased supplies in the UK have depressed returns from the French market which is our single most important and this in turn has been reflected in lower prices here. The ongoing renationalisation of the French market is also a factor as are the continuing problems in Russia which has substantially reduced prices for lambskins. The market has, however, firmed considerably over the past number of weeks mainly due to stronger demand in France and prices are now 24% higher than at the same time last year, although on average prices for the current year are 8% lower than in 1998.

I accept that the ewe premium system fails to reflect the disparity in prices between member states and therefore, even allowing for differences between production systems in member states, does not support the income of producers in an equitable manner throughout the union.

I have on a number of occasions pointed out to the Commission the deficiencies in the sheepmeat regime in this respect and raised the matter most recently at the November agriculture council. At that meeting I outlined the serious income situation facing sheep producers at the present time and the failure of the ewe premium system to properly compensate Irish producers because of the lack of convergence of prices across the European Union. In particular, I called on Commissioner Fischler to take urgent action to address these issues, including by way of the temporary suspension of the stabiliser or through the payment of a supplementary premium in member states where prices are significantly below the EU average. Apart from the United Kingdom, I received no support from other member states. As far as the extensification premium is concerned, I have also raised this matter with the Commission on a number of occasions in recent years. I have also recently asked the Commission to introduce a staggered retention period, beginning on the day after an application is lodged, for the ewe premium. Commissioner Fischler has indicated that he intends to review the current regime next year which is an important development.

I also accept that New Zealand imports can create difficulties on the EU market and both I and my French colleague have maintained pressure at EU level to limit the effects.

As far as headage payments are concerned, under transitional measures the existing sheep headage scheme will continue to apply in year 2000. The details of the scheme which will apply following the changeover to an area based scheme from the year 2001 has not yet been formulated. Discussions will take place with the farming organisations before any final decisions are taken.

I think that it is worthwhile to remember that, in spite of all its defects, the ewe premium system does in fact provide important income support to Irish producers amounting to £110 million per annum with a further £22 million coming from the headage payments under the Structural Funds. This is a substantial amount of money and, while I am fully committed to securing improvements in the system, we have to acknowledge that the regime is seen to be relatively expensive by the Commission and other member states.