Dáil Éireann debate -
Tuesday, 23 May 2000

Vol. 519 No. 5

Adjournment Debate. - Sheep Subsidy Scheme.

Mr. Connaughton:

I thank the Minister for attending this debate. The price of lamb is again in freefall. It is now at £1.20 per pound and is expected to fall further. Two weeks ago lamb was £1.35 per pound. To compound the problem for Irish farmers, their French counterparts are getting £1.60 per pound or 40p more but Irish farmers are getting the same level of ewe premium.

The first instalment of the 2000 ewe premium at £4.22 flat plus £4.71 or 90% of the rural world premium bears no relationship to the costs involved in rearing lambs. It is no wonder that 20% of Irish sheep farmers said in a recent opinion poll that they were getting out of sheep production. Why are they doing this? They see no future in the industry because there are major structural problems which the Minister does not appear to be capable of tackling. The only proposal put forward in the last few weeks was a possible rejig of the current sheep headage scheme, which suggests that the headage should be scrapped on all hogget ewes in hill and lowland flocks and should be increased for ewes. This is no more effective than rearranging the deckchairs on the Titanic.

The Minister does not appear to understand the plight of sheep farmers. He does not understand the problems that will beset Irish sheep farmers as a consequence of Agenda 2000. He has done almost nothing to provide a level playing pitch so Irish sheep farmers can make money from sheep production.

A number of fundamental changes must take place if our 40,000 sheep farmers are to remain in business and compete. The retention period for the ewe premium scheme must be moved back to prevent the negative effect of hoggets coming onto the market at the same time spring lambs are offered for sale. It will have to be staggered in some way. The meat factories will have to improve. It is obvious that some profiteering is taking place. Bord Bia will have to do more to promote the image of Irish lamb at home and abroad. I welcome what happened this week but I cannot understand how French farmers can get 40p more per pound for their lamb. Something is wrong with the system.

The rules on extensification must be changed. We cannot play around with this any longer. If sheep are calculated as livestock units, they must be paid for and if they are not, they must be excluded. The stabiliser must be reduced or removed as the factors for its inception have now changed in that the number of ewes has dropped considerably across Europe. The method of calculation for the ewe premium scheme, based on the entire EU area, militates greatly against Irish farmers. The French farmer who received £1.60 per pound for his lambs today has a negative impact on the amount of money an Irish sheep farmer receives on his ewe premium. That is unacceptable.

These are the problems and they are well known. The Government and Minister appear to be unable to grapple with them. Unless there is a major change there will be fewer sheep farmers in Ireland and that would be a disaster given that the EU is only 86% self sufficient in sheepmeat. I ask the Minister to do more than rejig the premium and I look forward to hearing his views on this subject.

Mr. Walsh:

I thank Deputy Connaughton for raising the plight of sheep farmers and the sheep industry. Everybody is disappointed with the downturn in the last couple of weeks. During the first quarter of the year prices for lamb were attractive and everybody hoped that would continue. However, it is a difficult category of farming. It is mainly carried out in disadvantaged areas and in any category of farming where there are no quotas or supply control, there will be over production. There has been considerable over production in this category, particularly in the UK and in Spain, and it regularly leads to these difficulties.

Under the Agenda 2000 agreement, headage grants in the disadvantaged areas will move from a payment per animal basis to a payment per hectare. Under transitional arrangements the headage schemes as they have operated until now will continue to apply this year. In the change from headage to hectare basis I am committed to introducing a system which will protect the payment levels to the categories of farmers for whom disadvantaged areas payments are an important part of their income. As provided for in the Programme for Prosperity and Fairness, a task force, representative of the Department and the main farming bodies, was established to formulate a new scheme. The task force has met on a number of occasions and discussions on the nature of a new scheme are currently under way between the Department and the farming bodies. The details of any new scheme will have to be approved by the EU Commission.

As part of those discussions, the question of how sheep farmers generally should be accommodated within a new scheme has been examined. Until now, sheep farmers in all disadvantaged areas were paid £11 on mountain breeding ewes substantially maintained on mountain grazings while hogget ewes maintained on mountain and lowland grazings attracted a payment of £12 per hogget ewe. The maximum grant payable was £2,000 per producer.

Under the existing scheme, therefore, sheep producers in lowlands were precluded from being paid in respect of breeding ewes. One of the issues being examined in the context of the discussions with the farming organisations is how payment of compensatory allowances might be extended to sheep producers in lowlands who maintain a flock of breeding ewes. The vast bulk of lowland sheep producers have a mixture of breeding ewes and hogget ewes but since payment is currently confined to hogget ewes, some producers do not qualify for payment at all and those who do qualify do not in all cases attract the maximum payment of £2,000. The further difficulty, highlighted by Deputy Connaughton, is that due to the retention period the hoggets come on the market at this time and create difficulties for everybody.

The discussions with the farming organisations are continuing and various options are being considered. No final proposals have been made and no final decisions have been arrived at. What has been taking place is the consideration of a range of options in the context of the changes in the system which arise from the Agenda 2000 agreement. We hope to conclude the discussions shortly in order to be in a position to submit proposals to the EU Commission. The final agreement will be a consensus between the farming organisations and the Department. It will ensure that the new system will protect the payment levels of farmers as they were under the headage system. However, any new arrangements cannot proceed without the approval of the EU Commission.