Jack Wall
Question:238 Mr. Wall asked the Minister for Agriculture and Food if he will increase export refunds; and if he will make a statement on the matter. [15445/02]
Written Answers. - Export Refunds.
Michael Ring
Question:298 Mr. Ring asked the Minister for Agriculture and Food his proposals to lift milk and cattle prices.
Denis Naughten
Question:310 Mr. Naughten asked the Minister for Agriculture and Food if export refunds for the beef and dairy sector will be enhanced to ensure they are more competitive in third country markets; and if he will make a statement on the matter.
I propose to take Questions Nos. 238, 298 and 310 together.
The major factors in determining price levels are the availability of and ease of access to markets, the returns from those markets and, in addition, in the case of third countries, the level of export refunds. Other factors involved include efficiency at processing level and the extent to which value is added to the primary product.
As far as beef is concerned, the EU market has recovered well from the last BSE crisis. The destocking of cattle arising from the FMD outbreak last year has resulted in a substantial reduction in beef production in the United Kingdom. These developments have created additional opportunities for Irish beef exporters. With regard to the third country markets, the EU Commission increased export refunds on 27 September last by up to 30% for Egypt, following my strong representations to Commissioner Fischler. This new special high rate of export refund will make Irish beef more competitive on the Egyptian market and should lead to the resumption of trade to a very important traditional market at a crucial time in the cattle disposal season. With regard to other third country markets, the decision by the Russian Government to lift restrictions on the six county BSE ban was also made following contacts between the Irish and Russian authorities and will substantially improve access to that market for Irish beef. I expect exports to Russia to reach 75,000 tonnes this year compared to 43,000 tonnes last year.
Intensive efforts are ongoing with the Gulf region, the Philippines and Indonesia to have those markets re-opened to imports of Irish beef. Of particular interest is the fact that this week my Department is hosting a visit by technical experts from six Gulf states who are looking at food safety and consumer protection issues in relation to Irish beef.
I am hopeful that these initiatives will contribute positively to the overall situation in the beef sector, particularly coming as we head into the peak autumn slaughter period. As far as current cattle prices are concerned, cattle prices have to be seen in the context of the Agenda 2000 agreement which provided for a 20% reduction in institutional prices in return for a substantial increase in premiums, worth approximately 59 c/kg or 21p/lb in the case of steers. Apart from the initiatives outlined above, the EU Commission has decided, following my representations, to increase the rate of advance payments of the beef premiums from 60% to 80% in order to improve the cash flow of beef farmers generally and, in particular, of those affected by the poor weather earlier this summer. This will improve the cash flow of Irish farmers by €80 million this year.
As far as the dairy sector is concerned, export refunds for butter, skimmed milk powder, whole milk powder and cheese have increased considerably in the past year in response to the international decline in demand for dairy products. I have kept the situation under constant review and have raised the matter directly with Commissioner Fischler on a number of occasions. The Commission has responded positively as is evidenced by the fact that export refunds for butter have increased on three occasions, SMP on seven occasions and cheese on two occasions. In addition, aid for the production of casein has been increased in three steps by 83%.
There are now early signs that demand is recovering and I am satisfied that current export refund rates are contributing to the competitiveness of Irish and EU beef and dairy products on international markets. This should also help to alleviate price pressure at producer level. I will continue to monitor market developments and will not hesitate to press for further rate increases where these are justified.