Brendan Smith
Question:260 Mr. B. Smith asked the Minister for Agriculture and Food if his Department will provide financial assistance to the meat and bonemeal sector; and if he will make a statement on the matter. [5710/03]
Written Answers - Meat and Bonemeal Sector.
My Department has provided financial assistance to the rendering industry since January 2001, when meat and bonemeal was banned as an animal feed. By the end of February 2003 the overall expenditure on supporting the production of MBM will have been €138 million. This funding is apart from other actions to support the beef sector in the wake of the BSE crisis in late 2000. For example, the total funding of cattle destruction schemes came to €426 million, which included €217 million in Exchequer funding, in the years 2001 and 2002. The funding of the disposal of the 170,000 tonnes of MBM currently in store, will have to borne by the Exchequer at some future date. From December 2002, the Department's contribution towards the rendering of offal and the disposal of MBM was set in agreement with the rendering industry at €410 per tonne of MBM for a three month period up to the end of February.
Since the introduction of the rendering subsidy it has been the policy of my Department to reduce the Exchequer contribution on an ongoing basis especially in the context of the beef market returning to normality. The policy of disengaging from Exchequer funding in this area of the livestock and meat sector is in line with developments in other European Union member states and with Commission guidelines on state aid, which require such aid to be ended by the end of 2003.
Since the introduction of the subsidy, the costs associated with disposal abroad have been falling. The industry has also had the time to arrange outlets for the disposal of MBM on an on-going basis and has done so since last December. I am also of the view that in the absence of the State subsidy the industry will focus greater effort on the achievement of more cost-efficient means of handling meat and bone meal and including the use of such product in industrial or energy production. There are already indications that lower cost disposal options are being actively explored. I would expect, in those circumstances, that rendering and disposal costs will continue to reduce as greater efficiencies are achieved.