Vol. 564 No. 3
5 Mr. Stanton asked the Minister for Agriculture and Food his proposals to restore profitability to winter beef producers who are currently losing money at the cattle price level of ?2.38/kg, 85p/lb for R grade cattle and ?2.24/kg 80p/lb for O grade cattle which is not viable; and if he will make a statement on the matter. [9073/03]
The prices paid by processors for cattle is a matter for direct negotiation between beef producers and individual beef processors.
The profitability of specific producer sectors will depend on a combination of prices paid to producers for finished animals, their own cost structure and, critically, the prices paid for young animals.
As far as current cattle prices are concerned, they 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 73c per lb in the case of steers in comparison with 46c per lb in 1999. Current prices for steers in Ireland are roughly at the same level as 1999.
The major factors in determining overall price levels paid by the processing sector 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.
My function in relation to cattle prices is to set the policy parameters and support framework and to seek by every political and diplomatic initiative to secure access to markets.
Is it also the Minister's function to increase the cost to farmers, which he mentioned as being one of the parameters, by doubling the disease levies and will he do something to redress that situation? Will he agree that profitability is affected by costs at one end and prices achieved at the market at the other end? His actions and those of his Department and the Government are about to increase costs. Has the Minister any information with regard to any recent developments in the Russian market? Has it introduced quotas or is it about to introduce them and, if so, what will he do about it and, what would be the likely impact? What is the position about traceability in regard to third country imports to Ireland and its impact on profitability? Will he agree that beef from markets outside the EU should be labelled and that the consumer should be told where it originates?
There is a margin in every area of activity. Farmers are in the private enterprise world and many of them buy store cattle. At present, store cattle are about 11.7% dearer than they were this time last year. Those without a premium are making around €300 with their weight, and they are making up to €1,000 if one can draw two premia on them.
I find it difficult to understand how farmers pay that amount of money for store cattle and expect to make a margin next autumn, but that is what is happening. Under the EU premia arrangement, farmers are now receiving a total of €540 per head if they draw all their premia. Cattle are making about €200 more per head than they were in 1999 in terms of premia.
There is a change in the Russian market. With effect from 1 April 2003, all shipments of beef to Russia came under a new quota regime and the total quota is 420,000 tonnes. The application process will be operated under import licences and the industry in Ireland is already applying for them. I expect that the present quota arrangement will not make any great difference to us.
Deputy Stanton mentioned imported beef, which is a straightforward issue. We produce approximately 500,000 tonnes of beef, of which we export about 450,000 tonnes. Some 245,000 or 250,000 tonnes are exported to the UK, some 90,000 tonnes are exported to Russia and 100,000 tonnes are exported to mainland Europe. We consume approximately 50,000 tonnes ourselves, 12,000 tonnes of which is imported, some of which is for reprocessing and re-export. If one has an industry producing 500,000 tonnes and imports 12,000 tonnes, this is indicative of a pretty good ratio in an open economy such as ours.
I have been assured by the Commissioner with responsibility for health and consumer protection, Mr. David Byrne, that the quality and safety of food imported into Ireland is up to the very highest standard.
Since the Minister entered office in 1997, leaving aside the lifting of the five county ban in respect of the Russian market, what additional overseas markets for live cattle have we established?
There were six counties involved so we can increase the percentage a little. That is only a minor technical matter. The Russian market is very valuable to us and we export about 90,000 tonnes to it. The big breakthrough has been in the UK market, which is the most remunerative because of the strength of sterling and the fact that we export 250,000 tonnes to it. Additionally, a major effort has been made by Bord Bia, the industry itself and the political system, including myself, in respect of mainland Europe. As the Deputy knows, following the foot and mouth disease crisis and some food scares, consumption decreased by about 80%. This has increased again and we are now exporting 100,000 tonnes to mainland Europe.
I succeeded in reopening the trade to the Egyptian market. The industry has not taken up on this yet because the return is not as good as that from our nearest neighbour. I am still in negotiations with the Gulf states and South Africa. It is tough going because we still have a low level of BSE, with intermittent outbreaks—
We are way over time on this question.
Is the Minister saying that aside from the Egyptian market, which will affect no commercial shipment except for the famous—
We have run out of time and must move on to Question No. 6.
The Government has—
The Chair wishes to make a statement. Under Standing Orders, each question is subject to an overall six minutes but we have spent nearly eight minutes on this question. In addition, supplementary questions and the answers thereto are subject to a limit of one minute. I ask Members to bear in mind the rules laid down by the House.
The Minister could have answered my last question in ten seconds.
It is worth noting that there has been a big increase in the live trade.
That is true.
