Vol. 973 No. 4
1. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine his plans to commence the process of working towards a €200 annual payment for suckler cows under the rural development programme to ensure the sustainability of the national herd; and if he will make a statement on the matter. [41646/18]
I ask the Minister for an update on the beef environmental efficiency pilot scheme announced in the budget. What are his plans to commence the process of working towards a €200 annual payment for suckler cows? Can the Minister make a commitment to further progress following the welcome commencement of the measure announced in the budget?
My Department is examining all appropriate measures to support the different agrifood sectors, including the suckler sector, in preparation for the next iteration of the Common Agricultural Policy, CAP. The measures adopted will be informed by stakeholder consultation on the needs of the sector to develop in an economically and environmentally sustainable way, as well as the relevant research and the available budget and structure of the new CAP when it is finalised.
I was pleased to secure an allocation of €20 million in the 2019 budget this week for a new pilot scheme for suckler farmers, specifically aimed at further improving the carbon efficiency of beef production. The scheme will target the weaning efficiency of suckler cows and calves, measuring the live weight of the calf at weaning as a percentage of the cow's live weight. The data will be used to target improvements on a herd basis by giving the farmer detailed feedback on the performance of individual animals. The data collected will also be a valuable addition to Ireland's impressive database on cattle genomics. Details of the scheme will be announced in due course.
I am also confident that suckler farmers will be significant beneficiaries of the additional €23 million in funding announced for the areas of natural constraint, ANC, scheme.
The beef data and genomics programme, BDGP, is currently the main support specifically targeted for the suckler sector, which provides beef farmers with some €300 million in funding over the current rural development programme, RDP. This scheme is an agri-environmental measure to improve the environmental sustainability of the national suckler herd by increasing genetic merit of the herd.
My Department has rolled out a range of schemes as part of the €4 billion Rural Development Programme 2014-2020. In addition to the BDGP, other supports which are available for suckler and sheep farmers under Pillar II of the CAP include the green low-carbon agri-environment scheme, GLAS, ANCs and knowledge transfer groups. Suckler farmers also benefit from the basic payment scheme and greening payments under CAP Pillar I.
I am conscious that this has been a difficult year for the sector in terms of weather and the range of challenges associated with it. At the recent meeting of the beef round table on 3 October, I highlighted the need for stakeholders to recognise their interdependency. I urged processors to engage positively with their farmer suppliers to build the sustainability of the sector as a whole and to ensure a reasonable return for the farmers upon whom the sector relies for its development. It is essential that the position of the primary producer in the supply chain be secured if we are to build a sector for the future.
Additional information not given on the floor of the House
The beef round table also included discussions on the potential for producer organisations and the development of new technologies as ways of adding value along the entire supply chain, all tools to build resilience in the sector. Producer organisations would allow farmers to engage collectively with processors, with the aim of strengthening farmers' bargaining power. Additionally, I have asked Bord Bia to conduct a detailed examination of market dynamics, with the co-operation of the industry, taking into account sales of particular cuts into particular segments of the market to improve price transparency.
One of the unique strengths of the agrifood sector is our shared vision for the sustainable development of the sector in Food Wise 2025. I hope that this positive engagement will continue.
I am strongly of the view that this new provision announced in this week's budget and the existing range of supports available to suckler farmers, together with ensuring access to as many markets as possible, both for live animals and beef exports, are appropriate supports for the continued development of the sector. According to national farm survey, suckler farmers receive support equivalent to approximately €500 per suckler cow on average.
I will continue to argue for as strong a CAP budget as possible, post 2020. In particular, I am committed to ensuring that suckler farmers continue to receive strong support in the next CAP. Such payments should support and encourage suckler farmers to make the best decisions to improve the profitability, and the economic and environmental efficiency, of their farming system. The beef environmental efficiency pilot is a positive step in that direction.
I welcome the introduction of new beef environmental efficiency pilot. It is a start in the process of delivering a proper payment to the suckler sector to ensure it is sustainable and that there is a margin and income for the farmers who are working so hard and underpinning our beef sector.
It has been a difficult process to get to additional payments made towards it. As the Minister will be aware, a number of months ago Fianna Fáil introduced a Dáil motion which the Government voted against. That motion mapped out a pathway towards the payment of €200 per suckler cow. The Minister previously set his stall against introducing a payment that would be coupled in some way to the suckler cow. However, this particular payment is a coupled coupled payment in that it is tied to both the suckler cow and calf and paid on the cow. It is important and will contribute to improved data collection.
It is vital that it be straightforward, simple and easy to operate for farmers. They must not see the money slip away through costs associated with the scheme. Will the scheme be open to all suckler farmers? When will the scheme open for applications? Will the Department provide assistance to ensure that those farmers without access to weighing scales can be provided with them to ensure there is no cost implication for them?
I confirm that the scheme will be open to all farmers and not just current participants in BDGP. It is consistent with every utterance I have made in the context of the suckler sector; it is not a coupled payment. A coupled payment would run contrary to everything the industry has been striving to achieve over recent years, which is improving the quality of the herd. That is the direction of this initiative and it is compatible with the objectives of the BDGP, where currently minimal data are being collected on the weanling efficiency, that is the relative weight of the weanling to the suckler cow. It is not a coupled payment.
I fundamentally believe that a coupled payment would be the wrong direction in which to travel. That is the reason there will not be a coupled element to this scheme. As I said, it is open to all farmers. I appreciate the Deputy's observations about not everybody having access to a weighing scales. That is the detail we need to work through with stakeholders, including the Irish Cattle Breeding Federation, ICBF, with which I have had some preliminary conversations. I am satisfied we can get to a situation where the majority of the payment will be to the farmers. There will be some costs insofar as they will have to access weighing scales but I believe we can do that in a very cost-efficient manner.
It is crucial that the drive to improve the payments being made continues. This is a decent start. We would have liked to have seen more but I acknowledge and welcome it as a good start. I have been clear with the Minister that, from a Fianna Fáil perspective, we would be flexible regarding the way in which the payment would be delivered to the suckler cow sector, the key point being that the payment is forthcoming and that we see not only a message going out but a demonstration in terms of funds that there is an understanding of the pressure the sector is under and that it would be supported.
Can the Minister confirm today that the funding for this scheme will not be taken from other unspent funds in the rural development programme, RDP, and that it will be additional funding? Will he commit today that he has seen the light and will work towards the achievement of a €200 annual payment per suckler cow? He indicated he was not willing to do it in this budget and that he would seek to provide for it in the future and in the next CAP. It is great we have got to the stage where he has come around to introducing this scheme and starting off this process here today? Will he commit that this is his policy and that this work will continue in the context of the next budget and future ones towards the achievement of a €200 annual payment per sucker cow? Fianna Fáil will be driving forward to achieve that. I acknowledge the strong support and campaigning for this from the Irish Farmers Association, IFA, and the Irish Farmers Journal, which have highlighted the need for this support in the budget. It is important that work continues and that additional progress is made.
The commitment of the Government to the suckler cow sector, which underpins the beef industry, was never in question. We are the only member state that has a specifically focused initiative in our rural development programme for the suckler sector in the context of the beef data and genomics programme, which is delivering €300 million to the suckler cow sector. I have always said that in the context of supports it would have to be compatible with the objective of improving the genetic merit of the herd. That is compatible with our objectives in respect of climate change to make sure that the industry is as carbon efficient as possible. Much of that effort in terms of carbon efficiency leads to profitability for the farming sector also. The refrain the Deputy and I would have often heard at public meetings is that the cost of keeping a suckler cow for a 12-month period can be €700 to €800 and if she is quite an inefficient cow the cost could run over €1,000. The objective of the BDGP, and this scheme, is to accelerate a situation where the genetic merit of that herd delivers a smaller suckler cow, a bigger weanling, a cow that is in calf every year, that has an easy calving, that has sufficient milk to deliver a quality suckler cow and, in achieving all of those, improves profitability and drives down the carbon footprint. That is the direction of travel to which I have been committed from day one. I am glad that others now see the merit of going along the direction of a measure that is compatible with the BDGP rather than a coupled payment.
2. Deputy Martin Kenny asked the Minister for Agriculture, Food and the Marine the way in which he plans to tackle the crisis in the beef and suckler sector. [41466/18]
I welcome the scheme. It is a move in the right direction. I mentioned to the Minister at a committee meeting a few weeks ago that we needed to come up with something outside the box and that it needed to be related to the calf. That, by and large, is what has happened. I understand an action must be involved in it. There is some concern about the cost of the weigh-in and the way that will work out. Perhaps the Minister will give more detail on how farmers will manage that, particularly in areas where traditionally there would not have been the use of a weighing scales except when farmers went to the mart which is the only time they would have seen the use of a scales. That is a problem for farmers in many areas. The bigger issue for the suckler and beef sector is the price the farmer gets. That must be dealt with. Currently prices are very low for beef when it goes to the factory and that has a knock-on effect all the way back down to the weanling in the market.
My Department is examining all appropriate measures to support the different agrifood sectors, including the suckler sector, in preparation for the next iteration of the CAP. The measures adopted will be informed by stakeholder consultation on the needs of the sector to develop in an economically and environmentally sustainable way, as well as the relevant research and the available budget and structure of the new CAP when it is finalised.
I was pleased to secure in the budget this week an allocation of €20 million in 2019 for a new pilot scheme for suckler farmers, the beef environmental efficiency programme. The data collected on this will also be a valuable addition to Ireland's already impressive database on cattle genomics. Details of the scheme will be announced in due course.
The BDGP is currently the main support specifically targeted for the suckler beef sector, which provides Irish beef farmers with some €300 million in funding over the current rural development programme period. This scheme is an agri-environmental measure to improve the environmental sustainability of the national suckler herd by increasing the genetic merit within the herd.
My Department has rolled out a range of schemes as part of the €4 billion rural development programme. In addition to the BDGP, other supports include GLAS, ANCs and knowledge transfer groups. Suckler farmers also benefit from the basic payment scheme and the greening payments under CAP Pillar I.
I am conscious this has been a difficult year for the sector in terms of weather and the range of challenges associated with it. At the recent meeting of the beef round table on 3 October, I highlighted the need for stakeholders to recognise their interdependency. I urged processors to engage positively with their farmer suppliers. It is essential that the position of the primary producer in the supply chain be secured if we are to build a sector for the future.
The beef round table also included discussions on the potential for producer organisations and the development of new technologies as ways of adding value along the whole supply chain, all tools to build resilience in the sector. Producer organisations would allow farmers to engage collectively with processors, with the aim of strengthening farmers' bargaining power. Additionally, I have asked Bord Bia to conduct a detailed examination of market dynamics, with the co-operation of the industry, taking into account sales of particular cuts into particular segments of the market in order to improve price transparency.
One of the unique strengths the agrifood sector has is our shared vision for the sustainable development of the sector in Food Wise 2025. I hope that this positive engagement will continue.
Additional information not given on the floor of the House
I am strongly of the view that this new provision announced in this week's budget and the existing range of supports available to suckler farmers, together with ensuring access to as many markets as possible, both for live animals and beef exports, are appropriate supports for the continued development of the sector. According to national farm survey already suckler farmers receive support equivalent to approximately €500 per suckler cow on average.
I will continue to argue for as strong a CAP budget as possible, post-2020. In particular, I am committed to ensuring that suckler farmers continue to receive strong support in the next CAP. My view is that such payments should support and encourage suckler farmers to make the best decisions possible to improve the profitability, and the economic and environmental efficiency, of their farming system. The beef environmental efficiency pilot is a positive step in that direction.
The Minister spoke about producer organisations being one of the answers to this issue, and perhaps they are. Additional supports are provided for producer organisations. However, in the past, most emphasis was placed on reducing the cost to the farmer of producing the product. That emphasis needs to switch towards improving the price for the farmer. I strongly believe we need to get that right. As I have said umpteen times, and I know the Minister agrees with me, we produce an excellent quality product. Irish beef is grass-fed, free-roaming, traceable from farm to fork, and comes from family farms, all of the elements the European consumer wants, yet we consistently find that the price returned to the Irish farmer is little or no better than that returned to the average European farmer. That is not right and should not be the case. Something needs to be done to ensure the Irish farmer gets a premium price for what is recognised worldwide as a premium product. In that context the beef forum has failed Irish farmers in securing an enhanced price. That is where we are at on this issue. While I understand marketing is under way and we are talking about getting into new markets in Kuwait and other countries around the world, farmers are not seeing an increased value for their product when they go to the mart in Leitrim or in Cavan to sell their weanlings or when they fatten their animals and bring them to marts in the other end of the country. We need to see something happening.
If the yardstick by which the Deputy measures the success or failure of the beef forum is in its capacity to deliver price, it is inevitable it will fail because the forum is not a price-fixing mechanism. By law we are specifically excluded from considering price. The Competition and Consumer Protection Commission has advised the Department that it has no function in that regard. However, there are many other things that forum can do and achieve, one of which is building such a collaborative approach. I look forward to a day when all the stakeholders will engage in that context. The problem currently, on which the Deputy has touched, is the position of the beef farmer in terms of being a price taker as a stand-alone supplier.
The benefit which producer organisations can bring is to give the supplier more power. It will make the supplier more efficient in the case of groups which are purchasing inputs etc. and it will also give him or her power when negotiating specification and supply on the basis of prices. That is missing from the architecture but it is very much part of the architecture of other countries.
I understand that. I am not talking about price fixing but enhancing the industry in order that a better price is returned to the primary producer. There is quite an irony in the Minister stating the rules set it up for the big processors to do very well but not for the farmer to do well. That needs to be examined.
We need to look at specification and supply. When I go to buy a piece of roast or some mince, there is nothing on the packaging to state whether it comes from a U grade or an O grade or whether the animal was aged 30 months or 35 months. The rules and regulations curtail the price that is returned to the farmer and this needs to re-examined quickly.
The new scheme is meant to be a pilot scheme. Is it intended to make it a permanent scheme, one that will be in place in the long term? People are a bit nervous about pilot schemes because they come and go. We want a scheme that is sustainable into the long term. In the budget, the Government found another €1 billion. In that context, a little more could be done to return a better supply of money to the agricultural sector.
I share the Deputy's concern that farmers should get the best possible return for their endeavours because without their commitment to producing a quality product, the edifice that is the Irish beef industry would collapse, domestically and internationally. I have said ad nauseam that processors also need to be aware of the symbiotic relationship that exists and I asked that they engage in the beef forum, bilaterally if not directly, which they agreed to do.
A pilot scheme is followed by evaluation and I am confident that the data which will be collected and fed into the process will be significant and will ensure the initiative is mainstreamed. Until we see the data, however, and see how successful it has been it would be premature to say it will definitely be mainstreamed. If it is not a success and does not help us accelerate the improvement of the beef herd's genetic content, we would have to consider other initiatives but I am confident that it will achieve its aims and that it will be mainstreamed subsequently.
Deputy McConalogue has kindly agreed to let Deputy Mattie McGrath put his Question No. 4 before Deputy McConalogue's Question No. 3, as Deputy McGrath has another engagement in the House.
4. Deputy Mattie McGrath asked the Minister for Agriculture, Food and the Marine the measures he is taking for the fodder crisis; the measures he is taking to import high-concentrate foods to make up for fodder shortages; and if he will make a statement on the matter. [41636/18]
I thank Deputy McConalogue for facilitating me. I have to attend a meeting of the Business Committee at 10.30 a.m. My question is about the fodder crisis, which is having a severe impact in Tipperary, east Waterford, south Kilkenny and east Cork, as well as other parts of the country. I want to know what measures the Minister is putting in place. I asked in July and he was devoid of answers on how to help distressed farmers.
I am grateful to have the opportunity to inform the House of the actions I have undertaken in seeking to ensure sufficient supplies of fodder for the coming winter and spring of 2019. A survey of fodder supplies in September, conducted on my behalf by Teagasc, indicated that the potential national fodder deficit had reduced from 18% earlier this summer to 11% at that time. Further reductions are anticipated since this survey was conducted as farmers continue to harvest fodder in what has been a productive autumn period on Irish farms.
My priority is to support the conservation of as much fodder for the coming winter as possible from own resources, and to supplement this with necessary imports as required. To achieve this I introduced a number of targeted measures. I introduced a €2.75 million fodder production incentive for tillage farmers to encourage tillage growers to actively engage in the fodder market and there has been very positive uptake of this measure - in the region of 20,000 ha.
I further announced a €4.25 million fodder import support measure for autumn 2018. The measure seeks to reduce the cost to farmers of imported forage. While the measure will operate through the co-operatives and registered importers, the actual beneficiaries will be farmers who need supplies of fodder.
Additionally, I secured agreement from the European Commissioner, Phil Hogan, to pay higher advance Pillar 1 and 2 payments, which will be increased to 70% and 85%, respectively, resulting in €260 million in additional cashflow for farmers at a vital time of the year. Furthermore, following consultation with the European Commission, my Department made some temporary adjustments to the green low-carbon agri-environment scheme, GLAS, for this year and, in consultation with my ministerial colleague, Deputy Eoghan Murphy, a two-week extension of the closed period for the spreading of chemical and organic fertilisers was announced and has allowed farmers capitalise on autumn grass growth for fodder production.
I am confident that the range of measures introduced by me to date, taken together and targeted at producing as much fodder as possible from our own land, is the most effective response to ensuring adequate supplies ahead of the coming winter. I do not propose to introduce measures to support the importation of concentrate feed. However I can assure the Deputy that I will continue to closely monitor and engage on this significant challenge during the coming period.
Animal welfare and sustenance is the most important thing to any farmer, along with crops. Our farmers are excellent at animal husbandry but they are worried and fearful. I note that the Minister has revised the deficit down from 20% to 18%. It is going down every day.
It has now got down to 11%. The Deputy needs to get his facts right.
Two weeks ago the Minister said it was 20% but it is 11% now. I do not know who is providing his figures or where he is getting them from but this is not the real situation on the ground.
Grass is growing.
The reality on the ground is somewhat different. Thankfully, we have had a fortuitous year in terms of growth and I welcome the initiatives for cash crops, as well as the tinkering that there has been with the slurry and so on. Such matters should be based on weather anyway and not tied to calendar dates. As the Minister should know, the weather is all important. He used to be a farmer but he is now totally removed from agriculture. There has been inaction throughout spring and summer.
In all the Deputy's contributions I have not heard a single positive suggestion, which is a continuation of a theme.
The Minister is in charge.
We had this discussion prior to the summer recess and the Deputy's contribution was equally unfocused and lacking in specifics. On the other hand, I have had positive engagement with all the stakeholders, which include farm organisations. All the initiatives Deputy Mattie McGrath denigrates, which have achieved substantial progress for farmers, came from the stakeholder forum. In denigrating the things we have delivered, he denigrates all the stakeholders as well.
I do not denigrate any measures but welcome them, small as they are. I was denigrating the Minister on account of his slowness to take action. I represent farmers in Tipperary and in the whole community. I mentioned the south of the county but up in Cloughjordan, in the north of the county, they were completely burned by the drought. The Minister has made no real efforts to address this. I would love to know what inducements he is giving to stakeholders to come up with the figures he has given us. The situation on the ground is very different and many farmers have huge issues with not having enough fodder and no way of getting funding. The banks effectively are not working and the money announced in last year's budget was not drawn down, while this year's budget was a damp squib for agriculture. Suckler herds are on their knees and farmers in that sector wanted €200 per cow but the Minister gave them €40 but one must weigh calves and their mothers, meaning the farmers must spend €50 to get €40. The Minister's treatment of farmers is farcical.
The west has not been badly affected and it may be possible to get fodder from there, in a reversal of what normally happens. The Minister's inaction is disgraceful and whoever is manipulating them for him, his figures are not real.
The Deputy should reflect seriously on the accusation he has made against Teagasc to the effect that it has manipulated figures. It conducted a national fodder survey, the veracity of which has been accepted by all stakeholders. I accept that within the national deficit of 11%, there are individual holdings where it is higher. The best outcome from the stakeholder forum was the advice from the advisory services, namely, Teagasc, private advisers or co-operatives. The Deputy should reflect on his charge that a State organisation has manipulated figures.
It has questions to answer.
The Deputy is seeking a cheap headline. It is rather unfortunate to try to make a cheap political point on the backs of farmers, who have had an extremely difficult year.
The farmers have sleepless nights. Certain others do not.
It is a hit-and-run effort by Deputy Mattie McGrath. He will not even stay for the rest of Question Time.
The Minister does not even run or hit.
3. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine his views on the price beef farmers are receiving for their produce from factories; the details of the discussions at the recent beef forum meeting; the actions and deadlines agreed; and if he will make a statement on the matter. [41647/18]
I wish to ask the Minister to discuss the price of beef farmers are receiving currently from the factories, to give an overview of discussions at the recent beef forum meeting and to give an update on the actions and deadlines agreed at it. As the Minister is aware, beef farmers are under immense pressure at present due to the factories taking advantage of them. Farmers have to release additional cattle into the system. As a result, we are seeing pressure on prices at a time that farmers cannot afford to bear it. We need an update from the Minister on actions taken to address this, particularly actions agreed at the beef forum.
As the Deputy will be aware and as I have mentioned to Deputy Martin Kenny, in accordance with competition law neither I nor my Department have any role in determining market prices for any commodity, nor can I intervene in this process. I am conscious that this has been a difficult year for the sector due to weather and the range of challenges associated with it. We have to acknowledge that input costs at farm level will be unexpectedly high this year as a result of fodder shortages.
At the recent meeting of the beef round table on 3 October, I highlighted the need for stakeholders to recognise their interdependency. I urged processors to engage positively with their farmer suppliers to build the sustainability of the sector as a whole and to ensure a reasonable return for the farmers upon whom the sector relies for its development. It is essential that the position of the primary producer in the supply chain be improved if the industry wishes to build a sustainable future for itself. The beef round table also included discussions on the potential for producer organisations and the development of new technologies as a way of adding value along the whole supply chain through increased engagement in the bioeconomy. These discussions were aimed at highlighting available tools to build resilience in the sector.
I noted that a commitment was made at the beef round table in 2015 to legislate for the recognition of producer organisations, POs, in the beef sector. This initiative was supported by all sectoral stakeholders and in February 2016, a statutory instrument was signed into law to give a legal basis for my Department to maintain a register of recognised POs in the beef sector. The recognition of POs will encourage primary beef producers to form producer organisations and allow farmers to engage collectively with processors. The ultimate aim is to ensure the viable development of production by strengthening farmers' bargaining power with downstream operators. At the round table on 3 October, I also asked Bord Bia to conduct a detailed examination of market dynamics with the co-operation of the industry, taking into account sales of particular cuts into particular segments of the market, to improve price transparency.
One of the unique strengths of the agricultural sector is our shared vision for the sustainable development of the sector in the Food Wise 2025 strategy. I hope that this positive engagement will continue.
Additional information not given on the floor of the House
In regard to the beef sector more generally, I was pleased to secure €20 million in the recent budget for a new pilot scheme targeted at suckler farmers and specifically aimed at further improving the carbon efficiency of beef production. The pilot will build on existing work in this area and inform the development of future policy direction.
My Department is examining all appropriate measures to support the different agrifood sectors, including the suckler sector, in preparation for the next iteration of the CAP. I will continue to argue for as strong a CAP budget as possible post 2020. In particular, I am committed to ensuring that suckler farmers continue to receive strong support in the next CAP. My view is that such payments should support and encourage suckler farmers to make the best decisions possible to improve the profitability and economic and environmental efficiency of their farming system.
I thank the Minister for his response. The unfortunate reality is that he has allowed the beef forum to become little more than a talking shop. That is reflected by the fact that instead of being at the beef forum, around the table with the Minister and the factories, the farming organisations were outside protesting at how they are being squeezed, pressurised and taken advantage of through the price they are getting at the factory. While prices have increased across the Irish Sea in recent weeks, they have been decreasing here, to the extent that prices are now dropping below €3.80 and €3.75 per kilogram, with further downward pressure on them. That is simply unacceptable. The last time this beef forum met was in February 2017. The Minister was not planning on having the meeting until the end of this month. Three weeks ago, I called for it to be brought forward and dealt with immediately. Thankfully, the Minister decided to do that it was but too late. Why did the Minister not meet representatives of the meat factories during the summer drought to ensure they would not take advantage of it? Unfortunately we have seen talks, discussions and considerations but no real action or delivery for the farmers. I ask the Minister to clarify the particular actions that were agreed. Moreover, how did he hold the factories to account for the fact that they are offering lower prices to farmers at a time when they simply cannot afford it?
I find it slightly confusing that the Deputy says the beef forum is only a talking shop on one hand, and on the other makes great play of calling for that talking shop to convene. I repeat what I said to Deputy Martin Kenny. By law, neither I nor the forum has any role in respect of price. I have taken initiatives to give the primary producer, the beef and suckler farmers whom we discussed earlier, greater clout. We have tried to promote producer organisations to avoid a situation where a farmer drives up and delivers cattle as a price taker. Through organisation, a large number of farmers are able to engage with the processing sector from a position of strength. That is the advantage of producer organisations. In other big beef economies such as France, producer organisations are a key part of the architecture and enable farmers to engage from a position of greater strength than they can as single farmers. We need to develop that further. We have the legislative framework for them. We have approved facilitators which have not yet been activated. There is a role there that needs to be exploited. As for price, the Deputy knows there is nothing the forum can do about price.
We understand that the Minister cannot dictate the price. It is not something that a Government can control or decide, but what the Minister can do is hold the meat factories to account. He can also ensure that there is transparency in the pricing system and the price that farmers are getting. Unfortunately he has been doing neither of those things. He is simply throwing his hands in the air, not using his position to maximum capacity by holding the meat factories to account and ensuring a light is shone on their treatment of farmers and the prices they offer. Why is there a significant price gap with the UK which has been increasing in recent months? Why is it that in recent weeks, the gap between European prices and Irish prices has diverged so much? These are issues on which the Minister has failed to hold the factories to account. When the drought was impacting during the summer, the Minister failed to maximise his influence to tell the factories that under no circumstances could they take advantage of farmers and profiteer on the pressure they were under. It is time for the Minister to take more control of this interaction and ensure transparency. In light of the explanations he has been given, what has he decided to do and what actions will he take in his engagement with the factories in the coming weeks?
The engagement at the forum was quite useful in addressing all the factors that influence the market, such as the impact of the weather, as I discussed with Deputy Mattie McGrath. The weather phenomenon had an impact right across Europe. On any analysis of the number of cattle slaughtered, the weather resulted in a downward pressure on price because of the increase in slaughter. For example, we would normally have a market for cow beef in Scandinavian countries during the summer, particularly in Sweden. That did not materialise to any great extent this year because of significant cattle slaughter in that country due to fodder issues.
The market is complex and dynamic. We engaged on this at the forum. As I repeated earlier, neither I nor the forum has a role in telling the factories that they must pay a certain price. I did encourage them to engage. The forum is usually a place where farm organisations and factories engage intensively on these matters. At the forum, processors made a commitment to be open to further engagement, whether at the forum or bilaterally between farm organisations and meat processors.
5. Deputy Catherine Murphy asked the Minister for Agriculture, Food and the Marine his contingency plans both short and long-term in the context of a Brexit both with and without a backstop in view of well established and highly integrated Ireland and UK supply chains; and if he will make a statement on the matter. [41575/18]
This questions relates to contingency planning for Brexit, with or without a backstop.
The agrifood sector is exposed to risks and geography plays a part in the fresh food industry. Will the Minister give an indication of the scenario where there is a deal and of the scenario in which we will rely on the backstop?
In line with the Government decisions of 18 July and 18 September, my Department has been working closely with other Departments on Brexit preparedness. The primary focus has been on the staffing, infrastructural and IT requirements that will arise in the context of the implementation of import controls at ports and airports on an east-west basis.
Depending on the shape of the final deal, these requirements are likely to be significant and will arise in respect of the import of live animals, plants and products of animal and plant origin from the UK into Ireland and the EU once the UK has become a third country. There are also likely to be significant export certification requirements for the export of such products to the UK, although this is a matter for the UK authorities.
Accordingly, I have made provision in my Department's Estimate for 2019 for the commencement of a phased process of recruitment of additional staff to carry out the greatly increased volumes of import controls and export certification arising from Brexit. A sum of €4 million has been set aside for this purpose, with a further initial provision in 2019 of just over €3 million to address ICT hardware and software requirements. Further expenditure is planned in these areas in 2020 and 2021, with full-year staffing costs from 2021 estimated to be €28 million.
My Department is also continuing to engage intensively with the Office of Public Works and other Departments on the additional infrastructure that will be required at ports and airports, in accordance with the Government decision of 18 September 2018.
Together with my colleagues, the Tánaiste and Minister for Foreign Affairs and Trade, Deputy Simon Coveney, and the Minister for Business, Enterprise and Innovation, Deputy Heather Humphreys, I recently launched a new Government communications campaign on Brexit preparedness. This will provide information to stakeholders on our planning activities, and includes a series of so-called "Brexpo" events during the month of October.
Additionally, the Government has introduced a range of measures to deal with the short-term impacts of Brexit. To deal with competitiveness issues, my Department introduced a €150 million low-cost loan scheme, new agri-taxation measures and increased funding under the rural development and seafood development programmes in the 2017 budget. In budget 2018, I provided €25 million to underpin a €300 million Brexit loan scheme to provide affordable flexible financing to Irish businesses, at least 40% of which will be available to food businesses. This scheme will be rolled out in 2019.
Under market diversification, my Department is supporting Bord Bia in its investment in market insight through its The Thinking House, and in market prioritisation initiatives aimed at identifying and developing potential diversification opportunities. I have increased funding to Bord Bia by 60% since 2014.
Additional information not given on the floor of the House.
As regards product diversification, I am supporting Teagasc in the development of a new national food innovation hub in Fermoy and will provide €6 million for this purpose in 2019.
I also announced further measures worth €78 million in this week's budget, which are aimed at helping farmers, fishermen, food SMEs and my Department navigate the many challenges associated with Brexit.
I assure the Deputy that the Government remains focused on supporting the agrifood industry through the challenges ahead. The Government will be firm in arguing that any agreement reached between the EU and the UK must take account of the serious challenges presented by Brexit for the sector, particularly given the unique circumstances on the island of Ireland and the importance of our economic relationship with the UK. Of course, ultimately, Ireland's objective in the negotiations is to have a trading relationship with the UK which is as close as possible to the current arrangements.
The short-term impacts for some, particularly smaller producers, will be on their survival and the flexibility of a loan scheme will be important. The smaller the producer, the less expertise they will have available to them. It will probably be about keeping the show on the road for small niche producers. The requirement for proximity to the market for fresh food producers means there is a high dependency on the UK. Has the Minister evaluated the flexibility of the loan scheme and examined its availability or the uptake of it by smaller suppliers in the sector? We all understand there are likely to be controls and checks at borders, and this infrastructure must be put in place, but looking at it from a producer's perspective, what contingency plans are in place for the survival of smaller producers?
I thank the Deputy. The agrifood sector has exposure to the UK market, which accounts for almost 40% of our exports, and if smaller and artisan producers want to put their toe in the water to export, the UK is the logical and obvious place to go. They are particularly challenged, and very often they do not have in-house expertise or resources to navigate all of the challenges. This is why considerable effort has been made by State agencies, including Bord Bia and Enterprise Ireland, to, in a way, handhold, reach out and assist these industries to prepare, to look at market diversification opportunities and to look at how they can navigate the challenges in their supply chain logistics, particularly because the sterling impact will be immediate. This is detailed work, which has been informed by the stakeholder consultation. The responses of agencies such as Bord Bia has been to tailor products to meet the specific needs of individual companies.
On the loan scheme, 40% of the existing €300 million working capital scheme is ring-fenced for small and medium-sized agrifood enterprises, including artisan food producers, because of the Department's contribution. It has only been on the market since earlier in the year and the drawdown is beginning to accelerate. It will be available over a number of years. I am anxious that awareness and access will improve in the coming weeks.
What are the stakeholder meetings telling the Minister about the flexibility of the loan scheme? Is he listening to the stakeholders? Is he taking initiatives to change the nature of the scheme? Hand holding is fine to point people in directions but it may well be that systems are required to link suppliers as opposed to individuals trying to get a loan through the loan scheme and trying to navigate it themselves. It may well be that a collaborative approach is required and State intervention might be needed to assist.
The range of assistance is significant and some of it takes the form of loans. Loans are not always what are needed so in this year's budget the Department has a €13 million loan fund for small and medium-sized enterprises to assist with innovating new products. It will also assist companies with a product that was specifically targeted to the UK market to diversify and tweak the product for a different market. There is capital grant assistance and assistance for product innovation through further investment in the food innovation hub in Moorepark and the prepared consumer food facility at Ashtown. There is a range of incentives. The €300 million loan scheme is for working capital for a sector that has proved it is Brexit exposed. The consultation also identified a need for access to loans at competitive rates for capital investment. We will bring to market a further €300 million loan fund specifically geared for longer-term low-interest finance for capital investment in plant or facilities that will assist companies to navigate the Brexit challenge.
