On behalf of the Minister, Deputy McConalogue, I thank the Deputy for raising this issue. I am certainly happy to bring the following to the attention of the House: the continued development of the pigmeat sector is a priority for my Department, given the pivotal role the industry plays in the national economic context. It is a large agrifood sector and has shown remarkable growth in recent years. The sector supports approximately 8,000 jobs spanning production, slaughter, processing, feed manufacture and services.
Our pig farmers have always been remarkably resilient but my Department is acutely aware of the challenges they are facing. The pigmeat sector across the EU has faced significant challenges in 2021, including the impact of African swine fever in a number of member states and consequential loss of third-country markets. This has had a knock-on effect on supply and price within the Single Market.
The average price paid for pigs in Ireland has fallen in recent months, in line with trends across the EU. The 2021 average price was more than 8% lower than that of 2020. As of 6 February, the average grade E pig price came in at €141 per 100 kg, that is, just over 7% lower than the same week last year. This is still well above the EU average price, but in the current circumstances is creating a significant price-cost squeeze.
At the recent European Council of Agriculture Ministers, the Minister, Deputy McConalogue, clearly expressed his concerns regarding the difficulties facing the Irish pigmeat sector, both in respect of the ongoing impact of increases in fuel, fertiliser, feed and energy prices over recent times that are putting farmer margins under significant pressure, and the sustained nature of the difficulties being experienced on the pigmeat market. The Minister sought the rapid deployment of appropriate solutions on both issues.
The Minister of State, Deputy Heydon, and the Minister, Deputy McConalogue, met with the main banks to discuss the current challenges in the pigmeat sector and the importance of their ongoing support. At this meeting it was emphasised the importance of the pig sector, its overall resilience and the importance of their support to their customers through the current downturn in the business cycle. The key message was that farmers experiencing cash flow difficulties should engage with the banks as soon as possible to discuss options and that the banks remain committed to supporting their customers in the period ahead.
Separately, they met with the Strategic Banking Corporation of Ireland, SBCI, to discuss the Brexit impact loan scheme and the Covid-19 credit guarantee scheme, both of which are financed by the Department of Agriculture, Food and the Marine in partnership with the Department of Enterprise, Trade and Employment. These finance schemes can be used for working capital finance and include features that address the current financial needs of pig farmers.
We are all aware of the cyclical nature of the commodity markets, which for the pig sector at this time is compounded by rising input costs.
During this period, maximum flexibility of financial matters is needed to ensure the ongoing viability of those in the pig sector.
The Minister of State, Deputy Heydon, chaired the recent pig round table and had a further detailed discussion on the current difficulties with all stakeholders, including farm representatives, the banks, the processing industry and the feed industry. The increase in input costs is likely to continue for at least the first half of this year.
In terms of State supports, Bord Bia outlined the significant efforts being made to promote quality-assured Irish pigmeat on the domestic and export markets and Teagasc outlined the dedicated advisory supports being provided to pig farmers. The Minister, Deputy McConalogue, also attended a meeting with the IFA president and IFA pig committee members to discuss concerns. At this meeting, the Minister reiterated the Government's commitment to supporting the sector, including through the previously mentioned advisory supports provided by Teagasc and Bord Bia. Deputy Cahill can rest assured that the Department will continue to monitor the market situation closely. We are examining all possible measures to assist in supporting farmers through this significant market disturbance.
