I welcome the Minister for Agriculture and Food, Deputy Coughlan, and her officials to the meeting. We invited her here to discuss a number of issues, namely, a general overview of agriculture, the CAP, fees payable by potato growers, the nitrates directive and the sugar regime. Representatives of Greencore, the farming organisations and unions will be before the committee in two weeks' time when we will have an opportunity to discuss this serious issue with them. I invite the Minster to make her opening remarks.
Agriculture Sector: Ministerial Presentation.
I am almost afraid to ask the Chairman how many minutes I have.
Three and a half.
Then I will simply say we are doing a great job. What else can I say?
Tá lúcháir orm go bhfuil an seans seo agam bheith ar ais aríst os comhair an choiste, agus is deis domh é cur in iúl do na Teachtaí Dála an méid atá ag dul ar aghaidh ag an bhomaite. Tá súil agam go mbeidh díospóireacht bhreá againn ag éirí as an óráid nuair a bheidh mé críochnaithe.
I am pleased to be back again before the committee. As we had a very brief occasion heretofore, this is my first opportunity to address in a formal way the sugar beet issue, the nitrates directive and the issue of fees payable by potato growers in addition to a general overview of agriculture.
The agrifood sector is a major player in the economy, accounting for 8% of GDP, 7% of exports and about one fifth of net foreign earnings from traded goods. One in eleven people in the workforce is employed in the industry. Last year's exports exceeded €7 billion for the sector.
Last year was a positive one for the sector. There was a good story to tell under various headings such as farm incomes, product prices, animal health trends, further development of technology, investment supports and other services to this sector, and Ireland's presidency of the EU. Throughout the year the Department once again maintained a clear focus on food safety, consumer assurance, animal welfare and the environmental dimension, with further enhancements in a number of these areas. Arrangements were put in place during 2004 for the operation from 2005 onwards of the single payments scheme with farmers being issued statements of provisional entitlements.
Towards the end of last year I announced a milk quota restructuring scheme which has been generally welcomed by the dairy sector. Responsibility for forestry was reassigned to the Department at the beginning of 2004 and the year saw continuing major investment in the sector with farm forestry dominant in the 11,000 hectares planted in that year. In addition, significant legislative developments included the publication and introduction in the Oireachtas of both the Veterinary Practice Bill 2004 and the Land Bill.
Moving to 2005, issues of food safety, consumer assurance, disease control, animal welfare, environmental enhancement and promotion of best practice throughout the agrifood sector will remain to the fore. The Department will continue to invest in and develop and roll out systems to underpin such a sustained focus. A new statement of strategy and a new customer service action plan, including our first ever customer charter, will be published shortly. The implementation of the Official Languages Act 2003, in so far as it relates to the Department, will be progressed.
We will continue to promote, encourage and facilitate efficient production of agricultural output and the ongoing development of an internationally esteemed and competitive food and drinks processing sector, with increasing emphasis on consumer research, competitiveness, scale, innovation, market development and delivery. In that regard, I wish to particularly mention the recent major trade mission to China, led by the Taoiseach, in which I was happy to participate along with other ministerial colleagues. The potential of markets in China for Irish agri-food production, technology and know-how is enormous and I believe that this visit will have laid the groundwork for Irish exporters to further develop market share for all of our food and drinks products. I will be unstinting in my support for those who are committed to the continued growth in the reputation and market share of Irish agri-food products on export markets.
Live exports remain a very important outlet for our livestock producers and an essential factor in ensuring competition in the marketplace. Therefore, I welcome the fact that recent uncertainties about the continued provision of roll-on roll-off shipping services to the Continent have been dispelled. Live exporters will continue to have access to the necessary transport links to get livestock to continental Europe and I wish the operators of the new roll-on roll-off service well.
The outlook for the diary sector in 2005 is that the buoyancy of the markets will continue. While it is difficult to forecast with certainty, many observers are predicting continued growth well into 2005. Nonetheless, there are many factors which will influence developments over the course of the year, particularly the continued strength of the euro against the dollar and the next phase of the mid-term reform, MTR, of CAP on 1 July. It will be important to ensure that the EU market management mechanisms are responsive to any negative developments which may emerge in the marketplace.
The new milk quota restructuring programme, which I announced last December, involved a number of significant changes to the scheme. The decision on the new programme was made after an in-depth review of the existing scheme and wide-ranging consultations including the milk quota review group. The previous scheme had been effective in increasing average quota size but the mid-term review CAP reform and the WTO framework agreement made it imperative to introduce changes to accelerate this process and ensure that the maximum volume of milk will be available in a timely manner to active committed producers.
The programme will allow farmers to plan ahead with greater certainty. The new fixed price takes account of the decoupled support payments and the fact that quota sold next year would not include the value of the decoupled dairy premium. There is a need to provide a reasonable return to farmers considering leaving the industry while ensuring that purchasers were not burdened by an uneconomic price.
The introduction of two allocation categories will simplify the existing scheme and will focus clearly on the viability of milk production at the levels already identified. The level of allocations to the various categories in recent years was also a factor. As regards the reallocation of the restructuring pool, the existing priority will continue to apply to successors of producers who had sold into restructuring scheme in the past, lessees who were unable to renew existing leases and 25% would continue to be available to new and recent entrants to dairying.
The scheme will continue to operate on a co-operative collection area basis as there was general agreement on the importance of the regional spread of dairy production. However, in the event of quota purchased under the programme not being sold within three months of purchase, a mechanism will be put in place to distribute such quota on a national basis. There is no doubt that the dairy sector faces challenges ahead but there is already evidence to suggest that operators within the sector are beginning to look at the potential for operational and cost efficiencies and such developments will ultimately benefit the sector as a whole.
The year 2005 marks the beginning of a new era in cattle farming. The reform of the CAP agreed last year means farmers will enjoy greater freedom to grow and develop their enterprises, producing for consumer requirements supported by the single farm payment. In terms of slaughterings, it appears unlikely that de-stocking associated with decoupling will take place in 2005. Consequently, it is forecast that there will be only a slight decrease in bovine slaughterings this year, compared with 2004. Considering that the slaughter premium will remain in place in some member states in 2005, it is expected that the demand for Irish calves and weanlings will be maintained, particularly in continental Europe. Nevertheless, live exports are forecast to decline marginally in 2005 compared with 2004.
It is anticipated that demand will remain strong for cattle and beef imports in the United Kingdom — our biggest market — and even with the signalled ending of the over thirty month scheme there in the autumn, the projected EU shortfall in beef production of 350,000 tonnes in 2005 should ensure that demand remains firm. However, this will mean that markets have to be found for 70,000 tonnes of Irish beef which would otherwise have gone to this market. This will be the major challenge facing the Irish beef industry during 2005. The development of new premium customers in EU markets will also present significant challenge to the Irish beef industry during 2005. I will be most anxious that we do all in our power during this year to make further inroads for Irish beef on the high-value markets in other EU member states.
On the financial side, my Department will spend €3.3 billion in 2005, the highest level of spending ever. In addition, a further €20 million in farm-related taxation reliefs will be available during 2005 on foot of measures announced in the recent budget. The single payment scheme will go live in 2005, with payments issuing to all qualifying farmers later in the year.
This will herald a new era in Irish farming, with farmers having a greater freedom to farm and to tailor their enterprises to meet the needs of the marketplace and to reflect their own strengths, personal preferences and aspirations. It will present challenges but I am confident in the capacity of the farming sector to adapt, as it has so often before, to the needs of the new environment and to pursue the many opportunities and attractions which it has to offer Irish farmers.
In the area of international negotiations, 2005 will be an important year. At EU level, issues such as reform of the EU sugar regime and accommodation of Ireland's specific concerns within the negotiated rural development package will feature prominently. In the WTO forum, Ireland's concern will be to ensure, via the co-ordinated EU approach to final negotiation of the new round, that the future of the CAP is protected and that the interests of agriculture are not prejudiced in the interests of securing an overall agreement.
In the legislative area, it is my intention to see both the Veterinary Practice Bill and the Land Bill through all Stages in the Oireachtas in the earlier part of 2005 and to give effect, by means of secondary legislation, to significant adjustments to the control regime covering veterinary medicines on foot of a comprehensive review of this area.
This year will be a busy and significant one for Irish agriculture and I expect to be fully occupied on several fronts throughout it, not least by lambastings by the Opposition. I am surprised that Opposition members are so quiet.
The sugar sector has been very much in the news of late. Sugar beet growing and sugar processing have a long tradition in Ireland, dating back almost 80 years. The Government has always been committed to the industry, both to the sugar beet growing sector and the sugar manufacturing side. The sugar beet crop is an important element in the agricultural economy and a valuable source of income to 3,800 farmers in the beet-growing sector. On the manufacturing side, the industry has provided important employment opportunities in the sugar plants, in addition to supporting employment in associated industries. Clearly, I recognise the concern expressed by many at the recent announcement by Greencore of its intention to close the Carlow sugar factory. My sympathy goes to the workers who have recently lost their jobs.
I have already had discussions with Enterprise Ireland with a view to creating alternative sources of employment in the region. The company has made it clear that it took the decision on commercial grounds. In the context of the consequences of the decision, it is now most important that satisfactory arrangements be put in place to transport to the Mallow factory beet grown by those farmers who had hitherto supplied the Carlow plant. I met yesterday with the company and underlined the importance I attach to addressing this issue as soon as possible in a manner which is satisfactory to all concerned. In the coming weeks, both the company and farmers must engage constructively to achieve the most efficient ways possible to transport beet to the Mallow plant. The vastly improved rail and road networks will facilitate this and I will take a close interest in developments. Prior to this meeting, I met the farming organisations and advised that I will facilitate and advise the company of their concerns in ensuring that this matter is finalised. Respect for both sides must be adhered to and the impasse must be dealt with quickly.
In the forthcoming negotiations on the reform of the EU sugar regime, my objective will be to ensure the continuation of an efficient sugar beet growing and processing industry. I do not underestimate the challenge this entails. While reform of the EU sugar regime was not dealt with in the main CAP reform process in 2003 and 2004, it is now unavoidable because of developments at WTO level and other international pressures. The EU Commission's initial reform ideas would, if adopted, have serious repercussions for sugar beet growing and processing in Ireland. In discussions at the Council of Ministers I have made clear that the initial proposals are unacceptable. Along with ministerial colleagues from nine other EU member states, I made a submission to the Commissioner for Agriculture and Rural Development pointing out that the proposals would have a devastating effect on farms and the industrial enterprises working in the sector. While accepting the necessity to reform the existing regime, the reform must aim at maintaining the existing distribution of sugar beet and production in the EU territory.
Reform must be based on several principles. An import system from third countries must be put in place to ensure predictable and regular import quantities. Price reductions must be significantly less than what is proposed and implemented more gradually. The impact of the quota reductions must fall on those member states that are net exporters of sugar. The transfer of quotas among member states should not be allowed.
The Commission is expected to bring forward formal legislative proposals next May, with a view to reaching agreement in the Council of Ministers before the end of 2005. I anticipate the negotiations on these reform proposals will be protracted. My objective in these discussions will be to protect the viability of sugar beet growing and processing in Ireland. I will work vigorously in common with like-minded member states towards that end.
Recent surveys of voter attitudes in the EU show a desire to continue supporting farming through the CAP, but gaining certain things in return, particularly environmentally friendly agriculture. The days when intensification was put above all else are history. Farmers in Ireland and the EU now operate within a complex set of environmental rules and regulations. Of course, farming has made the countryside look the way it does now. Generations of our ancestors, clearing land for grazing and, to a lesser extent for tillage, have given us our landscape. The present generation and their successors are the only people who can keep it that way. Among better-informed commentators, there is a growing realisation of the role of farmers as stewards of the rural environment and landscape. Irish farmers are adapting successfully to the increasing environmental focus of the CAP. Intensification in Ireland has been nothing like as prevalent in some member states. While we have few of their problems as a result, there are issues we must confront. While European law compels us to do so, it would have been necessary regardless.
There was undeniably a problem of overgrazing by sheep on some western commonages, caused by a minority but with serious consequences for all involved. This was dealt with through the REPS and the commonage framework plans, ensuring that compensation due was paid. Under the birds and habitats directives, the Commission compelled the designation of farmland in some areas with the result that farmers have been restricted in their activities. I fully understand how unpalatable this often can be. I applaud the efforts of the Minister for the Environment, Heritage and Local Government, Deputy Roche, and his predecessors, to reach consensus with landowners on designation. However, where designation is unavoidable, farmers are entitled to compensation. Many of them seek it under REPS; others look to the national compensation arrangements offered by the Department of Environment, Heritage and Local Government.
We are again in discussions with the Commission on the nitrates directive. A well-thought out package of proposals was put to the Commission before Christmas, drawn up with the assistance of Mr Denis Brosnan and inputs from many sources, including the farming organisations. However, it did not find favour with the Commission. The Minister for the Environment, Heritage and Local Government has indicated his disappointment, as it was a good package. I agree with him and both of us recently met the farming organisations. Our officials have begun discussions with the Commission and have made it clear that we will defend our proposals on scientific merits. However, the Commission holds the stronger hand in this situation and we must work for a successful outcome. We are not only facing substantial national fines, but we also must safeguard our continuing CAP funding. Negotiations will begin soon on the next round of rural development funding, covering the REPS, compensatory allowances, forestry and the early retirement scheme. I am convinced that our position in those negotiations will be made difficult if we are still in contention with the Commission on the nitrates directive.
The proposed fees for the seed potato certification service arise out of an expenditure review of programmes in the potato sector, carried out by my Department during 2003-04. This review evaluated all programmes operated in the sector and made nine broad recommendations. Among these were that there should be full cost recovery of field charges for the seed potato certification service and that the sampling and testing for potato cyst nematode should be carried out at the growers' expense. Expenditure reviews form an important element of the Government's efforts to secure value for money from public expenditure in many areas. My Department must take account of the recommendations contained in such reviews.
There has been wide consultation with all parties affected by the recommendations. My officials met the IFA on 25 June 2004, and again on 12 October 2004, when the proposed new fees were outlined. It was accepted that change was necessary to achieve progress. I, along with the Minister of State, Deputy Brendan Smith, met a delegation from the IFA on this issue on 10 November 2004. At that meeting the principle of charging for the service provided by my Department was accepted, although concern was expressed about the scale of the charges and proposed future increases over the next five years. In deference to the views expressed on behalf of growers by the IFA, I decided the proposed charges for potato cyst nematode sampling and testing should be reduced by half, from two charges comprising €51.50 per hectare to a single charge of €25 per hectare.
The other fees, comprising charges for crop inspection, tuber inspection and labels will remain as initially proposed. Overall, the charges work out at about €5 per tonne in a 20 tonne crop, considerably lower than the charges in Northern Ireland. The fees relate to field charges only and do not cover the full cost of providing the seed certification service. They will be phased in over a five year period and subject to an annual review. At that stage, further consultation can take place if necessary.
Apart from the recovery of costs, an important element of these charges is the need to bring commercial focus to the area of seed production. The aim is to develop a specialised seed potato sector and to give the committed grower a good livelihood. In this context I will consider grant assistance to assist seed growers to develop their facilities. My aim is put the seed potato sector on a sound footing to meet the needs of ware growers and reduce our dependence on imports.
Deputy Ó Fearghail took the Chair.
I thank the Minister for her presentation. I wish to ask a number of questions. With regard to the nitrates directive, the Minister says she wants to make it clear that the proposals will be defended on their scientific merits. Officials from the Department of the Environment, Heritage and Local Government as well as from the Department of Agriculture and Food attended the committee meeting last week. They have been making the case referred to and they pointed out or admitted that both Departments have made a case regarding the derogation that approximately 8% of the country is vulnerable or prone to leaching from nitrates. In the light of that, does the Minister agree that we need to make a strong case for defending, on the scientific merits, the proposals made?
The Minister says that she will defend the proposals on their scientific merit, but then comes the sting in the tail, the reference to the Commission holding the stronger hand in the situation, the need to work to a successful outcome and the negotiations about to begin on rural development, REPS and so on, all a possible threat to Ireland's negotiating position. In regard to that, the Minister seems to be setting us up for a fall in that she currently defends the Brosnan proposals but intends to retract from that position and put forward amended proposals. She might elaborate on that.
Regarding the nitrates directive, when will we see the introduction of the new grant rates? A lead-in time is involved. Farmers must seek planning permission and there are no details on the specification for the earthen banks or the outwintering pads. There is also the issue of development charges at local authority level. Would it be possible to put the grant scheme in place now to allow for that lead-in time?
Will the Minister also elaborate on her own position regarding the calendar restriction for the spreading of slurry? It is very difficult to use a calendar to decide when we have growth in this country for grass and so on. Regarding the Carlow sugar factory closure, it is a great blow for all that the decision on the rail head has been abandoned by the developer. We should focus on the ownership of the quota, a critically important element for the farmers and all involved. Does the Minister agree that there is a vulnerability with regard to Greencore being aggressively taken over in light of the fact that the Carlow plant will be decommissioned and the property sold off?
Some 350 malt and barley growers have been abandoned in the midlands and assets are being sold off there. The core element of the company's process is to reduce its overall debt from roughly €387 million so that it is attractive for a takeover. In the light of that, does the Minister believe it is critical that we first clarify the issue regarding ownership? The Minister met company representatives yesterday. Did she discuss that issue with them? Did she discuss the situation of the malt and barley growers or does she intend to do so?
In March 1993, in a letter to Mr. Peter Cassells, the Taoiseach, who was Minister for Finance at the time said with regard to the sugar quota: "I would emphasise that this is an asset of the State and not of the company". Since the Taoiseach was able to provide that information in 1993, why is it taking the Minister so long to come up with that clarification? It seems she is still waiting for clarification from the Attorney General.
Farmers are very concerned about cross-compliance and how it will be approached by the Department of Agriculture and Food. We know there will be a 1% charge on farm inspection. The Minister may correct me if I am wrong, but my understanding is that a shortlist will be drafted by the local authorities who will point to farmers they feel should be checked on, after which the Department will carry out its inspection. If that is so there will be a great many non-compliant farmers and further pressure from the EU. I know that is currently the opinion of many of the local authorities. Will the Minister clarify that?
Regarding cross-compliance and tagging, how will that be interpreted by the Department? If one animal is missing two tags, does that mean the herd and farm are non-compliant with regard to beef and more especially now with regard to sheep, where tagging has gone from a voluntary system to part of the cross-compliance measures? If there is to be zero tolerance regarding the tagging of sheep, no sheep farmer in this country will be compliant under those regulations.
The Minister says she will introduce a new veterinary medicines regime by means of secondary legislation on foot of a comprehensive review in the area. She might tell us how that review currently stands. Finally, she might return to the issue of marketing. I will give beef as an example. Currently our beef is being virtually dumped into the catering trade in the UK. We are not making efforts to actively market our Irish product as a premium product with low dioxin levels, fed off grass and so on. That type of active promotion is not taking place. In fairness, Bord Bia is doing a lot but the campaign needs to be taken a step further with regard to marketing, promotion and labelling. If we are serious about getting a decent price for our product in the future, the Department and Bord Bia need to be much more progressive in their approach to the marketing of Irish produce.
I thank the Minister for attending and for her presentation. I have questions regarding nitrates, and Greencore in particular. Reading page 16 of the script, it seems that the decision on nitrates is now almost a fait accompli and that this country is quite likely to find itself in a situation where it may face substantial fines. With regard to the discussions held with the EU Commission by the Minister along with the Minister for the Environment, Heritage and Local Government, Deputy Roche, how do they see the prospects for the nitrates directive? In spite of all the scientific evidence put forward and supported by what would considered to be the best scientific advisers in the country, that is being turned down by the Commission. What does the Minister think will happen in that regard?
Arising from the Minster's discussion with Greencore management yesterday, is there any change or review of the situation to offer any optimism for the workers? Is there any discussion with the trade unions to indicate any arrangements or agreements brought about between the unions and Greencore? If so, has the Minister been party to any of the discussions? The fact that the site proposed for rail transport has now been withdrawn is highly significant. What is the Minister's view of Greencore's insistence on the urgency of the closure of the Carlow factory, since there is at least another year before the need for a decision regarding a sugar quota?
Two other matters were not included in the Minister's presentation. There is broad agreement that we will have many more small farmers with off-farm employment. How does her Department view the support for those farmers and are there any proposals to be put in place to ensure a viable livelihood for those farmers in addition to their farming opportunities, which clearly will not provide them with a viable income? Does the Department consider it has any responsibility in promotion of alternative farming enterprises as well as off-farm employment?
The issue of the price that the producer gets for the raw material and the price that has to be paid by the consumer has been raised a number of times without response. Will the Department undertake a substantial independent review or audit of the costs for the producer and where the percentage mark-up arises in the chain from producer to consumer? We need such a review to show where that mark-up is happening.
I thank the Minister for her presentation. I was speaking to dairy farmers last night. The value of the calf to such farmers is holding up at between €3.30 and €4.20 — that was what they were making in Tralee market last night. The person buying that calf who was paying that money last year and before had the comfort of the premium. I am extremely concerned for the consumer. There is no way that someone will be involved in that type of beef production unless there is a profit. They are already at quite a substantial deficit starting off. The minimum is approximately €160. I suspect that it will be added to the price of the finished animal, and the knock-on effect will be felt by the consumer. Is there any way of dealing with that aspect?
On the closure of the Carlow sugar beet factory, we have 3,800 producers in the country. How many in the Carlow and Leinster area does the Minister envisage remaining in the industry? As I see it, transport costs will rise to get to Mallow, and there will be an extra problem for the producer in that regard. I sense that many of those producers will abandon beet. The Minister also mentioned her upcoming talks with the WTO and the opening up of markets. Is it feasible in current circumstances, without fairly strict restrictions? The entire sugar beet sector of our agriculture industry is in grave danger. How does the Minister hope to deal with that?
On the question of the early retirement scheme, there is a major question at present regarding how much land is with or without a quota. Since many people availed of the scheme, with the quota remaining with the active farmer, the value of the land owned by the person who did not work during the reference years and is now essentially without a quota has been greatly reduced. There is no avenue for them to be compensated, and many will have to sell out. We are moving towards larger holdings and intensification.
There is no mention of alternative farming in the Minister's proposal. Does she have any ideas or suggestions for a mechanism for us to move towards alternative farming, probably with a policy of integration in rural communities of farm work complementing farm work?
Deputy Hoctor took the Chair.
There has been a fairly broad brush covering several areas. I know that there have been extensive discussions between the Department of the Environment, Heritage and Local Government and my Department on the nitrates directive. Though the former is ultimately the lead Department, the implications of any decision will affect my Department too. I had the opportunity to meet the Minister for the Environment, Heritage and Local Government, Deputy Roche, and the farming organisations, to brief them on the Commission's views on the Brosnan report. My officials and those of Deputy Roche travelled to the Continent and had protracted discussions on the issue. Deputy Roche has said that he would meet Mr. Brosnan to see what might be done to pursue the proposals that have been put forward.
As a pragmatic politician, when I notice that agreement has been reached with colleagues in Northern Ireland, and the lack of tolerance for colleagues in some other member states, including the Danes and the Dutch, from the Commission, I recognise that we are not the only ones who have had to go back and review the proposals. It is still our view that our scientific knowledge is correct. However, ultimately, there is a lack of tolerance from the Commission for the non-implementation of the directive. Since it has put the boot into the Danes and Dutch and there is more or less an agreement with the North, I can see that we may have to compromise. We can rehearse the entire discussion — I remember its taking place approximately ten years ago — on calendar dates, soil, climate and farming practices, but my view is that we are approaching a deadline of 22 March. After that date, we will be paying €30,000 per day for the privilege of not having an agreed action plan. If we have no plan, we cannot even go near a derogation.
We are, therefore, in a very short timeframe where a deal will have to be struck. Ultimately, in my very short experience as Minister for Agriculture and Food, a deadline often means that a deal has to be reached the night before it comes into force. To be honest, that is how I see matters. We must ensure that we reduce the impact of the nitrates directive on the farming community. That is how I see my role. It must be done in such a way that not just larger or more intensive farming enterprises are supported but those smaller ones outside the ambit of some of the grant-aid that has been made available heretofore, and therein lies the problem. There is an expectation that there will be an increase in the grant. An agreement has been reached and honoured under Sustaining Progress that there will be increased grant-aid of up to 40%, with new permutations for the costings. That is a substantial grant and more than our colleagues have had as their answer to the nitrates action plan. Northern Ireland has a different intensity to its farming. As Deputy Crawford would know, there is a very intense regime there.
That said, the one big problem that Mr. Brosnan had when he put forward the scientific evidence was that he was not Deputy Cowen. It is usually very helpful if one is the Minister for Finance when one makes any financial commitments on behalf of others. However, there is a realisation that there are implications for the farming community. Farmers will say to me — and I think we would agree — that it is dead money and does not give one a return on one's investment. There are alternatives that must be examined. I have asked Teagasc to complete the research that it is conducting on behalf of the Department regarding alternatives, and that will be done fairly quickly. In the interim, I have carried out an inventory of what is in Ireland and what would be needed depending on what is the Commission decision.
I agree that the nitrates directive will have great implications for farming enterprise and practice, and I wish to cushion that by getting the best deal possible for the regions. As members are aware, the Commission accepts the regions. However, at the same time, the easy option will not be there. There will be a little pain, but I intend to cushion that by supporting farming enterprises.
Does the Commission believe that the Minister's scientific evidence is not watertight?
To be frank, if our Lord came down and said that it was right, the Commission would not accept it. It does not necessarily agree with the evidence we have put forward. One of my officials who is here today attended the Commission. That is the situation. The Commission is seeking clarification on a number of matters and we will revert to it. The Minister, Deputy Roche, will meet me and the officials again to evaluate the current position and we will have further opportunities to meet the farming organisations fairly soon with a view to clarification.
All is not lost. A substantial document, which all the partners have bought into, has been agreed. That is important because it was agreed on the basis that it was a good document. If it has to be tweaked, so be it but as it stands we are having serious difficulties in convincing the Commission to proceed on the basis of the document. I do not say the scientific evidence put forward is inadequate. My view is that it is adequate but we must clarify some of the issues raised by the Commission while trying to reach the deadline of 22 March. I am sure the €11 million a year could be used in better ways by the State than paying fines to the European Union. This is a discussion document and our discussion will take place for some time.
Perhaps I could tie that into the issue of cross-compliance. The Deputy is right in saying that the number of farm visits will be reduced to 1%-5% for entitlements. Two issues arise in that regard, one of which is the 48 hour notice versus a longer term notice. The view is that there should be single farm inspection. If we allow that we are tying ourselves into the 48 hour scenario. I have given an undertaking to do a number of things. The first is to determine what we can do in terms of single farm inspections. Second, we are putting together a protocol with farmers on a mutual respect basis and realising that a plethora of compliances would be needed and severe penalties put in place if somebody did something silly. I recognise that as an issue and I see the necessity of having some flexibilities in place because the implications of it are so great. If someone was to lose their single farm entitlement it would result in a major income loss. We are currently putting together a protocol on that.
The issue of local authorities compiling a list has nothing to do with cross-compliance. My Department has given an undertaking that we will be the lead Department on the issue of cross-compliance. We will work with our colleagues in the county councils and in the National Parks and Wildlife Service. It is not a witch-hunt on farmers. I would like an agreement between farmers and the Department to ensure we have some flexibilities and tolerances within the scheme.
Does that suggest something because there are local authority staff who are strongly of that opinion?
Local authority staff have their job to do. One aspect some local authority members forgot about concerns the nitrates directive, which is not particular to us. They produced agreements and by-laws on phosphates, the tolerances surrounding which are much higher than what we proposed in the nitrates directive. That is not particularly helpful. We were reminded of that. It must be remembered that the Commission knows everything about what is going on everywhere.
I presume its tolerances are lower.
Some of them are and some are not. There is a divergence between what is proposed in the nitrates directive and some of the by-laws in some but not all counties. That is causing the difficulty.
We believe the single farm entitlement is very important to the farmer. We will not be lenient on the issue of cross-compliance because we cannot afford to be but we will be flexible on the basis that we will have a protocol in place to ensure people know when the inspections are due to take place and realising, as the Deputy said about part-time farmers, that they are taking a few days off work because, say, three or four inspections are taking place. However, there must be some respect in that regard.
The Deputy raised the issue of tagging. That arises within the tolerances aspect, as long as it is not a blatant disregard of the normal methodologies of tracing, which happens on occasions. I would not regard it as a shooting offence, so to speak, at this stage.
The issue of sugar will be up for discussion for some time. I had the opportunity to meet with representatives of Greencore. I met with representatives of the IFA today. I have received a request today for a meeting with the unions and I will meet them, probably next week. A number of issues arise. If we could extricate what is happening in Carlow from the issue of the sugar regime, the situation in Carlow is very serious. Farmers in the north Leinster region are discommoded.
Deputy J. Brady took the Chair.
They will have an additional cost attached——
(Interruptions).
Half the sugar beet in Ireland is grown within the Carlow area. I have met with the company and we have discussed facilities for the growers. As the Deputy is aware, the Wellington Bridge project is going ahead and also the issue of a north Leinster depot. Bagenalstown is not going ahead because of difficulties. I agree with the IFA on the importance of putting this issue to bed and getting agreement between the farmers and the company. They must realise that there is a cost implication in change, which will have to be addressed, and discussions at the highest level should be facilitated between the company and the members of the farming organisations. I have given an undertaking that I will impress upon Greencore later this evening or tomorrow the necessity of coming to the table with a view to bringing this matter to a finality and addressing the concerns of those who produce beet in north Leinster.
The Deputy asked about the sugar regime. My view is as I outlined in my contribution and in a number of others. This is a very serious issue, the implications of which will be massive. Under normal circumstances, politically speaking, we would have a lot of support from the French, which we will not have on this occasion but we still have a blocking minority. Agreements will have to be made with regard to people like ourselves. The Presidency facilitated a discussion with the ACP countries, which have serious concerns also about the regime. The issue will also come up before the WTO panel, which will have implications on the discussion. With the WTO Hong Kong negotiations coming up at the end of the year, a decision has to be made.
There are two issues in my view — price and quota. The notion of transferring quota from one nation to the other is dead. That has been an issue for all member states but it is not one that will be brought forward. I have impressed upon the Commissioner the implications of the changes, and I believe we will have tough negotiations on this issue. I will try to come out with the best deal possible to ensure we continue to have a sugar industry in this country.
On the issue of ownership, the Deputy mentioned a 1993 letter from the Taoiseach. That is our understanding of the quota.
He was the Minister for Finance at the time.
The Department of Agriculture and Food would agree that the quota is in the ownership of the State. There has never been legal clarity on that, nor has there been clarity within the European Union for that matter. We gave an undertaking to ask for advice from the Attorney General. He has come back to us with a substantial number of questions, answers to which are being formulated for him. I spoke to him again and he said that once he got that documentation he will try to come to a decision very quickly. I am still of the view that we are in ownership of the quota because if, for example, some other company decided to come into this country it would have an entitlement to produce a certain amount of sugar regardless of what happens. This issue is like a bee in a bonnet for many people and I want clarification on it.
On the issue of malting, I took the opportunity of discussing the issue as it affects Banagher,Borrisokane and Tullamore. If we were in another committee we would be giving out about this but the reduced consumption of beer and stout is not helping the malt and barley business. I might be scorned for saying that. Perhaps a change could be promoted from the hard liquor into stout and beer.
The Minister should set an example.
We could step outside later, except that it is Lent. Therefore, I cannot. However, there are issues to be addressed. I was equally annoyed, if not disappointed, over the malting issue. Perhaps I will take the opportunity to repeat what I have said before. I know people are annoyed about their contracts and wonder whether it is worthwhile transporting their produce from the midlands as far as Athy. People will probably go back into feed grain. I have indicated that if storage capacity is a problem in the midlands, I will be more than willing to review the situation. However. I have been told that Greencore is going to sell those three facilities as going concerns. If there is an issue of storage for the farmers in the midlands, I am prepared to evaluate that.
Has the Minister received clarification from Greencore that it will sell the business as a going concern? The opposite had been rumoured.
Yes, there are three facilities to be sold as going concerns.
While it is normal to allow members to ask supplementary questions, we must allow other members to ask questions.
It will be sold as a going concern. That is precisely what I said in my note on this to the Deputy.
We could be here until doomsday discussing the issue of veterinary medicine. There was legislation, which I am sure was evaluated by this committee, when it went through the House. We are preparing for a statutory instrument. It is now going to my advisory committee to evaluate and then I will be advised accordingly. There are issues to be considered. There is a view that veterinarians and prescription only medicines will have implications for the farming community. I am somewhat restricted in that there is an EU regulation which stipulates that when the Irish Medicines Board determines a product is prescription only, it must be issued by a vet. Some pharmacists take the view that they should prescribe, but I am not going down that road. Another view is that licensed merchants should be able to prescribe. At the moment I am not in a position to say one way of the other. In Northern Ireland this is to be allowed in certain circumstances. I will evaluate that.
As regards the sale of doses etc., I do not see the need for restrictions on what is normal. There are one or two other issues to be considered, for example, where a farmer needs a prescription and the vet does not see the animal. This is not on if a farmer is paying the vet to see the animal and give a prescription. There are issues of concern, for example, where a farmer might feel under a compliment in buying from the vet when it might be cheaper to get the produce from a licensed merchant or a pharmacist. I have indicated I will review within the year the workings of this statutory instrument and if I find matters are not going as they should, I will re-evaluate the situation, as I will that of the licensed merchants. The best way to put it is that no one will be happy, so therefore it must be half right. However, we will try to take a pragmatic and practical approach to this. As members of the committee know, the issue of medicines, not just for human but animal consumption is now a major issue and it must be right. Nonetheless, we are freeing up the regime in many ways in comparison with what was the case before.
On the issue of prices, my predecessor as Minister for Agriculture and Food, Deputy Walsh, set up a consumer liaison panel. A project has gone to tender specifically on this issue and I hope there will be a decision soon on who will be chosen to undertake it. We will be more than happy to bring it to the attention of the committee when it has been completed and analysed.
Deputy Ferris is right. If one buys a calf for €280 or €420 and one does not make money when it goes to the factory, then there is a problem. The dairy people can tell to the last cent the cost of inputs for their enterprise, but the beef people cannot. That is an issue of education. It is just the way it is at the moment, but it will change. I know 18 or 19 loads of live cattle — weanlings — left Wexford and that there is a good trade at the moment, along with good markets. That is helping to keep the buoyancy in the market. The Deputy is right. If one starts an enterprise where the costs are too high, one is not going to make a profit. At the same time the consumer wants to reduce the price of the food bill. Those positions are not reconcilable, and we will have to examine how they may be dealt with. Producer groups supporting quality and enterprise is an area that will have to be examined to see how a greater return may be made from investment.
I see opportunities with different types of alternatives. People may want to return to the more traditional, less intensive farming, not necessarily free range as opposed to organic farming. I would like to push organic farming and we are trying to do some work in this area. Another issue is energy crops about which there is much interest, especially among producers. It may also be of interest to many tillage people who are under pressure in finding alternatives. The Minister of State, Deputy Browne, is working with the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, in that area and we wholeheartedly support such alternatives as well as the agri-food industry which is equally important.
Matters have now come full circle. People like to buy their produce at a farmers' market as opposed to going to fancy shops. It is a matter of swings and roundabouts. There will be some difficulties with agri-food, as with the dairy and beef sectors because of rationalisation, access to quantities and competition. On the other hand there will be major opportunities in enzymes, convenience foods and such areas with the necessity for more research and development and better education. I am not necessarily referring to farmer education, which is always a necessity, but other types of education, such as in the area of food and marketing, which will be very important. The issue of marketing is vital. We are criticised for having so many opportunities abroad. That is rubbish. My view is the more high quality food we can sell, the better. The more we facilitate our exporters with importers abroad, the better. Promoting ourselves more is also very important.
I agree that people have a blind expectation, perhaps, when they go out to dinner, that they will eat an Irish steak. They might not ask for it to be Irish, but it is expected. I am anxious to pursue the labelling and sourcing issues. I will push that and the committee can be guaranteed of my wholehearted efforts in that direction. It is also an opportunity for our restaurants to show what we have. If we are not prepared to eat it ourselves, why should anybody else? We must take a practical approach. As regards markets, we have a beef deficit and there are opportunities. We will have competition in due course. We have it anyway from the Brazilians and other South Americans. We must get into other markets. We still need to pursue some of the non-EU markets. Equally, we would like to have opportunities within China. We will pursue these markets vigorously at diplomatic level and through Bord Bia and our own efforts.
One or two issues were raised concerning lands with no payments attached to them. Early retirement is another thorn in my side. If one retires, that is it. When someone retires from farming, he or she has retired and is therefore not going to go back into farming. There are issues concerning indexation of the old scheme that annoy people. There are also issues regarding the social welfare pension. We are in discussion with the Department of Social and Family Affairs to see what may be done to make the transition smoother for people who might not be aware of their entitlements and might end up with a large bill they cannot afford to pay, especially if they are pensioners. We are trying to iron out those issues and are pursuing them with the Department of Social and Family Affairs. There is an issue concerning no entitlements. We could have opted at the time for a flat rate for everybody. However, that would have meant penalising people who were enterprising.
It is the same with the price of milk and the milk quota. This is the issue. It is causing angst for some people, but land with no rights is a consequence of decoupling. If we are trying to support those in enterprise and trying to keep people in farming, then a flat rate would not have been the choice. If people feel that they have entitlements within the national reserve, they should apply for them. I have extended the date for applications to the national reserve to 19 February. As many people must have taken long Christmas holidays we have facilitated that.
The maps will be submitted in the next few weeks and May 19 is the final date. Will members, when dealing with constituents and farming groups, tell them to ensure that they have their application in on time? I agree that the penalties are too severe. We are in the middle of negotiating that issue.
Is there any chance of a reminder being sent to people nearer the date?
I suppose we could send out a mailshot.
Early May would be a good idea.
The Chairman will do it if the Minister gives him a database.
I surely would.
If a farmer does not apply, he loses his rights and the quota goes into the national reserve for nine years. That is serious, so it may not be a bad idea to send out a mailshot.
What about an advertisement on local radio?
We will do that anyway.
The difficulty will be for elderly people with entitlements. Younger people will sort it out, but elderly people with entitlements may not.
The Deputy may not believe this, but many people probably will not take up the entitlements they have. They will do that for particular reasons. I know many dead people still claim entitlements.
I know a man who sent a card to the Minister recently. He never submits anything on time. He is a bachelor farmer; we all know the type.
The Chairman told him that I was not married and that I was a fine woman looking for a man. I have a big Valentine's Day card sitting on my desk with his telephone number. I thank the Chairman for that. If my husband is worth dumping, I will let the Chairman know.
I would not do a thing like that.
I thank the Minister for her far-reaching comments on all the issues raised. I congratulate her on her appointment. We were used to a very high standard with the previous Minister, Deputy Joe Walsh, but since she has come into office, she certainly has been good in consulting groups. She is very popular among farmers.
Most of the questions I wanted to ask have been dealt with in the discussion paper. I was concerned to hear that the nitrates directive situation could affect the negotiations on the rural environment protection scheme and other allowances. I have a particular interest in the early retirement scheme. Those payments are of vital importance to many farmers and that highlights the necessity of trying to get agreement. I know it is very difficult for the Minister. I raised a question on beet at a policy meeting last September. At the time, I was very impressed with how aware the Minister was. I will always remember what she said, that it could be the wildest fight Ireland ever had. Nobody should underestimate the challenge facing the negotiating team at this time. That crop is of vital importance to Irish tillage farmers. I have no doubt that the Minister will negotiate well. I wish her well representing Irish farming. Circumstances are changing rapidly. The farming I grew up with is practically gone. Farmers must make significant decisions over the next few years. I wish the Minister well.
I welcome the Minister and wish her well in her new job. I want to speak about the nitrates directive because I am very conscious of this issue. I understood that the Danes had agreed a position on the directive with the European Commission. As the Danish version had been agreed, the Commission was looking for an Irish version to be modelled on that. I heard the Minister speak about the future of agriculture. There are 130,000 farmers in this country registered with a herd number. There are 20,000 commercial farmers and they represent the backbone of Irish agriculture. They supply the goods for manufacturing and are the real farmers. They are involved in intensive agriculture. If they are to be disrupted in any way by this directive, the agriculture industry will be in crisis. I refer to the large intensive dairy farmers and the pig farmers of Cavan and Monaghan who will have to transport slurry to the midlands under licence. They will have no derogation and the onus will be on the person or persons who take the slurry from them. The same applies in north and west Cork. Much nonsense has been spoken about a high-cost facility to digest and dry slurry and so on. There is also much talk about earthen banks. I would like it if we used a bit of common sense in our approach.
I opposed the appointment of Denis Brosnan because I thought he was not qualified to deal with the issue. I wanted a practical person and the Minister was at the meeting when I walked out. I wanted someone who had both a practical and scientific knowledge of farming. There was no reason to get a business person who had little knowledge of these issues. I met farmers and farming groups who sought a meeting with Mr. Brosnan. He did not meet them and they were disappointed. This directive was brought in back in 1991. I know Mr. Beecher as he comes from my county. I have worked in agriculture with him and was a great admirer of his. We did well together, but we also had differences. If testing is not taken in hand, then we will have no agriculture industry in Ireland. There will be days for spreading and storage costs, and all this will have to be done practically. I have spoken to the people in the Commission in Brussels. I intend to travel over to meet them as I take this seriously. It affects all my neighbours.
I have spoken quite a bit on the sugar beet industry. We closed the Thurles and Tuam sugar factories. My Government did it. The beet industry is at a crossroads. It has possibly got a five-year life span when the reforms are put in place. I accept that the Minister will fight on behalf of Irish farmers. We have the worst beet growing climate in Europe, even worse than the Finns. We have a low crop and sugar yield. I have never heard such nonsense about what is happening at the moment. There are 1,016 beet growers in County Wexford. Most of that beet is sent by rail to Mallow from Wellingtonbridge. The IFA has behaved highly irresponsibly on this issue. When the bacon factory closed in Mitchelstown, we did not see farmers from the IFA marching in the town, even though 1,500 people turned up, because it did not want to identify with the workers. What is the difference between the workers in Carlow and the workers in Mitchelstown?
The pig sector in the area is also in crisis. I support Greencore's businesslike and realistic plans to rescue what it can of the sugar beet industry. If it does not take action, we will have no sugar beet industry. The nonsense must stop and we must be realistic about an industry which is important to the economy. As I said, it is at a crossroads.
My next point is on veterinary medicines. I do not understand why I can buy double strength paracetamol in any shop but cannot buy for a calf a tablet of the same strength. I would like it explained.
I recognise the important role of the Minister in the dairy sector. She is going down a dream with Irish agriculture and people are delighted with her in rural Ireland. She spoke from her heart today and said it as she saw it, which is how things should be done. It is what agriculture is about.
The Deputy's time is well over.
I do not come here very often.
You are not a member of the committee. There are members who want to get in.
The Minister met representatives of the dairy sector on Monday to discuss obtaining her help to get intervention for butter. Will the Minister elaborate on whether that can be done or not? What is the outlook for the dairy industry for the next three years based on current market conditions? One person says the market will be strong for three years at which point there will be a downturn, and another says something else.
I call Deputy Crawford.
The Minister said in a speech on Private Members' business in the Dáil that she would address the issues of country of origin and place of manufacture of food. Yesterday's Irish Independent reported on eggs, the choice of eggs and traceability.
I ask you to respect the Chair, Deputy. I have called Deputy Crawford.
I thank the Minister for her comments today. I congratulate her on her decision on the milk issue. Certainty and understanding were long overdue for producers to let them know what they are likely to be able to do for the next year or so. Co-operatives, which we still have in my area, and farmers appreciated her action. While I welcome the movement on live exports, are we finished with live exports to third countries? What is the attitude of the Department? The outlet is important for animals like Holsteins and we should not ignore it.
I raised with the Minister before the idea of greater freedom to farm as a result of the single premium. We have gone over the top in this regard. I used a different term in a different forum, but my meaning is the same. The nitrates directive must be decided once and for all as it implies restrictions. It is the most important issue. I spent a few years in Brussels and make no apologies for reminding people about that constantly. Nobody ever gave one thanks for returning from Brussels without a decision and for leaving a thing in the air indefinitely. The issue of the nitrates directive has been allowed to drag on for far too long and we now have our backs against the wall. The Minister referred to 22 March as D-day. We must sort the matter out.
For once, I agree with my colleague, Deputy Ned O'Keeffe. Denis Brosnan may be a whizz kid, but I dealt with him as a member of the meat board and his understanding of some of these matters is not that great. As has been stated, the issue affects pig, poultry and mushroom farmers in Cavan and Monaghan to a greater extent than other counties. We are in the high zone in terms of weeks of storage and certainly more so than any other part of the country in terms of the intensification end. While there are sizeable pig or poultry units down south, they are more often part of larger farm units. The situation is very restrictive in Cavan and Monaghan. When she considers the grant aid structure, the Minister will have to take into account extra help for those who must provide long-term storage. Spending money on concrete will not put one penny of profit into farmers pockets.
On-farm inspection is completely unacceptable, as I said to the Minister privately. I make no apology for putting the case on record. I am aware of a case in which there had been a death in a family circle and the sister of the deceased had to stay with an inspector for hours while an inspection was carried out. Her brother was being waked a few miles away. The attitude to farmers must change and I welcome the idea of a customer charter.
In another case, a farmer who was told an issue would be sorted out in October has still not received satisfaction. I refer to that in the context of the penalties I see are to be imposed where a farmer fails to lodge maps. The penalty used to be 1% per day but is now 4% per day. Can we be assured the contrary will apply whereby someone whose payment is delayed receives interest at the 10% rate imposed on people who fail to pay their taxes? I am serious about this. People have encountered significant problems despite being told issues will be sorted out. It may only happen to a small minority, but it is no joke to be the one who is caught by a computer glitch.
Is it realistic to assume moneys forfeited by farmers as a result of cross-compliance will be refunded to the Department of Agriculture and Food? I have serious reservations about that. If the farmers to be inspected are hand-picked, the ones chosen may be the victims of the spite of Department officials. If an incentive exists in that the Department can collect money through the process, matters will be even worse.
I thank the Minister for her wide-ranging submission. The only item on the agenda as far as I am concerned is the sugar industry. Having met Greencore, is the Minister satisfied its decision to close the Carlow plant is of such urgency that it must be implemented this year? Everyone associated with the industry in the Carlow area will wish to see some flexibility in the decision given its implications for the mid-Leinster region. It has implications for employees, farm families and ancillary services and the level of disappointment is difficult to appreciate. Last November, Greencore told unions that jobs in Carlow were safe. The position has totally changed.
When I queried the golden share, the Minister said she would investigate if the company should have negotiated with her on whether it could make the decision it did without the consent of the Department. What is the position?
The Minister stated she would facilitate a meeting with the IFA and Greencore. The IFA will meet part of the costs it will incur in the short term but at least the crop will be safe and the association will not suffer a major loss. However, the employees who will lose their jobs on 11 March have not been facilitated with a meeting with Greencore management. I received correspondence from the union earlier, in which it states it has no agreement with the company on this matter.
Given that the rail link to Bagenalstown has been knocked on the head, the company will try to run 250 large trucks a day through Mitchelstown and Mallow but that is not possible. A total of 200 loads of beet per day will be transported to Mallow along with 50 loads of sugar and since these trucks will make return journeys, 500 trips will be undertaken. That will create major logistical problems. The company should consider keeping the Carlow factory open for a year in order that everyone can come to terms with the economic and social impact on the region. I call on the Minister to return to Greencore management to ask for the postponement for one year of the closure given the impact on employment, infrastructure and the prospect of farmers, employees and towns, which will experience major problems.
I welcome the Minister and I thank her for outlining the outturn in the agriculture sector last year. While the agri-food sector performed well and farmers, in general, did well, we are facing a relatively difficult time. I wish the Minister success in her portfolio because she will need all the support she can get.
I have an interest in the sugar industry and the recent closure of the Carlow sugar factory. Deputy Wall did not declare his interest but he is the only Oireachtas member who worked in the factory for a number of years. He has an acute knowledge of the feelings of the workers who were so cruelly told of their fate some time ago. A thesis could be written on the manner in which Greencore management conducted itself in announcing the closure. While it is a plc, operating internationally, it was high handed and arrogant in the way it announced the closure, which will affect not only the workers, but also farmers, hauliers and agriculture contractors. I accept the decision was taken well in advance and brochures, which included the calculation of redundancy payments for the majority of the workforce, had been produced to outline the closure but the arrogance of those involved in the announcement was despicable.
Greencore is stripping its assets. It is not committed to domestic agriculture, its workers and the country generally. I am glad the Minister is seeking advice regarding the ownership of the sugar quota because if it were left to Greencore, it also would be sold. I take issue with Deputy Ned O'Keeffe's summary of the direction of the sugar industry. If his attitude were adopted, the Minister might as well put up her hands and wave the white flag when she travels to negotiate a new sugar regime for Ireland.
I commend the IFA and the workers for coming together on this issue. The sight of workers, hauliers, farmers, agricultural contractors and other business people coming together in Carlow recently was welcome as they showed solidarity with one another in this regard. I hope a similar display of solidarity will take place if Greencore adopts the same attitude and decides to close the Mallow factory in a few years.
It is important that clarification should be sought as soon as possible regarding ownership of the sugar quota because the Minister should know where she stands when she begins negotiations in Europe. I hope the Attorney General's initial response that the State retains ownership of the quota is correct. The Minister faces difficult negotiations, as there is currently a stand-off between farmers and workers on the one side and the company on the other. I fail to see a valid reason for not keeping the factory open for one more season.
The Minister stated it probably will be the end of this year before the sugar regime talks conclude. What is the problem with keeping the two factories open? We can then sit down and decide what to do. The company should at least have the courtesy to talk to the workers, farmers and other vested interests about the future. At least by the end of the year, everyone will know what is Europe's thinking and what is the Minister's position on the sugar regime. The two processing facilities should be given one more season. It is not a lot to ask. I urge the Minister to use her good offices to bring the two sides together because the stand-off will not do the country, the industry or the her negotiating position in May any good.
The nitrates directive will affect large intensive operations as well as smaller enterprises. Pig producers observe many EPA restrictions and scientific evidence points out that a reduction in water content could be examined. Problems have been created for pig producers who do not have access to other lands. I soon must consult representatives of the industry in this regard.
Different technologies with intensive pig producers are being used in other countries and they must be taken up here. There is a significant reluctance in Ireland to use environmental controls whereas farmers in Germany and the Netherlands look on them as opportunities to use new technologies and methodologies. They then sell the technologies to our farmers. We have a blind spot when it comes to these issues. Some people feel the more pressure that is applied to introduce environmental controls, the better because they look upon them as an opportunity.
However, other alternatives are available. The Deputy is correct about earthen banks and that issue must be addressed. While there might not be costs involved in the earthen banks, fencing is a cost and from a safety point of view we all want to ensure that nothing would happen to a child who might wander into one of these places. Anaerobic digestion is being considered and some of the farm relief people are preparing proposals, which could be beneficial. The implications of the nitrates directive will be huge depending on where people are coming from. A smaller farmer may feel its effects as much as a larger intensive farmer, which is the crux of the issue. This is why I feel the cushioned approach and considering alternatives will be very important. We need to learn from what our colleagues have been doing in recent years in terms of technology and farm practice.
Live exports are going very well at present. We must come to the realisation perhaps in the next ten, 15 or 20 years that live exports will no longer be feasible. This is because of a political view in the European Union and significant competition from other countries, including some of the new member states such as Estonia with direct land access to the EU market. We will have more competition for the customers we have in Spain, Italy and France. I am firmly committed to the live export trade with an animal welfare balance on which we are all agreed. Considerable work was done by Department officials and the former Minister, Deputy Walsh, on the new animal welfare directive that was agreed recently. There is significant opposition to live exports and we must face that reality in due course. Having said that, as discussed in the Dáil last week, our present approach is pragmatic and practical.
On the issue of third countries, I have been asked what could be done about Egypt, where a new Minister has been appointed. The secretary general has had discussions with his counterpart and we are considering whether third country markets will become open to us. We have considerable competition. A gap existed for some time and others have filled that gap. We have some customers on the live exports side that we will try to pursue. The Deputy is right in saying that some issues need to be addressed. We are actively negotiating on the Egyptian market.
I had discussions with representatives of the dairy sector yesterday. We discussed an issue regarding the dairy certificate and Russia, which is causing a difficulty at the moment and I have given undertakings in that regard. I discussed the intervention price and I know we are in negotiations. However, as I left my notes on my desk and I do not want to give the wrong information, I will come back to the Deputy on the matter. There are issues regarding the imbalance over the intervention price going in and coming out. As members know, we will see pressure for reductions and casein has been reduced. We want to see a rational decision made. I will supply the Deputy with more information on negotiations taking place.
On the issue of the freedom to farm and the single farm payment, I agree that the 4% penalty is too high. We have returned to negotiate on that basis. While the majority of farmers conform to environmental controls, no mercy will be shown to those who blatantly refuse to do what they are supposed to do. I would like to see a fair-minded principle applying to both sides. There are other issues on the freedom to farm.
The budget for CAP within the European Union was enormous in the past and is now experiencing pressures for reduction. Member states are not prepared to support agriculture as much as they have done heretofore. If they are to support it, they will insist on environmental controls and value for money. Ireland will now be a net contributor to the European Union and we would like to see value for money and accountability in any state supports we give to other countries. It is a question of ensuring that the taxpayers of Europe get good value for money and equally that the job is being done.
Deputy Crawford asked about the single farm payment not being taken up. These funds will go back to Europe and will not come back to Ireland. That is what happens with REPS and the same should apply to the single farm payment.
The closure of the sugar factory is a double whammy, especially for Deputy Nolan and the other members from the area. They must face job losses in their town which has a tradition in the industry. Many employees have worked in it for a considerable number of years. There is a perception in that part of the country that I am not doing my job. I will say it as it is. I have taken the opportunity of meeting representatives of Greencore. In normal circumstances Ministers do not get involved in negotiations between workers and employers — normally a plc — or between suppliers and plcs. In the main that is a very good idea.
Having said that, there is an impasse and a gap between the beet farmers and the company. I met representatives of the IFA and said I would pass on their views to the company. They asked me to consider a number of issues, which I am prepared to do. I made it clear that I support a number of matters, including that a sugar beet industry should continue in north Leinster and that operations at Mallow should not be undermined as a consequence of any decisions made heretofore. Rightly or wrongly the company has a particular attitude and has made its decision. My gut feeling is that the plant in Carlow will close. However, there needs to be recognition of the 80 years it was in Carlow. There is recognition that the farmers, who believe they are being undermined or discommoded, will need to have some financial recompense for the change. They should have access to the Mallow factory where they should get a good return on their investment.
I was asked whether the timing of the decision was warranted. I cannot answer that question. However, I recognise the company is under pressure of competition. In supermarkets Siúcre Éireann packages are being moved sideways on the shelves and replaced by cheap French sugar and in due course we will see even cheaper Brazilian sugar. In Deputy Ned O'Keeffe's area the company lost access to Nestlé and it needs the business from Cadbury, Coca Cola and other big consumers of sugar to maintain its operation. I will do all I can to facilitate the workers. I said I would speak to the unions on the issue. I believe an agreement will be reached between them and the company. I will facilitate a meeting of minds between the company and the farmers. While there is a huge chasm, we must do what we can to resolve the matter. We have only about three weeks in which to act as people need their contracts and they need to get at the beet. I am more than willing to work behind the scenes to try to facilitate bringing the sides together to reach a resolution on the issue.
We discussed the issue of the golden share. I cannot do anything about it until I receive a proposal to sell the asset, which has not yet happened. In the interim, these other issues will need to be addressed or else we will have a serious impasse which will not be beneficial to me when I need to negotiate changes to the sugar regime.
Problems will be created for this season as it will not be possible to have the rail facilities in place.
The company has said to me and to the IFA that it will be able to facilitate the transportation to Mallow. It has said it has another site that will be announced at the end of the week.
The Minister of State, Deputy Parlon, has another one.
I had not realised he was into property.
He announced a site in Portlaoise.
I was not aware of that.
The Minister of State, Deputy Parlon said——
The Senator should let the Minister continue and should not interrupt. Members should show some respect for the Minister.
There is no decision as I have been advised by the company where another facility will be located. I am giving a personal view. I am not in Greencore and do not live in the south of Ireland. I am reporting what the company said to me in no uncertain terms, which is that the factory in Carlow will close.
I want to see a threefold approach. The workers employed within the factor will have to be properly cared for. Those thinking of moving on will have to be facilitated by my former Department and FÁS as regards retraining, reskilling or entitlements. I have met Enterprise Ireland officials to impress on them that there is a need in the area of Carlow town for a replacement industry because I can appreciate the impact that the ending of an 80-year tradition will have on the area. Most importantly from the viewpoint of my Department, those who grow sugar beet in north Leinster must be facilitated properly and recompensed for the inconvenience and the increased cost which I have been advised will work out at around €10 per tonne for access to the factory in Mallow. All these initiatives must be put in place within the next three weeks or we will not have got very far.
Uncertainty within the market because of the EU sugar regime and because of the man or woman who needs to decide whether to grow sugar beet needs to be dealt with promptly. In the next three weeks we will have to try to bring finality to all the concerns I have expressed there. I will facilitate, support and push as best I can to get a consensus.
I welcome the Minister to the committee. I have three main points to raise. The Minister warned the committee in her opening statement that she is convinced her position will be much more difficult as regards the REPS and other negotiations that will take place later in the year, including early retirement, if the nitrates directive controversy is not resolved. Will the Minister comment further on how she believes negotiations may be affected if we have not arrived at the solution we want as regards the nitrates directive? I commend and congratulate the Minister on her initiative in undertaking the inventory of malting barley storage and capacity facilities in Borrisokane and Banagher. This move is very much welcomed by the farmers of north Tipperary. We assure her before the inventory is completed that she will find there is a deficit in storage capacity for malting barley. We also welcome her commitment to fund storage if and when the need arises.
I want to make a point about brewers. The Minister said that there has been a reduction in the intake of beer in Europe and that Ireland has followed suit. However, the small breweries welcomed the VAT reduction announcement in December by the Minister for Finance, Deputy Cowen. Up to then they had been on the same VAT rate as large companies such as Guinness. It was recognised that there could be much greater participation by small brewers in the brewing market. I have asked the Minister's Department to contact such companies to find out where they source their malt and whether it might be possible for them to use the malt produced in Ireland rather than importing it. Will her Department follow up on that? It is an important development that the small brewers welcomed the initiative of the Minister for Finance, Deputy Cowen, and they may be able to help the Irish supplier in return.
Senator Coonan I also welcome the Minister to the meeting and thank her for giving us the up-to-date position on many of the issues. Many of these have been dealt with by now so I do not want to go over them again. The Chairman might allow me to tell a story about little Johnny in the school which ends with the punch line, “I like the way you are thinking”. I am sure many in the farming community will not like the way the Minister or her officials are thinking given the line in her opening statement which stresses the role of the farmer as steward of the rural environment and landscape. If that is the Minister’s attitude, we are going to end up as maintenance people for agriculture and the rural landscape. If that is the best hope she can offer them in the future, God help rural Ireland and the farming community.
Many of the issues have been addressed. As regards the sugar question which I do not want to go over again, the Minister has to come to grips with Greencore. I believe the reason it is keeping Mallow open is because it is near a port. If the Minister is not careful, there will be no sugar industry left because Greencore will import the cheap stuff from South America the first chance it gets. That is the cane and the brown sugar which will be sold on the market as Irish, as is happening already. This is a serious matter and it is time it was treated as such. We will support the Minister in whatever efforts she can bring to bear to prevent that happening.
The Government has commissioned many experts to examine specific industries or one aspect of life or another, but it has failed miserably to do this with sugar. If matters had been dealt with properly, Thurles would have been the ideal place for a single plant location because it was central. It was a political decision to close it. I do not doubt the Minister's sincerity when she says what she will do for the people of Carlow in terms Enterprise Ireland attracting a replacement industry. We have heard all that before and it will not happen. I will ask the Minister when she returns to this committee in a few years' time what industry was located in Carlow to replace the sugar factory. Despite the promises and the fact we had a Minister in the constituency, nothing was ever done for Thurles. The industrial base was never replaced to the same extent and the region has struggled.
The Minister was not from the Senator's party.
Certainly there was one from my party. I did not interrupt Deputy Hoctor when she was speaking. However, those are the cruel facts of the matter. We do not doubt the Minister's aspirations, but we will wait to see if they are fulfilled.
As regards malting barley, storage is only one aspect. Most farmers depend on the merchant to provide the seed and the fertilisers and perhaps to advance the credit to get it to the storage stage. I like what the Minister had to say about the housewife and the price of sugar on the market. However, what the farmer gets in value from a pint of Guinness is 0.7 cent. I appreciate the fact the Minister is not acting as a promoter for Guinness.
That is an uncertain thing to do. Perhaps we should go back to a few of our own traditions while we are at it.
I assure the Minister that I am very much sticking to it. She has defined the situation concerning the beet quota. What is the situation with the malting barley contract? Has she taken that up with Guinness or with Greencore? That contract belongs to the people in the area. They have received several national prizes for the production of malting barley and they produce nothing but the best. The company is known as Minch Norton and I do not believe it should be allowed to pinch the contract from the farming community. That is important.
On the nitrates directive, once again I do not want to go back over ground that has been covered. One of the issues the Minister must examine in the context of all the international evidence is global warming and climate. Officials from the Department of the Environment, Heritage and Local Government spoke to the committee last week on the subject along with officials from the Department of Agriculture and Food. Amazingly, an official from the Department of the Environment, Heritage and Local Government said there was no growth after October in this country so slurry could not be spread outside a growth period. We pointed out conflicts of interest between the two Departments. That is something else the Minister could bear in mind from the scientific evidence. The point I am making is that a blanket ban or calendar date is not feasible in this country any more. Weather is not sufficiently predictable, as the Minister knows.
There are a few other issues. How is consistency monitored among inspectors, the people who come to farmyards to act as judge and jury on farming methods? Some of them are excellent but others are awful and there is no great consistency among them. Unfortunately, if a farmer is unlucky enough to get one of the awful ones, he or she can be almost put out of business. How are standards measured in that regard?
What is the position on staffing in local offices of the Department? In my case I am told the reason for REPS payments being delayed is inadequate staffing levels. There are many inspectors but not enough staff on the ground to deliver the service to the farming community.
I would love the Minister to meet some beef producers in north Tipperary and tell them that they do not know what they are making from beef.
Some of them do not.
The Minister is in for a treat because some of them are excellent and know well what their costs and returns are. Rather than condemning beef producers, she should be tackling the factories. When those who run them know that the farmer has to get rid of his or her livestock, they drop the price and take the bottom out of the industry. There is no alternative such as live exports to remove cattle. There is a great difference between what the factories can give a week before Christmas and a week afterwards. The slaughter premium goes into the pockets of the factory owners who are acting in a cartel and the Minister and her officials are doing nothing about it.
Is the Minister keeping the modulation funds in the Department, or is she proposing that they be given to her colleague in the west, the Minister for Rural, Community and Gaeltacht Affairs, Deputy Ó Cuiv? It is vitally important that they are given back to the community from which they came. They have been taken from the farming community to which they should be returned.
I thank the Chairman for allowing me to ask questions. The Minister spent her first day in the job in Carlow at the national ploughing championships when many farmers expressed concern at her appointment as she was not aware of the beet industry in Carlow. Unfortunately, her recent inaction lends support to that theory. She was slow in responding in dealing with the issue. While I accept that she met representatives of Greencore this week, it was two or three weeks too late. That is also the feeling on the ground in Carlow.
It is bemusing to hear the Minister of State, Deputy Parlon, speak on local radio about keeping the factory in Carlow open for one more season. From her answers today, it appears the Minister is accepting the deal that the factory must close this year. That the Government amended the recent Seanad Private Members' motion on the issue is a further indication. Did the Minister put any pressure on Greencore to allow the factory remain open for one more season, especially since the rail depot project is not now going ahead?
When Greencore announced the closure of the Carlow factory, it made a big play of the fact that Carlow would have a rail depot for the new campaign. The rail depot planned for Bagenalstown fell at the very first hurdle. No preparatory work was done. The project had not even reached the preplanning stage. Therefore, I would be very suspicious of anything Greencore representatives might say about any other potential depot. It is worth noting that Greencore would have a depot on the Carlow site except for the fact that it sold land across the road last winter. This is now being used an excuse to explain why a rail depot cannot be located there again. I certainly do not trust Greencore and the Minister should not be hoodwinked by it.
The Minister has pointed out that half of all beet growers are in the Carlow area. That is why it makes sense to have a rail depot located there. I regret the fact that the Cork politicians have tried to make this a Cork versus the whole country debate. In time, they might regret this themselves. What is happening in Carlow could happen in Cork. The Mallow factory is being stripped in advance of the arrival of new equipment for the winter campaign. That suggests to me that Greencore has no intention of keeping the Carlow plant open. It is time we received straight answers. Is the Government putting pressure on Greencore?
When did the Minister become aware that the Carlow plant would be closing? Did she receive advance notice? Was any work done by her Department to avert closure for another year? Has the issue of extra transport costs been raised by her Department with Greencore? When the Tuam and Thurles factories closed, the numbers of beet growers in the areas affected fell dramatically. The same will happen in Carlow, Kildare and Laois, the places furthest away from Mallow. Can Mallow take the extra road traffic if the rail depot is not up and running by the winter, as is suspected? The Minister has stated she will take a close interest in developments. That is complete waffle. What does it mean? Will she take an active role in advising the company about rail depots, or she will sit idly by?
Is there a weight restriction in Wellington Bridge? If so, what implications will this have for transporting beet from Wexford and the south east to Mallow? Deputy Fleming wrote an article in a newspaper a few days ago claiming that the announcement by Greencore of the closure of the Carlow factory was illegal in terms of the Stock Exchange. Is that the case? If so, what are the implications?
I want to soften a few coughs. It is very easy to be in opposition. All one has to do is talk the talk. It is very easy for me to speak on local radio in Carlow and say I will do this or that. I will be damned if I do something I am legally precluded from doing. Following my discussions with Greencore, the way I see it is that Greencore has decided that the Carlow factory will close. That is regrettable for a number of people. It is regrettable for the people who work in the factory and for the economy of the town and its hinterland. That is a fact and I will not be held hostage to fortune. It is a misnomer that I can stop it; I cannot. While I could make life awkward for everyone and may have to in due course, I cannot interfere in a public company on the basis of what people living locally want me to do. I might like to do it but I cannot.
The issue of the golden share has been bandied about but I need very good reasons to prevent certain things from happening. I cannot make a decision on the matter until such time as the sale of the asset comes before me. As of now, there is no such proposal. In the interim it will be too late for farmers in north Leinster if they do not know in the next three weeks where they will be going with their contracts and sugar beet. I have not been sitting knitting at the Department while people are under pressure in north Leinster. That might be the perception but I will not go out and roar my head off when I do not know where we are going or when we can get down to the crux of the issue which, from a farming perspective, is cost and the location of the rail head. I also know that there will be a transport issue in Cork if all these lorries have to head there. We all had to sit behind tractors, trailers and lorries during the beet campaign.
I have to accept the bona fides of a plc when it tells me certain things. I have no hand, act or part in its day-to-day running. Having said that, there is a chasm in attitude between the two parties. I have given a commitment that I will try to bring them together to see if we can arrive at a mature and professional decision that will satisfy both. There is no sugar enterprise without sugar beet. Therefore, the reality is that people must get together and be supported. I will do my best to ensure this happens but I cannot run Greencore. I do not have the time to do so and cannot be seen to be running a plc but I will facilitate the farming fraternity and the company in bringing this matter to finality as quickly as possible.
I know the reality of the politics of Carlow and that Fine Gael will do its best to make it as awkward as is humanly possible on the ground——
What about the Progressive Democrats?
(Interruptions).
The Minister should talk to her colleagues in government. They are the ones making the commitment.
Can I finish?
Order, please let the Minister continue. Some members only attend the committee when certain issues are being discussed. I ask them to have manners when they are allowed to attend.
Hear, hear.
Politically, matters can be made awkward or problematic. If somebody makes a planning application, it only takes one person to object. That is the reality and committee members know as well as I do that it does not have to be a politician. While that is the way it can be, I do not want it to happen because, if it does, farmers will stop growing sugar beet in north Leinster and I will have no sugar industry to fight for in Europe. That is not what I want. I want the farming men and women — I am not sure how many women grow sugar beet — involved in growing sugar beet to know where they stand in the next three weeks.
One important person involved is the Minister.
Let the Minister continue, please.
I am not running the regime. I can only facilitate those involved and do my best on the issue. Coming from Carlow, Senator Browne knows the problems on the ground which are attitudinal as opposed to anything else. If we could facilitate the two sides in coming together, this matter could be sorted out but there must be give and take on both sides.
As I told the IFA today and my parliamentary party last night, I am more than prepared to shovel in to try to sort out this matter, and that is what I will do. However, I cannot change the world. My professional view is that the plant in Carlow will close. I sought information on whether it had to close and on guarantees for the farmers involved. I have been advised that the capacity of the plant in Mallow will increase and that the company is prepared to go ahead there.
I know that farmers in Cork and particularly south Wexford have concerns about the regime and the timeframe on the basis that there will be more capacity in Mallow. However, that is a sugar content issue. I met them to discuss this issue and will do what I can.
What if that does not happen?
The Senator can ask a supplementary question later. The Minister should continue to answer the questions she was asked.
I could be facetious and say that at least they have a rail depot but I will not. In my part of the country we have nothing.
There is a rail line but no rail depot.
A Deputy
What about Portlaoise?
Let the Minister continue.
I am not getting involved in determining the location of the depot. Wherever it is, I want those who must use it to be facilitated in regard to the cost implications of having to change depot. It is not up to me where it is located. No decision has been made on this issue. I am told six options are available, of which one will be chosen at the end of the week. I may or may not be advised but I am sure some of my backbenchers will tell me.
Or the Minister's colleague.
Senator Browne wanted to know when I was advised. One would think I was working for the secret service. I was advised on Monday, 10 January, that a proposal was going before the board on Wednesday. On the day of the board meeting everyone involved was advised the company was going to the Stock Exchange. Everyone involved knew this because there are worker-directors on the board.
I met representatives of Greencore in the autumn to discuss the sugar regime. However, I was not advised at that meeting that the Carlow plant would close on 13 January. I was told there was competition and about the position in the United Kingdom and France. As it is part of the industry, I asked Greencore for its views on the changes within the regime, a matter on which I had reason to ask. However, I was not told, nor was anyone else aware, that it would make a sudden decision.
Was the Minister told the plant would close?
No, I was told a proposal would go before the board on the Wednesday. On that day I was advised by my officials of the outcome of the meeting, as was the beet representative, Jim O'Regan. That is when I was told. There is no conspiracy. The Department was not involved in any decision made by Greencore.
With regard to Minch Norton, there is no quota.
There is a contract.
There is no quota. There is a free market in the growing of malt and barley.
Where is the contract?
There are contracts but they are not between the Department and the barley growers but between the growers and the company. The committee cannot expect me to interfere in private contracts between an individual and a company.
The Minister is dead right.
I know malt and barley growing is a support to the tillage industry in the midlands and Deputy Naughten's constituency. In the minds of farmers, if a contract is available, it is probably not worth the bother applying because of the cost. It will be up to farmers to talk to Greencore to ascertain the situation in Athy with regard to contract. However, I realise this is an issue in that part of the world. If there is a storage capacity problem, I will see what I can do to facilitate farmers because we are entering a particular season. I am prepared to do this and have said so publicly on three occasions.
The modulation funds are up for consideration but no final decision has been made. I will consult those involved. There are a number of parameters within which we must work. I will make the decision within the next two to three months.
How is it looking?
That would be telling the Senator.
That is what I want to know.
I was just saying to some of my officials that perhaps we will go for the Q-mark with regard to inspections. However, on the basis of the protocol between all the farming organisations and the Department, I hope we will be able to get rid of this issue.
One of problems with farming in the past 30 years has been increased paperwork. Serious problems are caused for those who make small mistakes, for example, putting on the wrong tag or having sheep belonging to one farmer on another farm. Coming from where I do, I understand the situation and believe the problem will disappear with the advent of the single farm payment. We are now talking about a land based as opposed to a stock based issue. This will alleviate many of the problems that public representatives have had to address with the Department in recent years.
I see this measure as being progressive. People make small mistakes such as including a wrong number or not listing a herd. These things happen but the problems will disappear.
It would not happen in my area.
No, because in the Senator's area one does not find mountain sheep.
They must be tourist sheep.
Many of the annoying little problems of the past 20 years will disappear on the basis of the single farm payment. One will have to have an entitlement of 5% in respect of inspection and 1% in respect of cross-compliance.
I want to make sure farmers are fully informed as to what is expected. We will make information available as simply as possible. I realise that not everybody watches television or reads the Irish Farmers’ Journal but they should know the exact implications of this. We will try to disseminate as much information in as simple a way as possible to ensure farmers get their entitlements. I support them in getting their entitlements. I do not wish to go against them. We will inform the committee in due course in regard to the 4% penalty which is too sharp. We are negotiating to have this figure reduced.
I am not here to insult farmers on the issue of beef. However, there are many who have no clue how much it will cost. The practicality is that if one buys a calf for €420 and will only sell it when it is worth €600, somebody is losing out somewhere.
The Minister should deal with the other end of the issue.
The bottom line is that the farmer will lose out.
There are two sides to every story.
Yes. However, with the removal of premiums and the first and second punch and so on, there will be a higher quality specialised product. It must happen.
The product must still be sold.
We still must sell it and will not do so unless it is quality produce. That is what must happen. Attached to this is the issue of labelling. We are in a very competitive market and it has taken us seven years to get a piece of Irish meat——
I refer to the issue of the cartel.
I will speak about that presently. It has taken seven years to get a piece of Irish meat onto a supermarket shelf in France. Much effort and money have been invested to achieve that objective and this effort must continue. Supermarkets will change, as will people's attitudes. Therefore, we must be ahead of the game.
I met all those involved in beef production and they know they must rationalise. Unfortunately, the issue is under consideration in the courts and we are stuck. There is a realisation, facilitated at the time by the former Minister, Deputy Walsh, that there is a problem and that rationalisation must take place.
The methodology by which the factory and the farmer work must change. This will not happen in the next two or three years. In a moment of weakness I said I would look at bringing the farming enterprises and the factories together to see if the issue could be resolved. There is a glut in the market and people are taking in their own cattle to bring down the price. When there is a gauntness in the market, one will get one's price or prices will move in the other direction. This has been going on for the past 40 or 50 years. In Italy, however, one can have a contract for beef production over a certain period of time, similar to the situation in regard to milk and dairy producers in the past 20 years.
That is a consequence of competition on mainland Europe.
That has worked well and it is this type of model that we must consider. We may have to examine our animal husbandry and turn things around in order that some will specialise in the spring and others in the summer or winter. There will be an issue in the coming years regarding the number of cattle being made available. Beef produce must be of a high quality and we must be focussed on the market and the consumer. This is achieved through quality, traceability and good marketing.
There will be a good deal of specialisation. From a different standpoint, I might have much to say about those who went into other enterprises in which they should not have been involved in the first place. Certain farmers in the west were always good at doing certain things but others decided they also wanted to get in on the game. This caused problems for us. People should be allowed to return to where they traditionally came from and should be facilitated in specialising on that basis with an emphasis on quality.
On the issue of a custodian of the rural environment, who else will take this role apart from farmers themselves? I do not like the attitude of some animal welfare activists that farmers are neglectful or harmful in the manner in which they care for and transport their animals. In the main, the attachment between farmers and their animals is strong. Equally, the custodians of the environment are those who live and work in that environment all their lives. They have mostly been very good in this regard. They recognise this role and are willing to undertake it.
The REP scheme is very popular and encompasses an environmental issue that may be traditional but is also important. I take a broad perspective in this regard. I am not saying farmers must do everything but the majority of those who look after and own the land are farmers. They have performed this role which must be progressed further in the future.
After all that, I will go easier on the Minister than other members.
I wonder when Deputy Blaney adopted that approach.
I thank the Minister for dealing with the issue of potato growers which I raised at a previous meeting. While she has not wavered on the question of charges, I welcome that she is hoping to introduce grant-aid for growers.
That will apply to seed potato growers.
Yes. Undoubtedly, the sector is in danger. County Donegal is one of the major seed-growing areas and the problem is that profit margins are small. I do not like the idea of these small farmers being encouraged to increase production significantly because seed potato production is labour intensive. If one gets involved in it in a major way, it is not possible to take the same care of the crop. However, I support the introduction of grants as a replacement for a reduction in fees and look forward to implementation of the scheme.
I emphasise one point in regard to the nitrates directive, about which I have spoken with officials from the Minister's Department and the Department of the Environment, Heritage and Local Government at a previous meeting. It relates to sewage or sludge storage. If one considers the times of year that growing takes place in terms of a map of Ireland, it is not on a North-South basis. The Minister lives in a coastal area and is aware that we had our first winter frost in November. Another member observed that growing does not start and finish on specific dates, it is different every year. The seasons are changing, particularly in coastal areas where there are not the same patterns as in previous years. I see more frost in Dublin these days than in County Donegal. I hope the Minister understands the point I make.
Yes.
As a guest of the committee, I will try to be as civil as possible.
The Senator has great manners.
I thank the Chairman. To take up Senator Blaney's point, confidence is at an all-time low in the seed potato sector. It is unfortunate that the majority of seed potatoes are imported which is difficult to comprehend in a country that was seen 20 or 25 years ago as an ambassador in Europe for the sector.
The IFA is still unhappy about the charges, although the Minister has met the organisation and tried to provide some leeway. The IFA is beating itself up in this regard. On the one hand, the Minister is trying to instill confidence in the potato sector by announcing plans to introduce grant aid and other incentives for producers. On the other, she is taxing them in the first instance. This is not the correct approach for a sector for which incentives are required. It is timely that the charges should be reviewed.
The Minister attended a private in-house meeting with other representatives in County Donegal last Friday at which she used a comparative analysis between charges in Northern Ireland and the South. I hope she does not object to me raising this matter. I may be taking a parochial attitude in this regard but one cannot compare the rich alluvial soils of Northern Ireland with the land of County Donegal. We cannot compare my small part of the country with that of the Minister or Deputy Blaney. I am playing the violin but it is a necessary musical instrument in dealing with this issue.
I understand the Minister plans to meet again with a delegation from the IFA . I encourage her in this endeavour and ask her to listen to that organisation's concerns and arrive at a compromise. In what context and to what extent is she considering the introduction of grant measures for seed potato growers? IFA representatives do not want to hear the talk but about tangibles. Will the Minister outline what she means with regard to grant aid and incentives for seed potato growers?
As it is getting late and I have a few things to say, I will be brief. I welcome the Minister and admire her stamina in surviving to this point. However, my advice is, "Bí cúramach". An dtuigeann tú?
Tuigim.
We have already advised one Minister. We do not want to advise another.
As a person of advanced age, I do not mind giving that advice. What is Greencore's real agenda?
The Minister shall answer in one minute.
Does anybody here know the answer? Is anybody here a shareholder? I am not. Again, I pose the question: what is Greencore's real agenda? Let us return to the subject of Erin Foods which was sold down the drain. Greencore is quickly going down the drain. The day it decided to close, it stated it would open Bagenalstown loading station for beet.
Representatives from Greencore will be here in a fortnight and the Senator can tell them all about it then.
No. I will do so now. I would not come to a meeting if there was the same nonsense all evening. I have another question for the Chairman.
As the Minister will answer the questions, the Senator should not ask me.
Deputy Ned O'Keeffe and I shared a platform one evening four or five years ago on the issue of the price of beet when there was a similar discussion between the IFA and Greencore. We were on the same side that evening. I asked Dr. Brady what his agenda was. It strikes me that it was running an incompetent, inefficient business then. Irish Sugar is only a small portion of its business.
I wish to address a certain issue for the second time today. Deputy O'Keeffe and I were on slightly different sides this morning but finish up on the same side this evening. I admire the Minister's forthright and forward thinking. Some would have us return to the days of the horse instead of machines. Let us move forward. Galtee, owned by a co-op and controlled by farmers, was closed as was Siúcre plc. If the Minister has a spark of sense, she will keep away from the matter. That is my advice.
I have point regarding the nitrates directive. I picked up a vibe from the Minister's earlier communication that there were other up-to-date methods. The main issue regarding the directive concerns organic nitrates, storage and spreading. Storage can be provided for through earthen banding. This presents no problem. There is ample evidence of this. I will bring the Minister to where Deputy O'Keeffe lives where there is one on a limestone farm which has been operating for the past 20 years without leakage. There are many more around the country.
Anaerobic digestion is the way forward. The lateral spreading of slurry will be illegal in five years. If we are interested in farming, let us look at what is happening down the road from us. Some talk about the tube in the field. I saw one operating near me over the ditch but it is now gone. However, let us look at the matter from the farmer's point of view and the practicalities. Anaerobic digestion has energy, fertiliser and environmental value. It requires the locking in of at least three Departments, not just the Department of Agriculture and Food or the Department of the Environment, Heritage and Local Government on its own. It must include the two of them with the Department responsible for energy because there are gains to be made in that regard. I make this suggestion to the Minister and her officials today.
I do not know good the EPA document is. However, it signposts the road ahead. We did this in Cork County Council until 1991 when the Department of the Environment, Heritage and Local Government refused to give us money to continue trials. Deputy O'Keeffe was not a member at the time.
The Minister has adopted an enlightened approach which she should keep. She should take the road forward, put down markers and follow her own mind. I appreciate what she has done but with regard to Greencore, I say, "Bí cúramach".
Deputy Ned O'Keeffe will make a brief supplementary comment. We do not want to be here past 6 p.m. and there is much more on the agenda.
More than half the sugar beet in Ireland is grown in counties Wexford and Cork. Of the 3,700 growers, over 2,000 are to be found in these counties. All of the beet produced in County Wexford goes to the factory in Mallow. I have never heard such rubbish as I have heard this evening. We must look at the Dutch and French industries which process beet in a much shorter period. They rationalised at a faster rate. The Dutch recently closed a factory and there was not a word about it in Holland. I admire the Minister's efforts. She has led other countries in Europe to save the industry, apart from France which is against us.
I talk common sense and the Minister has common sense. The practice of earthen banking must stop. Look at what happened in Iowa and North Carolina a few years ago when the earthen banks came apart in storms and hurricanes and destroyed the waters of North America.
That is rubbish taken off the Internet.
Having an earthen bank in limestone land with aquifers is not on. Let us be straight on the issue. The nonsense must stop. We must be realistic.
The golden share concerns me. We privatised the Sugar Company in 1989. The sugar sector is the most profitable part of Greencore's business and returns the best yields. The golden share was vested in the Government, namely, the Department of Agriculture and Food. That was clearly stated by the then Minister, former Deputy Michael O'Kennedy. I was sitting alongside him.
Regarding the malting ban, things go wrong and things change. Senator Callanan made a great point about pig production in Mitchelstown but that is an issue for another day. There is a problem with malting barley but we must be realistic, as we have been in most cases. We must use our common sense, although there has not been much of that today.
I must leave at 6 p.m. to attend another meeting. The Minister has two minutes to reply.
I know some members of the IFA are not happy but I have gone a long way — much further than expected heretofore — on this issue. There are a couple of issues with regard to seed potatoes. We are being beaten around the head because of competition. Most seed potatoes are grown in Scotland, even though we have disease-free status and have done a lot of work on new varieties.
I wish to retain our high grade seed area status in the European Union but to retain it we must take certain measures. I did a comparative analysis with the position in Northern Ireland and reduced the charge by 50%. I thought I was being relatively fair in doing so. I also gave an undertaking that I would speak with the Irish potato marketing board. We have had some fairly hot and heavy conversations about where we stand with regard to potatoes.
The level of potato consumption has seriously decreased. People are eating rice and pasta because they are handy. One must think outside the box. What will the housewife or person living alone do? Some people do not even peel spuds anymore but use a machine.
Skins and all.
Skins and all. Times have changed. While I do not wish to see a traditional industry decline, especially one based in County Donegal, my own part of the world, as well as County Meath and north Dublin, it must modernise. One problem is that many involved in the industry have never received professional support from an educational or marketing point of view. Also many of the farmers involved are elderly who find the work difficult. I have reduced the charges by 50%. By way of comparison, growers in Northern Ireland with whom we are in competition pay €76 more for supports. I will meet the interested parties again in the middle of April.
The Minister of State, Deputy Brendan Smith, will carry out a marketing and promotional drive to persuade people to return to eating potatoes. In particular, we must get young children who do not eat potatoes now to do so, or we will no longer have an industry.
Butter and spuds are very healthy.
They are very good for you.
Pre-basic one and pre-basic two potato tubers are going back to the growers. This is causing angst because they must be kept at a cool temperature. I am prepared to provide facilities and grant aid on this basis. I wish to drive the industry which died a death because nobody took a huge interest in it. If the same interest and exuberance shown in the sugar beet industry had been shown in the seed potato industry, we could have had a more active enterprise.
The Minister of State, Deputy Brendan Smith, will handle the marketing issue. I will look into the question of moving beyond potato inspection to a more supportive role. I met the potato marketing board representatives and will rise to the challenge concerning quality. They stated that if I could deliver a certain standard, they would consider the production of more seed in Ireland. Rooster is one of the great potatoes in the world and accounts for 40% of the market. Much of its success is due to its presentation. There is a new white potato that looks very well——
Is it branded?
That is the problem. It all comes down to marketing and presentation. Carrots do not grow straight. They are dirty, can be crooked, grow in funny ways and have big long things on top. A wain might die and would not know what a carrot looked like, where it came from or how it was grown. Tomatoes are not and could not be perfect but as consumers we expect to have Dutch tomatoes. We do not appreciate the Spanish tomato which is grown on a vine, is larger and has small bumps. If it is perfectly round, we will not buy it. This is a consumption issue which drives the vegetable market. Lettuce does not come clean in a bag, rather it is dirty and one washes it.
As this is not how it will be in the future, we must move on with regard to potatoes. It took 20 years to get to the position where a housewife was no longer obliged to buy stones, dirt or muck on her potatoes, or to have marbles and huge potatoes in the same bag. In reality, one can no longer do this. I say to seed potato growers that we have to move on. I am prepared to market and support the industry and look at its potential. It is absolutely ridiculous that we import seed potatoes from the Canaries, Cyprus and Scotland when we could do it ourselves if we just made more of an effort.
On the advice proffered by Senator Callanan about staying out of Greencore, if I did, there would be an issue. I do not intend to intervene to run a company.
Good girl.
I have enough bother as it is.
I congratulate the Minister on doing a crash course in practical and production agriculture.
The Minister spoke about the commercial sector. Would she be prepared to offer grant aid to the small farmer with 40 acres as an incentive? There are many market ventures in small rural towns. The sad reality in rural Donegal is that all one sees growing in the fields are houses. Some farmers in the REPS scheme keep a few cows and engage in dry stock farming. There should be an incentive for small farmers to set two or three acres of spuds.
I have been told by growers in County Meath that the Department and the European Union pay enormous amounts in grant aid to so-called traders who are now bypassing the producer and importing potatoes. This is an area at which we have to look.
It is an issue. The Minister of State, Deputy Brendan Smith, has special responsibility for food and is very interested in dealing with the sector and I support him fully. We have some form of on and off-farm grant aid available. Small farmers got out of the business because they used to sell to the local shop which is no longer in existence. Many consumers now go to Tesco, Superquinn or similar stores and have certain expectations.
Members of the committee might take the chance and go, not to Argentina, but up the road to County Louth where I met a young farmer who produces free range pigs and poultry. He is a craft butcher and employs 12 people. His only assets are a certain amount a land and a small forest plantation. Instead of getting out of farming when he took over the farm from his father, he showed enterprise and expanded into a niche market. People travel from all over Ireland to buy his free range bronze turkeys for about €70 or €80. One cannot get one for love nor money. He has a beautiful shop in which one pays a little more to get something different.
That is the kind of activity to which some farm enterprises could return and the reason the Leader programme is involved in farmers' markets. The Minister of State, Deputy Brendan Smith, is looking at new food initiatives to try to support niche markets. People will return to the old-fashioned way of doing things. This is an opportunity for smaller enterprises to grow for a farmers' market as opposed to a shop. Realistically, they would not be able to supply a big wholesaling venture. I am prepared to support such an industry.
I know there are difficulties within the fruit industry. We are prepared to support it and do what we can to resolve the issues involved.
The clerk to the committee will be in contact with the Minister to get that person's details. I would be delighted if members of the committee could visit someone like him.
If it is raining, bring a good pair of wellies.
As well as a knife and fork.
We certainly will. On behalf of the committee, I thank the Minister and her officials for attending.
The joint committee went into private session at 5.50 p.m. and adjourned at 6 p.m. until 11.30 a.m. on Thursday, 17 February 2005.