Joint Committee on Agriculture, Food and the Marine debate -
Tuesday, 31 Mar 2015

Animal Health Issues: Animal Health Ireland

Chairman

I remind members and witnesses to switch off their mobile phones for the duration of the meeting, as they interfere with the broadcasting of the session.

I welcome, from Animal Health Ireland, Mr. Mike Magan, chairman, Mr. Joe O'Flaherty, CEO, Mr. David Graham, deputy CEO, and Ms Finola McCoy, programme manager of CellCheck.

I thank them for appearing before the committee to update it on progress made across their various work programmes.

Before we begin I wish to remind witnesses of privilege. By virtue of section 17(2)(l) of the Defamation Act 2009 witnesses are protected by absolute privilege in respect of their evidence to the committee. If witnesses are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against either a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I invite Mr. Joe O'Flaherty to make his opening statement.

Mr. Joe O'Flaherty

Animal Health Ireland, AHI, wishes to thank the Chairman for the invitation to today’s meeting and looks forward to the opportunity of engaging with members on this, the fourth occasion on which we have appeared before the committee. In my opening statement I wish to outline for members the key aspects of the Animal Health Ireland Strategic Plan for the period 2015-2017, and to summarise progress being made in two of the major programmes for which we are responsible – the eradication of bovine viral diarrhoea, BVD, and the control of dairy cow mastitis.

It is most appropriate that AHI is meeting with the committee today, 31 March 2015, the day on which the milk quota regime comes to an end. The ending of restrictions on the volume of milk supplied by our dairy sector represents the beginning of a once in a generation opportunity for that sector particularly, but also the agrifood sector more generally, which has already demonstrated its resilience and its ability to achieve strong growth, even in the face of recession. Animal Health Ireland is proud of the contribution it has made to improving the profitability, sustainability and competitiveness of the sector in recent years and looks forward to continuing this contribution over the period of the current strategic plan and beyond.

This strategic plan, which has been developed following intensive consultations with our stakeholders, is the second such plan developed by AHI since our establishment in 2009. It is the outcome of an extensive consultation with our stakeholders, which was undertaken in the second half of last year, a report of which is available on our website. In conjunction with the imminent publication of the strategic plan, Animal Health Ireland will also shortly publish a document summarising the extent to which we have delivered on the commitments set out in the previous plan.

The work programme in this strategic plan is significant and ambitious. However, I believe that much more can and needs to be done to further improve animal health in Ireland; that with a more robust and expanded funding model, the return on investment which AHI has demonstrated to date can be extended into new areas, such as a programme to improve fertility in the national beef herd or the establishment of animal health programmes for species other than cattle. As a food exporting nation, we should aspire to stand in the first rank of countries worldwide in terms of our animal health status, and I am convinced that, properly leveraged, the animal health infrastructure, both public and private, which has been developed in this country, can enable Ireland to achieve such a goal.

The strategic plan identifies four priorities for Animal Health Ireland in the period 2015-17. The first of these, in fulfilment of the substantial commitments which we have already made to our stakeholders, is to "ensure the continued delivery of the priority programmes and the other work areas identified in the 2012-2014 strategic plan". Priority two, reflecting the concerns of the board and many stakeholders in relation to the manner in which our activities are financed, is to "review the fitness for purpose of the funding model and reconfigure as appropriate". The third priority, related to the second, is to "review the fitness for purpose of the corporate governance structures, including the process of appointment to the board, and to reconfigure as appropriate". Finally, priority four, which takes account of the need to bring additional resources to bear in support of the beef sector, in particular, is to "develop new programmes to support the beef sector and strengthen the horizontal supports to all programmes".

While priority one – the delivery of our existing core programmes – will be dealt with more substantively later in this opening statement, and will undoubtedly be the subject of further questions by members, I wish to outline some of the thinking behind the other three priorities articulated in the strategic plan.

Priority two is to review the fitness for purpose of the funding model and reconfigure as appropriate. The stakeholder consultation exercise highlighted that the current funding model, which is largely based on subscriptions provided by private sector organisations and the partial matching of these by the Department of Agriculture, Food and the Marine, is highly vulnerable to the loss or withdrawal of funding by individual stakeholders. The loss of even relatively modest amounts of stakeholder income, amplified by the consequent loss of matched departmental funding, would have a dramatic impact on AHI’s ability to sustain current programmes and hence on the viability of the organisation itself. Concrete proposals for the development of a revised, sustainable funding model for Animal Health Ireland will be developed by the board, in consultation with stakeholders. These proposals will be presented to members, in conjunction with proposals on revised governance arrangements, at a special general meeting, which will take place in 2015.

Priority three is to review the fitness for purpose of the corporate governance structures, including the process of appointment to the board, and reconfigure as appropriate. Following consideration of the outcome of the stakeholder consultation exercise, the board of AHI has undertaken, in consultation with the Department of Agriculture, Food and the Marine and other members and stakeholders, to bring forward proposals aimed at further strengthening and ensuring the continued fitness for purpose of the corporate governance of the organisation. These proposals will establish the competencies and skills mix required of directors, embody best practice in terms of corporate governance, bring greater transparency to the appointments process and provide a mechanism to allow for members’ voices to be directly represented on the board. A discussion document detailing the proposed new arrangements will be circulated to members in the first half of 2015. The alterations to the articles of association required to give effect to the proposed changes will be presented to members, in conjunction with proposals on revised funding arrangements, at a special general meeting, which will take place in 2015.

Priority four is to develop new programmes to support the beef sector and strengthen the horizontal supports to all programmes. In this regard, Animal Health Ireland is pleased to be able to highlight to members the establishment of a new programme – Beef HealthCheck – which is being developed by AHI, Meat Industry Ireland and the Irish Cattle Breeding Federation, ICBF, in collaboration with the Department of Agriculture, Food and the Marine and Veterinary Ireland. The objectives of this programme are twofold - to develop tools to assist farmers and their veterinary practitioners to control losses due to liver fluke and pneumonia through capture, analysis and reporting of abattoir data; and to contribute to the development by ICBF of economic breeding indexes that incorporate health and disease data.

The objective of this programme is to eradicate bovine viral diarrhoea, BVD, from the national cattle herd by year end 2020. BVD is a disease of considerable economic importance to Irish farmers; a cost-benefit analysis commissioned by AHI places the losses associated with this infection at €102 million per annum.

The compulsory phase of the programme, which began in 2013 following a successful pilot in 2012, is divided into two three-year periods. In the first of these, running from 2013-2015, the emphasis is on tissue tag testing of newborn calves, using the modified national identity tag, with follow-up testing by blood sample and tag testing, as required. The second period, running from 2016-2018, will see the emphasis switching to monitoring, by means of targeted blood and milk sampling, in addition to continued tag testing. The level of farmer engagement with the programme has been very strong, with in excess of 99% of all registered calves having been tested for BVD each year since the programme entered the compulsory phase.

My colleague, David Graham, will be happy to take members through the details of the progress being made in this programme. However, to briefly summarise here; the incidence of PI calves has fallen by 31% from 0.67%, 13,942, of all calves born in 2013 to 0.46%, 9,762, in 2014. To date in 2015, the PI birth rate has fallen further to 0.30%.

The CellCheck programme is the national mastitis control programme, which is co-ordinated and facilitated by Animal Health Ireland, and which is being developed and delivered in partnership with industry bodies representing farmers, processors, service providers and Government. The objective of the programme is to facilitate the Irish dairy industry to continue to improve milk quality, such that 75% of the milk supplied by Irish farmers will have a somatic cell count, SCC, of 200,000 cells per millilitre or less by year end 2020.

High somatic cell counts, which are an indicator of mastitis, have a major impact on the profitability of dairy farmers and dairy processors. Teagasc research shows that there is a very significant inverse correlation between SCC and net farm profit. On the basis of this research, it can be stated that the average dairy farmer can improve net profitability by at least 1 cent per litre by improving mastitis control to reduce SCC to achievable and sustainable levels. Put another way, the research shows that a reduction from >400,000 to <100,000 cells per millilitre would lead to an increase in overall returns to farmer and processor together of 4.8 cent per litre. A 10% reduction in national cell count would be expected to yield €37.6 million savings for the Irish dairy industry.

My colleague, Ms Finola McCoy, will be pleased to provide further details of this programme to members. However, I wish to highlight at this point that data from milk recording herds shows that the proportion of these with a SCC of less than 200,000 cells per millilitre, which had fluctuated between approximately 25% and 35% of all milk recording herds in the period 2004-2010, has shown a marked improvement in the period since then, to stand at approximately 55% in 2014.

I take the opportunity to acknowledge publicly the steadfast support, financial and otherwise, which we have received from our members and stakeholders in the period since our establishment. Without it, we would have been unable to deliver on behalf of the industry. As CEO, I thank the chairman and directors of AHI on whose good counsel and guidance I have always been able to rely. We are prepared to answer any questions the committee has on the opening statement or any other aspect of our business.

Chairman

I thank Mr. O'Flaherty for a condensed and informative report. It indicates the level of progress that has been made by virtue of the establishment of Animal Health Ireland with regard to the two diseases with which it has initially been charged. There is plenty of ground for other work programmes including in relation to beef. I call Deputy Martin Ferris.

Deputy Martin Ferris

I thank Mr. O'Flaherty for his presentation and commend him on the work that has been done. When it is laid out in front of one and one sees what has been achieved, one is very encouraged. I am very complimentary to AHI on that. I note in particular BVD and the 99% take-up by farmers in that regard. It shows what a tremendous effect one gets from that kind of co-operation in trying to eradicate disease. I note also liver fluke and pneumonia have been checked and so forth. The thing that worries me is AHI's financial situation. It is very dependent on stakeholders to continue its work. I do not mean anything derogratory in asking who the stakeholders are. Is Mr. O'Flaherty referring to farming organisations, meat factories and people who have a vested interest in the sector? If that is the case, I note the necessity for an organisation to be independent. Being dependent for funding on people who are stakeholders can send the wrong message. AHI is working in the context of the new phase we are entering following the abolition of quota and the potential that has to deliver. Many of us are a little concerned about how it will work out and what can be delivered if enough people stay in the industry. AHI's independence is hugely important in that context, in particular its financial independence. Mr. O'Flahery might respond on that. Mr. O'Flaherty also said AHI has proposed changes to the members in conjunction with proposals for a revised funding arrangement at a special general meeting in 2015. Can he elaborate on that?

It was stated that one could increase one's profitability by at least 1 cent per litre with proper controls and the reduction of mastitis and through SCC control. That looks very encouraging. Is there more scope to improve in that regard?

Senator Pat O'Neill

I thank the members of Animal Health Ireland for attending today. Deputy Ferris has hit on an observation I had regarding priority 2. AHI's funding appears to be on an ad hoc basis. Mr. O'Flaherty said it receives matching funding from the Department. Do the witnesses consider that AHI should be 100% supported by the Department rather than having to rely on the stakeholders whom Deputy Ferris has asked Mr. O'Flahery to identify? We are not saying it is the case here, but when people from an outside body are providing funding, they may have a conflict of interest. Animal Health Ireland is a fine organisation and the work it has done in many areas can only be commended, but how is it funded? Is it 60% from the stakeholders and 40% from the Department? Do the witnesses feel it should be 100% supported by the Department so that the stakeholders are left out of this?

My other observation is in relation to BVD. I compliment AHI on BVD which was a scourge in the beef herd, especially for those buying weanlings in the autumn. For some unknown reason, one could find one dead in a house that was down to BVD at a later stage, particularly where an animal came under stress. How can it be that only 99% of all registered calves are tested? If an animal is to be tagged, one must use BVD to tag. What happens the other 1% that are not tested for BVD?

I compliment AHI on CellCheck. The figures set out on profitability are there for all farmers to see. The fact that 55% now stand at under 200,000 cells per millilitre is a testament to AHI's advice and the husbandry of farmers. It is something we must continue. As milk quotas disappear after tomorrow, it will be all about being competitive. To be competitive, one must use best practice. Best practice is about doing things most efficiently. This is the advice AHI has given farmers in relation to CellCheck. It has been more than helpful and it must be continued.

The funding issue is the main one. As a committee, we recognise the work AHI has done and its neutrality. It is important that there does not appear to be a conflict of interest from stakeholders. Should the Department provide the organisation with 100% of its funding?

Deputy Thomas Pringle

I thank Mr. O'Flaherty for his presentation and apologise for being late. I also have a couple of questions on funding. Mr. O'Flaherty said that under priority 2 of the strategic review, AHI is highly vulnerable to the loss or withdrawal of funding by individual stakeholders. Has there been an ongoing level of withdrawal of funding by stakeholders that has given rise to concern? Do stakeholders attempt to exert any influence on the type of programmes AHI develops and use funding as leverage in that regard?

On priority 3, the review of corporate governance structures has been flagged through the consultation with stakeholders. What has been the nature of the concerns that have been flagged on corporate governance?

Priority 4 is linked to the funding issue. How viable are new programmes if funding is precarious in respect of existing programmes in the context of the reliance on stakeholders? How sure is AHI that the new scheme can continue based on the funding doubts that exist?

Chairman

Deputy Pringle referred to new programmes of which the beef health check is an example in conjunction with AHI, Meat Industry Ireland, ICBF and the Department of Agriculture, Food and the Marine. The Food Safety Authority and Teagasc are both funded by the Department. Do they collaborate with AHI, if not financially? If one is looking at the overall expansion of a healthier herd and food production system in the interests of reputation and profit, they are the other key stakeholders that should be involved. While it is in the report, Mr. O'Flaherty did not mention Johne's disease in his presentation. Does Mr. O'Flaherty have any comments on that? Deputy Ferris and I were at the first meeting with the committee during the last Dáil when Johne's diseases was predicted as something to watch. Certainly, it is coming down the line. Does Mr. O'Flaherty have any observations?

Mr. Joe O'Flaherty

I will address the Chairman’s questions first and then take the others in order. He asked about the level of collaboration with Teagasc and the Food Safety Authority of Ireland. There have been and continue to be very strong linkages between Animal Health Ireland and Teagasc. Staff from Teagasc are on many of our technical working groups. We have a technical working group that underpins each of our programmes. In addition to making a contribution on the technical working groups, Teagasc provides considerable support, particularly regarding the economics of animal health. Therefore, the work on cell counts, which I referred to, was undertaken as part of Teagasc's research programme.

Teagasc is a major interested party in regard to the CellCheck programme. It provides specific funding in this regard. My colleague, Ms Finola McCoy, was formerly an employee of Teagasc and is now employed by Animal Health Ireland. Across a range of issues, we have an extremely good, close working relationship with Teagasc. Yesterday, we met the director. We are continually exploring areas of further collaboration between the two organisations and we are very happy on that front.

We have not to date had any structured engagement with the Food Safety Authority of Ireland. However, we are aware that a new CEO has recently been appointed to the authority. We certainly would seek to reach out to that individual and look for areas of collaboration. An obvious area for collaboration is antimicrobial resistance. It is an area of interest common to both organisations. We will pick up on it with the new CEO in short course.

I will hand over to my colleague, Mr. David Graham, to respond to the query on Johne’s disease.

Mr. David Graham

On Johne’s disease, following extensive discussion by the technical working group and subsequently the implementation group, drawn from industry representatives, we initiated a pilot national dairy programme. It started at the end of 2013 but 2014 was really its first year. The implementation group has, in the past month or so, taken the decision to continue with that programme through this year. The initial intention when it was launched was to recruit some 1,000 dairy herds to the programme. That was quickly passed and a revised target of 2,000 herds was agreed upon. We ended up with some 1,900 herd owners submitting applications and agreeing to the various terms and conditions of the programme.

The programme has three elements: a testing element; an on-farm risk assessment element, which evaluates the likelihood of management and husbandry practices to control or contribute to the spread of the organism within the herd; and a process of herd categorisation to compute the degree of confidence we have that a herd, although it tests negative, is genuinely free from infection, based on some of the limitations of the tests that are available.

We are very encouraged by the uptake in the first year of the programme. There was considerable work to get it going, including through the training of veterinary practitioners to carry out the on-farm risk assessments. We recently completed a survey of participants in the programme. Certainly, there was very positive feedback on the range of elements, including the risk assessment or the "ramp", as it is referred to. We are just in the process of delivering a similar survey to the practitioners who are involved in the programme. As with bovine viral diarrhoea, for example, the goal is to learn the relevant lessons and apply them to the refinement of the programme for the incoming year. That is the current position. We now have a significant body of data and we are working through it to analyse trends and determine what it tells us.

Chairman

I have a question on the approach when the data are collated. It should be remembered that if Johne’s disease is to be dealt with there is no compensation package. There are protocols in place for bovine viral diarrhoea, and there are obviously protocols for tuberculosis and brucellosis. Is the culling of animals a matter on which the delegates hope to engage with the Department’s agriculture officials with a view to forming some sort of programme to reduce the incidence of Johne’s disease or eliminate it? Is that the overall goal?

Mr. Joe O'Flaherty

Perhaps I could answer generally. My answer touches on a couple of the questions asked by members. All the programmes have a range of beneficiaries. Very often, the farmer is the primary beneficiary of the control, but not the exclusive beneficiary. Certainly in the case of Johne's disease, the farmer benefits absolutely from controlling the disease but other parties do also. Milk processors benefit but one could also argue that the State benefits at some level because we are controlling the risk from a potential pathogen in the food chain. Where there is a range of beneficiaries, for the programme to be sustainable one has to come up with an equitable model of cost sharing. Inevitably, that will involve a contribution by farmers, processors and the State.

One of the distinctions between the tuberculosis eradication programme and the Johne's disease programme might be that the culling of a Johne's disease-infected animal, or an animal that tests positive, could be undertaken within the course of the normal management of the farm. It would not necessarily require the immediate removal of the animal. It is largely about controlling the risk that the cow represents to her calf or the other calves in the group. The programme will provide tools to the farmer to assist him or her to manage those risks without necessarily triggering an immediate cull of the animal. Perhaps the Chairman might like to comment on this issue. As a dairy farmer, he is probably more exposed to the front-end of these programmes than I am.

Mr. Mike Magan

The Johne's disease programme has attracted a lot of attention among farmers because of concern over the ostensive link to human health. However, we are very anxious that we do not create a scare in the industry from an issue that could potentially spook the market. At the same time, we need to have something happen regarding Johne's disease in Ireland. As a farmer responding to Mr. O’Flaherty’s prompt, my intention, if the disease were in my herd, would be to manage it out of the herd, to use the information from the programme and scheme to help me to become better at managing the risk around calving time, which is when a spread is most likely to occur, and to manage the animal so she would not rebreed the next year. I would cull the animal earlier than she would otherwise go in normal circumstances.

Our intention is not to create another programme of compensation for the removal of the animal but certainly a programme with State support, perhaps for the risk assessment on the farm. I refer to a novel approach rather than compensation for the removal of the animal. Ultimately, we need to free ourselves from compensating in respect of animals on the farm. Ultimately, we must get across to the farmers of Ireland that the benefit is healthier herds. By being as good as or better than any other country, Ireland’s reputation in international marketplaces benefits. That is really the approach. It is a novel approach to disease control. It is best captured in the area of Johne's disease by trying to approach the problem in a different way.

Consider the question on governance and change to the board structure. We inherited the model we have when we were set up by the previous Government. We are very keen to examine any model with which the industry is more comfortable. I take the points on potential influence by stakeholders if they are funding us, but equally it is only fair that those making a significant contribution to the finances of the organisation feel they have a voice around the board table. There is a delicate balance to be struck between not being influenced by the stakeholders regarding what they believe is in their best interest and having the independence we currently enjoy.

It is a delicate balance. The point about funding is well made and it is something about which we are very keen. We are very aware that the current model will not stand an enlarging of our programmes.

It is to the benefit of the reputation of Ireland that our programme be expanded and that we examine disease eradication programmes in other countries. At a minimum we must compete with them and even be better than them. As we enlarge output from the dairy herd we will become challenged as to how we are dealing with certain diseases. Significant progress has been achieved but we need to ensure that the programmes are robustly funded so that we do not run into difficulty. It is good to highlight this point in this forum so that we can get the support of members as we look at enlarging that funding model.

On the Senator's question as to whether the State should provide 100% of the funding, I think not. It is good that the industry co-funds as it keeps us on our toes and it keeps us relevant to the needs of the industry. It keeps us very reactive and in touch with their needs. No more than moving away from the compensation structure, moving away from a 100% State funding structure is good but we do need the State's involvement. The State brings an authority and an influence with our stakeholders that we would not otherwise enjoy. Finding that balance between State involvement and also being funded independently by the industry is something that we probably need to look at. I favour perhaps a redeployment of the national disease levy that is currently being collected. A contribution of a very small amount from every animal to the overall funding would be a good model for us to consider.

Senator Pat O'Neill

How much is the State contributing?

Mr. Mike Magan

Mr. O'Flaherty can provide the absolute figures.

Mr. Joe O'Flaherty

When Animal Health Ireland was established in 2009 our total income was around the order of €350,000. In 2010, it was around €650,000 and then it grew to about €1.1 million. Our total income in 2014 was €1.5 million and we project an income of €1.5 million this year. We have a memorandum of understanding with the Department of Agriculture, Food and the Marine, which provides for an income cap of €530,000. The amount of funding from the Department in 2014 was €530,000.

Senator Pat O'Neill

The other €1 million comes from the stakeholders.

Mr. Joe O'Flaherty

Another €500,000 comes from subscriptions from stakeholders and from some generated service income. The pass through of the Department funding of the risk assessment component of the ONAYs programme was included in our accounts for last year. We characterise it in our accounts as a Department grant.

Stakeholder income of the order of €450,000 or €460,000, comes from the dairy sector. In reply to Deputy Ferris, the stakeholders on the dairy side are the large processors who account for about 95% of the milk processed in Ireland. We have recently entered into an agreement with Meat Industry Ireland for significant six-figure funding from them. We also have the income from the Department. Whereas we started at a balance of about 50-50 between the Department and the private and sub-private sectors, because there is a cap the Department has fallen behind that 50%. Therefore, in last year's accounts its subscription represented about 43% of the total subscriber income. Those other companies I mentioned represent the balance of the 57%.

I will pick up on some of the questions on financing. I refer to Deputy Ferris's point about the independents and to which the chairman of AHI has alluded. There would be opportunity for Animal Health Ireland to acquire significant funding from commercial interests within the sector but we have rejected that approach to date. I will explain. I refer to the pharmaceutical industry which has a clear interest in some of the programmes and some of the animal remedies side of things. We have resisted approaching that sector for funding. We have drawn the entirety of our funding from dairy processors and meat processors. We have not come under undue influence from any quarter. In answer to Senator O'Neill, there has been no withdrawal of funding by any stakeholder so we have actually maintained all of the stakeholders from the beginning and in fact, grown the contribution from each of the stakeholders. While there is certainly a theoretical risk that the current stakeholders might attempt to exercise undue influence I can assure the committee that this has not happened to date. Animal Health Ireland is very much an evidence-driven body and it could not allow that to happen because we trade on our reputation with farmers and on our advice which is independent and science-based. We will not allow that to be compromised in any way.

As to the evolution of the funding over the period I would concur with the AHI chairman that it would be inappropriate for the Department to be the 100% funder of Animal Health Ireland because the range of issues which we examine falls into the category of being closer to the private goods end of the spectrum. One can imagine that diseases like TB, brucellosis and BSE very much fall on the public good end of the spectrum because these diseases have the potential to impact on human health and on the macro-economy whereas many of the diseases and animal health issues that Animal Health Ireland is addressing fall at the private end of the spectrum where the beneficiaries are largely farmers. It would be inappropriate for the Department or the State to be the 100% funder. We have probably approached a reasonable balance in the current state of affairs but that is an evolving position.

Deputy Pringle raised a very good point about the viability of future programmes. Animal Health Ireland has been very careful in the current strategic plan and in the previous plan, to very clearly state what we intend to do. We have identified three core programmes and we state in the current plan that we will only expand beyond those if we have a robust funding model in place. We will be sticking to the knitting in terms of what we are already delivering, barring that we get additional resources.

A couple of questions were asked about the CellCheck programme. My colleague, Finola McCoy will deal with those points. Deputy Ferris referred to-----

Senator Pat O'Neill

The BVD-----

Mr. David Graham

I will answer Senator O'Neill's question. With respect to the calf registrations for 2013, the final outturn figure was 99.6% which left 0.4% where we had not got a result. The amended legislation requires that any animal born after 1 January 2013 requires a negative result in order to be moved. Any calves or older animals on farm at this stage that have not been tested in compliance with the legislation, cannot be traded and they cannot leave the farm. The 0.4% missing from the 2013 data set represents animals who died as calves. The calf may have died before it was tagged or maybe the initial sample was empty and it had died before the re-test. We are aware of a very small number of herds which have not fully complied with the programme and the Department is in the process of addressing that issue with those non-participants but typically it is a very small number of herds and very small numbers of animals within those herds.

Ms Finola McCoy

I will respond to the question on the CellCheck programme, which asked whether there is scope to expand or improve on that financial opportunity. The figures that have been presented by the CEO show that Irish farmers, on average, stand to gain an extra 1 cent per litre through improved udder health. When we talk about averages, essentially it depends where they are starting from. In other words, if a farm has a herd with a cell count of 350,000, if they aim to reduce that to 250,000 there will be a gain of probably about 1 cent per litre. If they start at 250,000 and their target is to reach 150,000, the gain will be even greater. It is probably about 1.5 cent per litre. Depending on the starting point, there are various increments of opportunity in terms of financial gain. The bottom line is almost all farmers in Ireland stand to gain from improved udder health. That can be achieved through very simple practices and measures. There is no miracle solution and there is no quick fix but it is about attention to detail and focus on everyday routines and practices. They are the messages that we present, and that the science would stand behind from the cell check programme, through all of the resources and through farmer workshops. We have five simple practical messages that all workshop participants can explore and use in their own milking practices and they are the ways in which farmers will achieve that extra gain. Where the gain is coming from is primarily through increased production. When an animal has a higher cell count, it is because she has an infection in a quarter, and because of that infection she cannot produce as much milk as she is genetically capable of. If we keep infection out of the equation she will produce to her full potential and that is where the majority of that extra gain is from.

Chairman

Deputy Ferris has a supplementary question.

Deputy Martin Ferris

Mr. Magan has said that some of the people who have been described from various groups are on the board. What is the make-up of the board? How many are on the board? Are there Government appointments on the board? How many from the stakeholders are on the board?

Mr. Mike Magan

None of what one would term as stakeholders is on the board. The easiest thing would be to name them. Is that okay?

Chairman

Yes, they are in the report.

Mr. Mike Magan

They are in the report. We have Professor Michael Doherty, professor of veterinary medicine in UCD; Joe Collins from the Irish Dairy Board; Gerard Brickley, a dairy farmer who was one of the executives of Bord Bia; John O'Sullivan, a dairy farmer from Cork, who is chairman of ICBF; Robin Talbot, a beef farmer from Laois; myself, a dairy farmer from Longford; and Dr. Sean Brady, who I think the members of the committee know. They are the seven.

We have put ourselves forward for election or removal, whichever is the appropriate, and to date that offer has not been taken up. There is some pressure from the farm organisations and Meat Industry Ireland to have somebody on the board. Equally, there is an alternate view from some of the other stakeholders that we would find ourselves enlarging the board substantially if we were to put most of the major funders around the board table. My view is that we have avoided having political debates around the board table. We are concerned about output and technical advice to farmers and the science. We are hesitant to change the model without necessarily changing the funding model in conjunction with that. I think the most appropriate thing would be to change the funding model in conjunction with changing the governance or the representation model around the board. What we do is we keep the science and then we bring it to the industry and at implementation level the agri-politicians have their cut and thrust as to how to implement it. I contend that that model is working very very well.

Maybe we will have to have a serious look at how we are structured as a board. I do not necessarily want to go into how much each individual organisation gives. It is available for people to study. There are conflicting views as to how the board is best structured. Some believe that the current model works well. I share that view. Otherwise, I feel that there is, as I said earlier, a legitimate claim by some of the very large funding stakeholders that they need a voice around the board table. I am concerned by the point raised by some members of the committee that our independence is being compromised slightly. To date, it has not.

Deputy Martin Ferris

That is the worry. When there are people who have that influence on the board whether real or otherwise, it creates a perception and it can be very damaging to the confidence that people would have in the board as it is working and constituted now. I am saying this because if there was somebody from the meat processors on the board they would have influence even though the producers are fighting a battle with them over price and so forth. It would send a very bad message because of the perception that is there. What is needed is independence. The importance of it being independent is paramount, in order to have that credibility.

Senator Pat O'Neill

The present board is very credible.

Chairman

It is good that it is part and parcel of the board's four priorities. If Mr. Magan looks at this committee's pre-legislative scrutiny of the Horse Racing Ireland (Amendment) Bill, which proposed amendments to the structure of Horse Racing Ireland, or if he looks at the board of Teagasc on the other hand, because they are probably the most comparable, he will see that there are representatives from industry but it is counterbalanced. For instance, if Animal Health Ireland was to have representatives from Meat Industry Ireland and ICOS on its board, that would have to be balanced with representatives from the farming organisations. As it stands, the chairman of Animal Health Ireland is a farmer. When one looks at the structure of the board it is made up of experts in the field of health. If one widens out the remit one is widening out what the board has to consider. I think that is why the technical working groups are there to deal with that. I think the biggest risk is not the risk of reputation being compromised but the risk of losing focus on what the core work of what Animal Health Ireland should be. Everybody has a stake in this because it boils down to reputation and profit, basically. That is what it boils down to for everybody.

Senator Pat O'Neill

Who took the charter when Animal Health Ireland was set up in relation to the composition of the board? Was it the Department? Who decided the composition of the board?

Mr. Mike Magan

Yes, when we were set up we inherited the structure on the advice of the Department. The industry had been talking for some time about having something like a structured animal health grouping but like a lot of other great ideas somebody needs to be the catalyst to make it happen. The Department took on that role and decided to develop a structure and they went to the industry and asked if it would accept it. Initially, to get things moving it accepted the existing structure. There are now negotiations to change that structure and I would like to put on record that I have no opposition or objection per se to any of the farm organisations or Meat Industry Ireland being on the board but I feel that it needs to be thought through very carefully and it should only be in conjunction, for example, with the delivery of another funding model. I think we need the agreement of farm organisations. For example, if we were to have some kind of a levy, I believe it would be impossible to get a levy through the farming industry without having its approval and I would equally accept that that approval should probably come with a seat on the board. I take on board the points made by the members of the committee and I think it is something that we need to be careful about but, as I say, I do not want it to go out from here that I have an objection to anybody else sitting around the board table but I feel the current model is delivering. We should be judged on delivery and I think delivery since we were formed a relatively short time ago has been pretty impressive and I would also suggest that there is more to be done.

Having the debate with the industry at implementation level is appropriate, but as I say let us see how things evolve. Meat Industry Ireland was really good to come on board and provide funding because it was not part of the original agreement on the setting up of Animal Health Ireland, AHI, by the State with the industry. That was hard won work on behalf of the CEO of AHI, in particular to get it on board. We need some quiet discussion with the industry as to what is in their best interest because we have conflicting views. We are open to change provided it makes things better.

Senator Pat O'Neill

Judging by some of the comments, the current structure is something we would like to see stay in place. No matter how neutral the representatives from the farm organisations or stakeholders, there may be a perception they are trying to influence in a certain direction. I am in favour of the current board.

I apologise, I must attend for a vote in the Seanad.

Chairman

The reputation of food safety is interlinked with animal health and that is the reason for Teagasc and AHI. Bord Bia and the Irish Dairy Board have the job of marketing the product when everything has been satisfied.

The mission of Animal Health Ireland is very simple. The proof of the pudding is in the eating. If they achieve healthier animal status, be it in the dairy, beef or other sector the system is working. There is an old saying, "if it ain't broke don't fix it". I would be careful of change, because in an industry worth of the order of €10 billion - depending on whom one talks and listens to - an expenditure of €1.5 million or €2 million on dealing with animal health issues seems like very good value for money. I think we could all accept that. The reputation of the work of Animal Health Ireland has never been questioned. That is the reason the joint committee sees the value of bringing the witnesses from Animal Health Ireland before it to put on public record the work of AHl so that people understand what it has done. I know this takes time from the busy schedules of all the witnesses but the exercise is well worth continuing as this has been its fourth appearance before the committee in six years. It is worthwhile from everybody's perspective to conduct this exercise periodically.

Before I draw the meeting to a close, may I wish the witnesses, the editorial and broadcasting staff, ushers and the committee secretariat a happy Easter. As there is no further business the committee will adjourn.

The joint committee adjourned at 4.55 p.m. until 2 p.m. on Tuesday, 14 April 2015.