I will start with the Chairman's comments and then work back. The Chairman raised several points, including on unfair trading practices. I was in Brussels yesterday to meet the Austrian Minister, Ms Köstinger, and we met the Commissioner, Mr. Hogan, as well. The meeting was mainly around the Common Agricultural Policy but we got to talking about the unfair trading practices because the negotiators failed to reach agreement last week in the trilogue. Another meeting is due to convene tomorrow. Those involved hope that, because meetings have been arranged in the background, they can reach agreement on the way to move forward. That is crucial. At least discussions are continuing and the Commissioner is keen for things to move on at pace in the coming months because of the European elections and the Commission changes this time next year. I hope they will reach some sort of agreement on that tomorrow and then the process can be moved on for legal status.
I was asked about some areas that might be improved. There is provision for a three-year review. I realise it is three years down the line, but at least we will be able to see what the teething problems are and what areas might need improvement.
As mentioned, there is an absolute need for an independent ombudsman. In one of these rooms we heard representatives of the Competition and Consumer Protection Commission clearly state – the Chairman will remember this - that the commission's role was to defend the consumer and they had little interest in defending the producer. They said a different person was needed to do that. There is a perfect example in the UK with Christine Tacon, who is the UK Groceries Code Adjudicator. She has stated that the very fact she is in that position almost renders the position unnecessary, but if she was taken out of it for a few weeks we would all see what would happen. The retailers know she is there and they are afraid of her. They fund the office and if she does not spend the money doing research into unfair trading practices then they get the money back. There is a need for such an arrangement here.
Another area where there is major need for scrutiny is the factories. This goes back to some earlier questions. Transparency is a major area within the agricultural markets task force proposals. Everyone knows what the farmer is getting for the beef, more or less. The base price today is €375 or €385. People know what the consumer is paying at the other end. Senator Michelle Mulherin raised this point and referred to farmers receiving 45% of the retail price for beef. It is difficult to know what happens between the processor and the retailer. There is a lack of information and knowledge in that area. Transparency is required. I hope the proposals passed at European level will give us more room.
There were numerous observations and statements with a fair amount of repetition among people but overall people took the view that the report, which is what we came in to discuss, was good and worthwhile and that Professor Hennessy did a good job.
Senator Conway-Walsh, who is not present at the moment, asked about the capping issue. That has been put in the proposals by the Commissioner, not the IFA. Some associated figures have been mentioned.
Reference was made to the areas of natural constraints, ANC, scheme. We ran a series of meetings around the country in the build-up to the review of the scheme. We had several priorities but chief among them was that the ANC payments would reflect the natural handicap of any given area.
We lobbied long and hard for this and lobbied all the members of the committee individually. I should have thanked members for their support for our lobbying on suckler cow payments. That was our priority in our pre-budget submission. We got good support from this committee and many of its members highlighted the issue and kept it to the fore. We did not get all we wanted but it was a start.
We lobbied to get the ANC payments restored to 2008 levels at least and between the budget before last and the most recent budget, they were restored to that level. However, they need to be increased further. The ANC scheme review has been done and the proposals in that respect have been set out. Four thousands extra areas have been included and 1,300 have been lost out. We are engaged in explaining the position to farmers in a series of meetings around the country. The first two such meetings were held in Athy and Cavan last week.
The Senator also raised the issue of the agri-environment options scheme, AEOS. It has been more or less replaced by the green, low-carbon, agri-environment scheme, GLAS. We are lobbying hard for GLAS to be opened again. Farmers have fully subscribed to the scheme and have shown an interest in being involved in it for a number of reasons. It relates to another question that was raised regarding the importance of direct payments. GLAS was not mentioned but reference was made to the beef data and genomics programme, BDGP. All those direct payments are of great importance. Any cut to them would represent a cut to more than 100% of the farmer's profits as direct payments make up 113% of the average farm income on sheep farms and 115% on cattle rearing farms. That shows their importance.
I attended our forestry meeting and Deputy Willie Penrose raised the issue of forestry. The Government can do much more for that sector. We are way below the target for forestry planting. The target is 7,000 ha per annum and we barely broke 5,000 ha this year. That shows that not enough is being done to help farmers. If we do not have farmers planting forestry, we will not get the level of forestry we need. There is 185,000 ha of enclosed land that could be planted but for some reason it is not allowed to be planted. Also, the forestry premium needs to favour the farmer planting the land rather than investment funds and so on. We have put that point to the Minister and the Department on a number of occasions and, hopefully, the penny will drop sooner rather than later.
Some people might ask why we should have a suckler cow herd if it is not making a profit and farmers are voting with their feet by leaving the sector. However, the issues of public goods and the maintenance of the environment arise. Tourism figures were released this morning. I do not have them to hand but they were positive. Some 11.6 million tourists visited the country last year and there was a major spin-off from that. Much of that tourism is built on the back of farmers maintaining the rural countryside. People would not be eager to visit the country and look at an overgrown countryside. There are those public goods. There is also the beef sector which is worth almost €3 billion and the spin-off from that to rural areas. Professor Thia Hennessy highlighted two or three of the figures in that respect. Deputy Charlie McConalogue said that the number of suckler cows has dropped from 45,000 to 39,000, which is a 12% decline, give or take. Professor Hennessy's report stated that for every 10% drop in suckler cow numbers, there is a loss of €145 million to the beef sector and a loss of €305 million in total output to the wider economy. That highlights that we cannot simply single out suckler cows and say they are not making a profit on a farmer. There are many other links in the chain.
It was stated that taxpayers will inevitably cop on and stop paying in this respect.
Taxpayers are getting a good deal for their money, whether in the shape of the CAP or the beef price. Some 50 years ago, 30% of the average household income was spent on food but today it is between 10% and 12%, and that is because the farmer is not getting paid as much as he or she should be. In the consultation process which the Commission put in place across Europe in the build-up to the CAP proposals, the figures were very positive and it would be interesting for committee members to get hold of them to learn the views of non-farmers about subsidies being given to farmers to ensure they provide an adequate amount of top quality, safe and healthy food at affordable prices. The statistics showed a clear majority of taxpayers in favour of the CAP being adequately funded to pay farmers to continue in this way. This was also made clear at a COPA meeting in Brussels.
There were numerous questions about the possibility of factories gobbling this money up, whether it is €40 or €200. This was mentioned and Mr. Woods and Mr. Kinsella discussed the issue in meetings of the livestock committee. The suckler cow farmer needs support but it is difficult to find the ideal way to provide it and to guarantee the factories do not gobble it up. The feeling we have is that the further away from the finished animal the money is, the better chance there is of it staying with the farmer. I am not saying it will work out but there is something there to work on.
The issue of pitching farmer against farmer was also mentioned a few times. We always try to avoid that. We represent all sectors of farming and I agree with Deputy Cahill that this should not put one sector against another. There is significant interdependence between the sectors and the IFA will never pitch one against the other.
The importance of live exports was stressed and Deputy Cahill rightly pointed to the weekly kill of 40,000. Last week it was 38,500 and it has been below 40,000 in only two of the past six weeks. As the Deputy said, it is hard to get a price increase at over 30,000 kills, whether the factories say they can manage it or not. The markets are quite tough at the moment but in August and September, when the beef price was rising in the UK and the markets were good, all we saw here were factories cutting the beef price by the equivalent of €100 per head. That was very difficult to take and we met the factories to highlight that. We have also met the Minister and the Department to highlight the very important role which live exports play, which will be particularly so this spring when we need to get as many dairy bred calves out of the country as possible.
Turkey was one of the best markets we had for a couple of years but the uncertainty there two years ago, when the exchange rate went all over the place, meant that the weanling which cost €1,000 here cost the Turkish farmer 3,200 lira.
The following year it was 4,500 lira and at one stage this year it was 7,500 lira. To get the same value per weanling they almost needed to get a €1,000 for a weanling for which they had paid €400 or €500 two years ago. That market has really been taken out of the equation.
Another issue highlighted was climate change. We were before this committee last week talking about it. It is important to recognise that we have a huge role to play. I talk about climate change at every IFA meeting because it is a key issue. It is a challenge Irish farmers can embrace. Climate change is a global, not just an Irish, issue. We have to produce our commodity as efficiently as possible in terms of its carbon output. We must use the Teagasc report, research, genetics and science to do it as efficiently as possible and must always aim to do it as efficiently as possible and constantly improve. Farmers have done that, which is why we are now producing 40% more than we were in 1990, while at the same time producing the same amount of carbon. We have found via the smart farming programme that there are further improvements we can make which can lead to a win-win. We can reduce our carbon emissions and also costs on farms. Teagasc has set out a roadmap and highlighted three areas in which to seek improvements: land use, agricultural use and renewables.
We have spoken about farm forestry. Anaerobic digesters and solar power are two key features. However, in that regard farmers have experienced a false dawn and been given false hopes in the case of willow and miscanthus plantations. In other areas such as feed-in tariffs, access to the grid and the development of regional biomass trade and logistics centres, the Taoiseach and the Government must lead the way. There are areas in which we can make improvements, but it is clear that we need Government support.