Animal Health Levies (Pigs) Regulations 2019: Motion

Before we begin, I remind members, witnesses and those in the Public Gallery to make sure that mobile phones are completely turned off. I welcome the Minister for Agriculture, Food and the Marine, Deputy Creed, to the meeting. The purpose of this meeting is to discuss the motion referred to the committee by the Dáil and Seanad on 27 June for consideration. This referral imposed a deadline on the committee to report back to the Houses by 9 July.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

We are dealing with regulations in respect of pig levies. I call the Minister to make his opening statement.

I thank the Chairman and members of the committee. I am here today to seek approval from the committee for the introduction of the Animal Health Levies (Pigs) Regulations 2019. Under section 26(3) of the Animal Health and Welfare Act 2013, draft regulations relating to animal health levies must be approved by a resolution of both Houses of the Oireachtas. As such, the Dáil and the Seanad have referred this matter to the committee for consideration.

The draft regulations for which I am seeking approval will introduce a levy at a rate of €0.04 per porcine animal slaughtered or exported live from the State. If approved, I will commence Part 5 of the Animal Health and Welfare Act 2013, which relates to animal health levies. The regulations are proposed to come into operation on 1 September 2019.

The Irish pig industry is the third most important agrifood sector, after the dairy and beef sectors. It accounts for 8% of gross agricultural output. There are approximately 440 commercial pig producers in Ireland producing about 4 million pigs annually. The total number employed in the industry, including those employed on-farm as well as in associated sectors such as pig meat processing, feed manufacture, haulage and services, is estimated at 8,300. In 2018, the value of pig and pigmeat exports amounted to approximately €832 million. After a number of difficult years, recent months have seen a welcome increase in prices to €1.73 per kilo, up from a low of €1.39 per kilo. This is due to reduced European production and increased demand from China due to the outbreaks of African swine fever in that country.

As Ireland seeks to grow its pig and pigmeat exports, the imperative to maintain high standards of pig health also grows. The moneys raised by the levy will directly fund Animal Health Ireland’s activities in these areas. To date, Animal Health Ireland, AHI, has made an important contribution to cattle farming in Ireland. Government funding for AHI is provided on the basis of strict matching funding with private sector contributions. In July 2017, I pledged €125,000 per annum for three years in order to allow AHI commence work in the pig sector on the strict understanding that the pig industry would contribute a similar amount.

A key recommendation of the 2016 report of the pig industry stakeholder group is the expansion of the AHI model to the pig sector. The chair of the pig industry stakeholder group, Dr. Seán Brady, strongly supported the initiative and in October 2017, agreement was reached for the imposition of a levy on pigs presented for slaughter or export in order to raise the industry’s €125,000 contribution. In February 2019, the pigs committee of the Irish Farmers Association, IFA, unanimously endorsed the introduction of such a levy.

Following agreement on funding, the AHI undertook a competitive recruitment process for a pig health expert. An experienced person has been appointed pig health check programme manager. They will take up their position with AHI at the beginning of September 2019.

I strongly believe the introduction of this levy is in the interests of the Irish pig sector. Outbreaks of disease in Europe and further afield have highlighted the requirement for high standards of pig health. It is a small but important contribution as we seek to exploit the opportunities arising out of the challenges facing pig health elsewhere around the globe. I very much welcome the support of the industry and the IFA for this levy. It is recognition of the need for a partnership approach between Government and the private sector towards matters of pig health, and the safeguarding of this important agrifood sector.

I thank the Minister for coming before the committee. What is the projected total amount of funding from the levy that will go to Animal Health Ireland? The Minister indicated there will be €125,000 funding from the Government alongside that, if I picked him up correctly. Will he provide us with more information on the type of work AHI will be undertaking? What, if any, work of that nature has been happening up to now and who has been responsible for it?

I thank the Minister for his presentation. This measure has emanated from agreement between the farm organisations and the Department. It appears approximately €250,000 will be available and it will apply per animal, regardless of its value. It will be strictly curtailed in that regard. What will that money be spent on with respect to the identification of potential diseases that may well give rise to issues? We must be mindful of swine fever and the development of various mutations of it at various levels in terms of bacterial and virus-induced diseases. Pig farmers have had a difficult time during the past two or three years. We talk about other sectors but pig farmers have been on the ground for the past two or three years and it is only in the past four or five months that things have started to pick up for them. That is excellent. There are three or four pig farmers based in Westmeath. I would make the point that they maintain high standards of hygiene and animal welfare. They are excellent in the work they put in and are a source of employment across County Westmeath and extending into Longford. In this context, what work will Dr. Carla Gomes, as a pig health check programme manager, be doing? With respect to the Government input and that of the pig producers and exporters, it is important they get a return from this money and that it is not a contribution on which there is no return. Every penny should be earmarked for positivity in this respect. One of the reasons we are discussing this sector is that China has suffered outbreaks of the African swine fever and that is partially why the prices in our pig industry have risen. What can happen elsewhere, however, can happen here. What protective measures to deal with the investigation of animal diseases, particularly those impacting on pig health, will be put in place?

A number of members are offering. I call Deputy Martin Kenny.

I thank the Minister and his officials for this briefing on the proposed animal heath levy on the pig industry. The levy will be 4 cent per animal. I read in other documentation that a larger levy of 10 cent or 12 cent per animal was mentioned. Was that a previous proposal? With respect to the proposed levy before us, I assume the key objective in introducing it to ensure the sector continues to maintain a disease-free status. Many of our competitors throughout the world have issues with disease and that inhibits the marketability of their product. It is proposed this levy will be placed on each pig which will generate the contribution from the industry. What will be the Government's contribution to the work involved and the research? Is there scope to expand our pigmeat industry? It has gone through a difficult time in recent years. Many farmers involved in the industry thought hard about whether they should continue in the business but the sector is doing well at present. We need to build a sustainable future for the pig industry. While we recognise much of it is related to scale, we need to explore if there are opportunities for new entrants to that industry. If it is run properly, I believe it has big potential for expansion, particularly given that many of our competitors have not been able to achieve the disease-free status we have in Ireland. I welcome the concept of what we are trying to achieve. The quantity of pigmeat we export is a reflection of the good work that has been done in the past, particularly by an industry that has been innovative and has been focused on delivering a high-quality product. Anything that can drive that forward further is welcome and from that point of view I welcome the concept of what has been proposed. I would like the Minister to clear up those few matters I raised.

I welcome this concept also. I agree wholeheartedly with it by virtue of the fact that the industry has been brought in on it. A concern in the industry is how strongly ring-fenced the contribution will be within the AHI to ensure it is spent in the pig sector. It has been questioned whether the contribution would simply go into the AHI's overall budget and whether it could end up benefitting other sectors. What proposals are on the table for the physical collection of the levy? I presume it will be collected in respect of the animals killed here through the abattoirs but how will it be collected in respect of the animals being exported live? What will be the logistics of the collection of the levy?

I thank the Minister for his presentation and his officials. This industry has gone through hard economic times in recent years. If there was ever a good time to apply a levy to pig farmers, it might be now with profitability starting to rise for the first time in many years. Every industry faces new challenges. It is essential research into animal health is carried out, and the pig population face many health challenges at various stages. Research in that area would be more than welcome. In July 2017, the Government pledged funding of €125,000 per annum for three years. Is it envisaged with the industry's agreement that it will contribute 4 cent per pig and, with respect to the Government contribution of €125,000, that it will continue to match the producer’s contribution?

I thank the Minister for his briefing on this proposed measure. Will this fund be used to address animal welfare issues with respect to how animals are being kept, as well as addressing animal diseases that will affect exports?

Do any other members have questions before I call the Minister to respond? I note Deputy O'Keeffe has just arrived.

I was following the discussion on the monitor. I will be brief. I have a few simple questions.

Obviously anything that enhances the welfare of the pig industry must be welcomed. There will be the levy going to the Department and the pig industry also subscribes to Bord Bia. How do we utilise this money? Animal Health Ireland, AHI, has some schemes in the cattle sector. One scheme related to the eradication of bovine viral diarrhoea, BVD. A timeframe was put on that but the target has not been achieved. What are the targets for this levy? Is there a timeframe? Will it be ongoing? I know the Minister appointed Dr. Carla Gomes, who has good experience. Is there a timeframe for this levy?

What is the Minister's view on the pigs Mercosur countries will be entitled to import arising from the EU-Mercosur deal? What is the potential impact?

We should really stick with the levy today.

I must shortly take a debate in the Dáil Chamber.

I am conscious of that and we will try to get going.

As there is a degree of continuity in the questioning, rather than dealing with the questions individually, I will try to deal with them broadly. If I omit to deal with anything, I would be happy to come back to it.

This is trying to build on the template that Animal Health Ireland has brought to the livestock sector. As alluded to by Deputy O'Keeffe, that has ten years under its belt. It has been a significant success. I appreciate that the Deputy zoned in on one of the sticks used to beat it. Broadly speaking, it has been quite a successful endeavour in dealing with BVD, infectious bovine rhinotracheitis, IBR, Johne's disease and somatic cell count and has contributed to the public good for farmers. For example, on BVD the private gain to farmers, if I may put it that way, has been estimated at approximately €85 million. As a model it works because it is owned by the industry stakeholders and facilitated by the Department, which puts some money into it. We are trying to do the same thing for the pig sector. I confess that this is somewhat later than I would have liked. As I said in 2017 we hoped the matter would get under way, but we are getting there now anyway.

In response to Deputy Pringle's question, it will deal with welfare issues. It will deal with a host of other efficiencies, delivering on biosecurity issues through a targeted advisory service to be delivered through private veterinary practitioners to individual pig producers. AHI has been successful in a tendering process under the rural development programme in that area. That will be a critical part of it. Hiring somebody to lead the effort in this area is really important. I believe we have got a really credible internationally recognised expert in the field to drive this significant agenda.

We are developing a database to map the status of all producers' efficiencies, looking at things like lean management practices. We are more familiar with that in its application to industry. In the past 12 months I have seen its application in the dairy sector. We are working on driving that efficiency programme into the pig sector.

Welfare will form a critical part of it. It is an holistic embrace of the industry, driven as much by the industry itself as by the expertise that AHI or the new programme manager brings to it.

Somebody asked about what we are doing about African swine fever on which much remains to be done. While I am somewhat slow to say we are prospering on others' misfortune, it is critical that we do everything we can to protect our own biosecurity here. We are fortunate that, as an island nation, it is somewhat easier than it is elsewhere. However, there is no room for complacency owing to the amount of traffic into and out of the country.

A disease information leaflet went out with the annual pig census letter to all registered pig farmers last autumn. We are preparing some messaging on food waste, which is a critical issue particularly for smaller farmers. A biosecurity leaflet for non-intensive pig farmers was distributed at the ploughing championship last year. A biosecurity leaflet for hunters travelling to African swine fever areas was sent to the National Association of Regional Game Councils in April. The Department of Transport, Tourism and Sport sent a leaflet to international hauliers on our behalf. Members will be familiar with a new poster campaign at point of embarkation from the State, whether airports or ports. We are working with individual pig farmers to address their own biosecurity issues.

Considerable effort is going into African swine fever issues to create awareness not just within the industry, but among members of the public because an accidental or inappropriate disposal of salami, ham sandwiches etc. could expose the entire sector here to African swine fever. Some of the recovery in the market is as a consequence of problems other countries are experiencing in this area and we want to ensure we have no own goals in that respect. It is a complex multifaceted approach to try to create awareness of the appropriate biosecurity measures, not just at the industry level but among the broader public travelling abroad.

In response to Senator Paul Daly, it is 4 cent per animal slaughtered or exported. The collection will be primarily through the slaughtering plants. There is agreement between the producers and processors on this issue. It will raise approximately €125,000 for AHI and we will match that.

In terms of market potential, we obviously see significant market potential in China, which is our second biggest market after the United Kingdom. We also see opportunities for increasing exports arising from EU-Mexico and EU-Thailand trade deals. We have agreed veterinary health certificates for pigmeat with Ukraine recently. All those help to contribute to a positive market situation, which has seen the price rise from about €1.39 to about €1.70 in recent months.

Deputy Cahill is correct that it is a difficult sector and is a capital-intensive sector. I believe Senator Mulherin asked about the possibility of new entrants but it is a capital-intensive sector to enter. It goes through cycles of challenge in terms of returns. It is not an industry for the faint-hearted in that sense. People need to be able to ride out the downturns while waiting for the upswing. The upswing is significant now and there is a level of confidence about the sustainability of that in the medium term for reasons I have just alluded to.

I appreciate that Deputy O'Keeffe would know more about this than any of us in the room. While there is potential for new entrants the numbers have been reducing steadily. There are about 440 commercial pig farmers in the country, but 19% of them produce more than 40% of the total output. Some of them are very big by any international standards. As I said, it is a very capital-intensive industry to get into.

What about the issue of the money being ring-fenced?

Within Animal Health Ireland, the industry is its own policeman in that sense. There is no question of it slipping into any other sector.

Is there any question of matching funding?

We have committed to funding for three years at €125,000.

To make sure everyone pays, what about the export of the fat pig into the North? How will that be collected? Will it be collected at source?

I am advised we have a system of collecting it for live exports, whether it is to Northern Ireland or anywhere else. Outside the island of Ireland there is a limited export of pigs, mostly for breeding purposes. There is an arrangement in place for progeny passing over to Northern Ireland for slaughter purposes.