Joint Committee on Agriculture, Food and the Marine debate -
Tuesday, 6 Jul 2021

Beef Task Force: Discussion

Chairman

Apologies have been received from Deputy Kehoe. Before we begin, I remind members that in the context of the current Covid-19 restrictions, only the Chairman and staff are present in the committee room. All other members must join the meeting remotely from elsewhere in the parliamentary precincts. The secretariat can issue invitations to join the meeting on Microsoft Teams. Members may not participate in the meeting from outside the parliamentary precincts. I ask members to please mute their microphones if they are not making a contribution and to use the raise-hand function to indicate they wish to contribute. Please note that messages sent in the meeting chat are visible to all participants. Speaking slots will be prioritised for members of the committee.

The topic of this session is the work of the beef task force. I welcome to the meeting Mr. Michael Dowling, chair of the beef task force, Ms Sinéad McPhillips, assistant secretary in the Department of Agriculture, Food and the Marine, and Ms Maria Dunne, principal officer in the Department of Agriculture, Food and the Marine, who are joining us from the witness room in Kildare House.

Witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They 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, persons or entity by name or in such a way as to make him, her or it identifiable.

I now invite questions form committee members for Mr. Dowling and his fellow witnesses.

Deputy Michael Collins

I welcome our guests. I spent weeks with farmers outside the factory gates, protesting for the right to get some kind of proper price for their animals. I welcome any report. I also welcome the appearance by representatives of the beef task force before us. Perhaps our guests will update us on how they have succeeded to date. There were many issues relating to the fifth quarter. Where have our guests got to with negotiations on the fifth quarter? There is a lot of thought out there that somebody is profiteering from the fifth quarter but it is certainly not the farmer.

At the time of those protests, discussions were happening around the Dáil and the countryside, and outside the gates, that considerable amounts of money were being made on the sale of other animal body parts, not only the meat value alone. Different suggestions were made that some people are making massive profit from other body parts of animals and that should be shared equally with the farmer who brought the animal into the world, fed it and brought it to the factory. The farmer ends up getting the least from the deal.

We must open up as large a market as possible for beef produce, including a market in China. Have we succeeded or are we succeeding in developing the Chinese market or other foreign markets? The more competition we have, the better.

Mr. Michael Dowling

I thank the Chairman for the welcome he has given to my colleagues and me. I will ask Ms Dunne to outline where the Department and Ireland are with regard to the Chinese market.

The Deputy asked about negotiations around the fifth quarter. Committee members will know that we commissioned reports from Grant Thornton on three different topics. One of those was to outline the position around competition law in Ireland. The second report related to the market requirements for beef. The third report related to the price points in the supply chain. Included in the reports we got from Grant Thornton was an attempt to calculate the average price that farmers got for cattle over a two-year period and the price at other points of the chain. It was not possible to get representative data in respect of the price outside Ireland because of the difficulty in getting data from operators outside this country. In respect of Ireland, it was possible for Grant Thornton to state the price farmers received and the price factories received, on average, for the product that was exported. Included in that calculation was a figure for the value of the fifth quarter. Grant Thornton has, effectively, come back with an overall figure for the value of beef at the processing stage and its value at the farming stage. One can be compared to the other. Those figures included all parts of the animal, including the fifth quarter.

I will ask Ms Dunne to talk to us about the Chinese market.

Ms Maria Dunne

Members will be aware that market access for Irish beef exports to China has been suspended since May last year. Department officials, through the Irish Embassy in Beijing, continue to engage positively with their Chinese counterparts with a view to regaining market access for Irish beef. There has also been engagement at political and diplomatic levels. The Minister for Agriculture, Food and the Marine, Deputy McConalogue, and the Minister of State, Deputy Heydon, had a virtual meeting with the Chinese ambassador to Ireland, H.E. He Xiangdong, in March 2021 at which a number of market access and trade issues were raised. The Minister for Foreign Affairs, Deputy Coveney, raised the issue with his counterpart in the Chinese foreign Ministry in May of this year. Most recently, the Minister, Deputy McConalogue, has written to the relevant Minister in China, informing him of the revised BSE status awarded to Ireland. The Minister, Deputy McConalogue, noted the strong trade links with China that have emerged in several areas. He also stressed his desire to see beef exports resume and offered the engagement of his officials, as relevant, to try to resolve this issue. We very much hope for and continue to work towards the imminent resumption of trade but we must recognise that the timing of this decision lies with the Chinese authorities.

In the meantime, the Department continues to work to try to gain access to as many new markets as possible. It is also carrying out equally challenging work to enhance and retain access to existing international markets. Each part is crucial to our mission to expand our global footprint while maintaining our position as a quality food producer and supplier.

Another of our priority markets for beef is Korea. A public consultation on our beef access recently concluded in Korea, following which Ireland's beef market access is now with the National Assembly for deliberation. It passed to the National Assembly in May. That is a step further down the road because the process has not concluded but it is a positive step towards getting access to another market that the industry has prioritised.

Mr. Michael Dowling

I will ask Ms McPhillips to talk about the market tracking arrangement of Bord Bia in respect of the fifth quarter and the US offal indicator.

Ms Sinéad McPhillips

One of the immediate actions under the September 2019 beef sector agreement was that Bord Bia increased its market price-tracking and reporting function. One of the indicators it tracks is a US by-product market indicator. In regard to offal and hide coming from an animal, there are no published prices for Irish or EU hide or offal products. Instead, Bord Bia produces a regular indicator report on offal markets, which is available from the US Department of Agriculture and which is used broadly as an indicator of how world markets for offal and hide in general are going.

Deputy Michael Collins

I asked about the huge money made on animal body parts, not just the meat value, in other areas. Has the beef task force looked at that? What percentage did Grant Thornton indicate was lost to the farmer on the fifth quarter of an animal?

Mr. Michael Dowling

I do not know that the task force looked at the question of the value of other body parts in addition to the hide and fifth quarter. Grant Thornton did not put a figure on whether farmers were gaining or losing on the fifth quarter. What it was asked to do was put an overall figure on the value of beef to the factories and the farmer. That is what it was asked to do under the terms of reference of the study the task force agreed it should undertake. That was agreed by all members of the task force.

I should say that the task force was commissioned to oversee the implementation of the agreements reached in August and September 2019 and the actions arising out of those agreements. There were 30-odd actions between the two agreements. The function of the task force was to examine and oversee the implementation of those actions, and that is what it has been doing for the past two years or so.

Deputy Michael Fitzmaurice

I thank the witnesses for attending. I have a number of quick-fire questions. One of the functions of the task force was to establish the four-movement and 30-month rules and requirements for what we call "specs". I know Grant Thornton was looking at that. My understanding is that the processors and retailers were asked about this and the different specs that are needed in different countries. Is that correct?

Mr. Michael Dowling

Yes.

Deputy Michael Fitzmaurice

Bearing in mind the market we are in, I killed cattle not too long ago that were overage. No one in Bord Bia was worried about whether they were overage because there is a shortage of cattle at the moment. It seems nobody cares whether they may have had 20 movements or are 40 months old. It is my understanding from research I have done that neither Grant Thornton nor anybody else went out to the consumers - not the retailers or processors but the consumers who buy this meat in the retail shops on a continual basis - to get their views. Is that correct?

Mr. Michael Dowling

The Deputy is correct that there was not contact with consumers as such, but he should understand the reason for that, which is that Irish beef is bought by customers and those customers are generally retailers, food service operators or manufacturers. They are the people who buy the beef and specify what they want. Obviously, it was to them that Grant Thornton had to go because they are the people who are doing the buying.

Deputy Michael Fitzmaurice

With due respect, it would have been no harm to go to the people who buy and eat the beef. That was not done, however. That is it. I will move on.

I have a question regarding the information in the report on offal and the price of carcases. Mr. Dowling stated clearly that Grant Thornton was able to get the facts here in Ireland. Is it the case, however, that some retailers and processors did not co-operate in giving Grant Thornton information on overseas exports?

Mr. Michael Dowling

Yes. The information from the stakeholders in Ireland, including retailers, other purchasers, farmers and factories, was made available. Grant Thornton was not able to get from stakeholders outside Ireland a sufficient amount of data to be able to create representative prices.

Deputy Michael Fitzmaurice

I thank Mr. Dowling for that information. He has been on the task force for a while. In his opinion, what is the reason that the price dropped suddenly in February and cattle were able to go up after that? This did not happen in any other country in Europe. What is his thinking on that?

Mr. Michael Dowling

I do not know specifically why the price fell in February. That point was raised by a number of people on the task force. As the Deputy knows, the task force is made up of people appointed by the Minister but nominated by individual organisations, including Meat Industry Ireland, MII, which represents processors. A number of members asked that we bring the processors in directly, rather than just having the MII representatives, and talk to them about a range of issues, including, as it turned out, the price situation in February. That is what we did. The processors came in and explained, and their explanation was that there was a very large quantity of beef moved from Ireland to the United Kingdom in advance of Brexit and the cold storages, etc., were full of Irish beef. The demand fell in February and the price fell with it. That was their explanation.

Deputy Michael Fitzmaurice

An application has gone into the EU for protected geographical indication, PGI, status for Irish beef. Is it the task force's understanding that there will be a premium price for PGI product? Has any work been done to make sure that if we get PGI status, it will mean a higher, premium price for our beef?

Mr. Michael Dowling

The expectation is that PGI status will lead to a premium over and above beef that does not have that status. Obviously, that will only be tested when we get PGI status and the product is on the market with the PGI label on it. The expectation is that it will attract a premium price. The experience generally across Europe is that there is a premium on product that has PGI status.

Deputy Michael Fitzmaurice

In his submission, Mr. Dowling referred to farmers getting €160 million or €170 million extra, if I recall correctly. What moneys is he referring to there? Is that funding coming under the beef environmental efficiency pilot, BEEP, or something else?

Mr. Michael Dowling

I ask Ms McPhillips to take that question.

Ms Sinéad McPhillips

Mr. Dowling referred to €180 million in additional supports for beef farmers between September 2019 and July 2021.

In November 2019, approximately 16,000 farmers received payments totalling €15 million under the beef environmental efficiency pilot, BEEP, scheme. In December 2019, payments were made to 32,500 farmers to the value of some €78 million under the beef exceptional aid measure, BEAM, which related to market disturbances and was co-financed by the EU. In November 2020, 27,200 farmers received payments totalling €46.6 million under the beef finisher payment, which was an exceptional payment funded from the Exchequer in respect of market disturbances caused by the Covid-19 pandemic.

Deputy Michael Fitzmaurice

I am sorry for interrupting but it should be made clear that when the €100 million was made available, including the €50 million from Europe, €70 million or €75 million was paid because cattle prices were on the floor. Some of the schemes Ms McPhillips mentioned existed before the task force was set up. We are seeing a reduction of 5% because of the BEAM scheme. It needs to be noted that we are not getting extra money. Farmers have lost €200 per head on the price of cattle. They have received €100, which I believe is 25 cent per kilo. That is not even half the loss. As such, I do not believe that we can say that farmers were compensated fully for their losses. They were not. I understand that there is no money in the Exchequer to do so, but we must be clear on this point when we speak about how much money is being made available.

With all the work that was done, does the Chinese market only account for 3,000 tonnes? At the time of the protest, I had to negotiate to try to get a Chinese group into a plant. Given how much beef has gone to China, it was a waste of time for the beef sector. Is that fair to say?

Ms Sinéad McPhillips

I will conclude the point about payments. It is a factual issue. In November 2020, 24,000 farmers payments totalling €40 million under the BEEP suckler scheme. There is a continuation of that this year.

Deputy Michael Fitzmaurice

Am I correct in saying that no suckler grant was made? In his submission, Mr. Dowling referred to there being talk about a suckler grant and about money being made available, but no suckler cow welfare grant has been paid. I am talking about €200 or €300 to save the suckler herd. None of that was achieved.

Ms Sinéad McPhillips

The BEEP suckler scheme involves welfare actions-----

Deputy Michael Fitzmaurice

I know that.

Ms Sinéad McPhillips

-----and environmental actions. As such, it involves weighing actions. These are new payment schemes that have arisen since 2019. I am just making a factual presentation on them.

The Deputy is correct in saying that a large amount of effort went into opening the Chinese market in 2018. The years 2019 and 2020 were essentially spent opening that market and beginning to see trade. The prospects for that market are bright. Bord Bia identified a significant demand for quality beef in the Chinese market. The volume might not be great, but it is a significant outlet. As Ms Dunne outlined regarding the Department's market access work, we are trying to open as many market opportunities as possible. It will then be a matter for trade to follow those opportunities. In terms of diversification from our dependence on the British market in particular, it is correct to open those avenues for trade to the greatest extent we can.

Deputy Michael Fitzmaurice

Mr. Dowling is analysing cattle numbers and the beef sector. Does he have concerns about the number of dairy cattle or dairy beef that will come on the system next year? Does he agree that factories can increase the price when the supply of cattle is short? For example, there is no one banging on his door at the moment over the price because there are €4.50, €4.70 and €4.80 deals being done. What are his thoughts about next year? Does he agree that, when there is a shortage of cattle as there is at the moment, prices can be increased readily and movement rules, age limits and so on seem to go out the window? How is that the case when the specs are so important in other countries and the housewife, househusband or whoever is buying it is so particular?

Mr. Michael Dowling

Regarding next year, one can never be accurate in predicting how prices will go. It is true that, if there is a drop in supply, prices normally increase. That is a function of the market. I do not know what next year will be like. Currently, the indications are that the market should remain reasonably strong going into next year. The work of the task force was not principally about looking at where prices were likely to go. That was not something we were asked to do. We did what we were asked to do, which was to oversee the actions that were agreed in 2019. That work is, to a large extent, done. The market is the market and I imagine that next year will probably be reasonably strong, but I could be wrong.

Deputy Michael Fitzmaurice

I have read most of the Grant Thornton report. The industry, retailers and so on have said that they need this, this and this but they do not seem concerned at the moment about the four-movement rule, the 30-month rule or any of the other specs. Is that not unusual if the specs were important before now?

Mr. Michael Dowling

It is unusual if that is the case. The information from the market was that all of the specs were required by some markets but not by them all. The specification of cattle being under 30 months of age is required in virtually all markets. In some markets but not all, there are requirements relating to movements and length of time spent on the last farm. There is a fairly general requirement that the beef should come from quality assured farms. As I understand it, that remains the position.

Deputy Michael Fitzmaurice

I thank Mr. Dowling.

Senator Paul Daly

I welcome the witnesses and thank them for their submission.

I wish to ask about Mr. Dowling's interaction with Deputy Michael Collins regarding fifth quarter offal. He referenced a Grant Thornton report that was based on the cost per kill. The task force's submission reads: "the value of beef animals for slaughter averaged over 2018 and 2019, and exclusive of VAT, was €2.2 billion; while the value of sales of beef from Ireland was €2.9 billion; or excluding prepared and preserved products, which may include some element of double counting, €2.7 billion." Does the report exclude the 10% of beef that is consumed on the island and is included in the slaughter value? We export 90%. If that 10% is excluded and the best case scenario for exports was €2.7 billion, the markup on what the report states is the slaughter cost was more than 50%. Does Mr. Dowling not believe that this highlighted something that the task force should have looked into, given that it was set up on the back of farmers' protests about how, due to the prices they were getting, it was possible that many of them would not survive in the industry in 2019?

Mr. Michael Dowling

I am not sure that the Senator has got that right. The 10% of beef that is consumed in Ireland was not excluded.

It is included in the figures. What is excluded is some product which may have been double counted but that is not-----

Senator Paul Daly

I am agreeing with Mr. Dowling that the 10% is not excluded. That means only 90% of the €2.2 billion in beef was exported for €2.7 billion, which gives a mark-up of 50%.

Mr. Michael Dowling

I do not think that is right but we will come back on the figures in more detail, if the Senator would like.

Senator Paul Daly

Does Mr. Dowling not think it is something the Beef Taskforce should have been pursuing?

Mr. Michael Dowling

We do not follow the point, to be honest. My understanding is that the figures are for the total value of the product, including what is sold in Ireland and what is exported.

Senator Paul Daly

I will give Mr. Dowling the opportunity to forward me clarification on it. It specifically states the value of sales of beef “from Ireland”, which does not allow for the 10% of our beef that we consume domestically. Mr. Dowling can have a look at it and he might come back to me with clarification.

Mr. Michael Dowling

I will.

Senator Paul Daly

In my view, it is glaring that a report would come back with what I clearly see as something having a 50% mark-up post the primary producer. That was the essence of what the Beef Taskforce was set up for. I will give Mr. Dowling the opportunity to come back to me when he has a closer look at the figures.

Another issue that came up, and Mr. Dowling responded to Deputy Fitzmaurice on this, concerned the age limit rather than the movement limits. In the veterinary certificates report, 33% of countries said they would accept product from 48 months and even up to 72 months. Were those countries prepared to pay premium price, although they were accepting the older beef? Did the Beef Taskforce question that if they were paying premium, why then would the factories not pay premium to the farmer for the post 30-month carcass, when, based on that report, they evidently had 33% of the countries surveyed as a market?

Ms Maria Dunne

These are the health certificates and the conditions we negotiate with the third-country markets, so they are the bottom line and we cannot export anything that does not fit those requirements. There are eight veterinary health certificates at the moment which provide for full or partial 30-month age restrictions for Irish beef, and these are for China, Iran, Saudi Arabia, Turkey, Qatar, Switzerland, Egypt and Singapore. In those cases, we have no option and we can only certify meat which is from animals under 30 months. That is the bottom line within those countries.

Senator Paul Daly

However, that is only 67% of the countries and 33% of the countries will, as a bottom line, accept product older than 30 months.

Ms Maria Dunne

Yes, they will, but it is just that we can certify that product into that country. It does not reflect what the customers in that country, that is, the retailers or the food service, want to buy. It just reflects that we can certify into those countries.

Senator Paul Daly

The Department did not pursue that. If post 30-month beef is going in there, is it being sold at premium price or at a similar reduction to what the farmer who provided it has taken?

Ms Maria Dunne

I think that was addressed in the Grant Thornton report and it was not able to find out all that information from third-country markets.

Senator Paul Daly

Okay. In conclusion, will Mr. Dowling elaborate on what contact and dealings the Beef Taskforce has had with the Competition and Consumer Protection Commission? There was a lot of talk at the time of the protests before the agreement in 2019, and when we met them on the pickets, many farmers mentioned monopolies and cartels. The Beef Taskforce had contact with the Competition and Consumer Protection Commission and I would like to get feedback on how those deliberations went.

Mr. Michael Dowling

We had the Grant Thornton report on the nature of competition law in Ireland; it is available on the website and it was available to all the task force members. We are also organising a webinar with the Competition and Consumer Protection Commission for the task force and for other stakeholders, if they wish to join in, for 14 July, which is in one week's time or thereabouts.

Chairman

Will Mr. Dowling expand on Senator Daly's point that what really concerns farmers out there is what we consider a dominant force in the marketplace? The committee had a couple of sessions in the recent past on organic farming and it emerged at those sessions that there is only one purchaser of organic beef in the country. That is something the Beef Taskforce might raise with the Competition and Consumer Protection Commission in regard to how it allowed a situation like that to develop.

Mr. Michael Dowling

As I said, we have organised a webinar and it will be open to us and others to raise that question and other questions with the Competition and Consumer Protection Commission. The Competition and Consumer Protection Commission has looked in the past at the beef industry and has taken a view that there is nothing that required it to take any action. That remains the position as of now but, obviously, it will be open to people to question it during the webinar, and it is open to any individual or organisation to complain to the Competition and Consumer Protection Commission if they have evidence of malpractice.

Chairman

I thank Senator Paul Daly.

Deputy Martin Browne

In March of this year, there was severe disappointment among farmers’ representatives in regard to the beef price developments over the previous month and unhappiness at the explanation provided by meat industry representatives at the forum on this issue. In April, members of the committee expressed disappointment at the market transparency studies, and the reports failed to identify the division of price among those in the supply chain. In June, at the next meeting of the task force, there was dissatisfaction with the contribution of the meat processing industry, particularly in regard to the sudden drop in base prices in February of this year.

It is precisely because of inconsistencies such as this and the lack of transparency that our farmers want this task force to work properly. Is it not true to say that when it comes to the level of transparency that farmers want, we are not much further along the line? In the Grant Thornton conclusions on the demand for in-spec bonuses, it pointed out that several customers referenced developing market requirements and the fact demands may change over time. When something is being reviewed, we have to look at the weakest point, which may be the most problematic. What is Mr. Dowling's view on this level of ambiguity about the market demand? Does it indicate to him that there are shortcomings in regard to the demands that are placed on farmers by the processors in regard to in-spec bonuses?

Is there not a fundamental problem with the fact the price paid by the end consumer is not within the scope of the report, and neither were processor-to-processor sales?

Why was that excluded? Does Mr. Dowling believe that omissions such as these serve the best interests of small family farmers?

Mr. Michael Dowling

I have referred to the in-spec bonuses and in-spec criteria. I understand people are from time to time disappointed with the price. In terms of transparency, we asked Grant Thornton to go the whole way along the chain. It was not possible to do so because it was not possible for the company to get sufficient information from operators outside of Ireland to do the final bit. It did, however, get significant, comprehensive and representative information in respect of the Irish market and beef that is exported.

It also could not get sufficient information from operators outside of Ireland to get the final bit on what the retailer of food service operator or manufacturer was paying. That is not all that is surprising. There is no compunction on people who are buying Irish beef from Irish processors outside of Ireland to supply information, which effectively means supplying information on their margins. They would normally regard that as confidential and would probably be slow enough to provide it, even in their own markets. That is, therefore, a problem. It is not a problem manufactured by the task force, however. It is a problem of people not wanting to give information they do not necessarily have to give. That is one issue.

Through Bord Bia, we got significant additional indices comparing Irish prices with prices across Europe. In particular, Bord Bia has produced an index providing a composite price based on the internal producer prices in the main markets to which we supply beef. That shows, over a long period, a reasonable correlation between the price being paid in Ireland and the price that would be paid across all the markets we mainly supply in respect of their own beef. Sometimes the exports composite price is above our price and sometimes our price is above theirs. The difference is not all that significant at any stage, however. That provides some degree of greater transparency than was there before the task force came into operation. Ms McPhillips wants to add something to that.

Ms Sinéad McPhillips

The issue of price transparency is not confined to Ireland. As Deputies will be aware, there has been significant work at EU level on improving market price transparency as one of the strands of efforts to improve the position of the primary producer in the chain. As part of that work, Deputies will be familiar with the new EU market observatories that have been introduced for a range of commodities. Additional price reporting requirements are being introduced through EU regulations and in fact, the Department and the task force secretariat will be hosting a webinar with EU officials in mid-July to further explore those issues and see what lessons we can learn.

The new office of the national food ombudsman or regulator will be introduced by primary legislation. The Minister for Agriculture, Food and the Marine has outlined that increased price analysis and reporting will be one of the functions of that office. We would see that there is an opportunity for that office to pick up some of the gaps that have been identified through the work to date and to see what additional price reporting is required to further increase transparency.

I will take the opportunity to revert to Senator Paul Daly on that query on the Grant Thornton figures. I confirm that the €2.9 billion figure includes all sales, including in Ireland. What we are talking about, therefore, is farm gate value for cattle sales of €2.2 billion compared with sales in Ireland or abroad of €2.7 billion, if one excludes the processed products.

Senator Paul Daly

To confirm, it needs to be brushed up on in the context of the report because it specifically states the value of sales of beef from Ireland.

Chairman

I thank the Senator. I call Deputy Carthy.

Deputy Matt Carthy

I thank our guests for taking the time to be with us this evening. I have a number of questions, most of which will only require short answers so I will ask them individually.

Perhaps Mr. Dowling would outline what he considers to be the main achievements of the beef task force since its establishment.

Mr. Michael Dowling

We set out the achievements in the document, which we sent in advance. The effective introduction of the new in-spec bonus system is one. The successful application for protected geographical indication, PGI, status is another. There is also the immediate written commitment by the industry on several points, including insurance schemes and carcase images; significant input into the application for PGI status, as I mentioned; the establishment of a group to oversee the development of a suckler brand propositioned by Bord Bia; the three substantial reports on market transparency, which add to the knowledge about the sector; and the work Bord Bia has done on improving its indices and creating a new index in respect of the comparison between the composite export price and the domestic price.

Deputy Matt Carthy

What does Mr. Dowling consider the status of the Grant Thornton reports to be now?

Mr. Michael Dowling

The status of the Grant Thornton reports are finalised. One of them - the competition law report - is simply an explanation of what the competition law means in Ireland in respect of the beef sector. The in-spec bonus, at least, in the market requirement report, confirms that the market requires all the current specifications but not necessarily that every market requires them. In general, the under 30 month age requirement is fairly universal, as is the requirement for quality assurance. The requirements in respect of movement and length of time on the final farm are, however, required by some markets and not by others.

The report on price composition shows what the composition is on the chain within Ireland. As I have said repeatedly, however, it does not include what is added to it outside of Ireland.

Deputy Matt Carthy

There is, therefore, a big problem here. Universally, farmers I speak to consider the Grant Thornton reports to be fudges, at best, and potentially even whitewashes in the sense that farmers consider them to reinforce the proposition of Meat Industry Ireland, MII. In many cases, the reports acknowledge that they are heavily reliant on the industry for whatever information they contain.

Going back as far as 2019 to the beef sector agreement, what measures were taken to ensure that all farmers are aware of their entitlements under that agreement?

Mr. Michael Dowling

At the time, the agreement was widely publicised, particularly in the farming press. All the farm organisations were party to the agreement. I assume that the farm organisations let their members know what was in the agreements to which they are party.

Deputy Matt Carthy

Let me rephrase that. Did the beef task force take any specific steps to publicise the new entitlements that were available to farmers as a result of that agreement?

Ms Sinéad McPhillips

I will respond to that. As Mr. Dowling has said, the farm organisations and the farming press would have publicised all of the actions in the beef sector agreements at the time. Since then, after every meeting of the task force, we have made sure that the update reports, the actions, all of the reports and the minutes of the meetings are made available on the Department's website.

Deputy Matt Carthy

The beef task force has put the minutes on the website to ensure that farmers are aware of their entitlements. That is essentially the response to that. Are the witnesses satisfied that the processors are honouring their side of the agreements that were made?

Mr. Michael Dowling

In general, yes. From the farmers’ point of view, the most important element in the agreement was the one that related to the inspect bonuses. As far as I am aware, there is no evidence that that has not been honoured everywhere.

Deputy Matt Carthy

Is Mr. Dowling satisfied that, for example, weighing at processing plants is universally happening?

Mr. Michael Dowling

No. It is happening, but there undoubtedly some factories where it is not happening. We have obviously raised that issue. It has been raised at the task force-----

Deputy Matt Carthy

We can say, then-----

Mr. Michael Dowling

-----by other people as well. May I finish? The answer on the meat factory side is that they prioritised other aspects and there is not a significant demand for it. However, it is available in some but not in all. Therefore, to that extent, that part of the agreement is not fully operable.

Deputy Matt Carthy

So essentially, we are saying that the meat factories can pick and choose which aspects of the agreement they consider they are required to implement?

Mr. Michael Dowling

I am not saying that. I am saying that this is what the task force has been told, when the issue has been raised with meat factory representatives.

Deputy Matt Carthy

Is there a mechanism there? An agreement has been in place. It was publicised to a degree. I am not sure if the detail of it has been conveyed to all farmers concerned. What recourse is there, when meat factories do not adhere to their end of that agreement?

Mr. Michael Dowling

I am not aware of any other aspect that falls into that category. The recourse is persuasion. We can do nothing more than that.

Deputy Matt Carthy

Mr Dowling mentioned that the protected geographical indication, PGI, status was a success. However, it is not through yet. What estimate has been made by the beef task force in respect of an additional price that will be made available, either in percentage or real terms on a per kilo basis, for those cattle that meet the PGI status?

Mr. Michael Dowling

When I said that PGI was a success, I meant that it was a success to get agreement in the beef task force on the application to be put to Brussels. Obviously, we cannot claim that its outcome will be a success until we get back from Brussels. Nobody is prepared to say exactly what the premium will be. The information that we have is that in general in Europe, there is close to a 10% premium for product which has PGI status, over the equivalent product which does not. Nobody can guarantee that at this stage but the expectation is that there will be a reasonable premium.

Deputy Matt Carthy

What equivalent product is there in respect of PGI status for an Irish grass-fed standard that potentially will encompass 90% of beef? Is there another PGI equivalent to which we could compare that, at the European level?

Ms Sinéad McPhillips

I do not think that there is an exact equivalent. We have the experience of Scottish beef and Welsh beef. They have used PGI for many years. They qualified for PGI under previous PGI regulations. These were probably less onerous than what we are facing at the moment. There is certainly a preference there. Bord Bia research would establish that on our main markets, PGI status is likely to have a significant benefit, as Mr. Dowling said. When that PGI application was discussed and agreed with the beef task force, it was also agreed that if and when the PGI is successfully registered for Irish grass-fed beef, an oversight group will be established to ensure that producers have an input into and an understanding of the bonus that arises.

Deputy Matt Carthy

I am aware of the work that the task force has done on the issue of getting the agreement the witnesses have spoken about, as well as the efforts the Department is putting in to bring this PGI application over the line. It would be a travesty if at the end of the day, the PGI status simply became another “inspect bonus” or that in other words, it became a penalty for those who do not reach it as opposed to an additional price for those that do. What, if any, examination or overview was taken to ensure this does not become the case?

Ms Sinéad McPhillips

That concern is the origin of the agreement to have an oversight group when the PGI is registered, in order that there is an understanding and analysis of the benefits flowing from that PGI and that there will be a fair distribution of those benefits along the chain.

Deputy Matt Carthy

On suckler beef and the promotion therein, what needs to happen to deliver an additional price for the suckler product? What work has Bord Bia been doing or has committed to do? What differential is made or can be made? Has the task force looked at and examined the issue of factory-owned feedlots and their impact on the sector and on the overall pricing structures for the beef market?

Ms Sinéad McPhillips

There was an agreement in the context of the task force, that a sucker brand development oversight group would be established. I chair it myself and stakeholders are involved in that. The purpose of that group is to oversee the work by Bord Bia to develop a suckler brand proposition and to test it in relevant markets. That work is ongoing. Bord Bia has commissioned research in relevant markets where there is an appreciation, or the possibility of an appreciation, for the distinctiveness of suckler beef production and a willingness to pay for that. We expect to have a meeting of that group again before the end of July.

Deputy Matt Carthy

I have a brief question for the chairman of the beef task force on the feedlot beef that I reference. To maintain our image as a green producer of food, would it be useful for the sector were feedlot beef to be labelled as such?

Mr. Michael Dowling

My understanding is the volume of beef that comes from feedlots is not enormous but obviously there is some. It is not eligible for a grass-fed label so to that extent there is a clear distinction between beef reared in a traditional fashion and beef which originates or comes from, in its final stage at least, feedlots.

Deputy Matt Carthy

Okay, I will take that as a "No". A defining question then is whether Mr. Dowling considers the beef industry to operate with cartel-like behaviour.

Mr. Michael Dowling

It is not an issue for me but the issue has been raised, as I understand it, with the Competition and Consumer Protection Commission on a number of occasions and the latter has not found that it has operated-----

Deputy Matt Carthy

I am coming to it in a minute.

Mr. Michael Dowling

-----in a cartel arrangement. If people feel it does or there is evidence then the proper thing to do is to produce that evidence to the Competition and Consumer Protection Commission. As I said, we have webinars lined up with it for the week after next.

Deputy Matt Carthy

Yes, I see that. The difficulty is, and the hope would have been, that a beef task force might have taken on that job because it is simply impossible for a farmer or group of farmers to prove what is apparent to many. Having read the Grant Thornton reports and the CCPC responses of last year that will probably be reiterated to Mr. Dowling, has anybody given him an easy to understand explanation as to how the beef prices across all factories appear so in tune with each other, regardless of the direction they move in? They go up together and go down together with almost minimal variations. What explanation does Mr. Dowling think there is for that?

Mr. Michael Dowling

Nobody has given an explanation per se. I emphasis the beef task force was set up to oversee the implementation of the agreements of August and September 2019. A series of actions were agreed. That is what the task force has been doing. It was not asked to take, or those actions do not include taking, a view as to whether or not there is a cartel operating in the beef sector. As I said, there is mechanism for having that examined and that is where it should be examined.

Deputy Matt Carthy

Why then will the task force have the CCPC before it in a webinar format?

Mr. Michael Dowling

It is for information for the members of the task force, and others, if they are interested, who have been asking for some contact with the Competition and Consumer Protection Commission and we are arranging that.

Deputy Matt Carthy

It is to discuss the issue of pricing or allegations of price-fixing.

Mr. Michael Dowling

Or anything they wish to raise.

Deputy Matt Carthy

There are clearly members of the task force who have the same view as I have of that body's potential to deliver some transparency.

Mr. Michael Dowling

I do not know whether they have the same view or not but it is obviously an issue for some people, so we are organising the webinar.

Deputy Matt Carthy

Having read the CCPC responses to the allegations that were made previously, and given it did not actually engage with MII before it published its findings, does Mr. Dowling consider the CCPC to be up to the role it has in investigating these matters?

Mr. Michael Dowling

I expect it is.

Deputy Matt Carthy

I have a final point and I will come back in at the end if there is time. Having gone through the number of hearings and engagements he has, does Mr. Dowling see a role for an independent beef regulator? If so what additional powers should it have above the existing statutory bodies?

Mr. Michael Dowling

The unfair practices legislation is being put in place. There will be a food regulator. It is open and the consultation has taken place on what powers should be given to the regulator. That is now a matter to be decided, and hopefully put into legislation, in the second half of next year.

Deputy Matt Carthy

I thank Mr. Dowling for his answers.

Senator Tim Lombard

I thank Mr. Dowling for his contribution so far. He has been involved in the beef task force since it was set up. It is a very significant role. He is doing his best to appease an awful lot of sides in this very important argument.

On 15 September an agreement was made. One of the key issues about that agreement was that it was to include transparency and a long-term plan for the beef industry. That was one of the priorities laid out in that agreement. Does Mr. Dowling think the task force succeeded in convincing farmers there is now transparency in the beef industry, after this process has been gone through?

Regarding the long-term plan which was part of the agreement, does Mr. Dowling think there is the bones of a long-term plan there for the beef industry regarding transparency and price fairness? Has the farming community seen those two goals of the agreement delivered on?

Mr. Michael Dowling

On transparency, there is some improvement on that and with the information which is available. It is a significant improvement. Many farmers probably believe it is not transparent enough but that is as far as it can go at the moment.

The long-term plan will now need very substantial consultation to include the review of the CAP, the requirements from a climate point of view and other matters which were not within the remit of the beef task force. There will be a need for a consultative body for the beef industry going forward, beyond what the task force has been able to do because those issues were not ones it had the remit to examine. The CAP issue, for instance, is something that is only beginning to be crystalised now. A consultative process will be required into the future on the longer-term strategy for beef and indeed other sectors in agriculture but it would follow on from the task force rather than being a job for it.

Senator Tim Lombard

On the issue of payments on the grid, there was a proposed review in that terminology of the agreement of September 2019. Will Mr. Dowling update me on where that review of quality payments on the grid is at the moment? He might also inform the committee of his view on that update.

Mr. Michael Dowling

Teagasc was asked to do a technical examination of the grid. It examined it in the light of price movements since the original grid was introduced. The conclusion was the difference between the different categories on the grid had not changed sufficiently to justify adjusting the grid and that the grid should continue as it stands. Teagasc has looked at, from a technical point of view, whether a different type of comparison could be made, in respect of looking at carcases from the point of view of cuts.

Teagasc has outlined how that might operate and asked the farm organisations to reflect on it and revert to it on whether they would like to pursue a fundamentally different type of grid. My understanding is that consultation is ongoing and nothing significant has yet come back from the organisations.

Senator Tim Lombard

To reassure farmers that the grid is working effectively and fairly and is not open to any tampering, is the task force satisfied the grid is working appropriately?

Mr. Michael Dowling

Yes, I think so. The expectation was that the price differentials might need to be substantially changed because of price changes in the market since the grid was introduced, but the technical work done by Teagasc indicated that that was not necessary because the changes were not sufficiently large to justify any significant adjustment of the grid.

Senator Tim Lombard

Mr. Dowling spoke about the changes in-spec bonus payments for cattle under 30 months of age and so on. The residency requirement of 70 days has been reduced to 60 days. How was the period reduced? Is there room to move that 60-day period further or is that as far as we will go?

Mr. Michael Dowling

It was agreed as part of the December 2019 agreement. Whether it could be called a concession or not, it arose out of the discussions as part of the agreement. As for whether it can be reduced from 60 days, I do not know. That is a matter for agreement within the industry. The length of time is not the most significant in-spec bonus issue, given that the vast bulk of animals qualify for that under the four-movement rule. There does not appear to be good reason to change it. Nevertheless, it is a requirement, and I suppose under some degree of negotiation in the future, one could see it being adjusted further. Residency is an issue for quality assurance, QA, status, however, and that remains the position.

Senator Tim Lombard

Mr. Dowling mentioned the food ombudsman and the public consultation period that opened a few weeks ago, to which I have made a submission. Has the task force, or any of its members or staff, made submissions to the consultation? What our guests' views on the power the ombudsman should have? What funding mechanism should the office have? Where will it fit in to the new regime of the farming community believing they are getting a fair price for the product?

Ms Sinéad McPhillips

I might take that one. The Department has run that consultation regarding the additional powers to be attached to the new office of a national food ombudsman or regulator. The Senator will appreciate that as Department staff, we have not made a submission ourselves, and Mr. Dowling is acting as independent chairman of the beef task force. Several other organisations in the task force process have made submissions to the public consultation and they are being analysed. We had a useful webinar to present some of the preliminary results of that consultation, for the information of the public and interested people.

Senator Tim Lombard

What do our guests see as the future of the beef task force? What is the lifespan expected to be? Do its terms of reference need to be changed? Does there need to be a complete review of how the beef task force is viewed? The original agreement, set out on 15 September 2019, is almost two years old. What is Mr. Dowling's personal view on where the beef task force should go and the new direction it should take?

Mr. Michael Dowling

As I said, the task force was set up to oversee the implementation of the September 2019 agreement. Thirty-odd action points arose out of the agreement and their implementation has, largely, been completed, although the task force has one or two issues to tidy up. Beyond that, it has, in my view, completed the work it was set up to do. As we said earlier, two webinars will be held soon on competition law and transparency within the European Union and they will cover many of the remaining issues.

I did not set up the task force and I am in the hands of Ministers and so on, but I do not foresee that under its current remit, it will have a long life. Nevertheless, there will be an increasing need for a consultative group for the beef sector's future strategy, given the CAP changes, the climate demands and other issues. A new consultative group, with a revised remit, will be necessary, but that is not for me to decide but rather a policy decision for the Minister and his officials. I think the current body has, largely, done what it was set up to do.

Deputy Michael McNamara

I thank Mr. Dowling. I am glad we have been able to conduct this meeting virtually. When I asked the Minister's predecessor why the beef task force had not been sitting for such a long period at the start of the Covid crisis, I was told it was not possible to meet virtually, so I am glad it is possible.

In the course of the beef task force's existence, laws have been passed in Spain that effectively preclude the sale of agricultural produce below the cost of production. It was a major bugbear of farmers - not just beef farmers but especially them - during the protests that gave rise to the beef task force that they were, in effect, being asked to produce beef below the cost of production. Beef can be produced in Ireland with far fewer carbon emissions than in most other parts of the world but, at the same time, there has been much Government subvention of beef farmers. Every time the Government puts money into beef farmers to try to make up for the fact that processors do not pay adequately for produce, the processors take that into account and cut the price even further.

Did the beef task force look at the Spanish law or any examples around Europe? There was a groceries order in Ireland that made below cost selling unlawful. That is slightly different to what has been done in Spain, which has banned selling below the cost of production. Did the beef task force look at that? If not, why not?

Mr. Michael Dowling

It did not look at it. It was not within the task force's terms of reference. There is an issue with below cost selling. The task force noted that this sort of issue should be referred to the new regulator once the new food office is set up.

Deputy Michael McNamara

Would Mr. Dowling accept that for the office to function properly, it will need to be able to determine the cost of production or to refer that to some other statutory body? We are not talking about below cost selling as previously existed but selling below the cost of production. There will have to be some mechanism to determine the cost of production of beef in this case, though there are many other agricultural and horticultural products in Ireland which are regularly sold below the cost of production. That will be necessary. Secondly, it will have to have the teeth to examine issues. There is currently a complete lack of transparency, as Mr. Dowling knows, and commercial sensitivity is regularly cited with regard to who is paying what to whom. If the regulator is to have any effect, it will have to have strong statutory powers.

Ms Sinéad McPhillips

The issue of below cost selling has been raised in some of the submissions in respect of the public consultation on the new office of the national food ombudsman or regulator. As the Deputy points out, there is quite a distinction between concepts of below cost selling and selling below the cost of production. Those issues can be considered in respect of the primary legislation attached to that office. Establishing the cost of production, which can vary from farmer to farmer, would be a significant challenge. The second thing that distinguishes Ireland from France and Spain is that in those countries, farmers are largely selling into their own domestic market. Primary producers therefore have much greater sway in discussions with retailers and final trade customers, whereas in Ireland, 90% of the beef we produce is exported, so the final customers are far away and are much less subject to influence by producers.

Deputy Michael McNamara

I accept that point. We do not import much beef from Spain. It is the other way round. Likewise, we do not export much olive oil to the Spaniards. Every country exports and we all have competitive advantages. I accept that we export a lot of meat and dairy produce. That does not seem to stymie the Spaniards in trying to set the cost of production. There is much talk about green measures. I accept that they are essential but we need to make sure that farmers are adequately protected in Ireland for producing an environmentally sustainable product and ensuring that they are not expected to sell that product below the cost of producing it. That would seem to me to be the bare minimum. I appreciate the difficulties of setting that and doing so in a way that is compatible with competition law. We are not alone in seeking to do this. Other countries are trying to grapple with this. Spain is one example. The Spanish Embassy is forthcoming with information about Spain's laws when approached and I thank it for its assistance to me when I was looking for that law. I thank the Chair and our guests for their forbearance.

Deputy Matt Carthy

I want to go back to the 30-month and four movement rules. The task force is essentially putting its hands up and saying that nothing can be done and that these rules are in place. The penalties, as I would describe them because I do not believe they are bonuses, will continue to be in place. Is that a fair reflection of the task force's position?

Mr. Michael Dowling

Not really. Our position and our information is, to take the under 30-month rule, that for most markets to which we supply any significant amount of beef, that rule is required. If that is the case, then if one wants to supply those markets, then one has to meet that rule. There is no argument about that. Over 30-month cattle can find a market. The issue is whether or not they can find a market with a remunerative price. The advice given to farmers in the UK from their own organisation is that the target for the product being supplied either to retailers or food service manufacturers should be under 30 months if they expect to get the maximum price. That is the position as we understand it, from all the information we get from the market and the Grant Thornton report too.

Deputy Matt Carthy

I am not sure how anything Mr. Dowling said contradicts the statement I made.

Mr. Michael Dowling

It does not. The Deputy said that we were happy that all this would go on.

Deputy Matt Carthy

I said that Mr. Dowling said that nothing can be done about it.

Mr. Michael Dowling

If the market says that it wants beef that comes from animals that were under 30 months at slaughter, then if we want to supply that market at a price we want to supply at, we have to supply beef that is under 30 months. That is my understanding.

Deputy Matt Carthy

It is important to clarify. Mr. Dowling mentioned the market and in a number of instances talked about consumers or customers. He is talking about retailers in this instance.

Mr. Michael Dowling

I am talking about retailers, and food service suppliers and manufacturers. They are the people who buy the beef.

Deputy Matt Carthy

They buy it to sell on to the next person, who is the actual consumer. Therefore, I think it would be useful to know whether Mr. Dowling has carried out any analysis of whether any of the group that he has just mentioned has labelling systems in place for the end customer that indicate the age or number of movements that the cattle and beef in question went through when they were back home in Ireland.

Mr. Michael Dowling

I do not know. From ordinary experience of seeing beef on shelves both outside and in Ireland, I have not seen references to 30 months or movements on the labels.

Deputy Matt Carthy

Does it strike Mr. Dowling as strange that a retailer would be so specific about what it needs to sell a product but would not feel a need to provide that specification to the end customer?

Mr. Michael Dowling

I do not know. There are reasons that retailers like to have cattle under 30 months and under certain weights.

It facilitates the placement of the product into particular types of cartons, etc. There is a technical reason for it. In addition, retailers have been telling Grant Thornton and others that they believe there are climate reasons beef from younger animals is a better bet than beef from older animals.

Deputy Matt Carthy

There is another reason retailers and processors like it, which is that it allows them to exert more control over the primary producer. In terms of the product, there is a primary producer and the end customer but the people in the middle, whom, I suspect, are making the vast of the profits being made on beef, happen to have a set of specs that allow them to, in many cases, manipulate the price they offer for the primary product, which they can then sell on to the end customer at a substantial profit.

Mr. Michael Dowling

I cannot comment on the profit that retailers make because we have no significant information on it. The margin in respect of the processor is as set out in the Grant Thornton report. I reiterate that as far as I know, the various specs, particularly the under-30-months and quality-assurance requirements, are demanded by a large number of customers of Irish beef and, therefore, if we are supplying it we must meet those requirements. It is as simple as that. They do not have to buy from us.

Deputy Matt Carthy

To return to the establishment of the beef task force, we all recall the protests at factory gates. I am sure Mr. Dowling will accept that the primary cause of the agitation, which led to the establishment of the beef task force, was price.

Mr. Michael Dowling

I agree that the agitation at the time was principally caused by price.

Deputy Matt Carthy

Mr. Dowling's evidence to the committee is that matters pertaining to price are outside of the scope of the beef task force.

Mr. Michael Dowling

I did not say that. The beef task force was not set up to determine or to try to determine the price. The in-spec bonus changes which took place, which the task force was tasked to oversee the implementation of, were price-related. The increase in the bonus for animals under 30 months, the payment of a bonus for those over 30 months that was not paid previously and the other changes in the bonuses were price-related. That is the price element that came out of the agreement. The other elements that came out of it were set out in the various actions. The task force was asked to, first, oversee implementation of the changes in the bonus system and, second, oversee the implementation of the other 30-months-plus actions. That was the remit of the task force and that is what it has done. It was not asked to things beyond that.

Deputy Matt Carthy

In terms of the remit, the problem from my point of view is that we have beef prices that are potentially manageable if they remain stable. I have heard nothing today which suggests that we are moving to a point where we can prevent the type of major price fluctuations we have seen in the past. In reality, this means that many primary producers will have to endure periods of poverty because they are producing at much less than the cost of production. That is clearly unsustainable. I am not sure how we navigate the work of the task force to bring us to a point where we are providing a stable price flow and a profitable margin into the medium and long term for primary producers. I ask Mr. Dowling to shed some light in terms of the measures which were outlined that will deliver those things.

Ms Sinéad McPhillips

I will respond to the strand of the Deputy's question on improving the bargaining power of the primary producer in the food supply chain. One aspect of that is beef producer organisations. We are not by any means suggesting that that is the answer to all of the issues relating to the beef sector, but it is one mechanism for which the Department has legislated and provided financial assistance to enhance the position of the primary producer. Our view would be that producer organisations present a significant opportunity to strengthen the position of the beef farmer in the supply chain. There are currently three Department of Agriculture, Food and the Marine recognised beef producer organisations that received recognition from the Department in September 2019, October 2019 and May of this year, respectively. The Department is engaged extensively, through the task force and separately, with stakeholders in promoting the establishment of beef producer organisations which are exempt from competition law requirements and allow for producer organisations to bargain on behalf of their members. We would strongly support that.

On the next CAP, we would propose that the existing supports be maintained and, perhaps, enhanced to further encourage the establishment of the producer organisations and that consideration be given to extension of that support to the sheep sector.

Deputy Matt Carthy

We have a beef sector agreement that was reached in 2019 but that has not been fully conveyed to all farmers. Some farmers have outlined to us that there are major issues in terms of beef price transparency. In real terms, nothing has been proposed to deliver on that. We have penalties in respect of movements and age and no proposal in that regard. We do have proposals in regard to PGI and promotion of suckler beef but, apparently, no analysis as to what the end benefit will be. The CCPC refuses to investigate any of these matters. I would love to be a fly on the wall at the upcoming webinar. Essentially, we are talking about a beef task force that has met on several occasions, the remit of which is essentially to implement the agreement from 2019, and the evidence before the committee is that that agreement is not being adhered to by the beef processors. The witnesses will be aware that many farmers will be watching these proceedings, I am sure in absolute exasperation.

Chairman

Would Mr. Dowling like to comment?

Mr. Michael Dowling

Not very much, except to say, as I have repeatedly stated, that the task force was given a remit and it has carried out that remit. Virtually all of what was agreed as part of the September 2019 deal has been implemented, including the bonus systems which have enhanced the price return to very many farmers. It is not true to say that there are elements that have not been generally implemented, other than the issue of the weighing in the lairage which some factories are operating and which others, for reasons they have explained, are not. Beyond that, the vast bulk of what was agreed as part of the deal in September 2019 has been implemented by the task force, as agreed.

Deputy Matt Carthy

I thank the witnesses.

Chairman

I call Deputy Fitzmaurice.

Deputy Michael Fitzmaurice

I would like to go revisit a couple of issues with Ms McPhillips. There are producer groups already operating in the sheep sector and they are working well. There appears to be a resistance to the producer groups among the factories on the beef side. Is it correct that approximately 70% or more of the beef we export goes to the UK for mince?

Ms Sinéad McPhillips

No. Approximately 50% of our beef, overall, goes to the UK by value and volume.

Deputy Michael Fitzmaurice

How much of that is mince?

Ms Sinéad McPhillips

I will come to the Deputy on that in a moment. Does he mean in terms of-----

Deputy Michael Fitzmaurice

Representatives of MII gave us figures indicating a huge volume of mince. My understanding on specifications, and I have done a bit of digging on it with Bord Bia, is that something like 750,000 cuts equates to 250,000 cattle but 750,000 cattle are needed to get enough cuts to be able to cater for demand. If the figure is approximately 50% of our beef, only 250,000 cattle, if they all had the right cuts, would be required for the specifications as against what goes everywhere else. I am talking about the full volume of cattle, which is 1.4 or 1.5 million. Is that correct?

Ms Sinéad McPhillips

I do not think the figure for mince could be as high as the Deputy suggested. The issue is that the UK is one of the highest-paying beef markets in the world. Certainly, UK retail is a highly-priced sector. Its preference is for British product in the first instance but Bord Bia research establishes that Irish beef is very highly regarded by UK consumers. They see it as almost equivalent to their national preference.

Deputy Michael Fitzmaurice

I have one problem. I am not blaming Mr. Dowling for this but how much did Grant Thornton get for these three reports?

Mr. Michael Dowling

I cannot remember offhand but we can find out.

Deputy Michael Fitzmaurice

The one problem I have is that one report was done on specifications and, whether we like to believe it or not, we have gone to the wrong people. In fairness, some people outside the country co-operated with Grant Thornton. However, on the value of an animal, the fact is there are now people around the world who are looking for many parts of an animal, including gallstones. We talked about the fifth quarter, offal and all the different parts but we have no genuine figure for what an animal is worth. We do not know, even though we have gone through three reports because we could not get co-operation. In my view, that report is not finished.

The officials talked about specifications. The person who actually does the survey should be in the shop or outside the door or wherever, in the same way surveys are done to see who votes for whom. Until we do that we are going nowhere because, as has been pointed by Deputy Carthy and others, nothing is written down stating that a certain animal was 36 months old and it was moved five times. At the moment, and I am reiterating this, you can get top dollar for any animal, no matter what it is, because of supply and demand. I am concerned that we have two reports from Grant Thornton that do not seem to be finalised because it said it could not get the information for one and the second, in my view, did not include the people it needed to. If I was sent to Dublin in a lorry to collect 100 cattle and I came home with 70 or 80, there would be queer looking. Grant Thornton should finish compiling those reports in a different way.

Any information can be found out nowadays. It is easy to look at the price of products on the shelf. I will give a very simple analogy. If I am selling to five different companies in five different countries, I know who they are. They are well known and their products are on the shelf. We can walk along the shelf, look at the price of the stuff and see how much it is per kilo. Did the factories give all the information about what they are getting for what they are exporting from Ireland? Would it be fair to say you would not need to be mathematician to find that out? Did the Department get information from factories in Ireland about what they get from retailers in the different countries they are selling to?

Mr. Michael Dowling

That was not the problem. The problem was what the retailers or food service operators were getting for beef. That information could not be got. The information on what factories get is compiled. That is how Grant Thornton was able to get the figure for the total value of the product exported from, or sold within, Ireland. That was not the difficulty. It is not as simple as going along, if I understand what the Deputy said, and saying we can find out what the retailer is getting because we can look at the price he or she is charging. First, it is nearly impossible to do that on any sort of representative basis but, second, a big proportion of what we sell goes into food service. Food service product comes out as a beefburger or some other sort of product, which is mixed up with other agricultural products on the plate people buy. It is not an issue that is very easily solved by doing a spot-check of what is on a retail shelf.

Grant Thornton had expertise and it did its best. It could not get the final price but it got the prices in between and that was, at least, beneficial in understanding what sort of gaps there are between farmer price and the price that beef is sold to the final customer, although not the final consumer. To do a survey of consumers to ask them what they think about specifications etc., would not necessarily give any information other than the fact that consumers probably do not know an awful lot about the matter. Producers are not selling directly to the consumer; they are selling directly to people who are either manufacturing, cooking or retailing the beef themselves. They are the people who create and who are the demand for Irish beef. They are the people Grant Thornton had to try to deal with.

Deputy Michael Fitzmaurice

That is grand. I think Deputy Flaherty wants to come in.

Deputy Joe Flaherty

I am okay. I thank the Chair.

Chairman

On behalf of the committee, I thank Mr. Dowling, Ms McPhillips and Ms Dunne for engaging with us on the important issue of the beef task force. As many contributors have said, thankfully, price is in a far better place than it was a couple of months ago. When the price dropped in February, it sent shivers up the backs of primary producers because they could see no logical reason for it. The world market was going reasonably well at the time and it really shook confidence. Thankfully, in the last two months, we have seen prices rise. As was said, it was getting to a place where people could not see beef farming being viable into the future. I thank the officials for coming today and for answering our questions in what was a fairly intensive session.

I propose we meet in private session tomorrow morning at 10 a.m. for a briefing from the Office of Parliamentary Legal Advisers, OPLA. It relates to Thursday's meeting with representatives of the horse racing industry. Is that agreed? Agreed.

The joint committee adjourned at 5.19 p.m. until 9.30 a.m. on Thursday, 8 July 2021.