Skip to main content
Normal View

Seanad Éireann debate -
Thursday, 28 Jun 1984

Vol. 104 No. 8

Exported Live Stock (Insurance) Bill, 1984: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

The Exported Live Stock (Insurance) Board was set up under statute in 1940 at the request of the Irish livestock trade. The Bill now before the House arises from a request from the trade and from the board itself to wind up the board because of the decline in live cattle exports to Britain. The basic legislation contained no provisions whereby the board might be dissolved and winding up, therefore, requires enabling legislation.

Under the Exported Live Stock (Insurance) Acts, 1940 to 1950, exporters of cattle, sheep and pigs are required to pay into an insurance fund a levy in respect of each animal exported direct, or via Northern Ireland, to Britain. The fund is administered by the Exported Live Stock (Insurance) Board, which is a statutory body set up under the Acts and appointed by the National Executive of the Irish Live Stock Trade. Payment of the levy entitles the exporter to compensation for damage to, or loss of, animals from the time of shipment, or from the time of entering Northern Ireland, until up to 84 hours after release from the landing place in Britain. These statutory insurance arrangements were set up at a time when livestock exports were almost exclusively to Britain and they were designed to be entirely self-financing.

In the past ten or 15 years there has been a sharp downturn in live cattle exports to Britain and in recent years disbursements, mainly administrative expenses, from the fund have exceeded receipts from the levy. In the forties exports of live cattle to Britain, and Northern Ireland, were running at 430,000 head per annum. In the late fifties they exceeded 700,000 head but by 1983 they had fallen below 24,000 head. Exports of live sheep and pigs to Britain over the years have not been significant.

The balance in the fund is presently less than £10,000 and consequently the board is operating under the threat of possible insolvency. The National Executive of the Irish Live Stock Trade and the board have indicated that the possibility of regaining a situation of financial viability either by extending the compulsory insurance arrangements to cover exports to all destinations or by increasing the rates of insurance levy would not be acceptable to the livestock trade generally. I think that is the crucial statement.

The current non-UK trade, which is mainly to North Africa, involves a much greater insurance risk and would call for very high premiums. The exporters involved in that trade prefer to make their own insurance arrangements, as would exporters to Britain if faced with substantially increased rates of levy. The National Executive and the board, therefore, see no option other than to wind up the activities of the board. Exporters of livestock to Britain will then have to make their own insurance arrangements in the same way as shippers of livestock to other destinations do at present. In view of the precarious state of its fund, the board has taken steps to have the risk of possible claims arising during the winding up process underwriting by a commercial insurance company.

In addition to the fund balance of under £10,000 the only capital asset which the board owns is an office at North Circular Road, Dublin, which was acquired in 1972. The Bill proposes that the disposal of these premises should be subject to my approval.

The board currently employs two officers who have service of 41 years each. Two other officers who had service of 39 years and 32 years were made redundant in March. The board has been contributing to a pension scheme with a pensions firm on behalf of the staff and the determination of final pension and other arrangements for the staff on the termination of their employment is a matter for agreement between them and the board management within the resources of the board. However, there is a provision in the Bill whereby the Minister for the Public Service will be the final arbitrator in the event of any dispute on pension or other terms between staff and management.

Finally, the Bill contains a provision whereby the disposal of any residue after all claims and liabilities have been discharged will be subject to my approval.

Because of the precarious financial state of the board it is important that the possibility of claims should cease as soon as possible. Dáil Éireann passed this Bill yesterday. I would like to thank this House for agreeing to deal with the matter quickly so that the winding-up process can be concluded as soon as possible.

This seems to be the week in which we see the abolition of State boards. Yesterday we had the dissolution of An Chomhairle Olla which we objected to very strongly. Today we have the winding up of another State board, the Exported Live Stock (Insurance) Board. While we objected yesterday and today to the abolition of An Chomhairle Olla, I can see the point in the Minister bringing this legislation before the House. Certainly I have no intention of opposing this Bill, particularly since the request has come from the exporters themselves that this board should be wound up because, as the Minister has rightly stated, the statutory insurance arrangements were set up at a time when livestock exports were almost exclusively to Great Britain and they were designed to be entirely self-financing. The situation has changed in the intervening years. We are not exporting the same volume of beef on the hoof and we are not exporting store cattle to Great Britain, as was the case in the past.

Last year we exported 200,000 head of cattle live and 231,000 tonnes of beef. This is where the change has come about, and this is as it should be. We have been requesting for some time that more cattle be slaughtered here, that more processing take place here and, consequently, more jobs would be created for our young labour force. While we all want to see this happening, we do not want to see the live export trade eliminated altogether because it is very important that there be an element of competition there. We know what happened in 1973 when the factories had a monopoly of the trade. The people who suffered were the poor farmers who unfortunately had to sell their cattle to the factories. We do not ever want such a situation to arise again. For that reason, it is very important that we have competition between live trade, exports of vac-packed meat and so on.

At the moment we have a good trade to North Africa. I am sure that has contributed significantly to the prices that have been obtaining in the cattle marts in this country for the past couple of years, and I hope that trade will continue. Perhaps we could make greater efforts to get more cattle into Great Britain. It has been our traditional market down the years and there is no reason why we should not explore it still further.

With regard to the processing of our meat, much can be done on the European market. In Germany, Irish beef is known to be of a high standard and is advertised there as Irish beef and under an Irish label. This does not happen in Great Britain, because for political reasons the Irish label is not used. The Irish label is not used in France either. This is a pity, but one can understand the reasons for the France farming organisations insisting on this. They do not want to see Irish meat promoted in their country.

The export of cattle and beef is making a very significant contribution to our balance of payments and I hope every effort will be made by our Government to improve that situation. For the past few years we have been trying to increase our cattle number but we have not made any great progress. I hope that a renewed effort will be made to increase our cattle numbers. I do not know what scheme might be introduced, but I am sure this is something the Departments are monitoring at all times. Some of the schemes which exist at the moment do not seem to have any great impact. I thought the payment of cattle headage grants, the calved heifer grants and all the other support schemes that have been made available to our farmers would help to increase the cattle numbers but that does not seem to be the situation at present. The Government's decision last year to reduce the ceiling of off-farm employment from £5,000 to £3,500 is not going to help the situation either because farmers who had part-time employment and who qualified for these grants under the old system will no longer qualify and therefore they will not be producing the extra cattle we hoped for.

This is a narrow, technical Bill and we on this side of the House fully support it. I hope that the people working in the insurance board will be compensated. I understand some people have been employed there for a long time and I hope they will be adequately compensated. The fund is not a very big one and I am sure the Minister will find somewhere to dispose of the £10,000 and I am sure he will find use for the office in the North Circular Road. I support the Bill and realise the need for bringing it to the House at this stage.

I welcome the Bill. The board have outlived their usefulness because the export of live cattle to Great Britain and Northern Ireland has diminished over the years. Like Senator Hussey I know how important the live cattle trade is to our farmers. Most of our live cattle trade is with North Africa and people trading with North Africa can arrange their own insurance. Much is said about the added value of killing and processing our cattle at home, but we still depend on the live trade. We know we could break into good markets in Europe but the danger there would be the upsets caused by strikes in factories. A few weeks ago the meat trade nearly collapsed and this is still affecting prices. We have the potential and it is a pity that we cannot look after our beef so that we will not be vulnerable to upsets. I agree with the principles of the Bill and I support it.

I do not know if I can run down the stream as simply as my colleague, Senator Hussey, and the other speakers on the termination of this board. This move is a continuation of the spate of the winding up of boards as Senator Hussey said. I do not want to doubt what is in the Minister's speech but insurance is more necessary now than ever before because we export livestock to destinations in the Third World.

In 1941 the board were set up to deal with the export of cattle, sheep and pigs to Northern Ireland and the United Kingdom and the board have given a very worth while service. I am a livestock exporter and during that period I availed of the insurance services whenever an animal died or was injured because of stress. They have paid out approximately £4 million to £5 million on claims to date. The Irish livestock exporters were always secured because they knew they had insurance cover. Every time we have a change of Government we have a spate of closures and redundancies and this is happening now at a time when job creation should be our first concern. The number of cattle being exported to Britain at present has decreased, but not enough to warrant the closure of this board.

I would like to see legislation introduced updating this board to include countries outside the United Kingdom. That would stabilise the insurance board rather than terminating it. Thousands of cattle are exported to the eastern bloc and to countries outside the United Kingdom. Because of the long sea journeys involved, sometimes more than seven days, and the animals suffer a lot of stress, the livestock exporters should have independent insurance cover. The Minister has a responsibility in this area.

I will deal now with the modernisation of transport. People sell their horses and send them by air because of the long distances involved. Some farmers experimented and sent their sheep abroad by air rather than by sea. Many new boats plying between Ireland and the eastern bloc have been reconditioned but the air conditioning in these boats may not be suitable for the transportation of animals. There is a great need for an extension of the insurance board rather than its termination. However, it is on the cards to terminate this board and nothing I say can change that but I will have something to say about this on Committee Stage. There are some Deputies, Senators and officials of Departments who would love to see the live export cattle trade abandoned but there are other Members of the Oireachtas who would not like that to happen because the day that happens will sound the death knell of our farmers. If the live exporters do not compete with the fresh meat exporters there will be a drastic drop in trade. If all these facilities are taken away there will be a break down of the organisation. I would not like to see this happen.

It is said if no livestock is exported, this would lead to more employment at home. But it does not work that way. We are exporting most of our beef as forequarters and hindquarters but it is not processed here. That argument does not hold up, because the fresh meat exporters are not processing their meat here, and they are not giving employment. I will be asking questions on Committee Stage.

I thank Senators for their contributions although some of the arguments were not directly related to the Bill. The livestock people have asked to have this insurance board terminated. This is not something we are imposing on them. The board were set up for a specific purpose which no longer exists. This type of insurance became too expensive for the few people involved.

I would like to sort out any confusion there might be about the shipment of animals to eastern bloc countries or to North Africa. The people involved have stated quite categorically and unequivocally that they wish to have their own insurance for these animals. We have no hassle with that. If that is the way they want it, then so be it. It is important that we inspect these boats. Our veterinarians travel on the boats. We insist that the boats are properly ventilated. The customer is always right and it is in our own interests and in the interests of our exporters, that the animals arrive at the other end in good condition. There is no argument about that.

In the past we exported a lot of forequarters, hindquarters and carcase beef. There is an increasing volume of vac-pack trade and processing. This is something I welcome. While I agree that the live end of the business is very important, and is something I have had to defend from time to time, we have to be thinking more and more in terms of processing. I would like to see inter-factory competition.

Senator O'Toole was worried about somebody having a monopoly of the processing industry. That would worry me. In the Cork area there is a new group engaged in a very big operation. They will be processing with special reference to the eastern bloc countries. They will be in competition with Cork Marts and with everybody else. That is the sort of competition I would like to see eventually. On the North African side, I think it is well to be involved in the live trade and to develop it further so that when these countries are ready to accept processed frozen products we will be the obvious people to turn to. We have to keep a foot in the market, as it were.

The trade have asked us to wind up this board in a responsible and amicable way and we are doing this. This was a self-financing operation but the danger is that it will not continue to be so. The few people who are exporting to the United Kingdom have indicated quite clearly that they would prefer to make their own insurance arrangements because they would work out a lot cheaper, and we are complying with their wishes.

Question put and agreed to.
Agreed to take remaining Stages today.
Top
Share