I move:
That Seanad Éireann approves the following Order in draft:
Córas Beostoic agus Feola Act, 1979 (Levy on Slaughtered or Exported Livestock) Order, 1985
a copy of which was laid in draft before the Seanad on the 13th day of December, 1985.
Córas Beostoic agus Feola Act, 1979 (Levy on Slaughtered or Exported Livestock) Order, 1985: Motion.
It is proposed in this order to increase the levy payable to CBF in respect of cattle and sheep slaughtered within the State or exported live. The present rates at 70p for cattle and 7p for sheep have remained unchanged since 26 July 1982. The new rates proposed are £1 for cattle and 10p for sheep. Section 28 of the Coras Beostoic agus Feola Act, 1979, provides that orders increasing levies payable to CBF may be made only after a resolution approving the new rates has been passed by each House of the Oireachtas.
Córas Beostoic agus Feola is a statutory body which replaced Córas Beostoic agus Feola Teoranta, a company limited by guarantee, in 1979. Its purposes are, broadly, to promote the export of cattle and sheep and their meats, to provide promotional and marketing support to exporters and to promote beef, mutton and lamb on the home market. Its activities have included intensive promotion of vacuum-packed beef on the German and United Kingdom markets, as well as a continuing emphasis on the market intelligence work which it developed in previous years.
CBF have two sources of income, namely an Exchequer grant-in-aid from the Vote for Agriculture and the proceeds of levies on cattle and sheep slaughtered within the State or exported live. It is estimated that in 1985 income from the levies will amount to about £1,300,000 while the grant-in-aid will come to £787,000.
The CBF corporate plan for the years 1986 to 1990 envisages a significant increase in funding to enable it to expand and develop its promotional work. The estimates for 1986 contain a grant-in-aid of £1.1 million for CBF which represents an increase of almost 40% per cent over the 1985 level. That increase demonstrates the Government's commitment to the marketing of meat and livestock, and to the activities of CBF in particular. CBF have consulted producer and trade interests and they have agreed to increase the levies as their contribution towards expanded activity by CBF. The draft order now before the House will give statutory effect to this increased contribution. It will raise the levy on cattle from 70p to £1 and that on sheep from 7p to 10p. The new rates are expected to yield an income of £1.8 million in 1986, which with the £1.1 million from the Exchequer will give CBF a total of £2.9 million next year as compared with about £2.1 million this year. I propose to bring these rates into effect on 1 January 1986.
Could I ask, first of all, if the Minister is taking the other motion immediately after this? Is the other order being discussed?
It is not being taken.
Is it being taken today, Senator?
If the Social Welfare item is disposed of by 5 o'clock. If it is not ——
An Leas-Chathaoirleach
The Leader of the House has indicated that we are taking No. 4 now, and then we are going back to No. 3 and then to No. 5, Senator Hussey.
I was only asking because if the two motions were taken together it would broaden the scope of the debate. In that way we would possibly have more to say on the matter. However, I abide by the ruling of the House.
In a year like this any increase in levies would have been resisted. Indeed, I am sure none of us like to see those levies being increased, particularly when farmers' incomes are taking a tumble and when the prospects for 1986 seem very gloomy, according to the forecasts emerging at present. However, I accept that CBF are doing a good job in the export market. They have developed markets in many countries where we did not have a market before. There is still very considerable scope there for CBF to develop those markets further. The last increase given was in 1982. We are fortunate, in one sense, that we have got away with it for so long. When you consider all the levies that are imposed on farmers at marts and creameries, and so on, it all adds up to a sizeable sum. It is all being taken out of the profits of the farming community. Those profits are small enough at present, particularly with the weather conditions that we had this year.
There is very little that we can say on this order except to agree reluctantly to the increase being granted. There will be an increase from 70p to £1 on cattle and from 7p to 10p on sheep. It is hoped that that will yield £2.9 million next year as compared with £2.1 million in the current year. I hope that CBF will make this increase worthwhile for the farmers who will be paying it and that they will be able to develop the market further. I think there is considerable scope for the development of the market in the "vac-pack" meat area. This has worked very well in Germany and other countries. I feel it can be developed further in other European countries. I hope that the increase we are giving here today will enable CBF to undertake an expansion of that market.
I believe that the measure of increase proposed to support CBF financially by increasing the levies is necessary. It is warranted. I am confident that it will yield the results we all expect. As was stated by Senator Hussey, it is more than three years now since there was any adjustment in the amount of the levy. It is no surprise that a levy increase would be necessary at present. I believe that, as an indication of the Government's absolute sincerity about the role of CBF, the contribution can highlight the fact that the Government are increasing their contribution by 40 per cent. The Government's contribution as stated by the Minister, is now £787,000. This is a measure of the Government's confidence in CBF. It is true to say that an organisation like CBF, which is a promotions body, is difficult to assess entirely. It is difficult to quantify precisely what it has done and what it has not done. At this stage the need for an effective promotions board was never greater. I feel, and I have stated this in this House before, that CBF rather than being entirely as it is, a promotions body, should have some degree of direct marketing responsibility.
I am aware of the various ramifications of the marketing of meat and meat products but, at the same time, I believe the Minister and the Department of Agriculture should look at the whole question of the future of CBF as a promotions body exclusively. They should examine the desirability of their being given a degree of responsibility in the direct marketing area. At a stage when the whole future of intervention and the buying of beef is very much to the fore, when we are informed that intervention for the coming season will operate only in special circumstances, it makes it all the more important to have a dynamic and vigorous promotions body like CBF to ensure that we sell in the marketplace.
The present chairman of CBF, Mr. Brosnan, and the chief executive, Mr. Moore, are excellent people to head an organisation of such importance. It is also relevant to put on record that CBF are representative both of the trade and also of those at producing level. There is a direct input of all parties concerned into the operations of CBF. It is also worthy of note that the farming organisations and others directly involved in this entire important area are supportive of the measures announced today. One could not overstress the importance of marketing. Up to now in the area of meat marketing and other marketing spheres we have been tinkering around in many instances. It is good to note that there is now a programme up to 1990. This is very encouraging. This programme, while it concentrates a good deal on marketing within the European Community, also, of course, extends to third countries.
Emphasis will be placed on the whole question of added-value. Added-value is something that has often been referred to in relation to meat, but not enough has been done about it. There is great potential in the area of added-value where we would aspire to process meat to a stage where it is suitable and fit for consumption and that we get as near as possible to the consuming stage rather than sending out as at present a large amount of our beef exports in the form of sides of beef. There is vast potential if we were to concentrate meaningfully on added-value in the beef sector. Many jobs could be created. A great deal more could be earned for the economy which would alleviate serious unemployment and at the same time help significantly the balance of payments deficit. For that reason the areas which CBF will be concentrating on in the future are deserving of the fullest support possible.
When speaking about added-value it is important that we couple with it the whole area of research into consumer tastes, because we have not concentrated sufficiently in the past on finding out and ascertaining what precisely the consumer wants. This effort by CBF in the future will do a great deal to ensure that we are producing for the needs of consumers rather than merely trying to sell our products. This point cannot be overstressed. It is being accepted by practically everybody that we must produce for the marketplace rather than trying to market what is produced.
One could talk at length about the whole area of CBF, their activities, projections, plans and so on. There is no question but that CBF have a very vital role in the future. The adjustment in the levy for CBF to £1 and 10p for cattle and sheep respectively is indeed warranted. I subscribe to the view expressed by Senator Hussey that people are not in favour of levies. As a producer of beef I would prefer if there was no levy at slaughtering stage. But one has to accept the reality of the situation. If we want a good job done it must be paid for. It behoves us all not alone to support fully the measures proposed by the Minister with regard to CBF but to ensure on an on-going basis that we would contribute in whatever way possible to making CBF more effective. There is one important point I would put to the Minister, that is in regard the performance of CBF. In so far as it can be done their performance should be monitored on a fairly frequent and on-going basis.
I am satisfied that the £2.9 million that CBF require to operate on an annual basis is quite realistic if one were to compare it with other organisations and bodies who might not have anything like the far-reaching responsibilities that CBF have. In order to arrive at that figure the Government have shown their absolute sincerity towards CBF by increasing by 40 per cent their contribution to the total amount. It is something which both sides of the House must support very fully.
This order, which increases the levy from 70p to £1 for cattle and from 7p to 10p for sheep, gives us an opportunity to discuss the area of agricultural development. Whereas I accept that it is vital that CBF play a dynamic role in the promotion of the product at home and in particular abroad, it is important that they be funded to the best of our ability as a nation and by the industry itself. For that reason I am pleased that in the consultations that took place between the producers and the trade agreement was reached on the principle of increasing the levies, which have remained at their present level for a period going back to 1982.
CBF in their corporate plan have envisaged that they would have to develop their promotional role. Any of us with knowledge of the working of the intervention system will realise that it is vital that we have an agency to play a dynamic role in the marketing of our product. There is about 700,000 tonnes of beef in intervention. Anybody with any regard for the future of the industry will realise that that situation could not continue without some dynamic body to ensure that these products are marketed outside of the intervention system. Otherwise that system is likely to collapse, and the case we would make for the retention of CAP would be undermined, particularly when we are talking about a product which, out of intervention storage, does not lend itself to be transported to the starving people in Ethiopia and Sudan. Once the product is out of intervention storage the problems associated with transporting it to warmer climates ensure that the product will be inedible within a day or two before it gets to its destination. For that reason beef intervention is a very tricky matter. Therefore, this new role that CBF are taking upon themselves with assistance from this levy will be vital to the maintenance of what is a very important industry.
There are quite a number of people employed in the production of beef. There are many people employed in factory jobs in the processing of beef products apart from what is exported on the hoof. We must welcome every opportunity to ensure that as much processing as possible take place in this industry to create as many jobs as possible at home and to add as much value as possible to the end product. If we take that into account and if we take into account also the corporate plan recently announced by ACOT for the development of agriculture, we will see the importance that ACOT have put on the development of the beef industry. For the past number of years those involved were either earning no profit or a very small margin of profit because of the marketing situation. With most of our milk producers faced with a milk levy it is important to know that farmers can turn to the production of beef in the knowledge that a market will exist there. As Senator Hourigan stated, it is time we went out to sell what the market requires rather than producing what is not required and then trying to sell it. This is a fallacy and such a policy has been a failure.
The Irish beef producer has made many changes in recent years in trying to ensure that the proper standards of grading were achieved and that the right type of breeding was used to produce proper beef at the end of the day. We have made a major change in this already. Any effort to open up new markets, whether they be in Germany, the United Kingdom, in any other part of Europe or in the Middle East, must be assisted in every way possible by this House and by the industry. I am glad that agreement has been reached on this in principle. It is imperative that the industry realise that they as producers have a responsibility also to be associated with marketing. CBF are the correct agency to handle this. They have already made contacts and have a very good standing throughout the world. I will not go into the recent controversies about the personnel involved in that marketing board. It is imperative that the industry can turn to some body with the contacts and the expertise which CBF have to sell the product at the best possible price, thereby producing results for the producer, the consumer and those employed in the industry.
I commend the order to the House. I hope it will have the desired effect and that the overall increase in the allocation to CBF will be sufficient to allow them to carry out the kind of programme they want. I trust that, when the Minister of State, Deputy Connaughton, makes a report on this area, the results of today's work will be reflected on the ground and that the Irish farmer, beef producer, worker and indeed the nation as a whole will be the beneficiaries of it.
While most of us as producers normally do not welcome any increase in levies, the increases under the headings of both cattle and sheep are too small to talk about at present. Agreement has been reached with the producers in regard to these increases. It is very important in these times that CBF, a board with renewed vigour, should go out to search for markets. We all know from television and other sources about the beef mountain, the butter mountain and the milk lake. The producers of both cattle and sheep are always concerned when they read about these surpluses. The main worry of most producers at present is to find a market, and we hope that this increase will result in better markets for us.
There has been a certain amount of uncertainty in the cattle trade over the past number of years. We have some excellent producers, but the margin of profit at the end of the day has declined in recent times. For that reason it is important to producers to get the right price for their produce. Marketing at present is very competitive. In recent times we have seen certain signals from the EC regarding intervention. They are inclined to cut back on intervention, which would be a serious blow for the producers. However, we have a Minister who is fighting our case daily and weekly in relation to these cutbacks.
In regard to the prices we receive, it should also be mentioned that the restrictions on hormones or implants for cattle will reduce further the profit margin at the end of the day for the producer. Therefore, it is necessary that we find the right markets.
In regard to sheep, it is true to say that the margin of profits, plus certain subsidies in recent times, has been reasonably good. Therefore, the increase of 3p is nothing to talk about.
In an all-important sentence in his speech the Minister said that CBF have drawn up this year a corporate plan for the period from 1986 to 1990. He went on to say that the plan recognises that in those years livestock and meat producers are likely to find themselves operating in an increasingly competitive market, both in the European Community and in third countries.
When we talk about the beef and sheep producers we have to mention the milk producers also. The good prices we have had for our beef over the last number of years meant that the producer was in a position to pay very high prices for calves, perhaps in some cases too high. When they saw a future for their livestock perhaps they were encouraged to pay those prices. This was a great help to the milk producers because if they did not get the necessary increases — I am not saying they did not — it meant that the price of their calves adequately compensated them for any loss they might have on the other side. I know from speaking to many farmers who are quite prepared to continue producing cattle that their only concern is the markets. As Senator Hussey mentioned earlier, the cost to the producer can amount to a lot of money. Nonetheless, there is still enough confidence left in the trade to enable people to continue. People are still encouraged to produce more cattle and they always respond to the call — down through the years this has been the case. It is important to keep these people producing cattle and sheep because if they were to produce something else, such as milk or grain, we would also have over-production in those areas.
In these days when one talks about finished cattle one is talking about a price of £700, £800 or £900. The levy would mean about £1 off at the end of the day, which I do not think matters too much. We should give this new board all the help and encouragement possible. We have the right people there to do the job that is so badly needed to be done. For that reason it is good to see them getting this 40 per cent increase from the Government. I commend this motion to the House and I wish the new board of the CBF every success, because, naturally enough, their success will be our success at the end of the day.
Firstly, I want to thank the Senators who took part in the debate. It is, as all Senators said, very important that we have a good export arm in CBF and I have no doubt that the additional funds which have been made available to them because of this order will enable them to do what most Senators have said and indeed what has been said by Deputies in the Dáil.
Question put and agreed to.