I am glad to have the opportunity to contribute to this debate. Although I am, by fact and conviction a city dweller, I do not think it is impertinent for me to speak on the matter before the House at the moment. I say this for a number of reasons, the principal one of which is that this is a matter of grave national importance, a view on which there seems to be unanimity in the House. It is not just the immediate problem of jobs though everybody feels very strongly about that aspect and has compassion for people both in the farming industry, and involved in other associated areas of activity. In this context I was very glad that Senator Byrne mentioned the haulage industry. There are many people that I am aware of throughout the country who are affected by what has happened in the case in question who are financially over extended and who may have considerable difficulty in having the cheques honoured and moneys owed to them paid. I simply do not think it satisfactory that people should be left as the Senator said, "hung out to dry in this manner".
However, I see this whole problem as a national problem. I say that because of its importance but I would not want it to be though that I agreed with some of the previous speakers who have indicated that they feel there is a special problem of deprivation in certain areas of the country that is not reflected in the city. I just say that as a kind of a prior warning because I live in the north inner city of Dublin in an electoral area for Dublin Corporation in which there are levels if unemployment reaching up to 80 per cent so I can say that, although I have a position of privilege myself as a Member of this House and as a member of the staff of Dublin University, I live in an area of deprivation that is at least equal to anything that the rest of the country experiences. I do not say that with any pleasure. I hope that we can look forward with confidence to a time when there will be much fuller employment. However, that is a national matter. Now one must address the immediate consequences of the present tragic situation.
I have listened with great interest to people who spoke with considerable knowledge and expertise about the impact on the farming community in the immediate aftermath of the collapse of UMP but I think there is another and broader canvas that needs to be addressed and that is what I hope to do here today. I refer to the question of the lamentable failure of the beef industry over a number of years to be properly prepared, sophisticated and geared to the situations in the international marketplace of the late 20th century. The meat industry, and particularly the beef industry, have always seemed to me to go for the easy options of intervention and of selling into unpredictable and unstable markets. I can point to the record of this House as to when, for example, export credit guarantees were given in respect of exports to places like Iraq and Lybia. I suggested, that on political grounds, that was an inappropriate move but I said also at that time and, I retain that conviction, that it was a mistake in business terms to attempt to develop markets which were so internationally unstable. I believe our principal markets should be Great Britain and Europe, and we are in an extremely good position, if we take certain steps, to exploit that particular market. I have to say also that it is quite extraordinary that over the last short while we have seen the collapse of virtually the entire beef industry in this country; first of all the troubled Goodman company and now, secondly, Halal or UMP.
This illustrates to me the significant dangers of concentrating this very important national resource in the hands of what, if not a monopoly, is certainly a dangerously oligarchical situation and I do not think that is appropriate. We now have the consequence, and one could reasonably say that with the collapse of these two principal elements in the beef industry there has been a complementary collapse in the cattle trade. I understand from a contact in the midlands, for example, that if farmers are lucky enough to be able to sell cattle, they are getting a level of 80p per pound, whereas in order to survive economically and in order to make some small profit they need a rate of about 105 or 110 pence.
That indicates, in my opinion, the disastrous situation facing farmers if they are actually seeking markets into which they can sell their product at a loss. My heart goes out to them because farming is a difficult, unpredictable way of earning a living and this places particularly small and medium size farmers in a very difficult situation. What a tragedy because I was brought up in a country where there were all kinds of expressions like "beef to the heel, like a Mullingar heifer", where we were proud and we knew we had a quality product. This is something I want to return to, because there has been an absolute failure, due to the laziness, the greed, the inertia and the tendency to always go for the easy option, to capitalise on the native excellence of our product and establish it as a kind of brand image abroad, particularly within the European Community and the United Kingdom market especially.
I say this because it is obvious that what the beef industry have been doing is commodity marketing; they have not really been looking, in any serious way, for added value in the product as it leaves this country by developing specialised markets, frozen meats, establishing a brand image. It is perfectly clear that we can do this in this country. We have an excellent standard bearer in products like Kerrygold. Everybody in Europe knows Kerrygold; they are even selling millions of pounds worth of cheese to Greece which has its own indigenous, very well thought of cheese industry. I know this because I gave a lecture on James Joyce, Homer and the idea of epic, and the entire conference in Athens and in this land of Carpathos was sponsored by Kerrygold. I discovered that they were actually selling an enormous amount of cheese to the Greeks, which is like selling ice cream to Eskimos or coals to Newcastle.
I did not intend to waffle here today because I think it is an abuse of the Seanad if people who do not know something about a subject get up and simply, in order to fill up a quota, start to speak. I am aware that people with far greater expertise than I have have already contributed but they have principally addressed the immediate problem which they, as representatives mainly from the countryside, feel a special and valid need to address.
Something that, I think perhaps, has not been averted to, certainly at any great length, as I have been listening on the monitors, is a very significant report which is now 15 years old but the main theoretical outline of that report remains, in my opinion, still very relevant today. We have a copy in the Oireachtas Library and may I take this opportunity of complimenting the Library staff for the way in which they immediately are able to find even an obscure report when somebody like myself rushes in at the last minute and seeks it. They are extremely efficient and helpful in providing us with the instruments to perform our parliamentary function.
The report I refer to is interesting because there has been some criticism of the banks, as one might have come to expect in this House as a result, if I may say, of the O'Keeffe initiative, as it has been named and I would certainly be happy to join in many of the criticisms of the banks in certain respects. However, I would like to put on the record of the House the fact that as far back as 1977, the Bank of Ireland commissioned a report from McKinsey and Company called A Marketing Opportunity for Agricultural Products and it is one which I certainly recommend the Minister to reexamine — because I am sure it has already been examined. It seems to me that the theoretical basis for using this reverse as an opportunity to restructure the beef industry is contained in this report. If I may show my schoolboy French there is a French proverb reculer pour mieux sauter— you take a little step back in order to get a good jump forward: this is not a little step back — it would be trivialising and minimalising it to suggest that it is — but it is an opportunity to take stock of the beef industry and have a look at it.
I would like to refer to some of the comments made in this excellent report. The summary starts off by referring to the land as one of Ireland's primary national resources, and I think that we all, whether we are city dwellers or whether we are fortunate enough to live in the countryside, would agree that this is certainly the case. We have the essential capacity in terms of raw materials and a natural environment to produce products of excellent quality, but that is not enough. I would also have to say that in recent years, lamentably, this has been damaged by the use of angel dust and so on and by the unfortunate, inaccurate publicity surrounding things like mad cow disease which our vulnerable markets in the Middle East, for example, are very quick to capitalise upon. However, in dealing with the livestock sector, this report makes a number of important points and the first one is the requirement to improve the credibility of Irish meat products overseas. This should be a prime target now of the Government because there is no question of doubt whatever that in international terms, Irish agricultural products and particularly beef have suffered from lack of credibility because of the dangerous economic base — which was exposed in both Goodman and Halal UMP and also by the unwise policies of a very small minority of farmers in employing stimulants such as angel dust. What we have to look at is not just the situation of farmers on the ground but our capacity as a sophisticated society to create wealth from the products of the farm. This can be done by adopting a sophisticated and a properly applied marketing approach. This report refers in a very logical step-by-step way to the sequences that are necessary and I would like if I may to put some of these on the record of the House.
First of all, they identify market opportunities that contain the potential for stable long term growth and in which the enterprise or country has some distinct competitive advantage and, they have a rather interesting appendix dealing with how you actually identify the market opportunities and so on. May I say here again they talk about stable long term growth; what observer of the international political scene could possibly describe Iran, Iraq or Libya as markets having the capacity for stable long-term growth? Further on in the report they talk about cultural affinities. I do not know that there are that many cultural affinities, certainly not of the kind I would welcome, between this country and Iraq, Iran or Libya.
The report refers to taking whatever steps are necessary to consolidate the competitive advantage, for example, developing new products, establishing a brand image in the marketplace, building a direct presence overseas. Has this been done? No, it most definitely has not. Again I draw the attention of the House to the parallel I instanced with Kerrygold where in the dairy area we have successfully done this but in meat produce we have not. We see in Irish supermarkets Danish bacon, New Zealand ham, all this kind of stuff, but in Europe when you buy excellent Irish beef, you just buy beef: there is nothing to say, this is Irish, from the Emerald Isle, from the land which is unpolluted — which is a byword for excellence and a clean environment.
Their third point was that the Government and the industry must be prepared to commit the long term resources required to achieve success, involving not only marketing investment but also the capacity to sustain losses during an extended build-up period. Here both huge meat combines found themselves exposed because of various financial fluctuations. In the case of Goodman, the principal catalyst appears to have been unwise adventurism on the British stock market which, in my opinion, is completely inexcusable. The situation in regard to UMP is a little more confused.
Again, in talking about the need to identify markets, this report went on to say that additional wealth can be created, first, by finding stable consumer markets — they again come back to the idea of stable consumer markets which can be developed long term — for the increased levels of farm output predicted; second, by establishing a premium position for Irish products in overseas markets and, thereby, adding more value in Ireland and, finally, by exploiting opportunities for new product development by extending the range of products available in the market or developing by-product applications of existing processes.
In order to establish this pattern of growth, they went into some detail in a later chapter indicating precisely how they feel this capacity for growth can be generated and then sustained. For example, they indicate the proximity of the United Kingdom market and look at the particular preferences of that market. Again this is another thing that I do not think, very significantly, has been done. We have not actually identified the consumer preferences in the different markets into which we sell. They say that in the United Kingdom, for example, the market for frozen meat products had, in 1977, grown by 30 per cent in real terms over the previous five years and the delicatessen market by 90 per cent. Processed products increased their share of the total meat market from 22 per cent in 1970 to 25 per cent in 1975 and, they said in 1977 — they turned out to be right — that they were likely to continue to do so. They point out that these opportunities are potentially very attractive to Ireland and that packed and processed products command a higher added-value than the carcase product even though profits do not always increase proportionately.
They also examine — I find this very interesting — the different regional variations in taste. This is something they explore in terms of what quality actually means because quality is, after all, a function of perception. If a housewife goes into a supermarket she perceives as quality what she wants to buy. If the predominant taste in a particular regional area is for streaky bacon, then somebody going into a supermarket looking for quality will be looking for streaky bacon. However, if their notion of quality is lean meat, lean rashers and so on, they will be looking for lean rashers and that is what will indicate quality. There are significant regional variations which can be established so we can procure specific markets for specific elements and byproducts of the meat processing industry.
They amplify this point as follows:
The housewife in London, for example, likes well covered beef with a higher proportion of fat than does her counterpart in northern England or most continental countries and is prepared to pay accordingly. The purpose of controlling quality, therefore, is not only to ensure that all production meets minimum quality standards, although that is important, but also to provide an effective way of meeting consumer preferences and of obtaining the price premium that follows from doing this successfully.
They speak of meeting consumer quality requirements; God knows the image of Irish beef has taken one blazes of a dent with the revelations that have come out of Goodman about bad meat being sent back and recycled, relabelled and so on. It is a horror story in which the greatest marketing skills of the agricultural and meat processing agencies and the Government will have to bring to bear in order to counter the negative impact.
One way in which this can be done — as suggested here — is by the introduction of a proper classification scheme for meat products. Even back in 1977 they were saying that the beef sector was one area which principally needs this and this can be done. Every carcase can be given a descriptive class on a dead weight basis and the price paid to the producer reflects this kind of quality grading. In addition, if this becomes fully effective and operative, then there can be a feedback into the farmers' network so that they will be advised as to the kinds of meat it is most economically appropriate for them to engage in producing.
I would like to end with two points. I know this report is out of date by 15 years, but, as I said to the Minister, I believe the theoretical approach contained in it provides the framework for a move forward in this tragically troubled industry. My final word is one of real sympathy to the farmers of this country, in particular to the workers in the beef processing plants and their families because it is a tragedy to see on television night after night during the past week people who have opted to stay here and to be part of an ever dwindling workforce in the rural community and who now appear to be cruelly, by an accident of economic circumstances beyond their control, on the point of being deprived of this possibility of staying in their own country. I wish the Minister well in whatever he can do to rescue this lamentable situation.
