Seanad Éireann debate -
Wednesday, 13 Feb 2002

Vol. 169 No. 4

Beef Industry: Motion.

Mr. Connor:

I move:

That Seanad Éireann condemns the failure of the Minister for Agriculture, Food and Rural Development to address the crisis in the beef industry; to bring forward proposals to rid the national herd of remaining cases of BSE; and his utter failure to simplify the application documentation for the various premia and income support schemes which has given rise to the disproportionate and unjust penalty system.

There is a slight misprint on the Order Paper regarding the motion, but I do not know whose fault it is. The motion refers to proposals to rid the national herd of "remaining" cases of BSE, but should refer to proposals to rid the herd of "recurring" cases of BSE.

I welcome the Minister of State at the Department of Agriculture, Food and Rural Development, Deputy Davern. I would have been delighted if the Minister, Deputy Walsh, had come into the House as most of my comments are directed at him. However, I do not wish to take from the work of the Minister of State. I have little criticism to make of the Minister of State as most of my criticism is directed at the Minister.

This debate is timely as agriculture remains one of the pillars of the economy and continues to face difficulties. We are on the eve of the mid-term review which arose from the Berlin summit in 1999. The last set of CAP reforms included a mid-term review to begin in 2002 which has to be completed by early 2003. Therefore, it is timely that this House makes an input into the position to be taken by Ireland regarding the crucial mid-term review. The general outlook is that the review will result in more cuts in, and pressures on, the CAP.

Irish farmers are among the lowest paid in Europe. The average farm income in Ireland is about €13,000 or €14,000. One of the three issues which I have identified for the purposes of this debate is the situation faced by beef farmers. On average beef farmers earn less than €7,000 per annum, an income which would keep one just above the poverty line.

I wish to deal first with the critical issue of beef. There is much talk on the part of the Department and the Minister regarding the reopening of markets for Irish beef. Our main market is the UK. Our current situation is similar to that of the 1940s, 1950s and 1960s, prior to our entering the EU, in that the vast majority of our beef has to be sold to the UK. All of our international markets are closed. There has been much talk of the reopening of the Egyptian market. Technically speaking that market has reopened, but not one ounce of Irish beef is being exported to Egypt which was one of our best markets.

Commissioner Fischler and the Minister promised that when the Egyptian market opened there would be a move to increase export refunds, but this has not happened. Why has there been no move to increase export refunds to third countries as promised by the Minister and the Commissioner? Such an increase would improve access to the Egyptian market where we face difficulties competing against cheaper beef from India and Brazil. There has never been a more opportune time to address the problem of export refunds. I would ask the Minister of State to address this issue first. It is a pity the Minister is not here because there is a beef management meeting in Brussels this week and I want to know whether this issue will be raised.

The Minister is fond of, and has confidence in, Bord Bia. According to the board, in the coming year we will need markets to take an additional 100,000 tonnes of Irish beef. This year we will not have the slaughter scheme which took a significant amount of beef off our market last year and we have no international markets, other than Russia. We had profitable markets in Indonesia, the Philippines, Algeria and South Africa which took 100,000 tonnes of beef from the Irish market. However, all of these markets are now closed, except Russia.

If Russia takes 30,000 tonnes, at best, this year, what will happen in August, September and October when there is a glut of cattle on the market? What provisions are being made for new markets in these countries which are closed to us? They are closed due to BSE to which I will come in a moment, but something must be done to ensure that the international marketplace in which we had several customers and where we have several potential customers is opened to us.

We do not want a repeat of what happened last August. In three weeks of that month when the Minister was on holidays and Brussels was closed, the price of beef over 30 months old went into free-fall, dropping by 15p or 16p per pound. Thousands of farmers were ruined by those events because there was a large number of cattle over 30 months old in the herd at that time. They were fetching reasonable prices throughout June and July, but in August when a glut suddenly appeared, they suffered the brunt of it. Nothing was done. The price fell, on average, by £100 to £120 per head. The Minister was away on holidays, Brussels was closed down and nobody cared. Everyone had their backs turned. That is not acceptable and it should be an election issue.

That kind of thing cannot be allowed to happen in the autumn of 2002. Prices are currently reasonable or even good because of the pick-up in trade in the UK as a result of the slaughter that took place during its foot and mouth crisis. This will not last when the cattle start to come off grass feeding in August, September and October and maybe a couple of weeks of November.

The critical issue of the beef market must be addressed in the coming six months or so. I would like the Minister to provide some answers in his reply this evening – not just a banal spiel written by his Department officials, but direct answers to our specific questions. The main problem in the beef industry is BSE, which is a very serious matter. Other than a policy of saying as little as possible, no policy exists.

I obtained some figures for BSE incidence today from the Department of Agriculture, Food and Rural Development and they are quite worrying. In January 2001, 19 cases of BSE were reported. For the next few months everything was all right but come August, 41 cases were noted. In September there were 33 cases, in October 26 and in November we had the highest figure ever at 53. In December, leaving Christmas aside as cases are only noted during slaughter, there were 22 cases. In January of this year there were 42 cases and at least ten cases have been reported in the first half of February.

Something must be done about this. We have never addressed the question. Enormous damage is being done. These figures will leap up and bite us later this year. The excuse that will be used by our customers, the Saudis, the Indonesians and the South Africans, is the huge number of BSE cases in the national herd.

Has any thought been given to a targeted cull of cattle in certain areas, for example where farmers were customers of the seven or eight feed compounders who were the biggest offenders in manufacturing the product which gave us BSE? We should be able to identify them. Female animals are the most numerous victims of BSE. I am not sure what percentage of animals in the dairy herd are over five years of age – perhaps Senator Kiely, who is a dairy farmer, could advise us on that. It may be as high as 50% or it may be less. A major problem is that a total cull over six or seven years of all the animals at risk, with full compensation, would be extremely costly, to say nothing of the huge disruption which would be inflicted upon the dairy industry and on milk production.

However, something must be done. We must introduce a targeted cull of animals of a certain age, or animals in certain herds which have been particularly at risk from infected feed. We know that the feed was manufactured by six or seven compounders and these are only the worst offenders. Not a hand has been lifted against any of those compounders, but there should have been. Later in the debate we will talk about the penalties placed on farmers who make simple errors in application forms and so on. No penalties have been imposed upon these people, no more than in respect of the wrongdoing uncovered by the beef tribunal. These people have done enormous damage to this critical sec tor of the industry which is still the largest in the country.

We must find a new approach to the problem. Perhaps radical solutions are called for, but statistics show that more than twice as many cases of BSE showed up in January 2002 as in the same month in 2001. The amendment to the motion states that we are putting in place a better set of detection controls and so on. However, this is not the point. Our international customers will be reading these statistics. We must end our policy of shushing and saying nothing, because it is simply not enough.

The level of frustration and anger boiling up among farmers about bureaucracy and penalties is quite something. We will all get it in the neck during the election campaign but the Government will deservedly get quite a roasting from the farming community. An opportunity has been missed. An agreement on integrated controls was reached in December between the European Commission and this country, but nothing was done during those talks to simplify the application system or to alleviate the draconian nature of the penalties. Farmers bring these upon themselves by the simplest human error of not ticking a certain box or answering a question. The questions are not simple. The application document is convoluted and deliberately complicated. The form of words used is different for each question. Phrases such as force majeure are used. An ordinary farmer may never in his education have been exposed to phrases such as this. I do not know what it means. A phrase such as “in circumstances beyond your control” could be used instead, but the Department puts in something like this to confuse people. It is totally unnecessary and is typical of the abstruse and inscrutable nature of the wording used. The Minister is smiling, but this is a serious problem. I can assure him the smile will be wiped from his face during the election campaign

Mr. Davern:

I have no doubt that it will.

Mr. Connor:

If what I hear is anything to go by, this issue will have to be addressed. I hope to return to this later.

Mr. Davern:

The Senator should see the letters coming from doctors who understand force majeure.

Mrs. A. Doyle:

It is with great pleasure that I am here to second the motion proposed by my colleague, Senator Connor, on behalf of the Fine Gael Seanadóirí. I am here not just as a Member of the Seanad but as a member of the European Parliament, of the European Parliament's agriculture committee and of its environment, public health and consumer affairs committee.

In the European Parliament, food issues and public health issues related to food are separated from agricultural issues, which is not how things are done here. I have been proposing discussion on this issue in Ireland for many years and the next Minister for Agriculture, whoever the Fine Gael Minister may be, must consider it seriously. At this point in our development, consumer-related food issues must be separated from farmer-related agricultural issues because there can be conflicts of interest. One Minister must be master of two sectors. Even if there is no conflict of interest there is perceived to be one by the public and that in itself is a problem. The food brief must be separated from the agriculture brief.

I concur with all my colleague has said about the crisis in the beef industry. The continuing importance of beef production to Ireland and the Irish economy must be underlined. The figures have been rehearsed many times on the Seanad record. The bottom line is that we must export up to 90% of the beef we produce. Virtually every market is still closed to us because of the tragedy not only of BSE but also of foot and mouth disease, which came and went in the meantime. During that outbreak, BSE took a back seat but although it was no longer on the front pages it was always there. Due to these crises, the only markets still open to us are Russia, as has been indicated by my colleague, and – in theory – Egypt, although nothing is going to the Egyptian market.

Having promised an increase in export refunds, the Minister, Deputy Walsh, supported their gradual phasing out at a recent Council of Agriculture Ministers. I am not sure whether we can have a rational debate on whether that is in Ireland's long-term interest, a short-term gain for long-term interest, or whether the Minister is speaking with forked tongue. Perhaps we are not fit to have a rational debate on that in this House because the Minister's Department will put a spin on it to justify his vote and the stance he took.

He was gung-ho here to the IFA and the farmers before he went, saying that he would protect the future of export refunds, yet he voted for the gradual phasing out of refunds at a Council of Agriculture Ministers. As a country that depends to a large extent on exporting to third countries, until we can increase our markets within the EU, that is a serious blow and a concern, in the medium term, to Irish exporters and beef producers. We need an explanation of the Minister's behaviour in relation to that and to how he let the farmers down on that occasion.

He also let them down in December at the Agriculture Council of Ministers in relation to the whole review of the sheep regime. I know our focus tonight is beef but I will explain how he let them down. It is all right that he failed to deliver the €30 fixed premium. We knew he would not be able to deliver that as he did not have support from the other agriculture Ministers on that issue. Farmers generally have not trusted or seen the power of the European Parliament. The agricultural committee and the full plenary of the European Parliament voted by a large majority on what to give our sheep producers. These producers had a miserable time up to 2001 and they only benefited then because of the foot and mouth disease crisis. They have had ten years of appalling income returns. The Minister did not deliver on the €30, unlike the European Parliament. He failed the sheep producers by not being able to stand up to his colleagues for a reasonable fixed-rate premium and he failed to look after rural people with what is now to be called a supplement premium with the €7 that is on offer.

I ask him now in the mid-term review to be sure that when we get to the point of beef extensification, which is under the microscope for the mid-term review, the first 15 livestock units of sheep are excluded from calculation of beef extensification. The sheep are counted in but not paid for in calculating extensification. That is driving people out of production of sheep – there is underproduction in that area in the European Union – and into production of beef where there is over-production because farmers are paid extensification on beef. They are paid on a product where there is surplus, yet are not paid to stay in sheep production, a product in which there is a deficit. The logic of that escapes me.

The lack of logic from Commissioner Fischler, the Minister and the Council of Agriculture Ministers in cross-referencing between the different agricultural regimes to be sure that we are not driving people out of a product in under supply in Europe into a product in surplus is further depressing the price for our hard-pressed beef producers. This is an important issue for Ireland because we rely on exports. Most other European Union countries are not dependent on agriculture to the degree we are. It is an Irish issue and we depend on the Minister to support our beef producers and to look after them around the table.

The mid-term review is imminent. Commissioner Fischler's noises in recent months, when speaking about the mid-term review, have been largely in reference to excessive production in the beef sector. This is an area where excluding the first 100 ewes from calculation of beef extensification will keep people in production of sheep and not push them into beef production. The Minister must tell us exactly what line he supports on behalf of the Irish beef and sheep producer, the dry stock sector. What is happening in this area is a worry for the people.

The Irish Government is looking for consumption to return to its former levels to prevent the Commission from introducing cuts in relation to excess production in the mid-term review. If there is not an all-out drive here and in Europe to increase consumption, procedures will be put in place to cut production. That is not in the interest of the Irish beef sector, an important contributor not just to the agricultural sector but to our GDP. What has the Government done and what is Bord Bia doing to market beef, our healthy, safe meat? There should be an all-out drive to promote it and if necessary prices should be reduced. The farmer is not getting paid but the housewife has to pay a lot for the prime product of the limestone grasslands of Ireland. I call on the Minister to do all he can to increase consumption of beef as a way of helping our beef producers and of stopping Commissioner Fischler from cutting production. There will be cuts if we do not get it right.

There is nothing to fear with enlargement of the European Union in relation to agricultural payments but there is something to fear if we do not get right the switch from direct payments to area aid payments, particularly for the beef farmer. I do not have time to develop that issue but perhaps the Minister will explain how the country is handling that.

In relation to BSE in our cattle herd, our TSE – transmissible spongiform encephalitis – legislation has us in the second category. For obvious reasons the UK is in category one. How close are we to moving to the next category and to being safer still? Our product is safe. The problem in Ireland is an historical one but we are not getting that message across. The Minister has failed to open the export markets, resulting in a crisis with over-production and an income crisis in our beef sector. The new beef labelling has been in operation for the past few weeks and should not cause a problem. We should be proud to label and indicate the source and origin of our beef.

I rest my case. The Minister has a lot to answer for. He said one thing to our beef producers and then went to the Council of Agriculture Ministers and voted otherwise.

Mr. Davern:

That is not true.

Mrs. A. Doyle:

Yet the press releases are neutral and anodyne when he returns. He must look after one of our prime industries.

Mr. R. Kiely:

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Seanad Éireann commends the Minister for Agriculture Food and Rural Development, for introducing a range of special measures to support the cattle and beef industry; for implementing comprehensive and enhanced BSE controls and for achieving major progress in the simplification of payment applications and in the efficiency of delivering payments, while respecting EU requirements to account for annual payments to farmers of over €1.5 billion.".

I am pleased we are having this debate. Any debate on agriculture is useful and this one will, I hope, be constructive. Agriculture is a vital industry to the economy. I commend the Minister and the Minister of State, Deputy Davern, who is present tonight, for the wonderful work they have done for agriculture since 1997. I was often critical of the Minister's predecessor and was justified in that criticism.

The Minister has done great work, despite what was said here, in his negotiations at EU level and he got increased premia for beef producers. Ireland has to depend on an export market as 85% or 90% of our produce is exported. We must be more diligent in the manner in which we produce our beef because we must satisfy consumers abroad as well as our own consumers. There was a bleak start to 2001 for a number of reasons, particularly because of confirmation of BSE outbreaks in the EU where there had been no outbreaks. That meant that consumption in a number of European states fell by 30% – in Germany it fell by 80%. That had an effect on prices. Third world countries terminated contracts because of BSE and consumer confidence was affected. Consumer protection had to be increased and consumer confidence restored.

The beef producers also had to be protected and I compliment the Minister and Minister of State on introducing schemes that helped producers to maintain their incomes in the beef trade. The introduction of the purchase for destruction scheme and its successor, the special purchase scheme, was valuable and very much appreciated by beef producers. It did not add to the beef mountain and led to the export of more beef for which there was not a market elsewhere.

The cattle under 30 months scheme is important in improving confidence in foreign markets. We must ensure that cattle are free of disease. Cattle under 30 months have definitely a lower incidence of disease than older cattle. Farmers must be made more aware of the need to finish cattle younger to ensure a better export market for beef.

There was trouble getting cattle into factories at the end of August last and there is a case for saying that factory managers take advantage of beef producers and farmers in such situations. Frustration was caused, especially among farmers with cattle near the 30 months point. When cattle are accepted after age 30 months, the farmer gets less money per animal.

We have enjoyed a good price for beef since Christmas and the factories are looking for cattle because there is a scarcity. However, it would be best if we could have a system where factory management is more considerate towards farmers. The factories are inclined to make it a seasonal rather than a year-round market.

Export markets must be restored as the Egyptian market has been. Cattle should soon be exported to Egypt again. There have been veterinary inspections from third country markets and the inspectors who visited were satisfied with the results.

The increase in the incidence of BSE has been mentioned in tonight's debate but it should be recognised that progress has been made in that area. Animals born since 1996 have not shown signs of the disease; all animals diagnosed with the disease were born before that year. The dairy herd has many older animals and it is often dairy cows that get BSE. However, the age of cattle has decreased and farmers are becoming more con scious of the problem and are anxious to cull and replace diseased animals.

Regardless of the compensation they get – and it varies widely – farmers dread a BSE outbreak in their herds because they must then depopulate. I would like to see a system introduced where a farmer who has a BSE outbreak could put his own value on the herd. The valuation that gets the farmer the most compensation should be the basis of the price the farmer gets. From talking to farmers who have had outbreaks of BSE, it is a most frustrating experience and whatever financial compensation they receive is no real compensation.

I congratulate the Minister and Minister of State on the programme they introduced to ensure the outbreak of foot and mouth disease would not spread to this country. There was one outbreak caused by a careless or rogue dealer who imported sheep from Scotland into the Six Counties, and from there to the Republic. He was penalised and is in jail, but any penalty would not be severe enough for a man who does such a thing. He put the entire beef industry in jeopardy.

Beef production in the UK will be 12% down again this year as the herd is rebuilding. That will offer additional market opportunities for Irish beef which should ensure a good price.

I congratulate the Minister for Agriculture, Food and Rural Development on the great work he is doing, especially in relation to the Agenda 2000 negotiations where he got a great deal for Irish agriculture despite terrible opposition from other speakers. I also congratulate him on yesterday's launch of a booklet on direct payments which will make that subject easier for farmers. An animal event recording book can be very useful. One hour working on that is time well spent and the facts can then be sent off. It is important and is not time wasted. When I started farming, I spent about two or three hours going to the creamery. That is not needed now and time can be better spent ensuring that farmers get what they are entitled to and avoiding the penalties that have been mentioned in the House today.

Minister of State at the Department of Agriculture, Food and Rural Development (Mr. Davern):

I thank the Senators who put down the motion for giving me the opportunity to reply. There is no truth in Senator Doyle's accusation that the Minister for Agriculture, Food and Rural Development, Deputy Walsh, voted to abolish levels at the Council of Ministers. The Minister is due an apology for that.

Mrs. A. Doyle:

Is the Minister of State talking about export refunds? The Minister has—

Mr. Davern:

No, he has not. If so, why did he succeed at Doha in objecting to the exported refunds being rejected? He succeeded by holding talks all night to ensure that this was not a part of WTO negotiations.

Mrs. A. Doyle:

He supported the gradual removal and reduction of export refunds and he is on the record as having done so.

Mr. Davern:

My understanding is that the European Parliament voted recently to abolish export refunds.

Mrs. A. Doyle:

With the exception of Irish MEPs, the Minister, and the Council of Agricultural Ministers also. I will produce the details.

Mr. Davern:

That would mean that the influence of some Irish MEPs is not as great as they assume it is.

The motion proposed for this debate demonstrates in a stark manner a complete lack of appreciation or understanding of what has been achieved by the Government, especially as regards the beef sector in Ireland. It is understood that, over the past few years, the beef sector in Europe faced an enormous challenge when BSE was discovered in late 2000 in a number of continental member states. The action taken by the Government here, in particular the operation of the destruction schemes at a cost of €200 million to the Irish Exchequer, insulated the beef sector from the effects of the overall market disturbance and has left it in a relatively favourable position today.

For the benefit of those not familiar with the beef market, I will spell out the situation. It is easy to forget that, prior to these scares, the EU market was in excellent condition. Unfortunately, the favourable market situation was completely overturned by the BSE scares which led to a substantial reduction in beef consumption in many member states and to the closure of all major third country markets except Russia to beef from the European Union. The fall in consumption in some member states, such as France and Germany, was quite dramatic, and consumption remained at about 30% of normal across the EU generally for a considerable period of 2001.

In view of the importance of export markets to the Irish beef sector, these developments were potentially very damaging to the industry. For that reason, the Minister for Agriculture, Food and Rural Development played an important role in ensuring that speedy and effective action was taken at EU level to deal with the situation. The strategy adopted at EU level was to attempt to increase consumer protection and to restore consumer confidence in beef, to protect producers' incomes through the introduction of the additional market support schemes, and to ensure that every effort was made at political, diplomatic and technical level to secure the re-opening of those markets which had imposed an import ban on EU beef as a result of the BSE scares.

My Department, together with the Department of Foreign Affairs and Bord Bia, has been working intensively over the past year to demonstrate to the authorities in our export markets the level and effectiveness of the controls in place in Ireland and to emphasise the guarantees in relation to food safety we can offer. In view of the importance of export markets to the Irish beef sector, these developments were potentially very damaging to the beef industry. For that reason, the Minister played an important role in ensuring that speedy and effective action was taken at EU level to deal with the situation.

The strategy adopted at EU level was to attempt to increase consumer protection and to restore consumer confidence in beef. We also sought to protect producers' incomes through the introduction of the additional market support schemes which I mentioned. We ensured that every effort was made at political, diplomatic and technical levels to secure the re-opening of those markets which had imposed an import ban on EU beef as a result of the BSE scares.

My Department, with the Department of Foreign Affairs and Bord Bia, has been working intensively over the past year to demonstrate to the authorities in our export markets the level and effectiveness of the controls in place in Ireland, and to emphasise the guarantees of food safety that we can offer.

Our ability to provide these assurances is underpinned by our computerised CMMS cattle traceability system. We can also demonstrate considerable success in our handling of BSE based on the shift in age profile of BSE cases to animals of an older age category. No animal has turned up that was born in 1997. That is tremendous progress.

Mr. Connor:

There were twice as many cases as this time last year.

Mr. Davern:

We have released those figures because we want people in Europe to be confident. As the numbers decrease they will see it. We have been open, unlike some others in Europe.

Mrs. A. Doyle:

The youngest animal is 42 months old.

Mr. Davern:

This strategy proved successful with Egypt. Our sustained efforts culminated in a visit to Ireland by a technical delegation, headed by the Egyptian chief veterinary officer. In the course of this visit, our controls were fully accepted and this provided the basis for the re-listing of Ireland as a country from which Egypt would accept beef imports. All the technical details have been agreed with the Egyptian authorities and it is now a matter for Irish exporters to contract for business with Egypt. Unfortunately the price of cattle is high and we cannot sell there because beef costs 91p per pound. The people who went on strike last year were looking for 87p per pound.

Given our success in regaining access to the Egyptian market, I am confident that this success will be repeated with other important markets worldwide. No effort will be spared to achieve this outcome. We held discussions with representatives from Indonesia recently and have invited them to visit the country. The Minister visited South Africa last year and invited a specialist team to assess the position on the ground. The Gulf region, where there are crucial third country markets, is also receiving top priority and every possible channel is being used to have the bans in those countries lifted. In many cases, however, the ban relates to the EU as a whole which, given the different stages of BSE among member states, can be a problem. Nevertheless, we were able to convince Egypt that we were in a different category and I am confident we can repeat that.

Looking back over the past year, there is no doubt that the measures introduced at EU level dealt effectively with the situation and helped to protect Irish beef producers from the worst effects of the crisis. Consumer confidence in beef has been restored, as evidenced by the gradual recovery in beef consumption across Europe from 30% below normal at the beginning of the year to 5% below normal at present. The beef market has been effectively supported, particularly in Ireland where approximately 500,000 cattle, or 28% of beef production, was removed from the market under these schemes in 2001. This cost approximately €400 million, of which some €200 million is covered by the Irish Exchequer. The level of Exchequer support is a clear and unambiguous indication of the commitment of the Government to protecting producers' incomes. I attended the beef fair in Germany where a Green Party Cabinet Minister ate Irish beef in front of the television cameras. That was a major achievement.

These measures helped to sustain cattle prices in Ireland last year at a significantly higher level than normal relative to EU prices. For example, average steer prices increased from 90% of the EU average price for young bulls in 2000 to 99% in 2001.

Mr. Connor:

The EU average had fallen.

Mr. Davern:

This contrasts sharply with previous BSE scares, such as in 1996 when cattle prices in Ireland fell by more than the EU average, and is clear proof of our effective management of the beef sector through this crisis.

Mrs. A. Doyle:

Those are creative figures. The average had decreased. We had increased to 99% of a lower figure. Very clever scripting.

Mr. Davern:

These measures not alone supported beef prices but kept the processing sector functioning at a high level of activity and thereby protected jobs.

Developments in cattle prices must be seen in the context of Agenda 2000, which provided for a 20% reduction in prices over three years with compensation through increased premium payments. In the current year, the maximum premium payable on steers is 160 cent per kilogramme – 57p per pound – or €540, that is, £420 per head.

Agenda 2000 also provided for substantial increases in the suckler cow premium and for the inclusion of heifers in the premium system. The increase in these premiums substantially offset the fall in cattle prices in 2001, with the result that the majority of beef producers in Ireland enjoyed stable incomes last year in spite of the enormous market disturbance arising from the BSE crisis.

One of the side effects of more recent BSE scares is that the market demand is much stronger for beef from younger animals and this is reflected in the development of significant price differentials between under and over 30 month cattle in the course of the past year. The importance of moving to under 30 month beef to meet this market demand has been emphasised on a regular basis throughout 2001 by my Department, Teagasc and Bord Bia. I stress this point once more. Our producers have no choice but to produce what the consumer wants and it is abundantly clear that the consumer wants under 30 month beef.

There is no evidence, however, that farmers are experiencing difficulties in getting over 30 month cattle into factories. Judging by the increased prices now available for such cattle, factories are more than happy to accept them. The market for steers and heifers is quite strong and this is reflected in a substantial increase in prices in recent weeks. Steer prices have increased by over 15% since last November and prices of over 260 cent per kilogramme – 95p per pound – are being paid by many meat factories for under 30 month cattle. Even higher prices are being paid for heifers. Prices for over 30 month cattle are also strong and are now over 250 cent per kilogramme – 90p per pound.

The market outlook for 2002 is favourable for steers, heifers and young bulls but, unfortunately, less so for cows. Demand on the UK market remained strong in the second half of 2001 because of the scarcity of beef there arising from FMD outbreaks both in the UK and in Argentina. Beef production in the UK is expected to fall further again this year as herd rebuilding begins, and this should offer additional market opportunities for Irish beef exporters.

There are also signs of recovery in some of the continental markets, particularly Italy. Russia is our second major market and should continue to absorb significant quantities of Irish beef this year. The veterinary agreement with Egypt is in place and it is now a matter for the traders to conclude commercial contracts with Egyptian importers.

The element of the motion dealing with the eradication of BSE from the national herd surprises me as it questions the very stringent BSE control and eradication measures which have been in put in place since 1990. Those controls have the highest reputation among experts throughout the world and, according to the EU's scientific steering committee, have been "optimally stable" since 1 January, 1998. While constructive criticism is always welcome, criticism which fails to recognise the effectiveness of controls which have been in place for some considerable time can only cause concern to consumers and damage to the beef industry and the very many farm families who depend on it for their livelihoods.

It is important, therefore, to set the record straight on this matter. Since 1989, Ireland has taken a proactive approach to the control and eradication of BSE. Measures adopted since then include the compulsory notification of the disease; a ban on the feeding of meat and bone meal to ruminants in 1990; the depopulation of herds, and the tracing and slaughter of birth cohorts, progeny and UK animals; a significant enhancement of feed controls in 1996, comprising a comprehensive licensing system which, inter alia, prohibited mills producing feed for non-ruminants using meat and bonemeal – similar measures were only introduced in many member states at the end of 2000; and a ban on the use of specified risk materials in the food and feed chains in 1997.

These measures are underpinned by a comprehensive cattle movement monitoring system and are supplemented by ante-mortem examination of all animals at all abattoirs; detailed post-mortem checking of all beef carcases and ongoing audits by the Food Safety Authority of Ireland, an authority that is entirely independent of the Department, at abattoirs and meat retail outlets.

In addition, following the European BSE crisis in autumn 2000, the Council of Agriculture Ministers introduced a series of horizontal measures designed to further protect consumers, to address problems arising principally in other member states and to avoid unilateral actions which might adversely affect trade. These included, in addition to a range of market support measures, a ban, from 1 January 2001, on the feeding of meat and bonemeal to all animals for food production; increased active surveillance among at risk animals; and testing of all slaughtered animals over 30 months of age, resulting in almost 630,000 tests being conducted in 2001.

Up to 1 million cattle will be tested in this manner in 2002. Senators will be aware that the number of BSE cases identified increased last year. This is fully in line with predictions by, among others, the scientific steering committee and our own veterinary experts and arises because of additional active surveillance. Of the 242 cases in 2001, 119 were identified under the active surveillance programme and most were identified in fallen animals which would not in any event have been destined for the food chain. Therefore, 123 cases were identified through passive surveillance, a significant decrease on the total of 145 cases identified in 2000. In addition, it remains the case that BSE has not been confirmed here in any animal born after 1996. This demonstrates that the enhanced controls introduced in 1996 and 1997 are having the desired effect.

It is also noteworthy that the age profile of cases has changed dramatically despite the higher number of cases over the last two years. In this regard, animals aged five years and under constituted 53% of those confirmed with BSE in 1998, while by 2001 this figure was down to 16%, despite the fact that more than 654,000 BSE tests were undertaken that year. This demonstrates that the control measures in place are working. These figures must be compared to a total national herd of 8 million animals.

There has been some speculation in recent months in relation to the possibility of a targeted cull of older animals in certain circumstances. This approach warranted consideration and, to that end, my Department, in conjunction with the Food Safety Authority of Ireland, recently conducted a feasibility study of cull options. Their conclusion, following this exercise, was that there was no scientific basis for proposing a targeted cull and that no significant additional health guarantees would be provided by such a strategy, providing that the existing control framework remained in place. I understand that this outcome has been accepted by the CJD advisory committee. My Department will, nevertheless, keep this option under review.

It is easy to put forward radical solutions for the elimination of BSE. At one extreme, slaughtering the entire national herd would undoubtedly eradicate the disease. Other options have been advanced and considered but they do not represent solutions, in particular because they would not provide any significant public health guarantees and would be extremely expensive. In this regard, significant numbers of cattle would have to be slaughtered under any scenario for very marginal benefit, particularly in a situation where all animals over 30 months of age are, in any event, tested before entering the food chain.

Thus, there is no quick-fix panacea for the eradication of BSE which stands up to detailed analysis. The measures we have in place, and which have been developed, introduced and effectively implemented by successive Administrations over the past 13 years, are working. These have as their primary aim the protection of human health and have also stood the test of time in terms of their credibility among potential customers for our beef.

The Department continues to keep abreast of the latest scientific developments through its participation in the standing veterinary committee of the European Commission and its liaison with the EU's scientific steering committee. Neither the Department nor myself is inextricably wedded to a particular view of how best to tackle BSE. However, any changes in the existing policy must be on the basis of a proper analysis which is supported by the latest scientific data. Account would also have to be taken of the alternative uses to which public funds can be put.

The evidence to date is that the measures in place to control and eradicate BSE are proving effective and that BSE will be reduced and eradicated as older animals leave the system. At this point, I do not propose to introduce any radical changes to the existing policy unless there are sound, science-based reasons for doing so. I admire the Department's policy of openness, transparency and traceability with regard to BSE. We provide the figures and when decreases occur, it will stand to us on export markets.

I now turn to the premium arrangements. The motion again demonstrates a lack of understanding of the real position and the efforts made to assist the small number of farmers whose applications incurred penalties, mostly due to late submissions. In excess of 1.4 million payments, valued at €1.1 billion, were issued to farmers during 2001 under the various livestock premia, compensatory allowance and arable aid schemes. Following the successful outcome of Agenda 2000, the rates of payment under the various schemes will reach their highest level this year. Taken together with REPS, these payments represent 120% of farm incomes of cattle and sheep producers and approximately 75% of the income of tillage farmers. Given the scale of the moneys received from the European Union for these schemes, there have to be controls and regulations; otherwise, the funds will not be forthcoming.

I am conscious of the need to simplify documentation and I have made it clear that our documentation should be kept under constant review with the aim of keeping it as clear and straightforward as possible. In recent years, my Department, in consultation with farm bodies and with the progressive use of information technology, has made major progress in simplifying the application procedure under the various schemes. The changes introduced include: pre-printing of personal details, including name, address, herd number and, in the case of area aid, land parcel identification numbers on application forms; use of bar coding on bovine animal passports – in most cases there is no need to list tag numbers on applications; provision of CMMS herd profiles to assist farmers in completing extensification census forms; automatic processing of entitlement to slaughter premium without the need for farmers to submit an application; and the removal of certain notification requirements. Such information is now taken from the database.

There is a widespread perception that many farmers were unfairly penalised under the various schemes, but this is not borne out by the facts. For example, under the 2000 schemes, some 169,000 applications were received under the special beef premium scheme. Of these, 4,088 or 2.42% attracted a penalty.

Mr. Connor:

Grossly unfair.

Mr. Davern:

Of the cases penalised, 742 or 18% arose because of the late submission of an area aid application. Believe it or not, some people did not even sign the application forms. The forms then had to be returned to them for signature but were still not returned in time. Under the 2000 suckler cow premium scheme, 71,078 applications were received. Of these, 2,695 or 4.12% attracted a penalty. Of the cases penalised, 1,165 or 40% arose because of late submission of either the area aid application or the suckler cow application. A similar pattern prevails in so far as the 2000 ewe premium scheme is concerned. Some 41,210 applications were received and of these, 2,110 or 5.12% attracted a penalty. Of the cases penalised, 1,311 or 54% arose because of late submission of the application.

Mr. Connor:

Why is that a crime?

Mr. Davern:

The amount of money withheld following the imposition of penalties represents 0.42% of the amount paid out under the special beef premium scheme, 0.63% of the amount paid out under the suckler cow premium scheme and 0.44% of the amount paid out under the ewe premium scheme. Nevertheless, we have been to the forefront in raising the question of simplification of the rules surrounding the penalty regime at the Council of Agriculture Ministers. A new EU regulation was published on 12 December last. It is of the utmost importance that farmers fully understand the rules governing these schemes so that they can maximise their entitlements. The Department has published an information booklet which is being sent to every farmer in the country.

Mr. Connor:

To confuse them even more.

Acting Chairman (Mr. J. Cregan): Please allow the Minister to continue without interruption. The Senator will have an opportunity to respond.

Mr. Davern:

I will personally get one to the Senator.

Mr. Connor:

I will be waiting like everybody else.

Mr. Davern:

The booklet explains how the new regime will work. The Senator can use it when he is canvassing but he should be sure to say it is with our compliments when he is doing so. It will serve as a useful guide to farmers and their advisers.

Mrs. A. Doyle:

Martin Mansergh will not understand it anyway.

Mr. Davern:

Dr. Mansergh is a very successful beef farmer in south Tipperary.

Mrs. A. Doyle:

One learns something every day.

Mr. Davern:

There are three things the Senator did not know today. That is the third one.

Mrs. A. Doyle:

The Minister was incorrect on the first two, so I will have to check about Martin Mansergh.

Mr. Davern:

Starting from Monday next, my Department, in conjunction with Teagasc, will hold 50 public information meetings for farmers. These meetings will take place in every county over the next three weeks. The emphasis at these meetings will be on how farmers can avoid penalties and maximise their entitlements under the various schemes. I am satisfied that the new arrangements, while not giving us everything we would want, will be of considerable benefit to farmers. However, if farmers do not attend these meetings, they will lose out on the applications. I want the farming bodies to make sure they reach out to them. They have advisers in Teagasc and Department officials will help them to apply if they bring in the forms. Some people have not even applied for what they are entitled to because they did not know. Every registered farmer will receive an application form.

Mr. Connor:

Why screen a lot of people for small amounts?

Mr. Davern:

Because we are getting the benefits from Europe. It is European funding and we must be accountable to Europe in order to get the money. We have the highest acceptance of payments in the European Community with a proper supervisory system and we have been—

Mrs. A. Doyle:

Will the agency be any addition when it is up and running?

Mr. Davern:

The motion proposed by the Opposition Senators is completely misguided and electorally founded and betrays a serious misunderstanding both of the enormity of the problems for the Irish beef industry posed by the BSE crisis and the effectiveness of the measures adopted at national and EU level in helping the industry to manage its way out of the crisis. I am also disappointed at the lack of understanding of the Opposition about the Government's handling of the BSE situation generally and the Minister's efforts to minimise bureaucracy and penalties. Now that Senator Connor perceives that there is a problem I look forward to his help in ensuring that the smaller farmers in Roscommon will be fully notified and I expect that he will help them on his rounds in the next couple of months—

Mr. Connor:

Only for my efforts many of them would not get their premia.

Mr. Davern:

—to ensure that they maximise their payments.

Mrs. A. Doyle:

What about the other points we raised which were not dealt with in the Minister of State's speech?

Mr. Davern:

The first two things the Senator said were incorrect.

Mrs. A. Doyle:

Is the Minister of State only saying what is in his script? This is disappointing.

Mr. Davern:

I am delighted to see Senator Doyle back in the Seanad.

Mrs. A. Doyle:

I am glad the Minister of State missed me.

Mr. O'Brien:

I second the Fianna Fáil motion proposed by Senator Rory Kiely and I commend the Minister for Agriculture, Food and Rural Development and the Minister of State, Deputy Davern, for the introduction of a range of special measures and supports for the cattle and beef industry. I compliment the Minister of State and the Minister, Deputy Walsh, on the launch yesterday of the information booklet on the change in the livestock and arable aid scheme. This booklet will be of valuable assistance to farmers and will assist them in making application to the various Departments. In the past a small number of applicants were penalised but from now on we will see a big improvement in the submissions and I compliment the Minister on the publication of the booklet.

Poor prices last year were largely a result of BSE and the foot and mouth crisis. The Department, the Minister and the Minister of State, Deputy Davern, did an excellent job and it is not fair for anyone in this House to criticise them.

Mr. Connor:

We will offer up thanksgiving instead.

An Cathaoirleach:

Order, please. Senator O'Brien without interruption.

Mr. O'Brien:

The outlook for 2002 is quite good. The market for steers and heifers is quite strong with an increase of 15% since last November. The price is approximately 95p per pound across the board. Who would have thought that in the month of February 2002 we would see a price of nearly £1 per pound for steers and heifers? It is a wonderful price.

Our UK market is very successful at present and I hope it continues to be so. The Egyptian market is restricted but I know that the Minister and the Minister of State are doing everything possible to open up this market again. The Russian market is available now and the future augurs well.

Farmers are very pleased with the inclusion by the Minister of the maiden heifer into the suckler cow premium scheme. This is of great benefit to farmers. It serves the purpose of taking some heifers off the beef market and it enhances the suckler cow herd. The cull cow is still not doing so well and I ask the Minister of State, the Minister and the Department to investigate how this could be improved.

Mr. Callanan:

I welcome the Minister of State to the House and I am pleased to participate in this debate. We should recognise the excellent work done by the Minister and his Ministers of State and the staff in the Department of Agriculture, Food and Rural Development. I acknowledge what the Minister of State, Deputy Davern, has achieved in Europe in relation to the early retirement scheme for both widows and widowers. That is just one of the many successes achieved by the Minister of State and our team of Ministers for Irish agriculture and for the national economy.

I support the amendment. On a first reading I thought the motion was commending the Minister for his achievements but that is not the case. The role of Opposition is to oppose but I expected factually correct statements, in particular from a member of the European Parliament who should be better informed. It is a pity Senator Avril Doyle engaged in misinformation.

Mrs. A. Doyle:

The truth hurts.

Mr. Callanan:

It does.

Mrs. A. Doyle:

I will not apologise for the facts.

An Cathaoirleach:

Senator Callanan, without interruption. Senator Avril Doyle had an opportunity to make her contribution.

Mr. Callanan:

The truth hurts and corrections to misinformation and misstatements also hurt. An all-Ireland approach is desirable. The Minister and Ministers of State are in daily contact with the authorities in the Northern counties. That should be expanded and a one country approach should be taken to the control of animal diseases. The foot and mouth disease crisis illustrated the benefits of working together. Farmers, North and South, the industry as a whole and related industries would gain enormously from a one country approach.

There are future challenges, including the expansion of the European Union, and there is a need to ensure that competent people are placed in charge of the industry. In this regard, even the Opposition seems to be of the view that it is desirable for the Minister and Ministers of State to continue in office after the general election. Their competence is especially needed to deal with the forthcoming review of the CAP to ensure that what emerges will be of best advantage to Irish agriculture. The WTO talks are ongoing and negative results could ensue for this country in the absence of competent people in charge of agriculture.

The foot and mouth disease crisis was the greatest challenge to the country in many years. We must recognise the enormous competence of those involved in agriculture. Their prompt and decisive action and the successful implementation of wide-ranging and stringent control measures ensured that the one outbreak that occurred in Proleek, County Louth, was contained and the threat to the national economy averted. A recent estimate put the net direct cost of the outbreak of the disease in the UK at Stg£2.7 billion. It indicates what could have happened in this country had the virus achieved a foothold. As it was, the net cost to the Department was approximately IR£30 million.

The foot and mouth disease crisis overshadowed difficulties in the beef market. The disclosure of BSE cases in some European Union member states this time last year impacted adversely on all beef markets. The purchase for destruction scheme, which operated from January to June 2001, and the special purchase scheme, operated by the Department from July 2001, supported the market for Irish beef. Some 278,025 cattle were removed from the market under the purchase for destruction scheme, while 153,838 steers, 87,290 cows, 34,226 heifers and 2,671 bulls were also removed.

The reopening of the Egyptian market is to be welcomed. It is for the industry and those in the trade to negotiate and sell good quality Irish beef. I am pleased with the documentation provided by the Minister of State. I support what he said. Coming from a rural constituency, he has displayed his competence on many occasions, as has the Minister and the Minister of State, Deputy Ó Cuív, especially with the various programmes he has introduced. We in rural Ireland will do well from their efforts and the Opposition will also benefit.

Mr. Burke:

I compliment Senator Connor on moving this motion. He was ably supported by Senator Avril Doyle, who went out of her way to speak to this debate. The beef industry is in a bad way.

Mr. Davern:

To be able to get 92p per lb is not a bad state of affairs.

Mr. Burke:

According to figures before me, BSE levels have increased on a monthly basis, from 19 cases in January 2001 to 41 cases last August. There were 33 cases last September and 42 cases this January. As a consequence, apart from the UK market, other markets appear to be closed. The Government has failed to campaign on behalf of farmers in the Egyptian market.

Mr. Davern:

The Senator is living in a different world. The Egyptian market is open. We cannot sell beef there because the price of beef in this country is too high.

Mrs. A. Doyle:

It is also because the Minister sold out on the export refund.

Mr. Davern:

That did not happen in my time in the European Parliament.

An Cathaoirleach:

The debate must proceed in an orderly fashion. Senator Burke is in possession and I ask him to continue.

Mr. Davern:

He may be in possession but he is not in his full faculties.

Mr. Burke:

The countries of the Middle East used to import 100,000 tonnes per annum from this country but those markets are no longer in operation. Bord Bia has said that unless we can find a market for 100,000 tonnes of beef later this year there will be a collapse in the beef industry when the flood of Finnish cattle comes on stream. What is the Department and the Minister doing to address this? We have heard nothing about the opening of further markets.

Almost every farmer in the country is baffled with the form filling requirements. This problem goes back many years when other Governments were in office. There must be a way in which this process can be simplified. Severe penalties can be imposed for even the slightest mistakes. For example, Department inspectors can decide to deduct €500 or €600 from a payment due to a farmer for an incorrect detail. Despite this, the Department can make any mistake and nothing can be done about it. Will the Minister have a look at the simplification of forms for farmers? If a stone falls off a wall and the Department hears about it, it will dock a farmer's claim for REPS or whatever.

Many farmers will say they have had to go to their accountant to fill up the forms because they are so complicated. Given that many of the farmers are well educated, it is a sad state of affairs that they cannot fill out those forms. I ask the Minister of State to speak to his officials with a view to simplifying the form. He appears to be indicating that he is doing something about it.

Mr. Davern:

The forms are simplified. We are sending out an information booklet and we will ensure the Senator gets one. The Senator should tell them he is campaigning.

Mr. Burke:

Those with whom I have been speaking—

Mr. Davern:

My photograph is on it.

Mr. Burke:

Given that every Government pamphlet issued recently bears the photograph of a Minister or a Minister of State, I would be disappointed if the Minister of State's photograph was not on one of them.

Mr. Davern:

I knew the Senator would support it.

Mr. Burke:

I would welcome it if the Minister of State said the filling out of those forms would be simplified. I hope this will help farmers so that they will not be penalised. Every Senator, Deputy and public representative knows people who have been penalised for doing very little wrong. I am pleased the Minister of State has indicated there will be a simplification of the forms for REPS and so on.

Recently I attended a meeting in Crossmolina of 300 farmers, fishermen, business people—

Mr. Davern:

Was it in Ring Street?

Mr. Burke:

It was not far away. Many people are worried about water quality and there were heated exchanges between fishermen and farmers. This issue will have to addressed. Everyone is concerned about water quality. In the Crossmolina area, there is the Deel River, and many lakes such as Lough Conn, Lough Cullen and so on. The farming community is blamed for the increased levels of phosphates in the lakes. The fisheries board has said that despite the drafting of the Lough Conn report by Mayo County Council and other groups in 1993 the level of phosphates has increased, even with restrictions on farmers in regard to the spreading of slurry. Given that restrictions have been imposed on farmers in regard to the building of houses, septic tanks etc. it is a matter of concern that phosphate levels have increased in the lakes.

When a tank is full the farmer has no option but to spread the slurry. The Department should ensure that farmers have extra storage capacity. The Department has said in most cases it would allow only the minimum requirement for slurry to farmers. Farmers should have extra storage capacity and they should be grant-aided. They are put in a precarious position when they have to empty tanks in wet weather in areas such as the Moy catchment area which includes Lough Conn, Lough Cullen and Lough Gara.

I am pleased the Minister of State has seen the light in regard to the simplification of the forms and I hope he will look at the issue of grant-aiding farmers for extra storage capacity for slurry.

Mr. Gibbons:

I welcome the Minister of State and the opportunity to discuss this important subject. Having said that, I am a little confused. While Senator Connor addressed the subject in great detail, Senator Doyle did not. She gave us a long dissertation on her work in Europe in the European Parliament but did not address either the motion tabled by Fine Gael Senators or the amendment tabled by Senator Cassidy. I was disappointed because I thought with all her knowledge, Senator Doyle would have been able to contribute something constructive to the debate.

The one thing people tend to forget is the complexity of the BSE problem. From day one, when it was first discovered, the biggest difficulty people faced was a lack of knowledge of the disease. Because of that we are only feeling our way through it. The knowledge is not available anywhere. The only knowledge we have is that scrapie, a related disease, is known to have been in the sheep herd right across Europe for many years. If Fine Gael was in Government I would say exactly what I am about to say, because I have strong views on this issue. We are feeling our way through this problem. The scientists do not know all the details. The foot and mouth disease last year was also complicated but scientifically we knew a good deal more about it than we know at this stage about BSE.

The first thing that has to be borne in mind in adopting any measures in regard to BSE has to be the safety of human health. That has driven not only our approach to dealing with it but the approach of all other countries in Europe. All the European export markets for beef suffered hugely as a result of BSE, but it hit us far more heavily than any other country, simply because we export so much of our beef. I ask Senators to put matters in proper context when referring to this issue.

I read an interesting article by Dr. Mark Rogers of the department of zoology in UCD on the strategies for the control of BSE and scrapie in which he outlined factors that must be considered in designing an effective control strategy. These include better understanding of the epidemiology of the disease; developing rapid and reliable tests for the disease; introducing a suitable surveillance system for both BSE and scrapie; minimising the consequences for farmers that have BSE infected animals; and implementing and monitoring legislation to prohibit the spread of potentially infectious material.

If one looks at the measures implemented by this Government and all Governments since the late 1980s and early 1990s, they have followed all those procedures extremely effectively. The areas in which we are deficient are in gaining a better understanding of the epidemiology of the disease from somebody working in the area and developing rapid and reliable tests for it. That is where our deficiencies lie. If we could go out tomorrow morning, test an animal on the spot and get a recording in vivo from an animal we would be in a much stronger position, but that cannot be done.

With regard to the BSE figures about which my colleagues on the Fine Gael benches are concerned, the reason they are increasing is simple. It is due to the surveillance system that is in place. Last year, more than 650,000 cattle were tested for BSE, which is a huge increase. Furthermore, many of the cases concern fallen animals and, consequently, the number of cases will rise. In these circumstances, one cannot expect the figure to fall.

It should also be borne in mind that, although the surveillance mechanism for scrapie has been in place for several years, the number of annual tests will rise from 8,000 to 60,000 this year. This is the way we must go. One can only conclude that the measures being implemented by the Government are effective and are helping to develop a knowledge of the disease. In terms of human health, which has to be the ultimate objective, we have all possible guarantees that our meat products are safe.

A further issue to bear in mind is that the original outbreak of BSE was connected to a change in the process for rendering meat and bonemeal, which lowered the temperature at which rendering took place. Many scientists believe this was the cause of BSE. Regardless of whether that is the case, this potential source has been eliminated and the likelihood of the disease spreading has been minimised to the extent to which current scientific knowledge allows. It is imperative, therefore, that we try to take a strong scientific approach to the problem.

The beef industry will recover from BSE, but it will take time. The Egyptian market is evidence of this – it is open, but nothing is being bought because of a latent and understandable fear. We must continue to convince people that our products are safe and develop the current system throughout our food production industry. The House would be much better off focusing on these matters rather than attacking the Minister and his Department. Given that we are in the run-up to an election, it is, however, understandable. What more can one expect?

The motion refers to the "utter failure to simplify the application documentation". There is no question that this has been a problem. The amount of documentation required is enormous and has caused huge difficulties for many farmers. I welcome the new booklet which will help people fill in the forms and reduce the number of farmers who are penalised. Having said that, the system is providing an extremely important bank of information and knowledge about our herds and the situation at farm level. It must, therefore, be maintained.

I am concerned about the level of penalties for people who make errors filling out forms. This matter should be addressed because, as the Minister of State pointed out, many of the errors are relatively minor. People are penalised, for example, for forgetting to sign forms. We need to take a more humane attitude. While I welcome the opportunity to speak on this issue, I would prefer to have a more constructive debate, based on the presentation of the facts, so that we can move forward together.

Mr. Davern:

Each 30 minutes a farmer spends filling out a form is worth £500.

Mrs. A. Doyle:

That is assuming a 40 hour week which most farmers do not work.

An Cathaoirleach:

Senator Moylan without interruption, please.

Mr. Moylan:

I welcome the Minister of State at the Department of Agriculture, Food and Rural Development, Deputy Davern, to the House and compliment him and his colleagues, the Minister for Agriculture, Food and Rural Development, Deputy Walsh, and the Minister of State at the Department of Agriculture, Food and Rural Development, Deputy Ó Cuív, on their work.

I listened with great care to the points made by the Opposition, but the amendment has my strong support. Last autumn we addressed the predictions made by experts with regard to beef prices, one of the main sources of income for farmers. They all stated that the maximum price was 86p a pound, which is around €1.09. Even cattle of over 30 months, which they argued would not be required, are now making prices far in excess of that figure. Great credit is due to the Minister, his staff and Bord Bia, which took Opposition flak this evening, for their work in ensuring that there is an outlet for our produce at a favourable price.

Sometimes it helps to examine the position in one's county to find out what is happening in the country at large. In my county, Offaly, we have approximately 4,000 farming households. Last year direct payments for livestock and crop enterprises in the county amounted to €33 million, a significant sum which reflects the underlying strength of our farming sector. Since many of the payments reflect numbers of livestock and hectares of crops, this figure indicates that farming is adjusting successfully to the many challenges created by the various policy and market regimes.

Further support for the rural economy of County Offaly includes some €6 million annually for participants in the REP scheme, more than €2 million annually for farmers participating in the early retirement scheme and a further €1.6 million annually to farmers who have planted land. When these figures are extrapolated across the country, one realises that a substantial sum of money is arriving in the form of subsidies. This must be welcomed.

Offaly is a small county, much of which is currently under water as a result of flooding. A €43 million annual input to a rural economy of its size is significant by any standards. These figures augur well for the future and illustrate the healthy state of farming which is attributable, at least in part, to the major steps taken by the Government to ensure that farming is maintained as the backbone of the rural economy.

The Minister of State and other speakers referred to several problems and outlined areas where improvements have occurred. Among other things, the difficulties associated with filling out forms were raised. Despite these difficulties, change is necessary. As the Minister of State stated, the expertise of Teagasc is available to the farming organisations to ensure problems are rectified, mistakes are not made and payments are made on time.

Speakers complained about calf registration. As matters stand, a completed calf registration will be dealt with practically by return of post. This is progress. The Opposition knocked the system when it commenced, claiming that calves would be weanlings by the time the registration process was completed. This is no longer the case. In Bandon, for instance, there is a fast turn around. Most schemes now send farmers the list of their stock and the numbers, with the age profile on it. The system is being simplified month after month by the Department officials to whom great credit is due, and I have no doubt the process will improve further.

We are not dealing with small numbers. There are approximately 130,000 to 140,000 cattle holdings in the country and perhaps 40,000 sheep holdings. Those are not small numbers, yet the system is working well and it is wrong to come into this House and criticise the Minister and the Department in this motion.

I was always against paying beef subsidies for Holstein cattle, but that is a matter for another day. On the percentage of stock in the dry heifer scheme, we may have to change that. Our numbers may decrease to such an extent that we may have to examine that again.

Great play was made of the BSE crisis and the testing process but, as the Minister of State said in his contribution, the numbers have increased because he introduced testing for old and fallen stock. Prior to that, many of those fallen animals were being dumped and we did not know about it. All fallen stock is now tested, which is a welcome development. We now know that feedstuffs are being tested regularly so that we can ensure that animals are being fed the very best and that there is no danger of a risk of BSE.

We must have great confidence in agriculture. Prices are substantial at present. One pound per lb is the current price for cattle. Who would have thought in the September-October-November period that would be the case? It was all doom and gloom at that time, but with the great work done by Bord Bia, the Minister and the Department, farmers are getting a proper price for their stock.

Senator Doyle is here this evening at enormous expense to tell us how bad matters are elsewhere, but if she talked to farmers in Wexford she would know they are very happy. Everything is going well in Wexford and throughout the country.

Mr. Ryan:

Just as I would not wish the representatives or the protectors of the agricultural community to stay away from urban matters, I always feel a certain disposition to talk about matters to do with agriculture. I am intrigued by Senator Moylan's comment about a pound per lb for cattle, or €1.27 per lb. It is only a day since I bought a lb of mincemeat for €1.89 in my local butcher, and that is the leftover bits they get rid of.

Mr. Connor:

That is true.

Mr. Ryan:

Somebody somewhere is making a fair few bob and it may not be the farmers.

Mr. Connor:

It is not the farmers.

Mr. Ryan:

I remember a Wednesday afternoon in July about three years ago when a delegation led by the leader of the IFA, now the Progressive Democrats candidate for Laoighis-Offaly, came in to talk to us about the woes of agriculture. That was before the single currency. As was his wont, he made a very eloquent, well-prepared and effective presentation. Among other matters he said that if the country were to be divided, as it subsequently was, into two regions for European support, farmers should get the same level of support regardless of the region in which they lived, unlike everybody else, because they were special. We know they are special. Having spent half an hour addressing a committee of the two Houses of the Oireachtas, the IFA forgot to mention either consumers or the marketplace. I do not know of any other business, including the trade union movement, that could talk for half an hour about the interests of members and forget to mention the marketplace, food quality, etc. Having said that, the country under-invests in everything that can sustain a vibrant community in rural Ireland but the way that is done is a matter with which I and most Members of this House would take issue.

I have no problem with sustaining a rural lifestyle by State supports. I am a socialist. I believe in the use of the State to redistribute resources but I have a problem with an industry – I am not sure if that is the correct term – in which the primary producers now get approximately half their income from other than the sale of produce, which amounts to approximately €1 billion per annum.

Mrs. A. Doyle:

More. It is €1.7 billion.

Mr. Davern:

I thank the Deputy for giving me the opportunity to say it is €1.5 billion.

Mr. Ryan:

Is the Minister of State saying that as much as €1.5 billion of the total income from agriculture comes from cheques in the post?

Mr. Davern:

Income supports, yes.

Mr. Connor:

Income supports.

Mr. Ryan:

Apart from the top 15% of farmers who should not be subsidised, that is not a bad idea. I have no problem with subsidising a lifestyle that has so many positive contributions to make, particularly when it is linked to environmental performance. What I have a problem with is that we expect somebody else to pay for it. The two Government parties believe in lowering taxation all the time, and we got eloquent testimony of that from the Progressive Democrats last weekend. They do not want taxation, but they want farmers to get €1.5 billion from somebody. From whom will it come? It will come from the poor misfortunate taxpayers in the rest of Europe who have to pay reasonable levels of tax that we are avoiding. That is unsustainable and profoundly unjust. To suggest that people in other countries should pay taxes so that our farmers and Irish society should avoid paying taxes is wrong.

Mr. Davern:

I thought the great concept of socialism was to divide everything that everybody else had.

Mr. Ryan:

The Minister of State and I have had many disagreements and one of them is about the concept of socialism. I am a socialist. I believe that everybody who can afford it should contribute to the lifestyles of those who cannot afford to support themselves. That should not start in continental Europe, however, which is what the Government parties believe. They believe we should have American style taxation and European style income support for our rural communities. That is a nonsense. It will not work and it will not last.

Mr. Davern:

We are now a net contributor to Europe.

Mr. Ryan:

I accept that we are just about a net contributor to Europe and—

Mrs. A. Doyle:

Any agricultural supports are still a net gainer. We are a net contributor minus the agriculture supports.

An Cathaoirleach:

Senator Ryan has just one minute remaining. Please allow Senator Ryan to conclude without interruption.

Mr. Ryan:

I have made my point to my satisfaction, which is that the method of payment is unsustainable unless we accept that we, as a community, have a major contribution to make to sustaining it and all the other social services which essentially make up a large part of agriculture.

Dr. Henry:

I wish to make a short contribution. My success in convincing the Minister of State to put down an amendment relating to sheep tagging to the Diseases of Animals (Amendment) Bill, 2001, has encouraged me to get involved in agricultural matters once more.

I am sure the Minister is familiar with Eurovet, a good method of animal traceability which has been developed in this country. The system, which can be used for all animals, has been tried in some countries which are candidates for EU membership, but I am disappointed that it has not been brought forward here. Perhaps the Department of Agriculture, Food and Rural Development will look more favourably on it now that I have raised it. I have been in contact with the Minister for Agriculture and Rural Development in the North, Bríd Rodgers, and I encountered a great deal of enthusiasm about Eurovet. This ideal method of traceability should be introduced on an all-island basis, especially given the difficulties we faced during the foot and mouth disease crisis last year. I encourage the Minister of State and his Department to make a concentrated effort to examine this proposition. I do not think it would be expensive and it would certainly be worthwhile.

While I appreciate that it is sometimes difficult to implement the findings of research which is at an early stage, it may have been an advantage for us last year if, rather than having to resort to the destruction scheme, we could have used a new urine test which can identify prions in animals infected with BSE. I hope the Department of Agriculture, Food and Rural Development's immediate goals lie in such areas, as the destruction scheme cost the taxpayer an enormous amount of money last year. It will cost even more when we begin to dispose of the carcases.

I understand that the Department has many things to do, but it should keep an eye on research developments so that they can be put to practical use as soon as possible. It is particularly important that we progress on an all-island basis, as our island status gives us an advantage not shared by European countries with large land borders.

Mr. Norris:

This is one of a limited range of subjects on which I do not regard myself as a natural expert. It is regrettable that my modesty is not shared by some of my colleagues. Having listened to some of this debate in the hope of advancing my education and store of information, I wish to congratulate the Minister of State, Deputy Davern, on a magisterial performance. I particularly relish the manner in which he is able to bat aside interventions. I am often loyal to my side of the House, but I am prepared to vote with the Government when I have been convinced intellectually and that is precisely what I propose to do this evening.

Mr. Ryan:

This will not go down well in Tipperary South.

Mr. Norris:

I congratulate the Minister of State on his performance and on the good initiatives that have come from his Department's battles in Europe. The House should take a great interest in this country's fine performance in Europe. I congratulate the Minister of State and his colleagues on the remarkable achievement of preventing foot and mouth disease from coming to this country to any great extent. I intend to support the Government amendment to this motion.

Mr. Connor:

I want to deal with the Minister of State's speech as, unlike Senator Norris, I found it far from satisfactory. The first issue I raised this evening was the beef market and I cited information I have received from Bord Bia, a body in which the Government and I have great confidence. Bord Bia has said there will be a price collapse similar to that last autumn if we cannot find a market for 100,000 tonnes of beef later this year. I asked the Minister of State to outline what is being done to improve the market to absorb the additional supply of meat.

Senators on the other side of the House have made a great deal of the fact that the price of beef is buoyant at present, but that is because sales are at a trickle, as is always the case at this time of year. The annual pattern of beef disposal in Ireland is that 90% of disposals take place between August and December. We face the same pattern as last year, when there was a 20% drop in the price of certain animals within three weeks in August, while the Minister of State was on holiday and while Brussels was shut down.

Mr. Davern:

Senator Avril Doyle knows I was not on holidays.

Mr. Connor:

As a Senator elected on the agricultural panel, I believe we should do something to prevent that from happening again this year. The Minister of State did not answer a central question I asked, so I say "boo" to him. The House was given a lot of spoof about the outlook for the industry, but I have heard it often enough to know that it is almost always rubbish.

Mrs. A. Doyle:

The real issue is that the Minster of State knows he will not be in Government next August.

An Cathaoirleach:

Senator Connor should be allowed to reply without interruption.

Mrs. A. Doyle:

The Government is not preparing for August because it will out of be office.

Mr. Davern:

Are opinion polls spoof too?

Mrs. A. Doyle:

No.

Mr. R. Kiely:

What odds will Senator Doyle give?

Mr. Connor:

I also raised the issue of BSE and I quoted figures for what has been taking place. There is a kind of hush-hush policy, that we do not say anything about it, that we do not talk about it.

Mr. Davern:

No, no.

Mr. Gibbons:

No.

Mr. Davern:

I have to object to that remark, as there is anything but a hush-hush policy.

Mr. Connor:

There is.

Mr. Davern:

We are fully open and transparent.

Mr. Connor:

The Minister of State is not telling us.

Mr. Davern:

That sort of remark on the part of the Senator does extreme damage to the beef industry.

Mr. Connor:

I ask for the protection of the Chair from this totally unwarranted verbal assault, which has been delivered in an almost aggressive fashion.

An Cathaoirleach:

Senator Connor should not provoke interruptions.

Mr. Connor:

BSE has done enormous damage to the Irish beef export industry. More than half our outlets are closed off to us because of the presence of BSE in our herd.

Mr. R. Kiely:

And in other countries.

Mr. Connor:

I do not blame the Minister of State, as it was the fault of certain people who did not obey the regulations that were introduced as long ago as 1990. Not a single sanction has been imposed on these people, six or seven of whom have done enormous damage to this country. In January 2000, 19 outbreaks of BSE were officially recorded by the Department, but this figure had more than doubled to 42 by January 2002. We know that there are many reasons for this, but the message being sent to people—

Mr. Davern:

It is transparent.

Mr. Connor:

—in Algeria, Egypt and other so-called third country markets is that BSE is on the increase in the Irish herd.

Mr. Dardis:

No.

Mr. Davern:

No, the purpose of exposing our figures was to show that we are transparent.

Mr. R. Kiely:

He is not interested.

Mr. Dardis:

The Senator should give the reasons if he knows them.

Mr. Connor:

The point I have been trying to make this evening is that something more radical needs to be done, such as looking at the possibility of a cull of animals of a certain age. Did the Minister reply to that suggestion? No, he did not.

Mr. Davern:

No, but the Senator certainly said it.

Mr. Connor:

He offered a load of totally irrelevant waffle. Not a line of it was germane to the central question I raised.

Mr. Davern:

The Senator implied that there has been a cover-up, but there has not.

Mr. R. Kiely:

The Senator should withdraw the allegation of a cover-up.

Mr. Davern:

There has been no cover-up.

Mr. Connor:

The Chair will have to give me a lot of injury time—

An Cathaoirleach:

There will be no injury time.

Mr. Connor:

—because I have been interrupted.

Mrs. A. Doyle:

I ask the Chair to protect my colleague from the Minister of State.

An Cathaoirleach:

Senator Connor has one minute remaining.

Mr. Connor:

In support of my earlier description of the penalties as utterly draconian, I cite the example of a small farmer who contacted me last year when officials from the Department made major mistakes in relation to his application for area aid. He has 10.5 hectares of land, but he did not notice that the Department had recorded this as 1.85 hectares. He suffered a large penalty for this mistake and the appeal, which I conducted on his behalf, took a year and a half to conclude. Such mistakes on the part of the Department occur far more frequently than the Minister of State is prepared to admit.

Mr. Davern:

He should have gone to someone else.

Mr. Connor:

The Minister of State has talked about 4.5 and many extra farmers—

An Cathaoirleach:

The Senator should conclude now.

Mr. Connor:

I was severely impaired when speaking as the Minister of State interrupted me.

An Cathaoirleach:

Very briefly.

Mr. Connor:

The Minister of State has said that a new regime is in place to reduce the level of penalties and to simplify the ridiculous and draconian application procedure. How does he reply to an article published in the Irish Farmers' Journal, a leading agricultural publication, on 2 February, headed “Tough New Penalties on Cattle and Sheep Errors”? Another headline reads, “New and Severe Penalties on Extensification.”

An Cathaoirleach:

The Senator's time has expired and he must conclude.

Mr. Connor:

This article was published and read by tens of thousands of farmers. Not a word has been uttered by the Minister, the Minister of State or their officials to gainsay any of the claims made in the article.

An Cathaoirleach:

That concludes the debate.

Mr. Connor:

Will the Minister of State issue a statement tomorrow which will contradict the article?

Mr. Davern:

It was published yesterday.

Amendment put.

Tá

Bohan, Eddie.Callanan, Peter.Cassidy, Donie.Cox, Margaret.Cregan, JohnDardis, John.Farrell, Willie.Fitzgerald, Liam.Fitzpatrick, Dermot.Gibbons, Jim.Glennon, Jim.Glynn, Camillus.Kett, Tony.Kiely, Daniel.

Kiely, Rory.Leonard, Ann.Lydon, Don.Moylan, Pat.Nolan, M. J.Norris, David.O'Brien, Francis.O'Donovan, Denis.Ó Fearghail, Seán.Ó Murchú, Labhrás.Ormonde, Ann.Quill, Máirín.Ross, Shane.Walsh, Jim.

Níl

Burke, Paddy.Connor, John.Coogan, Fintan.Cregan, Denis (Dino).Doyle, Avril.Doyle, Joe.Henry, Mary.Jackman, Mary.

McDonagh, Jarlath.Manning, Maurice.O'Dowd, Fergus.O'Toole, Joe.Ridge, Thérèse.Ryan, Brendan.Taylor-Quinn, Madeleine.

Tellers: Tá, Senators Farrell and Gibbons; Níl, Senators Burke and Connor.

Amendment declared carried.

Motion, as amended, put and declared carried.

An Cathaoirleach:

When is it proposed to sit again?

Mr. Cassidy:

At 10.30 a.m. tomorrow.