Dáil Éireann Debate, Tuesday - 6 November 2012
854. Deputy Michael Healy-Rae asked the Minister for Agriculture, Food and the Marine in view of the fact that feed prices for the pig sector have risen by 23% in the past six months and on average prices have increased by 76% since 2010, if he will offer any support to ensure that the approximately 400 pig farmers that are left here will be able to stay in business; and if he will make a statement on the matter. [47424/12]
View answerThe pig sector remains the third largest individual component of the agri-food sector, with production, prices and exports all growing significantly during 2011. I am aware of the concerns currently being expressed by the sector, particularly with regard to feed costs. High feed costs, most notably cereals and compound feed remain an issue. Pig producers are especially affected by the increase in cereal prices since June 2009, given that cereals account for 75% of feed. Contributory factors include weather events in the Black Sea region and the United States during recent years, currency fluctuations and general supply and demand factors including but not limited to, better diet and increased meat demand in emerging economies and the ongoing shift towards biofuels.
The price of pigmeat and, of course, feed is ultimately determined by demand and supply considerations. You will be aware that, due to Ireland’s membership of the Single Market, unilateral actions or interventions to support individual sectors is not permitted. For my part however, I and my officials will continue to press the European Commission to make use of all the available market supports when circumstances require it, to ameliorate the worst effects of price volatility. Indeed the Aids to Private Storage Scheme introduced for pigmeat in 2011 played a significant role in putting a floor under pigmeat prices at that time. This, together with release of cereal stocks from intervention, improved the situation somewhat at that time.
From a National perspective, the ‘Food Harvest 2020 Report ’, which was published in July 2010, sets out the vision for the future of the food industry including the pig sector. The Report targets a 50% increase in the value of output by 2020. This is a target set by the industry for itself. I am personally chairing a High Level Group to ensure that the steps necessary to facilitate the development of the sector are taken. My Department and its agencies will, along with industry, play a central role in this regard. For example Teagasc, through its Moorepark pig research facility and the provision of FETAC courses in pig production and benchmarking pig herd performance, plays a critically important role in improving productive capacity at farm level. Teagasc have also circulated pig producers with a number of the options available to them to reduce feed costs and improve feed efficiency. This is particularly important given that feed is the largest single component of the overall cost of production.
While input costs have increased significantly in recent years, the returns available to producers have also risen sharply. This has helped ameliorate the situation to some extent. At the end of October, prices were almost 24/c per kilo ahead year on year, which equates to an increase of more than 16%. Compared to the same week in 2010, per kilo prices have risen by over 40/c per kilo, or almost 31%. The forecast decline in the European sow population and consequent lower production and ongoing high demand for European pig meat internationally, should lead to even higher prices in the coming months.
New EU Animal Welfare rules set down new standards in relation to the housing of sows and these are due to come into force on 1 January 2013. A significant number of producers have undertaken the necessary work required in order to upgrade their facilities in order to comply with the new rules.
My Department is aware of the scale of the challenge facing pig farmers in respect of the new requirements. To this end, the Department introduced a Targeted Agricultural Modernisation Scheme (TAMS) for Sow Welfare in June 2010. Grant-aid is available at a rate of 40% to eligible producers with a maximum investment ceiling of €300,000, i.e. a maximum grant of €120,000. A total of €13 million has been provisionally allocated to this scheme under the rural development Programme. It follows two earlier schemes in 2005 and 2007 and payments of €6.2 million have already been made under these schemes. The provisions of the scheme were modified earlier this year to allow multiple applications from pig farmers with more than one sow house together with an increase in the ceiling to €500,000 for the first house and €300,000 for each of the next three.
Furthermore, in order to ensure that as many pig producers as possible would be in a position to comply with the new EU animal welfare rules, I have extended the closing date for applications to end-January 2013. All applications received during the period of this extension would now be included in a new final tranche for which a sum of €3 million has been made available. The final date for completion of work and the lodgment of payment claims is 30 September 2013. Applications from almost 120 producers, to the value of €13.86 million are currently being processed by officials in my Department. I can assure the Deputy that my Department and its agencies will continue to work closely with the industry to ensure that it can continue to develop and grow in accordance with the targets in the Food Harvest 2020 Report.
