Éamon Ó Cuív
Question:2. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine the steps he is taking to deal with the present crisis in the beef trade; and if he will make a statement on the matter. [35430/14]
View answerTuesday, 23 September 2014
Questions (2)
Oral answers (21 contributions)
I apologise. I could not get out of the National Ploughing Championships. It was hard enough to get in, but then I could not get out of it when I was in it.
No problem.
As the Minister has alluded to, there is a crisis in the beef industry. What is he doing to resolve it?
This has undoubtedly been a difficult year for the beef sector. Prices are down by about 10.5% on last year, which saw an all-time high. So, even though historically the prices at the moment do not look that bad when compared with the prices two or three years ago, certainly the prices that many farmers paid for store cattle last year on the back of very high prices has meant that this year many beef farmers are losing money or making very tight margins.
We are trying to do a number of things. First, it is important to say that I cannot set prices, but I can try to improve the structure of how the beef industry operates to increase the negotiating capacity of farmers. We are trying to do that specifically by setting up producer organisations in the not too distant future. We are in the middle of a consultation process on that right now and I would welcome feedback from Opposition parties on that. At the moment beef farmers, unlike those in the dairy sector, effectively negotiate on their own with factories when they bring animals in. We would like to set up producer organisations which would be legal entities, professionally run, representing 5,000, 7,000 or 10,000 beef farmers. They would negotiate with factories, probably on a regional basis so that they would have real bargaining power in terms of providing top quality animals at the right age and the right specification to get the best price possible for farmers. Of course there would be an ongoing negotiation with factories that would improve the communication significantly and deal with much of the mistrust that has existed between farmers and factories over the past 12 months or so.
We have also had a beef forum, as farmers are calling it. Michael Dowling completed a report for the second meeting. That report is being implemented where possible at the moment. We have increased the marketing fund through Bord Bia for Irish beef right across Europe.
There is a specific cross-Border problem, about which I am sure Deputy Martin Ferris will ask me later.
I thank the Minister.
I have spoken to my colleague in the North about the matter on numerous occasions at this stage and I will meet her again on Friday. I have also met representatives of supermarkets and written to retailers about it.
I thank the Minister.
We are also opening up new markets for Irish beef and are facilitating an increase in live cattle exports. We are working intensively on all the things I control in terms of policy and structural change whereby we can influence in the industry. I cannot, in a market-----
I thank the Minister. I call Deputy Ó Cuív and I will come back to the Minister.
I have a final comment. We are producing 15% more beef in volume terms this year and every market into which we are selling is either stagnant or reducing its consumption of beef. There are market forces here that have weakened prices.
I thank the Minister.
I cannot change that with policy decisions.
As the Minister knows and has alluded to, there has been a major problem with the nomadic cattle. We have the farcical situation that cattle born, bred and slaughtered on this island are not classed as Irish. I understand the Minister has had very fruitful discussions with his counterpart, the Minister, Ms O'Neill, MLA. I understand an agreement was reached to have the EU labelling on it as UK, but it would be called Irish beef. I ask the Minister for an update on his discussions with the supermarket chains on calling it Irish beef on the supermarket shelf. Did they ask for some assurances on traceability?
Were the Departments able to give that assurance - which should be no problem because both have very good systems - in order that they can get the product on the shelves, not as nomadic cattle but as Irish beef? While I welcome the discussions, results are needed from them.
It is important to bring clarity to this discussion because we have done everything we can to facilitate a new compromise label approach if someone wishes to pursue that course of action. However, that label must come from a processor in Northern Ireland and I cannot force that action. I have made it clear to the Minister, Ms Michelle O'Neill, that we have no problem with that to try to ensure there is a normalisation of the cross-Border trade. Approximately 50,000 animals normally go north from marts in Border counties and along the west of Ireland. Moreover, there has been quite a pick-up in that trade over the past two or three weeks, as anyone who attends marts will have seen, and a strong price is being paid for finishers and store cattle in marts. However, there is an issue in that when there is a lot of meat around, as is the case this year, retailers are much fussier about what they accept. They do not want label ambiguity, whereby consumers look at a labelled product that is produced in the Republic of Ireland and slaughtered in Northern Ireland, that is, the United Kingdom and therefore is not British or Irish but is something in between. I have written to the three UK retailers that buy and sell Irish beef. I have met representatives of Tesco, with whom we had a long meeting on this subject. Tesco is open to compromise in this regard to try to be helpful but there is a responsibility on a processor who is selling into that market to work out with retailers in the United Kingdom what such a compromise label actually would look like in the end.
Thank you. I will come back to the Minister but I must call Deputy Ó Cuív.
While the Department will support and facilitate it, ultimately I cannot force a label in another jurisdiction and this must happen in Northern Ireland.
My understanding is that one ultimate assurance sought from the Minister, Ms O'Neill, in respect of traceability has now been given. Would it be a good idea at this stage for both Ministers to meet the main multiples together and emphasise to them that there is full traceability and that the Irish label is completely satisfactory to both of them?
Second, the Minister mentioned producer organisations, which I welcome. However, this has not worked within the vegetable and horticultural industry, as the supermarkets still are too powerful. In line with the commitment in the Lisbon treaty that farmers are entitled to a fair price, will the Minister be taking up the issue with the incoming Commissioner, who he knows fairly well? Will he take up with him the issue about the need for the European Union to ensure the relationship between primary producers of all products across Europe and the multiples is more even than is the case at present and that just as there is legislation to protect the consumer, there should be equal legislation to enforce the commitment in the Treaty of Lisbon to ensure that the relationship of the primary producers with the supermarkets is on an even footing?
First, I agree with the Deputy on the last point. If one considers the trend over the past 15 to 20 years, one will see that primary producers on average had received approximately 30% of the end price of a product sold in a retail outlet. That figure now is approximately 20% and for many products is less than that. Consequently, there has been a squeeze which has forced more competitive pricing because retailers have become much bigger and their systems are much larger and more efficient. Moreover, in many cases, they are very demanding of primary producers. This is the reason producer organisations are needed and the collective response from the European Union on this in the Common Agricultural Policy has been to support actively producer organisations. I accept that more must be done and that it must be done collectively as the European Union because were Ireland to try to do this on its own, it simply would make itself totally price-uncompetitive.
Agreed.
Given that we export almost 90% of everything we produce into these other markets, we cannot force prices up in Ireland, which would mean the countries into which we sell at present simply would stop buying from us. There are issues in this regard but producer organisations do work in many cases. There are examples within the fruit and vegetable sectors in Ireland in which producers have been put under a lot of pressure but if the Deputy considers the mushroom business in Ireland, Monaghan Mushrooms is the largest producer of mushrooms in the world.
It is part of a very successful producer organisation structure, which has helped to build that infrastructure. In most other European countries, there are strong producer organisations representing primary producers and negotiating on their behalf very professionally. That is the type of structure we need in the beef industry.
We will now proceed to Question No. 5 in the name of Deputy Éamon Ó Cuív.