Dáil Éireann Debate, Wednesday - 18 February 2015
80. Deputy Bernard J. Durkan asked the Minister for Agriculture, Food and the Marine the extent to which he remains satisfied regarding the development of, and future prospects for, the beef, lamb, dairy, pig meat and poultry industries; if he is satisfied regarding the adequacy of margins to ensure a reasonable return for the producers; and if he will make a statement on the matter. [7239/15]
View answerThe information sought in respect of the various sectors is set out under the headings.
Beef
The prospects for the beef sector have improved significantly after a difficult year in 2014. Since September, average prices have risen by over 15% and now stand at €4.05, exclusive of VAT, for R3 Steers. This price is 5.5% higher than the same period last year and is also ahead of the same period in 2013, a year of exceptionally high prices for beef in Ireland. With supply forecast to tighten in 2015, I would be hopeful that recent price rises will be sustained and that they can result in improved margins for beef producers.
Margins are, of course, also impacted by a number of factors other than price and these are the areas where I have focused my efforts since becoming Minister. I established the Beef Roundtable last year in order to bring all stakeholders together and to facilitate open discussions between industry and farming organisations. At the 4th meeting of the Roundtable in November, the stakeholders agreed to a broad range of outcomes which address areas of concern for the sector such as relate to product specifications, price transparency and quality payment system.
The Roundtable allows stakeholders to engage in a positive way on strategic goals for the sector. As an example, the most recent meeting of the Roundtable held earlier this month resulted in the establishment of a stakeholder group, led by Teagasc, which was tasked with preparing written guidelines for beef farmers which would act as a blueprint for those currently producing bull beef or those considering developing bull beef production systems, taking into account production efficiency and market dynamics.
The Deputy will also be aware that I have provided for a package worth over €70 million for the beef sector in 2015. This includes €52 million for the Beef Data and Genomics Programme (BDGP) which forms part of Ireland's draft Rural Development Programme, and will involve a budget of some €300m over a 6-year period. The proposed BDGP is intended to deliver an accelerated improvement in the environmental sustainability of the beef herd through the application of genomics technology. This will help farmers to manage their enterprises in a sustainable way that is cognisant of Ireland's climate change commitments, while supporting improved quality and traceability in the national suckler herd. It will also place Ireland at the global forefront in the application of genomics technology and cement our place as one of the most important and export focused beef producing nations in the world.
Of course, new market opportunities for both beef and live cattle exports also impact on the eventual returns to farmers. The recent the opening of the US market to Irish beef is a major achievement in this regard and I am confident of delivering more markets in the coming months which will further improve prospects for the sector.
Sheepmeat
The industry wide strategy for developing the sheep industry in Ireland was set out in the Food Harvest 2020 document which envisages a 20% increase in value terms of the sector by 2020. My approach to building on the significant achievements of the strategy up until now is to drive the development of the industry at home and increase Ireland's market share of the world market. This will ensure that producers and processors can plan for the future, increasing the value of the industry for the benefit of all.
In terms of the performance of the sector in 2014, Irish sheep throughput at DAFM-approved plants was up slightly on 2013, with a marginal increase 1%. Prices paid to producers over the same period have increased, with the average factory price running at 6.9 % of last year's level at the end of the year. To date in 2015 there is a 5% drop in throughput at DAFM approved plants with an approximate 12% increase in the average factory price over the same period last year.
At producer level I continue to put in place incentives to ensure that producers see a viable future in the sector. During 2014, I announced the extension of the Sheep Technology Adoption Programme (STAP) for a further year. In committing funding of €3m to the programme in 2015 I am acknowledging the success of the scheme in 2013 and 2014 in which 4,000 producers participated.
Support for the sheep sector has also come from the Grassland Sheep Scheme for which I have prioritised funding over the last five years. This scheme delivered €83 million directly to the incomes of Irish sheep farmers. As it was not possible to implement the grassland payment under the new CAP regime I decided that payments received under the 2014 Grassland Sheep Scheme will be incorporated into the calculation of the entitlement value in each year of the new regime for those farmers who participated in that Scheme. This will have the effect of increasing their entitlement value and ensure that such farmers do not lose through the cessation of the scheme at the end of 2014.
Under the new Rural Development Programme (RDP) I have made provision for improving efficiency and profitability in sheep production under the Knowledge Transfer measure which has a budget of €100m. The experience in STAP will inform the development of this measure. In addition to profitability, the emphasis will be on the key issues of business skills, environmental sustainability and herd health, with increased interaction between individual farmers and advisors in order to customise information exchange. The Knowledge Transfer Programme for the sheep sector will be launched in 2016 when the current STAP concludes.
The current AEOS Scheme supports sheep farming through its commonage measure. The proposed new agri-environment scheme, GLAS (Green Low-carbon Agri-environment Scheme) will also support, amongst others, extensive and hill farmers, who have shown themselves to be careful custodians of the countryside in previous agri-environment schemes. GLAS intends giving priority to those commonage farmers who come together to form an agreed plan to manage these valuable landscapes. It also includes a menu of environmental actions, many of which will be suitable for all sheep farmers.
On the export front I intend to drive further the search for new markets. My Department in consultation with the meat industry and in cooperation with Bord Bia and the Irish Embassies abroad is constantly pushing for new markets and opportunities.
During 2014, we have agreed veterinary health certificates with Lebanon, Namibia, Hong Kong and The Philippines thus allowing for the export of Irish sheepmeat to those countries. Also, during my visit to China leading a Trade Mission in November 2014, I was able to hand over the completed version of a sheep questionnaire which we had been asked to complete in connection with our efforts to gain access to the Chinese market for sheepmeat. This represents the first milestone on the road which will lead, I hope, to Ireland gaining access to the Chinese market for sheepmeat in the future.
Dairy
With respect to the dairy sector, Ireland strongly supported the abolition of the milk quota regime, on the basis that quotas were widely regarded as a brake on the potential of the Irish dairy sector to respond positively to market opportunities. The ending of milk quota regime represents an exceptional opportunity for the dairy industry to increase milk output and, as a result, the industry has set itself a target, under Food Harvest 2020, of increasing milk production by 50% in the period to 2020. This will result in increasing the 2008-2009 average annual milk production of 5bn litres to 7.5bn litres in 2020. Consequently I am satisfied that dairy production in Ireland will not suffer in the aftermath of the abolition of quotas. Furthermore, since the publication of the Food Harvest 2020 Report, my Department has been providing a range of supports to assist farmers in exploiting the potential for expansion and development.
Notwithstanding a softening market for dairy products on world markets towards the end of 2014 and the consequent reduction in farm gate prices for milk, the general consensus among forecasters in this area is that increasing global population and other demographic factors are expected to result in strong demand for milk and dairy products in developing countries. Ireland is well placed to take advantage of this increased trade in the context of the removal of quota restrictions which will facilitate the necessary increased production.
Pigmeat
The development of the pigmeat sector is a priority for me given the crucial role which the industry plays in supporting approximately 7,000 jobs including production, slaughter, processing, feed manufacture and services. The sector accounts for 5% of the total agri-food sector and is the third largest individual component. In 2014 export volumes were up 7%, continuing the growth seen in previous years, while export values increased by 3%, constrained somewhat due to price pressures. Pigmeat prices tend to be cyclical in nature with periods of lower prices and production followed by recovery and this has remained the case for many years.
Support is provided by my Department for the development of the pig sector in a number of ways. Firstly I have included provision in 2015 and throughout the whole RDP for an on-farm capital investments scheme, TAMS II, with an overall budget of €395 million across all sectors, with €37 million allocated for 2015. Among the areas identified for initial funding are investments on pig farms for energy, water meters and medicine dispensers.
Other supports for development of the sector come through Teagasc which, through its Moorepark pig research facility and courses in pig production, plays an important role in improving production at farm level. Through its Joint Research Advisory Programme, Teagasc supports Irish pig producers by providing advice, research and education across a range of issues of importance to the sector. The high level objective of the programme is to enhance the sustainability of Irish pig meat production, including improvements in economic, social and environmental standards. This will result in improvements in the production and marketability of Irish pigmeat.
I am also conscious of the need to promote the consumption of Irish pigmeat in domestic and overseas markets. Bord Bia provides assistance to the pigmeat sector through its marketing and promotional activities, and the pigmeat quality assurance scheme helps to consolidate the position of Irish pigmeat on the domestic market and helps expand its presence on EU and third country markets.
I am pleased to report that overall Irish pigmeat exports in 2014 increased by 10%, to a value of €570m. Exports to Asia alone are estimated to have risen by 20% to China, 210% to Japan and 650% to South Korea. International trade is expected to improve in 2015, reflecting the ongoing increase in demand in response to growing per capita wealth in China, and the redirection of pigmeat usually directed towards the Russian market to different locations such as South Korea and the Philippines. For my part I have undertaken to ensure that as many alternative markets as possible are open to Irish Pigmeat processors. In this regard I was pleased to recently announce the opening of the markets in Vietnam and the Philippines for Irish pigmeat which are already serving as valuable alternative markets to Russia for Irish pigmeat exports.
I am of course aware of the current price difficulties for Irish pig farmers and have met with farm organisations and processors on a number of occasions to discuss possible solutions to alleviate these difficulties. I will continue to work closely with like-minded Ministers in the EU to persuade the European Commission to come forward with market response measures in response to current price difficulties. In addition my Department will continue to engage with the Russian authorities and with a view to lifting the pigmeat restriction as a priority.
It is important to remember that pigmeat remains the most consumed meat worldwide and this will continue to present opportunities for Irish producers, given our self-sufficiency. In addition, the progress made in the last few years in establishing and consolidating a presence in important international markets will better position Irish producers to take advantage of growing demand.
Poultry
Poultry meat has long been seen as a value for money food and this has underscored an increase in demand, particularly in recent years. The sector has faced considerable challenges in recent years with rising input and energy costs combined with significant pressure from lower cost imports. While input prices reduced somewhat in 2014, the beneficial impact of this was counterbalanced by reducing producer and wholesale prices.
Support is provided by my Department for the development of the poultry sector in a number of ways. Provision is made through the RDP, TAMS II, for poultry investments. In addition knowledge transfer groups will be established to optimise producer productivity and profitability in the poultry sector.
In terms of marketing supports, on a national level Quality Assurance plays a fundamental role in promoting food and horticulture and provides the platform for consumer promotion of product quality. The primary outlet for Irish-produced poultry is the fresh retail trade where Irish product is still dominant. The Bord Bia Poultry Quality Assurance Scheme (PQAS) is a very important instrument in that market and is recognised by consumers as a guarantee of traceability and reliability which is sought after by Irish retailers.
Ireland exports poultry meat to almost 40 international markets and export values grew by an estimated 20% in 2014 to €310 million, underpinned by strong growth in the export of processed products.
