Martin Kenny
Question:2. Deputy Martin Kenny asked the Minister for Agriculture, Food and the Marine the way in which he plans to tackle the crisis in the beef and suckler sector. [41466/18]
View answerThursday, 11 October 2018
Questions (2)
Oral answers (7 contributions)
I welcome the scheme. It is a move in the right direction. I mentioned to the Minister at a committee meeting a few weeks ago that we needed to come up with something outside the box and that it needed to be related to the calf. That, by and large, is what has happened. I understand an action must be involved in it. There is some concern about the cost of the weigh-in and the way that will work out. Perhaps the Minister will give more detail on how farmers will manage that, particularly in areas where traditionally there would not have been the use of a weighing scales except when farmers went to the mart which is the only time they would have seen the use of a scales. That is a problem for farmers in many areas. The bigger issue for the suckler and beef sector is the price the farmer gets. That must be dealt with. Currently prices are very low for beef when it goes to the factory and that has a knock-on effect all the way back down to the weanling in the market.
My Department is examining all appropriate measures to support the different agrifood sectors, including the suckler sector, in preparation for the next iteration of the CAP. The measures adopted will be informed by stakeholder consultation on the needs of the sector to develop in an economically and environmentally sustainable way, as well as the relevant research and the available budget and structure of the new CAP when it is finalised.
I was pleased to secure in the budget this week an allocation of €20 million in 2019 for a new pilot scheme for suckler farmers, the beef environmental efficiency programme. The data collected on this will also be a valuable addition to Ireland's already impressive database on cattle genomics. Details of the scheme will be announced in due course.
The BDGP is currently the main support specifically targeted for the suckler beef sector, which provides Irish beef farmers with some €300 million in funding over the current rural development programme period. This scheme is an agri-environmental measure to improve the environmental sustainability of the national suckler herd by increasing the genetic merit within the herd.
My Department has rolled out a range of schemes as part of the €4 billion rural development programme. In addition to the BDGP, other supports include GLAS, ANCs and knowledge transfer groups. Suckler farmers also benefit from the basic payment scheme and the greening payments under CAP Pillar I.
I am conscious this has been a difficult year for the sector in terms of weather and the range of challenges associated with it. At the recent meeting of the beef round table on 3 October, I highlighted the need for stakeholders to recognise their interdependency. I urged processors to engage positively with their farmer suppliers. It is essential that the position of the primary producer in the supply chain be secured if we are to build a sector for the future.
The beef round table also included discussions on the potential for producer organisations and the development of new technologies as ways of adding value along the whole supply chain, all tools to build resilience in the sector. Producer organisations would allow farmers to engage collectively with processors, with the aim of strengthening farmers' bargaining power. Additionally, I have asked Bord Bia to conduct a detailed examination of market dynamics, with the co-operation of the industry, taking into account sales of particular cuts into particular segments of the market in order to improve price transparency.
One of the unique strengths the agrifood sector has is our shared vision for the sustainable development of the sector in Food Wise 2025. I hope that this positive engagement will continue.
Additional information not given on the floor of the House
I am strongly of the view that this new provision announced in this week's budget and the existing range of supports available to suckler farmers, together with ensuring access to as many markets as possible, both for live animals and beef exports, are appropriate supports for the continued development of the sector. According to national farm survey already suckler farmers receive support equivalent to approximately €500 per suckler cow on average.
I will continue to argue for as strong a CAP budget as possible, post-2020. In particular, I am committed to ensuring that suckler farmers continue to receive strong support in the next CAP. My view is that such payments should support and encourage suckler farmers to make the best decisions possible to improve the profitability, and the economic and environmental efficiency, of their farming system. The beef environmental efficiency pilot is a positive step in that direction.
The Minister spoke about producer organisations being one of the answers to this issue, and perhaps they are. Additional supports are provided for producer organisations. However, in the past, most emphasis was placed on reducing the cost to the farmer of producing the product. That emphasis needs to switch towards improving the price for the farmer. I strongly believe we need to get that right. As I have said umpteen times, and I know the Minister agrees with me, we produce an excellent quality product. Irish beef is grass-fed, free-roaming, traceable from farm to fork, and comes from family farms, all of the elements the European consumer wants, yet we consistently find that the price returned to the Irish farmer is little or no better than that returned to the average European farmer. That is not right and should not be the case. Something needs to be done to ensure the Irish farmer gets a premium price for what is recognised worldwide as a premium product. In that context the beef forum has failed Irish farmers in securing an enhanced price. That is where we are at on this issue. While I understand marketing is under way and we are talking about getting into new markets in Kuwait and other countries around the world, farmers are not seeing an increased value for their product when they go to the mart in Leitrim or in Cavan to sell their weanlings or when they fatten their animals and bring them to marts in the other end of the country. We need to see something happening.
If the yardstick by which the Deputy measures the success or failure of the beef forum is in its capacity to deliver price, it is inevitable it will fail because the forum is not a price-fixing mechanism. By law we are specifically excluded from considering price. The Competition and Consumer Protection Commission has advised the Department that it has no function in that regard. However, there are many other things that forum can do and achieve, one of which is building such a collaborative approach. I look forward to a day when all the stakeholders will engage in that context. The problem currently, on which the Deputy has touched, is the position of the beef farmer in terms of being a price taker as a stand-alone supplier.
The benefit which producer organisations can bring is to give the supplier more power. It will make the supplier more efficient in the case of groups which are purchasing inputs etc. and it will also give him or her power when negotiating specification and supply on the basis of prices. That is missing from the architecture but it is very much part of the architecture of other countries.
I understand that. I am not talking about price fixing but enhancing the industry in order that a better price is returned to the primary producer. There is quite an irony in the Minister stating the rules set it up for the big processors to do very well but not for the farmer to do well. That needs to be examined.
We need to look at specification and supply. When I go to buy a piece of roast or some mince, there is nothing on the packaging to state whether it comes from a U grade or an O grade or whether the animal was aged 30 months or 35 months. The rules and regulations curtail the price that is returned to the farmer and this needs to re-examined quickly.
The new scheme is meant to be a pilot scheme. Is it intended to make it a permanent scheme, one that will be in place in the long term? People are a bit nervous about pilot schemes because they come and go. We want a scheme that is sustainable into the long term. In the budget, the Government found another €1 billion. In that context, a little more could be done to return a better supply of money to the agricultural sector.
I share the Deputy's concern that farmers should get the best possible return for their endeavours because without their commitment to producing a quality product, the edifice that is the Irish beef industry would collapse, domestically and internationally. I have said ad nauseam that processors also need to be aware of the symbiotic relationship that exists and I asked that they engage in the beef forum, bilaterally if not directly, which they agreed to do.
A pilot scheme is followed by evaluation and I am confident that the data which will be collected and fed into the process will be significant and will ensure the initiative is mainstreamed. Until we see the data, however, and see how successful it has been it would be premature to say it will definitely be mainstreamed. If it is not a success and does not help us accelerate the improvement of the beef herd's genetic content, we would have to consider other initiatives but I am confident that it will achieve its aims and that it will be mainstreamed subsequently.
Deputy McConalogue has kindly agreed to let Deputy Mattie McGrath put his Question No. 4 before Deputy McConalogue's Question No. 3, as Deputy McGrath has another engagement in the House.