Beef Industry

Wednesday, 3 July 2019

Questions (44)

Charlie McConalogue

Question:

44. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine his views on the criteria set down in the EU Commission implementing regulation providing temporary exceptional adjustment aid to farmers in the beef sector; when beef farmers will be able to apply to the national scheme; when payments will issue from the EU fund; and if there will be a 100% Exchequer top-up on the €50 million EU fund provided by the EU Commission. [28505/19]

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Oral answers (11 contributions)

Deputy Charlie McConalogue

I ask the Minister his views on the criteria set down in the EU Commission implementing regulation providing temporary exceptional adjustment aid to farmers in the beef sector. When will beef farmers be able to apply to the national scheme? When will payments issue from this fund? Will there be a 100% Exchequer top-up on the €50 million fund being provided by the EU Commission?

Minister for Agriculture, Food and the Marine

I am keenly aware that the past few months have been very challenging for beef farmers in particular following a difficult year for farm incomes in 2018 arising from weather conditions and price challenges. There was a prolonged and exceptional period of depressed prices lasting from autumn 2018 to spring 2019, with the ongoing uncertainty surrounding the outcome of Brexit, among other factors, contributing to this market disturbance.

In this context, the recent announcement by Commissioner Hogan of European Union exceptional aid for the Irish beef sector is very welcome. I have been making the case for some time for an exceptional aid package from the European Commission for Irish beef farmers at EU Council of Agriculture and Fisheries meetings and in direct consultation with the Commission. The submission made by my Department to the European Commission in request of the aid package is available on my Department’s website at www.agriculture.gov.ie/farmingsectors/beef.

This exceptional aid has been granted by the European Commission on the basis that the Irish beef sector is heavily reliant on export markets and is uniquely exposed to shifts in the UK market in particular. In addition, Ireland’s extensive beef system with its comparatively long production cycle presents challenges in responding to these market shifts. The Commission has also recognised that it is in the interests of the market stability of the EU beef sector to avoid a situation where downward price pressure on Irish beef spills over to other European member states.

This temporary exceptional aid provision is given effect through a Commission implementing regulation. This regulation, the draft of which is available on the Commission's website, will be published soon. Article 1.3 of the implementing regulation provides as follows:

The measures taken by Ireland shall be aimed at reducing production or restructuring the beef and veal sector and one or more of the following objectives:

(a) implementation of quality schemes in the beef and veal sector or projects aiming at promoting quality and value added;

(b) boosting market diversification;

Ireland must now notify the Commission, no later than 31 July 2019, of the measures to be taken in accordance with the regulation. My Department is currently working on the detailed parameters of an exceptional aid scheme, in co-operation with the Department of Public Expenditure and Reform and the European Commission. Further details on the aid scheme will be announced in due course following the appropriate stakeholder consultation. As the Deputy is aware, the Government has committed to matching the funding provided in this regard.

An Leas-Cheann Comhairle

We will have to respect the time if we are to get through as many questions as possible this morning. I will be reminding Deputies of that. Deputy McConalogue has one minute for his first supplementary question.

Deputy Charlie McConalogue

As the Minister rightly points out, the last 18 months have been very difficult for farmers and the beef sector, particularly in light of Brexit. Incomes were down by as much as 25% last year as a result of the distortion in the market arising from Brexit. Just before the local elections the Minister and Commissioner Hogan made a big announcement and engaged in a PR drive about how funding had finally been secured to address the loss of income farmers had suffered as a result of Brexit. It was said that this would comprise €50 million from the EU and €50 million from the State. There was no mention of this funding being tied to stock reduction or restructuring before voters went to the polls in the local and European elections. It was entirely sold as a market disturbance measure to address income loss. Farmers were misled by the Minister and Commissioner Hogan in that regard.

We on this side of the House had looked for aid under Article 219 of the Common Market organisation regulation, which specifically deals with income reduction. Why did the Minister not manage to get the European Commission to deliver funding under that regulation rather than what has been delivered here?

Will the Minister clarify whether the €50 million co-funding to be provided by the domestic Exchequer is available and will be in place? Will he indicate today when the money will be delivered to farmers?

Deputy Michael Creed

My objective has always been to provide the maximum level of support to Irish beef farmers. My track record, whether on additional payments under areas of natural constraint, the beef environmental scheme or the beef data genomics scheme, speaks for itself. It is a particularly income-challenged sector. While we cannot intervene on the price paid for commodities to farmers, we have some liberty to deliver income supports in other ways and that is what we have been about. The case we made to the Commission is on the Department's website. It is that from the back end of 2018 into the spring of 2019, there was a prolonged period of price depression for Irish beef, which arose in particular from sterling shifts and our exposure to the UK market. I note our previous experience with the Commission, including in relation to the dairy support measure of 2016. Interventions by the Commission come with terms and conditions attached and we make the effort to ensure the Department and the agriculture community are in a position to live within those terms and conditions. In that context, we will engage in the coming days with farm organisations and devise a scheme for submission to the Commission by the end of July. My objective has been to get the money to farmers at the earliest possible date and I am convinced we can do so.

Deputy Charlie McConalogue

Under Article 219 of the Common Market Organisation Regulations, (EU) Regulation No 1308/2013, it is possible for the Commission to provide funding directly to address income reduction as a result of market disturbance. However, that is not the regulation under which the Minister and Commissioner Hogan have delivered this funding. The irony will not be lost on people that there are strings attached to this fund, which includes a requirement to restructure or reduce the production of beef in Ireland at the same time that the Commission and the Minister and his European counterparts are proposing under the Mercosur deal to increase the amount of beef coming into the EU from South American countries.

I asked the Minister specifically about the €50 million. Is that funding set aside within the Department's budget to ensure it can be delivered to farmers this year? When will the funding actually be delivered to them? Farmers took this income hit last year. They are already out of pocket and need this funding promptly. How will the funding be distributed? It is essential to have a mechanism which properly reflects the losses people had through the selling of cattle and finishing of cattle over that period. The funds must be delivered proportionately to those who suffered those losses. Can the Minister please clarify the €50 million question, when the funding will be delivered and how it will be distributed to farmers?

Deputy Michael Creed

The how will be in consultation with farm organisations. That will take place in the coming days and will be subject to approval by the Commission. The ambition will be to pay in 2019 at the earliest possible date. The funding is €50 million from the European Union and I have committed to match that funding from the Exchequer. The terms and conditions are what they are. I am convinced that we can live within them without an adverse impact on the beef sector. It is naive to suggest funds could come from the European Commission without terms and conditions. The precedent I quoted in respect of the dairy industry had a supply-reduction measure within it as well. I am satisfied that we can live within the terms and conditions as envisaged without any adverse impact on the Irish beef industry.