Deputy Carey has permission from Deputy Heydon to introduce his question.
Wednesday, 3 July 2019
Questions (49, 50, 53, 56, 62, 81, 83, 87, 88)
Oral answers (16 contributions) (Question to Agriculture)
49. Deputy Martin Heydon asked the Minister for Agriculture, Food and the Marine the details of the new aid package for beef farmers based on EU exceptional aid; and if he will make a statement on the matter. [28264/19]View answer
50. Deputy Aindrias Moynihan asked the Minister for Agriculture, Food and the Marine the way in which he plans to administer the recently announced EU beef fund; when farmers can expect payment; and if he will make a statement on the matter. [28261/19]View answer
53. Deputy Bobby Aylward asked the Minister for Agriculture, Food and the Marine if the distribution of the €100 million Brexit fund for farmers will be subject to preconditions and or specific categories of farmers such as beef finishers as has been reported; if the fund will be available to farmers at stages along the beef chain (details supplied); and if he will make a statement on the matter. [28230/19]View answer
Éamon Ó CuívQuestion:
56. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine if in the submission submitted to the EU Commission by his Department for special assistance due to the beef price crisis, a proposal was made do reduce the suckler cow herd; if so, the details of such a proposal; and if he will make a statement on the matter. [28082/19]View answer
62. Deputy Lisa Chambers asked the Minister for Agriculture, Food and the Marine the details of the €50 million fund announced to help farmers cope with the impact of Brexit; and if he will make a statement on the matter. [25181/19]View answer
81. Deputy Thomas Byrne asked the Minister for Agriculture, Food and the Marine the status of the latest EU-Mercosur talks; when payments will issue under the EU beef compensation fund; and if he will make a statement on the matter. [28254/19]View answer
83. Deputy Martin Kenny asked the Minister for Agriculture, Food and the Marine when beef farmers will receive money from the €100 million beef Brexit fund; the terms and conditions of the scheme; and if he will make a statement on the matter. [28157/19]View answer
87. Deputy Aindrias Moynihan asked the Minister for Agriculture, Food and the Marine when he plans to meet the farming stakeholders to discuss the recently announced EU beef fund; and if he will make a statement on the matter. [28262/19]View answer
88. Deputy Willie Penrose asked the Minister for Agriculture, Food and the Marine if there will be no compulsory reduction of cattle numbers linked to the €100 million Brexit emergency package; when it is intended that farmers will be paid the funds arising from the package; and if he will make a statement on the matter. [28078/19]View answer
This question is to ask the Minister the details of the new aid package for beef farmers based on EU exceptional aid and if he will make a statement on the matter.
I propose to take Questions Nos. 49, 50, 53, 56, 62, 81, 83, 87 and 88 together.
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 due to weather conditions. 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.
The recent announcement by Commissioner Hogan of EU exceptional aid for the Irish beef sector is very welcome in this context. I have been making the case for some time for an exceptional aid package from the EU Commission for Irish beef farmers, at EU Council of Agriculture Minister meetings, and in direct consultation with the Commission. The submission made by my Department to the EU Commission in request of the aid package is available on my Department's website: https://www.agriculture.gov.ie/farmingsectors/beef/
I confirm to Deputy Ó Cuív that it did not request in any way, shape or form a reduction in suckler cow numbers.
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. Additionally, Ireland's extensive beef system, with its comparatively long production cycle, presents challenges in responding to 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 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;
(c) protecting and improving the farmers’ environmental, climate and economic sustainability.
Ireland must notify the Commission, no later than 31 July, of the measures to be taken in accordance with the regulation. My Department is 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 of the aid scheme will be announced in due course following the appropriate stakeholder consultation.
I welcome the Minister’s efforts in that regard. While the package is welcome, I have been told that the factories should not be the main beneficiaries of it. Will the Minister indicate that that will not be the case? Suckler cow and finisher farmers should be the primary and sole beneficiaries of the package. It is important that the terms and conditions of the scheme be correct. Will the Minister give more details of what has been done in the stakeholder consultation process? How confident is he that he will have it finished and the measures agreed to with the industry by the end of July?
I have stated repeatedly that the money is for farmers. That is my intention. Within that category, I see two distinct beneficiaries, namely, finishers and suckler cow farmers. The submission to the Commission makes clear our thinking in that context. The case is made on the relative hit both sectors took in comparison with what happened in the previous 12-month period. From memory, the quantifiable losses were approximately €67 million on the finishers' side and €35 million on the suckler cow farmers' side. The submission has been made and it is my clear intention that the beneficiaries will be farmers only. It would be incorrect to have terms and conditions before we have the consultation process. It will take place shortly. The ambition is to have that engagement lead to the formation of a scheme. It is intended to have it approved by the Commission by the end of July. Thereafter, we will invite and process applications. It is intended to get payments out as quickly as possible in 2019. It is a challenging timeline, but we are doing our best to meet it.
Beef farmers have been under phenomenal pressure for the past year, with Brexit impacting severely on the sector. There has been a 25% reduction in beef prices and incomes. Last week’s Mercosur deal put the tin hat on it. The Minister can understand why anybody involved in the beef sector is angry and under pressure. The scheme was initially announced before the local and European Parliament elections and appeared to be a Brexit relief scheme to aid farmers. Now it is being linked more with reducing production. At what point did the Minister become aware of that element of the scheme? Was it part of the original submission or more recent? While the consultations are ongoing and due to finish shortly, has the Minister set a timeline for when farmers will be paid the money? Will it be paid in the third or fourth quarter of this year? Are funds in place to the make the payments this year?
On the terms and conditions and supply reduction, I point the Deputy to my original reply. Our submission is on the Department’s website. It contains no proposals for supply reduction. That is a term and condition attached by the Commission. We became aware of it once it was published by the Commission. In previous interventions under the Common Market organisation, CMO, regulation, supply reduction was an instrument used by the Commission to address difficulties in the marketplace. I presume it is connected to the economic laws of supply and demand. Kill levels in the beef industry are high and there has always been a market issue once the level moves above 32,000 or 33,000.
One of the other issues with which we are dealing is Brexit. A hard-deal Brexit will have a different and significant impact. However, we are also dealing with the competitive challenges arising from the currency difficulties.
The Minister has said he only became aware of the proposal to reduce production when the Commission published the regulation. Is he stating categorically that there was no tic-tacking with the Department about the proposal until the Commission published the regulation? Once again, we are being shown discourtesy by the European Commissioner, Mr. Phil Hogan. The Minister has been given a scheme, about which the Commissioner conveniently forgot to tell us before the recent elections, which requires a reduction in production. Will he give us some indication of his thought processes in that regard?
My thought process is that it is manageable. We managed it in the dairy industry without damaging the sector and can also manage it in the beef sector. The Department has extraordinary levels of data for stocking densities on all farms. By the creative management of individual farmers’ stocking requirements, it is possible to deal with the issue in a way that will not inflict any long-term structural damage to supply in the beef industry. The first we became aware of the reduction issue was when the Commission published its terms and conditions. As I said, our proposal which is on the Department’s website is clear in quantifying the scale of the challenge and contains no reference whatsoever to supply reduction.
When will beef farmers receive money from the €100 million Brexit beef fund? What will be the terms and conditions of the scheme?
The conditionality set by the Commission is in the public realm, but the scheme has yet to be devised. The schemes we have devised, including the beef environmental efficiency programme, are straightforward. Our ambition will be to have the scheme as straightforward as possible for those who have taken the hit, namely, finishers and those who suffered back along the line in producing weanlings with the prices reflected in their sale. The scheme will be devised following the engagement with stakeholders. It will then be approved by the Commission and followed by the invitation of applications. Payments will be made as quickly as possible.
It is important that the Minister outline a timeframe for the scheme and when farmers can expect to receive payments under it.
Earlier I asked the Minister to lay out a timeline for when farmers could expect to receive payments under the scheme.
Is funding in place to pay it this year? Does the Minister envisage having that fund or ensuring that farmers receive cheques in quarter three or four of this year? I understand consultation is ongoing and that much of the next number of weeks will be focused on that but the Minister will have all the information and consultation he needs finished by August. Surely then a timeline must be set out regarding when those payments will be issued.
I understand that the submission in April referred to by the Minister set out one of the conditions as being the application of extensive production methods. What was meant by that? Does it mean that the smaller-scale farmer will go away? What was intended by that?
Could the Minister clarify what he means by the term "application of extensive production methods"? Is he saying that the more intensive beef farmers will take the hit? Is that the suggestion? What does it mean because it seems to open a door for the response the Minister got from the EU?
I would like some clarity regarding suckler cow farmers. We understand that a large portion of this fund would probably go to the finisher. The Minister mentioned what would happen down the line but often times its a case of wait horse and get grass and they seldom get fed. That is the problem here. Will a specific portion of this money be allocated? What pro rata amount will it be? Will it be 2:1 or a 50:50 split between the finishers and the suckler cow farmers?
I will start with the last question. The submission we made to the Commission quantified the relative hits that finishers and producers of weanlings, particularly from the suckler herd, had taken. While I do not want to stand up here and say I have the scheme now, broadly speaking, that will be reflected in the final shape insofar as targeting the €100 million where the hit impacted most. My recollection is that the figures in the finisher and suckler area are €67 million and €35 million. Let us wait and see what happens subject to consultation and approval by the Commission, which is a critical hurdle.
My ambition is to do it as quickly as possible. I do not underestimate the challenge in terms of designing a scheme and giving farmers an appropriate time to apply bearing in mind that the scheme will, hopefully, over the line from Brussels. The deadline is 31 July. We will then put together the necessary administrative arrangements to invite applications, a closing date, processing of applications, a payment system and the back office requirements in terms of systems to support the payment and processing of all those applications. This is not an insignificant task but it is certainly my ambition to do it at the earliest possible date in 2019.
Regarding Deputy Ó Cuív's question about intensive or extensive, the measure will deliver support where losses were felt. They are in both intensive and extensive systems and I hope would be reflected in that context. The ambition is to focus the resource wherever the hit was felt be it anybody who sold finished cattle regardless of whether that was an extensive system of finishing, or anybody who reared sucklers regardless of whether that was a highly stocked intensive system or an alternative system bearing in mind that the average suckler herd is 15 suckler cows which broadly speaking is not considered to be an intensive system of production.