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Dáil Éireann díospóireacht -
Tuesday, 13 Mar 1984

Vol. 348 No. 11

Adjournment Debate. - Pig Breeding Industry.

I thank you, Sir, for giving me the opportunity to raise this problem here. It is appropriate that we have a discussion on it now because I understand that it was announced on the news today that the pig farmers propose to take certain action tomorrow to highlight their plight. Before they are driven to that it is appropriate that we in this House take note of the difficulties facing the industry and the possible results not only for those engaged in it but also on the economy of their failure to achieve success in having their situation improved.

We are not here to talk about an industry that has been subsidised heavily in the past, that has been carried on or nursed by anybody except those engaged in it. We are not talking about a second-rate industry that has already consumed taxpayers' money. Somebody told me recently that a report carried out on behalf of the European Commission stated that the Irish pig farming industry was the most efficient in Europe. I understand that Pig International stated recently that the Irish pig industry was among the most efficient to be found in any part of the world. Therefore we need not apologise to anybody for standing up at a time of crisis in the industry and asking the Government, the State and everybody concerned to take note of that serious crisis and to do something about it.

One problem of immediate concern to the industry is the number of pigs being imported from Northern Ireland weekly. This importation is quite legal. The pigs are being imported into the South, with the assistance of an MCA payment, in numbers something like 10,000 per week. The pig industry takes responsibility within itself for its own surpluses and the cost of exporting pigs is collected from every producer.

What about the crubeens? We are exporting truck loads of crubeens.

That is an interesting question and I am waiting to hear more about it. It is not the first time that such cases have come to light. I am amazed that, it having been mentioned publicly, we seem never to hear any more about it. I would like to get more information on that.

The cost to Irish pig producers to get those pigs out of the country is something like £3 per animal and the cost of every pig exported dead may be about £10. If we had only our own surpluses to export, then that cost would be reduced to something like £1 instead of £3. That would not bridge the gap between breaking even and losing, but at least it would be an improvement on the present situation. Those involved in the industry have an obligation to consider the present plight of the producers and voluntarily to make a decision to cease importing pigs while the market is in its present condition. It would serve nobody's purpose in the long run if we pursue policies within any sector which are to the detriment of another sector and will eventually create a disaster for the entire industry.

We have been debating jobs here. Consider the number of pigs produced and the size of the breeding herds. It has been stated that something like 1,000 farmers are involved in the industry and the number of labour units involved is something around 2,000 which is a considerable number of full-time very productive labour units. It is fair to say that we could expect that at least four other jobs would depend on every job in the various industries connected with the pig industry, in milling, processing, maintenance and other sectors, and the number might well be higher. We are talking about probably 6,000 or 7,000 jobs and about an industry which cannot survive for very long. Years ago we had the notorious pig cycles when prices dropped, profits became small and herds were reduced fairly rapidly.

Farmers in those years were less professional that they are today. We had a large number of part-time farmers to whom the production of pigs was of marginal importance and they got rid of their herd quickly in times of crisis. Those involved today are far more professional, as they must be if they are running an industry which competes with the best in the world, and is recognised as doing so. They have made their investment and must stick with it. Very few people involved in the industry today can opt to get out at short notice. They must either stay or go entirely bankrupt. Most of them have modern houses, equipment and facilities. Most of them have borrowed heavily and to break the line of production at this stage would mean probably absolute disaster for themselves and their families. Therefore, everybody is holding on even if everybody is losing money. If at some stage the industry breaks under the pressure, which must occur before very long, it is not the more inefficient people who will go to the wall. People will go depending on what stage they came in, on their interest rates and the repayments they have put behind them. A very large proportion of the people involved in that industry have heavy repayments and if the present situation goes on much longer they will not survive. As I pointed out in another parliament some weeks ago, if that happens we can be asssured that the people who will pay to rebuild a similar industry in Ireland will be the consumers. Regardless of how we look at it, the demand for pork products will be there and will be filled from abroad or from the home market. If we have a total disaster in the industry then eventually the consumer, through higher prices, will create an environment in which that industry can return and investment in it be encouraged again. The importation of pigs from Northern Ireland is part of the problem. We have also the importation of pork and bacon which probably is not nearly so detrimental, perhaps about 20 per cent of what comes in as live animals. This is borne out by the fact that in recent years the breeding herd in Northern Ireland has increased.

What is the 20 per cent?

Pigmeat products total imports are probably as little as 20 per cent of what is imported in the live form.

In volume or in value?

In volume, pig numbers. It is estimated that slaughterings in Southern Ireland increased by 13 per cent and our breeding herd decreased by perhaps something like 1.8 per cent. On the other hand, slaughterings in Northern Ireland increased by 18 per cent. That clearly indicates that they have been producing the breeding herd and we have been accepting their pigs. In addition, our producers have been subsidising the export of these animals to other markets. The industry would be patient with and would tolerate being forced to subsidise or assist export of their own surplus, but one should not expect beleaguered farmers to export the surpluses of another State.

This year higher prices of feedstuffs is an important element in the cost of producing animals. The European Community policy is to have intervention prices for cereals and to maintain those prices which are considerably higher than world prices, at the same time not expending any protection to the pig industry which is thereby adversely affected. This also affects the poultry industry. The part of the country from which the Minister and I come suffers as a result because we have to import feedstuffs which are more expensive than they would otherwise be because of that Community policy, without protection for the poultry and pig industry. This anomaly will have to be rectified.

Our Minister and those of us who represent Ireland in the European Parliament should keep this matter under consideration and seek a suitable policy to assist the pig and poultry industries and the areas which do not grow grain, to correct this imbalance.

After the handling of the super-levy proposal, the Deputy surely would not expect his Minister to do anything in Brussels for the pig industry.

Will the Deputy on the far side hear me through? He could have raised this subject, if he had so chosen. I can discuss the question of the super-levy with him later. It has been admirably handled.

The Deputy should be ashamed of himself for saying that. It is an absolute disgrace.

We are being sold out. The present Government will be known as the great national sell-out.

We could not be in a better position than at present. The Minister has succeeded in getting——

Interruptions in a limited debate are very disorderly.

The Minister has succeeded in getting everything that our farmers, or any reasonable politicians or public-minded people expected him to get at this stage.

Keep to the pigs, for goodness sake. Do not expect us to believe that.

If the Deputies on the far side would listen until I have finished, they can then put down a question on the super-levy and it can be discussed at a later stage.

Keep to the trotters.

We did not give in half as quickly as did some Ministers from the other side on the question of sugar beet a couple of years ago.

Keep to Curly Wee.

Has the Deputy any foundation for saying that? There is an increase in the price of sugar beet.

Order, please.

It is fairly remarkable that pigs are slaughtered in Southern Ireland at something like £1 per unit extra veterinary charge over Northern Ireland charges. If our costs were as low as those in Northern Ireland, we would have that extra £1 advantage. Furthermore, the dairy industry could go some way to help. It appears that that industry are now willing to take less for their skim milk and whey from the factory that dries the product for sale into intervention.

(Interruptions.)

Deputies should not try to muzzle Deputies who have permission to raise a question.

Deputy O'Keeffe appears to be intent on stopping me from making a case for the pig producers.

The Deputy is making no case. What is the formula for rescue?

Deputy O'Keeffe should restrain himself. If he cannot, he should leave the House.

I am trying to identify a number of areas in which pig farmers can be helped. One is through better co-operation from the dairy industry, another by reducing charges at bacon factory level, another concerns the problems of pollution in areas where farmers have built up large herds and where it is quite obvious that pressure is being put on them — and rightly so — to restrict effluent from getting into waterways and fishery areas. These measures are important, but if the consumer and the public want the co-operation of the agriculture industry in preventing pollution, farmers must be given the assistance that manufacturing industries have been getting through the years — grants of 50 to 60 per cent at times — for methods of preventing pollution. Pig farmers, who have a particular problem at present and are finding it difficult to make the sort of investment required to improve our waterways and fisheries, need this assistance and should get it.

The Deputy has our support on that.

I ask the Minister to sit down with all the interests involved. I cannot — as some of the Deputies opposite, I have no doubt, would — propose an instant solution to the problem which will not impose charges on the taxpayer and create problems in other areas. If we propose a fully fledged intervention system, this industry is such that there would be overproduction for evermore and Governments would be buying pig meat and storing it until we encountered the same problems as with dairy surpluses. I would not propose that as a solution. However, in the interim we should act, for our own sake. The French Government have made interest-free money available on an informal basis to those involved in this industry in France. I have no doubt but that under the table assistance will be given to the British industry. This has always been the case. The Minister should combine with the dairy industry, the pig farmers and those in the processing and exporting end to work out some solution to this crisis.

This industry has been very self-sufficient, self-financing itself with very expensive money. It has made itself the most efficient in the world, employing something like 6,000 people, earning at least £60 million in exports and producing £150 million of wealth here. This is an important industry and before it is too late everybody concerned should calmly discuss all the options open and the banks and lending institutions should take part as well. They say that they would treat such people with sympathy, but sympathy will not resolve the problem. They will have to put on the table what they propose as their contribution to an industry which has given them good business and plenty of profits over the years. The banking institutions will have to make their contribution, like everybody else.

Hear, hear.

That is my request to the Minister this evening. I do not expect him to have an exciting solution which he can put into practice in the morning, but his advisers in the Department should try to work out some solution before it is too late.

The Minister should tell us what he is going to do.

Firstly, I am completely aware of the problem facing the pig industry. We are all very much aware of it, because of the many reasons which Joe McCartin has outlined.

Deputy McCartin, please.

Outlined by Deputy McCartin. A number of factors to which I would like to refer briefly has caused this situation to develop. Like all other areas of farming, this industry has its ups and downs. However, some of the aspects of the pig industry produce difficulties and the Deputy referred to the famous cycle over the years. That is one of the reasons, but not the most obvious at present. We had a huge increase in the cost of pig compound feedstuffs, something that has not happened here for a number of years. There has been an increase in the cost of feedstuffs generally, but this one has had a greater effect on profitability in the pig business. We had a massive 20 per cent increase last springtime.

Does the Minister think that barley is too dear?

This was because the United States and Europe had a very bad harvest, with low yields, compounded by high transport costs because of the great distances involved. This increase was very difficult to take on board. It is something we have to live with.

I would like to point out it is 40 per cent.

On the other side of the coin, as if that was not enough trouble for our pig producers, the consumer demand, particularly in the UK, remains stagnant. This is due to the recession. For a strange reason, in the UK in 1983 we had great competition for bacon and pork, as far as the housewife is concerned, with the cost of lamb. This obviously had a great bearing because producers were being hit by a 20 per cent increase in foodstuff prices and their product was losing ground in a very important market.

I would like to refer the House to the great changes that can come in the pig industry in a very short time. Most pig producers admit that 1982 was quite a good year for them because the factors I talked about worked in their favour. Within a few short months they found themselves in a deficit position. There is one other very important factor, and it is important that we remember this at all times. The EEC was 102 per cent self-sufficient in pigmeat last year. That is a fairly major change from what we were used to. As every pig producer knows to his cost, the minute you have an oversupply on the market, irrespective of where it is, you have problems.

(Interruptions.)

It is a well-known fact in marketing circles that one lorry load too many, no matter how many lorry loads are required on the market, creates a surplus. This is obviously what is happening. It appears from the best information I have that self-sufficiency will not be any greater in 1984. We have to be thankful for small mercies. As the House is no doubt aware, about 25 per cent of our total production has to be exported. The home market takes 75 per cent. During last year Denmark had the misfortune to have foot and mouth disease. Because of that we got a very useful foothold in the Japanese market. I understand that we exported about 10,000 tonnes of pork to Japan last year.

There was a Cavan man in Japan before that.

There was, but he had not 10,000 tonnes.

He was there some years ago.

Deputy MacSharry did a lot for the pig industry when he was Minister for Agriculture.

I remember bad days in the pig industry when Deputy MacSharry was Minister. There is no doubt that because of the export refunds that work in the pricing mechanism we got this important foothold in the Japanese market. If it was not for that and for the misfortune in Denmark we would be a lot worse off.

We have got a very good name in the Japanese market and we should be able to get more pork into that market in the future. We have another great problem, as Deputy McCartin pointed out, of pig imports from Northern Ireland. It amounts, because of the MCAs and the way they work, to a subsidy of about £5 per pig. The kernel of the matter is that many of the live pigs imported are Irish and they are doing a U-turn. It has been estimated that the figure is as high as 60 per cent.

(Interruptions.)

This problem of being exported and then imported in order to collect the MCAs is causing havoc. The Minister is looking very closely at this in Brussels at the moment. There is a debate on the whole question of dismantling the MCAs, as Deputies are aware.

They are destroying Irish agriculture.

It is quite possible some agreement will be reached on this. Even if we were to halve the MCAs——

(Interruptions.)

The interruptions will have to cease. It is a long time since I have seen so much interruptions in an Adjournment debate. It is not good enough.

It would be most advantageous to us to export to the two major countries we export to. Because of the method by which it would equalise itself with Northern Ireland this would be a great boost for our producers.

Deputy McCartin referred to intervention. We have a type of intervention which has worked reasonably well. It is not an EEC-aided intervention but a private storage aid whereby factories are paid a subsidy by the EEC to help to get over the glut period. There is about 1,000 tonnes of pigmeat in this category at the moment. If private storage aid was not available this year we would have many problems.

Where are they?

In this country. There are about 1,000 tonnes stored at the moment. I would not like to see a situation when we would build up another huge mountain of pigmeat. The lessons to be learned in the EEC in five or six years show that this is not the best marketing strategy. I believe that if we can arrive at a situation through negotiation we can dismantle the MCAs and, even if we get a 50 per cent reduction and because it appears that the feeding situation in relation to cost is beginning to right itself, at the end of this year there will be reasonable hope for our pig producers.

I would like to refer to what Deputy McCartin said about the importance of the pig industry. It is very important because of the number employed in it not to allow a situation to develop where many people would have to ease themselves out of this production. It takes a lot of very expensive capital to get back into the business. We hope as a result of the negotiations taking place that there will be a reasonably bright future during this year. I might also add — this has been mentioned previously — that all the people involved in pig production will be meeting the Minister for Agriculture next week or the following week to discuss what else can be done.

Will the Minister be there?

Of course he will be.

He will not have resigned?

I have no doubt at the end of the day that the concern the Government are showing for pig producers will be seen where it counts most, more profitable pig production.

The Dáil adjourned at 9 p.m. until 10.30 a.m. on Wednesday, 14 March 1984.

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