Paul McGrath
Ceist:11 Mr. McGrath asked the Minister for Agriculture and Food if the 1990 ewe premium will reflect the dramatic price reduction in lamb this year; and if he will make a statement on the matter.
Ceisteanna — Questions. Oral Answers. - Beef and Lamb Trade.
Brendan McGahon
Ceist:18 Mr. McGahon asked the Minister for Agriculture and Food if it was a shortsighted policy to reduce the level of funding to CBF by 7 per cent over the past two years; and if he is satisfied that CBF can market Irish beef and lamb adequately on its present budget.
Paul Connaughton
Ceist:20 Mr. Connaughton asked the Minister for Agriculture and Food if his attention has been drawn to the major financial hardship caused to Irish sheep farmers as a result of the current market collapse of the lamb trade; that some farmers cannot sell lambs this week; that current values are down £25 per head when compared to last year; and if he is satisfied that the cutback to the CBF budget was shortsighted and highlights the Government's strategy for beef and lamb.
John Browne
Ceist:43 Mr. Browne (Carlow-Kilkenny) asked the Minister for Agriculture and Food the total budget provided for CBF for 1989 and 1990; and the markets which they exclusively operated.
I propose to take Questions Nos. 11, 18, 20 and 43 together.
CBF's total budget was £3.7 million in 1989 and is estimated at £4.1 million for 1990. The Exchequer grant amounted to £0.5 million for both years and the remainder is made up of statutory levies contributed by producers.
Marketing of beef and lamb is a commercial matter for the firms concerned. The functions of CBF are to develop, promote, encourage and coordinate the export of livestock and meat. They provide valuable services to the meat industry which improve the effectiveness of our meat companies in the market place. It is my intention that these services should continue and, indeed, be enhanced in the future.
I am aware of the current difficulties being encountered by Irish lamb producers due to a fall in market prices but I am glad to note some recovery has occurred this week. The drop in prices is due to a number of factors including the advantage to British lamb exports to the French market caused by the drop in the value of sterling vis-à-vis the French franc, the lower level of clawback on British lamb exports and increased slaughterings both here and in Britain. The 1990 ewe premiums will compensate Irish producers for income loss sustained this year.
The ewe premium for 1989 was fixed at £17.75 at the Sheepmeat Management Committee on 4 May. Payments of the 1989 premium will be made when inspections are completed in early June. The estimated total value of the 1989 premium will exceed £80 million. This benefit to Irish producers should maintain confidence in the sector and assist farmers in dealing with present difficulties. In addition to the payment of the 1989 premium, two instalments, each representing 30 per cent of the estimated 1990 premium, will be paid later this year. Total ewe premium payments this year should exceed £130 million.
I should also mention that, as part of the EC prices package, which I recently negotiated, an additional premium of £3.40 per ewe will be paid from 1991 onwards for all eligible ewes to beneficiaries in disadvantaged areas.
The common organisation of the market for the sheepmeat sector provides for private storage aid arrangements. Monthly tenders have been in operation since the beginning of this year for those regions of the Community where prices fall below the 70 per cent benchmark level. The private storage arrangements should provide an important safety measure for the sector.
Is the Minister saying that the price level is a relative term, that perhaps he will not be compensating farmers for the low price of lamb, that there is a ceiling which prevents him from doing so?
No. I said the best guarantee is the price level, and I think every Deputy recognises that. For reasons I have mentioned, there are what I might call certain temporary distortions in that market, for instance, because of the situation in Britain at the moment. Our priority is to maintain a floor through the operation of the ewe premium which I have mentioned and that increases as the market price or the reference price decreases.
Is it open-ended?
Yes, of course. Its purpose is to make up the difference between the reference price and the market price at any time.
I agree with the Minister that there is a stabiliser in place on the ewe premium. Farmers who are losing up to £20 per head on their lambs this year due to a fall in lamb prices on the French market will not be adequately compensated via the ewe premium. Surely the Minister must understand that. He is giving the clear impression that farmers will be no worse off this year as a result of the low prices for lambs.
Is there not something very peculiar about the system that has operated in this country for the last three or four years, or maybe longer, whereby we promote actively the idea of farmers getting into sheep, when two years ago the Minister slashed the allocation to CBF, the Meat Marketing Board, by half — they were getting £1 million and now they are getting £500,000? Where is the consistency or the good sense in that? Is it not now we want the markets? As far as I can see, CBF have not got the financial resources to market our lambs.
This is a very long question.
It is not so much a question as a statement and I do not agree with elements in the statement.
What about the stabiliser price and the price of sheep? The Minister is side-stepping the issue.
No, I am not.
(Carlow-Kilkenny): I do not think the Minister answered my question No. 43 in relation to prices. I asked him the total budget provided for CBF in 1989-90.
I answered the question.
(Carlow-Kilkenny): I am afraid I did not hear it.
At the beginning of my reply I answered it.
(Carlow-Kilkenny): Would the Minister agree with the view expressed by many farmers that CBF are very important when things are going well but if there is a crisis they do not seem to be able to do anything and are irrelevant? Some farmers feel they are paying money for nothing and that CBF are not there to help them when a problem arises, as is the case at present.
CBF launched a quality programme in lamb and sheep production a year and a half ago not too far from the area the Deputy represents, in Hacketstown, which has been eminently successful. It is a code of conduct for producers, hauliers, drovers and processors which has resulted in much better prices for Irish products, particularly on the French market. I do not believe CBF are important to farmers only when things are going well. They have done an excellent job. I acknowledge that they do not have unlimited resources and I am considering possibilities of supplementing their resources, but the producers must do the same, particularly having regard to the quality image they promote.
Would the Minister not agree that our exports of lamb are restricted to one country and that we must sell to other countries in the future if we are to develop further and ensure continuity of the market?
It is important to recognise that there has been great concentration on the French market, which is vitally important, and they appreciate the quality of Irish lamb. It is equally important to recognise, as Deputy Leonard suggests, that there are other outlets. There has been an increase in the sheep population generally in the European Community and that, as well as world conditions, has given rise to a reduction in the world market price. I assure the House that through the operation of European Community instruments, such as the ewe premium and so on, I will try to ensure that prices remain buoyant.
Would the Minister agree that the crisis in the British meat market arising from "mad cow" disease there and the massive vote of no confidence by the British public in their meat industry creates an opportunity for Irish meat sellers? In that context would the Minister not agree that it is necessary to increase the funding to CBF to enable them to market effectively labelled, safe, clean, "green" Irish meat which is available in abundance?
That has always been, and will always be, a feature of the promotion of Irish meat — safe, clean, "green", as the Deputy calls it, from an unpolluted natural environment. My officials maintain constant liaison with CBF. The House will not be surprised to know that we had discussions with them yesterday and today in relation to all market possibilities. The Deputy will appreciate that, in asking CBF to promote the quality of our product, I cannot be seen to suggest that the quality of other products is contaminated. The quality of our product will be promoted in a very positive way.
In reply to Deputy McGrath's question the Minister indicated several reasons for the reduction in sheep prices this year. As Deputy Connaughton said, farmers are receiving £20 or £25 a head less for their lambs now than they were this time last year. The Minister did not give any indication of a possible cartel controlling these prices. If such a cartel exists, what is the Minister doing about it? The fact that there has been an increase in the sheep population in Ireland is no reason for factories to club together and control prices as they have done recently in announcing 92p a kilo as the price of sheep.
The Deputy will appreciate that the operation of what he calls a cartel or monopoly is not my responsibility but that of another Minister. I am very anxious to ensure that the market buoyancy is passed on, particularly to the primary producer. If I had any evidence of groups operating to reduce prices I would certainly do everything within my power to deal with it. If the Deputy or any Deputy has information to this effect I would be glad to get it.
Would the Minister investigate the matter for me?
Yes.