Dáil Éireann díospóireacht -
Thursday, 16 May 1996

Vol. 465 No. 5

Adjournment Debate. - Beef Industry.

Mr. Cowen

I am grateful to the Ceann Comhairle's office for allowing me to raise the issue of the continuing crisis in the beef industry, particularly the compensation package announced the day before yesterday, which does not compensate those hardest hit — it must be the first time such a step was taken, even in Irish politics.

The beef industry, particularly beef farmers, suffered a series of hammer blows in recent months. Yesterday's sudden cancellation by the Minister for Agriculture, Food and Forestry of his planned trip to Libya to assist sales of Irish beef underlines the political inadequacy and impotence of the response from the Government to the problems facing a beef sector in crisis. At the beginning of April the Libyans announced that they intended to purchase 140,000 head of cattle. Despite being pleaded with to personally go to that country to pitch for the sale of Irish beef, the Minister has stood back. It seems ministerial complacency has again cost the beef industry dearly.

This episode of the last 24 hours is the latest instalment in a series of inept mistakes. Last autumn and winter the Minister was warned by all quarters, including Members on the Opposition benches, that repeated and drastic cuts in export refunds would undermine the price of beef. Not only did he ignore those warnings, he sought to contend it would have no effect on the price of cattle. He repeatedly went on the record to assure farmers that prices would not be affected. Those promises proved baseless, and the price of beef is tumbling.

In addition to severe problems caused by cuts in export refunds there is the BSE crisis. The Government, particularly the Minister for Agriculture, Food and Forestry, is responsible for a fatally delayed and flawed response in that regard. After the announcement of 20 March in the House of Commons I set out in a debate in this House a coherent position that should have been adopted. To this day the only markets the Minister has visited are Italy and Spain, markets which were not closed and account for only a tiny portion of Irish beef sales. The Minister of State, Deputy Deenihan, visited Sweden, but the amount of beef we sell to that country is not even included in Bord Bia statistics.

The Minister has not been prepared to risk one iota of his precious political capital for the beef industry. Only safe photo opportunities and guaranteed good news could lure him into the real world. In the meantime, Ireland's traditional markets for beef, our largest industry, have been allowed to wither. When the Fianna Fáil delegation went to Iran a great effort was made here by the usual anonymous spokespersons to rubbish that visit. We were told that there were only technical problems which would be dealt with by the Minister in a matter of a few days. As of today I can confirm that the 6,250 tonnes of beef for which we got political clearance is only now being disembarked in Iran and nothing has been done about the 4,000 tonnes of beef in Irish cold stores — we also got political clearance for that to be shipped out. The Minister still has not visited Iran, where we received an excellent welcome. The Iranians understand that we have a problem and are anxious to deal with it at political level.

The Minister's response at EU level has been equally inept. The plan announced this week is completely unfocused and unsatisfactory. Those farmers most affected, winter fatteners, will not benefit. The proposed increase in the suckler premium by £24 and in the special beef premium by £20 will be of no benefit to the 12,000 farmers in the specialised job of winter fattening. The slaughter premium, which was a negotiating objective and stated as such by the Minister as he went into the negotiations in the Council of Ministers, could have been substantially increased. There is no assistance for winter fatteners who, it is recognised by everybody in farming circles, are hardest hit, with losses of up to £150 per head.

Tuesday's EU package is further proof, if proof were needed, that the Minister is totally out of touch with the scale and nature of the crisis. I appeal to the Government, whose political composition renders it totally uninterested in matters agricultural, including a £1.5 billion industry, with renderers about to confirm next Tuesday that they will take no further offal and meat factories about to close down once again, to initiate a concerted political campaign at Government level to reopen lost markets. We have seen the capacity of the Ministers for Enterprise and Employment and Trade and Tourism, and even the Tánaiste, to visit Spain to find the soles of shoes for Dubarry and to visit America to ensure that Digital and others reinvest here when hundreds of jobs were at stake. I accept those visits were necessary, but in a £1.5 billion industry, where the livelihood of 70,000 beef farmers, 6,000 people working in meat processing industries and 3,000 people working in secondary linked industries are at risk, the Minister has yet to come forward with a coherent response. Farmers in every county despair at the total lack of response and the havoc that results from the maladministration of the Department of Agriculture, Food and Forestry.

A concerted political campaign to reopen lost markets and make them fully functional as soon as possible must be undertaken as a matter of priority. A potentially huge contract for the live trade, the one area where we can dispose of the overhang in the medium term, was lost this week due to lack of action by the Minister and the Government. That is unforgiveable.

EU compensation must be targeted at those who have suffered most in this crisis. Surely the Minister is aware that should be the objective criteria upon which any compensation package can be based. The present EU proposals are the equivalent of throwing around snuff at a wake. If compensation is to be meaningful it must be targeted at producers of winter finishers through a substantial increase in the slaughter premium.

The Minister should go back to Brussels and represent those farmers who have been hardest hit. That is not only his political duty but his constitutional duty.

Mr. E. Kenny

I acknowledge Deputy Cowen's understanding of the absence of the Minister for Agriculture, Food and Forestry this evening. I intend to reply on his behalf.

Mr. Cowen

With as much passion as possible.

Mr. E. Kenny

With as much passion as is necessary. The Minister fully acknowledges that beef producers in Ireland have gone through a very difficult period since the beginning of this year, first, as a result of the various reductions in export refunds last autumn and, more recently, because of the BSE crisis following the announcement by the British Minister for Health on 20 March in the House of Commons of the possible link between BSE and CJD. The difficulties being experienced by our producers are evidenced by the substantial fall in cattle prices since the beginning of the year, which has resulted in income losses for many producers. The Minister's objectives through this crisis have been, first, to ensure that the market was adequately supported through the introduction of emergency intervention measures and, second, to secure compensation for the income losses arising form the BSE crisis.

Any reasonable commentator would acknowledge that the Minister has been very successful in achieving these objectives. As regards intervention, the emergency arrangements for April abolished the carcase weight limit and extended intervention purchasing to grade 04, a quality of animal not normally eligible for intervention. The arrangements for May reintroduced a weight limit at a relatively high weight and covered 70 per cent of our steer production. These arrangements have worked well to date and have succeeded in disposing of most of the backlog of cattle which had built up on farms in the immediate aftermath of the House of Commons announcement. The Minister is satisfied that the emergency intervention measures prevented a total collapse in the market, not just in Ireland but across Europe.

The Commission has also increased export refunds by 12 per cent to improve the competitiveness of our exporters on third country markets and to boost cattle prices within the European Union. This increase took effect from 9 May and, along with the intervention measures, should ensure a degree of stability on the market over the coming months.

The Minister was always conscious that the emergency intervention measures would be insufficient to support cattle prices at reasonable levels. For this reason, he insisted both at the Emergency BSE Council on 1 to 3 April, and again at the normal meeting of the Agricultural Council on 29 to 30 April that provision should be made for compensation to be paid to beef producers who suffered income losses because of the crisis. The Minister is pleased, therefore, to be given the opportunity today to outline the compensation package which the European Commission adopted yesterday. This package is a substantial response to the conclusions of the two Councils held in April. In summary, the compensation package consists of an increase £24.88 in the suckler cow premium and £20.71 in both instalments of the special beef premium. The Minister understands the intention is that the increased premium payments will be based on applications submitted in 1995, with provision for adjustments to be made where producers had fewer animals in 1996 than in 1995 and for the savings on this to be used to compensate those producers who had more animals in 1996.

This package is worth about £60 million to Irish beef producers. In global terms, it will go a long way towards alleviating the income difficulties of Irish producers. The Minister acknowledges, however, that the package as currently constructed is not sufficiently targeted at those winter fattener producers who have borne the brunt of this crisis. He intends to seek to have the package amended so as to provide for compensation to be paid also to these producers through the deseasonalisation slaughter premium. The Minister does not want to underestimate the extent of the difficulties he faces in persuading the Commission and other member states in agreeing to this approach. Nevertheless, this will be an extremely important objective for him in the negotiations ahead on the Commission's proposals.

In conclusion, the Minister is very pleased that the Commission has now adopted the compensation package and he intends to ensure that, first, it is targeted at those producers most affected by the crisis, and, second, that the compensation is paid out as early as possible.