Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Dáil Éireann díospóireacht -
Tuesday, 25 Jun 1996

Vol. 467 No. 4

Adjournment Debate. - Compensation for Beef Farmers.

I thank the Ceann Comhairle for allowing me to raise this matter on the Adjournment. Given the number of Deputies who wished to raise other matters, this is an indication that even his office recognises the substantial difficulties caused by the BSE crisis. When the Minister of State, Deputy Deenihan, played football he was very versatile. He is being called on to display that versatility again tonight — he is playing full back, midfield and full forward, a one man team. When the Minister of State is wheeled out to reply to issues the news is normally bad. The Minister for Agriculture, Food and Forestry is away at present and I wonder how effective he will be.

The outcome of the BSE crisis, which began on 20 March last with the now infamous House of Commons announcement, is that Irish beef farmers who have suffered losses of the order of £260 million are being offered compensation by the EU of 25p in the pound. By any standard, this represents a colossal political failure by the Minister, Deputy Yates. The negotiations in Luxembourg today about the premia Ireland will be paid is, to put the issue in perspective, like rearranging the deck chairs on the Titanic. It is outrageous that Ireland, the most beef dependent EU economy, could not have its concerns addressed at EU level between 20 March and 21 June when the Florence Summit eventually solved the British impasse. The compensation package is finally being discussed in Luxembourg but the offer is derisory.

I understand that, contrary to explicit assurances given by the Minister in the Dáil, the compensation package will be paid on 1996 applications, not on 1995 applications. Payments will not be made until 1997. Will the Minister clarify this point? If this is the case it is totally unacceptable and makes a joke of the already small sum on offer. Like other Deputies and farmers, I am very conscious that not one penny has yet been paid to farmers under the great sheep deal which was to be delivered in January by the Minister. If the Minister does not answer my question it will be totally unacceptable.

A sum of £8 million of the package on offer has been earmarked as discretionary. If the farmers who have suffered most are to be compensated at all then that sum must be increased. Further compensation must be targeted not simply at those who lost most money per se but rather at those small farmers who now find themselves with a negative income. One of the most effective ways of doing so is to compensate heifer beef producers; most compensation must go to farmers who have beef production as their main enterprise.

What must be avoided is a rerun of the temporary milk leasing fiasco when a deal was done among the big players to the exclusion of small producers. Fianna Fáil can honestly claim to be one of the few parties lobbying for the small farmer. The Minister for Agriculture, Food and Forestry certainly is not and few of his friends within the agricultural establishment seem interested.

Compensation, to be effective, must be paid on 1995 premia applications and targeted rigorously at those farmers most dependent on beef production for the greater part, if not all, of their income.

Last autumn the Minister for Agriculture, Food and Forestry sat idly by while export refunds for beef were being slashed relentlessly, repeatedly assuring Irish farmers that, as a result, the price paid to them would not suffer. It must be remembered that, ever before the beef industry was floored by the BSE crisis, it was already on its knees because of cuts in export refunds. With exports within the EU remaining down by 45 per cent, the issues of live exports and export refunds remain vital. Export refunds must be placed at the top of the EU agenda in Luxembourg.

It is also vital to our beef farmers that Middle Eastern markets be reopened. If the Minister fails to secure significant trade there in the near future, next autumn farmers will face a 1974 scenario. The Minister for Agriculture, Food and Forestry may be too young to remember 1974. However, no farmer can forget the disaster which forced many of them to give away calves at marts because buyers could not be found at any price. Farmers are rightly angry that the Minister for Agriculture, Food and Forestry is not using his muscle within Europe. His ineffectiveness is exacerbated by the inactivity of the Tánaiste and Minister for Foreign Affairs. Although two Government jets are fully operational no Government Minister can find time to visit any of our crucial Middle Eastern markets. Fianna Fáil has made countless calls on the Government to launch an initiative at senior ministerial level for the reopening of those markets.

It is time this rainbow coalition Government got over its grudge match with the beef industry which is our largest. The Minister for Agriculture, Food and Forestry cannot deliver, the Labour Party is not bothered and Democratic Left is opposed: farm families are paying the price for Government disinterest and inaction.

Deputy Hugh Byrne must have a very short memory since last year was a record one for farm incomes here and that is accepted by most farmers. Therefore, it is entirely unfair of him to attempt to attach the cause of the BSE crisis to his constituency colleague. It is not very sporting of him.

We want to win the game.

Deputy Hugh Byrne should state the origin of those cuts in export refunds, which were the negotiations carried out by the then Commissioner, Ray MacSharry, and part of the Minister for Agriculture, Food and Forestry, Deputy Joe Walsh, in the process that took place last year.

What is the Minister doing for the farmer; that is what I want to know. Excuses are no good to me.

Deputy Hugh Byrne has not the manners to listen to me. I listened to him and did not react. I am endeavouring to reply and he is trying to stop me.

In sporting terms I would call his "off the ball tackles" at which he seems to excel. However, despite his obstructionist tactics, I am pleased to set out the position regarding the BSE compensation measures at present being discussed at the Council of Ministers meeting in Luxembourg. First, I should like to set out briefly the background to these compensatory payments and Government efforts to date to ensure they are adequate to address the losses suffered by beef producers.

Since last autumn, when the Commission cut export refunds for beef and live cattle in order to reduce the level of subsidised exports to comply with the GATT limits — imposed by the Deputy's party — cattle prices, particularly for finished cattle, suffered. In the first quarter of 1996 particularly cattle prices fell by approximately 4 per cent compared with the last quarter of 1995 and 7 per cent when compared with the same period in 1995.

The effect of the House of Commons speech on 20 March was an immediate, serious fall in consumption in the EU along with the closure of important third country markets. Since that date the response and approach of the Government to the crisis has been clear, sure and effective. Following the onset of the crisis the full services of my Department, the diplomatic services and An Bord Bia were mobilised to reassure the authorities in our export markets of the safety and quality of Irish beef and beef products. We also ensured that Ireland was not caught in the scope of any measures taken against the UK.

Effective market support measures were also put in place quickly at EU level to help the industry. The opening up of intervention with the lifting or easing of weight restrictions along with the inclusion of 04 grades has been very helpful in clearing the backlog of cattle which has built up since the crisis. The increase in the export refunds by 12 per cent since 1 May has boosted third country trade.

However, the Minister has always been conscious of the fact that, while market support measures were essential in stabilising the industry in the face of this crisis, alone they would not be sufficient to sustain reasonable cattle prices for producers. This has been borne out by the fall in prices since the scare amounting to some 8 per cent for steers and heifers and 12 per cent for cows. Accordingly from the early stages of the crises we have insisted on provision being made for compensation to producers through direct income payments to make up for losses incurred.

At the Council of Ministers meeting on 29 May last the Commission proposed a financial package of 650 mecu for all EU producers based on the topping-up of the suckler cow premium and the special beef premium along with a special allocation for targeting those most affected. The package involved a proposal to increase the suckler cow premium by 25 Ecu — £20.73 — and the special beef premium by 21 Ecu — £17.42 — costing a total of 534 mecu with the balance of 116 mecu divided between member states on the basis of the number of non-dairy cattle in each country. For Ireland the total package was worth some £58 million, of which some £8 million was available for targeting those producers whose income losses were not addressed by the topups in the suckler cow and special beef premium. While this package was substantial, it was still considered inadequate to meet the current and projected losses for the year. Accordingly, the Government's efforts in getting additional compensation were rewarded at the Florence Summit when the Taoiseach, along with Heads of other member states succeeded in getting the Commission to agree to a further increase in the ceiling of the order of 200 mecu. This brings the total value of the package to 850 mecu, or £700 million. In the Commission's view, this is the maximum possible under the 1996 EU budgetary guidelines.

The BSE compensatory package and the EU price proposals for the 1996-97 marketing year are the major issues for discussion and possible decision, at this week's Council of Agriculture Ministers meeting in Luxembourg. At this moment the Minister is negotiating an enhanced deal from the EU based on the increased funds which have now been earmarked for EU producers. In particular the Minister is seeking an increase in the flexible package so that those farmers involved in winter finishing are adequately compensated. In this regard, compensation for specialist heifer fatteners is also being sought.

However, I should point out that producers in all member states have suffered losses because of the BSE crisis and each will be pressing for a fair division of the funds available. Many member states are unhappy with the approach adopted by the Commission in the division of the funds. This division is mainly based on the number of premiums claimed on cattle in each member state and not on production. This approach very much favours Irish producers because of our proportionately higher number of premiums claimed than in other member states due to our extensive steer-based systems of production. In this regard the Minister will be seeking to ensure that the proportion of the final package going to Irish producers will be, at the minimum, in line with the previous commission proposals.

Therefore, the Government needs no convincing that compensation is needed to assist beef producers, as is shown by the vigour with which the issue has been pursued. Very considerable progress has already been made. I can assure the House, and Deputy Hugh Byrne, the Minister is determined to secure the best possible package from the negotiations.

The Dáil adjourned at 11 p.m. until 10.30 a.m. on Wednesday, 26 June 1996.

Barr
Roinn