I wish to share my time with Deputy Brendan Smith.
Adjournment Debate. - Donegal Dry Stock Farmers.
Is that agreed? Agreed.
I thank the Chair for allowing me to raise this matter, which is most urgent, and the Minister of State for attending to hear what we have to say. It is unfortunate that in the past year we have had to deal with the BSE crisis. Last week's inclusion of County Donegal, and other counties, in the beef ban on the Russian market is another blow to the economy, particularly the agriculture industry which is perhaps the main one in County Donegal.
I am sure the Minister of State is acutely aware that small farmers — those who can least afford to take the knock — are the main type of farmer in County Donegal. We have a great tradition of rearing good weanlings for sale to the larger farmers in the midlands and in the south east. From speaking to farmers in my constituency, I know that many have lost at least £120 per beast in 1996 compared to 1995 in the sale of their weanlings. If the Minister or I had to take a reduction of that size in our incomes, we would certainly say we were struggling.
While I agree with pushing to reopen the Russian and Egyptian markets it must be done diplomatically. I hope something innovative is done within the Department to ensure those markets are reopened. The small farmer cannot afford to take such a severe loss in income although we have subsidies to help us in many ways. Will the Minister consider making available a special package for County Donegal farmers and all those included in the beef ban to compensate for their loss? It is most serious when one considers that the price of beef has been reduced by factories. If Donegal is to be included in the ban, we will lose good customers and a good market which we have valued and built up in recent years. Animal husbandry is important and we have developed in agricultural practices. There is a need for compensation and I hope the Minister will persuade his European partners to provide a proper package to compensate for the loss of income, for the reduction in the green pound and the loss to small farmers who I am sure are close to the Minister's heart since he is from County Kerry.
I am grateful to Deputy Coughlan for giving me the opportunity to express my concerns and that of my constituents about the ongoing difficulties facing the beef sector.
The news of the departure today of a delegation of Egyptian vets from Ireland without any definite move to reopen that vital market to Irish beef is disappointing. Farmers rightly want to see action to support the previously stated optimism for the outcome of this visit. Fianna Fáil supported the Government's move to mount a diplomatic initiative to tackle the growing crisis. I and others on this side of the House repeatedly called from March 1996 for such an initiative. We can only hope that, in waiting nine months to acknowledge the need for a political campaign to achieve progress, the Minister for Agriculture, Food and Forestry, Deputy Yates, did not leave it too late to send out an SOS.
Farmers still await the grand plan for the beef industry which was to be the result of a high powered committee of departmental Secretaries. This promised response to the extension of the Russian ban as well as the Egyptian one was to be prepared within one week. Two weeks have now passed. The problems facing the beef industry are as urgent as they are serious. I want the Minister, Deputy Yates, and this Government to close the gap between reality and their rhetoric. As a TD for Cavan-Monaghan, counties which have had to bear the brunt of this crisis, I can say this matter is one of survival for farm families. A second succeeding winter with serious losses will undermine the viability of many farms.
The reduction in the rate of export refunds, the closure of the Egyptian market to live cattle exports and the extension of the Russian ban to five more counties have been serious blows for the beef sector in the recent past. I repeat the call of my party for a national forum of all interest groups involved in the beef industry. The rapid evolution of a national strategy is ever more necessary. The Minister, Deputy Yates, has already found that he cannot handle the crisis in isolation from other Departments and Ministers. Equally, he can no longer afford to deal with this issue over the heads of the industry.
Counties Cavan, Monaghan and, as Deputy Coughlan said, her county of Donegal are highly dependent on agriculture. Our local economies will not be able to sustain further blows to farm incomes. I fully support the specific proposals outlined earlier by Deputy coughlan and I am glad the Minister of State at the Department of Agriculture, Food and Forestry, Deputy Deenihan, is here to respond.
I point out that the notice before us is in respect of livestock farmers in Donegal vis-á-vis the Russian authorities' difficulty.
I thank Deputies Coughlan and Brendan Smith for raising this important matter on the Adjournment this afternoon.
I am very much aware of the concerns of beef producers in general, particularly those in the eight counties affected by the Russian ban, regarding the ongoing difficulties in the beef industry. Apart from the difficulties resulting from the market problems created by the incidence of BSE disease, beef producers have also to contend with the recent 10 per cent cut in export refunds and the revaluation of the Irish agricultural conversation rate.
The consumption of beef in the European Union fell substantially following the announcement in the House of Commons last March of a possible link between BSE and a new variant of CJD. While there was a welcome recovery in consumption in the EU in the course of 1996, consumption remained significantly below pre-March 1996 levels in the bigger beef consuming countries such as Germany, France and the United Kingdom, for most of the year. This decline in consumption led to reduced demand for Irish beef in these countries and, at the same time, has increased the availability of beef in these countries for export to third countries in competition with Irish exports. The inevitable outcome of this increased competition was lower prices both on the EU market and in third countries. The difficult situation on the EU market arising from the BSE problems was also reflected in the fact that some 420,000 tonnes of beef was sold into intervention in 1996, of which some 55,000 tonnes came from Ireland.
Due to the dependence of the Irish beef industry on third country markets which accounted for more than 60 per cent of our beef and cattle exports in 1996, it is vital that all these markets remain open. In the aftermath of the crisis last year a number of key markets which closed were quickly reopened through the Government's efforts with the exception of Libya and Iran.
Due to the increase in BSE cases in the latter part of last year, Russian veterinary authorities imposed restrictions on our beef exports by banning beef from three counties. I am glad these restrictions had no adverse impact on cattle prices as the Russian contracts were more than adequately filled from the other counties while beef and cattle from the counties affected by the ban were disposed of on other markets. It should be noted that prices actually rose substantially towards the end of the year in response to fairly buoyant export markets and the further recovery in consumer confidence within the EU.
However, I acknowledge the closure of the Egyptian trade for live cattle and the extension of the Russian restrictions to a further five counties with effect from the 15 February are causes of concern for producers. I assure the House and producers concerned that everything possible is being done to maintain access for Irish cattle and beef to all third country markets. On invitation from the Tánaiste, an independent team of Egyptian veterinarians are in Ireland this week to examine the BSE situation here in order to enable the Egyptian authorities to review the ban on imports of live cattle from Ireland. While I am happy with the progress of the visit, a final decision on the future of the ban will not be taken for some weeks.
As far as Russia is concerned, a delegation from the Department headed by the chief veterinary officer visited Russia last week to outline the BSE situation here and the control measures enforced by my Department to control the disease and to safeguard consumers. While the delegation was unable to dissuade the Russian authorities from extending the ban to five additional counties in line with the veterinary Protocol concluded between the Irish and Russian veterinary authorities in October 1996, the delegation succeeded in persuading the Russian authorities to agree to a formula for lifting the restrictions. In the cases of Limerick and Cavan, both of which had four cases of BSE in 1996, the restriction will be lifted if no new case emerges between now and 1 May. More generally, it has been agreed that normal trading arrangements will be restored if there is evidence that the level of BSE has reached a peak in Ireland and the number of cases has declined.
While the extension of the restrictions is regrettable, nevertheless I am confident that the full Russian demand for Irish beef in 1997, which will be significant, will be met by counties not involved in the restrictions and that there should not be any undue impact on producer prices. The Russian authorities have indicated that they are fully committed to the continuation of the beef trade with Ireland and it is important that this very critical market remains open to Irish beef. Donegal beef producers, or indeed producers in Cavan and any of the restricted counties, will not be affected by this ban as all the remaining markets which account for more than 70 per cent of our exports remain open to them.
With regard to the difficulties caused by the 10 per cent cut in export refunds, my Department has made it clear to the Commission that the cut is unjustified and unnecessary at a time when the income of beef producers is still under severe strain. The Minister, Deputy Yates, has made proposals to the Commission for an alternative approach to controlling the demand for export licences in a fairer and more effective manner, thereby allowing the refunds to support market prices at reasonable levels. This issue was raised at this week's Council of Ministers meeting and support was forthcoming from a number of member states for a quick reversal of the decision. The Taoiseach has raised the matter directly with Commission President, Mr. Santer, and he has also written to him seeking an immediate increase in the refunds. Commissioner Fischler has undertaken to examine the Minister's proposals.
My Department is finalising the details of the £30 million BSE compensation package which was agreed last October by the Council of Ministers. This package, on top of the £70 million package which was agreed earlier in 1996, will go a long way towards meeting the losses incurred by beef producers due to the BSE crisis. In addition, we secured the continuation of the £16 million deseasonalisation winter slaughter premium, which is now being paid to winter finishers, as part of the BSE compensation package last June. This is a very important income support for beef producers at this time — it is worth 7p per pound. The improvements in the extensification premium, which we negotiated as part of the reform of the beef regime last October, are also worth £16 million to Irish producers in a full year.
Compensation for the 4.3 per cent Irish pound revaluation will be forthcoming later this year and I am anxious that the details of this package can be agreed in the Council of Ministers as soon as possible in order that beef producers, who represent the most vulnerable sector in the agriculture economy, will receive an early payout. The revaluation will have no effect on the value of the various cattle premia as they remain unchanged until 1 January 1999. I am conscious of the difficulties facing beef producers, but I am confident the measures we have succeeded in putting in place will maintain order in the market and underpin the income of producers.
I thank the two Deputies for raising this matter and recognise the presence of Deputy Crawford who, representing Cavan-Monaghan, has an interest in this matter. The fall in incomes and the decrease in exports of beef and cattle is directly related to the incidence of BSE, but I am confident that we can overcome the problem.
The Dáil adjourned at 5.30 p.m. until 2.30 p.m. on Tuesday, 28 January 1997.