Dáil Éireann díospóireacht -
Thursday, 8 Oct 1998

Vol. 494 No. 6

Adjournment Debate. - Pigmeat Sector.

Mr. Boylan

I thank the Ceann Comhairle for allowing me to raise this matter. I acknowledge the presence of the Minister of State, Deputy Ned O'Keeffe, to take this very pressing and urgent matter. I would like also to acknowledge his personal efforts to resolve this serious problem but, regrettably, they are not enough.

The reason I urgently sought this debate was to put on record the very serious dilemma faced by many of my constituents in Cavan and Monaghan who are in pig production. I am not talking about commercial enterprises but small family farms. I have had visits from a number of those people. While I do not want to overstate the case, they are in a serious situation. While some of them feel they are on the verge of a nervous breakdown, others feel suicidal.

There is also a problem in Donegal, and as Deputy McGinley is in the House I would like to give him a minute of my time.

I know the Minister of State is au fait with the pigmeat industry and the collapse in the market. About five years ago at a two day seminar at Ballyhaise Agricultural College farmers were advised to get into pig production as an alternative enterprise. They were told we could push production here to four million units per annum and that there was ample scope for developing a good alternative enterprise to their current family farm business. With this in mind these people expanded; they pumped in their profits and they involved themselves in small borrowings to set up units of 200 to 250 sows. Their costs are running at 95p per kilogram — those are Teagasc's figures, the people who advised them — but they are getting a price of 72p per kilogram; they are losing 23p per kilogram. On the average weight of pig sold at slaughter they are losing £17.25. One farmer and his wife who sell an average of 110 pigs per week are losing £1,725 per week, or almost £8,000 per month. That is substantial money to be losing on top of what they are borrowing. Over the past number of months they have found themselves with debts in excess of £40,000. They are bewildered. They are running out of money. Their children are suffering. Another farmer with an average throughput of 140 pigs per week is losing £2,415 per week, and has to beg people to take his pigs. He is losing over £10,000 per month and has massive debts. These people always prided themselves on paying their way, on building their businesses and owing nothing yet here they find themselves, through no fault of their own, in a shocking morass of debt.

I fear for their future. Urgent action is needed. The Minister should give a subvention to units of up to 200 sows. ICOS should be asked to come in. These are family farms, and that is what the co-operative movement is all about. The Minister of State, as the person responsible, will have to seek more from the Government and the Minister for Finance to help these people until the market comes right. That will happen, but these people will not be around if we wait much longer.

Mr. McGinley

I think Deputy Boylan for giving me a minute of his valuable time. I support the eloquent case he has put to the Minister of State. All I would like to add is that if the situation is serious in Cavan, Monaghan and the Border areas, it is even more serious in Donegal. There is a crisis there among pig farmers. A number of weeks ago the Minister of State went to Letterkenny and got first-hand information but matters have deteriorated on a weekly basis since then. The pig farmers in Donegal are at their wits end because they cannot sell their pigs due to a number of factors; any pigs they sell do not command the prices made by pig producers in other parts of the country.

The situation is critical. The Minister of State is an expert in this field and I appeal to him, as my colleague, Deputy Boylan, has already done, to do something, even if he has to produce a rabbit from a hat. We must safeguard the future of these people who invested so much over the years in this particular type of farming.

Minister of State at the Department of Agriculture and Food (Mr. N. O'Keeffe)

I thank Deputies Boylan and McGinley for raising this matter. I have also spoken privately to them and others about this major problem which is affecting farming.

Before dealing with the specifics of the crisis, I would like to put on record that Council Directive No. 91/630/EEC laying down minimum standards for the protection of pigs has been transposed into Irish law by the European Communities (Welfare of Pigs) Regulations, 1995. As a result, Ireland is fully complying with EU rules on pig welfare, particularly in the discharge by my Department of regular inspections of pig units under the rules. I am acutely aware of the welfare aspect to the current difficulties in the pig sector and I am keeping it under review.

The current difficulties in the pig industry stem from an oversupply of pigmeat in the EU as a whole. The oversupply has resulted from increased production in many member states, including Ireland, following high market prices last year and previously. The high prices were brought about by a shortage of pig supplies on the market, following the slaughter of over ten million pigs as a result of outbreaks of classical swine fever in the Netherlands, Germany, Belgium and Spain.

We also had the problems of BSE in 1996, when there was a downturn in beef consumption and an increase in pork consumption, which has now levelled off, creating further difficulties for the industry. Many of the problems have been brought about by unplanned production arising from the issues I outlined. There has been a downturn in the world market. We had a large market for pork in the Pacific Rim, specifically Japan and Korea, but there is little or no market there at present due to their economic problems. We are well aware of the huge storage of pork in many countries awaiting the opening of that market.

The disease is now almost eliminated, and production in the affected member states has been brought back to pre-disease levels. The result is that the EU is currently 108 per cent self-sufficient in pigmeat.

I have taken a number of measures to alleviate the difficulties facing pig producers. In May I sought and secured from the Commission export refunds for pigmeat. In August, following further requests from me, the Commission increased the refunds and introduced refunds for pigmeat products which previously did not attract a refund.

In September, Ireland, together with other member states, pressed for the introduction of an aids for private storage scheme. I am happy to say the Commission responded positively and introduced an APS scheme with effect from 28 September. The scheme allows for EU funding for the storage of up to 70,000 tonnes of pigmeat for up to a period of six months. On exit from storage, the pigmeat must be exported from the Community and, depending on the product involved, will attract in addition a refund on export. I am confident that these measures will have the desired effect of improving pigmeat market prices which, in turn, will benefit the income of producers.

The market in Ireland has been exacerbated by a fire in a pig processing plant last June in Northern Ireland. This plant was taking about 5,000 pigs per week for slaughter from southern producers. The fire caused problems in the slaughtering of pigs in the South, in that a backlog of pigs awaiting slaughter built up. To deal with this, arrangements were put in place, following agreement between my Department, the IFA and the Irish Association of Pigmeat Processors, to slaughter pigs on a Saturday or on overtime during the week. The backlog has now been greatly reduced. The problem of overhang of pigs on the market should be further lessened with the recent purchase of the Unipork plant in Northern Ireland by the company whose premises were destroyed by fire.

The slaughtering facilities in the South will be further helped by the recent announcement that the McCarren plant in Cavan is expected to reopen shortly. In that regard, my Department has been approached by a company which intends to lease the plant. The company is headed by some pig producers and they have asked the Department to carry out a veterinary inspection of the premises with a view to giving the necessary approval for activities to be resumed at the plant. This request was made two days ago and arrangements are in place to have this inspection carried out next Monday.

If the inspection meets the Department's standards, approval to operate the plant will be given. Once the plant resumes activities, it will have a major positive impact on pig producers in the Border region regarding pig slaughterings.

At the September Council of Agriculture Ministers I again requested the Commission to increase export refunds, particularly for the Russian market which continues to be difficult. I am keeping the market under review and I will continue to press the Commission to ensure that EU pigmeat traders can compete on world markets and, thus, ensure that primary producers can earn a reasonable return.

The Dáil adjourned at 5.25 p.m. until 2.30 p.m. on Tuesday, 13 October 1998.