Written Answers. - Cattle Prices.
Billy Timmins
Ceist:
17
Mr. Timmins
asked the
Minister for Agriculture, Food and Rural Development
the projected drop in beef prices as a consequence of the current round of world trade talks in view of the fact that a report (details supplied) stated that the last round of talks resulted in a drop in the price being paid to beef producers and if he will make a statement on the matter.
[9671/00]
(Mr. Walsh): The report in question identified a number of factors which led to a reduction in cattle prices in Ireland between 1992 and 1999. These factors included the 1992 CAP reform, the 1995 WTO agreement, the 1996 BSE crisis and the change in the composition of steers slaughtered in Ireland.
I accept that these are the major factors involved in the determination of cattle prices in Ireland in the 1990s, although I would also add to these the Russian crisis in 1998. While it is not possible to isolate the specific importance of any single factor, the 1995 WTO agreement was not a major determinant of cattle prices in the period. Cattle prices in Ireland fell by 18% between 1992-99. This reduction is not significantly in excess of the 15% reduction programmed under the 1992 reform which predated the 1995 WTO Agreement and which ensured that agreement would have little impact on the EU market over and above that of the reform itself. I point out that cattle producers were compensated for the fall in prices by substantial increases in premia. For example, the average premium payable on steers was worth 38p a pound in 1999 compared to 4.5p a pound in 1992. In 1999, the premium, together with the market price, resulted in an overall return of approximately 119p a pound to producers of steer cattle compared to a corresponding return of 104p a pound in 1992. This represented an increase of 14% in overall returns to cattle producers between 1992 and 1999.
The 1996 BSE crisis and the subsequent renationalisation of the EU market, which increased the dependence of the Irish beef industry on third country markets, had a major impact on the Irish beef market, particularly in 1996 and 1997. The Russian crisis in the second half of 1998 reversed the recovery in prices recorded in the first half of that year and was substantially responsible for the low prices in 1999.
As far as the WTO agreement is concerned, the ceiling on subsidised beef exports was not reached in any of the years since 1995 and the reduction in export refunds since then was linked more to conditions on the market, including the dollar/euro exchange rate, than to the WTO Agreement.
With regard to the next WTO agreement the negotiations have only commenced and will not be finalised for some time. In the absence of any indication of the eventual outcome of these negotiations, it is not possible to give any estimate of its likely impact on cattle prices. However, as in the case of the 1995 WTO agreement, the Agenda 2000 reform of the beef regime should help to limit its impact.
