I apologise to you, Acting Chairman, the House and Deputy Stanton for being late. There was a complete misunderstanding and I profoundly apologise for this discourtesy to the House.
I welcome the opportunity to address the recent developments on BSE and its effect on the beef market. The market is suffering from a serious reduction in consumer confidence in some of our major markets as a result of certain events in France. This in turn has led to a sharp fall in consumption and, accordingly, a contraction of market outlets for Irish beef.
My approach is to tackle the problem on two fronts. Consumer confidence in beef needs to be restored and the decisions taken at the Council of Ministers meeting last Monday were important in this regard. The standing veterinary committee also took decisions in regard to increasing testing of cattle for BSE. This should make a considerable contribution to the achievement of that objective.
Thankfully, Ireland has a rapid, reliable system for testing cattle. The decision by the Council of Ministers was to introduce this system for animals at risk from 1 January next but I believe it should be extended to more than cattle at risk. The cost is approximately £50 per head but under a tendering system that could be reduced substantially. If the test cost, for example, between £12 and £15 per head for an animal worth between £700 and £1,000 it would be reasonable. We succeeded in getting the Council of Ministers to agree the co-financing of the test by the EU and national governments. We can speed up the introduction of a more extensive testing system than that envisaged by the EU.
For example, it was suggested that the extension of the testing should be re-examined on 1 July 2001 but that is not way to treat consumers. Measures should be implemented to ensure absolute security and safety. Ireland is more vulnerable than any other European country because it is dependent on export markets for 90% of what it produces.
Given the dependence of the beef industry on export markets it is not surprising that the beef market has been affected by the current difficulties in the French market which, unfortunately, have spilled over into the Italian and Spanish markets. Outside the EU there was a problem in the markets of Oman and Russia. France is an important market for beef, particularly cow beef, and the considerable fall in beef consumption there has led to a major reduction in Irish beef exports to that market.
The impact of all this is evidenced in the fall in cattle prices in recent weeks, particularly cow prices. I emphasise that the high volume markets remain open. Our biggest market is Egypt, which imports 150,000 tonnes of beef, and the last thing we want to hear is that it has closed its market as that would leave us in a dreadful position. Thankfully, there has been no indication from Egypt in this regard. We have sorted out a number of technical matters in the Russian market and there is no commercial difficulty there.
I have made strong representations to Commissioner Fischler for an effective measure to support the markets and to address the current urgent problems. I am pleased the Commission has already introduced an aids to private storage scheme. It is a scheme for cow beef which takes effect from Monday next. It will provide for an EU contribution to storage of cow beef for a minimum of three months from 27 November to 2 February at a rate of 17 pence per pound and thereafter for another three months at 73 pence per pound. Hopefully, after that period the market balance will have been restored because we are trying to calm the market and restore normality.
I have urged the beef processing sector to make maximum use of the scheme so that the full benefits can be passed on to farmers. I believe, however, that more needs to be done. At the Council of Ministers meeting last Monday I urged the Commissioner to increase substantially the export refunds to third country markets because it is extremely important. I am keeping in touch with our embassies in the countries concerned and Bord Bia on a daily basis in regard to the markets.
A delegation from farmers' organisations and the meat factories is in Agriculture House now and I am late for the meeting but this is an urgent issue.
