Vol. 617 No. 2
33 Mr. Naughten asked the Minister for Agriculture and Food the steps she intends to take to stop the European Commission proposal to abolish the current system of offering pre-financing export refunds for farmers; and if she will make a statement on the matter. [12014/06]
Irish beef exports in 2005 stood at 487,000 tonnes. All these exports went to the UK and continental Europe except for 35,000 tonnes which went to third countries, mainly Russia. While the beef industry has in recent years become less reliant on third countries, these markets are important for specific cuts at particular times of the year. Third country beef exports attract export refunds.
At the Council of Agriculture Ministers on the 20 of March, the Commissioner for Agriculture and Rural Development, Ms Fischer Boel, announced her intention to abolish pre-financing of export refunds on the basis of criticisms levelled at the system in a 2003 report by the Court of Auditors which stated that the controls were complex and unevenly applied across member states. The pre-financing regime allows for the payment of refunds at the time beef is put under customs control and for the meat to remain in storage for up to four months. The regime is of benefit to exporters in that it assists them with cash flow and provides time for the exporter to build up an exportable quantity of stock and to find a suitable market.
At the Council of Ministers, I strongly opposed the removal of pre-financing and argued that its abolition was not justified. Pre-financing is being used by most of our exporters of beef to third countries and is an important part of their operation. The system was streamlined in 2003 and the controls are now working well.
An internal impact study by the Commission shows that the main advantage of the scheme was in the administration of beef exports rather the financial element. The Commission proposed new beef control measures to replace the present scheme and my Department and I will be examining the proposals to ensure, as far as possible, that whatever is put in place by the Commission to replace the existing system best suits the needs of the Irish beef sector.
I put it to the Minister that this is tantamount to the end of the export refund system as we know it. The timeframe for export refunds is limited to 2013 but is it not now the case that the European Commission is trying to put a more immediate end to these refunds? This will have a serious impact on the export of beef to third countries in terms of cashflow. The four-month period represents a substantial period and permitted a degree of flexibility, but its removal will threaten the viability of exporting products outside the European Union which has traditionally been important to this country.
I concur with the Deputy on a number of issues. France was the only state to support the argument I made at the last Council meeting that the removal of the pre-financing of export refunds is not appropriate at this time for two reasons. First, following the Court of Auditors investigation in 2003, we streamlined our procedures. Second, from a political and tactical point of view, it means the removal of export refunds in parallel with the loss of other support mechanisms as part of World Trade Organisation negotiations. I expressed my views forthrightly. It is unfortunate, however, that few apart from France support me on this.
I have written to the Commissioner to explain the issues we have with male beef and the fact that the pre-financing of export refunds is often exclusive to the export of carcases. We have listened to the views of the industry and are aware of the concerns it holds. I agree it is not necessary to introduce pre-financing at present. A further difficulty arises in that the matter is a Commission rather than a Council competence. However, we have presented our views to the Commissioner. I wrote to her to ask that our concerns about beef exports to third countries be considered in the context of the review she will conduct within the next six months of a new mechanism. We will strive to have these concerns addressed through beef management and will follow through politically.
The Commissioner's decision will lead to great frustration among the agricultural community in Ireland. The Commission is selling our rights at WTO level and allowing a substantial tonnage of beef to be imported into the European Union at low or no tariff, while at the same time the limited supports in place for beef exports are being withdrawn prior to any final negotiations at the WTO. Will the Minister put it again to the Commission in that context?
What steps are being taken in this country, in light of export refunds evaporating from 2013, to develop premium markets in third countries? There are a number of premium markets, not just for beef but for other food products, where we could get a premium price for products. What steps are being taken at this stage to develop those markets so we do not end up with what appears to be a traditional scenario of worrying about solutions when everything else is being closed down?
We will raise the issue in the beef management committee and consider the adverse effect this will have. On the basis of our meat exports per se, the majority goes to the European community and the United Kingdom in particular. In our preparedness to deal with the impact of change in the market as a consequence of the WTO, the Minister of State at the Department of Agriculture and Food, Deputy Brendan Smith, initiated with me a considerable marketing promotion for the next three years focused on the premium market. This is being rolled out vigorously within the European community.
With regard to third countries, I have taken the opportunity to travel to Russia. We are also working in Egypt, we have opened markets in Algeria and now that we have progress on pig meat in China, we will take the opportunity of a diplomatic visit here by the Chinese Government to pursue the issue of beef in China. In particular we will pursue the issue within the United Arab Emirates, and one of my colleagues raised the issue on a visit there.
We will look to return to the premium markets, where a good return was received for investment. We will continue to do so diplomatically, politically, through Bord Bia and with companies themselves. The Deputy is correct in stating that this is where we are. When we see market supports being removed, we must consider quality and return on that basis.
34 Mr. McEntee asked the Minister for Agriculture and Food her plans to ensure that adequate shipping capacity is provided at peak periods for the export of excess quantities of live calves to continental Europe; and if she will make a statement on the matter. [12025/06]
The function of the Department of Agriculture and Food with regard to the transport of livestock by sea is to approve vessels based on statutory requirements regarding the protection of animal welfare. The actual provision of such services is a commercial matter.
Approval for the carriage of livestock on roll-on roll-off vessels is considered on a case-by-case basis, having regard to the characteristics of the individual vessel, whereas there are specific statutory requirements which apply across the board where dedicated livestock vessels are concerned. Over the years, the Department has approved a number of dedicated and roll-on roll-off vessels and it works closely with applicant companies for approval to ensure that the conditions aboard such vessels are consistent with national and European Union animal welfare requirements.
A vessel approved by my Department for the carriage of livestock was recently approved for the carriage of two additional livestock units and underwent a successful trial voyage. The vessel is also provisionally approved for a further additional livestock unit subject to some minor modifications to the ventilation system. The vessel will then be capable of transporting a total of 21 livestock units. My Department has also authorised the transport of cattle from Shannon Airport on aircraft and to date three consignments of animals have been exported by this means. Up to 19 March 2006, 43,844 live cattle have been exported from the State, compared with 32,585 for the same period during 2005. This represents an increase of 35%.
The live export trade provides a valuable outlet for categories of younger animals and a degree of competition, thereby sustaining prices. The Department will continue to discharge its responsibilities on the live trade by ensuring that any such applications are dealt with in a thorough, professional and efficient manner and that our animal health status continues to allow producers to have access to markets in the European Union and elsewhere.
The Government's consistent position on live exports has been that they provide a vital and legitimate market outlet for the livestock sector. The role of the Government in the promotion and preservation of any commercial trade is to create an environment in which it can be carried on in an economic and sustainable manner and which allows it to make the maximum possible contribution to the national economy.
In the case of live exports, the preservation of the animal health status of the country, the international reputation of its veterinary certification services and the existence and application of a framework which ensures that good standards and welfare considerations are taken into account are key elements. In each of these areas, our record is exemplary. Ultimately, the transport of live animals is a commercial matter and there are sufficient numbers of approved vessels to provide a service if the commercial demand exists.
I thank the Minister of State for his lengthy answer, which contained much detail. The real problem for calf exporters some weeks ago was that they had no access to a means to export calves. Does the Minister of State accept that this causes a unique problem, especially in the case of calf exports? If calves cannot be exported before a certain age they must be tested for tuberculosis. This can cause further problems and increases the cost factor. Does the Minister of State agree that it is absolutely necessary to ensure that a continuous opportunity exists, on a weekly basis, for the export of live calves? Does the Minister of State accept that the Holstein type of Friesian is a valuable export, and without third country markets there are not many opportunities for Holstein type of beef?
I accept Deputy Crawford's point that the export market is very important. We have a very successful and important export market. The exports to date this year represent an increase of 35% on the comparable period last year. I reiterate that the Department acts in a speedy and efficient manner when applications are made for the licensing of vessels. Certain criteria must be met with regard to animal welfare and safety etc. and these criteria will not be compromised.
There were some delays in shipping due to weather conditions and we cannot legislate for those, as we all know. I assure the Deputy that the Chairman of the Oireachtas Committee on Agriculture and Food, Deputy Johnny Brady, spoke on a number of occasions to the Minister, Deputy Coughlan; the Minister of State, Deputy Mary Wallace; and me on the need for additional capacity. He highlighted the issue, his concerns were acted upon and additional capacity has become available.
Should there be any other applicants to the Department to have vessels licensed, the processing of applications will not be delayed. We are anxious to ensure that adequate capacity exists at all times to cater for the product going to the markets we have succeeded in obtaining abroad.
I thank the Minister, who sent officials when a problem arose where the smaller shipper was not being facilitated by the larger shipping units. The officials considered the case and extra facilities were made available, which was welcome. As Deputy Crawford stated, this is at a time when calves are coming on stream, and it is important that we get them out of the country. Is it intended to license any other new ships in the near future?
The main destinations of Spain, Italy and the Netherlands are very important markets, as everybody in the House will be aware. The Department understands that some commercial interests are considering the commissioning of an already approved dedicated vessel to provide additional capacity for live exports, particularly to the Spanish market. Were such an application to come before the Department, I assure the Deputy there would be no delay in the necessary processing of the application.
I thank Deputy Johnny Brady for his representation on the committee's behalf. This was a major problem which was not related to weather, and I am glad the Deputy clarified it. Has the Minister considered the possible opportunity to create a veal industry in this country? We could retain calves and make the industry profitable. Is it possible to have a cost-effective industry where we could compete with the likes of Italy or Spain?
As Deputy Crawford knows, the matter is not straightforward and it is a difficult issue. It is under consideration by Bord Bia.
The Minister of State mentioned exports through Shannon Airport. Will he clarify that these are through Bóthar or other aid organisations, and not new commercial exports?
Did they wear seatbelts?
They did, and they had comfortable seats.
The Department authorised the transport of live cattle on aircraft from Shannon Airport. To date three consignments of animals have been exported by these means and it is expected there will be future consignments, though this method of transport is not expected to last in the long term. It was availed of due to bad weather at sea some weeks ago and helped us to meet commitments abroad.
35 Mr. Naughten asked the Minister for Agriculture and Food the steps she has taken to try to retain the sugar industry for a final season; when her attention was drawn to the decision by Greencore; and if she will make a statement on the matter. [12008/06]
Throughout the negotiations on reform of the EU sugar regime, my primary objective was to seek to have the Commission's proposals modified to ensure the continuation of an efficient sugar processing sector in Ireland. I had several meetings with the Commissioner in that regard and Ireland played an active role in a group of 11 member states which had common cause in seeking to modify the proposals. The group remained steadfast in its opposition to the reform proposals from the time they were first mooted in July 2004 right up to the final Council meeting in November 2005. When it became evident at the Council meeting that there was not sufficient political support to adapt the proposals to the extent necessary, I focused my efforts on securing a compensation package worth €310 million for Irish stakeholders. I also succeeded in having the reform arrangements phased in, in a manner that opened up the possibility of sugar processing being continued in Ireland for a further two campaigns. Unfortunately, the recent deterioration in the market was a decisive factor for Greencore and on 15 March the company announced its decision to cease sugar production. I learned of the company's decision on the same day.
I thank the Minister for her response. I note she did not mention any discussions with Greencore. Did discussions take place with Greencore prior to the decision of 15 March? Was the lack of clarity on whether farmers would be eligible for the diversification fund if they did not grow beet in 2006 a factor in making farmers hesitant to indicate they would grow beet in the current season?
Will the Minister, as I asked a number of months ago, convene multi-party talks involving all the interest groups to discuss the future utilisation of the land and to address the issues surrounding the compensation deal?
I have asked the Minister on numerous occasions whether the Revenue Commissioners considered quota as an asset for taxation purposes. Have farmers who have bought and sold quota no legal rights or are all the legal rights in the hands of Greencore?
If the Deputy wanted to know what meetings I had with Greencore he should have asked the question. That is not the question that was asked. I have had several discussions with Greencore and its representatives, as I have had with farming organisations and people in the localities affected by the reforms. I have met Deputies and Senators from all sides and contractors and as many people as have asked to meet me to discuss sugar since I was first appointed, as I will continue to do. Those discussions covered a variety of issues. I obtained clarity from the European Commission on the basis of the legal text available to me. My position was difficult from the outset because I did not support the reforms, but the regime was going to change this year, in June or July, and I had to make a decision before I had the legal text. Having received the text, I had to make a further decision. I do not think that is the way to do business and it is unfortunate it happened that way, causing concern for many people. However, clarity has now been obtained and I conveyed that to farmers the minute I was in a position to do so. It would have been wrong of me to clarify the situation in a quasi-judicial way because I had to have a legal text available to me.
The question of the future use of the land is, quite rightly, up for discussion. The joint committee of which the Deputy is a member is considering the issue.
The diversification fund is quite specific. It can be used to support farmers and it can be used to support alternatives, if viable. I have recently asked Greencore for clarity as to whether, in the context of the new regime, it would be financially viable for it to consider growing sugar beet for bioethanol purposes and I await a response. The company has previously advised me that it was not economically viable but that is not to say the initiatives announced by former Minister of State at the Department of Agriculture and Food, Deputy Browne, and furthered by the present Minister of State, Deputy Wallace, will not bear fruit. We must investigate their viability.
It would be inappropriate to bring all parties in to one meeting to discuss how the restructuring fund will be dispensed. A process, on which I have sought independent advice, is being put in place at the moment. It will be open, transparent and will produce as balanced an outcome as is possible, given the legal constraints.
As I have said in the House on a number of occasions, my legal advice is to the effect that the quota provides a methodology for measuring an asset but is not, in itself, an asset as defined. The Deputy will accordingly notice that, in the context of the sugar reforms, the term "renunciation of quota" was used. Compensation will be based on renunciation and that clarifies the position with regard to ownership of quota.
The blame game over who destroyed the sugar industry may be over but I blame the Government for its actions in recent months. I have recently spoken to a number of farmers in the beet industry. As the Minister knows, agriculture in Wexford was largely dependent on the beet industry. People there were left in the dark as to whether they would be allowed to grow beet. Many will be affected by the loss of the beet industry in Wexford — farmers, croppers, haulage firms, machinery contractors and people who have invested thousands of euro in the industry over recent years. I spoke to a beet farmer before I came into the House this evening and he said he would erect a sign on his gate before the next general election forbidding Fianna Fáil candidates from entering his farmyard, and I cannot blame him.
That is pathetic, Deputy. It is as pathetic as the Deputy's telephone call to me on 15 March.
No Fianna Fáil member will be allowed to canvass in his farmyard.
He is a Fine Gael man.
He was a Fianna Fáil cumann member but will not vote for Fianna Fáil again because of what it did to the beet industry. Whose interests will the Minister look after in the compensation package? Will it be the farmers who have put their heart and sweat into the beet industry in recent years or will it, as in the past, be Greencore?
Can the Minister envisage beet being grown here in coming years as an alternative energy crop?
I will answer the latter question first. The question of whether to grow sugar beet for bioethanol is a matter for farmers and people who might want to be involved in the activity on a commercial basis.
It is a matter for the Department of Agriculture and Food and for the Government.
Order, please.
When Deputy Kehoe is on this side of the House he can spout——
We will be on that side.
——about how he would have saved the sugar industry. He could not have done so because nobody could.
The Minister should not give up so soon.
The consequences of this regime have been severe. Some 11 closures have taken place in countries where the impact statement did not anticipate this. I met people at the marts in Wexford who are involved in alternative energy and energy crops. This should be considered in the context of the diversification of the sugar industry. We should not underestimate the impact this has on the people the Deputy represents, those involved in the ancillary industries, those who work in Mallow and the company. I will not favour one side over another as I must work according to the legal text provided. When this decision is made I hope it will not end up as a catfight in the High Court or the Supreme Court. It is best we deal with this in a professional manner.
The single farm payment is being addressed at present. The diversification fund will be dealt with in the context of decisions made by farmers and the restructuring fund will be dealt with on the basis of economic and social criteria, with advice made available to me. I will do my utmost in the decision I make to reflect the loss suffered.
Has research been done on the future consequences of the cessation of beet growing and sugar beet processing? What alternatives have been suggested to replace sugar beet as a crop in the long term? What part is the Department playing in developing research into energy crops or is it solely concerned with food crops? How could the Commissioner in Brussels provide a clear answer on the question of the levy yet the Minister of State could not give a clear answer?
An impact study was carried out by the Commission, which indicated that in a number of countries this measure would have an adverse effect. Ireland was one of these countries, the others were Finland, Portugal, Italy and Spain.
Alternatives are being considered and a considerable amount of money has been made available for research into alternatives. This has been done in conjunction with the recent Department of Finance decision on taxation. The Minister of State at my Department, Deputy Mary Wallace, has special responsibility for examining alternatives in conjunction with the Department of Communications, Marine and Natural Resources. A commercial component of the decision made by the Minister for Communications, Marine and Natural Resources on Sunday will be rolled out.
Farmers will also have to make decisions on this matter. When I travelled to north Cork I met young people who had an interest in alternatives. The diversification fund, which the Commissioner has stated is specifically for alternatives, must be considered and should be used in the new technology programme. Alternative energy crops are being promoted in Deputy Kehoe's constituency and this must be examined. I agree that €45 per hectare is not adequate and in the context of the new energy policy, we put forward the view that the sum will not be sufficient for what we wish to achieve in alternative land use.
The special fund was made available because we did not have alternative rotation crops and the sum increased from €22 million. On that basis we are examining the impact the removal of sugar has had on the tillage sector. In consultation with a number of Departments we will examine and facilitate alternatives. Considering compensation, per se, may not be the best way forward and we must show leadership in encouraging people to continue growing in the tillage sector despite their disappointments.
The Commissioner indicated that one does not pay the levy in the year one renounces. I have watched every press conference the Commissioner gave and the decision was made as a result of the final text passed by the Parliament and the Council. It was only at that stage that we could determine the parameters of the levy.
Written Answers follow Adjournment Debate.
