Adjournment Debate

Swimming Pool Projects

The potential closure of St. Enda's swimming pool and sports complex is an important issue for the southside of Limerick city and particularly for the people of South Hill. Intensive discussions are currently under way between Limerick City VEC, the Catholic diocese, Limerick City Council and the Limerick Regeneration Agencies with a view to keeping open the sports complex, which consists of a swimming pool, gymnasium and various other amenities. The proposed closure comes on foot of the closure of the only other community swimming pool in the area, the Roxborough facility, in 2004. St. Enda's is now the only community sports facility of its type on the southside of the city. Twenty-five people are employed there, many of them with young families and having worked at the complex for many years. It is essential that their uncertainty is ended and their jobs are maintained.

The Department of Education and Skills has not come forward with the capital funding, of the order of €400,000 plus, that is needed to bring the facility up to health and safety standards. It is gravely disappointing that the Government should espouse the virtues of the Limerick regeneration project while leaving it to other stakeholders to provide the necessary funding for this vital project. Will the Minister of State, Deputy Connick, confirm that the funding of €400,000 plus will be provided to facilitate the much needed renovations to ensure compliance with health and safety standards? Will he give a further commitment that the Department will support the redevelopment of the complex? Renovation would require some €5 million and a full refurbishment approximately €10 million. That can happen only with the approval of the Department.

Intensive discussions are under way among the stakeholders. It is vital that the Department come to the table with the €400,000 that is needed to facilitate the much needed capital works. I hope the Minister of State will have good news for the people of Limerick and for the 25 staff at St. Enda's sports complex.

This is a most urgent matter. If it is not resolved, the swimming pool and sports complex will close this Friday. We are talking about the loss of 25 jobs and the removal of a vital amenity for the 24 schools which use the complex, including St. Enda's community school on whose grounds it is situated, as well as various community groups and swimming clubs. It would be an absolute betrayal of the communities concerned if the facility were to close.

I call on the Tánaiste and Minister for Education and Skills to take responsibility in this matter. The complex is owned by the Department and is in the grounds of St. Enda's community school. It is directly across the road from the top of O'Malley Park in South Hill, at the heart of southside regeneration efforts. This is a community that has had its share of problems. It would be a travesty to continue talk of building and developing new facilities if, at the same time, an existing facility that is widely used and is at the heart of the community were to be shut down. It is vital that actions are taken to keep it open. The Tánaiste has ultimate responsibility in this regard because it is the Department which owns the premises.

Negotiations are ongoing to seek to safeguard the facility. I commend my colleague, Councillor Joe Leddin, vice chairman of the board of the school, in this regard. There are signals that the regeneration board and Limerick City Council are willing to play a significant part in ensuring the complex stays open. However, the most important player is the Department. It must come up with the funding, which is not a significant amount in the context of the building programme and the Department's overall expenditure. It would be a terrible tragedy if the sports complex were to close because it would mean there would be no facilities for people in the area. When the nearby Roxborough pool was closed the indications were that the savings made would be used to safeguard the future operation of St. Enda's. Limerick City Council is responsible in that regard.

By raising this issue we hope the Tánaiste will assume her responsibility by giving an indication without delay that St. Enda's will be supported. We are absolutely determined that the complex will not close this week and that it will be given a solid foundation for the future, for the benefit of the communities it serves.

I thank the Deputies for raising this matter. I am pleased to be given the opportunity, on behalf of my colleague, the Tánaiste and Minister for Education and Skills, to clarify for the House the situation with regard to the St Enda's community school sports complex. The school has operated a swimming pool and sports complex since the 1970s, one of five such complexes operated by community and comprehensive schools. When the sports complexes were established alongside community and comprehensive schools, it was envisaged that they would operate on a self-financing basis. However, it was always recognised that additional costs were associated with the operation of swimming pools. For this reason, all five sports complexes receive an annual payment of €44,000 from the Department towards the cost of swimming pool maintenance.

Over a period of years, the St Enda's complex has failed to deliver on a commitment to become self-financing in its day-to-day operations and has built up a substantial deficit. Current funding provided by the Department of Education and Skills, together with some funding from the Limerick Regeneration Agencies and Limerick City Council, has allowed the complex to continue to operate. However, the board of management has recently reported that the sports complex has serious health and safety issues which, it is estimated, require immediate capital funding of €455,000 to resolve. Such an injection of capital funding will not resolve the wider issue that the ageing sports complex cannot compete with other facilities in the area and therefore has little prospect of an income stream that can meet running costs.

The stark reality is that this is a 40-year-old facility. It is estimated that a complete renovation could cost up to €3.5 million, while a new build to replace the entire existing complex would cost an estimated €10 million. The priority of the Department of Education and Skills must be to channel available funds to front-line educational services. The Department has been in contact, and will continue this engagement, with the board of management of St Enda's community school, the Limerick Regeneration Agencies and Limerick City Council on the future of the sports complex.

The Minister of State's response is inadequate. I hope the proposal will be endorsed and funding provided.

Private Health Insurance

I thank the Ceann Comhairle for allowing me the opportunity to raise this important matter. The announcement by the VHI of an increase in premia of between 15% and 45% from 1 February is a major blow to many families who are already struggling to cope in this recession. It has struck great fear into elderly people, many of whom are covered under the company's plan B and plan B Options schemes. Their premia are set to rise by €317 and €444 euro, respectively, for a single adult.

I am disappointed the Minister for Health and Children is not in the Chamber to address this issue. She is never there when she is wanted. How can elderly people be expected to afford these additional payments? Older people have worked hard throughout their lives and have paid their VHI premia for decades so that they could enjoy a good quality of life in their latter years. Now they face the prospect of having to cancel their insurance.

Middle Ireland has been dealt a series of hammer blows by the Government, particularly by way of the austerity measures introduced in last December's budget. Huge financial pressures have been heaped on middle-income families. More than 70,000 people cancelled their private health insurance last year and these latest price hikes will drive more people into a public health system which is already in crisis. In recent weeks an unprecedented number of patients have been left for days on trolleys in our crowded accident and emergency departments.

Fine Gael proposes the introduction of a universal health insurance scheme that would end the two-tier system. In the meantime, the drive away from health insurance will result in even longer waiting times on trolleys, more crowded accident and emergency departments and longer waiting lists.

The VHI argues the hikes are necessary because it is losing €850 for each of its 129,000 customers who are over 70. Two years after the Government's risk equalisation scheme was shot down by the Supreme Court, the Government has failed to act. The Minister for Health and Children claimed the introduction of levies and tax credits would obviate the necessity for price hikes but the policy has quite simply failed. Will the Minister of State clarify the position tonight? When will the risk equalisation legislation come before the House? Our health spokesperson, Deputy Reilly, has called on the Minister to publish the Milliman report into the VHI's costs. I support the Deputy in that regard.

My constituency office has been inundated with calls from concerned constituents since the price hike was announced. Several people have questioned the cost of hospital care and have asked whether the VHI is too quick to sign off on bills. For example, a man told me yesterday he received a bill for three nights after having spent one night in hospital. The VHI paid the bill without questioning it. Other people are simply astonished and angry. On the very day we heard the VHI chief executive announce the price hikes, he refused to state whether his salary was cut. According to the VHI's annual report of 2009, his pay was approximately €410,000. I will be very interested to hear what he has to say when he appears before the Joint Committee on Health and Children later this month. Surely it is time the Government led by example by capping public sector salaries at €200,000 per annum.

Taxpayers are entitled to see the Milliman report. After all, they paid for it. It will show significant savings can be made and it should be published without delay. The Minister should make contact with the VHI. It must not be allowed to increase its charges while the report remains unpublished. VHI customers, particularly the elderly and middle-class families, are facing weeks of sleepless nights worrying about their health care. If the Minister does not act, it will be another major blow for families.

The reality is that the buck stops with the Minister for Health and Children. I am disappointed she is not present in the House to answer questions on this issue of real concern for members of the VHI.

I thank Deputy Breen for raising this matter today as it provides an opportunity to outline to the House the responsibilities of the Minister for Health and Children, the current position of the private health insurance market and the Government's actions and plans for reform.

The Minister for Health and Children has responsibility for governance matters relating to the VHI, such as board appointments, the receipt of its annual report and accounts and other matters. VHI, while owned by the State, is a not-for-profit company operating in a competitive market. It would be inappropriate for any Minister to interfere in matters relating to prices set by any one company which is required to compete fairly within that market.

The VHI announced price changes in regard to a range of its plans on 6 January 2011, which will take effect on 1 February 2011. The increases will amount to 15% for more than half of its customers, with higher increases up to a maximum of 45% for those on other plans. While the Minister is conscious of the likely impact on customers in the current economic climate, a key principle of the market is the right of customers, guaranteed in law, to switch between or within insurers to get better value. This includes switching to a different plan with their own insurer or another insurer to get better cover or to reduce premium costs. This rule applies regardless of the age or health profile of any individual consumer.

Health insurance customers can switch easily, without having to serve additional waiting times and cannot be refused by another insurer. Provisions have been included in relevant health insurance legislation to ensure that switching is as easy and seamless as possible for customers.

The Health Insurance Authority, as the regulator of the private health insurance market, can offer independent advice to consumers in regard to their rights. The authority's website, www.hia.ie, contains a wealth of information for the benefit of consumers. It can be contacted by telephone at 1850 929 166.

It is important that the other insurers in the market, which have on many occasions indicated to the Minister their willingness to take on all customers, now take the initiative and offer plans to older persons that will attract them to move between insurers. In this way, the market could begin to move towards a more equal sharing of older customers between insurers and we could see competition driving efficiencies in services provided. This would also have the effect of reducing payments from the two smaller insurers to the VHI under the interim risk equalisation measures.

In May 2010, a comprehensive package of measures was announced by the Government to address a number of issues in the health insurance market. With regard to the VHI, advisers will be appointed next month to prepare for the capitalisation, authorisation and sale of the company. New minimum benefit regulations will be prepared on foot of the Health Insurance Authority's consultation on the matter, and other measures, such as the introduction of incentives for younger people to enter the market earlier, are also planned.

Following a Supreme Court ruling in July 2008 which struck down the 2003 risk equalisation scheme, the Government acted quickly to introduce an interim scheme of loss compensation. The scheme covers the period 2009 to early 2012, by means of a temporary scheme of age-related tax credits and community rating levy. The scheme is designed to be Exchequer-neutral over the course of the three-year period and ensures that a very significant degree of support for the cost of health insurance claims is provided. This scheme has been approved by the European Commission and is in place since 1 January 2009. Preparations are ongoing for a permanent, robust risk equalisation scheme which will come into effect at the start of 2013.

The Government is fully committed to continuing the community-rated health insurance market and it is the Minister's firm conviction that the preparations currently in train will act to preserve that principle.

Fishing Industry Development

I thank the Ceann Comhairle for the opportunity to raise this matter, which I genuinely feel is of national importance. If resolved, it could contribute towards the regeneration of many coastal communities. The entire mackerel quota increase for 2011 should be allocated to the polyvalent fleet.

As of 1 January, Ireland has had in excess of 6,000 tonnes of extra mackerel quota to allocate. It is time for the Minister to make an equitable decision to allocate the entire mackerel quota increase for 2011 to the polyvalent fleet. This would bring the polyvalent share of the overall quota to 20%.

I congratulate the Minister of State, Deputy Seán Connick, on his achievements at EU level before Christmas. The Minister has been very willing to meet industry representatives and for this I am grateful. However, I remind the Minister of the very positive socio-economic impact of increasing the polyvalent share of the mackerel quota.

The polyvalent fleet lands its catches wholly into Ireland, where the benefits to the economy from onshore value-added may be maximised. The RSW fleet lands approximately 80% of its mackerel catch abroad, with only approximately 20% being landed in Ireland. Switching landings to Ireland from abroad would lead to the creation of many extra jobs in the economy based on the expansion arising from the increased activity of the polyvalent fleet. The additional mackerel landed in Ireland would result in an overall increase in output throughout the economy. The coastal communities, which are areas of high unemployment, would be the main beneficiaries. The processing sector would add great value and there would be an increase in exports. In simple terms, it would mean extra jobs, extra salaries and extra disposable income.

The landing of catches abroad represents a leakage from the economy. In other words, the Irish economy does not get the opportunity to add value to fish landed abroad. It is bad enough to have the Spanish and French fleets fishing our waters and landing their catches abroad without our own fleet reciprocating.

The economy would benefit enormously if the entire 10% of the extra quota were allocated to the polyvalent fleet. As I have outlined, it would result in a significant increase in net output and create much-needed jobs in peripheral areas. I strongly urge the Minister of State to allocate the entire mackerel quota increase for 2011 to the polyvalent fleet so that we can begin the regeneration of our coastal communities. I urge him to take action.

Even when Ireland joined the European Economic Community in 1973, there was a feeling among fishermen and the fishing industry that, to excuse the pun, they were being sold down the river. To a large degree, it is true that fishing has been one of the Cinderellas of industry despite it being an indigenous industry of considerable importance for coastal communities. People sometimes forget that it makes a significant contribution to the economy in difficult times.

Ireland's 2010 quota for mackerel was 62,643 tonnes. The quota is divided, with 87% for 23 boats. These are known as the refrigerated sea water, RSW, fleet, which is almost exclusively based in the Killybegs-Donegal area. The remaining 13% is given to the rest of the boats in the State, that is, the polyvalent fleet, dry hold fleet, gill net fleet, and so on. Thanks to the excellent negotiations of the Minster of State, Deputy Connick, and his Department, Ireland has received an increase of 10% for the 2011 fishery. I take this opportunity to congratulate him warmly on his performance as Minister of State. He has been a revelation and the industry recognises that his talents have been of considerable benefit to it.

The increase for the 2011 fishery equates to 6,000 tonnes. Deputy Christy O'Sullivan and I are asking the Minster of State to allocate the additional 10% or a larger proportion thereof to the polyvalent, dry hold and gill net fleets because those boats, by the nature of their size and catching capacity, land fish mostly in the State. This has added value, in that they benefit small coastal communities throughout Ireland, not just in the Donegal-Killybegs area — I am referring to ports like Howth, Dunmore East, Baltimore, Castletownbere, Dingle and Ross a Mhíl — with additional direct jobs as well as all ancillary services associated with the loading processing and distribution of the fish.

With the additional 6,000 tonnes at the Minister of State's disposal, he can go a long way towards expanding and promoting the mackerel industry throughout the whole of Ireland without causing any loss of quota to the larger and established industry in Donegal by allocating the additional 10% to the 14 polyvalent and hundreds of smaller boats around the coast. Given that the 23 RSW fleet boats land a large amount of their quota outside the State, the Minister of State should try to ensure that the new additional quota at his disposal should be landed and remain in the State to create jobs in coastal rural communities where they are most needed. At this point in our economic history, it is important that we utilise our indigenous resources for the benefit of our people and ensure that any added value arising from those resources directly or indirectly benefits our country.

I thank Deputies Christy O'Sullivan and O'Donoghue for raising this matter. There is good news on the total allowable catch, TAC, front for mackerel, with an expected 10% increase in Ireland's quota in 2011 when fully confirmed. This increase will result in approximately €6.5 million extra in the value of landings for this stock. It was agreed at a bilateral meeting between the EU and Norway after the failure of the four-party talks with Iceland and the Faroe Islands, which went to four rounds but did not secure agreement. In overall value terms, landings of pelagic stocks will contribute €107 million to the Irish economy and they support further added value and jobs in the processing factories in coastal states.

Unfortunately, it was impossible to allocate the full amount of TAC available to member states because of a technical difficulty in regard to the mathematical methodology of integrating the southern component of the mackerel stock as agreed with Norway last January. In addition, there were technical difficulties with the mechanism to deal with the implications of the EU-Norway and Norway-EU transfers as a result of the integration. A significant amount of work has already been done on this with our Marine Institute heavily involved. However, the Commission was not in a position to finalise the work in time for the Council. The Commission will convene an expert group before the end of this month with a view to finalising the issue as soon as possible. Following the meeting, it is hoped the Commission will be in a position to table an amendment to the TAC and quota regulation for 2011 to provide for the full quota allocations for mackerel. I hope the amending regulation will be in place later this spring. We can expect a final annual quota for mackerel for 2011 of approximately 68,000 tonnes. Until the discussions at EU level are complete, we cannot be fully confident of the quota available.

At national level, the available quota at this time for mackerel for Ireland based on the interim TAC is 54,861 tonnes. The mackerel management allocation arrangements for this quota have been put in place for 2011 based on existing policy. The internal sharing arrangements between different parts of the fleet is subject to dissatisfaction and disagreement within the Irish industry, with each group of vessels seeking increased shares. However, it is important to understand that this is a zero sum game and any increase to one part of the fleet must involve a reduction to another part of the fleet.

I would like to give a brief history of the development of the current arrangements and changes that have been introduced in recent times. Prior to 2000, polyvalent multi-purpose vessels only caught small quantities of mackerel. The mackerel fishery was prosecuted by RSW vessels in the pelagic segment of the fishing fleet which were subject to vessel catch limits since the mid-1980s. There are 23 vessels in this segment of the fleet and they are large purpose-built vessels for the pelagic fisheries, mainly mackerel, herring and horse mackerel. For all practical purposes, there was a technological restriction in place in respect of the polyvalent fleet, in that the vessels concerned were small, dry hold, traditional vessels that were incapable of catching large quantities of mackerel. In such circumstances, the typical total national catch of those polyvalent vessels was of the order of 1,000 to 1,200 tonnes and a 1,500 tonne allocation was set aside for those out of the total national quota, which ranged from a high of 99,000 tonnes in 1994 to a low of 52,000 tonnes between 1985 and 2000.

This situation changed materially from 2000 onwards as a number of polyvalent tank boats were introduced into the fleet. These vessels had much higher catching and storage capacity and the national polyvalent catch trebled to more than 3,500 tonnes in 2000. Following extensive consultation and discussion with the various industry players throughout 2001, revised arrangements were eventually put in place in October of that year. This capped the total mackerel catch of polyvalent vessels at 7,000 tonnes, of which 1,500 tonnes were set aside to cover catches by vessels less than 65 ft. in length. The balance of the available mackerel quota, some 38,500 tonnes in 2008, was divided between the 23 RSW vessels of the pelagic sector according to set formulae.

In 2001 when the allocation of 7,000 tonnes for the polyvalent fleet was agreed, the Irish mackerel quota was 72,000 tonnes. Since then, it has decreased and fluctuated at a lower level. This decrease resulted in a low quota of 49,643 tonnes in 2008. Despite these quota reductions the 7,000 tonnes reserved for the polyvalent sector remained unchanged until 2009 when an Irish quota of 66,070 tonnes was agreed and requests for a higher share of the quota were received from polyvalent vessel owners. In January 2009, the Minister decided after much consultation and careful consideration of all of the available information that, for 2009 and future years, the polyvalent segment would be allocated 13% of the total mackerel quota.

On the level of landings into Ireland, under the EU open market policy, there can be no question of requiring or pressuring vessels to land in Ireland. It is always useful to have an understanding of the situation, as landings of pelagic stocks such as mackerel generate employment in processing in coastal communities. In 2009, almost all of the polyvalent vessels landed in Ireland while 60% of landings by the RSW pelagic segment vessels were in Ireland. The situation for 2010 has seen some change, with 75% of the polyvalent landings and 64% of the RSW pelagic segment landings being in Ireland. It is clear that both polyvalent and RSW pelagic segment vessels are capable of and do land a proportion of their quota abroad. From an employment and economic activity perspective, I would like to see the vast majority of all landings in Ireland and I would encourage the vessel owners and the processors to work together to maximise landings into Irish factories.

You have well exceeded your time. The rest of it will go on the record of the House.

Additional information not given on the floor of the House.

In 2009 a review of the internal sharing arrangements for mackerel within the polyvalent fleet was undertaken. Following wide-ranging and intensive consultations, I introduced a new policy last October after nearly 18 months of discussion and consultation. The arrangements for the sharing of the national quota between the polyvalent and pelagic segments of the fleet involve an allocation of 87% for the RSW pelagic segment and 13% for the polyvalent segment. As the quota for mackerel in 2011 will involve an increase over the 2010 quota, the polyvalent segment will receive a pro rata increase in its allocation.

Any change in the current arrangements would be justified if changes in circumstances since 2009 supported a new review of the arrangements in place. The then Minister of State, Deputy Killeen, fully consulted industry representatives and interested parties on the issue and, as a result, was fully aware of the divergent views that prevailed within the industry at that time in respect of the management of this fishery. The specific management arrangements for the allocation of the mackerel quota introduced in 2009 were developed by the Minister of State for the proper and effective management of the mackerel fishing opportunities and were fully cognisant of the divergent views on the issue within various segments of the fishing industry. I do not consider that there are substantially changed circumstances since that time. Accordingly, I do not consider that a review of these arrangements is justified. Any such review would require a full and thorough consultation with all relevant interests in the fishing industry and due consideration of all matters raised from the various differing perspectives. Past experience suggests that such necessary consultation processes take a significant amount of time.

At this point, all available quota has been fully allocated. It will take some months before amending regulations definitively granting the full 2010 quota are finally settled. A critical issue for Irish fishermen is to ensure that the future sustainability of the mackerel stock is protected. I will work at EU level to address the unacceptable and unsustainable situation whereby Iceland and the Faroe Islands have once again this year established large unilateral TACs for mackerel outside of any appropriate international framework. If this level of excessive fishing of the stock is allowed to continue, we will face reduced quotas over the coming years and the undermining of the fishery and the economic returns for Ireland's fishing fleet and the processing sector.

Pigmeat Sector

I welcome the opportunity to address this subject. Bord Bia issued a press release today to welcome the increase of agricultural output sales to €8 billion, with meat and livestock increasing by 20% to €2.44 billion, with a rise of 10% in pigmeat exports reaching €317 million.

Unfortunately, behind that statistic there are facts and figures that paint a different picture. I visited pig farmers last night and met people who are affected by four factors that affect any production unit, particularly pig farming: on-farm efficiency, the price for the product, the price for inputs and the availability of credit. There is no doubt that anyone who has survived in recent years in the pigmeat industry is as efficient as any producer anywhere in the world. Our pig farmers produce a quality product and the consumer shows great loyalty to Irish produce but is often being duped into buying produce from another country. Labelling is another issue that must be addressed.

The price farmers receive is around 17% of the price on the shelf. The primary producer receives 17% of the cost of a high quality product that has not increased much in cost to produce but the producer is being screwed by getting less than 20% of the supermarket price.

Input costs in the pig sector in 2010 were €19 million per month. This is not relevant to grass-based animals such as cows and sheep but it is a cost that exists all year round for pig farmers. This year, the costs will be €25 million per month. On top of that, millers cannot fund the costs, processors are not prepared to do it and the banks cannot do it. Farmers are being told to sell pigs and to send a cheque before feed can be supplied. Potentially people will have to leave the industry. They must already sell animals below optimum weight, which cuts profits massively. At present there is a threat of a 15% reduction, which will lead to the closure of one mill and one processor.

The pig farmers do not want a hand-out, they want assistance in the short-term, with a contingency fund of €20 million being put in place to allow for interest free credit to allow them to cover their costs. Inevitably the market rights itself in the pig sector. The fund can be topped up when prices recover so the contingency fund will always exist for situations like this.

I welcome the opportunity to support Deputy Doyle on this issue. I am surprised my constituency colleague, the Minister for Agriculture, Fisheries and Food, is not here because he is deeply involved in County Cavan, a major site for this industry. That is no slight to the Minister of State.

I asked the Taoiseach some months ago for an opportunity to discuss the crisis in the pig industry. Although he agreed it would happen, unfortunately the time allotted was reallocated to a debate on the Harvest 2020 report. Interestingly, one of the proposals in that report was for a 50% increase in pig output. Unless we retain the industry, however, this will not be possible.

The pig industry is worth €400 million, with €300 million in exports per year, providing 7,500 jobs for farmers, millers and processors. It cost €19 million per month to feed pigs in 2010 and this has since increased to €25 million per month for the same feed, creating massive cash flow problems. As the product price to the farmer has only increased by a small amount over that 12 months, there is a deficit of between €15 million and €20 million in the industry. Unless something is done to provide such capital, an industry that is so important and efficient could be lost, particularly in my constituency of Cavan-Monaghan.

The retailers have a responsibility to stop cutting prices and return a decent price to the farmer. So far, the Government has completely failed to control the retailers. In the absence of such action, Enterprise Ireland must come up with short-term funding to ensure a sizeable section of the industry is not lost because of financial pressure. Meats such as beef and lamb have increased in price and there is no excuse for Bord Bia not running a promotion for the pork industry.

This is a crisis and when the dioxin crisis happened more than €800 million was found to save the industry. I suggest if the will exists, the necessary €20 million can be found and the means to distribute it is not beyond the expertise of the Department, Teagasc and Enterprise Ireland.

This is a crisis. A number of small farmers have already gone out of business in Cavan and Monaghan. The Farming Independent yesterday reported that one of the five largest farmers in the country has had to close down. This is not limited to one area, it is a national crisis and we must ensure the industry is maintained. This is only short-term. Before this, banks would lend the money but they do not have it at the moment.

As the Deputies are aware, pig prices are a function of the supply and demand dynamics in the market place and the Department does not intervene in the relationship between pig producers and processors. However, it is evident that the recent increase in cereal prices is having a significant impact on pig producers and this fact cannot be ignored. In tandem with this are difficulties in obtaining credit from feed mills and general cash flow issues and this is putting the sector under considerable pressure. The Minister is acutely aware of these pressures and, with many producers being constituents of his, he is reminded of the problems on a daily basis.

Following a difficult year in 2009 prices began to recover early last year. This continued in the second quarter of the year to the extent that year on year prices exceeded 2009 levels in early July 2010. This recovery continued and, while the usual seasonal decline following the end of the barbecue season was again experienced, it was not to the same extent as in previous years. As a result, annual prices remained above 2009 levels and are still over 8% ahead with the price stabilising in recent weeks. Currently the Irish producer price, at €130.01 per 100 kilos, stands at over 95% of the EU average. In general, Irish price movements over recent years have mirrored those of the EU as a whole.

While returns have improved in recent months and are forecast to improve in the medium term, the biggest issue for producers at the moment remains feed costs, most notably cereals and compound feed. The volatility currently being experienced in cereal prices has come about due to a number of factors. In recent years the shift in production towards ethanol has resulted in upward price pressure on quantities produced for animal feed and human foodstuffs.

Extreme weather events during 2010 in Australia and Russia have led to restrictions in output and a reduction in stocks. These issues, together with exchange rate fluctuations and significant increases in transport costs, although falling in recent months, have made for uncomfortable times for livestock producers, who are among the largest consumers of cereals. Pig producers are especially affected by the increase in cereal prices since June 2009, given that cereals account for 75% of feed. This is reducing margins to below the long-term average, a situation which may have an impact on production decisions in both the short and medium term. Difficulties in maintaining credit facilities with suppliers and banks are exacerbating this situation. Officials in my Department met with the IFA before Christmas to discuss these issues. A number of proposals were discussed and my Department is following these up with various parties including Bord Bia and Teagasc.

Teagasc has prepared a development strategy for the pig industry, which identifies the issues facing the sector and makes certain recommendations. The pig industry strategy steering group, which includes representation from my Department and all sectors of the industry, has been established for the purpose of furthering those recommendations. This group has identified and continues to prioritise and promote actions needed to ensure a viable sustainable future for the pig sector. These recommendations were incorporated into the Food Harvest 2020 report which was published in July 2010. This group also recently wrote to me highlighting credit as the most immediate short-term issue facing the sector.

Bord Bia has put in place a number of relevant marketing and promotion initiatives. On the Irish market, a series of promotional campaigns have commenced and focus on building awareness and loyalty to the Bord Bia quality mark. These will underline the quality of Irish pigmeat and will communicate its origin. A customer reassurance programme will continue in export markets. This will entail a continued direct Bord Bia contact with customers, placing key information about the Irish pigmeat industry in context and demonstrating the integrity of Irish health controls; a trade communications programme designed to position the capability of the Irish pigmeat sector and the safety and quality measures in place to influence key decision-makers in the retail, food service and manufacturing sectors; and a programme to maximise international market access for Irish pigmeat products has been established. This will involve communications activities designed to build confidence among national authorities and opinion formers in markets, based around Ireland's health controls.

In an attempt to tackle the issue of input costs, the European Commission recently opened tenders for wheat and barley to be sold from intervention in an attempt to curb feed price increases. These tenders were fully subscribed and there are indications that similar exercises will be undertaken in the future.

The problems currently being experienced in the pig sector are not unique to Ireland. Prices in most member states recovered during 2010 but at a lower rate than in Ireland, while the subject of input costs affects pig producers Europe-wide. Issues affecting the pig sector have been raised at various EU fora, from management committees to the special committee on agriculture to Council of Ministers level. A Pig Reflection day was organised under the auspices of the Belgian Presidency in early December at which a wide range of issues were discussed. Chief among these were the downward pressure on margins caused primarily by the significant increase in input costs and the ongoing weakness in prices. The cost and availability of animal feed, the impact of GMOs, and the level and type of assistance that should be made available to the industry were also discussed. Many member states, including Ireland, called on the Commission to take some remedial action, specifically in the form of re-introducing export refunds.

The Commission is not convinced of the necessity to take measures to address the difficulties in the pigmeat sector. It has dismissed calls for export refunds on the basis that EU prices are close to world market price, and considers that aids to private storage will simply result in the release of stocks in the spring, as prices begin to recover. As the Deputies know, the State's commitment to the banking sector through the guarantee scheme and NAMA is influenced by the need to ensure credit for viable Irish businesses.

Recent figures from the Central Bank confirm that lending has picked up in the SME sector and this includes agriculture and forestry which in quarter three of 2010 accounted for €4.4 billion, representing 6.5% of the total outstanding lending to SMEs, or 13.5% of the core SME total. This is the third largest share of core SME lending. In the first three quarters of 2010, agriculture and forestry was the recipient of more new core SME lending than any other sector, for example, 23.9% or €511million. The Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, is meeting with the Irish Banking Federation tomorrow to impress upon it the necessity of getting its members to improve the credit flow to pig farmers, millers and the sector generally. A particular problem has arisen as a result of some producers not being in a position to repay the normal credit extended by feed millers, while both they and the millers have indicated that they are unable to replace this with bank credit. The Minister will raise this with the banks tomorrow and impress upon them the importance of finding viable solutions to assist pig producers at this time. This is ultimately in everyone's interest, including that of the banks.

The Dáil adjourned at 9.15 p.m. until 10.30 a.m. on Thursday, 13 January 2011.