I understand Deputy Ó Cuív, who has 40 minutes, is taking 25 minutes and sharing with Deputies Cowen and Moynihan.
Agriculture Industry: Motion [Private Members]
I move:
That Dáil Éireann:
notes:
— the importance of agriculture as Ireland’s largest indigenous industry;
— that Article 39 of the Lisbon Treaty sets out the EU wide objective of ensuring a fair standard of living for farmers;
— the historic reduction in direct EU supports through the Common Agricultural Policy Pillar 1 with the single farm payment to Ireland reduced by €42 million per annum from €1.255 billion to €1.213 billion, approximately a 10% cut in real terms, with a further 14 per cent decrease in Pillar 2 payments;
— that the long-term sustainability of the agri-food industry in Ireland requires an adequate and fair market price return for farmers;
— that the ongoing manipulation of the market by big supermarkets and large processors is driving down prices for primary producers; and
— the need to ensure a level playing field between all actors in the agri-food industry, namely primary producers, processors and retailers with a fair return to each sector;
condemns the Government and the Minister for Agriculture, Food and the Marine for failing to protect farmers from unfair treatment by retailers and processors; and
calls on the Government to:
— confirm its role and the remit of the EU under Article 39 of the Lisbon treaty in supporting Irish agriculture and establishing and overseeing a fair, effective framework for the market to operate within;
— ensure that the Minister emphasises the protection of farmers as the cornerstone of domestic and EU agricultural policy;
— work with EU Agriculture and Rural Development Commissioner-designate, Phil Hogan, to prioritise the re-balancing of power in the agri-food industry in order to ensure farmers get a fair, sustainable price for their produce;
— work, at an EU level, to ensure the objectives of Article 39 of the Lisbon treaty are fully achieved; and
— introduce a €200 per head beef genomics scheme payment in 2015 to support the vulnerable suckler cow sector.
We all recognise the right of all workers to get a fair day's pay for a fair day's work. Regardless of the industry, workers are entitled to make a decent standard of living from their hard work and effort, yet today in the Irish agricultural industry the primary producer in the food chain is being systematically undercut. The cornerstone of the industry, the family farm, is being whittled away by mounting pressure on price and market manipulation.
The ongoing beef crisis is a clear case in point. Some 80,000 dry-stock farmers are seeing their work and effort sapped by large processors and supermarkets. Interestingly, the Irish Farmers' Journal last week reported that a farmer in Ireland could expect to get €350 less than a farmer in Britain for the same-type animal. This is a toxic cocktail of short-term greed and Government indifference and it is destroying the basis of Irish agriculture.
My party introduced this Private Members' motion to highlight the increasing pressure that ordinary farmers are under across the country. Of course, this pressure has massive repercussions, not only for the Irish economy but for rural life and society. I am delighted to see here the Minister of State with responsibility for rural development, Deputy Ann Phelan, because I note, on the issue of the shape of rural society, it is not only about the economy. Often we talk about the society as if it was an economy but the economy is only a means to an end, in terms of creating a society that is a good place for people to live in. It is striking when one looks at the 1916 Proclamation, where there is interesting sentence which talks about pursuing "the happiness and prosperity" because they recognised that it was not all about economy. The economy was hugely important, prosperity was important, but so was the happiness of the people. In other words, the society that we are trying to create, which, in terms of Irish agriculture, is centred around the family farm rather than some corporate-type farming, is vital to rural society.
Agriculture is also our largest indigenous industry. On the agri-food sector, the Ministers' colleague, the Minister of State, Deputy Tom Hayes, was in my village, Corr na Móna, today looking at the sawmill. Fair play to Deputy Kyne, he made it back quicker than I did. I had a bit of car trouble on the way back.
Deputy Ó Cuív should have car-pooled.
Deputy Kyne is not going back the same way as I am going back. It reminds me of the day that Mr. Vincent Browne suggested to me on a television programme that I take the train home and I pointed out to him that there are no trains to Corr na Móna. Then he asked why I do not take the bus and I equally pointed out to him that there is no bus to Corr na Móna. One is confined to the car where I live.
Deputy Ó Cuív was in Government long enough. One would imagine he would have sorted it.
It would be impossible to provide the kind of bus service-----
Would Deputy Ó Cuív stick to agriculture?
-----that would leave me there whenever I decided I wanted to go home. As I am sure Deputy O'Donovan will be aware, as a Deputy one does not normally get home at sociable hours. I cannot see the day that there will be a bus service to Corr na Móna at one o'clock or two o'clock in the morning. Maybe this Government will promise it, like many other things they promised before they came into power.
The agrifood sector has weathered the storms of the recession to continue to play a central role in our economic life. Agriculture provides 60% of employment within the agrifood sector, which supports over 300,000 jobs across the country. Agriculture, including forestry, is still the engine of the rural economy. When one attacks and undermines the basic unit of that industry, the family farm, it will have implications for the broader economy.
Looking to the future of the industry, the sweep of the Food Harvest 2020 objectives sets out a bold vision for what we can achieve in Ireland. On a document prepared by the previous Government, it would be fair to say that the Minister has certainly bought in to trying to increase the take from agriculture. The major investment in both on-farm facilities and broader industrial capacity over the past decade has enabled our largest indigenous industry to grow and expand. There is untapped potential for the agricultural sector to flourish as the main employer in rural Ireland. However, this will be dead in the water if the price return to farmers is completely hollowed out.
The price has become vital in the context of the reduced funding available in the latest round of CAP funding and no matter what way we dress it up, there is quite a drop in funding. For example, direct payments between 2011 and 2013 dropped by 10%. They are down again this year and they will be way down next year, and the new CAP is a much smaller CAP than the last one. The Rubicon of reducing the CAP budget has been crossed and will inevitably come under further pressure in future years. EU subsidies will be harder to maintain over the next round of negotiation. This highlights the pressing need to emphasise a fair price return for farmers in the future. When the issue of export refunds was mentioned to officials on a recent visit to the European Union, the "No" was so firm. If the market will not pay the price and the subsidies are reducing, one can understand the pressure the farmers will come under.
Under Pillar 1, the single farm payment to Ireland has been reduced by €42 million per annum, from €1.255 billion to €1.213 billion, a 3.3% cut. With modest inflation of 7% over the period of the CAP, this is a 10% cut in real terms over the seven year period. Under Pillar 2, €2.2 billion in EU funding for Ireland amounts to €313 million per year. This is a 14% decrease in EU funding. With inflation at 7%, this is a 21% cut in EU funding over the seven year period. As that got cut, of course, the matching funding from the Government got cut. Overall, Ireland will see a reduction of 10% in Pillar 1 and 21% in Pillar 2 up to 2020. This fall in funding will be felt inside the farm gate in every farm in Ireland over the long term. This shortfall must be met by a fair return to farmers for their produce from processors and retailers. Under current manipulation, the CAP is effectively being exploited by these big supermarkets and processors to subsidise themselves by keeping farmers financially viable via State aid rather than through a fair price.
Addressing the issue is vital to the long-term viability of the agrifood industry in Ireland. All we have to do is think back to last Christmas and the manipulation of the vegetable and horticultural sector, and the huge effect that had on producers. We are aware of the situation with liquid milk. When one buys a litre of a milk in a shop for €1, for example, 11 cent less of the price goes to the farmer now than was the case in 1995 and 11 cent more goes to the processor, or the supermarket. In most cases the processor is a co-operative, however, and we know the money is not going to co-operatives. That is despite the fact that the labour input into a litre of milk in a supermarket is minimal because the processor puts it on the shelf and customers take it off the shelf. All the supermarket has to do is provide the space and to scan the barcode at the checkout. In many supermarkets staff do not even have to do that because people scan the barcode themselves at the automated checkout.
In the past year since the price issue came up it is interesting how many times the Minister said we should let the market look after itself. It took the Minister a long time to set up the beef discussion group but it is only a talking shop. The Minister will tell me one must allow the market to function, as that is what he has said to me previously
I said a lot more than that.
The reality is that we do not say the market should dictate to the consumer because we realise that if were to do so, the very powerful interests would manipulate consumers and they would lose out. We have a significant amount of international and national law to ensure consumers cannot be abused. The ordinary farmer is the other weakest player. A producer group is a step in the right direction but a very small one. It is a little naïve to expect such a group to solve the problem. It is important for the Government to set out a framework in which the market can operate, and that through legislation both in this country and the European Union we would ensure a level playing pitch for all players. If the Minister believes that is already the case then he should talk to a liquid milk producer, a vegetable producer, a potato grower, a horticultural producer, a strawberry grower or beef farmer.
The Government has abandoned its role as the custodian of a fair market. It has left farmers exposed to the power of processors and massive supermarkets who call the shots. The single farmer does not stand a chance against multinational companies who have revenues that rival the revenue of small countries. Some supermarkets are even bigger in power than some of the smaller countries and transnational in character.
The Minister should have stepped in to intervene at the beginning of his Ministry. He knew he would play a pivotal role in the European negotiations and he should have stood up for ordinary farmers across Europe. To put it mildly; the Minister has shrunk from the challenge. When we were discussing the Common Agricultural Policy, CAP, I kept asking the Minister what he was doing about price. The issue is fundamentally European as well as national as farmers across Europe are affected. Given the reducing subsidies provided by the new CAP, price should have been a cornerstone of discussions.
It is interesting to examine EU law. Article 39 of the Lisbon treaty sets out the objective of securing "a fair standard of living" for farmers. It is an integral part of EU agricultural policy. Given the multinational composition of large supermarkets and processors in the interconnected agrifood market on the Continent, it is vital that a joined-up EU approach is taken. Whether in the dairy, beef or vegetable sector, farmers can be left vulnerable to big supermarkets manipulating prices. It is important that the European Union would take the lead in achieving that across the Continent.
The successful passage of EU Agriculture Commissioner designate, Phil Hogan, through scrutiny in the European Parliament last week moves him closer to taking up the position in the coming weeks. The Minister must work closely with him to achieve a strong, fair market framework in Europe. The future of European agriculture is reliant upon a fair price for a good product. The success of the CAP in achieving food security and underpinning agriculture as the cornerstone of the rural economy and rural communities is reliant upon a fair price return. I note with concern that the Government's counter-motion fails to address the Lisbon treaty provisions.
The beef crisis is threatening the livelihood of dry stock farmers throughout Ireland. Dramatic falls in price have been caused by a combination of arbitrary specification changes by processors and artificial trade barriers with Northern Ireland and Great Britain due to the influence of supermarkets. The quality assurance scheme has been exposed as a tool for processors to artificially suppress prices. We are in favour of quality assurance but it cannot be a method by which the supermarkets and processors artificially penalise farmers for perfectly good cattle and set barriers that have no justification in terms of quality of animal or meat.
The suckler cow sector is being hammered by the fall in price, which means the backbone of the beef industry is under threat. The current crisis comes hard on the heels of the fodder crisis in 2013, which pummelled the income of dry stock farmers. Teagasc revealed that cattle-rearing farms saw incomes decline by 22% to €9,469 in 2013 due to higher production costs associated with severe fodder shortages early last year. The beef crisis is hitting an already exposed group. The crisis is having a greater impact in certain parts of the country than others. The shift in prices is driving struggling farmers over the edge, which will damage production, employment and the prospects for future growth under Food Harvest 2020.
The crisis has illustrated the grave imbalance at the heart of agriculture. Primary producers are at the mercy of a system that is immensely more powerful than they are. Large processors are eroding margins while big supermarkets are working to expand their share of the final price. The misuse of labelling and specifications to achieve that reveals the way the power is used by those who have it, to manipulate the market.
I have set out the problems at hand and the Government's responsibility to address them. They are the steps that should be followed by the Minister, Deputy Coveney, to get to the very root of the issue. It will take time to change the situation on a Europe-wide basis. I hope the Minister will convince the new Commissioner designate - I will certainly try to do so - that he should make a fair return to all farmers across the European Union, so that from the east to the west and from north to south, farmers and family farms - the cornerstone of European agriculture - will be defended.
In the meantime farmers face another hazard: as discussed during Question Time, next year will see the smallest payments over a 14 year cycle to farmers under the CAP. This will happen because, as the Minister knows, GLAS will not pay out significant money next year and REPS and AEOS payments will be minimal.
Farmers must pay bills now and we propose something very simple. There should be an introductory payment next year of €200 per head under the beef genomics scheme to bolster suckler cow income levels. This can be contrasted with the €80 proposed by the Minister.
Has the Deputy costed that?
I have, yes. The Minister keeps saying I live in cloud cuckoo land but I have not heard him criticise the Irish Farmers Association which wants more money to be spent under GLAS, though we all know this cannot be done.
The IFA is very happy with GLAS as we will spend €260 million per year through GLAS when it is up and running.
The IFA has sought that €260 million next year.
It has not.
It has. It seeks €500 million under Pillar 2 next year. The Minister should check his facts as leaflets on this were distributed to every farmer at the national ploughing championships. The Minister must not deny the facts as I can go to my car and get the leaflet for him if he so wishes. My proposal is cheaper than what is sought by the IFA.
The IFA wants 30,000 farmers in GLAS and that will take until next summer, at least.
The IFA wants a full year's payment and €150 million in next year's budget - it has stated this time and again. We were lobbied on this in the Alexander Hotel.
The Deputy knows that nobody is seriously saying that.
Is the Minister saying the IFA is not serious about this?
I am saying nobody is seriously suggesting that €150 million-----
The IFA is suggesting just that.
The Deputy and Minister should not engage in debate because the Deputy only has three minutes left.
This is a very good debate. The IFA is suggesting this and it is on all the literature.
It is the first time Deputy Ó Cuív has taken the IFA seriously.
I will argue with the IFA and say it is wrong when that is the case as I am entitled to do so. I take everything the IFA says seriously, even if I do not agree.
We suggest that payments should levelled over the seven year cycle as this would be easily done. An introductory payment of €200 should be paid as this would encourage farmers to join the genomics scheme for three years, something the Minister hoped to achieve. This would produce more data on the genetic base of the farming herd.
We call for the immediate establishment of an independent beef regulator to investigate, assess and advise on sharp practices in the beef industry and to try to determine who gets what from the animals provided to factories - something the French are doing. We need to learn who is making a profit from this because this information would highlight much of what we seek today. A beef regulator would give ordinary farmers a strong and independent representative in this David and Goliath battle that would stand up for a fair return. Also, Britain has a food ombudsman and Ireland has not provided for this in the new Bill - we need one.
Since I was appointed as the Fianna Fáil spokesperson on agriculture I have argued that two pillars are required to make Irish agriculture strong. First we need the CAP to be fairly distributed, on an objective basis, across the various schemes. Second, the issue of fair prices for farmers must be addressed. I have always advocated this two-pillar policy.
I think it is fair to say that the Minister gives the impression of being the Minister for agri-business but not the Minister for farmers.
That is the impression the Deputy tries to sell.
It is the impression people get from the Ministers' speeches. The Minister should read his own speeches. We want good family farms in Ireland and we want all of the land to be farmed. We want people to get a fair return for their products. We believe it is vital for the future of rural Ireland, the quality of food produced here and the image of Ireland as a green country that we maintain the family farm as the cornerstone of agriculture. We must not allow corporate farming that decimates rural Ireland.
I thank Deputy Ó Cuív for tabling this relevant and important motion. We all rightly acknowledge the pivotal role of agriculture in our economy - that is stating the obvious. It has played that role in recent times when many other sectors were under severe pressure and it underpinned many communities in rural areas. We all acknowledge that it is the largest indigenous industry in the country and the beef sector is a major component of this. Members on both sides of the House know that Food Harvest 2020 is a vital blueprint for the sector's future and I acknowledge the commitment of this Minister and Government to the policy, which was initiated by the last Government. I have heard the Minister give credit to previous office holders on this plan and I welcome this.
Growth in the sector is due in no small part to commitments in Food Harvest 2020 and there has been similar growth in the medical technology and computer technology sectors in recent years. Thankfully, many jobs have been created in these sectors, particularly in the food and drink sector, as the Minister noted. I hope the Minister will use his influence, as we conclude deliberations on the coming budget, and do all he can to reduce the tax burden in areas such as the universal social charge. The universal social charge was an emergency tax for a period of emergency. Despite all of the Government's promises before the last election it now acknowledges the universal social charge for what it is and I hope the Government takes advantage of the opportunities that exist, according to the economic indicators, to make this change. There are opportunities for many more jobs in the sectors I mentioned and a prudent reduction in the tax burden will help in this regard.
Potential progress in agriculture is under pressure because of the beef crisis. The Minister knows this and has sought to engage with the sector and with stakeholders but nothing has come of this to give those involved in the industry the confidence to believe the impasse has been avoided. The motion is clear and concise. We are disappointed because it appears that the Minister has taken a hands-off approach to the sector in the negotiations.
This concerns us. This is why we want to state quite clearly that we ask the Dáil to support our proposal on the €200 genomics payment to support the suckler cow sector.
The Minister will ask whether this is costed. Let us believe it costs more than €100 million. It would be a once off payment and, like the universal social charge, it would be an emergency solution for an emergency situation. This is how vital a component is required to allow the industry to flourish thereafter. The Minister must take on board such a request. He must acknowledge the input and effect it could have. If the Minister believes it would not have this effect, that it is pie in the sky and, as he has called it, auction politics, it is far from it.
We ask the Minister again, having previously done so at the request of Deputy Ó Cuív, to reconsider the prospect of putting in place a beef regulator, not necessarily to set price because we know this cannot be done and that one cannot interfere in the market in such a fashion, but a regulator could act in an independent fashion to assess the malpractice and underhand practices which allegedly occur in the business.
I ask the Minister to seriously consider the other components of the motion, including creating an ombudsman for the supermarkets. In light of the recent appointment of Commissioner-designate Hogan, I hope the Minister works with him, as soon as is possible and practicable, to explore the potential which exists in what is contained in section 39 of the Lisbon treaty. It is a blueprint by which the Minister may be able to regulate the market in such a way as to help improve the situation and the price and allow the sector play its part. This would be in addition to the ways and means by which the Minister and the Minister for Finance can help the industry to flourish and play its part in the continued recovery of the nation.
I welcome this opportunity and I commend Deputy Éamon Ó Cuív on tabling the motion so we can discuss agricultural issues. Agriculture is one of our main industries and is the backbone of rural communities the length and breadth of the country. Prior to the summer we discussed the beef crisis, and sought a regulator to be put in place so the agricultural sector could have confidence that somebody would be its guardian with regard to the situation which developed in recent months.
This time 12 months ago premium prices were being paid, but the industry almost collapsed in December and January. A major issue arose with regard to flagging dangers and alerting farmers to them. Farmers went in a particular direction producing bull beef, which had been the catchphrase for the previous two or three years. All of a sudden the specifications, guidelines and rules were changed and prices were cut accordingly. I wrote to the Minister in recent weeks with regard to the quality assurance scheme. To be perfectly honest, the response I received explained my letter back to me and stated it was up to other people to deal with the quality assurance scheme. We must examine how it was manipulated to cut prices for farmers as a serious issue arises.
When the Minister called a crisis meeting of all stakeholders in the beef industry on Holy Thursday this year there was a sense that a movement would be made and parameters would be set in place to ensure the viability of farming. That was six months ago but nothing has happened. A huge number of farmers are utterly frustrated with the system. Beef and suckler farmers are looking at their margins which have been absolutely cut. Those on family beef farms tell me if they had any substantial repayments they simply could not meet them. Family dairy farms considering the potential which will exist when quotas go on 1 April next year wonder whether they would be wise to invest. They are very cautious. Some farmers have bought into it and I hope there will be a future for them. The Minister stated he accepted there would be a danger with regard to milk prices in the coming months and farmers are very concerned.
We must examine the level of confidence which exists in the farming sector. Any family beef farms with substantial borrowings, children in school, house mortgages and borrowings for sheds and investments are simply unable to make their repayments. They cannot make them this year. This is the fundamental issue, although we can talk about the beef industry and the excellent product we have, which is renowned the world over and which we have produced for years. Over the past 20 years family farms have bought into regulations to ensure a premium product is on the market.
Deputy Ó Cuív mentioned agri-industry. At the ploughing championships and elsewhere farmers have stated there is too much emphasis on agri-industry and we must pull back to the primary producer. Throughout the country, people on fertile land and marginal land are willing to try to make a living, raise families and keep rural communities going. We have many other industries and ancillary businesses, but if we do not have a viable agriculture industry, whether in dairy, beef or tillage, we will not be able to keep these communities going.
I ask the Minister to deal in his remarks with the special investigations unit of the Department and state whether it will be rebranded or replaced. It has done huge damage. In April or May it went to a farm with minor transgressions regarding cross compliance and almost treated the farmer and his family as absolute criminals.
Other issues arise with regard to red tape and bureaucracy. At the beginning of the CAP negotiations, and when the first draft came out in October or November 2011, everybody in Europe and Ireland stated it was an opportunity to reduce red tape and that farmers had been working under a huge bureaucratic red tape machine for the past 20 years or more. I am sorry to say I cannot see anything in the new proposals which will reduce red tape for family farms; they will probably generate more red tape.
I know of people who wanted to clear some scrubland which had been grazed by cattle for the previous 50 or 60 years but it was described as forestry by the Department. The definitions used by the Department and common sense on the part of officials needs to be examined. Some officials are absolutely excellent in how they deal with farmers, but some take the regulations to the letter of the law and almost delight in putting pressure on family farms.
The core issue is the crisis in the beef industry. Deputy Cowen spoke about the need to take emergency action in the short term and I agree with this. The information I have received from people who keep suckler cows is that they are thinking about changing and looking at other options. Those with larger herds are considering the viability of the sector. Their sons and daughters are choosing not to work on the farms. We must face this crisis. We have stated throughout the world that our beef industry produces a primary product. The suckler cow scheme is very important in this regard and it must be enhanced. Something must be done in this regard. There is no point in having summits in Dublin Castle, which, I believe, have been referred to as "the last supper". It is no longer acceptable as we need real action, such as examining the machinery available through the various treaties of the European Union and elsewhere.
Within the European Union, the various treaties of the European Union or elsewhere, it is time for real action in that regard because many farmers are only coming out of the 2012 and 2013 fodder crisis. Some of them have huge debt overhang. Some of the smaller - and even the larger - merchants and co-ops will outline the figures for what was borrowed to keep the farm going and they are only just coming out of those massive debts.
Based on the weather particularly in my part of the country and probably throughout the country, 2014 has been an exceptional year for farming. One would think that after that farmers would be in good form, but they are anxious and concerned. The people in most danger are those with borrowings, whether it is for their own mortgage, for a shed or for other farm investments. They cannot make their repayments. The banks claim they are lending money to the agrisector, but I am afraid that they are not. They are binding it up in red tape and pointing to different issues.
The last debate we had in this area was on a regulator for the beef industry. It was shut down and we were told it could not be done. It has to be done. There must be an ard stiúrthóir or somebody to decide whether farmers are getting a fair price. Last week's Irish Farmers' Journal highlighted a €300 difference between Irish farmers and those in the UK. What is the red tape that is causing is the difference? What needs to be ironed out? What needs to be challenged within the European system-----
The Deputy should know the answer to that question.
----- to ensure that farmers here are getting a fair price for their product? They are conforming to all the regulations and are producing a top-quality product of which we are all proud. However, we need to give them a fair chance.
I ask the Deputy to conclude his remarks.
I will conclude. We need to give them fair chance. We need to ensure that the primary producer is at the core of any policy for agriculture in this country and at the core of the industry.
I move amendment No. 1:
To delete all words after “Dáil Éireann” and substitute the following:
“notes:
— the importance of agriculture as Ireland’s largest indigenous industry;
— the successful negotiation of the new Common Agriculture Policy during the Irish Presidency in 2013 which secured Pillar 1 funding of €8.5 billion for Ireland in the period 201420;
— the negotiation by Ireland of the €2.2 billion funding under the Rural Development Programme 2014-2020, to which a further €1.9 billion was added by this Government; and
— the importance of export markets to a strong Irish agri-food sector;
acknowledges:
— the dramatic increase in agri-food output and exports under this Government’s stewardship of Food Harvest 2020 to €10 billion;
— that the long-term sustainability of the agri-food industry in Ireland requires a continued focus on improving profitability on Irish farms and on competitiveness and efficiency along the supply chain;
— the success of the Origin Green campaign in this context; and
— the need to ensure a level playing field between all actors in the agri-food industry, namely primary producers, processors and retailers with a fair return to each sector, recognising that this is a pan-EU issue, given the very high level of exports of Irish agri-food products; and
supports:
— the ongoing efforts of this Government to re-balance power along the supply chain, through the Competition and Consumer Protection Act 2014 and through the public consultation on the establishment of producer organisations in the beef sector, which are intended, inter alia, to increase farmer bargaining power in the supply chain;
— the Government’s continuing commitment to the development of the beef industry, including through direct investment in 2013 of more than €40 million for the beef genomics scheme, technology transfer and other measures, and the provision of €295 million for the beef genomics scheme in the draft Rural Development Programme 2014-2020;
— the establishment of a Beef Forum, increase in marketing funds for the beef sector and efforts to increase transparency on pricing and specification for farmers; and
— the Government and the Minister for Agriculture, Food and the Marine in their continuing efforts to develop the agri-food sector and improve the profitability of Irish farmers.”
I wish to share time with Deputies O'Donovan, Kyne, O'Mahony, Connaughton and McNamara.
That is agreed.
I thank the Deputies opposite for bringing this motion before the House as it gives us an opportunity, which is always welcome from my perspective, to debate the Government's approach to agriculture.
The Fianna Fáil motion is based on Article 39 of the Lisbon treaty. It is important for people to understand what that states because the Deputies opposite only picked out a small portion of that article. It states:
1. The objectives of the common agricultural policy shall be:
(a) to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour;
(b) thus to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture;
(c) to stabilise markets;
(d) to assure the availability of supplies;
(e) to ensure that supplies reach consumers at reasonable prices.
and so on.
In other words, this is about providing a modern food-production system across the European Union through family farms to ensure we have a competitive market operating here so that we can see an industry grow and ensure farmers get a fair return for what they produce. That is exactly what we have tried to achieve and, in my view, have achieved through the negotiations over the newest Common Agricultural Policy.
It is important to remind the House that when the Government took office the predictions were that the CAP would reduce its funding by 30%.
Did the Minister believe that?
That was what Deputy Ó Cuív's Government left behind.
No, it was not.
The Minister without interruption.
It does not happen.
Was it the previous Government that set those figures?
Deputy Cowen, sorry-----
No it was not, but-----
Well the Minister should not try to-----
----- that was the figure that was being predicted previously.
We always do that.
Well, the Deputies are upset and they should be because they were not advocates for agriculture at the time.
I am not upset at all; I am just-----
What has been delivered in the CAP, which has been welcomed by all farming organisations, has been a €12.5 billion package for Irish agriculture between now and 2020. Instead of a 30% reduction in direct payments, it is 3%. In Pillar 2 we are ensuring that the average spend in rural development programmes over the next seven years is about €565 million, which is the same as the average spend for the past seven years, which the Deputies opposite seem to have conveniently forgotten about. In fact, in those negotiations in the last minute, the Taoiseach secured an additional €100 million or so in Pillar 2 payments.
This evening's debate contains the usual attempts to distort what has been really good for Ireland in the new CAP, which was a fundamental change from where the Commission was going and it was just as well for Irish agriculture. However, what is most concerning for me is that the three speeches I have heard this evening made no mention of productivity, generational change, land mobility, new markets, competitiveness or modernisation of Irish agriculture. There was none of that. It is all just, "We need more money", which paints agriculture in Ireland as if it does not have the capacity to make money form the markets as it is doing now.
We are having difficulties in the beef sector; this has been a very difficult year. I accept that and we have debated it on numerous occasions.
What is new in that?
I will come to that because unfortunately there is nothing new in Fianna Fáil's motion apart from a proposal to give €200 per animal to every suckler farmer in the country even though we have a beef genomic scheme that has gone to the Commission to be considered for approval. When we asked for observations during a public consultation process, there was no mention of this €200 per animal coming from Fianna Fáil. It was a last-minute conversion in the week of the World Ploughing Championships which it is now following with a Private Members' motion.
What is the Minister's solution?
If one looks at-----
That is because-----
The Minister without further interruption. Deputy Ó Cuív was not interrupted during his contribution.
I was.
I ask Deputies to extend the Minister the same courtesy.
I was constantly interrupted by Deputy O'Donovan and the Minister.
It is to the credit of Fianna Fáil when in government that it set in train Food Harvest 2020. Unfortunately since then, I have not seen any policy from Fianna Fáil in opposition in terms of the implementation of Food Harvest 2020 and taking those targets forward. However, let us consider progress on the targets so far. We have virtually achieved the target on beef already - in fact double the target set by Fianna Fáil, which was to increase the value of beef exports by 20%. We are already at 39%.
The target for increase in value of dairy outputs was 50%. We are already at 42% and we have not even moved away from quotas yet.
What are this year's figures?
In pigs against a target of 50%, we have already achieved 54%. In sheep the target was 20% and we have already achieved 19%. So Irish agriculture is forging ahead. There are always difficulties; every year some sector will have difficulty with price because we export 90% of everything we produce, which creates vulnerability.
Does Deputy Ó Cuív really believe that by putting a beef regulator in place we will have somebody in an office in Ireland who will be able to go to Riyadh, Berlin or Barcelona - or London for that matter - to regulate the price they are selling Irish beef there? In some kind of fantasy proposal he seems to be suggesting that somehow an Irish regulator will be able to determine the price of Irish beef on the shelves and in restaurants in different parts of the world.
We could do. Has the Minister determined-----
The Deputy will have an opportunity to respond tomorrow evening.
Has the Minister determined what it is sold for?
In terms of those markets-----
A regulator could determine, as the French are doing-----
I ask Deputy Ó Cuív to allow the Minister to continue without interruption.
The French do not export large volumes of beef; the French beef industry provides beef for its own marketplace, which is much easier to regulate than a market that exports 90% of what it produces.
They are not against regulation in principle.
The Deputy should know that, but it seems he does not.
In terms of market access issues, the Government has worked tirelessly to open up new markets for Irish produce, the objective being to ensure we are not large commodity producers of food but premium producers targeting premium markets across the world. In the past three years I have led trade missions to China, the United States, Algeria, Japan, Qatar, the United Arab Emirates and Saudi Arabia, in all of which we are making rapid progress. China, in particular, is a hugely exciting market, especially for dairy and pork products and seafood. In the not too distant future, it will also be an exciting market for beef.
In the past 12 months we have achieved agreements on beef access with Japan, Singapore, Egypt and Iran. We have gained access for sheepmeat to Singapore, South Africa, the United Arab Emirates, Canada and Russia. We have secured access to Austria and Serbia for pork. What market access did Deputies opposite secure when their party was in government?
Will the Minister check his facts, for God's sake?
I have checked them. In the coming weeks Irish beef will be the first beef from Europe to enter the US market for 16 years.
In terms of the domestic beef sector, I agree with the Deputies that this has been a very difficult year for many beef farmers. However, I do not buy into the view that everybody is now looking at leaving beef production and that no young people are going into farming. In fact, there are more young people trying to get into agricultural colleges than ever before. There is a sense of excitement in terms of the numbers of young people seeking to develop a career in the food industry.
Not in the beef sector.
As I said, all of the agricultural colleges are full. Teagasc management has repeatedly approached me seeking more staff for the colleges to meet the growing numbers on a month-by-month basis.
We need to restructure the beef market. The Deputies are correct that beef farmers are in a position of weakness when they negotiate with very large processors. They go with a trailer load of cattle and are price takers, which is wrong. That is why we are introducing a new policy - I hope Deputies opposite will contribute to the ongoing public consultation on it - which will see producer organisations representing large numbers of farmers as a collective. It is about having a professional negotiator to engage on their behalf on price, specification, age, species, markets and so on. This type of system works effectively in other parts of Europe. We want to see groups of 3,000, 5,000 or 7,000 beef farmers having collective access to a professional body which will negotiate on their behalf to ensure they achieve the best deal possible in terms of a premium price for the products they are producing. That is the type of structural market change we need, as opposed to a vague idea about a regulator without clarity as to what it would actually do, or some notion of changing prices without having any way of doing so. The way to improve the negotiating position for primary producers of food is by improving their bargaining capacity with processors and retailers. We will do this effectively through producer organisations.
We are also improving the information flow to farmers. For example, we have launched a Beef PriceWatch online tool which enables farmers to see what each factory is paying for different grades of animals right across the country. This will help to address the allegations regarding cartels and other issues that are understandably causing farmers considerable concern. Making accurate, up-to-date beef price data available to farmers will ensure there is transparency around these issues.
Fianna Fáil Deputies claim the beef forum has been a talking shop. In fact, it has been quite the opposite. After only two meetings, we already have a detailed report from Mr. Michael Dowling who is the author, as the Deputies know, of the beef section in Fianna Fáil's Food Harvest 2020 strategy. He has written an update of that strategy for the beef forum, which we are working to implement. If the Deputies actually knew what was happening at the forum, they would know about this.
We have also seen increased funding to Bord Bia which is spending €3.5 million in marketing Irish beef strategically in the markets we need to target, including Italy, the Netherlands, Germany and parts of the United Kingdom. Conveniently, however, the Deputies made no reference to this.
In terms of supports for the beef industry, this year we will spend more than €40 million on direct supports for the suckler beef sector, €23 million on the beef genomics scheme, €10 million on a beef data programme which is linked with the genomic scheme, €5 million on beef discussion groups and some €2 million as a residue from the suckler cow welfare scheme. Let us not forget that when we took office, suckler beef farmers were getting €40 per cow under that scheme. The Government has doubled the payment, as per our commitment under the rural development programme.
Deputy Michael Moynihan claimed that the suckler herd was disappearing before our eyes. The data show that 776,500 cows calved this year in the suckler herd, 1.5% less than last year. The year 2013 saw the highest ever price for beef in Ireland, being 15% up on what was being given two years earlier. For anybody under the impression that in the past three or four years there was strong pricing in beef markets, that is not the case. This year prices are down some 11%, on average, from last year's all-time high. That is not to say the situation is good; it is not good. Many beef farmers have lost money this year and are operating within very tight margins. However, it is simply not true to claim they are seeking in large numbers to get out of beef production. When one considers the prices being paid for store cattle in Irish marts this year which are as high as, if not higher than, last year when factory prices were at their highest ever level, it does not suggest to me that this is a sector about to collapse.
Let us not get into predicting doom. We must try to fix problems and increase the negotiating capacity of farmers.
Those farmers are depending on the Minister.
Yes, they are depending on me and I will not fail them. I have made it clear that the Government prioritises the beef sector as part of its agricultural policy. That is what we are doing under the CAP and, in particular, the RDP. We will continue to support the sector in the budget next week.
I certainly hope so.
There is nothing in this Fianna Fáil motion in terms of a strategic change in the agriculture sector. The budget will be delivered next week and that party has nothing to offer. Do the Deputies opposite even know that for the past 12 months we have been engaged in an agri-taxation review with the Department of Finance? There have been no suggestions as to what we should announce next week in respect of taxation changes that might help farmers. The Fianna Fáil Party has nothing to offer.
Farmers cannot pay their bills.
Has the Minister even read our motion?
I have read it. The Deputies are getting upset, rightly so, because they are not representing agriculture. I genuinely do not know what the Fianna Fáil Party represents.
The Minister adopted our policy on Food Harvest 2020 - thank God he did. He can do something for beef farmers next week, if he so wishes. I am sick of his talk.
I hope the Deputies have some policies that will help us to implement Food Harvest 2020 and the follow-on strategy we will develop which will build on the sense of Food Harvest 2020. That was a very important and significant policy document.
I have complimented the Minister on his adoption of it.
Just as I have always acknowledged that it was produced by the Deputy's party. However, the motion does not build on it. That is a fact.
We have made specific proposals to address the immediate challenges facing the beef sector.
It is left to the Government to build on the potential of Food Harvest 2020 and that is what we are doing.
Before concluding, I note that it is quite extraordinary that six months out from the abolition of dairy quotas which will facilitate the Irish dairy industry to grow to its full potential over time, there is no mention of that industry in a broad Fianna Fáil motion on agriculture.
Different sectors of agriculture will have difficult years at different times. This year was a difficult year for the beef sector and we are trying to respond to it as best we can by way of structural changes in the marketplace. Next year we may well see real difficulties in dairy markets, not because quotas are going but because of the difficulties in dairy product pricing globally into the future which will impact on dairy product prices in Ireland.
We need to work collectively to respond to that with appropriate policy, and we will do that. Let us talk about the facts in terms of what we are dealing with rather than trying to pretend things are an awful lot worse than they actually are.
I welcome the opportunity to speak on agriculture and rural affairs in general. I also welcome the Minister's comments on young farmers and the pressure he is coming under from Teagasc in regard to teaching numbers in agricultural colleges. There is a college in Pallaskenry in my constituency, which I have mentioned to the Minister on a number of occasions, and the teaching numbers in it are being stretched. If we are to deliver the type of education we require for the next generation of farmers, we require a level of investment there.
I welcome the recent announcements by many of the dairy companies, in particular in the Munster area, of significant capital investment, which was not referred to by any of the Opposition speakers. This will create real and tangible jobs in the Limerick, Cork and Kerry areas. I also welcome the Minister's comments on producer organisations and the possibility of negotiating on behalf of farmers.
The most regrettable thing missing from the Fianna Fáil motion is not statistics or a reference to the Lisbon treaty, which it negotiated. Deputy Ó Cuív went out of his way to oppose it at the time.
I never-----
He was actually pro that one.
I never-----
Sorry. Deputy Ó Cuív was pro that treaty but was against subsequent ones. The one thing this motion lacks is credibility because if one fell through the ceiling of the House tonight and listened to Deputy Ó Cuív complaining about the state of rural Ireland, one would say he was never in government, not to mention sitting at the Cabinet table. In the past three budgets Fianna Fáil brought in, the only references to agriculture were those in regard to what it was going to cut out of agriculture. The one thing that is missing from this motion is a scintilla of credibility.
Deputy Ó Cuív was right when he said the farming family is at the centre of agriculture and the development of agriculture. It is regrettable, therefore, that when he had a chance when he was sitting at the Cabinet table that he did not stand up for the installation aid or the early retirement scheme when the previous Government sent them down the river, along with a lot of others schemes which it did away with when it had the opportunity.
Is this Government going to bring them back?
The previous Minister for Finance made only passing remarks about the agriculture industry, which is in stark contrast to what the Minister for Finance, Deputy Noonan, has done since he went into Government.
Not to leave Fianna Fáil out on its own, its future, or potential, coalition partners have some right little ditties for the farming community, including a land tax. I have not heard it mentioned for a long time. Perhaps Deputy Martin Ferris will tell us about it. Will it be in Deputy Mary Lou McDonald's proposals tomorrow when she finally reveals what Sinn Féin has in store for us by way of a budget? Will the land tax proposal, which Sinn Féin proposed, be included?
In a previous debate, Sinn Féin referred to unworked farm assets. In my part of west Limerick, an unworked farm asset is bad land, and Deputy Ó Cuív will know a lot about that coming from the west as well as about severely handicapped land. Deputy Martin Ferris and his party want to tax it. This is a great opportunity to discuss what is happening in agriculture.
I wish the Minister well in his negotiations with the Department of Finance. He has delivered up to now and I have no doubt he will deliver next week as well.
I welcome this debate on our most important indigenous industry. I also welcome the level of money coming in under the CAP budget between 2014 and 2020 - €8.5 billion under Pillar 1, €2.2 billion for rural development and €1.9 billion from the Government.
This time next year we may be discussing issues in regard to challenges in the dairy sector but there great opportunities in that sector post-quota. The expansion by the major dairy companies in certain parts of the country was alluded to by the previous speakers. Not every part of the country will be able to develop a dairy sector, including marginal areas in the west of Ireland, but I hope that this time next year, we will not be discussing the plight of the smaller dairy farmers. However, there are certainly great opportunities in that sector.
As the Minister said, there is concern in the beef sector. I welcome what has been done in developing new markets, the increased funding for Bord Bia and marketing the great product we have. As the Minister stated, numbers in the suckler sector have stabilised. I know there has been some concern that post-dairy quota there would be a shift. Dairy numbers will increase at the expense of suckler numbers. There is no evidence of that yet and, hopefully, next year we will continue to see a strong beef suckler cow sector. The beef suckler cow is very important on the marginal lands, in particular in the west of Ireland. They are great a converting marginal quality forage into milk. That is the beauty of that animal. Those areas are constrained by land type and the protected status of land. Therefore, it is important we continue to have a strong direct payment system for those suckler farmers in the west.
I welcome the funding for the beef genomic scheme and the commitment under the RDP in regard to the disadvantaged area scheme, or the area of natural constraints scheme, the single payment scheme and GLAS. The beef genomic scheme is very important. The €80 is hugely important to maintain the beef sector. I hope it will be maintained in this year's budget, if not increased to some degree.
Last Friday we debated the issues surrounding GLAS. Again, it is very important we have had a continuation of the agri-environmental schemes from REPS to AEOS I, AEOS II and AEOS III and latterly to GLAS. This money is very important to farmers in those areas along the west coast and in other more marginal areas, many of whom are constrained by the land they have. Where there is designation, they are not able to reclaim the land, plant or invest in wind turbines, for example. There are ongoing concerns in regard to that scheme. I will provide the Minister with a possible solution to that impasse later and ask him to pursue it, if possible.
We will look at that.
I welcome the opportunity contribute briefly to the debate and to discuss the opportunities and challenges in Irish farming, following the successful negotiation of CAP last year and the budget of approximately €11 billion from Europe and almost €2 billion in Government funding over the next six years. I congratulate the Commissioner for Agriculture and Rural Development, Phil Hogan, on his appointment and wish him well. It is a key appointment for Ireland and he certainly demonstrated last week in no uncertain terms that he was on top of the brief even before he got his feet under the table. I hope all our MEPs will work closely with him in securing a good deal for Europe, but in particular for Ireland. It is a commissionership we always treasured when we had it in the past and we should do so again.
As was said by speakers on both sides, agriculture has been the mainstay of our economy, stretching the length and breadth of the country, since the foundation of the State. It has helped us to survive many recessions and depressions. In my constituency of Mayo, 12,500 farmers farm 700,000 acres and receive direct payments of €113 million. There are always challenges and we have seen the ball being lobbed from one side to the other this evening. As I said, in any market driven economy, we will have issues like the fodder and the beef crises, which have been spoken about, and the commonage issues. However, it is vital to strike the right balance in supporting production, in increasing exports to meet the targets of Harvest 2020 and in protecting vulnerable farmers on low incomes who must farm areas with poor land and in special areas of conservation. That balance has been struck by the Minister and I hope it will continue to be struck.
The beef crisis is a huge issue but I am glad prices have stabilised somewhat.
The crisis emerged because of a reduction in demand and an increase in supply. I welcome the efforts of producer groups in this regard and I hope the budget will offer support to the beef sector to help it overcome this crisis.
The issue of young farmers has been mentioned. Some young farmers do not appear to meet the European criteria. I ask that they be brought within the fold in order that the young farming population can remain in this sector.
I welcome the opportunity to speak on this broad topic. As Deputy O'Donovan spoke about Pallaskenry college, it would be remiss of me if I did not mention the agriculture college in Mountbellew, which in recent years has been bursting at the seams with new students wanting to get into agriculture and agribusiness. I ask the Minister to do all he can to ensure the college is properly staffed. Mountbellew is somewhat different from other Teagasc colleges in that it is privately run but it needs all the support it can get. As one of the last remaining colleges in the west, it receives farmers from County Donegal, throughout Connacht and as far south as County Cork. The college also offers courses towards the green certificate for people who see a future in farming on the land. That course is also over-subscribed. Young men and women throughout the country want to get into this sector.
The issue that arose this year is the pressure on the beef and suckler sector. The suckler cow is everything in Connacht. The cost of keeping suckler cows has become excessive in recent years, which creates pressure for the entire area. If prices decrease, the cost becomes excessive and uncompetitive. We all know the importance of the suckler cow scheme, but that did not stop the party opposite from cutting it in 2009. It also cut the disadvantaged area payment, installation aid and the early retirement scheme in 2009. It is important we restore these areas. As Deputy O'Mahony noted, 300 young farmers lost out because installation aid was cut overnight. These are the same people the Minister is trying to assist under the young farmers scheme, with great difficulty.
This Government did not bring it back.
We looked after young farmers.
I welcome that young farmers have been looked after under the new Common Agricultural Policy negotiations, which was not mentioned.
Regardless of how much money is provided for the suckler cow sector, exporting is the key to supporting the industry. Every farmer who goes into a mart wants to see buyers and confidence around the ring. Deputy Ó Cuív did not mention the markets the Minister has visited or reopened. That is the key to success. Increasing the number of cattle exports will put pressure on the beef industry. We can put as much money as we want into addressing the issue but I would rather give the money to Bord Bia in order that it can export the product the Deputy says is doing so well. Our suckler farms are important, especially in the west, and we should give them the support they deserve. We have doubled what the party opposite cut in 2008.
I wish to express my appreciation to Fianna Fáil for tabling this motion. I agree with much of what is in the Fianna Fáil motion, with the exception of the proposal to increase payments under the beef genome scheme to €200 per cow. Much as I would like to see that happen, it is simply unrealistic. I think Fianna Fáil will acknowledge that if it were in government, it would not increase the payment to €200.
For one year.
Deputy Ó Cuív can speak again later in the debate. I hope to be able to speak without interruption because I have just three minutes. At no time was €200 per cow the amount. It was announced as a payment of €200 but it was cut before it was ever paid, even during much better years. The country continues to face a deficit because we are not taking in more than we are spending by any means.
One would have to be deluded to think there is not a problem in the agriculture sector, the beef sector in particular. Policies pursued in agriculture and food by successive Governments, including Fianna Fáil Governments and this Government under the Minister's stewardship, have facilitated the manipulation of the market by large processors to the detriment of primary producers. Deputy Connaughton nailed it in his contribution because he said it is all about exports. The Minister announced some time ago that we have to maintain the level of live exports to keep the processors honest.
They are up 15%.
Two boats are licensed to transport cattle from Ireland to third countries. One boat is licensed to bring them to France and two are licensed to take them to England. More boats were licensed to carry live exports from this island to many other countries in 1970 than is the case today and there were more live exports than compared with the present. It is good that we are in a position to process more product because it adds value, creates employment and increases the reputation of Irish beef abroad. We can package and market it. It is not good, however, when departmental policy removes part of the market, namely, live exports. The European Court of Justice has ruled that national rules must not go beyond what is necessary to achieve the main purpose of the Council regulation on the protection of animals during transport and that they must not result in additional costs or technical difficulties which disadvantage producers in a member state or prevent attainment of the objective of eliminating technical barriers to trade in live animals. Our rules discriminate between boats that bring cattle to Ireland and boats that take cattle out. The Minister of State at the Department of Agriculture, Food and the Marine, Deputy Tom Hayes, told me this was a matter of animal welfare. That does not stack up because, if animal welfare was the concern of the Department, all boats transporting cattle in our territorial waters would be subject to these regulations.
It would not be because we do not control all boats in our territorial waters.
If the Minister, in his role as Minister for Defence, does not have a role in supervising boats in our territorial waters or boats which dock in Ireland, I am more worried than I was at the start of this debate. I am not being flippant; we have a role in patrolling the issue. The reality is that since as far back as the 1990s and the days when Deputy Rabbitte said that departmental officials were getting presents from Larry Goodman, departmental policy has favoured processors and made sure that as few cattle as possible leave Ireland on the hoof. That is not a bad policy per se but it is a bad policy when it is used by processors to drive down prices. That is what they are doing, and they are doing it on the Minister's watch.
For the record, live records are up 15% this year on last year's figures.
The number of boats is not up.
I commend Fianna Fáil on tabling this motion. I listened with great interest to the debate thus far. It was ironic to hear the Minister's presentation on how wonderful things are for the farming community and how great farmers are doing. He claims that everything is up.
I did not say that.
The reality is that large numbers in our farming community are on their knees. The Minister knows it, I know it and Deputies McNamara and Connaughton knows it. They are on their knees because a cartel is in operation and the market is being manipulated by the cartel and by the multiples. The figures are frightening. In the farming section of today's Farming Independent, Joe Heney calculated that he is getting €600 less for a Friesian steer now than he got in 1988. He took inflation and the single farm payment into account and did his sums. He is getting €3.30 per kilogram for O and P grades. Meanwhile, Tesco is selling fillet steak at €35.94, rib eye steak for €26.65 and minced round steak for €8.40 per kilogram. These are the people out there who are crucifying the producer, the small farmer in the west. The people whom Deputies from the west represent are on their knees. These are the people who had farm assist taken from them.
These are the people who have no social structures or anything to help them. The big barons can manipulate the market any time they want to by calling on their feeders to surplus the market and bring down the price of cattle. That is what they do. They have access to the database, maybe not legally, but the Minister and I, and every Deputy knows that. They use it to manipulate the market and the prices.
There are the multiples, the Tescos, and all those big companies. I commend the Minister for the work he has been doing to try to get Tesco and others to resolve the issue of an island of Ireland label. The chief executive officer of Dawn Meats objected to it, saying it was wrong, that he would oppose it and he called on other barons to do likewise. These people have influence over governments and Departments. That is why the beef producers in the west and south west are on their knees. They are victims of a cartel that is manipulating the market. The Minister and every Deputy knows that.
Is there a cartel across Europe as well because we are at European level prices for beef?
It is €3.30 a kilo. Is that the average European price? No it is not.
Deputies McNamara and Connaughton mentioned live exports. If the Minister does not get live exports up and running quickly to take the surplus second grade cattle out of the country it will collapse further. That will make matters worse, absolutely worse, for the producer and will have huge social consequences, particularly for people on marginal land, people who are struggling to survive and get up on their feet and get going.
The Minister has a responsibility. I have a lot of faith in him, believe it or not. He is quite good at his job but he needs to grow a pair of balls and take on the multiples and the beef barons. They cannot be allowed to get away with it. They have manipulated the farming organisations. They have sucked everybody into what they are doing. They are destroying rural Ireland and all our constituents and they are allowed to get away with it. All of us together must make a stand and say loud and clear that the Larry Goodmans and people like him, the cartel, will stop and have to stop. The multiples must not be allowed to decide that they will not accept an island of Ireland label in order that they can manipulate the market for their selfish ends. I could ask the Irish people to boycott them if they do not relax what they are doing now, charging €35.95 a kilo when the farmer is getting €3.30 a kilo. That is grotesque. It is wrong and it is criminal. It must be resisted and the Minister must stand up against it.
I note that the Minister thanked Deputy Ó Cuív for putting forward his motion and then began to tear it asunder. There is no doubt that beef farmers and sheep farmers, when we had the ridiculous proposals on commonage, vegetable growers and many groups of farmers are suffering.
Some may think that agriculture is important only to farmers, the initial food producers. That is not the case. Over the past few years, when the failures of neoliberal economics caused such massive economic damage to this nation, the only functioning part of Ireland's indigenous economy was agriculture, and to a lesser extent the tourism industry. This benefitted every man, woman and child in the State, not just people in rural areas, during the darkest of those dark days. Despite the trumpets our economic spring or summer has not yet arrived.
Agriculture, farmers and rural areas are once more at great risk because of Government failure to ensure a fair and balanced framework where beef farmers, processors, shops and shoppers can each get a fair deal. It is all a question of fairness. The framework is so heavily loaded against producers in favour of processors and multinational supermarkets that there is a strong case to be made for an examination by the Competition Authority or maybe even by the fraud squad. If that needs to be done at European level, let it be done because it is patently and obviously price fixing at its worst. That is what is happening, changing specifications in order to control the volume, in order to keep the price low for the processors taking in the cattle. It is scandalous and is bringing small farmers to their knees. Some of them see no future.
The Minister also said that the Fianna Fáil motion did not come up with any proposals to build upon food harvest 2020. I will come up with one, as a spokesman on communications, energy and natural resources: biomass. For an agricultural nation we produce a relatively small amount of biomass. An increase in our output would not only help diversify our agricultural sector, it would also help us reach our renewable energy targets.
Biomass is a widespread resource and can be divided into waste produce and purpose grown material. Waste produce can come from agriculture, forestry, households and sewage. Purpose grown material consists of crops which can be grown quickly for the purpose of creating biomass. Ireland has a strong agricultural sector but its contribution to renewable energy production from biomass and waste has been well below the EU average. The recent partial merger of Bord na Móna and Coillte should aid in the development of Irish biomass production.
A report carried out by BW Energy into alternatives to relying on wind energy to reach renewable energy targets found that the existing power station at Moneypoint, County Clare could provide a solution to Ireland's energy needs if we were to use biomass. Moneypoint, the largest fossil fuel power generator in Ireland, currently supplies around 25% of Irish power generation demand. It plays a key strategic role in the Irish power system with associated implications for how the 2020 renewable power generation target is met.
Biomass boiler technologies and the international biomass market are well established. Both biomass co-firing and full conversion are proven as technically viable and economically attractive for large coal fixed power stations such as Moneypoint. Following the scaling up of the international biomass market and technical advances in boiler design, co-firing with biomass, or conversion to biomass generation at the key Moneypoint coal station, should now be evaluated as a real option to meet the 2020 target.
Unless the threat to agriculture is taken seriously, we will all be poorer. We need fairness first, particularly in the beef and vegetable trade, and we need to take seriously the other options available, particularly in respect of biomass.
I concur with much of what has been said in this debate. The west has been mentioned often. I represent a midlands constituency and there has been a particular price problem for the beef and grain sectors this year. I know this has to do with the vagaries of the world production system for grain. We cannot do much about some of those things but where we can we must act.
The reform of the Common Agricultural Policy, Pillar 2, has been finalised but there is great disappointment in County Laois that under the last round the single farm payments to a few farmers, fewer than the fingers on my hand, were between €150,000 and €200,000. That is obscene. It should have been capped and we asked for it to be capped at €50,000. That is a huge problem.
It is capped at the lowest figure we were allowed to cap it at.
I heard that at the time but we have the commissionership now and Mr. Hogan needs to plough ahead with that to look for reforms.
Farming is a crucial part of the economy of my own county. There are 3,300 farms which generate an annual output of €200 million. There is a great deal of off-the-farm income and industry related to this.
In a county with a small industrial base, there are 1,400 people working directly in the food and drink sector. That is to be welcomed. I hope we can improve on that.
The prices being paid to farmers for their produce is the big issue in this debate. The Fianna Fáil motion refers to the manner in which farmers are being treated by large retailers and processors. This issue, which has been well rehearsed, is clearly a problem. Retailers and producers are using their muscle to force farmers to accept lower prices for a range of produce. Not too long ago, I saw a piece of roast beef that a woman had bought in a shop for her Sunday roast. The farmers are getting between €3 and €4 a kilo, but she had paid multiples of that. I understand there is a cost in processing, but I suggest that in between processors like Dawn Meats are creaming it off and making it. This is totally unacceptable. Deputy Martin Ferris has asked the Joint Committee on Agriculture, Food and the Marine to hold hearings on the matter. I hope those hearings take place. Similarly, I hope progress can be made on the issue of beef prices.
I would like to mention another issue that is relevant at this time of year. We should not have a repeat of the fodder crisis, given that it was a really good year for silage and crops. We have had severe weather events in recent years. We had a small taste of it last weekend. I hope similar weather events do not cause severe hardship again this winter. We welcomed the Department's efforts last year to address these problems in co-operation with the Minister and the Department in the North. Those efforts were aimed at ensuring the maximum efforts were deployed to alleviate some of the more severe cases that arose. In the aftermath of last year's crisis, we proposed that a sub-committee be established within the Department of Agriculture, Food and the Marine, with the input of other Departments as necessary, to draw up a contingency plan. Has that happened? Such a plan would be valuable if another fodder crisis or some other difficulty were to be caused by severe weather events. Are contingency measures in place? The Minister might give us an update on what is happening in that regard.
I was reading lately that Teagasc has estimated that one third of all stand-alone farms are not viable. This problem was also mentioned by the Minister in the debate. I listened carefully to what he had to say about the importance of the family farm. No one would disagree with that. We want to ensure farms are viable in order that as many people as possible are on the land producing quality food for a quality industry. We know the importance of it. The fact that 90% of beef is exported means it is a great cash earner for the State. We must do everything possible to deal with this issue in support of that. I meet many farmers when they come into my clinics to talk about these matters. I know that the activities of many beef farmers would not be viable without the cheque in the post. They sometimes have to eat into the cheque in the post to cover farming expenses. That is not sustainable. The price of beef must be increased. I implore the Minister to work with his EU colleagues and with the new Commissioner, the former Minister, Phil Hogan, to push this agenda. The power of the large processors and retailers must be curtailed. It has to be broken. Farmers need to be getting a guaranteed fair price for their produce. That is all they ask. I hope we can achieve that.
I welcome the opportunity to contribute to this debate about beef prices. Beef farmers are facing a crisis because of the prices they are getting for their cattle and their stock. I agree with what Deputies McNamara and Martin Ferris had to say about the issues in the beef sector. There is no doubt that the beef market in this State is controlled by a small number of processors who manipulate and control the prices that farmers can achieve for their stock when they take it to the mart. That is the crux of the problem for the beef sector in this country. The average income of beef farmers is between €12,000 and €13,000 per annum. It is not viable for them. They are struggling. Farmers along the west coast, particularly in County Donegal, are depending on this sector.
There are just three operators in the processing sector. This is what they do. Their natural tendency is to maximise their profits. They do this by manipulating prices. That is what they set out to do and that is what they do. The problem, unfortunately, is that this activity is not policed in this State. I recognise that live exports have increased. I looked at the Bord Bia figures today. The Minister mentioned that there has been increase of 15%, but I suggest we should set a target of achieving an increase of 30% or 50%. That would provide the competition in the marts that we are all talking about. If the processors have to compete, they will end up paying a living, reasonable price for the stock they buy from farmers.
Over the past 15 or 20 years, hundreds of small abattoirs had to close after increased regulations and standards were forced on them. When they were forced out of the market, it took many people who would have been buying cattle at marts out of the marts and out of the cattle-purchasing sector. That is one example of how the processors have managed to get rid of competition. Competition was further diminished when live exports were reduced. The processors have all the control. While I accept the Minister set up the beef forum, I suggest it merely involved politely asking the processors to do something to improve the way they deal with farmers and to increase their prices. It had no teeth. The Minister must have some teeth if he is to enforce the requirement on the processors to act reasonably and responsibly.
I do not believe the multiples play a huge part in Ireland in terms of the prices that farmers can get. We export 90% of what we produce through the factories. If the multiples here were paying better prices, it would not trickle down because it would involve no more than 10% of the stock that goes through processors. The big problem is the control the factories exert on the market in this country.
We need to think about to where this leads back. I read an article today tracing the genesis of the crisis in the beef sector back to last year's horsemeat scandal. The rationale for the article was that the supermarkets and multiples in England started to put pressure on processors to ensure they stuck rigidly to certain specifications. The processors then used those specifications to push down the prices at the marts. What has happened in the Department in the period since the horsemeat crisis threatened our beef sector? Has there been any follow-up on the horsemeat crisis? Are there any prosecutions outstanding? Is anything happening that will force the processors to act responsibly in the future? That is the kind of pressure we need to put on them if we are to ensure they behave responsibly.
We should ask the Competition Authority to examine the operation of this country's beef sector, with a particular focus on processing. If we are to address this issue, we must look seriously at the competition aspect of it. I saw a quote from the Minister today to the effect that the Competition Authority has suggested that the beef sector is very competitive. When I went through the Competition Authority's website, I could not find any reference to the investigation of the beef sector. I did not see any evidence of an outcome of an investigation containing a finding that the sector is competitive. The Minister should be asking the Competition Authority to assess the level of competition in the beef sector. He also needs to increase live exports and ensure processors have to pay reasonable prices for their produce.
Debate adjourned.
The Dáil adjourned at 9.10 p.m. until 9.30 a.m. on Wednesday, 8 October 2014.