Vol. 903 No. 3
6. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine why Irish beef exports to the United States of America in 2015 were significantly down on the target he set in February 2015; and if he will make a statement on the matter. [2309/16]
Last year, the Minister announced the opening of the American beef market with great fanfare, and predicted that the exports would be worth between €50 million and €100 million. The truth is far different. Only €11 million worth of beef was exported to the US. How did this discrepancy arise and how did the Minister get it wrong by such a massive factor?
I am not sure we got it wrong at all. Ireland received a major reputational boost for its beef sector in 2015 as the first EU member state to gain access to the US market which was opened to Irish beef exports from January 2015. Ireland remains the only EU member state to have secured this access, and six plants have been approved to export. As with any new market, it takes time to build reputational brand and a customer base, and the real time to assess its value is when these are bedded down.
This value is still being bedded down. Beef exports between Ireland and the US at the end of December had increased to an estimated 1,800 tonnes, which has a value of between €11.5 million and €12 million. This represents an exceptionally strong start to this trade, considering the first exports were only made in March 2015 and some of the plants were only approved for export as recently as September.
In addition, the trade is currently confined to the market for intact cuts, as we currently await approval for beef exports intended for grinding; in other words, manufactured beef. Another factor is that US beef prices have fallen back from the peaks recorded in early 2015, which makes beef imports less competitive. More important, the relatively high prices available for beef in Europe in 2015, particularly in the UK, meant US buyers may have been priced out of the market, as Irish exporters chose to send product to more valuable markets in the UK and on the continent. While the volume of beef exported to the UK in 2015 was largely the same as in the previous year, it increased in value to represent 54% of the exported beef from Ireland compared to 47% the year previously. This is helped by a strong sterling and a weak euro.
This is a significant market and we are now in it. We are developing and expanding it but we will always sell beef to the highest price market. The Deputy said that I indicated we would have €50 million worth beef in the US last year and I have not secured this. The market dictates where the beef goes. My job is to open these markets in order that the options exist for the industry to sell into the highest price market. My job is also to open markets for both processed beef as well as for prime cuts and we are close to doing that with the US. The US is still an exciting market. It is the largest beef market in the world and we will sell a significant volume of beef there but it depends on the year and the price.
The Minister is almost giving out to me as if I had made the prediction. He made the predictions, not me. As he said, 1,800 tonnes of beef were exported to the US. This compares with 270,000 tonnes into Britain. It turned out to be a small market. Will this market expand other than for prime cuts or is the only way to achieve the volumes and sales he mentioned through the export of manufactured beef? Does he accept that manufactured beef is a commodity that does not fetch premium prices?
We need both. Industry representatives places significant importance on two factors, both of which we are close to achieving. The first is the export of manufactured beef into the US and the second is the export of beef to China. A Chinese team of inspectors is in the country currently.
When I predicted volumes and value for the US market, we thought we would get manufactured beef in at the same time as prime cuts but that did not happen, which is a part explanation for the volume. Prime cuts comprise a much higher value but much lower volume. We will get manufactured beef into the US shortly and there will be a significant increase in volume. The industry says there is a market for this and, therefore, the value will increase as well. We need to maximise the value of the entire carcass, which means exporting manufactured beef products as well as prime cuts. The US has the capacity to buy both and pay a premium price for both.
We have only 20 minutes left and we have only done six questions.
This is my final question on the final day of questions in this Dáil before we all go before the people.
I do not want it to be a record.
Will the Minister predict the volume that will be sold into China in an average year once he opens that market?
The Deputy likes to hold me to exact predictions. He should consider what has happened with pork and dairy products in China over the past five years. People say the Chinese economy is supposedly slowing down but exports of dairy products from Ireland into China increased by 40% last year, with the value increasing by 25%. China represents a vast opportunity because it has a huge population. We can sell into restaurants and hotels there, which is a premium market. The industry is interested in that and we will make progress on getting in there this year. The volume and value of beef exports to China will be determined this year by when we get into the market. It could be in the first or second quarter or the second half of the year. We will have to wait and see. It is up to the Chinese but we are working well with them.
7. Deputy Thomas Pringle asked the Minister for Agriculture, Food and the Marine how he will ensure that active vessels of under 10 m will receive an adequate herring quota if a small quota is secured for the north west in 2016; and if he will make a statement on the matter. [2293/16]
The question relates to the potential share-out of the herring quota in the north west later this year. The Minister indicated it might be possible to finalise this in February.
The Deputy can read my reply later but I will answer him directly because I would like to get a strong message across to this sector. I am conscious there is huge frustration in Donegal and in the north west generally about this fishery, which extends to the Aran Islands. There is frustration because the Celtic Sea fishery has been profitable and progressive in recent years with strong quotas and so on. We had a robust and difficult conversation about the north west fishery last month. The science has changed and the advice is that the basis for the setting of quota or, in the case of the north west herring fishery, the non-quota, for the past number of years, is flawed in terms of understanding the two herring stocks off the north of Scotland and the south of Ireland and how they interact with each other.
We have agreed with the Commission that we will determine what quota is allocated on the basis of a new estimate of our understanding of how the two stocks interact with each other and allowing time to produce a more accurate assessment. I have insisted that the southern stock will get at least 30% of whatever is allocated. Last year, the northern or Scottish quota was 20,000 tonnes and, therefore, it has gone from that to zero. We have stayed at zero but I hope we will have a figure in February. It will be much less than 20,000 tonnes but we will insist on a fair share of that. I promise the Deputy that when we do, the inshore fishing fleet will get a fair share of whatever we secure to ensure we have an inshore fishing option for small boats off the north-west coast right down to the Aran Islands to catch herring. Everybody knows that I have made it clear to the big boys and the small boys that this is what I want to do. We will have a good news story for the inshore fishing fleet towards the end of February when we will have a number. I will make a commitment and even if I am gone from this office, I hope it will be followed up. This will be a new option for the inshore fleet in the north west. It needs new options and this is a great opportunity for something positive for the fishermen.
I thank the Minister for this positive news. It should be a positive message for the inshore fishermen, particularly those with boats of less than 10 metres. It is difficult to explain to them why there is zero quota in the north west when herring is being caught off the pier on Arranmore Island. Last weekend, I spoke to a fisherman whose son caught herring off the slipway in Glencolmcille with a rod and a line. He did not know what they were. Anecdotally, it seems there is such a strong stock that herring can be caught off the pier.
That is good news and I hope the Minister will ensure it happens. The last time there were quotas in the north west only 5% was made available to the under 10 m segment. We need to see significantly more than that. There has been a lot of discussion in the past about active farmers, but we should look at active fishermen as well.
We are probably at one on this issue, which is good to hear. I would be careful, however, with using anecdotal evidence concerning stocks. Scientists are trying to understand these stocks, as well as how and where the north and south stocks interact with each other. We are taking a robust line on this because we feel we have been treated unfairly in the past. We think the scientists got it wrong and they have accepted that, so we will not allow it to happen again. Whatever quota is currently there, both for the north and south stocks, we will insist on getting a fair share. I have put a marker down that we will seek 30% of whatever is on offer. I have also told the industry that I want a viable portion of that for the inshore sector so that they can have an active fishery here.
We need to get the actual quota first, however. Then let us split what is there. I am hopeful that we will be able to see an inshore fishing fleet with perhaps up to 1,000 tonnes, which will allow many small boats to create some viable fishing options. Hopefully, we will know that by the end of February.
8. Deputy Thomas Pringle asked the Minister for Agriculture, Food and the Marine if he will make a submission to the Competition and Consumer Protection Authority on the takeover of Irish Country Meats by Anglo Irish Beef Processors; and if he will make a statement on the matter. [2294/16]
Deputy Pringle should buy a lottery ticket. He is doing very well.
I do not think I would be as lucky on that somehow.
Are the machines working here?
This question deals with something that is quite topical within the farming sector. It concerns the purchase by Anglo Irish Beef Processors, AIBP, of 50% of Irish Country Meats. What implications could that have for the beef and lamb processing sectors across the country?
I would like to put on the record what the position is because many people have raised concerns with me about this issue. The relevant Oireachtas committee has referred the matter to the Competition Authority for examination.
Mergers and acquisitions of businesses within the State are subject to a process of examination to ensure consumers or other businesses do not suffer, or that the merger or acquisition does not lead to a reduction in competition.
I understand that, depending on the turnover of organisations involved in an acquisition or merger, either the Competition and Consumer Protection Commission or the EU Commission will conduct an examination to determine whether there will be any “substantial lessening of competition”. That is the term used.
As part of this process the examination of the proposed takeover will involve either a one or two-stage investigation by the relevant authorities, at the end of which the authorities may unconditionally clear the merger, approve the merger subject to remedies, or prohibit the merger if no adequate remedies to the competition concerns have been proposed by the merging parties. I am satisfied that this process will ensure a thorough and independent assessment of the impact of the proposed takeover on the Irish beef industry.
Concerns have been expressed and there is a system to deal with those concerns. There is an Oireachtas committee and many other people looking at it to see what is the outcome. My view is to let the system work. If there are no competition issues as a result of this, it will proceed. If there are competition issues, however, they will either have to be addressed or else they will not be able to go ahead.
That is a clear outline of the process that is involved in making the decision, in terms of the Competition Authority. However, the key point is that as the national policy deviser or driver for the agricultural sector, my specific question is whether the Minister and his Department will be prepared to make a submission to the Competition Authority should a call be made for interested parties. Surely, the Department would be an interested party, particularly when one considers that this merger will give 29% of the beef kill control to AIBP, and 40% of the lamb kill. It is significant that 50% of the rendering business across the country will be under the control of a single operator if this takeover goes ahead.
I am sure there must be some policy concerns within the Department to see the concentration of control in one person's hands. If the Competition Authority makes a public call for submissions, will the Department make a submission on it?
We will work with the system. If the Competition Authority asks for our opinion on anything we will obviously give full details of our views from a policy viewpoint. However, there are dangers with Ministers getting involved in trying to impact on mergers. There is a State body that has a legal obligation to assess these things properly and make informed choices. We all call it the Competition Authority but it is now titled the Competition and Consumer Protection Commission. It is a pretty robust organisation. I have already received letters from them warning me not to stray into price negotiation areas with the beef forum, for example. They are watching this sector pretty closely, so let us see what they have to say.
The Competition Authority may not ask the Department directly for its views on this. The authority may advertise that it is considering this merger and acquisition, and seek submissions from interested parties. Is the Department an interested party concerning this matter?
My Department can provide statistics and details, but I do not think it is qualified to make judgment calls on competition issues. That is what the Competition and Consumer Protection Commission is there for. If they ask us for information or a policy perspective, we will of course give it to them. I cannot be more open than that.
9. Deputy Mick Wallace asked the Minister for Agriculture, Food and the Marine the status of the Food Harvest 2020 programme, including details of any analysis he carried out or commissioned into the expected effects of this programme on the environment; and if he will make a statement on the matter. [2302/16]
The Minister has recently moved his attention to Food Wise 2025, the new ten-year strategy for the agrifood sector, which was published last July. He claims that the strategy builds on the successful vision of Food Harvest 2020. However, An Taisce concluded that the plan was nonsense and had no realistic assessment of its impact on the environment. An Taisce stated:
Overall, the draft report is unconvincing, inappropriately promotional, and quite difficult to follow even within its own framework. It is not in the national interest nor in the farm organisations' interest to have such a major agricultural policy plan based on such a flawed environmental assessment.
Does the Minister have details of any analysis carried out, or commissioned, into the expected effects of the programme on the environment?
We do have, absolutely, and I think An Taisce is wrong on this issue. Food Wise 2025, the new ten-year strategy for the agrifood sector published in July 2015, builds on the successful vision of Food Harvest 2020. It identifies the opportunities and challenges facing the sector and provides an enabling strategy that will allow the sector to grow and prosper.
Food Wise includes more than 400 specific recommendations, spread across the cross-cutting themes of sustainability, innovation, human capital, market development and competitiveness, as well as specific sectoral recommendations. Food Wise identifies ambitious and challenging growth projections for the industry over the next ten years, including an 85% increase in exports to €19 billion, and the creation of 23,000 additional jobs all along the supply chain by 2025.
Sustainability is at the core of Food Wise 2025 and the overriding precept of the strategy is that environmental protection and economic competitiveness are equal and complementary, and one will not be achieved at the expense of the other. That is very clear in Food Wise 2025.
I chair the Food Wise implementation committee and we have already had many conversations on the challenges of sustainability, emissions and climate change. We have also discussed protecting biodiversity and water courses. That committee, which includes senior officials from relevant Departments and State agencies, will drive implementation of the Food Wise recommendations. The high-level implementation committee has met three times so far. The second meeting, which took place in November, dealt specifically with sustainability, which is at the core of the strategy’s implementation.
As part of the Food Wise process, an environmental analysis report was prepared in parallel. This environmental assessment was taken into account in drafting the Food Wise report.
The final environmental analysis report was published in December following a public consultation process. The Food Wise implementation plan, which was also published in December, included a supplementary list of Food Wise sustainability actions and recommendations in response to the final environmental analysis report. We have looked at this from an environmental perspective as well as from the perspective of competitiveness and business opportunity.
I also established an environmental sustainability sub-committee of the high level working group, which met for the first time earlier this week. Its role will be to evaluate and assess the delivery of sustainability and mitigation actions set out in the Food Wise strategy report and implementation plan, having regard to other relevant issues that may arise and providing advice, including on developments at international and European levels relating to climate sustainability as they relate to the agrifood sector thereby subsuming the work of the agriculture climate group.
Despite what some people like to say about agriculture in Ireland and our approach to climate change and sustainability, I would argue that we are doing more than any other department of agriculture on the planet to ensure that our plans for growth, expansion and opportunity for farming and agriculture generally are sustainability-proofed and that we are auditing as we go to ensure that we are meeting the targets we set for ourselves.
The Minister might read Conor Purcell's article in The Irish Times today. I do not agree with everything the Minister is saying. Last March, he said that nobody in the Irish Administration ever suggested that agriculture was going to reduce emissions long term. In July, he assured me here that the mitigation and adaptation plans for the agriculture sector were on their way and were being informed by scientific evidence and research findings. Does the Minister have further information on what a mitigation plan for the agriculture sector might look like and how it might be consistent with increasing the output of the meat industry?
The Minister said that it would make more sense for the burden of emissions reductions to fall on other sectors of the economy. We all know that agriculture is hugely important to Ireland. It is our best indigenous industry by a mile and it is right that it gets great support from the State but does the Minister not think that we must rethink how we help it? Can we continue to increase the cattle herd and beef production and meet our environmental targets as well? The Minister says that the two are consistent but it is very hard to see how that is true.
I do not disagree with a lot of what Deputy Wallace said. Agriculture does not have a free pass when it comes to climate change responsibilities. If we look at the performance of agriculture, we can see than since 1990, emissions from the agriculture sector in Ireland are down 10% while emissions from the transport sector are up 120%, so agriculture is on the right trajectory. Our dairy system, which is the fastest growing sector in Irish agriculture, is producing milk at the lowest emissions intensity on the planet along with Austria and New Zealand.
The point I am making is that we need to get better at doing that in agriculture. We need to reduce the emissions intensity. We are the only country in the world to measure emissions intensity at a farm level. We are measuring the carbon footprint of the herds on 46,000 beef farms - the emissions coming from those herds. Every dairy farmer in the country - all 17,000 of them - has signed up to a dairy sustainability programme which will involve a sustainability audit system on farm in those dairy farms to understand emissions, feed conversion efficiency, efficiency of the herd generally, animal health, protection of biodiversity and all the other measurements and benchmarks around sustainability. This is the way it should be. We need to keep pushing and encouraging farmers to do more around sustainability. We are spending €4 billion in the rural development programme. Some 70% of that money is focused on sustainability, on a GLAS or a beef genomics scheme, and on more efficiency and on ensuring we produce more efficiently at reduced emissions.
When I come across as being a bit defensive about our sector, it is not because I do not believe in the awesome challenge of climate change and the need for agriculture to respond to that. I give an honest answer when I say there is abatement potential in agriculture, and we can reduce the emissions coming from agriculture and increase output, but that other sectors, like transport, also have dramatic abatement potential in terms of reducing emissions in a way that agriculture probably does not have.
It is interesting that the Minister brings up agriculture. George Monbiot published a powerful article in The Guardian last month from which I will quote. In the article, he says that:
A kilogramme of beef protein reared on a British hill farm can generate the equivalent of 643kg of carbon dioxide. A kilogramme of lamb protein produced in the same place can generate 749kg. One kilo of protein from either source, in other words, causes more greenhouse gas emissions than a passenger flying from London to New York.
This is the worst case, and the figure comes from a farm whose soils have a high carbon content. But the numbers uncovered by a wider study are hardly reassuring: you could exchange your flight to New York for an average of 3kg of lamb protein from hill farms in England and Wales. You'd have to eat 300kg of soy protein to create the same impact.
My last point before that-----
Is the Deputy suggesting that-----
The Minister told the Irish Farmers' Journal last March that nobody in the Irish Administration ever suggested that agriculture was going to reduce emissions long term. This is a bit worrying. What was the Minister's question?
Is the Deputy suggesting that we do away with the beef industry?
No, I am not and the Minister knows this.
Has the Deputy finished his point?
Of course, I am not suggesting it but I think we must work around it in line with dealing with climate change as well. We cannot ignore the challenges of climate change.
We are not ignoring it. We are putting Ireland in a position to ensure we are the most efficient food producers on the planet using the natural resources we have available to us and that when we look at climate change targets - unlike the person quoted by the Deputy - we also insist on calculating what the actual carbon sink value of permanent pasture, the afforestation of agricultural land in Ireland and other climate change-friendly crops in Ireland is as well as calculating the negative impacts of emissions coming from our herds.
Do we have plans to plant more forests?
We have. We have a very strong commitment to afforestation of agricultural land unlike practically any other country in the EU. We are spending not European money but Irish taxpayers' money - €119 million per year - planting trees on farmland between 6,000 ha. and 7,000 ha. This is a climate change strategy as well as a timber and afforestation strategy. We have challenges and agriculture does not have a free pass but we are doing a lot of good things in agriculture at the moment in terms of the climate change responsibilities we have. People need to look at that with a far more open mind than many people have.
