Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

Beef Industry

Charlie McConalogue

Ceist:

44. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine his views on the criteria set down in the EU Commission implementing regulation providing temporary exceptional adjustment aid to farmers in the beef sector; when beef farmers will be able to apply to the national scheme; when payments will issue from the EU fund; and if there will be a 100% Exchequer top-up on the €50 million EU fund provided by the EU Commission. [28505/19]

I ask the Minister his views on the criteria set down in the EU Commission implementing regulation providing temporary exceptional adjustment aid to farmers in the beef sector. When will beef farmers be able to apply to the national scheme? When will payments issue from this fund? Will there be a 100% Exchequer top-up on the €50 million fund being provided by the EU Commission?

I am keenly aware that the past few months have been very challenging for beef farmers in particular following a difficult year for farm incomes in 2018 arising from weather conditions and price challenges. There was a prolonged and exceptional period of depressed prices lasting from autumn 2018 to spring 2019, with the ongoing uncertainty surrounding the outcome of Brexit, among other factors, contributing to this market disturbance.

In this context, the recent announcement by Commissioner Hogan of European Union exceptional aid for the Irish beef sector is very welcome.  I have been making the case for some time for an exceptional aid package from the European Commission for Irish beef farmers at EU Council of Agriculture and Fisheries meetings and in direct consultation with the Commission. The submission made by my Department to the European Commission in request of the aid package is available on my Department’s website at www.agriculture.gov.ie/farmingsectors/beef.

This exceptional aid has been granted by the European Commission on the basis that the Irish beef sector is heavily reliant on export markets and is uniquely exposed to shifts in the UK market in particular.  In addition, Ireland’s extensive beef system with its comparatively long production cycle presents challenges in responding to these market shifts.  The Commission has also recognised that it is in the interests of the market stability of the EU beef sector to avoid a situation where downward price pressure on Irish beef spills over to other European member states.

This temporary exceptional aid provision is given effect through a Commission implementing regulation.  This regulation, the draft of which is available on the Commission's website, will be published soon. Article 1.3 of the implementing regulation provides as follows:

The measures taken by Ireland shall be aimed at reducing production or restructuring the beef and veal sector and one or more of the following objectives:

(a) implementation of quality schemes in the beef and veal sector or projects aiming at promoting quality and value added;

(b) boosting market diversification;

(c) protecting and improving the farmers’ environmental, climate and economic sustainability.

Ireland must now notify the Commission, no later than 31 July 2019, of the measures to be taken in accordance with the regulation.  My Department is currently working on the detailed parameters of an exceptional aid scheme, in co-operation with the Department of Public Expenditure and Reform and the European Commission. Further details on the aid scheme will be announced in due course following the appropriate stakeholder consultation. As the Deputy is aware, the Government has committed to matching the funding provided in this regard.

We will have to respect the time if we are to get through as many questions as possible this morning. I will be reminding Deputies of that. Deputy McConalogue has one minute for his first supplementary question.

As the Minister rightly points out, the last 18 months have been very difficult for farmers and the beef sector, particularly in light of Brexit. Incomes were down by as much as 25% last year as a result of the distortion in the market arising from Brexit. Just before the local elections the Minister and Commissioner Hogan made a big announcement and engaged in a PR drive about how funding had finally been secured to address the loss of income farmers had suffered as a result of Brexit. It was said that this would comprise €50 million from the EU and €50 million from the State. There was no mention of this funding being tied to stock reduction or restructuring before voters went to the polls in the local and European elections. It was entirely sold as a market disturbance measure to address income loss. Farmers were misled by the Minister and Commissioner Hogan in that regard.

We on this side of the House had looked for aid under Article 219 of the Common Market organisation regulation, which specifically deals with income reduction. Why did the Minister not manage to get the European Commission to deliver funding under that regulation rather than what has been delivered here?

Will the Minister clarify whether the €50 million co-funding to be provided by the domestic Exchequer is available and will be in place? Will he indicate today when the money will be delivered to farmers?

My objective has always been to provide the maximum level of support to Irish beef farmers. My track record, whether on additional payments under areas of natural constraint, the beef environmental scheme or the beef data genomics scheme, speaks for itself. It is a particularly income-challenged sector. While we cannot intervene on the price paid for commodities to farmers, we have some liberty to deliver income supports in other ways and that is what we have been about. The case we made to the Commission is on the Department's website. It is that from the back end of 2018 into the spring of 2019, there was a prolonged period of price depression for Irish beef, which arose in particular from sterling shifts and our exposure to the UK market. I note our previous experience with the Commission, including in relation to the dairy support measure of 2016. Interventions by the Commission come with terms and conditions attached and we make the effort to ensure the Department and the agriculture community are in a position to live within those terms and conditions. In that context, we will engage in the coming days with farm organisations and devise a scheme for submission to the Commission by the end of July. My objective has been to get the money to farmers at the earliest possible date and I am convinced we can do so.

Under Article 219 of the Common Market Organisation Regulations, (EU) Regulation No 1308/2013, it is possible for the Commission to provide funding directly to address income reduction as a result of market disturbance. However, that is not the regulation under which the Minister and Commissioner Hogan have delivered this funding. The irony will not be lost on people that there are strings attached to this fund, which includes a requirement to restructure or reduce the production of beef in Ireland at the same time that the Commission and the Minister and his European counterparts are proposing under the Mercosur deal to increase the amount of beef coming into the EU from South American countries.

I asked the Minister specifically about the €50 million. Is that funding set aside within the Department's budget to ensure it can be delivered to farmers this year? When will the funding actually be delivered to them? Farmers took this income hit last year. They are already out of pocket and need this funding promptly. How will the funding be distributed? It is essential to have a mechanism which properly reflects the losses people had through the selling of cattle and finishing of cattle over that period. The funds must be delivered proportionately to those who suffered those losses. Can the Minister please clarify the €50 million question, when the funding will be delivered and how it will be distributed to farmers?

The how will be in consultation with farm organisations. That will take place in the coming days and will be subject to approval by the Commission. The ambition will be to pay in 2019 at the earliest possible date. The funding is €50 million from the European Union and I have committed to match that funding from the Exchequer. The terms and conditions are what they are. I am convinced that we can live within them without an adverse impact on the beef sector. It is naive to suggest funds could come from the European Commission without terms and conditions. The precedent I quoted in respect of the dairy industry had a supply-reduction measure within it as well. I am satisfied that we can live within the terms and conditions as envisaged without any adverse impact on the Irish beef industry.

I asked about the €50 million.

I answered it. There is a commitment to pay the €50 million.

But is the money there?

Yes. Do not worry.

Beef Data and Genomics Programme

Martin Kenny

Ceist:

45. Deputy Martin Kenny asked the Minister for Agriculture, Food and the Marine the underspend in the beef data genomics scheme; his plans for the funds; the number of farmers who have withdrawn from the scheme; and if he will make a statement on the matter. [28197/19]

Many farmers went into the beef data genomics programme, or BDGP, and will remember that when it came out first, there was a statement in red ink on the form that if they breached the scheme, all funding would be clawed back. It worried a lot of farmers at the time. Recent reports suggest that up to 22 farmers a week are dropping out of the scheme and in the first four months of 2019, 322 farmers dropped out of it. That tells us there is a problem here. At this stage, there is an underspend running to almost €10 million per annum in the scheme. Can the Minister clarify the number of farmers who have dropped out of the scheme, what his plans are for the funds that will be underspent in the scheme and whether he can make a statement on the matter to bring clarity to the situation?

I thank the Deputy. BDGP I and BDGP II commenced in 2015 and 2017, respectively, and both will run for six years. They represent a significant commitment for participating farmers over the duration of the programmes. The number of active participants in BDGP I and II fluctuates on an ongoing basis as a result of participants withdrawing or being disqualified for non–compliance from the programmes and due to participants being re-admitted following successful appeals. In 2015, 29,903 participants applied to participate in BDGP I. However, 6,858 of those have either withdrawn or have been disqualified with 23,045 eligible participants remaining in BDGP I . In 2017, 1,896 participants applied to participate in BDGP II. However, 397 withdrew subsequently or were disqualified with 1,499 eligible participants remaining in BDGP II. Therefore, the total number of active eligible participants in the two programmes currently stands at 24,544.

All funds allocated remain committed to the BDGP for the duration of the current rural development programme. Generally, withdrawal cases will require any moneys paid over the course of the programme to be repaid in accordance with the regulations. However, where withdrawals are due to reasons such as ill health and force majeure, provisions of the EU regulations and the terms and conditions of the programmes may be applied with no recoupment of moneys paid. Payments totalling €42.8 million have been made to date to 23,483 participants, which represents approximately 96% of those still active in the BDGP programmes.

I note to the Deputy that the correlation between the number of applicants and the payments made is not linear. The experience is showing that while a number of applicants have left the scheme, they tend to be, albeit not exclusively, those participants with lower levels of financial commitment from the scheme. While there is a reduction and there will ultimately be some headroom in respect of the targeted expenditure, it will not be that significant.

The Minister is clearly acknowledging that there will be an underspend in this programme. Much of that is due to its onerous nature. That is what farmers are telling us on the ground. Does the underspend open the possibility of new applicants being able to enter the scheme? There are some farmers who want to get back into the scheme or who did not apply in the first place and want to apply now. It is also clear from what the Minister said that there will be a clawback from a number of the farmers who have dropped out. Even on the numbers the Minister quotes, the underspend will be even larger than currently appears when the clawed-back funds are returned. We need to see whether it is possible for more farmers to get into the scheme and to have its onerous nature addressed. Some of the rules and issues around star ratings mean a lot of farmers have found it very difficult to meet the criteria of the scheme to date. A review of that must take place. Where that number of applicants drop out of a scheme, there is clearly a problem and a need to reassess.

This is a very important scheme, albeit it may not be perfect. Unfortunately, only approximately one in three suckler farmers are in the scheme. Nevertheless, the data from the programme are showing real progress. In participating herds, calving interval days have been reduced by 20 days. That is a significant efficiency. The number of calves per cow in programme herds has increased also, which is another significant efficiency. The number of births per known sire is up 8% and with AI breeding it is up 2%. We have made some concessions recently on terms and conditions for stock bulls so we are tweaking the programme where possible. It is driving efficiency and it is regrettable that more farmers do not participate. We will have to look at how to devise a scheme in the next round of CAP which takes into account the weaknesses in the current programme. I am not saying it is perfect but it is delivering efficiency. It is often said that the quality of stock going through the factories is dropping. That may well be so. There is an increase in the volume of non-suckler beef and beef from herds which are not participating in BDGP. However, BDGP herds show that significant economic and environmental efficiencies are being delivered.

To come to the core of the Deputy's question, there may be an underspend. We have launched new initiatives in the solar panel area, for example. It is a new area of support. We do not yet have the overall figure, but we do not expect it to be significant.

The Minister is saying there will be an underspend, but he will not reopen the scheme to allow new applicants to avail of the underspend. He seems to be telling us that he will move the funds to other schemes. It would be disappointing if that were to be the case. As we have said, many farmers who are not in the scheme could benefit from it if they had an opportunity to participate in it. I would like to refer to other schemes that might come into play. All of this is relevant to the debate we will have later today. Farming in Ireland is more onerous than farming in other jurisdictions with which we are trying to do deals. The pressure on farmers to comply with rules and regulations under the various schemes in place is brought into sharp focus in that context. Will farmers have to carry out similarly onerous tasks under the €100 million scheme about which Deputy McConalogue asked? All the schemes are doing is giving farmers a little extra money to keep them afloat. The beef sector in Ireland is in dire straits. Many beef farmers will depend on this and other schemes. If they have no possibility of making a profit from their farming activities without such schemes, we are in a very difficult place

We need to be careful because we want to encourage farmers to avail of schemes such as this. The Deputy seems to be intent on talking down the achievements of the scheme, although I am not saying it is perfect, but we can learn from its imperfections when putting together its next iteration. The savings will be modest. The number of participants in the scheme has decreased from just over 29,000 to just under 25,000, but the expenditure on the scheme has not decreased pro rata. The larger farmers have tended to remain in the scheme. There may well be some savings. We recently launched new initiatives under the rural development programme, particularly in the area of solar panels, but the expenditure will not represent a significant saving. I will try to get more data for the saving for the Deputy, but it is not significant. We need to be careful not to talk down the benefits of a scheme such as this. It has been argued that it should be opened up to more applicants, but we cannot have it both ways. The scheme is delivering. As I said, it is not perfect, but we can use it as a template to make more progress.

Trade Agreements

Jackie Cahill

Ceist:

46. Deputy Jackie Cahill asked the Minister for Agriculture, Food and the Marine the position on the latest Mercosur talks; the steps he is taking to protect farmers by ensuring beef will not form part of a final Mercosur deal at EU level; and if he will make a statement on the matter. [28506/19]

The question of Mercosur has become more relevant in the last week. We had been asking the Minister to protect beef farmers under any Mercosur deal, but, unfortunately, beef production is part of the proposed deal. I ask the Minister to set out how he intends to protect the beef industry.

I appreciate that we had an discussion on this matter yesterday and I am sure we will have more engagements on it after Question Time. Such debates reflect the significance of the issue.

On the evening of Friday, 28 June, the European Commission announced that political agreement had been reached on a trade deal between the European Union and Mercosur countries. As a small open economy, Ireland is supportive of international trade deals. However, I am concerned about the impact elements of the deal could have on the beef sector. At a time when the beef sector in Europe is facing significant uncertainty because of Brexit, the agreement includes a significant tariff rate quota for South American beef. Over the full 20-year history of the negotiations, we have worked closely with member state colleagues and engaged directly with the Commission to make concerted efforts to minimise the EU offer on beef. While evidence of these efforts appears to be reflected in the final offer, I am deeply concerned about the potential impact on the beef sector. There may be opportunities for other parts of the agrifood industry such as the dairy sector and the drinks industry, but we will need to examine the text carefully to assess the full impact. It is worth noting that the agreement will not come fully into effect for some years. First, it will go through a process of legal scrubbing, which could take up to two years. Subsequently, it will be put before the EU Trade Council for ratification by qualified majority vote before being put before the European Parliament. If the agreement passes these hurdles, it is expected that the trade elements which fall under the competence of the Commission will be phased in over six years.

I have sympathy for the Minister because he is trying to defend the indefensible. The beef industry is under significant economic pressure. This is the first week of July and beef prices have decreased for the third successive week. The Minister has said there will be a time lag before the deal hits us fully. I suppose it will coincide with the date on which we will have to meet the targets under Food Wise 2025. That shows that it will be impossible to meet those targets. Beef producers are annoyed because the European Commission is speaking out of both sides of its mouth. On the one hand, the need to combat climate change means that European beef producers have to meet conditions that will increase the cost of production. On the other, it is proposed to give free access to beef from South America. Farmers believe they have been let down completely by the Commission. It is all the more galling for beef producers because the Agriculture and Rural Development Commissioner who is leading the Commission team is an Irishman. Farmers who have been despondent about the returns from beef production for many years believe this is the final nail in the coffin.

The Deputy will not find me defending the indefensible. I have stated my view clearly. I have a responsibility to use the time available to us following the announcement of a headline agreement between the European Commission and Mercosur states to ensure everything is done to frustrate and mitigate, dismantle the ambition and protect the interests of the Ibeef sector. As I said, the deal that has been reached at a high political level has not been endorsed by a single member state or national parliament, the European Parliament or the Council of Trade Ministers. There is a significant distance to travel. It is right that attention has been drawn to environmental and climate issues in the context of this proposal. We will, rightly, be implementing significant measures to make progress on climate issues, with which a significant element of the proposed deals. If we can use it to frustrate and thwart the ambition of Mercosur and make sure our efforts are legally robust, it may be possible to use the well documented disregard for climate issues of the Mercosur states to our advantage. That is one area. As I have said previously, we are not without friends in dealing with this issue. We have made common cause with other member states in the beef sector. Collectively, the challenge is to make progress on these matters in a way that will diminish the ambition of Mercosur.

In a previous life I had a lot of experience of negotiations in Brussels. Unfortunately, I have never seen anything promoted in Brussels not happen eventually. It might be in gestation for a long time, but in my experience it will happen eventually. Farmers believe the major industrial powers in Europe want this trade deal for their economies and that European beef farming is the scapegoat. It is proposed to provide for significant imports of pigmeat, poultry, sugar beet and ethanol. Many sectors will be affected. I know that the Minister will do his best to try to thwart the proposed deal, but it will be pushed through by the higher powers that be. We are seeing senior people being appointed in the Commission this week. We are a small pawn in the game of world trade, although we can try to thwart those who are proposing the deal, but in my experience, when the Commission sets off on a certain path, it is very hard to turn it from that course.

The Deputy might be throwing in the towel, but I am not. I appreciate the context his experience at European level lends to his views, but we can try to find common cause. I understand why the Deputy is focusing from a political perspective on the Agriculture and Rural Development Commissioner, but there is also a Trade Commissioner. The Deputy's extensive contacts in Europe may be of benefit to us in that context. We do not have a legally binding agreement. We have a considerable amount of time in which to influence the shape of the deal and secure reinforcements and guarantees in that context. If we find common cause in that endeavour, we may make progress.

Question No. 47 replied to with Written Answers.

Knackery Industry

Catherine Murphy

Ceist:

48. Deputy Catherine Murphy asked the Minister for Agriculture, Food and the Marine the controls his Department exercise over the intake register of category 1, 2 and 3 knackeries; the controls that exist to oversee and enforce the regulations relating to use of animal by-products from category 2 plants to ensure no cross-contamination between categories; his views on whether these controls are robust enough for his Department to guarantee the integrity of the food chain; and if he will make a statement on the matter. [28550/19]

This question is a follow-on from the RTE "Prime Time" report. It seeks to find out about enforcement. How does the Department ensure there is no cross-contamination? Are there audits of the registers of the knackeries? What is the effect of enforcement in closing down, prosecuting, etc., facilities that have so egregiously breached the conditions they are allowed to function under?

Category 2 intermediate plants, knackeries, and collection centres are approved and supervised by my Department in accordance with the EU Animal By-Products Regulations (EC) No. 1069 of 2009 and its implementing Regulation (EU) No. 142 of 2011, which lay down the health rules as regards animal by products and derived products not intended for human consumption.

Category 2 intermediate plants, knackeries, and collection centres play a vital role in the agri-sector. They play an important role in combatting illegal burial or the dumping of fallen stock, and are a vital conduit between the herd owner and the Department for traceability of all fallen bovines by their submission of documentation to the animal identification and movement system. They also serve as centres at which my Department can carry out statutory BSE and TSE sampling on cattle and sheep which serves to underpin Ireland's bovine spongiform encephalopathy, BSE, and transmissible spongiform encephalopathies, TSE, status and is a necessary part of the surveillance needed to ensure compliance with EU rules.

Official controls are carried out in the knackeries by veterinary personnel of my Department to ensure compliance with the EU and national animal by-product regulations and also compliance with the specific operational conditions laid down for category 2 intermediate plants. The Department carries out, on an ongoing basis, audits and routine and-or unannounced inspections at the category 2 intermediate plants. In addition, Department inspectors take samples from dead cattle and sheep at knackeries for the purpose of disease surveillance under EU Regulation 999/2001.

As part of their conditions of approval, knackery operators are required to keep an up-to-date electronic intake register, completed appropriately, in chronological order. The intake register is audited as part of the inspections. Senior veterinary inspectors at regional veterinary offices and veterinary inspectors working in headquarters carry out verification visits to verify effectiveness of official controls.

The rationale for the animal by-products, ABP, regulations is to create and ensure a one-way flow for ABP material which ensures that such material is dealt with appropriately and prevents the occurrence of cross-contamination with other categories of ABP. Enhanced controls have recently been put in place to ensure that no category 1 ABP material, which is designated under EU Regulation as lower quality ABP, may enter the intake area of the knackery. The stringent official controls in place as required under EU and national regulations, together with the frequency of inspections carried out by officials from my Department, provides a robust system of controls to ensure the highest standard of compliance is maintained.

It is very hard to match that with what we saw two nights ago and it is very difficult to see what the sanction is from the Minister’s response. The Irish Coursing Club's figures show that between 2013 and 2017, 86,754 individual pups were registered and 6,700 were reported to have died during that period. Much of the emphasis is on the post-2015 microchipping. Where have all those dogs gone? For example, if they were disposed of in incinerators would the microchips have survived? The export of dogs to the UK could hardly account for that number, nor could the rehoming of dogs. There is a statistic here that cannot be squared. It is very difficult to see what the sanction is for people who breach the rules in these facilities.

In the context of the broader exposé and the public service journalism conducted by RTÉ in that "Prime Time" programme the Department will give no comfort to anybody shown in that programme who is in breach of regulations. The content of the programme has been rightly commented on as being grotesquely offensive to people in the industry and to society in general, and in the context of animal welfare regulations.

The Department is examining all those issues in the operation of knackeries which serve a very important function in the broader agrifood sector, particularly for the livestock sector in respect of fallen animals. Insofar as there may be shortcomings in our own regime to deal in particular with the disposal of pets, which die for many reasons, including humane killing in veterinary practices for good reason, or fallen pets, road victims, we will consider all of that. It is somewhat reassuring that even in the programme there was evidence of Department inspections.

I have also been contacted by good people in this sector who are trainers and breeders. They have no confidence in the Irish Greyhound Board, IGB, in the regulation of this area. Is the Minister going to close these places down if they will not comply with the rules? I understand that they have to exist but the ones that are breaking the rules should not be allowed to continue in the sector. It is all very well saying it is robust but what does that mean? What action is open to the Minister to take?

They perform a really critical function in the operation of the broader agrifood sector. There is a specific focus on their activities and the legality around their dealing with the putting down and disposal of greyhounds. Insofar as there may be shortcomings in our regulations and a requirement to prosecute where there are breaches of the law, the Department is considering all those matters. In terms of closing down knackeries, we should make haste slowly. They perform a really critical function. There may be breaches of regulations or there may be weaknesses in the law as regards how they operate in the disposal of pets and that is an issue we will examine.