That leave be given to introduce a Bill entitled an Act to ensure the provision of an equitable price for beef to farmers operating in that sector in order to ensure that it is a sustainable means for them to earn a livelihood; to abolish the 30-month rule concerning cattle; and to provide for related matters.
Rural Ireland is in crisis. The average wage of a beef farmer in the State is €8,000, which is less than the State pension. The only reason it is €8,000 is the subsidy the farmer receives. Without it, the farmer would be incurring a loss of €5,000. By working day and night, producing food on which we all live and participating in a massively profitable sector, beef farmers are expected to make a loss of €5,000. We would not expect that in any other sector and it is all the more shocking, given the fact that the other participants in the sector are creaming it. One factory made €170 million in profit last year. The factory’s owner is tax resident in Luxembourg and pays 0.5% tax on that profit. To date, that owner has amassed assets of €3.5 billion, yet the company expects farmers to bring their cattle to the factory gate at a price below cost. It is unbelievable.
The factories are not alone in doing this. The supermarket multiples are making massive profits in this sector. They are participating in a form of competition which is beating down prices, yet they remained unscathed in the beef crisis which gripped the country over the summer.
The reason for the imbalance is the sector is extremely distorted and dysfunctional. The Minister, Deputy Richard Bruton, has some experience of economics and must understand the beef sector is asymmetrical. On one side, we have a small number of large companies which have massive buying power. On the flipside, there are a large number of small farmers who have no influence whatsoever on any of the terms and conditions of sale.
It is not unusual for the Government to preside over distorted markets. The housing and insurance markets are other examples. The problem I have is that the Government has a laissez-faire attitude towards getting involved in the beef market. Thousands of farmers have spent thousands of hours at beef factory gates across the country. It would be a mistake for the Government to think the crisis is over and that the farmers have gone away. They have not, nor will they go away until this issue is resolved.
One major problem the farmers have indicated is the refusal of the Minister for Agriculture, Food and the Marine to intervene in the crisis in rural Ireland. At the recent National Ploughing Championships people told me that the beef protests were an insurrection in rural Ireland as they were frustrated by a Government that was Dublin-centric. People have described the budget to me as a Ross O’Carroll-Kelly budget, namely, that it is focused solely on Dublin, in the process forgetting about the rest of the country.
All we are trying to do with the Bill is to ensure farmers can make a living. I note that the Minister of State, Deputy Doyle, is shaking his head. A senior Fine Gael Deputy told me that it was unreasonable for farmers to expect a price above the cost of production and that it was also unreasonable for them to participate in a market that would involve some profit from their actions. People should make no mistake. The number of farmers in the country is reducing rapidly. Teagasc stated one third of farmers were being pushed into poverty and debt, while another one third were only functioning within the market because they were supplementing their income by working off-farm.
The Bill seeks to make it illegal to sell below the cost of production on an interim basis. It is to have a floor in the market at break-even point which would be determined by Teagasc. Its aim is to send the message loud and clear to the beef factories that they must negotiate properly and that to date they have been well short of the mark. It is to create balance within the sector. At the same time, we need the Competition and Consumer Protection Commission to do the necessary work to tackle the oligopoly in this market. We want to have a profitable beef sector, with all elements of the supply chain being able to make a living and be profitable. We also want to make sure the farmers involved can make a simple living.
I accept that the Bill is not perfect. It has the support of the Beef Plan movement, as well as Fianna Fáil and Sinn Féin. Will the Government ensure it does not die a death on Committee Stage?