Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

Question No. 54 is in the name of Deputy McConalogue.

With the indulgence of the Ceann Comhairle, if I may, I will take Question No. 55 first and signal to my office that I require a reply to Question No. 54.

That is okay. Question No. 55 is in the name of Deputy Stanley.

Beef Industry

Brian Stanley

Ceist:

55. Deputy Brian Stanley asked the Minister for Agriculture, Food and the Marine the status of the implementation of the Irish beef sector agreement of 15 September 2019. [41607/19]

I ask the Minister for Agriculture, Food and the Marine the status of the implementation of the Irish beef sector agreement of 15 September. There was an agreement reached and it is important that it be implemented. The summary the Minister sent out includes clear lists of actions to be taken, most of which are very welcome. It is important to try to get confidence back into the sector.

There have been a series of formal negotiations with beef sector stakeholders, facilitated by my Department, since early August, culminating in an agreement being reached between stakeholders on Sunday, 15 September. The full text of the agreement is available on my Department's website.

The agreement involves a number of interventions which will provide immediate benefit for beef producers, as well as a range of strategic measures which seek to address structural imbalances in the sector.

Beef producers will benefit from an immediate increase in a range of bonuses. This will increase the level of bonus being paid on certain animals, as well as significantly increasing the number of animals eligible for bonuses. The cumulative effect is that over 70% of all steer and heifers slaughtered will now be eligible for a bonus on top of the base price paid.

A number of actions in the area of market transparency, beef promotion and strengthening the position of the farmer in the supply chain are included in the agreement. These measures set a course towards greater clarity for all stakeholders involved in the beef supply chain primarily.

My Department is also proactively engaging with several potential beef producer organisations, which have to potential to strengthen the bargaining power of beef farmers in the supply chain. Two beef producer organisations have been formally recognised by my Department in recent weeks.

I have established a beef market task force to provide the leadership to develop a sustainable pathway for the future of the beef sector in terms of economic, environmental and social sustainability. The task force will provide a robust implementation structure for commitments entered into in the agreement, with timelines and stakeholder engagement. Furthermore, the beef market task force will offer a suitable platform for strategic engagement with key stakeholders, including retailers and regulatory authorities.

I have appointed Michael Dowling as independent chair of the task force, the membership of which includes representatives from my Department, relevant State agencies, farm organisations and the meat industry.

The beef task force meeting scheduled for yesterday, 14 October, was adjourned as members of the task force were prevented from attending the meeting. It is in the interests of everyone involved in the beef industry that the work of the task force goes ahead. The task force’s remit is to monitor the implementation of the actions arising from the agreement reached on 15 September and offers the most viable platform for strategic engagement with key stakeholders. It was a great pity that farm representatives were not in a position to air the legitimate concerns of farmers at the task force.

We are just over one month since the signing of the beef sector agreement. It is unacceptable that there is an issue in regard to the outstanding legal injunctions against farmers. Was the Government naive to believe that the task force would meet successfully yesterday while the basic promises regarding the lifting of injunctions were not kept? The task force needs to meet, of that there is no doubt, and it is the place to sort out these issues. However, there is an outstanding issue in regard to the injunctions.

I ask the Minister to call on the processors, including C&D Foods, which is owned by the ABP Food Group, to drop all injunctions. While it says it is not party to the talks, and I am not trying to say it is, it is linked to a company that was party to the talks because it is part of ABP. Considering this is a sector in which there are serious issues of trust between farmers and processors, what does it say if one of the processors will not comply with such a basic part of the agreement? All disputes need to be resolved.

It was also agreed that Bord Bia would develop beef market index models. Will the Minister update us on the progress in that regard?

The talks process involved a large number of farm organisations and representatives of the meat industry, which was represented by Meat Industry Ireland, MII, in the negotiations which were brokered by myself and Department officials. C&D Foods was not a party to those negotiations, and that is the simple fact of the matter. We been assured by MII that all of the injunctions to which its constituent members are a party have been, or are in the process of being, stood down, and it is very anxious that this is acknowledged as the situation. We did not negotiate an agreement with C&D Foods and there are no farmers selling cattle to C&D Foods. Therefore, to expect that the agreement between the farm representatives and MII can have a reach beyond those represented in the room is not reasonable by any stretch of the imagination. I would like it if we had a situation where those were stood down. However, the pursuit of that has to be within acceptable norms of engagement, and not with the kind of intimidatory tactics that were adopted outside the Department yesterday, which I do not think anybody in this Chamber would condone.

While C&D Foods was not party to the negotiations, and I understand that, the ABP Food Group has influence with C&D Foods because they are related companies. I ask the Minister to lift the phone to the CEO of ABP to ask it to get that injunction lifted. I agree with the Minister that the talks need to happen and that is the place to sort it out. It is important to accept that all disputes are sorted out by negotiation. However, there was a commitment in that agreement back in September that all legal proceedings would be lifted and withdrawn. The Minister might answer the question on Bord Bia developing the market price index because it is important.

The agreement dealt with very basic demands. The vast majority of farmers accepted the deal in good faith but the Department has failed so far to deal with the issue of the injunctions. I ask the Minister to pick up the phone and ask the CEO of ABP to use its influence to have them lifted. It is taking offal from that company and it is a related company with huge influence, so it is important that this is done. We need to get the talks back up and running; that is the key issue. We need to get people around the table to resolve the issues.

I would like to see the task force up and running. It is the forum where all the issues can be raised and it is entirely regrettable that that was not enabled by the actions of a minority of people who stepped clearly outside the normal parameters of engagement yesterday. That is something I think all right-minded people would condemn and I hope that is a position Deputy Stanley shares in terms of the appropriate prosecution of what might be legitimate points of view.

I am not aware of the ownership structure of C&D Foods and how that relates to ABP, Mr. Goodman or anybody else, but I am aware of the injunctions that exist. As I said, we have engaged in my Department in an effort to dismantle that but it has to be acknowledged that it is a legal entity outside of the remit of MII. My Department does not have the leverage that has been alleged in order to be able to wave these away. That is an issue for the company itself.

Has C&D Foods been contacted directly?

I have not contacted C&D Foods directly. The Deputy asked me did I contact ABP and the answer is "Yes".

We will now return to Question No. 54.

Beef Industry

Charlie McConalogue

Ceist:

54. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine the amount in euro if all applications submitted to the beef emergency aid measure scheme were approved; the euro value for all approved applicants to date; the number of payments that have issued under the 2019 beef environmental efficiency pilot scheme; the total value of all approved applications; the status of the first meeting of the beef market task force and agreed timelines for actions; and if he will make a statement on the matter. [42247/19]

I ask the Minister the amount of euro involved if all applications submitted to the beef emergency aid measure scheme were approved and how much finance has been approved, the euro value for all approved applications to date, the number of payments that have issued to date under the 2019 beef environmental efficiency pilot scheme and the total value of all approved applications. In addition, what is the status of the first meeting of the beef market task force and the agreed timelines for actions?

The objective of the beef exceptional aid measure, BEAM, is to provide temporary exceptional adjustment aid to farmers in the beef sector in Ireland subject to the conditions set out in European Commission Implementing Regulation (EU) 2019/1132. BEAM is funded by a combination of EU aid and Exchequer support provided in light of the difficult circumstances that Irish beef farmers have been facing as a result of market volatility and uncertainty.

Applications for BEAM were accepted from 19 August until 20 September of this year. In total, 34,517 applications were received, with a potential total payment of €78,192,380. Arrangements for the processing of these applications are in place in order to ensure the timely issuing of payments under the measure in December of this year at the latest.

Payments in respect of the beef environmental efficiency pilot, BEEP, are expected to issue in December of this year. The value of all approved applications is just over €19 million.

There have been a series of formal negotiations with beef sector stakeholders since early August, facilitated by my Department and culminating in an agreement being reached between stakeholders on Sunday, 15 September. The full text of that agreement is available on my Department's website. The agreement involves a number of interventions which will provide immediate benefit for beef producers, as well as a range of strategic measures which seek to address structural imbalances in the sector. Beef producers will benefit from an immediate increase in a range of bonuses. This will increase the level of bonus being paid on certain animals, as well as significantly increasing the number of animals which are eligible for a bonus. The cumulative effect is that over 70% of all steer and heifers slaughtered will now be eligible for a bonus on top of the base price paid. A number of actions in the area of market transparency, beef promotion and strengthening the position of the farmer in the supply chain are included in the agreement. These measures set a course towards greater clarity for all stakeholders involved in the beef supply chain, primarily farmers.

My Department is also proactively engaging with several potential beef producer organisations which have the potential to strengthen the bargaining power of beef farmers in the supply chain. Two beef producer organisations have been formally recognised by my Department in recent weeks.

I have established a beef market task force to provide the leadership to develop a sustainable pathway for the future of the beef sector in terms of economic, environmental and social sustainability. The task force will provide a robust implementation structure for commitments entered into in the agreement, with timelines and stakeholder engagement. Furthermore, the beef market task force will offer a suitable platform for strategic engagement with key stakeholders, including retailers and regulatory authorities.

I have appointed Michael Dowling as independent chair of the task force, and its membership includes representatives from my Department, relevant State agencies, farm organisations and the meat industry.

I thank the Minister for his response. As he well knows, the reason we have such a crisis in the beef sector, which led to the protests and pickets over the summer, is the fact that for months, and indeed over recent years, farmers have been consistently losing money, and it is simply not sustainable. Coming out of the negotiation process, the agreement was that the beef task force would help address some of the transparency issues in this regard. Alongside that, support from the Department and the European Commission through the Common Agricultural Policy is essential.

Regarding the beef task force, I find it unacceptable that the Minister did not make a clear effort, or more of an effort, to ensure that all injunctions were removed in advance of the start date yesterday. The least we could expect of him today is to call very clearly for all remaining injunctions to be removed. While C&D Foods may not be a member of Meat Industry Ireland, its owners certainly are, and the Minister himself indicated he has been talking to them. They are showing bad faith by not removing those injunctions, and the least we can expect is that they do so in order that the beef task force gets up and running.

Regarding the supports farmers need and additional funding through the CAP, the Minister referred in the response he gave us to beef exceptional aid measure, BEAM, and the beef environmental efficiency pilot, BEEP, neither of which has yet seen payments made to farmers. Will he give an assurance to us today that he will go to the European Commission to seek funding to support farmers for the losses they have experienced from May until now, a period during which losses have been heavier than in the previous period, which was covered by the beef exceptional aid measure?

I thank the Deputy for his supplementary question. We have been attempting through various schemes to divert the maximum number of supports to farmers in the beef sector whose incomes have been challenged for some time. The Deputy will appreciate that the beef exceptional aid measure, the beef environmental efficiency pilot and the restoration of areas of natural constraint, ANC, payments to €250 million have all been about acknowledging specifically the difficulty the sector is in and providing additional income supports on top of other schemes that support the beef and suckler sectors in particular, including the beef data and genomics programme, the Department's environmental schemes, etc. As far as responding in a timely fashion is concerned, we have been ahead of where Fianna Fáil itself was in terms of initiatives. Fianna Fáil made no request in its budget submission last year for additional measures on top of the existing schemes to support the beef sector. We have also been proactive in looking for new market opportunities. As the Deputy will be aware, the Chinese were here during a difficult period. We have been in contact with the Commission repeatedly and successfully in the context of the €100 million scheme. As late as yesterday we talked to the Commission about the requirement for a timely response from it for enabling regulations to allow us-----

I thank the Minister. He is over time.

-----to support the beef sector, which has been identified as one of the most exposed sectors should there be a no-deal Brexit.

Talking about measures the Minister is introducing for farmers and debating them in the Dáil does not put bread on any farmer's table. I refer to the two schemes the Minister mentioned as providing tremendous support, in his view, to the beef sector, namely, the beef environmental efficiency pilot, which was announced in last year's budget, and BEAM, which was announced prior to the local elections, for losses experienced from last September until May. Not one euro has yet been paid from either of these two schemes to farmers, yet the Minister stands here and tells us about the great job he is doing in providing financial support to farmers.

First and foremost, it is time for the Minister to step up to the mark and deliver on the commitments made previously and ensure that the funding goes to farmers, considering the massive losses they have experienced over recent months. Second, will the Minister commit to ensuring there is funding to cover losses incurred from May until now, a period during which farmers have lost money hand over fist and in respect of which no support from the Government, which is very badly needed, has been forthcoming?

It is unreasonable to expect any body to make payments before 20 October from a scheme that closed on 20 September. The beef exceptional aid measure closed for applications on 20 September. The money will be paid before the end of this year, and that is not unreasonable. We announced last year a beef environmental efficiency pilot, in respect of which payments will also be made this year provided the applicants submit the required data on the weighing of weanlings relative to the weight of the suckler cow.

Not one euro has been paid yet.

I am telling the Deputy that approximately €100 million, which is additional money, will be paid out cumulatively to the beef sector before the end of this year. Looking across Europe, the beef sector is in considerable difficulty. We are the only member state that has received anything in support of our beef sector. While I appreciate that the market continues to be difficult, and we will continue to make the best possible case in support of our agricultural sector on all occasions, it is not simply a case of knocking on the door and collecting the money. A detailed case must be made. We are now particularly focused in our ask on a no-deal Brexit and the consequences it would have for the beef industry.

I ask Deputies and the Minister to be conscious of the time that has been allocated to priority questions. We are way over time.

Brexit Supports

Jackie Cahill

Ceist:

56. Deputy Jackie Cahill asked the Minister for Agriculture, Food and the Marine the contingencies being operationalised and the supports that will be in place to safeguard farmers and the agricultural sector from a no-deal hard Brexit; the details of the €110 million for agriculture announced in budget 2020 for a no-deal scenario; and if he will make a statement on the matter. [42248/19]

Will the Minister give an overview of the contingencies being operationalised and the supports that will be in place to safeguard Irish farmers and the agricultural sector from a no-deal hard Brexit? Will he also give a detailed breakdown of the €110 million for agriculture announced in budget 2020 for a no-deal scenario?

I have introduced a number of supports to assist farmers and the agrifood sector in preparing to address the challenges posed by Brexit. These include, most recently, the €300 million Brexit loan scheme for Brexit-impacted SMEs and mid-cap businesses whose funding arrangements ensure that at least 40% of the fund is available to food businesses. Up to 4 October 2019, 754 loans had been approved, of which 199, to the value of €44.1 million, had been sanctioned. Thirty-six of these, to the value of €9.29 million, related to food businesses and the Department of Agriculture, Food and the Marine and the Department of Business, Enterprise and Innovation future growth loan scheme, which will make up to €300 million of long-term strategic investment loans available to eligible Irish businesses, including farmers and the agrifood and seafood sectors. Businesses have been able to apply for loan eligibility through the Strategic Banking Corporation of Ireland since 17 April. Up to 4 October 2019, 1,364 loans had been approved, including 530 to farmers and 163 to food companies. The total number of loans progressed to sanction at bank level is 296, to the value of €50.1 million.

In budget 2020 the Government announced that it will provide a no-deal contingency fund to support our most vulnerable sectors, with up to €650 million available overall, to be activated in tranches as the full impacts of Brexit emerge. A sum of €110 million will be made available for the agrifood sector in the first tranche, to be supplemented by any exceptional aid provided by the European Union.

The provision of immediate supports for our beef sector will be a first priority, as will support for our fishing fleet. We also want to support food companies to reorientate towards new products and markets and to support other sectors to improve their competitiveness.

While supports cannot fully address the negative effects of a no-deal Brexit for the agrifood and fisheries sectors, this first tranche of supports will be used to ameliorate the immediate impact on farmers and fishermen as the full impact of a no-deal Brexit crystallises and to make some of the adjustments needed to improve businesses' resilience in the face of new market realities.

As we know, a no-deal Brexit is the biggest threat to our economy in living memory. Our agrifood industry is particularly exposed, with 35% of all Irish food exports going to the UK. There are grave concerns about a no-deal scenario and our readiness for it. While the €110 million in the budget is welcome, there has been a clear lack of measures to address the farm crisis. As Deputy McConalogue alluded to, the farmers who have suffered losses since May have not been catered for and no fund has been put aside for them. As we speak, serious losses are being incurred by store producers, who are selling cattle at very low prices. Will the Minister clarify how much of the €110 million will be ring-fenced for farmers?

Will the Minister outline the exact mix of grant aid, equity or loans contained in the fund? The Minister spoke about the Brexit loan schemes but there has been a very disappointing take-up of those schemes. Farmers and companies feel there is far too much red tape involved.

I should clarify that the €110 million is the first tranche of a €650 million fund available in the event of a no-deal Brexit. I hope we never have to spend that as I hope we can avoid a no-deal Brexit. It is a first tranche and it is appropriate for the funding to be released in tranches as it will enable us to react to what emerges from Brexit. We have prepared as well as possible but this is an event without precedent. It is therefore appropriate for us to hold some of our firepower in reserve and see how a no-deal Brexit crystallises. Of the €650 million total, we are getting €110 million in the first tranche and so is the Department of Business, Enterprise and Innovation, and the Department of Transport, Tourism and Sport is getting €40 million. This leaves a very substantial pot of funding available to react to the granular detail as it emerges of a no-deal Brexit and to respond accordingly.

The Deputy asked how much of the €110 million is available for the farming sector. We have identified €85 million as being necessary for the beef sector and particularly for beef finishers. This will be the sector immediately in the firing line. There will be some insulation from a no-deal Brexit by virtue of a tariff-rate quota, TRQ, in the United Kingdom for beef, of which we will get a sizable amount. However, that sector will feel the immediate brunt of a no-deal Brexit. There will be €14 million for the fisheries sector, €6 million for other livestock farmers and the mushroom sector, with €5 million available for the food and drinks processing industry.

As I mentioned, there is one element of beef farming, namely store producers, that has not been earmarked for any compensation. I was in a mart yesterday in my hometown so I know the price of store cattle has dropped very significantly. These farmers have not had the opportunity to get any of the €100 million previously earmarked. Unfortunately, not all of that money was spent. Their economic losses must be addressed. Has the Department formally made a request to the European Commission under Article 219 of the Common Market Organisation Regulations, relating to market disturbance?

As I stated in reply to previous speakers, I acknowledge that the beef sector is in a difficult space, whether the farmer is a finisher, a producer of weanlings from a suckler herd or rearing calves to beef and selling store cattle. It is not easy for anybody involved. However, the difficulties in the market now and what could happen with a no-deal Brexit - which I hope can be avoided - are very different. Notwithstanding a TRQ for beef, in light of our level of exposure to the United Kingdom market, particularly in beef exports, we could face a tariff rate of 37% on exports to the United Kingdom as a third country. It would immediately have the worst impact on finishers and reflect immediately in the price paid to them. It is important that we maintain our market share while getting out the other side of this. Therefore, the first tranche would be targeted at those beef finishers.

Beef Industry

Michael Harty

Ceist:

57. Deputy Michael Harty asked the Minister for Agriculture, Food and the Marine if a fully independent investigation will be commissioned into the beef processing industry to ensure companies are operating to the satisfaction of his Department in a transparent manner with regard to pricing, employment law, tax compliance, particularly VAT and to ensure meat plants are not abusing their near-dominant monopoly; and if he will make a statement on the matter. [41384/19]

Will the Minister commission a fully independent investigation into the beef processing industry to ensure companies operate to the satisfaction of the Department and in a transparent manner with respect to pricing, employment law, tax compliance and particularly value-added tax in order to guarantee meat plants are not abusing their dominant monopoly?

As an outcome of the recent beef talks, a number of initiatives aimed at increasing transparency along the beef supply chain were agreed in the Irish beef sector agreement of 15 September, which is published on my Department's website. These included the commissioning by my Department of reports, including an independent review of market and customer requirements, specifically on the four in-spec bonus criteria in operation in the Irish beef sector. Matters like the 30-month rule and four allowed movements were raised frequently in the dispute and there will be an independent study of those to see if they are used by the industry to suppress price and as a way to manage flow or if they are a legitimate demand of the consumer in respect of purchasing. There will also be an independent examination of the price composition of the total value of the animal, including the fifth quarter, along the supply chain and a summary of competition law issues as relevant to the Irish beef sector.

In addition, Bord Bia will develop a beef market price index model based on three components. These are live cattle prices, the beef market price index for retail and wholesale and an offal price indicator. Teagasc will also review the quality payment grid. Additional commitments in the agreement include detailed price reporting on the Beef PriceWatch app, examination of transparency models in other jurisdictions and a consultation process on the transposition of the unfair trading practices directive. Work on these commitments is under way and progress will be reported via the beef task force set up to oversee the implementation of the agreement.

The task force is comprised of key beef sector stakeholders, with Mr. Michael Dowling as independent chair. The beef task force scheduled for yesterday, 14 October, was adjourned, as members of the task force were prevented from attending the meeting. It is in the interests of everyone involved in the beef industry that the work of the task force should go ahead. The task force's remit is to monitor the implementation of the actions arising from the agreement reached on 15 September and it offers the most viable platform for strategic engagement with key stakeholders. It was a great pity that farm representatives were not in a position to air the legitimate concerns of farmers at the task force meeting.

The base price for a premium product is far below the cost of production and there should be a statutory investigation into what is going on in the beef industry. As it is currently structured, farming is not sustainable. Once the animal passes through the factory gate, the only person not making a profit is the farmer because the processor and the retailer make a profit. There is a lack of transparency in what happens in pricing and the Minister should be very curious as to why that happens beyond what has been agreed in meetings a number of weeks ago.

The Minister mentioned the "fifth quarter" and if that alone were paid, it would go a substantial way to meeting farmer demands. Many of the criteria used to decide price bear no relationship to the expectations of the retailer or the customer. The processor uses spurious criteria to drive down price so there should be a statutory independent investigation into the meat industry.

It is important that the task force considers all these matters. To inform that process, independent reports into these specific matters concerning transparency, residency and the four movement rules can be done. It will inform stakeholders' capacity to progress further such issues.

The Deputy raised issues around tax compliance etc. and any allegations of non-compliance with tax issues is a matter for the Revenue Commissioners. Any concerns should be reported to them. Concerns about the abuse of a dominant position are for the competition authority. One of the agreements is for a synopsis of competition law in the area. Some people would give the Minister the power to set price, for example, but we did not go near base price for good reasons. If I had the power to fix the price, who would I please? If the price is raised too high, demand would be killed. The market sets the price and we monitor the base price closely relative to what it is across Europe. It is a very depressed market because of flatlining consumption, changing dietary habits and new market opportunities etc. The Deputy raised concerns relating to employment law, which are a function of the Workplace Relations Commission. They are not issues that my Department would have direct competence or legal authority to inquire into.

I believe there are grounds for the Competition and Consumer Protection Commission to investigate the meat processing industry to ensure those involved are not engaging in price fixing or anti-competitive behaviour. Many issues relate to price. The Minister says the market sets the price. However, if the market has been distorted by anti-competitive behaviour or activities within the beef processing industry that change the market, there are grounds for investigation. If the farmer is the only person not making a profit in the meat industry, there must be something rotten there. It is incumbent on the Minister and his Government to ensure those involved are complying with all the various requirements. I fully understand that taxation and employment law are not within the Minister's remit but the Government as a whole should be investigating the meat industry to ensure compliance. I believe the activities of those involved are allowing them to maximise profit by paying a minimum price.

All these issues are areas of legitimate concern. Given the findings of all of the independent studies, the task force will be in a better position to make a judgment. Several developments are under way. One example is transposing the unfair trading practices directives into law. A public consultation process about a regulator for the sector is also an important development that could assist. There is no single silver bullet here.

The Competition and Consumer Protection Commission has been before the Joint Committee on Agriculture, Food and the Marine previously. This area requires constant vigilance. We monitor the price here and report in to an EU market reporting mechanism so that we can keep an eye on the price here relative to prices elsewhere in Europe. That is only one way of measuring whether we are out of kilter. It helps to have greater transparency around the value of the carcass and who is getting what. Retailers are getting so much and processers are getting so much. What is the consumer paying? What is the primary producer getting? We need greater transparency around those questions. All of those issues will be important in building a collaborative relationship between the players in the industry. The current level of engagement between the respective parties, especially processors and primary producers, is not conducive to an industry that, hopefully, has a long-term future here. We need to build those relationships.