Joint Committee on Agriculture, Food and the Marine díospóireacht -
Wednesday, 6 Dec 2023

An Rialálaí Agraibhia: Engagement with Chairperson Designate

An Cathaoirleach

I apologise for keeping the witnesses waiting. We are running behind time and the voting period did not help.

I welcome Mr. Joe Healy, chairperson designate of An Rialálaí Agraibhia, and wish him the best in his new appointment. He is accompanied by Ms Niamh Lenehan, CEO designate of An Rialálaí Agraibhia. She is very welcome to the meeting.

Five minutes will be allowed for the opening statement, after which we will proceed to a question-and-answer session. As I said, the committee wishes Mr. Healy the very best of luck. The establishment of An Rialálaí Agraibhia has been long awaited and we have great expectations of what it can deliver with regard to bringing transparency to the food chain.

Mr. Joe Healy

I thank the chairman and members of the committee for inviting me here today as chairperson designate of An Rialálaí Agraibhia. I am accompanied, as the Chair said, by the CEO designate, Niamh Lenehan.

I am delighted to have been selected as the chairperson designate for this long-awaited regulator, An Rialálaí Agraibhia. As the Chair and members know through the committee's extensive involvement in the passage of the Agricultural and Food Supply Chain Bill through the legislative process, this follows on from a commitment in the programme for Government to ensure fairness and transparency in the agricultural and food supply chain. It is expected that the date planned by the Minister for establishing the regulator is 13 December, which is this day week.

This regulator is something the agricultural sector, especially small food suppliers including farmers, have wanted for a long time. I am confident that the regulator has the powers it will need to act independently in promoting and enforcing the principles of fairness and transparency in the agricultural and food supply chain. In doing so, as provided for in the Agricultural and Food Supply Chain Act 2023, the regulator is required to have particular regard to the circumstances and needs of farming businesses, fishing businesses and small food businesses.

I will quickly recap on the main functions given to the agrifood regulator. The office will deliver a price and market analysis and reporting function for agricultural and food products to help increase the availability of market information along the agricultural and food supply chain, with a view to strengthening the position of smaller suppliers against larger buyers with greater bargaining power. The office will also assume the functions of the unfair trading practices enforcement authority currently based within the Department. The regulator will be responsible for building awareness and understanding of agrifood trading law and overseeing its enforcement. There are 16 unfair trading practices, UTPs, that relate to matters such as payment periods for suppliers of agrifood products, unilateral contract changes by the buyer and payments by the supplier for promotion or marketing, for example, where not agreed clearly with the supplier in advance. These UTPs are in place to help balance the bargaining power between smaller suppliers and larger buyers.

Since her appointment, the CEO designate, Ms Lenehan, has been acting as head of the unfair trading practices authority and in that capacity has had extensive engagement with a wide range of stakeholders while making preparations with a team for the establishment of the new office. Such preparations include the setting up of a physical office which, incidentally, will be based at the Government shared offices campus in Backweston, Celbridge, County Kildare. She has also been involved in the recruitment of staff, the development of communication channels such as a new website and social media accounts but, more important, establishing and building relationships with key stakeholders.

Priorities now include putting in place robust governance. In particular, as required under section 39 of the 2023 Act, the regulator must prepare and submit to the Minister a strategy statement for a three-year period as soon as is practicable following establishment. The regulator is also required to prepare an annual work programme stating the objectives and priorities for the year.

Fairness and transparency all along the agricultural and food supply chain to enable sustainability across different businesses within it are important for all of us. I acknowledge the work of this committee throughout the legislative process and I look forward to working with the board, CEO and staff to build strong foundations for the regulator to facilitate its work. I again thank the Chair and look forward to members' questions.

Senator Paul Daly

I welcome Mr. Healy and Ms Lenehan and congratulate them both on their new positions. I wish them the best of luck. I will be brief because I know the Chair had a lot of contenders to be the first out of the traps and Deputy Fitzmaurice seems to be in a hurry.

In asking my first question, I do not mean to put Mr. Healy on the spot. This is not Mr. Healy's first rodeo. He was before the committee in a different capacity when we discussed the conception of this whole idea. Now that we have got to this point, I would like to hear Mr. Healy compare and contrast, as is said in the leaving certificate, what he, as a former president of the IFA, looked for and what he has got.

Does Mr. Healy think that in his position he will be able to deliver on everything he would have been looking for in a former life as the farm organisation representative body? Will Mr. Healy and Ms Lenehan give some more information on the difference between their two roles? What is the role of the board as opposed to the regulator or the CEO? In what way will that relationship evolve? Will they give a breakdown of how they both see their individual roles in the overall picture? Without putting Mr. Healy on the spot, I would like to hear the compare and contrast between what he was looking for and what he got.

Mr. Joe Healy

I thank the Senator and would hate to see it if he was putting me on the spot. That is a very good question and the rules are there and the legislation is in place. There were 20 recommendations from this committee, 18 of which are involved, explicitly or implicitly, in the rules that were set down for us. I am very confident that with the work An Rialálaí Agraibhia has to do in creating an awareness, in bringing a lot more knowledge to the sector, and in empowering the suppliers on one side with knowledge of the situation in the marketplace at any given time, they will able to do better bargaining. We cannot get involved in price-making but one would hope the work we do in assembling and doing the research and giving that information to the people on the ground, they will be better empowered to do a better deal for themselves.

With regard to the difference between the board and CEO, it is like any board and CEO. I mentioned the importance of governance in my opening statement, and proper governance structures, and it is beholden on the board to ensure those proper governance structures are in place. To cut a long answer short, the board is to support the CEO and the staff in the work they do and to be part of the strategy and workplan for the next few years. Ms Lenehan will work very closely with the board in developing that strategy and workplan. The role of the board is to ensure that workplan is carried out and to give Ms Lenehan and her team every support they require to ensure that work is carried out.

Ms Niamh Lenehan

In terms of the Senator's question on the role of the CEO versus the board, I am really looking forward to working with Mr. Healy and the board because there is such a vast range of experience there across the agrifood supply chain. The board is obviously there to give strategic direction and to bring their expertise from all along the food chain. My job is to execute that workplan and the strategy that has been set in place. The board is there to hold me to account and, as Mr. Healy said, we are very cognisant of having very robust governance structures in place because we wish to have a very sound foundation on which this regulator will work.

Deputy Michael Fitzmaurice

Like Senator Paul Daly, I wish Mr. Healy and Ms Lenehan the best of luck. As the Senator said, Mr. Healy has been in front of the committee many times and he is a Galway man like myself. Ironically, when Mr. Healy and Ms Lenehan were talking to Senator Paul Daly, this week's price of cattle came up on my phone. I was looking through it and I saw that there was not 5 cent between it and every market room in the world at the moment. My question is for both witnesses. Do they feel that the legislation, tools or wherewithal are there now, so that if there was a fear that in the industry, or in any part of the agriculture industry, there were cartels, they have the tools and the legislation to do whatever they need to do to root it out?

Mr. Joe Healy

That has long since been an argument, that prices are all within a few cent. I did the market reports for the Farming Independent for approximately 15 years and there was very little difference a lot of the time. Suppliers never have any problem that they are all on a similar price if is it a good price because when all is said and done they are generally going into very similar markets. If one supplier can get one price there is no reason the next one cannot. An Rialálaí Agraibhia is not involved in pricing but it is very important that people have adequate information. There is a lot of different information out there but one of our roles would be to pull all of that information together. The Deputy mentioned beef. Some 90% of our beef is exported. Half of that now goes to a country outside the EU. Our office is replicated right across the EU, so when it comes to the EU we have the structures in place to follow up and work with our sister offices across the EU. The likes of the UK is not in the EU but there is adequate information there as well. We could pull information from the likes of Bord Bia, for instance, which has a lot of information in that area. Although we are an independent board, our job is to pull all of that information together and to work with suppliers, processors or retailers to try to have fairness and transparency - I will probably mention this a few more times - right across the food chain so that everyone sees a future in their respective part of the food chain. I hope that will include the suppliers getting a fairer return from the consumer.

Deputy Michael Fitzmaurice

Do the witnesses believe the legislation is there so that if they felt there was a cartel, they could go in and investigate that?

Mr. Joe Healy

We have the powers to do quite a bit. We are a new office but, as we are progressing our work, if we see a weakness in the legislation we can make representations to the Minister to have that legislation strengthened. Does Ms Lenehan want to add to that?

Ms Niamh Lenehan

The new office of An Rialálaí Agraibhia works within the powers and functions that have been given to it under the 2023 Act. To answer the Deputy's question specifically, I think he is referring to competition law, according to the Act, as it stands, we do not have a role in competition law. I know this was discussed a lot during the legislative process in terms of the Competition and Consumer Protection Commission, CCPC, having that role. An Rialálaí Agraibhia's role in that space is that in the course of our work, if we come across any practices or anything we feel does not look quite right, we have a duty to pass that on to the relevant authority. We are very confident in the powers the regulator has in terms of enforcing unfair trading law. That is a significant part of ensuring fairness and transparency in the agriculture food chain.

Mr. Joe Healy

One of the things Ms Lenehan mentioned there is very important. In the course of our work, if we come across a monopoly and a lack of competition, we are able to pass that on. It is very important we pass that on to the relevant authority, which is the CCPC.

An Cathaoirleach

Senator Lombard is next.

Senator Tim Lombard

I welcome our guests and acknowledge the really important role they will play in the agrifood industry. I ask Ms Lenehan to provide some details on the budget. What is the proposed budget for the regulator, year on year, for the next three years? Has that been set yet?

Ms Niamh Lenehan

The budget that has been assigned for 2024 is €2.5 million.

Senator Tim Lombard

What about the budget for the following two years? Does Ms Lenehan have any idea what the budget will be?

Ms Niamh Lenehan

There is a process that we go through every year in terms of Estimates.

Senator Tim Lombard

Is the regulator funded directly through the Department of public expenditure?

Ms Niamh Lenehan

No, we are funded through the Department of agriculture.

Senator Tim Lombard

How many staff is it proposed to have?

Ms Niamh Lenehan

There is a delegated sanction for up to 17 staff members. I am recruiting on a phased basis at the moment, in terms of looking at the skills that we need and so on.

Senator Tim Lombard

In the context of skills, the remit of the organisation is quite wide. It goes from statistics all the way to fishing and is very broad. On the fishing side of the house, I ask Ms Lenehan to give an indication of which employers would potentially be providing the expertise on fishing How is she going to make sure that the regulator is going to cover all the bases including fishing, small business, legislation and so on? A staff complement of 17 is small. How is Ms Lenehan going to get the appropriate staff to cover all of the different issues in a short timeframe?

Ms Niamh Lenehan

If we go back to the functions given to us in the office, there are a number of core ones. The first is in the area of compliance. We oversee compliance with, and enforcement of, the unfair trading practices regulations, which is a regulatory role. The second core function is the price and market analysis. In that area there is a lot of consultation and engagement, as well as statistics and economics. The third pillar, as I see it, is that of governance and running the organisation.

Senator Tim Lombard

I ask Ms Lenehan to talk us through how the regulator intends to report. Is it going to be on a per product basis? Is there going to be a fishing report, a dairy report, a beef report, a tillage report and so on? How does Ms Lenehan propose that the organisation will be reporting? Will it be done on a case-by-case basis? What is the strategy or has Ms Lenehan got that far yet?

Ms Niamh Lenehan

There is a lot to think about there. The board will be established next Wednesday and that is certainly one of the key items that we need to get working on straight away. We will focus on the strategy statement and work plan and obviously there will be a considerable consultation process around that.

Senator Tim Lombard

I ask Ms Lenehan to elaborate on the consultation element of that work. Is she going to put a work plan together, look for feedback and then approve it or what is the intention?

Ms Niamh Lenehan

In terms of the development of the strategy statement, the board will have to decide, in conjunction with ourselves, on how best to approach that consultation process in order that we are hearing all voices.

Senator Tim Lombard

As CEO, when does Ms Lenehan think the work plan will be approved? What is the timeline in her mind in that regard?

Ms Niamh Lenehan

The legislation makes reference to "as soon as is practicable".

Senator Tim Lombard

That is open-ended, to a degree.

Ms Niamh Lenehan

Yes. We are going to get working on the statement of strategy straight away and obviously the work plan would be associated with that. We would like to get on the road as soon as possible, obviously.

Senator Tim Lombard

Ms Lenehan will do very well. Her responses have been clear but does she think the work plan will be in place in three months time, for example?

Ms Niamh Lenehan

I would certainly hope so, yes. We have been working very hard to put the structures in place in the background to establish the organisation.

Senator Tim Lombard

How many members of staff have been hired to date?

Ms Niamh Lenehan

There are four of us right now on the ground and the recruitment process is ongoing.

Senator Tim Lombard

As I understand it, the regulator is based in Backweston at the moment. Will it be looking for statistics from the Department and working with it? Is Ms Lenehan happy with collocation with the Department or is there a long-term aim to move to a different location?

Ms Niamh Lenehan

Again, it would have to be considered going forward. Backweston is a shared Government campus. There are lots of entities located there, including Forensic Science Ireland. The beauty of having the office there is that we did not have to go out and find a location which was good in both efficiency and economic terms. It has enabled us to get up and running more quickly and more cost effectively. We can look at question of the long-term location of the office down the line. I have forgotten the other part of the Senator's question.

Senator Tim Lombard

It was just basically about data.

Ms Niamh Lenehan

On the data, we will be completely independent of the Department. As the Senator will know, the Department collects significant amounts of information for directives, including the transparency directive and we plan to have access to that information.

Senator Tim Lombard

How does Ms Lenehan propose to operate vis-à-vis legal advice? The appeals committee uses the Department's legal team to some degree. Will the regulator's legal advice come from within the Department or will it be independent of it?

Ms Niamh Lenehan

No, we are independent and will be procuring our own legal advice.

Senator Tim Lombard

Very good. I ask Ms Lenehan to furnish the Chairman of this committee with a copy of the work plan when it is published and we can review it at that stage.

An Cathaoirleach

Deputy Kerrane is next.

Deputy Claire Kerrane

I congratulate Ms Lenehan and Mr. Healy on their appointments and wish them the very best in their new roles. It goes without saying that a lot of farmers will be putting their faith in this new regulatory office and hoping it will be positive for them. A lot of this was born out of the factory protests and has centred on beef in particular but it is important to mention that this committee has done some work in relation to the horticulture sector too. Representatives of that sector were in here and we had conversations around carrots being sold for 60 cent and so on. This is a sector that we should, as a country, be looking to grow. We really should be standing on our own two feet a lot more when it comes to growing food. Between 30 and 50 years ago, people grew gardens, ate from them and were self-sufficient. It is important to mention horticulture here this evening because those in the sector are very hard working and deserve a fair price for their produce. The same is true for beef, obviously, but sometimes horticulture and other areas can be further down the line.

I ask our guests, as they take up their new positions, to share their hopes for the office and what it will mean for farmers on the ground, given all that it has taken to get us to this point.

Mr. Joe Healy

I thank the Deputy for her question. She is correct in saying that this office has been a long time in the making. We can go back to 2016 when the then EU Commissioner, Mr. Hogan, set up the agri-markets task force. That was the result of a lot of lobbying to get an office like this in place and it has worked on from there, through the European institutions of the Commission, the Parliament and the Council, as well as the Houses of the Oireachtas. One of the key aspirations and workings for the group will be to ensure greater fairness and transparency. We mentioned that earlier because a key role for the board, the CEO and the staff is to provide as much transparency as possible for the marketplace.

As I keep saying, it is important to note we are an independent board. We are there to represent all sectors and to represent the three areas of the food supply chain to ensure everyone is treated fairly and there is a future for every individual and group involved in each sector. We assimilate all of the information we can put our hands on and make sure it is out there. Since Ms Lenehan took up her job, she has done a lot of work in meeting the retailers. She has met them all at this stage and has assembled a lot of information.

Going back to Senator Lombard's point regarding the work plan, it is about building respect and trust among the different links in the supply chain so they see us as fair and feel we are there for all the right reasons, that is, to increase fairness in the food chain. That will be one of our key areas. There are a lot of sources of information now and not all are accurate. The only way we can gain the respect we need to be successful is to ensure whatever information we put out is accurate.

Ms Niamh Lenehan

In response to the Deputy's question as regards setting out on this historic journey, it is about trust. The involvement of the whole agrifood supply chain is a key principle in how this is going to work. There are different actors required to make the whole thing work. If one of the links is gone, it is no longer a chain. As Mr. Healy has said, one of the important things is building that trust across the sector and with all the different businesses operating in it. They must trust us. The Deputy made reference to producers or farmers. They must trust that they can come forward with any issues or complaints about unfair trading practices.

The other thing is transparency, which Mr. Healy has mentioned, and being able to gather those facts and that evidence to enable producers and farmers to make better decisions. I should not have said "better decisions". It is about informing their decisions about their businesses. That is what we are here to do.

Deputy Claire Kerrane

The witnesses have said they are confident the regulator will have the powers it needs. I obviously have to mention competition and anticompetitive practices. At every stage of the legislation, we sought to include an amendment to provide for such powers. Those powers do not exist in the first instance. The Minister was very much minded to give the regulator, as a new office, a chance and to look at giving it additional powers later, if needed. That is fair enough and the regulator should be given a chance but, on that element and given that much of this was driven by and stemmed from factory prices for beef and so on - I appreciate the campaign started long before that but it was a real turning point in respect of all of this - is the office concerned it does not have such powers or is it happy to take a wait and see approach? The CCPC exists but the issues are still there. Deputy Fitzmaurice used the term "cartel". Any of us would be lying if we said some farmers did not get the impression that a cartel does exist and there are anticompetitive practices in the industry. That is much of the reason farmers wanted transparency and wanted this office in the first instance. What are the witnesses' views on the fact the regulator does not have those powers?

Ms Niamh Lenehan

What I would look at is the powers we do have. The measures on unfair trading practices, UTPs, were put in place for the first time as a result of a European directive. They were put in place to rebalance that bargaining power. That says a lot. We have very clear powers in that regard. On the transparency side, a lot of information can be gathered from our reporting that may point to issues. As Mr. Healy has mentioned a couple of times, we are going forward as an independent agency. Our job is to bring transparency to and shine a light on the food chain as a whole and to identify those issues. That is what I would say. The Deputy made reference to giving what we have a chance. Obviously, we do not have powers in respect of competition but, as we said earlier, if something comes to light that we feel does not look right, we will certainly pass it on to the relevant authorities.

Mr. Joe Healy

We do not have the powers to put the world to rights but we do have quite a few powers. A great deal of work has gone into getting this as far as it has got. As I said in answer to the Deputy's first question, this goes way back. It really got momentum in 2016 when, for the first time ever, the commissioner set up an agrimarkets task force to look at the area. That is when the ball was really thrown in and started rolling. We worked hard on that to ensure momentum was created right the way through and that this was not allowed to become just another recommendation or report left on a shelf. That involved lobbying at many different levels. A great deal of work has gone into it. Different things were said to us along the way. We were told that, if X, Y or Z was included, it would not get through the Parliament, the Council or the Commission. Whether it is your own business or not, you work with the powers you have. There are a lot of powers there. We will work with them and see where they take us. If, at any stage along the line, we think there is a need for more powers, we can seek an increase in the powers of the board and the regulator from the Minister.

Deputy Claire Kerrane

I wish Mr. Healy and Ms Lenehan well.

An Cathaoirleach

I have just one question before we finish. There is a large discrepancy between our market and that of the UK market as regards the price of beef. Does the regulator see itself as having a role in investigating why that is?

Mr. Joe Healy

The Cathaoirleach is right. If we go back in time, it has often hit peaks and troughs. Over the past 20 years, it has varied between-----

An Cathaoirleach

We will leave the peaks and troughs out of it. The fact is there is a very large discrepancy between the two. Does the regulator have a role in seeing why the factories here are not able to match the prices in the UK or to come somewhere near them?

Mr. Joe Healy

Our role is to try to gather information associated with that problem. As the Chairman rightly says, it is a very significant problem at the moment. The difference is €300 to €400. At times, when the difference is down around €100, it is accepted. Over the years, we have heard about how it has to be transported and so on. The Chairman will have heard that in his previous role, as did I. As I said very clearly at the start, we cannot set prices-----

An Cathaoirleach

I accept that.

Mr. Joe Healy

-----or get involved in that but, as regards trying to maximise the amount of information and knowledge that is out there-----

An Cathaoirleach

The regulator sees itself as having a role in investigating why there is such a discrepancy between the prices our factories are being paid and the prices being paid in the UK.

Mr. Joe Healy

As the Chairman knows well, there is a lot of information out there at the moment as regards the different excuses that are trotted out, such as the product's place on the top shelf or other places being looked at to make trade deals. However, it is still a lot of beef. I believe 180,000 tonnes of Irish beef went over there last year. That is a large percentage of our beef production. The board will do anything it can to bring more focus to that issue, but that will only be done by ensuring we have accurate information from the UK market and working with the various bodies involved. For example, Bord Bia has an office in the UK and there are other organisations in the UK that are similar to ours.

An Cathaoirleach

I thank the witnesses for their contribution to the committee today. We genuinely wish them the very best of luck.

We have been waiting a long time for this body. We look forward to inviting the witnesses back to the committee in 12 months time to give an update on progress in bringing transparency to the market place. I thank the witnesses. The next public meeting of the committee will be on Wednesday, 13 December at 5.30 p.m. when the agenda will be the examination of the update on the eradication of TB. We may have a meeting on Wednesday morning on the new ICBF classifications. That has not been confirmed but it is more likely than not.

The joint committee adjourned at 8.50 p.m. until 5.30 p.m. on Wednesday, 13 December 2023.