That Seanad Éireann calls on the Government to—
(1) recognise the serious income crisis affecting thousands of Irish farmers,
(2) implement measures to alleviate the present income crisis in the areas of beef, store cattle, sheep, milk and cereals.
This is a motion which those of us associated with the agriculture industry are reluctant to see on the Order Paper. Nevertheless, the serious situation that has arisen in agriculture demands that this motion be on the agenda before the House today.
The social and economic importance of agriculture and farming is of vital importance to the economic future of this country. Very plainly, their importance is such as to be almost incapable of being exaggerated. What do we see happening all round us? A price collapse in practically all types of farming. The price collapse in beef and sheep is such that right now the prices being paid to farmers barely covers the cost of production. Beef bullocks, heifers and store cattle are down approximately £100 per head. Dairy farmers are taking almost £300 per cow reduction in their income. What is being done to ease the blow? Very little, I am afraid. When one considers the disastrous situation of our cereal growers, one wonders if there is a concentrated effort to move people off the land and denude rural Ireland of its population.
I know of no other period during the past 20 years when there has been such a sudden and sharp deterioration in the fortunes of Irish farmers and all independent observers agree that the future is far from bright. In fact farm incomes, according to the best independent advisers, will drop from 20 per cent to 25 per cent.
I welcome the Minister of State to the House. I regret that the Minister is not here but nevertheless the Minister of State, Deputy Kirk, is very welcome. This is an unparalleled and unprecedented drop in income from one year to another. I wonder why the report of the farm management survey has not been issued? Is it being deliberately delayed because of the frightening figures projected for farm income for 1990? Is it being delayed until the Dáil has gone into recess?
Prior to joining the Common Market agriculture was a severely underdeveloped sector which concentrated on supplying a small domestic market and satisfying the needs of the United Kingdom demand for a limited range of bulk commodities. To date, the Government would lead us to believe that agriculture spearheads the national drive towards employment creation and economic survival. Need I mention the publicity attached to the launching of the Goodman deal, when we were all convinced that down the road we were going to have everything pre-packed and landed on the shelves of Europe? We were going to create 2,000 new jobs. What has happened to this project that was launched with such fanfare and now seems to be left on the shelves to gather dust?
One of the main reasons given is that membership of the European Community has given us access to wider markets and the availability of institutionalised price support. These wider markets should have enabled us to boost production and expand processing capacity in areas as dairying, beef and sheep where we enjoy a natural advantage. I point out the advantage that could be gained from the processing of hide, skins and wool. Unfortunately the Government have failed miserably to do anything about these downstream industries. I cannot understand why the Government, in conjunction with the IDA and the National Development Corporation, have not pursued the possibility of creating jobs in the hide, skin and wool industries. I regret very much that the Government have ignored developments in these areas. These three commodities are at present priced at a very low level, and substantially less than they were last year.
I question strongly whether we have taken advantage of the huge market. What marketing strategy have we got? Have CBF and Bord Bainne been given the kind of support they require to market our produce? Have we moved away from bulk commodities towards added value manufacturing? This is something we heard a lot about but I believe, unfortunately, very little has been done about it. What effect has the huge cut in the CBF budget had on the marketing of our Irish produce? Have we taken advantage of the added stimulus from the change made over recent years in the Common Agricultural Policy price support system? I believe we have not and CBF have not been given support by the Government to sell Irish products, have them properly branded and launched in the same way as Dairygold or whatever. We have failed to do that with beef and lamb and we are paying the supreme price for it at present.
A fundamental requirement for the continued development of the agriculture sector is confidence in the industry, in order to continue to supply the raw material but right now this confidence is being shattered. Something needs to be done right away. Producers require confidence and guarantees. They want to know where they are going. I never saw so much uncertainty when one considers the impact the GATT negotiations could have on prices and the prices we are receiving today.
Over the past number of months, we have seen changes in those support arrangements. For example, arriving at the 1990 ewe premium the stabiliser, the method used to take into account increases in ewe numbers in calculating the ewe premium, has been increased to 7.25 per cent compared to 5 per cent in 1989 and the carcase co-efficiency has been reduced to 17 kilos compared to 17.5 kilos in 1989. These combined measures led to a reduction in the ewe premium of £2. That is tinkering with the mechanism by which Irish farmers gain subsidies under the ewe premium scheme from Brussels and because of changing the goalpost and the ground rules, we now end up with £2 less than we would be getting if the 1989 guidelines were adhered to in 1990.
Farmers are very concerned about the current nogotiations on the GATT round. Will prices be halved as is being suggested? Farmers want to know precisely what is happening so that they can plan for the future and invest accordingly. In the case of beef producers, specific decisions as to the extent of future intervention support for the beef sector is now needed. Our milk producers clearly need to know whether quotas will continue after 1992 and if so under what conditions. Farmers want to know if the existing link between quotas and land will be broken, and if so, whether after 1992 quotas will be transported across member state frontiers. This is a very important issue and one I hope the Minister will address when he replies. It is a matter of grave concern to farmers.
Huge questions must be raised about the marketing of sheep meat, when we find that New Zealand frozen lamb is being sold in our supermarkets. Why is this acceptable from a non-EC country when we have such a supply of lamb? Together with our own supply, we are now 105 per cent self-sufficient. Without them, the EC would be in a deficiency situation. Need I point out to anybody here the huge difference that this would make to the sheep farmers of Ireland. I believe it is an absolute scandal that this sheepmeat can come in at substantially reduced prices, be dumped onto the EC market, and as a result depress the price of Irish lamb.
Last week in reply to the debate on bovine TB levies, the Minister referred to a statement which I made regarding farmers' incomes. The Minister stated things were not quite as bad as Senator Naughten said. I want to point out that I did not exaggerate and I want to further point out that I am rather amazed at his statement. It quite clearly indicates that he is unaware of the extreme difficulties many Irish farmers are in as a result of a drop in prices in every agricultural commodity. If the Minister is not aware of the situation one must seriously question, if he is capable of representing Irish farmers at the Cabinet table or in Europe.
Let me point out to the Minister that lamb prices have reduced by 25p per lb between 1 July 1989 to 1 July 1990. Taking the average lamb at 43 lb carcase weight, that means a farmer is getting £36.12 in 1990 when he was getting £46.44 in 1989, a difference of £10.32. For a farmer with 100 ewes and a lambing average of 1.3, this means a loss of £1,342 on lamb prices alone. Taken in conjunction with the drop in wool prices from 72p per pound to 30p per pound, it means the income of a farmer with 100 ewes is down by a total of £1,600. This is exacerbated still further if one considers a farm with a lambing rate of 1.6; the losses then become £1,965. These are facts that cannot be denied.
Let me remind the Minister that lamb prices in the first week of July 1989 were £1.10 per lb and on the first week in July 1990 they were 84p per lb. Let me further point out that on 1 July 1989 cattle prices, steer prices, were £1.13 per lb. In the first week of July 1990 they were £1.06. Heifer prices in the first week of July 1989 were £1.10 per lb. In the first week of July 1990 they were 95p per lb. A farmer selling 20 heifers, killing at 540 pounds carcase weight will take a loss of £81 per head or £1,620 on his 20 heifers. A similar situation exists for the man feeding 20 steers. If one takes the average 50 to 80 acre farmer he can lose anything from £3,500 to £4,000. I ask the Minister if there is any other section of the population that would tolerate that. We heard of Black Monday on the Stock Exchange but if there were the same ratio drops on the Stock Exchange there would be a riot.
At present one of the greatest difficulties facing the farming community is the glut of lambs on the market. Let me point out to the Minister that on the advice of the Department of Agriculture and Food sheep farmers increased sheep production on the clear understanding that we were only 80 per cent self-sufficient. I ask the Minister, without any further delay, to introduce a scheme along the lines of aids for private storage that would take the immediate glut of lamb off the market for July and August, because if that is not done, the 84p per lb will become 75p per lb in two weeks' time. I appeal to the Minister to convey to the Minister, Deputy O'Kennedy, the vital importance of getting the glut of lamb off the market.
Mutton is being sold at 17p per lb. I cannot understand what CBF or the Department of Agriculture and Food have been doing to allow mutton prices to drop to this level. I appeal to the Minister to take up this matter with CBF and see what can be done to get a market for mutton.
In the dairy industry, 65 per cent of all farmers have 20,000 gallon quotas or less. Those farmers have no capacity to borrow and are taking an income drop of £3,000 to £4,000. They are small dairy farmers who cannot afford to lose this money. I recognise that many of the larger farmers, the 35 per cent with a huge gallonage, have done reasonably well over the years out of milk and can, for the time being tolerate a drop of income but the smaller producer cannot. Many of those people have borrowed to develop their farms and build up their herds. They borrowed on the advice of the Department of the Environment to comply with pollution regulations and so on and now they are not able to meet their loan repayments. There is another group of farmers who are about to develop or to comply with the pollution regulations but cannot get the money to do so because farmers no longer have any borrowing power with the banks. No banker wants to see a farmer borrowing for stock. He will give him money to buy a tractor if he deals in tractor hire or for a lorry if he is in the haulage business but not for farming.
Let me point out to the Minister the necessity to know with reasonable certainty how future community support arrangements will operate so that farmers can plan for the future. My concern is to maintain family based farming in the Ireland of the future and to ensure the viability of the rural lifestyle for our children. As a representative of a rural constituency and a farmer, I am sure the Minister shares my concern. I will continue to champion the cause of family farming and the preservation of rural society. It frightens me to hear that a 100 acre farmer today is not in a position to meet any commitments beyond family living expenses. This will have a devastating effect on farmers who have borrowed to stock their lands, to carry out farmyard improvements or to meet the new requirements under the water pollution legislation. Farmers who have borrowed for those purposes will be unable to meet their repayments.
What plans has the Minister to alleviate the major hardship on those farmers? It is in all our interests to plan with a degree of certainty and in a stable environment. Our dependence on agriculture is not fully realised. Proportionately, Ireland is one of the Community's largest exporters of food and drink which account for 25 per cent of the value of our total exports. Are the producers of the raw materials, the farmers, getting the kind of support they deserve? Commissioner MacSharry has promised a comprehensive range of rural development measures but we need more than promises now: we need action and we need those developments immediately.
The decision to get intervention beef paid for at 45 days instead of 120 days is something I have been calling for for a considerable length of time. It was one of the weaknesses I noted in the intervention system as a member of the Committee of Public Accounts. I welcome that. We were told at the time that this would mean an automatic increase of 3p per lb in factories. Not alone did producers not get the price increase of 3p per lb but the price of cattle was reduced by approximately 8p per lb. Some weeks ago Ireland looked for intervention facilities of 8,000 tonnes of beef and my understanding is that we got intervention of 2,000 to 2,500 tonnes, one quarter of what we looked for. I believe that the factories are working in co-operation with each other and if one checks the quotas of factories it is remarkable how close they are to one another.
Recently the EC Council of Ministers agreed to the importation of 200,000 young cattle and about 50,000 tonnes of processing beef at a time when we cannot sell what we have. The Minister for Agriculture and Food failed in his duty to farmers by not preventing those imports at a time when cow beef is being sold at 70p per pound. One cannot be blamed for believing that the Minister for Agriculture and the Agricultural Commissioner, Mr. MacSharry, have reneged on the Irish farmers and failed to represent their interests at the negotiations in Brussels.
It is frightening to realise that for the first time in Irish agriculture the farming community have no creditworthiness with the banking institutions. Farmers, by and large, are unable to repay loans which they received from the banks and others who need money for investment in livestock or for farm buildings or pollution protection cannot get loans. This is a clear indication by the banks of lack of confidence in the policies pursued by the Government. Most of the repayments will not be due until October or November and this will cause a crisis for many farmers at that time. Lending rates are in the region of 17 per cent and farmers just cannot afford to borrow money because of the amount of the repayments.
There are a number of points the Minister should immediately implement which would help to alleviate the disastrous situation which exists at present. Farmers should be guaranteed a minimum price level below which cattle will not fall in the spring. This is of vital importance to the beef farmer but it is also of major importance to the store cattle producer in the west of Ireland. If there is not a market for beef in the spring it will have an adverse effect on the store trade in the autumn. It is of vital importance that we have a guaranteed price for spring beef so as to guarantee the future for store cattle producers.
It is also of vital importance that the Government make low interest loans available to farmers. As a result of the high capital costs involved, interest rates have become a huge cost on Irish agriculture. It is vital, therefore, for the Minister without any further delay to seek loans in Deutschemarks and they could be made available at 9 per cent when normal bank handling charges are taken into consideration. I believe that shortterm loans could be made available to farmers at approximately 11 per cent or 6 per cent less than they are at present. The Government would have to underwrite the exchange risks. However, because of the short duration of the loans, this would prove a very small cost factor to the Exchequer. Current interest rates are crippling Irish agriculture. Those loans would help farmers to restructure their present loans and would help them to retain livestock over the winter. If the present trends continue stock prices in the autumn will be even worse than they are at present.
The Government should make loans available to farmers to purchase nitrogen for the purpose of a later cut of silage. This was done some years ago and was very effective. It created a substantial additional amount of winter feed. It is of vital importance that we face this winter with an adequate quantity of feed so as to prevent farmers from dumping stock on the market later.
With regard to EC headage schemes the Government have failed drastically over the past three years. Senator Hussey is well aware of what I am talking about here. Why the Government have not pursued the question of reclassification of all the disadvantaged areas to severely handicapped so as to ensure that headage payments could be paid to farmers in all of the disadvantaged areas I cannot understand. It clearly indicates the lack of commitment not alone on the part of the Minister but also on the part of the Government who have failed to make the additional funds available. This is one way that direct assistance could be given to farmers. We have not availed of that mechanism. It is subsidised to the tune of 65 per cent. It is one way that money could be channelled immediately to farmers but we have not availed of it.
I call on the Minister to increase headage payments to the maximum. At present farmers only receive 50 per cent of what they could get under the headage mechanism. At this point of crisis in the agriculture industry, the Minister should double the amount of grants available under the headage system and ensure that all grants are paid without any further delay. With regard to the system of application for those grants and the herd readings, I cannot understand why the applications have only gone out in the last couple of weeks and why the readings for headings payments will not start until August. What does the Minister propose to do with regard to the vast numbers of farmers who have applied for those schemes but who will not, because of the delay in readings, be able to dispose of their cattle until readings take place? This inevitably will cause a glut of cattle later in the year.
In relation to the headage scheme I ask the Minister to announce, without any further delay, that he will accept mart dockets and factory dockets for cattle that have been disposed of and so avoid a glut at the end of the year. If cattle are held until the headage readings take place, there will inevitably be a major glut of cattle in November and December. I cannot for the life of me understand why it is beyond the powers of the Department of Agriculture not to get those forms out in April rather than in July and have the readings started in May instead of in August.
I deplore the delay in the payment of the 1989 part of the ewe premium. I cannot understand why those payments have not been issued since readings for this scheme started last March. Is it that the Department have not got the finance to meet the payments or that they are understaffed? I call on the Minister to immediately pay the first part of the 1990 ewe premium together with the 1989 premium. What plans has he to set up a land authority? This was promised some years ago but unfortunately we have not got it. How long will we have to wait for a land authority?
With regard to the headage schemes and the ewe premiums, it is of vital importance that the farming community get their hands on this money. It is no use to them if they have to wait 12 months and pay 17 per cent bank interest in the meantime. I cannot understand this delay in headage payments. Part of last year's headage payments have not been paid yet. Every Senator from a rural community has had to make representations to the Department of Agriculture and Food to try to get those payments cleared. I am sure I am no different to any other Member of this House in that respect.
What is the Minister's policy with regard to agriculture? What is the future policy with regard to production, what lines of farming would the Minister advise farmers to go into? For example, milk is tied up with the quota system and unless you have a quota you cannot produce milk. With regard to beef, you can no longer produce it economically. It is a recognised fact that you would want to have 500 acres to have have a beef system that would give a family a livelihood. As regards sheep, there is a glut on the market and production costs are not being met. The Minister has a duty to outline to this House what exactly the future is for agriculture. Unfortunately I do not see any future in it.
There are problems in the dairy, beef and sheep industries. I believe the Department did not plan properly. As I stated earlier, farmers were told to get into sheep production. They did so and now they cannot sell their sheep. They were told that we were 80 per cent self-sufficient in sheepmeat and that there was a market there of 20 per cent but within 12 months we found that market was no longer there. The market for beef has slumped. There is absolutely no future there. Whatever future there may be for steers in so far as that you have an intervention system, limited though it may be, there is absolutely no future for heifer beef. Where does the Minister see the future for a young farmer taking over a 100 acre farm from his father or uncle? Where can he get money to stock it and what line of production can he go into?