Seanad Éireann díospóireacht -
Wednesday, 24 Jun 1992

Vol. 133 No. 8

Adjournment Matters. - Sheepmeat Policy.

Mr. Naughten

I thank the Chair for allowing me to raise this matter on the Adjournment this evening. I welcome the Minister to the House.

I want to make a few brief points about dismantling the sheepmeat regime and how it affects the Irish farmer. I regret very much, as I am sure every Member of this House regrets, what happened yesterday. I do not condone the actions taken by the farming community who drove sheep into a Government building. If one examines the dismantling of the sheepmeat policy and how it affects the Irish sheep farmer, one can understand the tremendous frustration of farmers. That type of protest does not do anybody any good but one must look at what has happened.

As I understand it, and hopefully the Minister will be able to clarify the position, the sheep premium which forms a large part of every sheep farmer's income has been cut by 27 per cent. I do not know how sheep farmers in the west of Ireland who depend on this type of farming for a livelihood are going to rear a family when there has been a 27 per cent cut in the premium. No other section of society would tolerate that. No trade union or group of businessmen would tolerate a cut of that size in their income. This matter was not given the degree of urgency it merited and I call on the Minister for Agriculture and Food to tell us what can be done to redress this situation.

There is no point in saying this started two years ago. That does not get the money back into the sheep farmers' pockets. What I want, and I hope what the Minister wants, is to restore farmers' incomes. They have taken a hammering on wool prices; wool is only 20p a lb. They have taken a hammering on lamb prices which are continuing to drop. That, together with the fact that the premium is fixed now on 1991 numbers, means a total drop in all sheep farmers' incomes and there is no question about it. There is a substantially greater number of sheep in the country this year than there was last year and that means that many of those farmers will have to cut back on production as a result of the change in the numbers for premium.

Again, we are dealing with a crisis affecting 52,000 sheep farmers. Those farmers and their families will not be able to survive on the land if this situation is not redressed by the restoration of income supports in the form of the beef premium and the sheep premium. Whether we like it or not, in the past number of years we have become more and more dependent on getting cheques through the post. That is regrettable. I would much prefer that farmers would be able to produce a commodity, sell it on the world market and get a price for it. However, whether we like it or not, that is the way farming has developed over the past five to six years and we are going to have to ensure that the commitments that were given are met.

Many farmers who bought sheep last year on the understanding that the sheep subsidy would be at the same rate as last year now find themselves having to take a 27 per cent cut in income. The vast majority of farmers were not aware of this huge drop in income until last Friday or until the news was published in the papers on Saturday. We were all led to believe that Ireland, by voting yes in a ratio of two to one on the Maastricht Treaty, had put the Treaty back on the rails and given a new impetus to a united Europe. Instead of that on Friday, before the votes were fully counted, we were stabbed in the back and had to accept a 27 per cent cut in sheep premium resulting in a drop of £30 million to the Irish sheep farmer. Hence, we had that spontaneous protest yesterday. I do not condone what happened, but that is why those people were on the streets yesterday.

Again, the Minister came back from Brussels a month ago and pointed to the different schemes which has been approved in Brussels, including the suckler cow scheme and the beef premium scheme. However, the ink was hardly dry on those contracts before the sheep regime was dismantled. What I and every other farmer would like to know is if the same thing is going to happen two or three years down the road to the beef premium or the suckler cow scheme. We have to ask that question. There is no guarantee it will not happen. If it has happened once, it can happen again. This is why the Minister will have a fight on his hands if he does not ensure that these premia are restored to last year's level.

In the part of the country I come from and the whole west of Ireland, we traditionally produce sheep and beef heifers along with the suckler cows. Now the sheep subsidy has been dismantled with a reduction of 27 per cent and we have got nothing for heifers. I predict that in two years time we will be back to the situation we were in after the collapse in 1973 when in my neck of the woods calves were won in card games. However, I do not want to pursue that; I am merely point out the major effects this shattering drop in income has had on the whole of the west of Ireland.

What I want to know is what steps the Minister proposes to take to restore this income. I could lambast and criticise the Minister for the way the negotiations were handled but I intend to be positive. What I want to know is how we can restore this massive drop in income. I was not privy to the negotiations, but if there was a limited pool of money some of it that was going towards the suckler and beef premia should have been diverted to the sheep meat regime and that regime should not have been allowed to be dismantled leaving the sheep farmers in the position they are in today. Between the drop in lamb prices, in wool prices and the cut in premium, they are all facing a 27 per cent drop in income. Many people outside sheep farming and farming generally do not realise that and that is what caused all the frustration we saw on the streets yesterday.

I understand the first part of the subsidy was cleared at £4.99 when in fact it was £6.75 last year. There is no way farmers can take this. I hope the Minister will be able to contradict me and say my figures are wrong but I understand that this year the sheep premium will be £16.33 where last year it was £22.69. In days gone by when we were discussing the milk quota and all of the difficulties that arose at that time the then Minister, Deputy Deasy, had to walk through a minefield not alone to ensure that our milk quota was not cut but at the time he got a 3 per cent increase.

It is of vital importance to the whole sheep industry, to all the people working in the meat factories that are killing the lambs and servicing the trade that this subsidy is restored to protect farmers' incomes. I have seen figures published by people with no vested interest in the matter and they calculate that instead of the subsidy reducing this year, it would need to be £28, given the drop in lamb prices and in the price of wool, to restore sheep farmers' incomes to what they were two years ago. This has arisen partly as a result of the change in the method of calculating the subsidy for sheep.

I regret very much that both the Irish farmer and the Northern Irish farmer were not treated as one separate unit. We are fast becoming the only island of Europe and we should have got special recognition. It costs us much more to get our lamb on the French market than it costs the people on mainland Europe but that was not taken into consideration. It must also be realised that many of the problems that have been created for the sheep regime are caused by importing lamb from New Zealand onto the French market thus affecting the price Irish farmers get for lamb and literally ensuring that Irish farmers cannot get a livelihood. That is what is happening at the present time. The Minister will have to ensure that that does not continue. We are exporting 80 per cent of our produce onto the French market; that is the market we have for our lamb. We are the only country in the world with that level of our production going for export and we must protect that export market.

Over the past number of years ewe numbers have increased in this country from 2.5 million to five million. Farmers were committed to developing the sheep industry on the advice of the Department of Agriculture and Food. Now they find the plug is pulled and that they can no longer continue to develop. There is no expansion. Young people going into farming cannot get quotas for the sheep, milk, beef and suckler cow schemes. I do not want to go into the whole mess. Questions are being asked and I am sure the Minister is well aware of them. However, I appeal to him to try to sort out the questions on the whole Common Agricultural Policy reform before this week is out because many farmers have forms which they do not know what to do with since they do not know the bottom line. Let me conclude by asking the Minister what steps he proposes to take to restore sheep farmers' income.

Minister for Agriculture and Food (Mr. Walsh)

I would like to thank Senator Naughten for raising this matter. At the outset I want to put the record straight and give some facts in relation to the background to this matter.

First, the first tranche of 30 per cent of the estimated 1992 ewe premium which forms an important part of sheep farmers' incomes was fixed by the European Community Sheepmeat Management Committee meeting on Friday last, 19 June. The amount of the premium this year for the first time, is calculated on the basis of a single region for the entire European Community and is in accordance with an agreement reached by the Council of Ministers in 1989.

As a result, the advance for Ireland amounts to £4.99 which is a drop of £1.76 on last year's level of £6.75. There has been some compensation in the disadvantaged areas, that is, an increase of £1.31 to £4.83 in the additional rural world premium. This will bring the level of payment to those producers up to £9.82. Therefore the payment of the first advance of the rural world premium in 1991 amounted to £10.27 resulting in a drop in 1992 of only 45p, that is, 45p in the entire disadvantaged areas which makes up 72 per cent of the country and £1.76 in the rest of the country. The additional premium will be paid to 37,500 of the 52,000. These 52,000 producers will benefit from the payment which will amount to £39 million. Taking into account the payment in April of this year, the total paid to 52,000 sheep farmers this year will be £84 million.

It should be noted that the level of the first advance is an estimate and that the premium will be amended in the light of market developments between now and the end of the year.

The Council agreement of 1989 resulted in a change in the market support arrangement for the sheepmeat sector. As part of the premium arrangement, it was agreed that the variable premium system, which operated only in the UK, would be abolished and a single premium would apply for all member states. It was further agreed that these arrangements will be phased in over a three year period or until the UK authorities decided to terminate the variable premium arrangements. This decision was taken for the 1992 marketing year, that is, one year in advance of the original time schedule but within the Council agreement.

That is the background and they are the incontrovertible facts. This was decided under the French Presidency in 1989. It was well signalled in advance; in fact many farmers were told that it would probably be halved. In the event the implementing decision was taken on Friday last and it is not correct to say that there was a spontaneous reaction to this because the matter was well known.

I now want to turn to sheep farmers' incomes. I acknowledge straightaway that sheep farmers have suffered a substantial loss because of the market situation and the reduction in this premium. I understand the feelings of farmers about the reduced level of the 1992 premium particularly when lamb prices are so low this year. I have been in contact with CBF, the Irish Beef Export Board to impress upon them the importance of obtaining the best possible return from the market-place for Irish lamb.

I now turn to the so-called spontaneous response of some sheep farmers. More than 100 of the 52,000 sheep farmers arrived in Kildare Street. However, the depressed price and the drop in premium of 45p and £1.76 does not justify the behaviour of some farmers who aired their grievances by forcing a number of unfortunate ewes into the foyer of the Department of Agriculture and Food intimidating some of the junior staff, messengers and receptionists who had nothing whatsoever to do with this matter. The protestors caused a great deal of distress to the unfortunate people and to the animals concerned. I want to put it on the record that I deplore that activity and I will not tolerate that behaviour.

As Minister I have a responsibility to the staff and I have brought the matter to the attention of the Department of Justice and the Garda Síochána. What I found most disquieting was hearing the Deputy President of the IFA, Mr. Tom Parlon, stating that what was done yesterday was only a tea party compared to what will be done in the future and I am taking every precaution to improve security in the Department of Agriculture and Food. I will not allow forced entry to cause bodily injury to staff and quite a substantial amount of damage to doorways, furniture and floor coverings in a Department office.

As regards the animals, some leaders of the IFA tried to suggest that this was hype. The whole country saw what happened on television. We are not behind the Iron Curtain. Not alone in Agriculture House but within the precincts of this House we saw an unfortunate animal being pushed through the railings in Kildare Street. I deplore that. I particularly deplore it because Ireland is a signatory to the Council of Europe Convention on the protection of animals kept for farming purposes and one of the recommendations in that Convention, which I fully support, is that sheep in particular should not be used to achieve any goal including their use to create public spectacles or demonstrations if such use is likely to be detrimental to their health and welfare. Clearly the actions I mentioned are in conflict with that goal.

I now come to another matter. It was stated by the president of the IFA on the 9 o'clock News last night that the ink was not dry on the reform proposals when this decision was taken. That was a distortion and a misrepresentation of the facts. This decision was taken in 1989 long before the reform proposals commenced. It has nothing to do with the Common Agricultural Policy reform proposals. The leader of the IFA knows that and I am disappointed that he should distort the facts.

I meet regularly with farmers, farm leaders, and representatives of the agricultural community. Yesterday morning I had a meeting with Mr. Alan Gillis, president of the IFA, Mr. Tom O'Dwyer, president of the ICMSA and Mr. Billy Nagle, president of ICOS. I cannot understand the behaviour of somebody who was in the Department for an hour speaking with me and my officials not raising this matter and then bursting his way back into the Department to make a point. It was extraordinary behaviour and I am taking every step to prevent it happening again. I spoke to a messenger boy in the foyer this morning who told me he was struck in the face and had to run for cover in fear of his life. I am concerned about that. I am not in any way exaggerating the situation. People were able to see for themselves what happened. I deplore this action in the strongest possible terms.

I will be meeting again with the farming organisations on Friday of this week because I want to keep in contact and exchange views with them. It is my policy to meet and discuss all matters relating to Irish agriculture particularly, as Senator Naughten said, because we are an island nation on the periphery of Europe and must make the most of our position in Europe. However, I want to do it in a civilised and rational manner.

Turning to the present problem, I raised the proposed reduction in the sheep premium during Council meetings over the last number of months and I pressed for an increase in the rural world premium as a means of compensating farmers in member states, particularly Ireland, where market prices are particularly low. I want to give an undertaking to the House that I will continue to press for such compensation. I have already put it on the agenda of the next Council meeting, which is next Monday. This matter arose last Friday. I could hardly do things more quickly than that.

I acknowledge there is a substantial drop in the incomes of sheep farmers because of the market situation. I am in constant contact with them and I will do everything I can through CBF and at a Council meeting of the European Council of Ministers next Monday to try to restore the premium in Ireland to its previous level between now and the end of the year.

Mr. Naughten

I can assure the Minister that the vast majority of sheep farmers were not aware that there would be a huge drop in their incomes. I have listened carefully to what the Minister has said and he has not contradicted any of the figures I gave. What he did was to indicate clearly what has been approved. However, I note from the Minister's last sentence that he will do everything in his power to restore farmers' incomes and I sincerely hope he will not accept anything less than they received last year.