Crisis in Agriculture: Motion.

Mr. T. Hayes

I move:

That Seanad Éireann condemns the Government for its mismanagement of the current crisis in farming and calls on the Minister for Agriculture and Food to:

—provide adequate shipping infrastructure to transport the maximum number of weanlings and other livestock to the Continent;

—introduce a fodder scheme that will address the shortage and cost of inadequate winter feed supplies on many Irish farms;

—pay double headage to hill sheep farmers and seek a derogation for the sale and export of culled ewe carcasses such as has been approved for Scottish sheep producers;

—extend the family income supplement to farmers and the self employed;

—reduce the retention period for suckler cows;

—instigate an immediate inquiry into the collapse in pig prices;

—pay all grants and subsidies due to farmers as set out under the Farmer's Charter of Rights;

—increase the resources of An Bord Bia to get new markets abroad for Irish farm products;

—introduce a greatly increased realistic fodder scheme over that already announced and set out now the details of this scheme and make it operational not later than 19 October, 1998;

—make a clear and comprehensive statement on the agreement, if any, with Libya on the shipping to that country of live cattle from Ireland with particular reference to when it is proposed to commence shipments to that country; and

—make a comprehensive statement on the beef export agreement with Iran with particular reference to the amount of beef provided for export in this agreement and when exactly these exports will commence.

I hope this debate will be constructive in light of the current difficulties facing agriculture. Historically, Seanad debates on agriculture have been constructive and I hope that will continue to be the case.

The current crisis is one of the worst in recent memory. All farmers are affected but especially farm families with low acreage and limited resources and who are dependent on livestock and sheep for a living. The crisis has been exacerbated by a serious fodder shortage in many areas, a situation that was independently confirmed by Teagasc. There is no need to outline the serious situation facing pig farmers as the Minister of State will be well aware of it. It is probably the worst crisis ever to hit pig farmers.

It is said that agriculture is the backbone of the economy. Despite the dwindling number of people working on the land, agriculture will continue to be our main industry into the next millennium. Approximately 140,000 people are dependent on the land for a living and thousands more work in related industries. Overall farm incomes are under severe pressure, particularly in the livestock sector, following this summer's unprecedented crisis. At the same time, the national economy is enjoying a period of unprecedented economic growth. Farm families, however, are less confident about their future than any other sector of the economy.

Farmers are frustrated at their exclusion from the growing prosperity of our nation. Today, as much as in the dark days of the early 1960s and the GATT negotiations of the early 1990s, farmers need leadership. However, this Government is not giving leadership. It was sad this morning to see farmers again protesting outside Agriculture House just as they had done in the 1960s. This is a disaster. The sadness on the faces of the protesters, both inside and outside the building, makes one wonder if the Government is really aware of what is happening.

The failure of the Minister to deliver an intervention scheme also makes one wonder if the Government is asleep. Over the past few days there was a great deal of negotiation between the Government and the EU but it yielded no results. The Government failed to convince the EU of the desperate state of Irish agriculture, the chaotic state of the beef industry and the need to introduce intervention. The only way the beef industry can be saved is through the introduction of a proper intervention scheme.

We have heard a great deal about the Libyan deal. Three weeks ago we were told that the Libyans were willing to take Irish cattle. Two weeks ago, during a debate on this crisis in the Dáil, the Minister confirmed that the Libyan deal would proceed. However, my information over the past number of days is that there will not be a Libyan deal. The Minister of State must clarify this tonight. Unless the deal is secured, Irish producers will be in serious trouble. Factories, farmers and others were waiting for and planning on the resumption of live cattle exports to Libya.

The Government is a dismal failure in everything it has done in relation to live exports of cattle despite the fact that, in Opposition and during the general election campaign, Fianna Fáil guaranteed that in Government it would use every boat in the country to facilitate the export of live cattle. That did not happen. Members on the Government side can make whatever gestures they wish but the reality is that Fianna Fáil has failed miserably and the farmers know it.

Recently a rescue package worth £10 million was announced. There are seven million cattle in Ireland, and everybody knows that they have dropped in value by approximately £100 per head. If this happened on the Stock Exchange it would have to close for weeks. In reality £700 million has been knocked off the price of Irish cattle and a derisory £10 million subsidy scheme has been introduced to help people in badly affected areas, despite the fact that the Government, the Department of Agriculture and Food, Teagasc and other bodies warned that this could happen.

The family income supplement must be introduced for farming families who need it. It would not cost the huge amount that has been stated. I urge the Minister of State to raise this issue with the Cabinet and to make the Government realise that the family income supplement is badly needed. The Minister of State has a personal interest in the crisis in the pig industry, and small pig farmers are experiencing hardship. However, nobody cares because they are a small part of the community.

Mr. Connor

I second the motion. I am disappointed that the Minister for Agriculture and Food is not here although the Minister of State does a good job and I have no complaint with him. The first thing I was going to do was to ask the Minister to resign, and if he was unwilling to do so, I would have asked the Taoiseach to ask him to resign because he has failed the most important industry in the Irish economy miserably and abysmally. There can be no further excuses. This crisis could be seen coming for the last year, yet he took no action. Everybody knew the condition of the Russian economy six months ago; the looming disaster was known to any pundit looking at the situation. Everybody knew the exposure of Irish agriculture to the Russian market. We knew that if the Russian currency came under pressure it would have disastrous effects on a country that sold up to 400,000 tonnes of beef there. Did the Minister take any action? Did he say anything? Did he even whimper about it? No, he did not.

For that reason alone he ought to resign. Tens of thousands of farm families are experiencing negative income and, as Senator Hayes said, in justice they should be made eligible for family income supplement. That was introduced ten years ago by a Government I supported to take people out of poverty traps and to protect those who might fall into poverty traps. Now tens of thousands of Irish farmers have fallen into a serious poverty trap, and the only scheme we have for alleviating such a situation is the family income supplement. The Minister has not given honest answers on what this might cost; he tried to say it will cost £60 million, but that is the worst of all possible scenarios and seems to assume that everybody who is self-employed in Ireland would apply for it. Approximately £20 million or a little more would finance the scheme.

I contrast this with the last crisis in agriculture, the BSE crisis in 1996. I do not want to bring politics into this, but the then Minister for Agriculture secured £69 million in special EU funds, backed up by Irish Exchequer funds, in aid to Irish farmers. That money was paid before the end of 1996, and a further £31 million in income support was paid in 1997. Approximately £17 million of that amount was from the Irish Exchequer and the rest were EU funds. All this Minister tells us he has is a fodder scheme which he says will cost approximately £10 million.

What is meant by this fodder scheme? Who will get it? When will it be operational? Does the Minister realise that a fodder crisis exists now, and thousands of farmers want to make decisions about the future based on information on assistance with their present fodder problems? The fodder problem could have been foreseen. We had the worst April in generations, according to the Meteorological Office. We had the wettest May in generations and the wettest June, July and August in years. Yet this blind Minister for Agriculture and Food could not see the crisis coming. Any fool would have seen that that would lead to a serious fodder crisis at the end of the season. What has the Minister done? Under severe pressure he has said he wants to introduce a fodder relief scheme. I and thousands of farmers want to know what that means. How will it operate, who will qualify for it and how much will it be worth? We want to know before next week. It is no good introducing this next Christmas; by then the crisis will have solved itself by destroying thousands of farmers financially. This relief, paltry as it is, should be introduced now.

What is happening in relation to Libya? The Minister sent officials to Libya and then came up with a brouhaha of announcements that he had opened the Libyan market. He said that it would add 5p to 7p per pound to the price of beef. The week after that, the price of beef, already at an all time low, fell by 5p per pound. Irish meat factories were allowed to drop the price of beef arbitrarily while the Minister was promising farmers that it would increase by 5p per pound.

I want to know more about the Minister's very cosy relationship with the meat industry. The beef tribunal revealed that there was an all too cosy and unhealthy relationship between too many members associated with the Minister's party and the meat industry. We sincerely hope we are not getting echoes of that. Any Minister for Agriculture worth his salt would have put his foot down with the meat factories and told them to pay at least the intervention price of beef to farmers. Any other price is profiteering, which is what they are doing. I am not blaming the Minister of State because I know he would agree with me, even if it would be difficult for him to do so publicly. I am asking his colleague to answer these questions, and that is why I suggest he should resign.

What is meant by the deal with Iran? Under severe pressure, the Minister stated that he has reopened the Iranian market. He does not say when it is to reopen or what tonnage of beef is to be sold there. If farmers and exporters knew that it might bring some confidence back to the market. Will the Minister of State make a detailed statement? The policy of say nothing, know nothing and then do nothing is making the situation worse. The Minister of State should make a comprehensive statement about Iran and what is wrong with Libya. Is there an agreement? If not, he should tell us. The Minister of State should not continue with the nonsense of a different statement on Libya being made every day. Let us know now if there is a deal and when shipping of live cattle to Libya will commence. That is an area of Libyan trade which would address itself to one of the most vulnerable areas of our cattle industry.

Because of bad breeding policies — introduced by a Fianna Fáil Government in the 1980s when we withdrew the licensing of bulls — we now find ourselves with cattle of inferior quality and cattle which do not have good confirmation and do not do well in our prime market. The only outlets for them are markets like Libya. We were hoping and expecting to get rid of several thousand of these animals to Libya this season. It is particularly sensitive that we get that market back to address the problems. That is the area where the greatest price drop has occurred. The Chairman, as a farmer, will realise this.

Acting Chairman (Mr. Dardis)

In my capacity as Chairman I must inform the Senator that his time is up.

Mr. Connor

I thank the Chair for his indulgence. I sincerely hope that as a Member of this House the Chair will join with me in the sentiments I have expressed. I assure you, they are the sentiments which are very much in tune with the real crisis.

Acting Chairman

The Senator knows the Chair never expresses sentiments.

Mr. R. Kiely

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Seanad Éireann commends the Government and, especially the Minister for Agriculture and Food, for their continuing support for the agriculture and food sectors, and their efforts to deal with the difficulties currently affecting farmers through a range of measures including:

—acceleration of direct payments to farmers amounting to almost one thousand million pounds in 1998;

—the increase in export refunds for beef, pigmeat and SMP, total market support measures in 1998 are expected to exceed £500 million;

—agreement from the EU Commission to improve access to intervention for cattle; —the introduction of aids to private storage for pigmeat and sheepmeat;

—securing the Iranian market for beef exports;

—the introduction of a winter fodder package;

—the increase in the rate of advance to 80 per cent for the suckler cow and special beef premiums;

I am telling the truth.

The Government cannot be held responsible for the economic situation in Russia any more than the weather. Recently Minister Walsh announced a series of measures to assist farmers with their cashflow this autumn. Such measures include speeding up direct payments to farmers; an increased advance in suckler cow and special beef premium payments from 60 per cent to 80 per cent — this will release an additional £45 million in November and December; more rapid payment of REPS where such payments are falling due; payment of the outstanding top-up of £6 million to certain beef producers; a fodder package for farmers worst affected by the weather in early summer — and not all farmers were affected; recent agreement to substantially increase beef export refunds — the increase is equivalent to 5p per lb of beef; and ensuring that appropriate transport facilities are available for live exports. Each of these measures was identified as an important issue in discussions with farm organisations and, in total, they represent an impressive list of actions.

Acknowledging the serious fodder problem, the Government responded by making £10 million available to deal with fodder difficulties being experienced by some farmers. The details of the new scheme will be finalised very quickly and the approval of the Commission is being sought with a view to making payments as quickly as possible. The Minister is also seeking the approval of the European Commission to continue sheep headage top-up equivalent to £2.75 million. The intention is that this money would be made available through a top-up in the subsidy for mountain ewes and suckler cows in the worst affected areas. A major consideration is the need to devise an arrangement that would get assistance to farmers and in that context the Government response was adequate and rapid.

The problem in the beef market stems almost entirely from the loss of the Russian market. Cattle prices were higher than in 1997 for most of this year but they have fallen back significantly in the last few months. The Minister left no stone unturned in his efforts to alleviate these difficulties. As early as last August we signalled to the Commission the potential crisis which could arise from the Russian situation and sought measures to be put in place with immediate effect to counteract these developments. The measures the Minister identified as being necessary included a substantial increase in export refunds, the introduction of an EU sponsored export credit guarantee system, a widening of the intervention system and an increase in the advance of the cattle premiums from 60 per cent to 80 per cent. The Minister spoke on four separate occasions to Commission Fischler in the past week and he is pleased that his efforts have borne fruit and that a variety of measures are now in place which should help to bring about an improvement.

Our exposure to the Russian economic difficulties is easy to understand. In 1997, Irish beef exports to Russia amounted to 70,000 tonnes and were expected to reach similar levels in 1998. However, the effects of the loss of the market have been compounded by the fact that this was also an important market for other European exporters. Russia took 40 per cent of EU beef exports in 1997. Beef previously destined for Russia is now being diverted onto the European market and the resultant increased competition on the European market has exerted downward pressure on cattle prices here. The situation has been exacerbated further by the fact that other third countries have attempted to exploit the difficulties on the Russian market by forcing down contract prices.

The situation is not helped by the renationalisation of the beef market in the European Union following the BSE scares in 1996. There is now a very clear preference in most member states for domestically produced beef. Nevertheless, Irish beef exports to European markets have recovered significantly from the 1996 situation, particularly to France, Italy and the Netherlands. There is a very substantial gap between cattle prices in Ireland and prices on these markets and I am glad to see the Minister has been pressing the trade to exploit whatever opportunities exist on these markets. Bord Bia is also assisting in this effort.

The current difficulties in beef are extremely disappointing because, in the absence of the Russian crisis, there were very good prospects for cattle prices to remain at the higher levels which prevailed earlier in the year. There are a number of reasons for this. In the first instance, the market balance in the European Union has improved significantly in 1998 compared with 1996 and 1997, both because of a continuing recovery in beef consumption and a significant reduction in beef production in the European Union. The recovery in beef consumption was assisted by the various measures adopted in the last few years to assure consumers about the safety of beef, especially Irish beef.

I welcome the fact that the Minister called to meat factories and warned them to take account of the serious difficulties faced by the finished cattle sector. I also welcome Minister Walsh's visit to Teheran. Arrangements are now in place for the visit of an Iranian technical delegation to oversee export arrangements to Iran. Live exports from Ireland to both EU and third countries are vital to maintaining competition in the cattle trade and in sustaining farm incomes. The Government has consistently recognised the importance of promoting live exports and have taken action in a number of areas to ensure market access for our cattle to both EU and third country markets.

As regards trade with Libya, both the Opposition and the farming organisations are aware of the agreement signed last July by the Irish and Libyan authorities which provides for the reopening of live trade from the end of this month. That will be done — unlike when we were told by the previous Minister before an election at the beginning of June 1997 that there would be live trade to Libya the following week, for which we are still waiting. However, I assure the Opposition it will be reopened in the very near future and matters will definitely improve.

I commend the Minister and the Ministers of State on their good work to alleviate this situation.

Mr. T. Hayes

The Senator told me that the first time I was here.

Mr. B. Ryan

Every time we debate agriculture I wonder about the party on this side of the House and the two parties in Government, all of which proclaimed their belief in the market economy on 100 occasions for everyone except one sector of the economy. They have enthusiastically preached the importance of competitiveness and keeping costs low to maintain our national competitiveness to workers in telecommunications, the ESB, the transport system and every other area. However, apparently none of these constraints applies to one sector in society.

It appears that agriculture must have the benefits of the market economy, in other words, if prices can be pushed up in any way, irrespective of the cost to consumers, it must be done, but if prices drop because of market forces then somebody must produce money to compensate for the loss of profit. If 5,000 industrial employees lost their jobs in Fruit of the Loom in Donegal and I said in the House that the Government should guarantee to buy up every piece of surplus product produced by Fruit of the Loom, every Member would laugh at me and tell me it was a daft idea.

This industry has already had direct payments to its participants of £1 billion. Depending on how one defines farmers, that represents an average income of between £7,500 and £10,000 a year per farmer. That is not a bad start. There are 600,000 people paying income tax whose gross income is £10,000 or less in the estimate of the Revenue Commissioners, with which £10,000 per farmer working in agriculture is a reasonable comparison.

In addition, based on the best figures I have, the cost to the Irish consumer of the Common Agricultural Policy is between £500 million and £1,000 million a year in inflated food prices. That is a competitive cost which the Irish consumer must pay to maintain this system.

If this system did what it is supposed to do, which is to sustain family farms and the maximum number possible on the land, one would have considerable sympathy with it. However, in fact, it has done the opposite. It has increased inequality in agriculture and has managed to leave us with the most undiscussed problem in Irish society, which is the appalling inequality of income in agriculture. The two farming organisations have managed to cover over this appalling inequality.

If we are to do something about the significant number of farmers whose incomes have suffered dramatically because of the appalling weather conditions, we should take some of the £1 billion in direct aid which is going to farmers who are successful, commercial and rich. They should be told that they can survive in a competitive economy and a significant proportion should be transferred, particularly money which is being paid for set aside in tillage, in income subsidies to those parts of the farming community which are genuinely suffering. Let us have a redistribution within agriculture instead of the eternal obsession with a redistribution from those not in agriculture to those in agriculture.

There is a succession of myths about this matter. Would either the Libyan or Iranian markets pay a commercial price, in terms of what an Irish farmer expects, or will they simply get further export subsidies? There is a need to get real about this issue because, sooner or later, Irish agriculture will have to compete in an open world economy without subsidies, guarantees or quotas. We must start now — it would have been preferable to do it last year but we should at least do it this year and definitely by next year — to work out a system of support for living in rural Ireland which is based on keeping people there and not on myths of guaranteed prices for products that nobody in the market place wants to sell.

I am a member of the Committee on European Affairs and I listened to an interesting presentation to that committee by the IFA on Agenda 2000 and many of the problems which undoubtedly face agriculture. However, two words were never mentioned in the entire presentation — the marketplace and consumers. How does one deal with an industry whose chief proponents and most articulate and effective representatives never mention markets or consumers when they are talking about what to do with their product?

We must stand back and look at this matter. Members of Fine Gael are great believers in the market economy but they apparently want subsidised shipping, fodder, hill sheep and incomes on top of already heavily subsidised incomes. As a socialist, I believe in all those matters and in intervention, but members of Fine Gael and the Government who do not believe in intervention in the market economy but believe that the market is the distributor of benefits and efficiency can no longer tell the rest of the people that the market economy is good for everybody except agriculture. They are kidding the rest of society and they are also codding farmers because the old days are over. It would be much better to look further and deeper at giving people proper incomes.

The family income supplement was introduced to deal with the problem of people on low incomes who were paying ridiculous amounts of tax. If people in agriculture are prepared to move their income tax from Schedule E to Schedule D and have their expenses as rigorously analysed as those of a PAYE worker, I will support the extension of family income supplement to them as long as they are taxed under the same schedule as those who currently receive it. However, there is no way that ordinary taxpayers will tolerate a best of both situations for farmers.

There is a considerable degree of financial support going to agriculture. It is unevenly distributed and makes those who are already rich richer and leaves those who are already poor poorer. The remedy for the current crisis is a redistribution of income within agriculture and not from anybody else to those in agriculture.

Mr. Gibbons

I welcome this debate, if for no other reason than to highlight the seriousness of the situation and to try to move it out of the political domain. The unfortunate situation in which the farming community finds itself at present is being bandied from A to B and back to A, with each pointing the finger at the other and saying they would do it better. That will not solve the problem.

The problems in the agricultural sector are many but, to a great extent, the two largest contributing factors, particularly as regards livestock, are the Russian economy and the weather over the past eight or nine months. This needs to be borne in mind. This country is not isolated from the serious situation in the Russian economy over the past six months. Of course, it is unfortunate but we cannot change that situation. All we can do is to try to put in place a safety net so that when something of this nature happens, we can address and feel our way out of the situation as quickly as possible.

There is no doubt that the situation in which livestock farmers, in particular, find themselves is catastrophic for many, especially smaller farmers. Unfortunately, many find they have no income and are losing money daily. We must consider what safety nets we can put in place to save them. I suggest bantering across this House or elsewhere is not the way to proceed. I also say to the IFA that camping in the Department of Agriculture and Food might not be the best approach. The argument is in Brussels and that is where we need to focus our attention.

Mr. T. Hayes

The Senator's party failed to bring it to Brussels. That is the problem.

Mr. Gibbons

The argument is in Brussels and the Minister has taken the case to Brussels over an extended period. In the run up to an election a particular Minister for Agriculture opened a market on polling day which is still closed. We do not want that because it does not get anybody anywhere. We want proper negotiation where those with an input sit down with the Commissioner to let him know the exact situation in case he does not know. We should all put our shoulders to the wheel to try to devise a way out. I look forward to the intervention system which was put in place to address these types of problems and to seeing it opened up considerably in the near future. It is a necessity; there is no question about that because this is an emergency.

We want to see the situation as regards live exports to Libya, Iran and Egypt resolved because it introduces competition into the market. That competition is the life blood of the beef industry. I would prefer if Ireland sold every animal it produced as a prepared meal but the market does not allow it to work in that way. We must encourage the live trade wherever we can. Whatever problems we have with the live trade, particularly as a result of BSE, we need to convince everybody that we have the best produce available and that we can supply it when and how they want it. The Minister, the Department and even the Taoiseach have and continue to emphasise this point. I have no doubt but that the situation will improve, as it has done.

Unfortunately, the factories are gobbling up any benefits which might accrue. We faced this situation before in the beef industry and it needs to be addressed. The factories have not played their part in a long-term strategy for the beef industry. That situation pertained even when some of them were farmer owned and farmer driven.

Senator Ryan made the point about the necessity to focus on consumers, with which I fully agree. We need to sell our agricultural produce to consumers who want it. That is why the agricultural strategy for this country in the long-term is based on going after niche markets where we can produce the best quality food available. There is a large market in Europe which will get bigger and we need to chase those niche markets for ourselves so that when situations such as these arise we are not exposed to them to the extent we have been in the past.

I return to the IFA's demand for family income supplement to be made available to the farming community. I support that demand in the following way. If members of the community are in a situation where they cannot put bread on the table, they are entitled to be supported by the State. We need to sit down, examine the situation closely and get all the facts together. If people are in dire straits, they should be supported. The family income supplement may not be the best way to support them but I do not know of any other system available to help them. The best way to help them would be to raise prices in the morning. That is what everyone wants, so we must work towards it. Again, if people are in dire straits, they should be supported. It is time to stop bickering and to focus on moving forward. We are a small country and need to move forward in a way which will benefit everyone, particularly the farming community.

Mr. Caffrey

Having listened to Senator Ryan, I hope he never becomes Minister for Agriculture and Food. As bad as the present Minister is regarded by the farmers, Senator Ryan would be a total disaster. He has no concept of farming or the farming way of life. We are trying to preserve a culture and a way of life. Agriculture is not an exact science like physics or chemistry; it is different. It is regrettable that it should be classified. The corollary of Senator Ryan's argument would be that if a man cannot find a job he should not get unemployment benefit. His arguments are completely off the rails.

The farming community has endured crises in the past dating back to the 1930s with the economic war. It has great resilience and has overcome many crises and I am sure it will overcome this one. The fundamental issue here is that the Government's response to the present crisis is inadequate. Several Members of this and the Lower House mentioned that 100 farmers weekly are leaving the land. This crisis, as well as being an economic disaster, will also undermine the remaining confidence in the farming community. That is the worst feature of the crisis. Young farmers, especially, see little future in farming. We have all attended the presentation of agricultural certificates in agricultural colleges and can see that the number receiving those certificates drops each time we attend. This is an indication that young people have been leaving the land at an estimated 100 per week over the past two decades. If that erosion continues, it will ultimately depopulate rural Ireland.

To date, the Government's response to this crisis has been totally inadequate. A figure of £10 million was mentioned as an immediate stop gap offer. However, one should consider the £10 million subsidy to Teilifís na Gaeilge every year to keep its 10,000 viewers and put this crisis in context. We are discussing an industry which accounts for approximately 14 per cent of Ireland's GDP. The relative figure in Europe is 0.3 or 0.4 per cent. This gives us an idea of the value of agriculture to our economy.

Approximately 170,000 people are employed directly and indirectly in farming and agri-business. It is our major industry and the sheet anchor of the economy. The IDA has made great efforts in promoting industry in Ireland. Without those efforts, we would be in a much worse position. However, unfortunately, the bulk of the job opportunities have been created in urban areas. They have become increasingly large while rural areas have become smaller. The result is that farmers who need part-time jobs to supplement their farm income cannot get them because the bulk of industry is located too far away. A new emphasis is required and there is a need to locate industry in the west in particular and in areas of serious disadvantage.

Legislation relating to the Western Development Commission was introduced in the other House last week and will come before the Seanad soon. A sum of £5 million has been allocated for western development under the package. However, £5 million would not buy a good pub in Dublin. How anybody expects £5 million to change the face of the western seaboard is beyond me. Last year the Government gave £20 million for the construction of a stand in Croke Park. We all love the GAA and the Sam Maguire Cup was brought to Connacht this year for the first time in many decades. Nevertheless, that investment must be placed in the context of the current crisis. Despite the expenditure of a large part of the £20 million, none of us could get tickets for the stand this year.

Mr. R. Kiely

The purpose of the £20 million is to ensure that people can get tickets.

Mr. Caffrey

It is possible that people will not get tickets next year either.

Mr. R. Kiely

When the stand is completed, people will get tickets.

Acting Chairman (Dr. Henry)

Senator Caffrey without interruption.

Mr. Caffrey

There is a crisis in farming and making the issue a political football is not the way to solve it. However, this side firmly believes that a measure which should be introduced immediately is a farm income supplement. This would cost in the region of £60 to £70 million but it is not a major amount in the context of the current budget surplus which is approaching £1 billion. This is the biggest budget surplus in the history of the State.

Farmers deserve a generous response from the Government at this juncture. This response should tide them over the immediate problems, which I hope are temporary. The farming community has faced crises since the foundation of the State. It has overcome most of them, but the fundamental point of our argument is that the Government's response has been totally inadequate and will not go any way towards alleviating the hardship being suffered by the farming community at present. Even Members on the Government side will concede that there is a major crisis at present. It is incumbent on all Members to exhort the Minister to do more than he has done to date to ensure the Libyan and Iraqi trade is reopened and to make a generous gesture to farmers at this critical juncture.

Mr. O'Brien

I second the amendment. The current crisis in agriculture is very serious. As we are all aware, farmers' incomes are at their lowest point for many years. Beef, pig and sheep prices are at their lowest for 20 years and this, together with the terrible weather conditions, has left farmers at a very low point as we approach the winter.

The dreadful weather over the past nine months has left the land in a very poor condition and caused a major shortage of fodder. Farmers had to house their cattle two months earlier than usual. Undoubtedly, the weather in addition to poor prices has contributed much to the current situation. Everybody agrees there is a major crisis in farming. It is the role of all Members to unite in finding a solution or at least a mechanism to provide some assistance to the farming sector in these difficult times.

It is not a time for political point scoring. Farmers and their families will not thank anybody who attempts to take advantage of the current crisis for political gain. A solution is not easily found because many factors are involved. The economic situation in Russia has caused enormous difficulties and the ongoing problems regarding the reopening of the live export trade to third countries are also causing major difficulties. If live cattle were being exported to third countries, there would be more competition and confidence in the market. In addition to the bad weather and the shortage of fodder, confidence is very low in the farming community.

The Taoiseach and the Minister for Agriculture and Food are concerned about the crisis and they are doing all they can to improve the situation. Their best efforts to date have had limited success, but I do not doubt that the Minister for Agriculture and Food, Deputy Walsh, the Taoiseach and the Government will continue to work hard for the farming community. They are aware of the situation in which farmers finds themselves and the extent of the problem. I do not doubt they will do everything in their power to help. I hope that in the near future they will have success in terms of the reopening of the live export trade to third countries.

I welcome the measures taken by the Minister to speed up direct payments to farmers. The increase in advance premium payments and the rapid payment of the REPS will certainly help. Seventy five pence per pound for beef is not acceptable as the cost of production is almost 85p per pound. Farmers will not and cannot be expected to sell cattle at a loss. New measures will have to be taken by the Minister and the Government to ensure that farmers do not have to sell cattle at a loss.

Efforts are being made as we speak to improve the pig situation. Hopefully they will be successful in the near future. Any success in opening new beef markets would be very welcome. I compliment the Minister and his officials for their efforts and the time they have devoted to ensure farmers are supported in this serious crisis.

Minister of State at the Department of Agriculture and Food (Mr. N. O'Keeffe)

I apologise for the absence of the Minister for Agriculture and Food who is engaged in important talks. In the Dáil on 30 September I made a comprehensive statement in reply to many of the points in the Opposition motion but I am pleased to respond to this type of debate. The current situation in agriculture merits serious discussion but it does not merit a campaign of political points scoring or the putting about of misinformation of the type circulated over the past few weeks. I am glad to have the opportunity of dealing with the issues raised in this House and to set the record straight.

I reject suggestions that there has been any mismanagement on the part of the Government as regards the current difficulties in agriculture. The contrary is true. The Government fully appreciates the difficulties being experienced by some sectors of Irish agriculture. In the main, these have arisen due to developments on the Russian market and the difficult weather in 1998. With the support of the Government, I have been very active in my efforts to alleviate the pressure on the sectors involved.

I recently announced a series of measures to assist farmers with their cashflow this autumn. These measures include speeding up direct payments to farmers which are worth £1 billion annually and account for half of all farming income; an increased advance in suckler cow and special beef premium payments from 60 per cent to 80 per cent which will release an additional £45 million to farmers in November and December; more rapid payment of REPS where such payments are falling due; payment of an outstanding top-up of £6 million to certain beef producers in early October; a special scheme to alleviate winter fodder difficulties on certain farms and arrangements for Teagasc to hold special free advisory clinics on fodder in the areas affected; promoting live exports through the approval of additional facilities for live exports to EU markets; ensuring everything possible was being done to get Libya to honour the agreement reached between the two Governments in July; increased beef export refunds — the increase is equivalent to 5p per pound of beef, which follows previous export refund increases for beef, pigmeat and SMP; negotiating the reopening of the Iranian market for our beef exports; the introduction of EU funded private storage schemes for pigmeat and sheepmeat.

Each of these measures was identified as an important issue in discussions with farm organisations and they represent an impressive list of actions. Since some of these items have been specifically mentioned in the debate, I will be dealing with them in greater detail a little later.

I accept that there is significant hardship on many individual farms in the areas most adversely affected by weather conditions. In August, when the situation was becoming acute, at the invitation of Deputies, Senators and the farming organisations, I visited the affected areas. West Limerick was the first area I visited.

The Government made £10 million available to deal with fodder difficulties being experienced by some farmers. The details of the new scheme will be finalised very quickly and the approval of the Commission will be sought with a view to making payments as quickly as possible. In addition, I am seeking the approval of the European Commission to continue sheep headage top-up equivalent to £2.75 million. The intention is that this money would be made available through a top-up in the mountain ewes and suckler cows in the worst affected areas. A major consideration is the need to devise an arrangement that would get assistance quickly to farmers, and in that context, and together with the wide range of measures, the Government's response was appropriate and rapid. The fodder scheme in the selected areas is close to being finalised and the intention is to make payments without delay.

In comments from the Opposition on the fodder package, an attempt has been made to create the impression that this is the only payment being made to farmers. The fact is that direct payments to farmers will amount to nearly £1 billion in 1998 and they account for a very large share of income. Specific payment targets for these schemes are laid down in the Charter of Rights for Farmers. I have made clear my intention to make these payments as early as possible this year. Excluding BSE payments, £140 million has already been paid to farmers under the 1998 headage and premium schemes. The corresponding figure paid at this time last year was £89 million.

Payment of sheep headage commenced on 21 September. This was ahead of the commencement date in 1997 and, to date, over £12 million has been paid. Payment of cattle headage commenced on 26 September 1998, three weeks ahead of the commencement date in 1997. Over £47 million has been paid to date. Effectively, over £67 million has already been paid under the 1998 disadvantaged areas headage schemes. This compares with just over £22 million which had been paid this time last year. Payments under these schemes will continue over the coming weeks with a view to ensuring that all eligible applicants are paid by 31 October.

While referring to the headage schemes payable in disadvantaged areas, it might be appropriate to point out that in the period 1994-8, the total expenditure on these schemes, including the amount provided in the Vote for this year, will amount to just over £605 million. While these schemes are 65 per cent funded by the EU, the reality is that the total Exchequer contribution in the period 1994-8 will be just over £305 million, representing 50 per cent of the total amount spent.

In so far as the suckler cow premium and special beef premium schemes are concerned, I recently secured the agreement of the European Commission to an increase from 60 per cent to 80 per cent in the rate of advance payment which may be made under these schemes. I sought this change in order to alleviate the problems facing cattle producers arising from the low cattle prices and the fodder shortage. Payment of the advances at this higher rate will enable my Department to pay an additional £45 million in premiums to farmers this year. This will substantially improve their cash flow. I have also made arrangements for payment of additional BSE compensation to those producers who had more animals in 1996 than 1995 — the year originally chosen as the base year for the 1996 BSE compensation package. This measure will be worth over £6 million to the producers and payments commence today.

I would like to refer to one other matter which has been mentioned and which is linked to the amount of these payments. This led to changes in the retention period of suckler cows. This year £455 million has been paid in headage and premium schemes. That is a huge amount of money.

The retention period for the suckler cow premium scheme is set out in the Council regulations. Producers who lodged their suckler cow applications in early May will have completed the retention period in early November. Varying the retention period, even on a once-off basis for 1998, would require the agreement of the Council of Agriculture Ministers. In the unlikely event that such a scheme would be forthcoming, it would involve a lengthy process involving the Commission making such approaches to the Council. Therefore, any such agreement would not be in time to benefit a reasonable number of producers this year. I am confident that the package of measures I have announced to deal with the fodder difficulties, together with payment targets I have outlined, will more efficiently address this problem.

Senator Connor made reference to the existence of a cosy arrangement between the meat processors and the Minister. I categorically refute that; the suggestion that there is any kind of collusion is outrageous. The Minister had a relatively difficult meeting with the meat processors today during which he put his cards on the table on this issue.

The decline in beef prices which is adversely affecting the beef market stems almost entirely from the loss of the Russian market due to the economic turmoil in that country. In 1997, Irish beef exports to Russia amounted to 70,000 tonnes and were expected to reach similar levels in 1998. The effects of the loss of the market have been compounded by the fact that this was also an important market for other European exporters, although it must be understood that we are more exposed than other member states.

The renationalisation of the beef market in the European Union, following the BSE scares in 1996, has given rise to this and has in fact created a situation where we are very much on our own within the EU in regard to this problem. Irish beef exports to European markets have, it must be said, recovered significantly from the 1996 situation, particularly to France, Italy and the Netherlands. Nevertheless, there is a very substantial gap between cattle prices in Ireland and prices on these markets and I have been pressing the trade to exploit whatever opportunities exist in these markets. An Bord Bia is also assisting in this effort.

The current difficulties in the beef sector are extremely disappointing because, in the absence of the Russian crisis, there were very good prospects for cattle prices to remain at the higher levels which prevailed earlier in the year. From the very onset of the Russian crisis in August, I signalled to the Commission the potential crisis we were facing and sought a range of measures to be put in place with immediate effect to counteract these developments. The measures I identified as being necessary included a substantial increase in export refunds, the introduction of an EU sponsored export credit guarantee system, a widening of the intervention system and an increase in the advance of the cattle premiums from 60 to 80 per cent. I am pleased that the Commission has so far responded positively with regard to export refunds and payments of the advances in the premiums.

It was alleged that successive Fianna Fáil Administrations made many poor decisions on animal breeding over the years; animal breeding policies during the 1980s were specifically referred to. A Fine Gael Administration under Garret Fitzgerald pursued animal breeding policies in the 1980s in which the procedures for the licensing of bulls were changed. Fianna Fáil has always been to the forefront in developing good animal breeding policies.

A major breakthrough has been made with the European Commission on behalf of Irish beef farmers. Following a request from the Minister, a major package of measures on intervention has been agreed. The 04 grades will be eligible for intervention, the weight limit will be adjusted and the processors' margin will be increased. The net result of these measures will be that almost 50 per cent of Irish steers will be eligible for intervention. These new intervention arrangements will remove surplus beef from the market, thereby stabilising it and underpinning the increase to beef producers at this time. It will be up to manufacturers to implement these measures and pass on the benefits. The management committee has yet to agree to the changes announced by the Minister on Friday but this should pose little difficulty.

The Commission increased the refunds on live cattle by 7.7 per cent on male carcases, 8 per cent on boneless hindquarter beef and 27. 5 per cent on male boneless forequarter beef. The changes in refunds on boneless beef amounted to an average increase of 12 per cent and is worth 5p per pound carcase weight. This increase will improve the competitiveness of our cattle and beef exports on third country markets and should enable our processors to pay higher prices to producers for cattle. I have insisted these refund increases should be passed back in full to producers by the factories; in fact, I have requested the meat processors to not only pass back refund increases but to fully use the support available. It is clear this has not been done this week given the low use of intervention.

I have also secured EU agreement to pay a higher advance of the premiums this year. The increase in the advance from 60 to 80 per cent will be worth an additional £45 million this autumn and will provide a major injection of cash at this difficult time. This cash will be of particular benefit to livestock producers who will be experiencing fodder shortages this winter.

I have also made a request to the Commission for an export guarantee system to be introduced specifically to deal with the Russian situation. This would provide EU exporters with the necessary confidence to resume trading with Russia pending the restoration of normality on the Russian market. The crisis occurred towards the end of August when the rouble came under pressure. For the first six months of 1998, we exported 38,000 tonnes of beef to the Russian market, 2,000 tonnes more than in 1997. An Bord Bia, the State food development and promotion agency, forecast that we would export more than 70,000 tonnes of beef this year. That may not now become a reality because of the situation in Russia. The market there is effectively closed due to the economic crisis in that country.

In recent days I have had further and lengthy discussions with Commissioner Fischler on the reopening of intervention, in particular in a way which would provide timely and meaningful support. I have received a commitment from the Commissioner that this would be done and a meeting took place earlier today between the Secretary General of my Department and the Director General of the Agriculture Directorate of the Commission to advance the matter. Specifically, we are requesting that the Commission put more effective and flexible intervention support arrangements in place to help stabilise the situation, including the inclusion of the 04 grade in the eligible categories for intervention, an increase in the maximum weight limit to 360 kg, and an increase in the processing margin from 10 ecus per 100 kg to 14 ecus per 100 kg has been sought. This would increase the quantity of steers eligible for intervention from a current level of about 20 per cent to approximately 48 per cent, thereby rendering this market support measure more effective.

While there is major reluctance by the Commission to reopen intervention again in light of the current stock levels of some 570,000 tonnes which are overhanging the market, I believe that in the current situation, all market support measures must be brought into play. The temporary re-opening of intervention purchasing is therefore essential at this time and I am making every effort to bring this about. I made a preliminary announcement of what will happen on Friday and I welcome the efforts of the Department, the Minister and the Secretary General, who travelled to Brussels in an attempt to bring about this decision to alleviate the current crisis. I hope it will satisfy the requirements of the farming community because no stone is being left unturned on their behalf. The Government fully realises the importance of the beef farmers and the measures I have outlined will help to alleviate the problem which exists.

As far as the long-term is concerned, I have recently received a copy of the McKinsey report on the most appropriate future strategy for the beef industry. The objective of the report was to prepare a development plan for the industry in the context of the challenges which already face it and which will intensify as we move into the next century. The report has concluded that the industry could substantially improve its profitability by the adoption of a series of initiatives, particularly at producer and processor level. In particular, the report has identified over-capacity in the slaughtering sector, the need for greater discipline in marketing and the introduction of a quality based pricing system as the major issues to be tackled. While some of these issues are already being tackled, it is essential that the main recommendations of the report be examined thoroughly. In view of this, I have invited Enterprise Ireland and McKinsey to meet me next week to present their analysis for the future of the sector.

As a result of the BSE crisis, the Iranian market has been closed to Irish exports since 1996. The Minister visited Iran last week for extensive negotiations with senior members of the Iranian Government on the re-opening of this market for Irish beef. The Minister spent three days in intensive discussions with the Iranian representatives, who were impressed with the systematic and comprehensive BSE controls operating in Ireland and with the advanced traceability system now in place. The Minister was able to give assurances regarding the safety of Irish beef and this, together with the declining incidences of BSE, resulted in agreement to re-open the market to our products. The extensive county ban will be replaced by a more limited exclusion of herds in the immediate area of any confirmed BSE cases. This is an enormous improvement on the position up to now and marks a very positive step towards alleviating some of the market difficulties facing the beef sector. The Iranians agreed to send a technical delegation to Ireland within the next week or so to finalise details of a protocol for the resumption of trade which the Minister is confident will take place immediately afterwards.

This year has been a mixed year for lamb sales. Following a request which I made to the European Commission for assistance, a scheme of aids for private storage was introduced which helped to alleviate this difficult market situation. There then followed a period of several months during the summer when lamb prices were at record levels and reached as much as 12 per cent above last year's level. Since mid-August however, this situation has changed and we again face a depressed market here, in the UK and in France.

There is a particular problem with the prices of mountain lamb and with the sale of cull ewes, which are considerably back on last year. This current market situation is due to weak demand in the Mediterranean market for light lambs and to the impact of the economic crisis in Russia. The collapse in the demand for sheepskins and a knock-on effect of lower beef prices resulting from the difficult market in Russia have had a negative impact on the demand and the price for lambs here and in the UK.

I am currently in the process of examining the possibility of introducing a cull ewe slaughter scheme under which farmers will be compensated for the removal of between 100,000 and 200,000 cull ewes from the overgrazed commonages. Subject to the approval of the Minister for Finance I hope it will be possible to provide funds of £3 million for the scheme and that the scheme will be up and running in the next few weeks, because culling will have to be completed by early December. This initiative is designed primarily to ease the situation for those producers who will be faced with some level of destocking under the environmental programmes in 1999. However, it will also assist producers who have not been able to find a market for cull ewes this autumn, and at the same time make a contribution to easing the fodder shortage problem facing many sheep producers.

Discussions have taken place between my Department and the farming and processors' organisations to examine the practicalities of the scheme. Further discussions are due to take place tomorrow. My intention is that all farmers with land in degraded commonages will receive a slaughter premium to immediately remove at least a quarter of their ewes. As producers with land in overgrazed commonages will in any event have some of their quota rights withdrawn for 1999, this scheme by providing additional compensation will help them progress towards the required level of stocking and at the same time provide an outlet for animals which have devalued significantly in the past months.

I am very conscious that hill sheep producers are largely dependent on sheep and of the consequent impact of the current situation on their incomes. I am also aware that a large proportion of these incomes derive from direct market supports. I therefore asked the EU Commission to facilitate the early payment of the second instalment of the ewe premium. The Commission has agreed to this request and the second instalment of the premium, amounting to £5.33 was fixed at a sheepmeat management committee on 2 October 1998.

In an effort to address the market problem in a targeted way, I have taken steps to encourage the live export of sheep. The Holstein Express was cleared to carry live lambs some time ago and a second vessel, which sails to France, is currently undergoing inspection. I am hopeful that live trade of light mountain lamb to southern Europe will give a boost to the sector and I am doing all within my power to encourage and facilitate it.

I have requested An Bord Bia to undertake a promotion campaign this autumn to encourage the consumption of lamb and especially to raise the profile of mountain lamb which becomes available at this time of the year. An Bord Bia has also focused a promotional effort on the Spanish retail trade and in September I travelled to Spain to meet with retailers to promote Irish lamb sales on this premium market. I was very encouraged by the attitude I encountered to Irish lamb and am happy that a very good job is being done on behalf of the Irish sector.

On the question of headage payments to hill sheep farmers, I have already referred to the top up of £2.75 million for which I am seeking Commission approval. Any proposal to further increase the rate of headage grants would need to be backed by convincing structural reasons. The Commission does not regard once-off difficulties associated with market conditions, weather conditions, etc., as constituting sound structural reasons for increasing rates. One must also take into consideration the amount of money remaining in the envelope for headage payments and the Commission's view that too high a percentage of the overall envelope has already been allocated to headage payments.

In the pig sector, an over-supply of pigmeat in the EU as a whole is the chief cause of the low prices being experienced by producers at present. Consumption in the EU has not shown any marked increase and the Asian and Russian markets, traditionally major outlets for EU exports of pigmeat, have been poor this year. In fact, the Russian market is now effectively closed. Increased production, static consumption and difficult export markets have combined to make the EU 108 per cent self-sufficient in pigmeat at present.

On the home front, the fire last June at a pig processing plant in Northern Ireland has added to the problems of certain producers who had been supplying it from the South. Around 5,000 pigs per week went to the plant. I have been continuously keeping the pigmeat market under review and in early summer I looked for increased export refunds and got agreement from the EU Commission. In May last the Commission increased the rate of refund on pigmeat exports and followed this with a further increase in August. In view of the continued weakness on the export market, and in particular that of Russia, I have been pressing for a further increase in refunds.

Some weeks ago I also requested the Commission to introduce an aids to private storage scheme to support the market. The Commission has agreed to this and a very attractive scheme is in operation. The scheme will provide EU funding for the storage of 70,000 tonnes of pigmeat destined for third countries for a period up to six months. On this point, I would like to urge pig processors to make use of this support scheme. Apart from giving the wrong signal to the Commission, it makes little sense to introduce an attractive support measure which is fully EU funded and make little or no use of it here.

There is further good news as this evening the Commission agreed to a further and very substantial increase in pigmeat refunds of 33.3 per cent which should be of further benefit to Irish producers. This refund increase is in response to a request made by Ireland and a number of other pigmeat exporting member states. I am hoping we will see a major improvement in pigmeat processing and that major advantage will be taken of the scheme.

The fire at a pigmeat plant in Northern Ireland caused some additional problems for the market in the South. A backlog of pigs awaiting slaughter built up. To deal with this my Department, the IFA and the Irish Association of Pigmeat Processors put arrangements in place for Saturday slaughterings. I very sincerely thank the slaughterers for the efforts they have made following the intervention of myself, my staff and the Department. There were a number of meetings with the farming organisations and the processors agreed to come to the rescue at that time. The backlog has now been greatly reduced. The problem of overhang of pigs on the market should be further lessened with the recent purchase of a major pigmeat plant in Northern Ireland by the owners of the plant which was destroyed by the fire last June.

To assist pig producers I have also put a proposal to the EU Commission for an adjustment in the veterinary inspection fee to reflect the price payable to the producer at a particular time within the pig cycle. I am pressing the Commission for an early response — to date there has not been a response.

An Bord Bia has recently launched a pigmeat promotion campaign on the domestic market. This should in due course lead to increased consumption.

I now wish to turn to the subject of live exports. Live exports from Ireland to both EU and third countries are vital to maintaining competition in the cattle trade and in sustaining farm incomes. The seasonality of the livestock trade in Ireland makes market access for live exports particularly critical during the back end of the year when large numbers of weanlings come off farms. I have consistently recognised the importance of promoting live exports and have taken action in a number of areas to ensure market access for our cattle, to both EU and third country markets.

As regards trade with Libya, both the Opposition and the farming organisations are well aware that last July, following discussions over five days in Dublin, agreement was reached with a delegation from the Libyan Government which provided, inter alia, for the reopening of the Libyan market to Irish cattle and beef before the end of September. This agreement was formally cleared by the Libyan authorities before the end of September. Reaching this agreement marked the culmination of frequent contacts with the Libyan authorities since early 1997. I identify with the IFA which was so involved in this issue and which clearly understands the current situation. The IFA was fronting the issue as much as I have ever seen it do. In this it received much assistance from myself and others and I say well done. However, the market has not opened but we are making major progress in this area. The Irish Ambassador in Rome and his assistant are currently in Tripoli. They will probably return this evening or tomorrow and I am hoping they will have ironed out the difficulty. We have done what we can as the regulatory authority and it is for traders and those involved in the business to take up the issue. We are trying to iron out the difficulties. The Libyan authorities have also indicated that they wish to have the agreement implemented as early as possible. The problem is purely commercial rather than regulatory or diplomatic in character.

The availability of shipping services to transport cattle and other livestock to export markets is, of course, a critical factor. However, we must be clear about the facts. Commercial operators of roll-on/roll-off ferries, both Pandoro and Irish Ferries, are again carrying livestock to the Continent and this is being augmented by the carriage of large numbers of animals on dedicated vessels. So far this year we have exported over 98,000 cattle to the Continent. This is more than four times the number of cattle exported last year and twice the number exported in all of 1996. Cattle exports to continental EU countries so far this year are already almost on a par with what we exported in 1995, which was the high point in recent years. These are facts and figures which those who have sought to create an impression of crisis around live exports consistently ignore. Between 4,000 and 6,000 cattle per week have been exported to the Continent in recent weeks and I believe exports will continue at a high level.

There was a breakthrough in Brussels this evening, which is subject to a final decision on Friday. It is understood that, following the Minister's request, a major package of measures on intervention has been agreed. The 04 grade will now be eligible; the weight limit will be adjusted; the processor margin will be increased and the net result of the measures is that 50 per cent of slaughtered steers are expected to be eligible for intervention. Is that not a major success?

Mr. T. Hayes

I thank the Minister for the clarification.

Mr. Gallagher

I welcome the opportunity to speak on this important motion. This issue has been topical recently and throughout the summer, particularly with regard to fodder prices. This is our first opportunity to address it. I have waited two weeks to respond to comments on "Morning Ireland" on 30 September by the Government Chief Whip, Deputy Brennan, who announced that there was no crisis in Irish agriculture. I wondered whether he was living on the same planet as me, never mind the same country. I appreciate that the Minister is very much in touch with the situation on the ground but if the Government Chief Whip tells the nation on a major current affairs programme that there is no crisis, then the Minister present and his colleagues should set the record straight. For the past month there have been rescue packages and special measures introduced in response to the pressures that are on people.

Many speakers have alluded to the fall in cattle prices to their lowest in 25 years. The Minister is aware of the problems in the pig industry. The weather has been a big factor and throughout the country, as a result of these measures, farmers are resisting opportunities to sell fattened cattle because of the dreadful prices they are receiving. Due to the fodder shortages they will find it very hard to keep cattle housed over the winter period. I do not believe that the Minister is responsible for the weather. If politicians could control the weather, I am sure we would have sunshine all the time. However, I believe there is a responsibility on politicians to deal with the consequences of the weather and the other factors that impact on agriculture at the moment.

The Minister for Agriculture and Food, Deputy Walsh, and the Minister of State, Deputy O'Keeffe, have been very busy in the past few weeks. A £10 million package was announced a few weeks ago to deal with the winter fodder difficulties. On 25 September an increase was announced in export refunds for beef and live cattle. Four days prior to that we had a progress report on the reopening of the Libyan markets. Many people would like to know if that progress report was based on a firm foundation. On 16 September the Minister announced an extra ship to accommodate cattle exports to the Continent. On 15 September he announced aids to the private storage scheme in the pigmeat sector. While all these measures and actions might go some way towards assisting in the short term, they will do nothing to ease the overriding crisis, which was pinpointed recently by Mr. Pat Lalor in the Drystock Farmer magazine. Mr. Lalor stated as follows:

The young people in farming are unsure of their future and are being scared by everything they hear and read about their gloomy future. They are being frightened by their friends who are earning £500 per week driving a digger with the full week-end off to enjoy their earnings.

This crisis, rightly identified by Pat Lalor, is about the future of family farms and the communities they support.

The decline in interest in farming is of greatest concern to disadvantaged areas where farms are small and where the brunt of the present difficulties are being felt most. To this end, it is imperative that we do not just depend on a series of emergency measures to deal with the current crisis. What is needed now more than ever is a proper agricultural policy which will ensure that it continues to be our most important indigenous industry and sustains the maximum number of people working in agriculture.

During the last debate on agriculture in this House I mentioned installation aid. This is an area to which I wish to return. If a young person of 18 years finishes their leaving certificate and is considering a career in anything other than agriculture, the State will make a major investment in their future. They will probably attend a regional college or university at a cost to the Exchequer of £6,000 or £7,000 per year. They will then take up a job which is grant-aided by the IDA, Forbairt or an enterprise board. If we are serious about encouraging young people to remain in agriculture we must adopt similar measures of support for them. Since the suspension of installation aid there has been a marked decrease in the numbers attending agricultural college. In 1996, 932 students enrolled in the 11 agricultural colleges, but these numbers dropped by more than 8 per cent in 1997. According to the first quarterly household survey published in May, every economic sector except agriculture has indicated an increase in the numbers of people working in them. In contrast, the period between April 1997 and November 1997 has shown a decrease of 6,000 in the numbers employed in the agricultural sector. In April 1996, there were 141,000 people employed in this sector; in 1997, there were 141,000 in the sector also, but the latest figures show that only 134,000 are employed in this sector. Recent statistics show that those people currently farming are on average the oldest in Europe, with only 12 per cent of farmers under the age of 35 years. The average Irish farmer is now 15 years older than his Australian or New Zealand counterpart. Added to this, people working in agriculture are among the poorest educated in the country, with a little more than half of workers in the sector having received second level education.

The suspension of the installation aid scheme has been central to the problems associated with encouraging young people into farming. I am very confused by the response of the Minister for Agriculture and Food over the last number of months in this issue. The Minister has repeatedly given public assurances that proposals to introduce a modified version of the installation aid scheme are already in train. In May we were told that the Minister for Finance had approved the scheme and it would be only a short time before it was implemented. Last week Deputy Penrose was informed in the Dáil by the Minister of State that the proposals for the revamped scheme were only sent to the Commission in late July. Since then the Commission has raised a number of questions regarding the proposals and as a result a date can no longer be given for its introduction. I believe the Minister has not been straight with us on this issue. The delays in reintroducing the scheme are sending a negative message to young people who are considering agriculture as a career. I would impress on the Minister the need to ensure in the forthcoming budget Exchequer funding for the installation aid scheme and reintroduce it as a matter of urgency. A sum of £6.5 million would fund the scheme for a year. This is a small price to pay for what is a very worthwhile intervention. Last year, 94 people applied for participation in the installation aid scheme every month while 100 people left farming each week. The introduction of this scheme is the least the Government should do to halt the drift from farming.

Mr. Moylan

I welcome the Minister of State and congratulate him on the announcements he has made. The meeting he has outlined with the meat management association will go a long way towards alleviating some of the problems in agriculture. I am somewhat puzzled by what some speakers have said here this evening and I wonder have they read the announcements that have been made in the last few months. I compliment the Minister for Agriculture and Food on his efforts. I do not believe that Ministers for Agriculture and Ministers of State in the past have worked as hard to try to secure proper incomes for the farming sector. I know there are difficulties in farming but more than the Minister must share the burden and come on side to help in these very difficult times. Recently Minister Walsh said he was very disappointed with the meat factories for failing to take account of the serious difficulties facing farmers in the disposal of cattle. They made a very small demand for cattle for intervention.

A number of motions have been tabled by the Opposition and I would not like to see them rejected. I support the motion tabled by Senator Cassidy. In the past the Minister achieved higher export refunds for cattle to the tune of 5p, but it did not get through to the farmer. Can the Minister be blamed for that despite his hard work to ensure the benefit would go to the hard pressed farmer? He did excellent work trying to reopen trade with Libya and getting approval for boats dedicated to exporting cattle and sheep to the Continent. I must compliment him on the boats used for exporting our young stock or weanlings. If the Government had not intervened to ensure boats were available, there would be a real crisis for small farmers. Those farmers have been able to sell some of their stock. Perhaps they would prefer to sell more, but at least much of the stock that has been exported and sold has not lost money. With headage payments those farmers have done reasonably well.

The speeding up of headage payments is very welcome. Previously farmers had to wait until well into the following year to receive payments. I welcome the move by the Minister and his officials ensuring that payments have started and that a large number of payments will be made in the next couple of weeks.

I also welcome the fodder scheme. Some people would comment that it is only £10 million. However, £10 million is a large amount of money and I welcome it. It is earmarked for people from areas which suffered real losses. The Minister said he was in parts of Kerry and Limerick which suffered losses. I am from an area which has losses every year as a result of the Shannon flooding. I hope the Department will target this money at those who suffer losses. I remember an incident where someone showed an empty silage pit but did not show his adjoining field in which he had 500 wrapped bales of silage, a substantial amount. I hope the £10 million is targeted at those with real need, particularly in areas where farmers have to carry their dairy stock over the winter and cannot dispose of them.

I heard Members speak gloomily on the high refunds for cattle under the EU funded export credit guarantee scheme. We all know there are problems but we can work together and help each other. Some farmers have a substantial amount of feed and could help out fellow farmers by sharing or selling at reasonable cost. Some farmers are selling at a high price and pushing hard pressed farmers further into borrowing from banks.

I welcome the Minister's statement and look forward to developments in the next few days. Hopefully factories will tender for the maximum amount for intervention to ensure a floor price is established in the beef sector. If we get over the current difficulty, farming will go from strength to strength. I have no doubt that the Minister will soon introduce installation aid for young farmers and farm pollution control. These measures will help. Some farmers are due payments. Perhaps the Department could make early payments and this could keep these farmers afloat.

Mr. Cassidy

I propose an amendment to the Order of Business as many Members wish to speak. I seek the consent of the House to conclude not later than 8.25 p.m.

An Chathaoirleach

Is that agreed? Agreed.

Mr. Coghlan

The Minister of State, Deputy O'Keeffe, is a brave man. In the words of the poet John Milton "You have with word clothed in reasons garb endeavoured to make the worse appear the better reason." Deputy O'Keeffe comes from a farming background and I am sure he would agree this is the worst time for farming in living memory. Farmers are affected very badly, particularly those with low acreage and limited resources who are dependent on dry stock and sheep. The crisis has been exacerbated by the serious fodder shortage to which Teagasc referred. Moreover, the pig industry is also in crisis and our most important beef markets remain closed. The depth of the fodder crisis is not understood or appreciated by the Minister for Agriculture and Food. The Minister has been in denial of the crisis for a long time. The Government's pathetic response to the farming crisis clearly indicates its profound lack of understanding of the depth and extent of the difficulties that livestock, sheep and pig farmers face. The Minister has proved totally ineffective. It is no wonder that such a damp squib of an aid package was all that was produced.

Teagasc estimates 25,000 farmers will face additional fodder costs this winter, averaging £2,000 each. The Government must introduce a better fodder aid scheme and allow intensive free Teagasc advice for farmers in need of assistance. The Minister has stood idly by as meat factories have gradually brought prices down to a lower level than at the height of the BSE crisis. Factories have used the Russian crisis to cut cattle prices at home and this is extremely detrimental to the long-term stability of the cattle industry. This is short-term opportunism and means a quick profit for the factories and more for the beef farms. However it does nothing for confidence in suppliers and is undermining the future of the industry. It looks after the barons who have cost the taxpayers so much; we are still picking up their tab.

This is all going on against the background of farmers being forced off the land. If nothing is done to stop this, Irish farming will wither as increasing numbers of young people opt out of agriculture to pursue more secure and better paid jobs in towns and cities. One of the key measures which should be reintroduced is the installation aid scheme. It should be expanded, with a total of £12,000 being made available to young eligible applicants over a five year period. It is also necessary to provide new entrants to the industry with farm development loans up to a maximum value of £30,000 which would be subject to a special rate of interest discounted by 3 per cent per annum.

Stamp duty on the transfer of land to new farmers should be abolished and there should be tax relief on the profits from farming for the duration of his or her first long-term land lease. With regard to quotas, new entrants to farming should be given the same treatment as small quota holders, making them eligible for quota priority rights in order to ensure they directly benefit from any increase in available quota.

Much has been said, rightly, about the need to extend the family income supplement to farmers. It is incomprehensible and discriminatory that this has not been applied. It is badly needed to provide an income safety net for low income families, particularly when one considers what they face in the spring when fodder will not be available and when what will be available will be unaffordable. It is disgraceful, given that equality is guaranteed under the Constitution, that a Government is not prepared to look after people who are facing not having the wherewithal to survive in the near future.

It was disappointing that there was no clear or comprehensive statement by the Minister of State on the agreement, if any, with Libya and Iran. He said the Government would ensure that everything possible is done to get Libya to honour the agreement reached between the two Governments in July. Was the agreement made in the desert with lines drawn in the sand? Everybody knows what happens to such agreements. The Minister of State also referred to the conclusion of contracts. It appears that the agreement, unfortunately, is far from being firmly in place. I hope I am wrong.

There is a need to provide adequate shipping infrastructure to transport the maximum number of weanlings and other livestock to the Continent. The Government has been singularly inept in this regard. There is no proper structure in place. Many farmers and exporters combined in a co-operative way to ensure better arrangements in this regard and they have been sadly let down by the Government.

Many other matters of great concern to farming families are listed in the motion. I agree there are many factors at work but, sadly, the Government is not tackling any of them well or adequately.

Mr. Dardis

I wish to share my time with Senator Leonard.

An Cathaoirleach

Is that agreed? Agreed.

Mr. Dardis

I congratulate the Minister for Agriculture and Food and the Ministers of State at his Department for their efforts on behalf of the industry at a time of unprecedented difficulty. One cannot overestimate the depth of the crisis which confronts the industry. It has been defined in substantial detail in the course of this debate.

The crisis is not in dispute. It is affecting all sectors including beef, sheep and pigs. However, it is important to look at the figures and not just at what goes on in the background. Much attention has focused on the fact that approximately 3,500 people leave the land each year. It is significant that when one consults the ESRI about this, one is told that the figure represents people who retire, people who die and people who have no heirs. It does not represent commercial, active farmers. They are not leaving the land but are farming their way through the crisis and, with the help of this Government, we hope they succeed.

By any economic yardstick, agriculture is falling further and further behind the rest of the economy and is not benefiting from the Celtic tiger. In terms of numbers employed, output or exports, agriculture is falling behind. That has been the case for many years. The figure of 3,500 for the number of people who leave the land each year has been applicable for the past 20 years, as was acknowledged by one of the Opposition Senators.

The crisis exists and the question is what will be done about it. The significance of the industry and its importance for the Irish economy is accepted by all. However, it must also be acknowledged that it is of declining importance and that, in terms of numbers employed, it has been overtaken by the tourism industry.

Look at some of the successes. Live exports in 1998 are four times greater than they were for 1997. The number of live exports to date this year are running at twice the total for all of 1997. That is tangible evidence of the Government's success in securing extra boats to export live cattle.

The current Minister differs in only one respect from his predecessor. Both are alike in terms of energy, effort and talent but the current Minister differs in the area of propaganda. He does not make a big fuss about what he does and does not constantly trot out to the Irish Farm Centre for photo opportunities. Every Minister for Agriculture this country has had was and is committed to defending the industry and doing their best on its behalf in Brussels. To suggest otherwise is wrong.

Are we to take it that the fire in the Bally money pig plant, which caused devastation in the pig industry, was caused by the Minister for Agriculture and Food? Are we to take it that the 170 per cent of normal rainfall in June and July which fell at Belmullet and Clones is his fault? Are we to conclude that the fall in the Russian rouble and the collapse of the Russian market, which was taking 70,000 tonnes of Irish beef a year and which took 38,000 tonnes until its collapse, was caused by the Minister? Of course not and it is ridiculous to suggest otherwise.

What can be done, apart from carrying out publicity stunts by camping in Agriculture House as organised and choreographed by the publicity department in the Irish Farm Centre? The news announced by the Minister of State with regard to intervention is one way of dealing with it. I do not like intervention. Many of the problems in this industry were caused by intervention. Farmers did not have to sell to the consumer and, consequently, did not have to pay any attention to the consumer. However, if intervention is required to clear a temporary glut on the market, it is welcome.

We need to examine what Agenda 2000 will do to this industry. If we are to keep our eye on any ball, that is the one to watch because it is the most important. Teagasc gave great impetus to the agriculture industry in the 1970s. It transformed the technology and introduced high input, high output profitable farming. That energy must be rediscovered. Teagasc has a serious responsibility to provide the technology which will reintroduce impetus in the industry.

Ms Leonard

I am grateful for the opportunity to contribute to this debate. I agree with Senator Dardis that nobody disputes that agriculture is experiencing great difficulty at present. There is also no doubt that it is not due to the Minister or the Ministers of State. I compliment them on the work they have done in recent months, particularly in dealing with problems in beef exports.

I am glad the Opposition acknowledges that the Minister is not responsible for the weather or for Russia's currency problems. That is a welcome change because he is being held responsible for everything else. A negative campaign is being staged by a number of farming organisations. It seems to be their way of operating for many years that every problem that has arisen in agriculture is a crisis, but when we have difficulties in agriculture the public perception is that the farmers are at it again. The farming organisations are helping neither themselves nor the people they are supposed to represent with such campaigns.

We all accept that there are problems in agriculture. I compliment the Minister on his efforts, particularly the increase in export refunds. The role of the meat factories should be emphasised; they did not pass that increase on to producers. There is no reduction in the price of meat in shops either, and perhaps supermarkets should be targeted for not lowering meat prices for consumers. Beef sales have dropped all over the world, but if a greater emphasis were placed on reducing the price of cheaper cuts of meat rather than the price of sirloin steaks, that might increase consumption, which would help in the long term.

The biggest problem in my area, apart from the weather, is the difficulty with pig slaughtering facilities. We have suffered as a result of the fire in Ballymoney, and despite the Minister of State's best efforts with the McCarron's meat factory in Cavan, matters are not working as we would wish. However, I compliment him on his efforts.

According to the McKinsey report we should be looking into small farmers forming processing groups to increase their influence with meat factories and shops. That could help them to secure better prices. We seem to be in an age of large producers, and this may be the way small farmers should work.

I was aware when preparing for this debate that the Minister for Agriculture and Food was going to be in Brussels fighting for changes in the EU intervention regulations. He made a verbal agreement with Commissioner Fischler over the telephone. I am glad that the Minister of State made a positive proposal in allowing 04 grade animals, good quality Irish bullocks, into this scheme. We are not churlish. We welcome this proposal and we know the Minister is in Brussels fighting for Irish farmers. However, there was nothing but aspirational language in the Minister of State's comments. As a teacher, I always look at tenses, and I would be happier to see things accomplished in the past tense rather than being promoted for the future. The problem is that we are hearing that various things will happen, but——

Mr. N. O'Keeffe

We must look ahead.

Mrs. Jackman

I like to see the past tense for what has been achieved. The aspirational aspect is either the modh coinníolach, which we look forward to, or the aimsir fháistineach, which is very specific. I am not at all happy with aspirational language for the future. We can look ahead for certain things, but I would prefer the past tense to describe what have been achieved.

The fodder crisis has been uppermost in farmers' minds. We have not said we do not accept that there has been a lousy summer. One could not even call it summer, and the weather has been atrocious even until now. However, silage could not be cut and there will be a winter of discontent and poverty. Last year one would have paid £10 for a bale of silage, but this year, if one has the money, it will cost £20. Again, this is a fact that farmers will have to live with.

As chairperson of Limerick County Council I presented certificates recently to young farmers. Senator Rory Kiely was there.

Mr. T. Hayes

Was he listening?

Mrs. Jackman

There is no incentive for young people to go into farming. When they look at their points and realise they can study engineering, computing, science or medicine, they will opt to study one of those.

I wish to correct the Minister of State on one issue. At the Joint Oireachtas Committee on the Family, Deputies Mary Wallace and McGrath accepted that farmers should get the family income supplement and it was included in a submission. That is the contradiction. Both of them advocated the committee's suggestion regarding the supplement.

I am disappointed we did not hear a more pragmatic and positive message rather than having to scrutinise what is happening in Brussels and wonder what is happening in Libya. We felt we should have received this information on 26 September, but we still have no definite facts. I had hoped to hear what has been done, not what is hoped will be done in future.

Mr. D. Kiely

I wish to share my time with Senators Chambers and Walsh. There is a crisis in the farming industry; there is no denying that. I live in a rural area which has a huge problem with fodder. Everything seems to be on fire at present — the pig industry, the sheep industry and the beef industry. The existing problem must be resolved. People in the industrial area were under extreme pressure when exporting to the UK because there was a difference of 17 per cent or 18 per cent between the punt and sterling and they had to face up to their problems. I am sure farmers could do the same if they cut their cloth to suit their measure. The biggest crisis facing them at the moment relates to pricing and the biggest problem they will face this winter will be with fodder. If that can be contained, we can overcome this crisis and the industry will grow. Farmers would be better off if they got together and worked with the Government and Opposition to try to resolve the problems. I appeal to those people to try to work together.

Mr. Chambers

I thank Senator Dan Kiely for sharing his time.

Everybody, including the Government, recognises that there is a crisis in the industry and is trying to work out a solution but market forces are the real issue at the end of the day. I welcome this evening's announcement of intervention though, as a Senator said earlier, it is not an answer to the trade problem. However, it will alleviate the huge amount of stock held within the agricultural sector particularly in beef and it will help to bring buoyancy to the industry and will mean money in farmers' pockets.

In times of crisis there is a responsibility on meat factories and the people involved in the business to see that farmers get their fair share and that they do not take advantage of the money provided in intervention. With the ewe scheme for mountain sheep, for which there is no place at present, and which runs in tandem with the Government's policy of the REP scheme, I think the factories have an obligation to be reasonable and fair. The Government and farming organisations must succeed in getting agreement on that before the schemes are implemented.

The Taoiseach and the Agriculture Ministers have done everything in their power to provide opportunities for trade which are very difficult to find and sustain. Every opportunity in relation to premium and headage payments has been taken by the Government with a view to getting payments to farmers and putting money into the pockets of the people who need it. I have been in communication with farming organisations but they have not come up with a solution to the problem of long-term sustainability. It is an industry that needs to be looked at and planned for in the future. Substantial changes are taking place within the industry but unless it is properly planned we will again find ourselves in the same position in the not too distant future.

Mr. Jim Walsh

It will be difficult to do justice to the debate in one minute. It is important to recognise when we talk about crisis that we can perpetuate and increase the level of problems within the industry. There are obviously difficulties, ones which have been there for quite some time. Sustainability is one such problem which requires long term ongoing policies to redress that situation. It is important that we do not have a campaign of misinformation and politicisation of the situation. While politicising various economic issues is the work of the Opposition, it is regrettable that the IFA in particular have gone down that road. If agriculture needs anything at this stage, it is a very responsible, considered approach and professional leadership from those involved in the industry. Without doubt efforts and initiatives have been taken which will reduce the difficulties in farming, but they will not ameliorate them completely. Those difficulties which have existed for some time will need to be addressed in a comprehensive way over the coming months and years. The various interested parties involved must be harnessed to work in a much more cohesive way. In this way we can ensure that the real difficulties are tackled in a way beneficial to farmers and to the social and demographic situation of this island in which farming has played such a pivotal role.

An Cathaoirleach

The proposer of the motion has five minutes to reply. I understand he wishes to give a couple of those minutes to Senator Fergus O'Dowd.

Mr. O'Dowd

There is a real crisis in farming. Farmers all over the country are deeply concerned and angry because they believe they are not getting an adequate and proper response from the Government. They want action and they want it now. We do not want to hear long winded speeches that mean nothing; we want action. Young people who wish to make a career of farming are finding they are not wanted or welcome. There is no incentive for them to take up farming. The Minister did not mention young farmers in his speech. What is essential is that young people in particular be given a financial incentive to get into farming. Fine Gael, in Government, have a policy whereby we will give a grant of approximately £14,000 set up for young farmers to get into the business. Farming is becoming a very difficult business. We need to have bigger farms in order just to stand still. The system is wrong; it is driving out the smaller farmer, the backbone of the country. It is time this was changed and that we got action and not talk from this Government.

Mr. T. Hayes

I thank the Senators who contributed to the debate. Some amazing comments were made. I welcome what the Minister of State had to say in relation to the announcement of intervention on Friday. We will be watching this with interest. Announcements have been made in relation to many other issues in agriculture that were not followed through. I am putting the Minister on notice that we will be following this through over the next number of days. Indeed, we hope this will be straightened out for the Order of Business next week.

One of the most amazing statements I ever heard in this House since I became a Member was the one made by Senator Dardis that there was very little difference between this Minister and the previous one.

(Interruptions.)

Mr. T. Hayes

The greatest contrast I have ever seen between any two men is the one between Deputy Ivan Yates and Deputy Joe Walsh. One only has to cast one's mind back to the BSE crisis; the lowest prices made by cattle in factories was 84p per lb. This week we have the extraordinary situation where they are only making 74p per lb. Furthermore, the compensation package put together by Deputy Ivan Yates during that crisis——

(Interruptions.)

Mr. T. Hayes

——was for £69 million in 1996 and £31 million in 1997.

An Cathaoirleach

Order please.

Mr. T. Hayes

The Minister has not given £1 in increased headage payments. Those two points alone show that the Minister, Deputy Walsh, and Deputy Yates are totally different people. The reality is that whenever one talks to anyone in the farming industry they all say "Bring back Ivan".

Mr. D. Kiely

They can never find him.

Amendment put.

The Seanad divided: Tá, 26: Níl, 10.

Tá

Bohan, Eddie.
Bonner, Enda.
Cassidy, Donie.
Chambers, Frank.
Cox, Margaret.
Cregan, John.
Dardis, John.
Farrell, Willie.
Finneran, Michael.
Fitzgerald, Liam.
Fitzgerald, Tom.
Fitzpatrick, Dermot.
Gibbons, Jim.
Glynn, Camillus.
Keogh, Helen.
Kett, Tony.
Kiely, Daniel.
Kiely, Rory.
Lanigan, Mick.
Leonard, Ann.
Lydon, Don.
Moylan, Pat.
O'Brien, Francis.
Quill, Máirín.
Ryan, Brendan.
Walsh, Jim.

Níl

Caffrey, Ernie.
Coghlan, Paul.
Connor, John.
Coogan, Fintan.
Costello, Joe.
Gallagher, Pat.
Hayes, Tom.
Jackman, Mary.
Manning, Maurice.
O'Dowd, Fergus.

Tellers: Tá, Senators T. Fitzgerald and Keogh; Níl, Senators Connor and Coogan.

Amendment declared carried.

Motion, as amended, put and declared carried.

An Cathaoirleach

When is it proposed to sit again?

Mr. Cassidy

At 10.30 a.m. tomorrow.

Seanad Éireann díospóireacht - Wednesday, 14 Oct 1998