I welcome the Minister for Agriculture and Food, Deputy Coughlan, and her officials to the meeting. The purpose of this meeting is to consider the Supplementary Estimate falling within the remit of the Department of Agriculture and Food, namely Vote 31, Agriculture and Food. I call on the Minister to make her opening statement.
Estimates for Public Services 2005.
Vote 31 — Department of Agriculture and Food (Supplementary).
I thank the select committee for facilitating our discussions this evening so expeditiously. With due deference and reverence to members of the select committee, I will circulate my address to them.
I present for the approval of the select committee a Supplementary Estimate for the Department of Agriculture and Food. This is a technical Supplementary Estimate for which no additional Exchequer funds are being sought, as the items under discussion can be met from savings already identified in the Department's Vote. It is required to be taken in accordance with public financial procedures to permit the creation of a new subhead for the payment of a national contribution of approximately €8.9 million to farmers who have lost income as a result of an overshoot in the national quota for special beef premium in 2004 and the payment of an additional grant-in-aid sum of €800,000 to Bord Bia, subhead K.
The first item relates to the provision of compensation to farmers who suffered a reduction in their special beef premiums as a result of an overshoot of the national quota for the 2004 scheme. The planned termination of the scheme on 31 December 2004, as a result of the advent of the single farm payment in 2005, had a dramatic effect on the numbers and the timing of the scheme application. Claims in respect of more than 2.4 million animals were submitted, compared to 1.9 million in each of the three previous years. During December alone, claims in respect of more than 935,000 animals were submitted, compared to 600,000 in 2003, of which claims in respect of 340,000 animals were submitted on 30 and 31 December. The facility to lodge late applications up to, and including, 25 January 2005 also resulted in a significant number of applications being lodged.
In the final analysis, the total number of quota animals applied for during 2004 was 1,396,000. This compares with a national quota, for animals in the bull and first age categories, of just 1,077,458 animals. While the termination of the special beef premium could have been expected to have an effect on applications towards the end of 2004, it was not possible when the 2005 Estimates were published to anticipate the EU Commission's reaction to Ireland's case for seeking redress for those affected by the resultant premium cuts. This has been discussed on several occasions by the committee.
The relevant EU regulations require the horizontal application of a pro rata cut in premia where the national quota is exceeded. Additionally, where the quota is breached, the overshoot reduction also must be applied proportionately to the second age, 22 month, category animals, notwithstanding that there is no quota for this category. However, not all applicants are affected by such cuts. Following discussions with farming organisations in late 2003, it was decided to implement the provision in the governing regulation which allows member states to set a national limit, below which any quota reduction would not apply in respect of the 2004 scheme. It was agreed to set this limit at 25 animals. This meant that any farmer who applied for a premium under the 2004 scheme in respect of a total of 25 animals or less would not suffer any reduction. Overall, therefore, approximately 52,000 or two thirds of applicants were not affected by the overshoot.
The impending termination of the scheme also had a dramatic effect on the number of applicants in respect of bulls. This is because applicants who were aware they would not receive the second age premium on bullocks once the scheme had ended were anxious to avail of the higher bull premium which, at €210 per head, significantly exceeded the €150 first age premium for bullocks. Against this background the number of bulls applied for increased from 150,000 in 2003 to more than 860,000 in 2004. The effect of this was a net additional payment of over €36 million to beef farmers.
From the outset, I recognised that the overshoot was a direct result of the decision Ireland had taken, in consultation with the farm bodies, to opt for a decoupled system of direct payments from 1 January 2005. Ireland was the first member state to do so. The decision to opt for full decoupling was arrived at following careful consideration of all options and following a widespread public consultation process. A persuasive factor in this process was the suggestion that farmers in those member states who fully decoupled would not be disadvantaged during the transitional period. I did not consider it fair or reasonable that some Irish beef producers should be negatively affected by this decision so I brought the matter to the attention of the Commissioner and strongly reiterated our case during her visit to Ireland on 23 June. Following difficult negotiations, I received a positive response from the Commissioner, which, when taken in conjunction with the Exchequer funding which is the subject of this Supplementary Estimate, will result in a package worth approximately €17.5 million. However, notwithstanding the efforts made regarding the first age and bull category, the concession agreed by the Commissioner only addressed the position of the second age category, as the Commissioner was adamant that no concession was possible in the first age and bull category in light of the legally binding ceiling of 1,077,458 animals.
However, including the package approved by the Commission, payments under the 2004 special beef premium will amount to almost €340 million, compared to €290 million paid under the 2003 scheme.
I will now turn to the second element of the Supplementary Estimate. In the case of Bord Bia, I am proposing to increase the grant-in-aid for 2005 by €800,000 under subhead K. This is made up of approximately €500,000 to finance an accelerated beef promotion campaign and approximately €300,000 for market initiatives in the enlarged EU and Asian markets. We launched that initiative last week. We are dealing with huge competition in the beef sector and on that basis we are vigorously promoting beef in the European Union and carrying out extensive research in the Asian market. The pressure from South American beef, of which we are all acutely aware, and the cessation of the over 30 month scheme scheduled for 7 November in the UK, which will cause a displacement of some 70,000 tonnes, will pose great difficulties for the beef sector. As a result of this I was anxious to support the initiatives being taken by Bord Bia using the savings in my Department.
It is a three year strategy and a €10 million campaign.
Having had the opportunity to meet Bord Bia and be briefed on what it is doing, I am proud of the work in which it is involved. The €300,000 it sought will also be used to promote developments in potential new markets in China and in the East.
Before anyone becomes apoplectic on the issue of savings they arise from subhead C, which is food safety in public health, animal health and welfare and plant health, and income and market support. As we have reduced the incidence of disease in the past year, and because we are not involved in intervention and do not have the necessity of income support, we are able to transfer money into more productive supports for the beef sector.
I ask the committee to support this initiative with a view to getting payment to the farmers as quickly as possible.
I thank the Minister and her staff for coming here today to brief us on this Estimate. I support it and want to see farmers get whatever money is available to them as quickly as possible. However, though they will receive €17.5 million in total, they will miss out on over €70 million. That is a significant issue.
Many full-time committed beef farmers did not increase their applications at all. They are the ones who will suffer from this reduction. As the Minister said, those under 25 do not lose anything. While that might have been a good political decision, it means that genuine and committed beef farmers are the ones who will carry the can. I have talked to some in the past few days in the run-up to this meeting and they made it clear to me that they will not be losing profit but incurring loss. One only has to look at yesterday's newspapers to see that factories are quoting, in old money, 85p per lb. Many years ago I was chairman of the national livestock committee and remember farmers asking me if they should take 119p per lb. Some did not, and had to take a lot less a few weeks later. Genuine beef farmers are at a serious loss.
Franz Fischler stated to the Minister's predecessor that no sector of farming should lose out if the country opts for full decoupling but full-time livestock farmers are losing out significantly. I welcome the funding but I am disturbed by the loss that so many farmers will incur in the current beef crisis. To that end I welcome some money being directed towards Bord Bia. As a former director of the meat board I know what it is like to go to some European countries to try to sell meat. I wonder whether this €800,000 will be sufficient to make the real difference that is needed at present. There was an opportunity in the UK market during the time their over-30 month cattle were withdrawn but we were involved in the lower end of the market in most cases. There is a need for quality promotion to ensure we get the highest price possible.
The Minister mentioned the Asian markets but have we forgotten about the Egyptian and other markets, which took significant quantities of meat in the past? A sum of €17.5 million in funding is without doubt welcome. Farm organisations and others were claiming responsibility for procuring the funding but I will give the Minister some credit for it.
I thank the Deputy very much. The headline in the Irish Farmers’ Journal will read “Fine Gael supports the Minister for Agriculture and Food”.
The factual situation is that the Minister's predecessor, as in many other issues, failed to pin down a promise from Mr. Fischler, and that promise has not developed into actual funding. That is a very serious situation. Livestock farmers are enduring a traumatic period where they are losing much money, and I urge the Minister to allocate more money if possible. If it cannot be paid through premiums, it should be allocated to promote livestock farmers. I am glad to hear that the Minister has admitted that when the situation in the UK changes and the market opens again for livestock over 30 months, it will have a dramatic effect. If we do not take steps to deal with that situation, real problems will come about.
I thank the Minister for attending the select committee this evening, making the presentation and bringing us up to speed on this relatively good news for farmers, although there is still obviously a shortfall. It is important in light of the commitment understood by the farming community following total decoupling, that is, that farmers who fully decoupled would not be disadvantaged. It is important that some redresshas been made, and while we have not reached a status quo, there is some movement in that direction.
I welcome the further promotional opportunities arising via Bord Bia. Opportunities are definitely evident in the enlarged EU and eastern European countries, and they must be promoted and exploited. Significant competition is being faced every day. Despite efforts on labelling of Argentinian beef etc., there is still a mountain to climb in terms of the promotion of Irish products abroad. All opportunities that exist must be taken, promoted and encouraged as far as possible.
I am not apoplectic about taking money from food safety and animal health and welfare initiatives but I have a slight concern about it. I welcome the trend on BSE but attention should be drawn to a particular fact. The number of positives for BSE animals born after 1996 or 1997 is not insignificant. For the period between January and the end of August this year, seven animals were positive, according to my research. We should be concerned about this with regard to the issue of ensuring animal safety and health. Even more significant are the risks that may be associated with the consumption of meat from BSE-positive animals. It is a considerable concern that so many animals born after the introduction of the ban are still testing positive for BSE when in theory none should do so.
The trends with regard to brucellosis are positive and should be welcomed. Although I recognise that the budget must come from somewhere, there are other animal diseases about which we cannot afford to be cavalier. We have discussed Johne's disease a number of times and it has not gone away. We must be assured that resources will be there to tackle that issue. The matter of avian flu is of recent significance and relates to both agriculture and health. We will ignore this issue at our peril, and it appears that this disease is escalating in countries such as Indonesia and spreading into the human population. There are serious concerns from a human health point of view on this topic, and whatever is necessary must be done to protect poultry products and migratory birds here. There must be an assurance that everything will be done to protect the poultry industry and, more significantly, human health.
We will now proceed to a general discussion of Supplementary Estimates under this Vote, discussing in particular two subheads. The first relates to a new subhead on beef premium overshoot and the second relates to Bord Bia. The subheads will be taken in that order. Members may discuss issues relevant to the individual subheads and may not recommend increases or decreases. There will be no votes. Do any other members wish to contribute to the debate?
I thank the Chairman for the opportunity to speak and the Minister and her team for coming in with good news. The situation a short time ago appeared fairly hopeless. The numbers of stock applied for had increased dramatically at the end of last year. The €17.5 million is undoubtedly very welcome for farmers. I congratulate the Minister and her team on their negotiation skills. The dramatic increase in numbers caused problems in the past but farmers are now quite pleased with this funding.
The money for beef promotion is badly required at this time and it is always difficult for a small nation such as ours to sell products to the wider world. Our great selling point is the cleanliness and environmentally friendly mode of our production. The money provided for promotion will help this process in future. Farmers did not get everything they desired but these results will be welcome nonetheless. I thank the Minister again for a job well done.
I will not be repetitive but I too congratulate the Minister and her staff on this procurement from the European Commission. It is delightful to hear Deputies Crawford and Upton complimenting her on her negotiation skills and giving her credit rather than giving it to farming organisations. The farming community appreciates the efforts made, and although it would have been nice if more funding had been procured, farmers will be content. Situations such as this will, one hopes, not arise again.
I welcome the Minister and her team this evening and join in congratulating her. We must remember that she entered negotiations with nothing and was able to acquire a figure that could have remained at zero had it not been for her negotiation skills. I also thank her for her negotiation skills in dealing with the Department of Finance on the issue of the Exchequer funding.
I was privileged to visit China in the past week with the Committee on Justice, Equality, Defence and Women's Rights, where I met the Bord Bia representative in Shanghai. I became very knowledgeable quite quickly on the promotion of Irish beef that is being attempted through Bord Bia. At the moment, China is not accepting Irish beef but it will, one hopes, do so in the near future. I was impressed in meeting the representative and seeing that aid is now in place. It should be recognised that the country has a huge population, with cities of 17 million people not remarkable. The Chinese are major consumers of meat, and their country is merely one example of where Irish beef, which we know is the best in the world, should be promoted. I commend the Minister on her promotion of the Supplementary Estimate providing €800,000 towards the promotion of that campaign.
I join my colleagues in congratulating the Minister. She did a superb job very quickly and responded to the satisfaction of many farmers. For farmers involved in the beef sector, there is no substitute for continuing investment in marketing and the €800,000 and the three-year marketing programme are particularly welcome. Every cent is money well spent. I am also conscious of promoting markets in China.
I spent some time last year in the United States and met representatives from Bord Bia. There is a large ethnic Irish community in the USA. To what extent do we target them as a focus group for Irish beef exports? I was surprised to discover that pork products are exported to the United States in far greater quantities than beef products. Could we make progress there?
The Minister and the staff involved in disease eradication should be complimented. There was criticism of the lack of progress in this area for many years but today's report shows substantial progress in a range of areas and those to the forefront of the eradication campaigns should be congratulated.
I would like to associate myself with the remarks made by other speakers. In March, Deputy Naughten and I attended a public meeting of the ICSA in Enfield. Farmers from all over the country were worried and they put pressure on me to see what I could do. I told them I was confident that the Minister would not be found wanting in getting compensation for farmers at EU level. I was pressed on the night to say aid would come from the Government if EU compensation was not forthcoming. Not only did the Minister secure EU funding, but national funding also, which was welcome.
Beef farmers have had a difficult time in recent years and, unfortunately, it is not improving. On the night the Minister made the announcement that she had secured funding, I received a call from the chairman of the IFA beef committee and the president of the ICSA welcoming what she had done. In Donegal the president of the ICSA repeated his appreciation of what the Minister had done for the beef farmers of this country.
The Department saved €800,000 and ploughed that back into the promotion of Irish beef though Bord Bia and she should be complimented on that.
It has been stated that the Minister was able to get money from the Minister for Finance. She said in her opening statement that she did not have to go to the Department of Finance, since the money came from her own Department. Did the EU insist that the Government could only pay matching funds? Is that why we are limited to €8.9 million when €70 million was needed?
We are spending extra money, which I welcome, on marketing our beef in other markets. At the same time, because of the lack of labelling, Brazilian beef is being sold here. My colleague, Deputy Naughten, has repeatedly raised this issue. The Minister is committed to ensuring the situation does not continue indefinitely but we must reach closure on it as soon as possible. What progress has been made on that?
I join my colleague Deputy Upton in asking about avian flu. My county depends to a great extent on the poultry industry and some farmers and production units are quaking in their boots in case anything happens. We must be careful.
It is 12 years since the former Fine Gael spokesman on agriculture in the Dáil, Ms Avril Doyle, MEP, raised the issue of Johne's disease. It is a critical issue and we should examine compensation for this, particularly if there are savings from the eradication of TB and brucellosis programmes. Some farmers are being destroyed. They were cleaned out by BSE, restocked with the support of the Department, and now face a crisis because of Johne's disease. I welcome the extra money but it does not mean that many committed beef farmers will be relieved of this burden. That is the element I worry about — their numbers are falling all the time. Many farmers are now working on a hobby basis but many committed beef farmers who keep the industry going in the long term are suffering. The Minister must do whatever she can do through marketing and other areas to compensate for that loss.
I thank the committee for its support on this issue. Just because a farmer might have fewer than 25 livestock units, it does not mean he is not a committed and genuine beef farmer. We have increased our capacity in the suckler herd in recent years by building up the number of small farmers. I am sure there are as many small farmers as there are big farmers in County Monaghan. It is my job to ensure that both options exist and are supported. The farming organisations, under the stewardship of Deputy Joe Walsh, agreed that 25 and under would be supported regardless and that was a good decision that supports those who may not have the capacity to develop or increase their beef herd. They should be as well respected as anyone else.
I appreciate that some of the larger farmers who have not increased felt hard done by in their applications last year. Equally, in the package I outlined there was an increase in the number of applications for bulls; it went from 150,000 in 2003 to 860,000 in 2005, an additional €36 million for farmers. Adding the package of €17.5 million, this year farmers will get €53 million more than in 2003. That is a fact.
In my view this is a good deal. With regard to the little nuance that, as this is not Exchequer funding, the Minister for Finance, Deputy Cowen, did not involve himself in freeing the money, I must point out I did have the savings. However, I needed the permission of the Department of Finance to create a new subhead to allow for payment and matching these funds. I compliment the Minister for Finance, who was more than supportive on this issue, given that he is already committed to the industry. He was more than forthcoming in his support for the national contribution.
State aid rules apply to this case, meaning this was the threshold I could manoeuvre within. Other than that, I would have had serious problems with my European colleagues. I would have had to ask the Council of Ministers to have the regulation changed, for which I would not have received support. In order not to risk an additional €17.5 million for the farmers, I decided this was the best deal. A pragmatic decision was made by all involved, including members of the committee and the farming organisations. This is the best deal that can be delivered. Once the Supplementary Estimate returns to the House on 4 October, we will be in a position to make payments. Members seem to forget the single farm payment is a reflection of the work done over the last several years through increased capacity by farmers within this sector. This will be reflected in the payment that will be made available. Notwithstanding some difficulties in the interregnum, I must compliment the EU Commissioner, who saw the genuine difficulties that existed. She made a strong, politically supportive decision on the case that was put forward by myself and my officials. I compliment her on this and it was reflected in her discussions with me on 23 June when she came to Dublin. When all is said and done, this is a good deal for farmers. An additional €53 million income for beef farmers is important.
The markets issue is very important. During August an opportunity was seen in the Egyptian beef market. My officials and veterinary officers travelled to Egypt to meet authorities there. They were able to secure a reduction in Egyptian restrictions on beef exports which will facilitate our entry into that market. Over and above the Bord Bia initiatives that are taking place, at a diplomatic level much effort is being made to get into the Emirates market. It presents a good opportunity for Ireland to sell top-end cuts of beef.
There is a cost element in exporting fresh meat to the US. Due to BSE, Irish beef was restricted and Ireland still does not export beef there. However, the US can empathise with our difficulties now that there is a BSE issue there. It must be remembered that the US does not test but we do. We have taken difficult decisions in consultation with the farming sector and supported by the Food Safety Authority of Ireland in the way business is done. Some traumatic decisions have been made by farmers, which have been appreciated as being in the better national interest. That better national interest is reflected in the fact that in 1997 three retailers were involved in the continental fresh meat sector and now it stands at over 100. It has been built on year after year. Every effort for Ireland to get back from its displaced position in some countries is being pursued.
At the beginning of the year a pork protocol was signed with China during the official visit there, which was helpful. On the basis of discussions with Chinese authorities, we have asked if beef exports will be considered. Every diplomatic and political support that can be given to this will be welcome. We will pursue this with Chinese leaders who will be on an official visit to Ireland at the end of the year. Entry into a market of 1.3 billion people would certainly support the beef sector. There will be plenty of competition but it can be addressed.
It is right to say the figures for overall competition within Ireland have increased since last year by approximately 60%. However, this represents 7,000 tonnes of imports. There are issues regarding the processing and manufacturing sector. The introduction of beef labelling is an initiative I and Members of both Houses have been more than forthright in supporting. The legislation is on Second Stage in the Seanad and will be on Committee Stage presently with the hope that it will be facilitated in the Dáil before the end of the year.
In the interim, an agreement has been reached with the catering and hospitality trade to provide labelling prior to the legislation being introduced. I agree there is an expectation that when one purchases a meal, the produce is Irish. The customer must be informed and it is then a decision for the customer as to what he or she chooses. I have not seen any huge reduction in the price of a steak, whether it is Irish, Argentinian or Brazilian. We must be proactively supportive of our produce. This initiative will be important and I will be continuing these efforts in the poultry sector, which is under much pressure, and the lamb and pork sectors. I believe we will continue the labelling of country of origin from there.
Manoeuvrability with the Estimate has been facilitated by the reduction in the need for having a certain amount allocated to the disease eradication programme. However, I will not be complacent in this matter. It is tremendous to see a reduction in brucellosis and BSE figures. The smaller these figures become, the better it will be for everyone. It will allow us into other markets that we have been restricted from entering.
In September a management discussion was held in the European Commission on avian flu. On the advice of the Europeans, we have examined our modus operandi. We are committed to ensuring in the possible advent of avian flu in Ireland that the Department will be prepared to deal with it. The Department will be in constant contact with the European Commission on any changes that will take place. We are on top of this issue, with a special committee established in the Department to deal with it and liaise with the Department of Health and Children.
I appreciate no finality has been brought to the issue of Johne's disease. Deputy Upton has a view on this but it is not necessarily confirmed at other academic levels. However, we must take cognisance of these issues. No definite connection between Johne's disease and Crohn's disease has been established. With the Minister of State at the Department of Agriculture and Food, Deputy Browne, I sought a pilot project on the matter but was disappointed that the farming organisations would not participate. Not enough information has been collated or research carried out on this issue. Johne's disease did not occur in Ireland until the opening of the single market. Other countries have major difficulties with it, which they often treat nonchalantly. I will be redoubling my efforts with the farming organisations to persuade them to participate in this project, as it will be beneficial to everyone and to the industry. Through studying, say, the methods used to feed calves an opportunity may be provided to tackle the disease. We will be keeping a close eye on this matter, since many people are committed to ensuring our disease status reflects the work, money and effort put in by the State over the last 40 years in dealing with disease eradication.
These initiatives will be beneficial to farmers and to their income levels. Support for Bord Bia works in parallel with them.
I am delighted we have pushed for an initiative within Ireland to encourage people at a retail level to buy Irish. I know good Europeans are not supposed to say that but I am a good Irishwoman as well and it is important.
I do not know if the committee has met Bord Bia members but they made an excellent presentation on their three-year marketing programme. Members should visit their team to see their proposals, which are a credit to them.
No stone will be left unturned in trying to support the industry to the best of our ability.