Wednesday, 16 April 1997
Dáil Éireann Debate
That Dáil Éireann notes the sharp decline in the incomes of farm families resulting from the  collapse of commodity prices, including cattle, beef and milk prices paid to farmers; calls upon the Government to cease in its hitherto unsympathetic approach to our farming industry; further calls on the Government and, in particular, the Minister for Agriculture, Food and Forestry, to pursue at a political level their responsibilities in relation to important agricultural issues, including export refunds and the reopening of lost third country markets; and also calls on the Minister for Agriculture, Food and Forestry to fulfil his promise of 4th February to farmers to secure matching national compensation for revaluations of the green pound.
Dáil Éireann recognises the income difficulties arising for beef and dairy producers as a result of the reductions in export refunds and the recent revaluations of the Irish Agricultural conversion rate and changed circumstances in export markets and approves the action taken by the Government to maintain access for Irish cattle and beef exports to all markets and endorses the approach adopted by the Government in its efforts to alleviate these income difficulties.
Mr. Leonard: I welcome the opportunity to say a few words on the crisis in cattle prices and the 1 per cent drop in prices on 1 April, which has been damaging in a number of ways. The factories set the prices. They were assured of supplies over the next few weeks because from yesterday there has been a £15 drop in slaughter premiums. They rail-roaded producers into continuing to sell cattle. In addition to the 6p per pound decrease there has been another 3p per pound drop today, making a total decrease of 9p per pound, with some plants now paying as low as 78p per pound, the lowest price for cattle in 20 years.
This crisis is affecting farmers in that, for many years, the Department of Agriculture, Food and Forestry made efforts to do away with the valleys and peaks and get a continuity of supply. In future people may not have that supply during the winter months because there is no confidence in cattle production.
I wish to put some questions to the Minister. Did he consider the proposals put to him last week to retain the full slaughter premium to 1 May? That would have eradicated part of the  problem to which I referred. It would reduce the rush of farmers to dispose of cattle to avail of the full slaughter premium. Did the Minister have any meetings with the slaughtering plants since the drop in prices? It is the Minister's job to do that. What is the Minister's view of meat slaughtering plants paying a flat rate for beef which, in the long-term, will affect the carcase formation because quality beef will not be reflected in the price paid? That is a serious question for the Department which should be working hard to pay farmers a flat rate.
Mr. B. Ahern: I thank Deputy Leonard for sharing his limited time with me. There is a serious crisis of confidence in Irish farming, clearly spelled out here last night by our party spokesperson and my colleagues, which is not being addressed by the Government. The BSE crisis was handled badly, both by the Government and at EU level. The difficulties facing farmers have been made worse by currency fluctuations, and more export refund cuts are on the way. Our beef prices are well below European levels and the milk prices are soft. Sheep quotas are not being fully taken up. The number of people in farming continues to fall rapidly year after year. There is a question mark over the future viability of the smaller family farms, particularly in the more disadvantaged areas. This has implications both for rural life and the environment. Last night, my colleagues explained in great detail the way this crisis is affecting rural communities, the confidence of Irish agriculture and those people who work extremely hard to make a just living from it as best they can.
At all times agriculture needs an experienced political hand and a Government that is prepared to act with energy and maintain farm incomes. On many occasions in the past, Fianna Fáil in Government adopted a vigorous, hands-on approach to counter threats to the livelihoods of farmers and of rural communities. Fine Gael has once again failed the farming community. The Government as a whole, which is seeking re-election, has failed farmers. It should be noted that since 1981, when Fine Gael came into Government with Labour, farm incomes have fallen. Over the period from 1982 to 1987, under the Fine Gael-Labour coalition Government, which provides a real index of social misery, farm incomes fell in real terms by 12 per cent. Between 1987 and 1994, under Fianna Fáil, they rose by 36 per cent.
According to the Central Bank, as independent a source as one can get to quote in this House, farm incomes this year will, in nominal terms, be slightly below what they were in 1994. In real terms that is a drop of approximately 7 per cent. While the rest of society has moved ahead by even more than that amount, we must be clear about one matter. Were it not for the Ray MacSharry CAP reform payments coming to their peak, negotiated by Deputy Joe Walsh as Minister, farmers' incomes would be far worse based  on the independent figures from the Central Bank. In many cases, direct payments now amount to 30 per cent or 40 per cent of farm incomes.
We have a fair weather Minister who retreats to his constituency when serious negotiations are necessary and gets down on his knees to the EU Agriculture Commissioner. As the Irish Farmers' Journal so eloquently put it, the Minister has lost his way in Brussels. Not only is he weak in negotiation, he has no support from his colleagues in Government.
The Taoiseach's notion that he can instruct traditional Fine Gael farmers to transfer their votes to parties like Labour and Democratic Left, who are hostile to the farming community, shows a laughable naivety. Not many years ago, a Democratic Left Member stated in this House that direct payments such as headage and set aside disproportionately benefited large farmers, and that this would continue to be the case unless the Common Agricultural Policy was subjected to a root and branch overhaul. I was involved in the negotiations on those payments in 1993 with the then Taoiseach, Deputy Albert Reynolds, and we worked extremely hard to secure them. Farmers voting for their political enemies who make these kind of promises is akin to turkeys voting for Christmas, to quote a former Deputy of this House.
The Labour Party Leader, Deputy Spring, did not have a single word to say about the problems facing the farming community or rural Ireland at his party conference. He had nothing to say to farmers in his own constituency of North Kerry. It is no wonder a Kerry delegate complained that the Labour Party has nothing to say about rural Ireland. Fine Gael does not have any policies of its own and the Labour Party has nothing to say about agriculture.
Democratic Left never misses an opportunity to play class politics and bad mouth those who work on the land because of its ideological hatred of those who own property, even if it is only 30 acres of poor land. Democratic Left never misses an opportunity to take a swipe at the Common Agricultural Policy which it regards as money down the drain. Listening to Democratic Left Members, one would think the farming community consisted mainly of a few large farmers who own hundreds, if not thousands, of acres of land.
There is hardly ever a word of sympathy for the average farm family that faces a tough and often uphill working life and never any solutions put forward to meet its needs. There is hardly ever a word about rural poverty, although every Deputy is well aware that there are parts of rural Ireland where there is genuine poverty. If farming were such a cushy number, as some members of Democratic Left seem to think, why have the numbers in farming continued to fall? If Democratic Left wants to create a country in which rural Ireland can go to hell, I hope it gets little  support. Why should the rural community vote back into Government an anti-farming coalition in which a Fine Gael Minister for Agriculture, Food and Forestry operates on sufferance as far as his Labour and Democratic Left colleagues are concerned and who, when special measures are needed, will not be able to persuade his colleagues to make that extra effort? It is obvious that a farm family should vote for parties that support the farming community, that understand the importance of the industry.
A Fianna Fáil-led Government will do a better job, be more experienced and understanding and far tougher in negotiations. As leader of such a Government, I will give the highest priority to the reopening of third country markets which are vital to healthy competition. In Government, I will also look sympathetically at how resources can be made available with EU approval to maintain farm incomes to the maximum extent, particularly in times of difficulty.
I would be the first to admit that winter fatteners are going through a nightmare for the second year in succession. These farmers are the innocent pawns in a strategy that was brokered in the last GATT agreement and the MacSharry proposals on the restructuring of the CAP. This will come back to Fianna Fáil's door because farmers know exactly who outlined the football pitch. Everybody knows the constraints within which we are dealing. Fianna Fáil will know that too well very shortly.
Mr. Connaughton: The revaluation of the currency is causing havoc for Irish farmers, but it is torturing the winter beef fatteners in a dramatic way. The devaluation of 9.5 per cent makes a difference of 6p or 7p per pound at the factory. The price that winter fatteners could get at the factory went automatically from 86p to 80p.
Mr. Connaughton: The meat processors are a disgrace. Everybody understood that there would be a price reduction. There had to be if there was to be a 9.5 per cent revaluation, but when the meat processors got the chance two weeks ago, in due haste and in concert, they dropped their prices. The meat processors are taking at least 3p  a pound out of the pocket of the winter fatteners. If that were paid things would not be so bad, despite what is happening. If the intervention price for steers drops, that has nothing to do with heifers, but the price of heifers dropped at the same time as the price for steers. It will take something to square that circle. There is only one time-honoured way to beat the factories, and that is to have a better live trade. I am delighted the Minister will be travelling to Egypt in a couple of weeks to do the best he can to open that trade.
Mr. Connaughton: The Deputy may not know much about agriculture but he should know enough about GATT to know that the Deputy beside him is the man who negotiated it. It was he who negotiated the CAP and made a hames of it.
During the past 13 months we have been subjected to the greatest upheaval in the food industry ever seen here because of BSE. People who did business with us turned their backs the next day and did not want to know us. Our own consumers turned their backs, as did every country in the world, yet the Deputies opposite say that everything should be as normal. Our Minister for Agriculture has been the best Minister in these adverse circumstances. It is very easy to be a good Minister for Agriculture in good times. It is a different matter to be a good Minister for Agriculture in bad times, and that is what Deputy Yates has been.
Compensation should be given to winter fatteners. I believe there will be a top-up. I have done everything humanly possible to ensure their views are known at every level, and this Government will not turn its back on any sector of the farming community.
Mr. Connaughton: The Deputy will get his answer very shortly. As to some of the comments made by Members on the Opposition benches about the Minister for Agriculture, Food and Forestry, a poll in the Irish Farmers' Journal last December found that Deputy Yates was believed by farmers to have done an excellent job during the BSE crisis, so good that Fianna Fáil appointed a new spokesman on agriculture. If everything was all right on that side, why the change? It is against that background that we can knock at every farmer's door over the next couple of months. Deputy Yates is regarded for what he is, an excellent Minister in the most difficult circumstances.
Mr. Crawford: I appreciate it is extremely disturbing for the Members on the Opposition benches that their marriage to the Progressive Democrats has proved extremely difficult, and that is  why they are so touchy. The reality is that there is a GATT agreement and nobody knows that better than Deputy Walsh. It was he who agreed it and who did not want to discuss the cutbacks and the potential unavailability of intervention or price supports in the future.
Farmers are having a difficult time. Coming from that background, I have every sympathy for them. The Fianna Fáil leader said that he would have sympathy for farmers if he were in Government. Farmers know that people have sympathy for them but what they want, and what they got from this Minister, is compensation to help them over a very difficult period.
Members of the Opposition seem to think that all one has to do is get on a plane and go to Egypt. Why was it that for two years there were no live shipments during their period in Government, and only slight discussion about BSE? They said there was no real problem as far as the international media were concerned, but those markets are closed. I will do everything I can to support the Minister in his efforts to get those markets reopened.
I listened with interest to the Fianna Fáil spokesman on agriculture who spoke about all he did during his time in office. I remember sitting where he is sitting now and asking about the pig farmers. He promised he would look after them, but the following Monday he was out of office and had never even met them. Farmers were promised by him, by Commissioner MacSharry and by the leader of the then Government, Charles Haughey, that one area in which they could go into production was deer farming. Letters were issued by the Minister and speeches were made by Ray MacSharry encouraging people to go into deer farming, but many of those farmers, having borrowed thousands of pounds, went bankrupt. It is difficult to listen to that, but we must face facts.
The Minister, Deputy Yates, has done a spectacular job in difficult circumstances. He has tried to maintain farmers' confidence. Milk prices have fallen for a number of reasons and the Minister is trying to get assistance for dairy farmers. When the price of milk fell by 19p per gallon in 1991 there was no question of compensation. The Minister was sympathetic and farmers were simply told that things were bad. As a farmer and a backbencher, I am proud of the work done by the Minister and the Taoiseach who have the support of a united party and a united Government. When we look back to 1994 when heads were delivered on a plate, there was little unity at that time.
Mr. Penrose: I welcome the opportunity to contribute to this important debate on an industry of fundamental importance to the economy.  Coming from the premier beef producing county in Ireland, I was amused to hear the leader of the Opposition speak about agriculture. He obviously did not follow the debate on agriculture that took place at the Labour Party conference at which I made a 20 minute speech, but that is a matter for him. I understand that, coming from Dublin Central, he would not know much about agriculture.
Mr. Penrose: Today our leader met the Egyptian Foreign Minister, Amr Mahmoud Moussa, and will have further consultations with him in the next few days. We are doing our best for farmers while people on the other side huff and puff and do nothing for this £2 billion industry. When Fianna Fáil in Government allowed inflation to increase to 21 per cent in 1979 I had to go to financial institutions, cap in hand, to bail out farmers, some of whom are under threat again today. I know more about farming than many Deputies on that side and I will take no lectures from them.
Mr. Penrose: I was a member of the sub-committee on EU legislation and the Joint Committee on Foreign Affairs which pointed out to Deputy Walsh, as Minister, the implications of GATT for Ireland. Because of the importance of beef to the economy and our dependence on exports, particularly to non-EU countries, the problems arising from that agreement were magnified. Beef is 11 times more important to the Irish economy than the overall EU economy. Since only 12 per cent of beef production is consumed here, none out of every ten animals have to be exported, and net exporting countries are more vulnerable to market over-supplies. This country accounts for about 7 per cent of total EU beef production and about one-quarter of EU beef exports. We are the largest net exporter of beef in the EU to third country markets. I make those factual observations to indicate that we knew well that the combination of the reformation of the CAP and the new GATT agreement would impact on beef prices. A new subsidy regime for each male animal was put in place to compensate for the reduction in prices.
It is encouraging that farming organisations have put on the record that in light of the BSE crisis their concern is for the consumer. I welcome their statement that the health and safety of the consumer is at the forefront of their objectives when producing food of either plant or animal origin. I called six months ago for the introduction of detailed integrated traceability systems, which are very important to farmers. I meet farmers on a regular basis and I am aware of the importance of tracing food from the field  to the dinner plate. Major advances have been made in that regard. Recently the Irish Cattle Traders' and Stockowners' Association called for the establishment of an independent office of ombudsman for food. That proposal merits serious consideration as such an office would be totally independent of Government Departments and agencies as well as sectoral interests in the food industry.
I wish to refer to the current problems experienced by farmers in all the main sectors of agriculture, particularly the beef sector. Coming from County Westmeath, one of the premier beef producing counties, I am particularly aware of the problems for this sector. The current crisis in the beef sector affects many beef producing farm families, particularly those engaged in winter finishing. The recent drop in price of 8p per pound, £65 to £70 per animal, has had a devastating effect on producers in the wider industry.
I will not repeat the reason for the 75 per cent cut in export refunds, the three green pound revaluations, totalling 8.8 per cent, and the closure of some third country outlets for live cattle, all of which have a cumulative effect on prices. The cut in export refunds of the magnitude of 17.5 per cent has a major effect on the beef sector. I castigate the EU for utilising an appallingly simplistic approach to management of the beef market. As a result of excess applications for export licences, it took the soft option to cut refunds instead of dealing with the matter in another way.
There are cartels in operation at factory level. Is it a coincidence that all export licences expired at the same time? Surely there were export licences available three weeks ago, yet all the licences coincidentally expired at the same time, resulting in a drop in price of 8p per pound. This matter should be referred to the Competition Authority. The cut in price is not benefiting the consumer, so who is making the profit? That question must be answered. The Competition Authority should investigate the matter and find out whether there is a cartel in existence.
Mr. Penrose: The export trade is critically important because it provides competition. Dr. John O'Connell of the department of agri-business and rural development at UCD, a former mentor of mine, recently prepared a paper for the Irish Live Stock Exporters' and Traders' Association in which he indicated that the price and revenue enhancing effect came about for three main reasons — first, increased competition engendered purely by extra numbers of cattle purchasers when there is a strong live trade; second, the preference, which has become stronger since the BSE crisis, in most countries for beef which  is stamped as having been domestically produced; and, third, the livestock trade serves distinct demands in certain countries for home-slaughtered fresh beef which cannot be served by the factory sector. Those worthwhile views of an eminent researcher should be taken on board.
Winter finishers are seriously affected. I know a farmer who purchased 200 cattle to finish in 1995, but did not purchase any in 1996, which saved him £20,000. Is it not time to focus some EU supports on the finishing sector? Seventy per cent of the farmers in County Westmeath are beef farmers, many of whom are engaged in winter finishing. The rural landscape will change if we do not focus EU supports on that sector. The viability of winter finishers is being threatened for the second or third consecutive year.
This is not a political issue. EU supports have been and disbursed without proper focus. I wrote an article on this matter in 1979. We did not focus on our particular needs when disbursing EU grants and implementing the farm modernisation scheme. Beef farmers, particularly beef finishers, will have to receive compensation.
Mr. Gallagher: (Laoighis-Offaly): I support the comments of my colleague, Deputy Penrose. The position he outlined applies particularly to the Offaly end of my constituency. Last autumn many traditional winter finishers did not purchase cattle. This impacts on family farms, store and calf prices and employment in the factories. I reiterate my colleague's call for an investigation by the Competition Authority into the lack of competition in this area because neither the farmers nor the consumers are benefiting.
I welcome the efforts to reopen markets in the Middle East. The Tánaiste made some progress today at his meeting with the Egyptian Foreign Minister and I am confident that when the Minister, Deputy Yates, visits Cairo in the near future he will secure a further reopening of that market, which would be a great example for other countries in the Middle East.
Kathleen Lynch: As Members are aware, I do not believe the farming sector should be exempt from criticism. The Common Agricultural Policy  is unsustainable in the long term. I will continue to make a case for PAYE taxpayers who shoulder a disproportionate share of the tax burden. However, I also believe farmers should be supported when confronted by a crisis not of their own making.
Several unrelated factors have conspired to force dairy and beef incomes down and grain producers have also been affected. The GATT agreement meant that export refunds had to be cut throughout the European Union. This cut would have been sustainable had farmers not been hit last year by the BSE crisis, which has its roots in the gross mismanagement of the UK beef industry. Irish farmers have been forced to pick up the tab for the Tory Government's gung-ho deregulation of the beef industry.
Within the EU beef consumption fell by a massive 50 per cent in the immediate aftermath of the BSE scare and, despite the recovery, consumption is still well below 1995 levels. This is not simply due to the BSE crisis. There is increasing public concern about food safety in general and beef consumption had been in a slow decline even before the BSE scare. BSE has caused enormous problems for Irish farmers, but this Government is determined to resolve them. Despite cries from the Opposition, the Minister has battled to regain lost markets, maintain existing markets and open up new ones. Consequently, today only Libya, Iran and Egypt remain closed to Irish beef cattle exports.
Even without the BSE scare, farmers would still be battling against the GATT ceiling which strictly limits exports. The only viable alternative to exports is to sell beef into intervention, a short-term solution which does nothing to develop the beef sector or to ensure that the sector is market rather than subsidy led. I am pleased the Minister does not agree with the strategy being adopted by the European Commission to comply with the GATT limits. I understand he is having ongoing discussions on this issue with the relevant Commissioner.
While the beef sector is being squeezed, the picture may improve. The destruction of UK cattle will reduce beef production by an annual 230,000 tonnes. By 1998 beef production is likely to fall by nearly 600,000 tonnes per annum. This may not be sufficient to rebalance the beef market, given that the GATT ceiling will also fall progressively, but it will represent an improvement.
The Government is aware of the pressure on producers' incomes not only from BSE and the export ceiling but also from the currency policy, something which should be examined in greater detail. A £20 million compensation package for the beef sector has already been adopted and I understand from the Minister's statement last night that a further agri-monetary compensation package is likely to be introduced. The income support measures negotiated by the Government during the past year will also have an impact on the sector.
Mr. Sheehan: We inherited it. The scourge of BSE originated under successive Fianna Fáil Ministers for Agriculture, Food and Forestry who introduced a mickey-mouse ban on the importation of British meat and bonemeal in 1989 and 1990. They allowed its importation for poultry and pig rations, but failed to make it a serious offence to include it in cattle rations. We are now reaping the results of that Government's sorry act in not placing a complete ban on the importation of meat and bonemeal. That was the time the problem should have been nipped in the bud, but irresponsible Ministers failed to face up to the challenge facing them. They could not guarantee the imported meat and bonemeal would not find its way into cattle rations. From 1989 to 1991, successive Ministers failed to take steps to depopulate herds in which an outbreak of BSE occurred. The request I made to the House at that time fell on deaf ears. The current beef price difficulty is related to three factors, the cut of 17.5 per cent in export refunds since January 1997, three green £ revaluations totalling 8.8 per cent and the closure of third country outlets for the export of live cattle.
Mr. Sheehan: The sum of £51 million compensation will be paid to beef producers in May, of which £21 million arises as a result of the January revaluation of the green £. The Minister has done everything possible to reactivate live cattle exports.
Mr. Ellis: This is a serious issue for all Members and our citizens. Not alone are we facing the current crisis but we will face a further crisis in the autumn if something is not done to resolve this problem.
I wish to compare current beef price with prices 12 months ago. This week's edition of the Bord Bia bulletin states that prices have dropped by 13.9 per cent for U3s, 12.6 per cent for R3s and  R4s and 13.4 per cent for O3s and O4s. That is a serious drop in prices, regardless of any level of compensation that might be paid to make up that loss. There is a danger that gluts may be created in the market in the autumn. Cattle kept over the winter by store farmers, especially in the west, in the hope that prices might rise are overhanging the market. There is also an overhang in terms of finishers who have not seen any merit in investing extra concentrates to ensure their cattle are finished and ready for sale. Farmers who had cleared their sheds and replaced stock now find they have lost their potential profit because of losses due to price reductions in the past few weeks.
A number of serious Government actions will cause major problems down the road. Will the Minister for Agriculture, Food and Forestry tell us if his colleague, the Minister for Foreign Affairs, informed him prior to the withdrawal of our Ambassador from Iran last week? A number of EU countries did not take similar action and tried to maintain their position in that country. I am reliably informed that Italy, Greece, Spain and Portugal did not withdraw their ambassadors from Tehran. Was the Minister consulted in view of the fact that we were told by the media that his officials had planned to visit that country at the end of the month to try to reopen that major market? Can the Minister tell us if those officials will visit that country or if it has been cancelled because of the political action by the Minister for Foreign Affairs? This is a serious situation and I hope the Minister can clarify the position. Was he or the Taoiseach consulted prior to the statement made by the Minister for Foreign Affairs?
That political decision should not surprise us because the Tánaiste promised to visit Egypt, Libya and Tehran in the past 12 months, but he has not visited any of those destinations. The Minister visited Libya last year with the intention of getting a contract, but was told no contracts were available. Yet the following day the Australians got a market share of 50,000 head of cattle. They took that share of the market that was left for us because the Minister was not able to give any commitment in terms of what was sought by Libya.
The position with regard to live shipping is clear. If we do not regain those markets in the next six to eight weeks, there will be serious problems again in the autumn. We also face the problem of shipping live weanlings to Europe which needs to be dealt with. I hope the Minister will use his influence with his colleagues to ensure that full shipping facilities are available for the transport of weanlings in the autumn.
 The Minister on 4 February in the Davenport Hotel promised compensation to our farmers equal to that given by Europe. When will he get clearance from his Cabinet colleagues to pay that compensation? I hope he can tell us tonight. Will he consider the position regarding intervention? The beef intervention price is 86p per lb, yet the price being paid for steers going into intervention is only 80p per lb. Does the Department not have the right to control who gets that difference of 6p or is it open for everyone to take a slice? That needs to be addressed urgently. EU money is being used for intervention and 6p in the pound is being taken. Why is beef in mainland Europe worth 20p a lb more than similar beef here? That is where our problem arises. I could talk on this matter for much longer, but I wish to share the remainder of my time with my colleagues.
Dr. O'Hanlon: Deputy Keaveney asked if I would share my time with her, but as I only have minutes to make my contribution I have had to refuse her. That indicates that this should not be a debate for Private Members' time. It should be a two-day Government debate.
Dr. O'Hanlon: The interest of Members on this side of the House and of the members of our party is such that we could debate this issue for two days. It is grossly unfair that we are only given minutes to participate in this debate. There is an agricultural crisis and milk prices are falling.
I wish to refer to the beef sector which is facing a crisis that has been developing for some time. The Minister showed poor vision and a lack of any affirmative action in dealing with the problem. The serious price slump in winter finishers is exerting backward pressure on prices for stores, weanlings and calves. The beef industry is more important to this country than to any of the other 14 European Union member states. Management at European Union level should have taken account of that fact and that 80 per cent of our beef is exported. There should be flexibility in regard to export relief which has reduced in terms of export refunds that have fallen by 17.5 per cent.
The green £ has been revalued by 8.8 per cent. What did the Taoiseach, the Tánaiste and the Minister do about securing markets for Irish beef? It is significant that the number of cattle exported in 1994 was 404,031. For the first quarter of this year, 13,559 were exported which indicates the seriousness of the situation in regard to live exports. I put down a parliamentary question yesterday asking the Minister where he had gone outside the European Union to promote a market for Irish beef. He went to just two countries, Libya and Russia, even though it has been over 12 months since the BSE announcement in the House of Commons. A golden opportunity was lost during our Presidency of the EU when we had more muscle, but no effort was made to  address the serious situation. No effort was made by the Taoiseach or Tánaiste to try to secure markets for Irish beef.
I appreciate the Government's problems as it consists of three parties with differing ideologies. It does not give much encouragement to farmers to hear Deputy De Rossa, leader of Democratic Left, say that farmers “are rolling in it”. The Government created a serious situation in regard to group water schemes when it totally ignored 150,000 householders in rural areas. The Democratic Left leader said that farmers were looking for free water. He should have known that was not the case. There has already been a reference to the fact that at the Labour Party conference last Saturday night its leader did not once mention agriculture. I have a certain sympathy with Fine Gael members of Government but they should assert their authority even though the Labour Party leader says each party is of equal standing in Government. Fine Gael has more members in Government and should assert its authority in addressing such issues.
I appeal to the Minister to address the reduction in export refunds and the green £ revaluation and to suspend the reduction of the slaughter premium for a few months to try to tide farmers over the current difficult period. Will the Minister impress on the Taoiseach and the Tánaiste the need to secure markets for live cattle? If he did, he would go some way to alleviating the current problems.
Mr. E. O'Keeffe: I am glad to have the opportunity to contribute to this important debate. Fine Gael is not in touch with the pulse of rural Ireland. The future is disturbing and frightening for the farming community. Huge change is being proposed in Europe where a price freeze for 1997 has been mentioned. This is the reason the Minister and the Government have been hiding. There will be a serious reduction in the price support for the cereal sector and if those involved do not accept it, the dairy and beef sectors will face a loss of £1 billion. This is a major problem and is not being addressed in the proposals before us.
It is wrong to blame the Minister because urban Fine Gael Deputies share the same view as Democratic Left and Labour Deputies. If Fine Gael was the true agricultural party it used to be, the compensation package would have been put in place.
The overall budget will not increase in 1997 and that is a problem. There is a great deal of uncertainty and much work has to be done to reform the CAP and other proposals. Work on it must be completed by July 1997 and the Government  has done little or nothing. It has not even put thought into any proposals or suggestions.
Mr. E. O'Keeffe: The CAP reform is serious and the major overhaul needed has not been addressed. I do not understand why the Government is not doing so when one considers its value to the economy. I urge the Minister and the Government to inform us about what is happening. The Minister has not had an input to the proposals or suggestions.
I want the Government to emulate the previous Government in 1992. Ray MacSharry, who was the EU Commissioner for agriculture, and the Minister for Agriculture, Food and Forestry at the time, and interested in the well-being of rural Ireland and its farmers, made a pact that was openly supportive of Irish farmers, although the package was an illusion.
Mr. E. O'Keeffe: Is the Minister afraid to table his proposals on restructuring the CAP because he is nervous about the reaction from Democratic Left, the Labour Party and elements in his own party? The current proposals will have a devastating effect. Where are his proposals? I want to hear them over the coming days because people have been asking me where we stand in relation to them.
A Green Paper on the dairy sector has been proposed by Commissioner Fischler. What is the Government's position on that? We are being conditioned on what will happen because no remedial action is being taken or measures have been put in place. We are aware of the importance of the dairy industry to rural areas.
Mr. E. O'Keeffe: What has happened the young farmer installation aid? Why are there delays? Where is the Minister's charter for farmers' rights? Is it just hanging on the wall covering over the cracks in Agriculture House?
Mr. E. O'Keeffe: I advise the Minister to withdraw it. He has let farmers down with delays in payments. They cannot believe what is happening. I am shocked at someone putting a charter in place without being prepared to honour it. All payments have slowed down. This can be seen on the Order Paper every day, where Deputies on all sides put down questions on the subject.
Live exports have been the backbone of the cattle industry but the Minister has placed so many impediments to the system through over-regulation that he has gummed it up. That is the major problem and until he withdraws many of the regulations, no animal will leave Ireland. We must have live exports because we have dual purpose animals, dairy and beef. The hindquarters of our Holstein Friesians are of no value but they appeal to a certain market, so they must be exported live. I urge the Minister not to allow Democratic Left, Labour and some of his own Deputies to wreck our economy.
Mr. Molloy: I thank Deputy O'Keeffe. The Progressive Democrats are pleased to support the Fianna Fáil motion. The farming sector is experiencing severe difficulties and our party believes it must be supported. The family farm must be protected and everything possible must be done to prevent people drifting from the land. The farming sector is in need of help. The price of cattle has fallen sharply — farmers are now receiving £120 a head less than they were at the start of the year. The worst of the BSE crisis has passed, consumer confidence is being slowly restored but the price of cattle going into factories  continues to fall. If this trend continues then despite all the subsidies and supports available, farmers will go to the wall.
Life is already tough for those involved in the production of cattle. Many are in dire financial straits and not all will survive if the present price trend continues. They are operating in an environment of total uncertainty. When they buy cattle they have no idea what price they will ultimately be able to get or whether there will be any market for them. Farming is a business and any well-organised business expects to know the cost of its raw material, the costs associated with production and the expected selling price of its product. Why is it impossible, despite the safety net of intervention and a framework of price supports, to apply these basic principles of business success to farming? The conclusion must be that the apparatus constructed by the EU to underpin farm incomes is failing hopelessly in its objectives. This leads to the further conclusion that the Government and the Minister must be far more pro-active in shaping and directing the course of European agriculture policy. Despite all the Minister's bluster and public relations hyperbole he has singularly failed, even during our EU Presidency, to convince his European partners——
Mr. Molloy: ——of the necessity to direct the money where it is most needed, that is to farm families. If, as we are told, he must go down on his knees before the EU Agriculture Commissioner in an attempt to secure a pre-election slush fund to paste over the cracks in Government policy, he should have done so much earlier and to more effect.
It is no exaggeration to say that beef farmers, and beef finishers in particular, are facing into the peak cattle disposal season this autumn with considerable trepidation. It is time we had a formal investigation into the workings of the beef market. A number of questions need to be answered. Why are people quitting farming at a time when the EU is pumping £30 million per week in subsidies into Irish agriculture? Why is there a crisis in farm incomes at a time when the total value of subsidies has never been higher? Why is there no evidence of full price competition between the processing plants, even though we have adequate laws to prevent anti-competitive practices? Why is the consumer not benefiting in terms of the retail price of beef at a time when farm gate prices for cattle have fallen so sharply?
It is obvious that the EU Commission is reacting on a unilateral basis to large applications from Ireland to pre-fix export refunds. Apparently it can act without any reference to or intervention from the Department of Agriculture, Food and Forestry. Ireland, therefore, pays a large penalty for its huge dependence on the export beef trade relevant to other European member states. The Minister has been unable to  convince our European partners of the central importance of agriculture to our economy and its dominance as an export earner.
Since the beginning of the BSE crisis market after market has been closed to Irish carcase beef and live cattle. The Minister repeatedly promised he would spare no effort to have these markets re-opened. Even the Tánaiste offered hopes of a restoration of the Egyptian market. Visits by third country buyers have been used to create an aura of activity and hope. The reality, however, is different from the rhetoric. Markets remain closed, prices continue to slide and the competition required to support the cattle trade never materialises.
Because of the strength of the Irish pound and the revaluation of the green currency, the price of milk has fallen by more than ten pence per gallon while beef prices are cut by seven and a half to eight pence per pound. In February, the Minister told the IFA in the Davenport Hotel, Dublin that he would introduce national compensation to offset the consequences of the revaluation. Nevertheless, on 26 March, the Minister told the House “there are no proposals to supplement the EU compensation from Exchequer funds.” Which is it? Will the Minister make a clear and unambiguous statement on this issue? Will he or will he not pay compensation? Is this another part of the slush fund which will be produced to buy the farming vote a few days before the general election? If the money is to come farmers need it now, not in five weeks' time. The Minister must also ensure that payments legitimately due to farmers are paid on time and not held back until just before the election. Third country markets for beef are hugely important but we must not lose sight of the value of European markets. What practical proposals does the Minister have to ensure that our beef and live cattle find profitable and improved markets within the EU?
This Government, ensured by its left wing ideology, has presided over an unprecedented collapse in farm incomes. It has brought one of the engines of our national prosperity to its knees. Today's difficulties have not been caused by BSE, low beef consumption or factors outside the Minister's control. Consumption has recovered significantly and there is demand for beef. This crisis could have been avoided if the Government was prepared to have more than a token presence in Brussels, more than a non-existent presence in third country markets which have been closed to us, and more than a passing interest in the profound difficulties confronting the industry and farm families.
All the rural development initiatives and supplementary measures to boost alternative enterprises and off-farm activity will be worthless if the commercial heart of agriculture is unprofitable. Pre-election gimmicks may win votes but they will not stop the slow death of rural Ireland. Stopping that decline and restoring some confidence  in farming is the task confronting the Minister and the Government. The record to date does not inspire confidence. We need fewer photo-opportunities and more action.
Minister of State at the Department of Agriculture, Food and Forestry (Mr. Deenihan): I am pleased to address the House on this motion. It is quite evident, after some two and a half hours of debate, that the motion tabled by the Opposition is both misguided and inaccurate. As the current difficulties in the beef sector can be put down to decisions taken at EU and international levels some years ago, combined with one of the worst public health scares ever encountered in the food sector, it is obvious that the motion tabled reflects a total poverty of understanding on the part of the Opposition. The motion also fails to acknowledge the enormous and significant collective efforts made by my colleague the Minister, Deputy Yates, my Department, the Government, various Government agencies and myself over the past year to protect our most important indigenous industry, thereby securing the incomes of producers in the sector. Accordingly, I believe the amendment moved by the Minister accurately reflects the position and I fully support it.
The current difficulties in the sector are predominantly due to the surplus beef in the Community. The beef surplus in the European Union is significantly greater than the quantity of subsidised beef which can be exported to third countries under the GATT agreement. The limit for the current marketing year, which ends on 30 June, is 1.19 million tonnes and already export licences for over 80 per cent of this quantity have been taken out by traders. Fearing that the limits could be breached, the Commission reduced the export refunds by 10 per cent in January and 7.5 per cent at the end of last month, in the expectation that fewer licences will be taken out. We have continually disagreed with the Commission's approach to managing the licensing system and have suggested what I believe are workable alternatives. The GATT limits could be more effectively adhered to through shortening the validity period for licences and the application of a reduction coefficient. The Commission has accepted our approach to the validity period.
The second element of our proposal should also be taken on board. The Minister will seek the support of his colleagues at the Council of Ministers next week to bring some order into this critical area and put an end to the ad hoc approach which is currently creating uncertainty in the industry.
The fall in beef consumption in the EU since the BSE crisis has resulted in a higher proportion of Irish beef now going to third countries. The demand for Irish beef on these markets remains undiminished. We are doing everything possible to reopen the few markets still closed. However, the closure of the third country trade for live cattle since the beginning of the year has removed  a very important competitive element from the cattle market and every effort is being made to get boats moving again. No effort has been spared in that context and every possible initiative has been taken and continues to be taken.
Opening those markets is not just simply a matter of getting on an aeroplane as seems to be implied by the Opposition. Such a facile view shows contempt for the concerns of the authorities of those countries, and scorns the intelligence of producers who have been down this path many times before since the BSE problems arose first in 1990. Dare I point to the abortive attempt by the then Fianna Fáil spokesperson on agriculture, Deputy Brian Cowen, who took it on himself to intervene in Iran with much hype and ceremony, and returned to Ireland with his tail between his legs and empty-handed to boot.
Mr. Deenihan: What is really required to reopen these markets is not platitudes or simplistic gestures, but painstaking effort at technical level to assure the authorities in those countries about the safety of Irish beef.
Mr. Deenihan: The recent reopening of the United Arab Emirates serves to illustrate the success of this approach. I am confident that reopening will be followed shortly in the few remaining markets still closed. In recent weeks a technical delegation from Libya visited Ireland to see our controls. They were impressed with our measures and will make a favourable report to their Government in Tripoli. Technical discussions are also continuing with Iran with a view to agreeing an acceptable veterinary Protocol. Some weeks ago the Egyptian authorities approved a revised veterinary certificate, thus enabling the beef trade to continue. The Minister will continue his efforts to have the live cattle trade reopened at the forthcoming Cairo Food Fair.
While the long-term solution to the beef problem in the Community is to rebalance the beef market, my immediate concern is to protect the income of beef producers through adequate market supports and direct payments. Apart from export refunds, we will continue to ensure that flexible intervention arrangements remain in place to provide a floor price for cattle. Some £30 million will shortly be paid out of the very sizeable BSE compensation packages agreed last year and that will relieve the hardship suffered by producers. In addition, £20 million is being paid out as a result of the revaluation of the IR£. Win ter finishers are being particularly targeted under this fund by way of top-up of the winter slaughter  premium. It is worth noting that the continuation of the slaughter premium in 1997 was a notable achievement in last year's negotiations for BSE compensation, as a result of which £20 million will be paid out to winter producers this spring.
Further compensatory payments due to the more recent IR£ revaluation will also be paid out. As far as 1997 is concerned the cumulative value of the various measures which we have negotiated for beef producers amounts to £96 million when the deseasonalisation premium is included.
The Government is fully aware of the problems encountered by beef producers and the beef industry generally, both as a result of EU policy, international obligations and the BSE crisis. Effective action has been taken and I am confident the Minister will reopen the market in countries involved in the very near future.
Mr. Nolan: There are no Labour or Democratic Left Deputies present for this debate, which proves how seriously they view the problems of beef farmers. They have no interest in farmers or agriculture, although those Deputies will vote against this motion.
I commend Fianna Fáil for this motion and reject the Minister's assertion that it is misguided and inaccurate. The crisis in confidence in Irish farming over the past 18 months is evident. I met a number of farmers in the past fortnight and have never before experienced anything like the crisis of confidence among beef farmers in particular. Farmers have been accused of crying “wolf” too often in the past, but nobody who has recently met small to medium-sized farmers who have been caught with stock they cannot sell and whose bank managers are beginning to lose confidence in them, would agree with that.
A Government with a commitment to agriculture would say it was serious about doing something, but nothing has been done to open our foreign markets. The Minister and his Fine Gael colleagues have paid lip service to opening markets that have now been closed for months to Irish exporters. Nothing has been done about the way Irish meat factories are abusing their monopoly of the beef prices being paid to farmers. Farmers received £1.07 a pound for beef two years ago; now they are receiving 80p a pound when it is accepted by economists and farmers alike that the price necessary to break even is 88 to 90p a pound. It is not good enough for the Government to say it is doing its best. In this case, its best is not good enough.
The Tánaiste's lack of concern has been mentioned. In a wide-ranging address to his party's annual conference last Saturday night, the Tánaiste did not once mention agriculture. There  is a serious crisis in confidence in agriculture which is not being addressed by the Government. It is not good enough to say this started with BSE and the consumers' lack of confidence in buying beef. I implore the Minister to take on board the plight of the Irish farmer, the beef farmer in particular.
Mr. Aylward: I join my colleagues in calling on the Minister to wake up to the crisis in Irish agriculture. We read a lot about the roar of the “Celtic Tiger”. That tiger is silent in rural Ireland. It is not just the farmers who are experiencing terrible difficulties but rural communities generally. There can be no doubting a strong anti-rural bias in this Government against farming and rural Ireland.
There are 150,000 farming families affected by this crisis. The Minister and the Minister of State are well-intentioned and hope to do what they can for the farmer, but they are not supported by their left wing partners in Government, the Labour Party and Democratic Left. It is eminently clear to many farmers that this Government is openly hostile to them and this has been adequately demonstrated on several recent occasions. The fact that the Tánaiste omitted to refer to farmers in his speech to his party conference last weekend has been referred to. When discussing water charges some weeks ago I was amazed that the Minister for Social Welfare found it necessary to launch an attack on farmers, stating that they wanted free water: nothing could have been further from the truth. We had been talking about those living in rural Ireland, not about farmers, yet he availed of that occasion, and never loses an opportunity, to launch a blistering attack on them.
Farm prices have collapsed to their lowest level for many years, beef being retained in factories at 80p per lb, the lowest in 20 years. Every aspect of Irish farming has been affected, including the price of milk, grain etc.
I fail to understand the lack of effort on the part of the Tánaiste, the Minister or the Cabinet in general to reopen markets for our live exports trade. I have no doubt that Irish factories, whenever afforded an opportunity, operate a cartel. For example, in the years 1993 and 1994 almost 400,000 head of cattle were exported. The total for the first quarter of this year was 12,740, which would amount to fewer than 50,000 in any one year. This amazes me because markets exist for these exports. The Egyptian, Libyan and Iranian markets have been closed, as has portion of the Russian market which absorbed almost 40 per cent of our beef exports. This clearly demonstrates the failure of the Government to make any effort to restore them.
The Irish Farmers Association and other farming organisations have submitted several proposals and called on the Minister on numerous occasions to honour his commitments, but he has reneged on them. Thirteen per cent of our total  workforce, in excess of 140,000 people are involved directly, in addition to those indirectly involved, in agricultural activity, the bedrock of life in villages and small rural towns which allows people to live and obtain employment within their local communities.
No Member of this House is endeavouring to score political points. There is a crisis and the Minister is the only person who can do something about it. No effort should be spared at top level within Government to grapple with the problem. The Minister should call on his colleagues and partners in Government to wake up to the horrendous problems in agriculture. The collapse in farm prices, the closure of foreign markets, repeated cuts in export refunds and the failure to deliver on the promise of matching compensation for green £ revaluations all indicate the failure of the Government to grapple with them.
Mr. B. Smith: Once again the Fianna Fáil Party has had to initiate a debate on a very serious crisis confronting the agricultural industry. There is anger and concern among the farming community, particularly those dependent on beef production who face enormous financial difficulties, who know this Government has totally failed the agricultural sector and that farming will not receive the support it needs. It appears the attitude of the Government is one of complete indifference to the plight of rural Ireland. The Minister and Government have failed to deal adequately with any of the difficulties facing the agricultural community since the end of 1994. The political and diplomatic effort needed to safeguard our markets and restore those lost has not been forthcoming.
The BSE scare, the revaluation of the green £ and several cuts in the rate of export refunds, have seriously dented the confidence of the farming community. In order to maintain a vibrant beef industry we must have markets for our beef products and live exports. The farming community is quite rightly convinced that the political leadership and commitment needed for such a large industry will be lacking as long as this Democratic Left and Labour-dominated Government remains in power. The electorate, the farming community in particular, are aware that the only way to restore confidence in farming is to call a general election, which hopefully will take place as soon as possible, allowing for a change of Government following on which one must hope that agriculture will receive the necessary  leadership and support from a Fianna Fáil Minister.
Mr. M. Ahern: An essential ingredient of any business is confidence. It is quite evident that there is a complete lack of confidence in this Minister and Government, not because of some efforts undertaken by the Minister and his Minister of State but because they are undermined by the left wing members of this Government. Everybody in Fine Gael knows that is the case and Fine Gael affiliated farmers will confirm that. It is time there was a change in Government so that the industry will be restored to its healthy state of two years ago.
The cereal, beef, potato and dairying sectors are in dire straits. One example relates to export refunds. On 5 February last the Minister informed us there was to be a 10 per cent cut, adding that this represented a first step in reducing the valid period of licences to 30 days, hopefully, a first step in the process which would presage refunds increasing to their former level. Yet, they were cut a further 7.5 per cent before being finally abolished yesterday. Therefore, we can deduce that, even at that stage, the Minister did not know what was happening. It is time he did the honourable thing, fell on his sword and allowed an efficient Minister to take over his portfolio.
Mr. N. Treacy: I support this motion and endorse what my colleagues have said about the inability of the Minister for Agriculture, Food and Forestry to grapple with the crisis in the agriculture industry. As someone who was born on a small family farm in east Galway and spent half my life working for the farmers of Galway, Mayo and Clare, I know what Ministers for Agriculture have done in the past to ensure that whenever a crisis arose in agriculture they were able to approach their Cabinet colleagues, obtain the wherewithal, muster the initiative and support to guarantee opportunities and the creation of markets.
It is tragic that, for the first time in the history of the State, every investment in farming has been suspended by the Minister, although a feeble effort was made in the budget to ensure that larger farmers, who traditionally support the Minister and his party, are given some tax allowance for investment purposes but there was none for small, developing farmers.
There is no gainsaying that there is a serious crisis in the agriculture industry at present, particularly within the dairying and beef sectors where farm incomes have dropped by some 20 per cent.  For the past three years cattle finishers have had their incomes reduced each winter, yet the Minister has done nothing about it. He told the nation on the national air waves that he was negotiating with the Russians, working ferociously for the nation and our farmers, when he was actually in Enniscorthy enjoying beverages or whatever. To tell the nation that he was committed to working for our farmers while actually in his constituency and not interested in discharging his constitutional responsibilities renders him unfit for office. When he spoke to members of the Joint Committee on Sustainable Development in July 1995 he told them he expected to restore the combat farm pollution programme by September 1995, yet some two years later that has not been done; that is what the Minister's commitments are worth.
It is vital that we export livestock, yet no markets have been negotiated or guaranteed. The Minister failed to take the initiative and obtain any support from the smoked salmon socialist deputy leader of the Government or the whiskered compatriot within the Cabinet to do anything. It appears they did not want live exports thus ensuring a competitive environment for our farmers, producers and finishers within the relevant markets.
There are markets in Europe for live cattle but the Minister was unable to protect them. What was the Minister's dismal response yesterday? Resulting from our exporters having to fill their traditional markets from Australia and elsewhere, the Minister's only response to this motion is that this Herod-type system will be a panacea for farmers' problems. He should not have accepted that because in doing so he accepted a slaughtering programme that will reduce our numbers and discontinue the additional support from Brussels which is vital to underpin Irish agriculture. The Irish Farmers Journal is correct. Time and again, and as recently as 5 April, its editor made it clear that at the end of the day responsibility for the present mess rests with the Minister for Agriculture, Food and Forestry and his Government colleagues who have taken no action to redress the problem and ensure people are not put out of business.
If we do not have support from the eastern part of the country for the livestock producers in the west, farmers in the west will be put out of business. It is time for the Minister to wake up or move aside and allow a Government, with a Fianna Fáil Minister for Agriculture, to take over and ensure the traditional markets for live cattle are restored for Irish farmers, underpin the markets and deliver an equitable and fair investment to the agricultural community as in the past.
Browne, John (Carlow-Kilkenny).
Gallagher, Pat (Laoighis-Offaly).
Noonan, Michael (Limerick East).
Browne, John (Wexford).
de Valera, Síle.
Ó Cuív, Éamon.
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