Thursday, 8 November 2001
Dáil Eireann Debate
Henshaws is a factory with a long history of providing good service to farmers. It is extremely unfortunate it has experienced financial difficulty. I understand a liquidator or receiver has been appointed recently. There are a number of farmers with cheques that are of no value as a result.
These farmers did not choose to send their animals to Henshaws. Some animals are bought by the Department under the valuation scheme. Others are bought by the Department from the farmer as a result of a tender system into which the Department enters each week. It advises the factories the number of animals available and receives tenders accordingly. The Department decides which tender to take and organises for the animals to be removed to the meat factory.
The animals bought under the valuation scheme are paid for directly by the Department. Those bought under the tender system are paid for partly by the Department under a grant structure and partly by the factory. The farmers concerned at no time make contact with the factory. In many cases farmers have requested that they be allowed send their animals to a factory of their choosing, but the Department has refused such requests.
Some 191 farmers nationally, who are in this position, are owed approximately £201,000. In County Monaghan, which I and the Leas-Cheann Comhairle represent, approximately 54 herds are affected. Between 5 September and 4 October  155 animals were removed, which is an average of fewer than three animals per herd. Twenty one of those 155 animals were bought under the valuation scheme, the rest were bought under the grant system.
The Department refused to buy the other animals under the valuation scheme because the regulations state that unless a farmer has more than six animals, the Department has to take them under the grant structure. Therefore, these farmers had no choice.
How can it be that one farmer, whose animals were bought under the valuation scheme, might be paid in full while another farmer living on the same road, whose animals were bought under grant structure, might not be paid? The Department bought these animals and those farmers must be paid not just for the sake of the money but for the sake of goodwill if this structure is to continue.
The valuation scheme was introduced under the PPF last year. Those farmers who can avail of it have major questions about it. A maximum payment applies for pure breed animals. The payment is £2,000 for females and £2,500 for males. A farmer told me recently that he had bought a female animal for £3,500 last year and although the animal is in calf now and much more valuable, £2,500 is the maximum he can be allowed for that animal.
The main problem is there are not enough valuers to make this scheme work properly. My county has one of the highest records of TB, but there is no valuer in County Monaghan. A valuer should be based in a county such as Monaghan in order that this issue can be speeded up and reactors removed from farms as quickly as possible.
Why were farmer applications for the valuation post not accepted? Was the Department worried that those people may know too much and be too sympathetic towards farmers? Why are valuers not allowed use their discretion or common sense? They must fill in 103 boxes on the required form. That does not allow for common sense to prevail. Many farmers are being told by valuers that they would like to be allowed use common sense, but the regulations tie them.
This is a new scheme, but if we are to have the goodwill of those who suffer enough as a result of disease among their animals, we must review this scheme to ensure it is workable and farmers get reasonable compensation, no more and no less.
Mr. Walsh: I thank Deputy Crawford for raising this matter and giving me the opportunity to reply. Under the TB and brucellosis eradication schemes, provision is made for compensation to be paid to farmers in respect of reactor animals removed for slaughter at designated meat factories. Under this system meat factories tender on a weekly basis for reactors and the Department of Agriculture, Food and Rural Development selects the meat factory or factories that are most  financially beneficial in the prices they offer for different types of animals.
Under the existing compensation scheme the payments to farmers are made up of two elements, one, the salvage value of the reactor carcase, which is paid directly to the farmer by the meat factory and, two, a reactor grant, which is paid to the farmer by the Department. However, under the Programme for Prosperity and Fairness, it was agreed between the Government and the social partners to introduce a new compensation scheme in the form of an on-farm valuation system. Under the new scheme the farmer receives the animal's market valuation less the salvage price paid directly to him by the meat factory. The valuation scheme has been phased in from February last following protracted negotiations between the Department and the farming organisations.
In order to qualify for compensation the farmer must avail of the reactor collection services, which is provided free by my Department, and comply with various other conditions. This collection service provides greater security in the movement of reactors between farm and meat factory and ensures higher standards of vehicle hygiene.
It is important that I point out that at all times the ownership of the reactor animal continues to reside with the farmer and, therefore, the contract for the salvage value is solely a matter between the farmer and the meat factory involved. Farmers are paid the salvage value of the animal directly by the factory. My Department's responsibility is to ensure the secure removal of the animal to slaughter and to pay the appropriate valuation or reactor grant compensation outside the salvage value.
In circumstances where a factory goes out of business, such as happened in the case of Henshaws, the recovery of moneys due to losses incurred by farmers is a matter for resolution between the farmers and the company's liquidators. While my Department will continue to meet its financial commitments by way of valuation or reactor grant compensation, the recovery of payments due in respect of unpaid salvage for reactors by Henshaws is a matter to be resolved between the farmers involved and that company's liquidators.
Compensation under the TB and brucellosis eradication schemes is a matter of ongoing review in the animal health forum and any modifications necessary from time to time are agreed at that forum. I will have reasonable requests for adjustment of the compensation schemes considered by the forum.
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