Wednesday, 13 March 1996
Seanad Éireann Debate
That Seanad Éireann condemns the Government's neglect of the cattle  and beef industry; calls on the Minister for Agriculture, Food and Forestry to secure the restoration in full of export refunds; and calls on him to fulfil his long standing commitment to institute a package of measures to sustain the sector in the face of the deepening crisis in the beef sector.
To delete all words after “That” and substitute the following: “Seanad Éireann endorses the measures which have already been taken by the Minister for Agriculture, Food and Forestry to address the difficulties being experienced by beef producers, commends efforts by the Minister to secure a full restoration of export refunds and welcomes the measures contained in the Structural Fund Food Sub-Programme and in the recent budget to improve the competitiveness of the beef industry.”
Is the other side of the House serious about this? A headline in the Farmers' Journal of 6 February 1996 referred to “special breed premium shocks”, another headline on 24 February spoke of a “crunch approaching on beef” and a further headline of 10 March refers to the “beef crisis deepening”. As these matters are very serious for the beef industry, I fail to see how the other side expects its amendment to be accepted.
Since last autumn export funds have been cut by 35 per cent with devastating results for cattle farmers. Cattle bought last September at 106p and 107p per lb. are being sold at 98p per lb. After months of winter feeding this represents a loss of up to £70 per head of cattle. Figures from Teagasc show that a price of 105p or 106p is required to break even. To make a profit of £30 per head, farmers would need to get approximately 109p per lb. As late as last Monday I took bullocks to Galtee  Meats in Charleville and was told I would get only 98p per lb. I was very bitter about this. I am sure that many farmers who have suffered losses of this kind are nearly suicidal. To spread this loss over the spring at £70 per head on 460,000 steers would amount to £32 million, a staggering figure, and this assumes that situation does not get worse.
There is no prospect of matters getting any better, indeed they will probably get worse. Farmers have held back stock hoping that matters will improve, and there is now a glut of cattle that will have to be sent to mart. With lower export funds in operation and no competition from the live trade, there are realistic fears that prices will fall even further.
The Minister has political responsibility for this calamity. He is out of touch with what is happening in Brussels and out of tune with how business is done there. His eye is off the ball. He was repeatedly warned of the effect the successive reductions in export refunds would have on the price of cattle but he ignored it. According to the Farmers' Journal of 28 January 1995, bullocks were quoted at 107p per lb. They are now quoted at 98p per lb. A bullock at 107p per lb. last year would have made £900, whereas now a similar bullock at 98p per lb. will only make £824. This represents a loss of £1,520 on 20 cattle and a loss of £3,040 on 40 cattle.
This illustrates what farmers have lost to date. Would any other section of the community lose such money? Yet we are now expected to pay levies for the beef industry. This is a burden on the farmers. The Government could make other sections liable, but it is the farmers who will be made to pay. The Minister is responsible for this.
This year prices came down. In January prices were 100p per lb.; they are now 98p per lb. In March 1995 prices were 109p per lb. A bullock sold at 109p per lb. would have made £900 last year; this year the same bullock will make £809, a loss of £91, or £1,820 on 20 cattle or £3,040 on 40 cattle. These are the  kind of losses farmers are enduring during the Minister's stewardship.
Under parliamentary privilege, the Minister launched an attack in the Dáil on the largest participant in the Irish beef industry. This attack, which the Minister was not prepared to repeat outside the House and which he has been unable to support, is outrageous. In attacking Mr. Goodman, he has deliberately and unnecessarily undermined the entire beef sector.
The attack by the Minister on Mr. Goodman was, perhaps, most notable for its timing. It coincided with a period of growing embarrassment over the Minister's handling of the beef fine. From last autumn he repeatedly made it known that the fine could be negotiated downwards to £50 million. It has become apparent that this is not possible. The Minister's deteriorating relationship with the EU Agriculture Commissioner and with other officials has placed him in a dilemma. If it was possible to reduce the fine, as he claimed months ago, this is not the position now.
There are serious political questions to be answered by the Minister as to how and why relations with the EU Commission on this and other issues have deteriorated. Clearly his relations with the Commission have not been helped by the series of attacks he has made on it over the last few months on a number of issues — once on the Agriculture Commissioner at the Berlin Food Fair. This attack, with other comments he made, have been badly received by the Commission. If the Minister is in a hole it is one of his own making.
Given this, it is possible to see the context of the Minister's attack on Mr. Goodman. It reveals that the Minister is unable to handle his own business and is searching desperately for a scapegoat. The farming organisations are disappointed with the Minister's attack on Mr. Goodman. My colleague, Senator Quinn, who is not in the House, said last  week when speaking on the bovine disease legislation:
Let me speak from the experience of a major buyer of Irish beef. As one who is part of a European group and who has introduced supermarket groups right across Europe to Irish suppliers of beef in both those capacities, I would be very sorry indeed to see Larry Goodman leave the Irish beef industry.
He said that in his experience and in the experience of his European colleagues, Mr. Goodman's company provides a level of professionalism and an ability to address the concerns of the customer that is quite exceptional in industry. He said that nobody likes irregularities. I will not condone irregularities or what happened in Rathkeale, the plant nearest to me; but we had the beef tribunal and nobody has been charged. People just want a scapegoat. There are irregularities in other countries in the EU, I understand, and there are irregularities in other areas of life. We do not tackle social welfare irregularities, on which the Government loses a lot more finance, as vigorously as we tackled these irregularities.
Some weeks ago, attending the launch of the Teagasc annual report, the Minister for Agriculture, Deputy Yates, used the occasion to announce that the “cheque in the post” era had ended for farmers. The president of the IFA, Mr. John Donnelly, said this was a terrible political blunder by the Minister. The Minister has no good news to deliver but he seems to be most anxious to deliver the bad news.
The Minister also took the opportunity to say that if Irish farmers were more efficient inside their own farm gates, up to £200 million could be saved. He pledged that Teagasc would work with farmers to deliver these efficiencies and provide consequent extra profit for farmers. However, the Minister did not say how he would address the growing staff crisis in Teagasc. It has now become apparent that even as he was announcing the campaign for efficiency, he already knew that he could not and would not deliver the staff Teagasc needs if it is to work with farmers to create greater efficiencies. There is a shortage of staff all over the country, especially in the farm development programme. Farmers have to wait over two years to get grants and all that time they are paying interest on the money they had to borrow to invest.
Some 44 jobs were sanctioned to Teagasc last week. Of those 44 positions, only three are permanent. The remaining 41 are temporary and will last only for the duration of these structural funds. None of the ten positions that Teagasc sought in the area of training and education was sanctioned. This is disgraceful, as the main reason for the existence of Teagasc is to train and educate young farmers. This is necessarily the core of any drive towards greater farm efficiency. The Minister for Agriculture's campaign for greater farm efficiency is a bottle of smoke.
The Minister has not been able to tackle the short term crisis in relation to the beef export refunds. It is also apparent from his attitude to providing  resources for Teagasc that he is not able or interested in tackling the long term underlying issues that Irish farmers need to face if they are to come up to speed at the end of this round of CAP. I wish to refer to the slaughter premium and to the 40 per cent that need to be killed. We were not able to meet the 40 per cent threshold last year; we were looking at 35 per cent. Now the Minister says he will accept 38 per cent, which will not suffice if Ireland is to qualify for the slaughter premium.
We have another beef sector which normally does not qualify for either of the special beef premia. Mature store cattle are bought in the autumn and sold in the spring. The essential point seems to have escaped the politicians. It is not the absolute price that matters in this sector but the difference between the buying and selling price. Let us examine the difference between the November and January prices over the last two years. In both 1993-4 and 1994-5 there was a rise of at least 4p per lb. This year there has been a fall of up to 7p per lb. The basic sums are that simple. Should finishers simply be told that these are the vagaries of the market and must be lived with? This does not wash.
Ireland has been pushed by deliberate EU policy into reliance on third country markets. In 1995 over 80 per cent of our steers went to third countries. Russia was our most important individual market in 1995 for the full mix of beef products, steers, heifers and cows, as An Bord Bia has pointed out. The UK and France were our next most important market, followed by Saudi Arabia, Egypt and Iran. We have a crisis in the beef industry. The farmers who assembled outside that gate today did not do it lightly. They are very worried.
The crisis facing the beef and live cattle sector is very serious. The future of 100,000 cattle farmers and 10,000 workers is at stake and the Government  and the Minister are doing nothing to assist this vital sector, worth £1.7 billion to the country annually. Indeed, the Minister is at every opportunity attacking the industry and destroying confidence in this sector. Farmers should not have to suffer for the mistakes or mismanagement of others. Farmers have over the last decade invested heavily in their business, with new facilities for better production in the market place. Why should they have to bear the 35 per cent cut in refunds by the EU commission because the EU mismanaged the GATT quota? It is an outrage that refunds have been cut by £100 per animal and by £120 per animal for the live exports on last September. This will lead to the financial ruin of the farmers of this country.
The live export trade brought competition to the cattle sales and was a very welcome boost to the sector, yet today our live export trade to Egypt has collapsed and the Australians are filling the orders to Ireland's loss. The Government and the Minister do nothing but talk of imposing further penalties on farmers with their beef fines. No matter how the Minister dresses this up, it will be imposed on farmers. Labour and Democratic Left have run in and out of the beef tribunal, which cost the taxpayers £30 million. They must not be allowed to make farmers pay the beef fines. The European Commission's threat to cut the £60 per head slaughter premium would be the final nail in the coffin for our winter finishers. This cannot be allowed.
I urge the Taoiseach and the Minister to immediately take up the crisis facing the beef sector and ensure the EU restores export refunds and removes the threat to the slaughter premium. Farmers have done nothing wrong and must not have to pay fines on behalf of others. It is time the Minister and his Government colleagues accepted the seriousness of the crisis and faced up to their responsibilities.
I urge the Minister, the Taoiseach and their colleagues to do everything in their  power to help beef producers and live exports, even at this late stage. Senator Kiely mentioned that farmers did not decide lightly to come to Dublin to protest today. The Minister is aware of that and the farmers' action should be taken on board. Everybody knows they had to do it because their lives and families are at stake.
Seanad Éireann endorses the measures which have already been taken by the Minister for Agriculture, Food and Forestry to address the difficulties being experienced by beef producers, commends efforts by the Minister to secure a full restoration of export refunds and welcomes the measures contained in the Structural Fund Food Sub-Programme and in the recent budget to improve the competitiveness of the beef industry.
This subject has been aired in the House many times, particularly in recent months, and nobody needs to be convinced about the difficult income situation faced by beef producers, particularly regarding winter fatteners. This has arisen following various reductions in export refunds, particularly since last autumn. The role played by the winter fatteners to ensure an orderly flow of beef during the year is most important as it keeps employment in the factories and also keeps the supply of meat, particularly for export, going throughout the year.
The origin of the problem is the GATT agreement which was concluded in 1993 and which came into force on 1 July 1995. In these proposals export refunds were to be reduced by 36 per cent over a six year period. This means a cut of approximately 24p per lb. in the price of beef. In addition, in practical terms the GATT agreement means that the export of beef from the European Union must be reduced from 1.3 million  tonnes in 1993 to less than 1.2 million tonnes in the first year of the agreement, which runs until 30 June 1996. This is a serious reduction in terms of volume. On top of these two issues, there has been, particularly in the last six months, the BSE scare in the UK, which has seriously affected the consumer and reduced considerably the consumption of beef across Europe. By and large, these three items together have created the present serious problem in the Irish beef industry.
The GATT negotiations were protracted. They started in 1986 and were scheduled to conclude by December 1990. However, this did not happen because sufficient progress had not been made in many areas, including agriculture. The negotiations did not conclude until 1993 and the United States, New Zealand and Canada found themselves in a far more favourable position than the EU at that point. Indeed, as a result of the negotiations, several areas of agriculture in the EU will deteriorate. In addition, in the negotiations the EU was asked to give guarantees of access to its partners to its market without receiving any similar guarantees itself. This was a very bad mistake.
The GATT agreement came into operation on 1 July 1995 and the beef industry was managed by the EU beef management committee and not by the Minister. Its actions and decisions proved very negative for this country and its beef producers. I cannot understand why the price of cattle was kept artificially high from July to December. It then proceeded to cut the export refunds in November, particularly for the live cattle trade. This created an imbalance and also a situation where there was no competition in the market place. As a result, the price of beef was reduced by approximately 6p a lb. These are the hard facts of the decisions taken in the latter half of 1995.
I am critical of the decisions taken by the EU beef management committee in view of what has happened over the past six months. The GATT proposal is that over six years export refunds  should be reduced by 36 per cent. However, there was a 35 per cent reduction in the first year. This does not make any sense to me and it is a warning to the entire. Community that the actions and decisions of this committee must be monitored closely on a regular basis.
I welcome the initiative taken by An Bord Bia in devising a market strategy for the UK. This market is most valuable and it is on our doorstep. I have always argued and will continue to do so that the steps taken, particularly by the meat factories, have been inadequate in terms of securing the maximum share of this market. Irish beef has a special place with consumers in England and I have no doubt that if our beef was properly processed, packaged and marketed, there would be a huge increase in our share of that market. I accept that market conditions are difficult at present, but there is strong support and always has been for Irish beef in Britain and we should take every step to ensure we exploit that market to its full potential.
There is keen competition from the white meat sector, particularly pork and chicken. However, in terms of consumers, nothing compares to Irish beef when it is properly processed and presented. The issue involves not just the UK market, but also the markets of Europe in general and the German market in particular. The quality of our beef is far superior than most European products. I have no doubt there is possible further percentage gain there and particularly in Italy. For example, a supermarket there was not prepared to put anything other than Irish beef on its shelves. This is great news for Irish beef producers, and numerous other markets are also available across Europe. I appeal to the Minister to ensure that marketing and processing is a priority as far as the beef industry is concerned. The Department, through An Bord Bia, should take a particular interest in securing these markets. The Irish beef industry can gain market share in Europe.
 I ask the Minister to ensure that the GATT agreement, and particularly the beef management committee, is monitored on a weekly or monthly basis. We cannot in the future accept similar decisions to those made this year. I am glad the Minister has taken a serious initiative regarding research and development, because production is just one aspect. We must present what the consumer requires. Unfortunately, our meat has not gained prestige in that regard although we probably have the best meat in the world. I have visited practically every country in the world and conditions are difficult, like those in Ireland. I commend the Minister for taking this initiative, but it must continue.
Mr. Kelleher: This is a timely motion as thousands of farmers have protested on the streets of Dublin today at the crisis facing beef producers, particularly winter fatteners. Many farmers would not shed any tears if the Minister left the Department of Agriculture, Food and Forestry, because they feel annoyed and let down by him. I spoke to members of the IFA today who feel that very little is being done for them. It is too late at this stage for some of the winter fatteners who have sold cattle at a loss of up to £150 per head.
This was well known in advance and something should have been done about it. We talk about beef management committees in Europe and how export refunds have been slashed, but the Minister must bat for the Irish farmer abroad. The Minister said there is not a crisis in the beef industry but farmers indicated in Molesworth Street today that their livelihoods are in jeopardy because of the inactivity of the Minister and the European beef management committee.
Mr. Kelleher: If we are serious about live exports, a conduit will have to be available to ensure such events do not happen in the future. Live exports are coming under threat from Compassion in World Farming and other lobby groups. Their arguments are unfair and are doing a great deal of damage to the world beef industry, particularly the Irish industry.
In regard to marketing, An Bord Bia has been quite successful in the short time since its establishment. However, that is of no consolation to farmers, who are at present facing a drop of up to £120 per animal this year. That is why they came to Dublin to protest today.
We are great at talking ourselves down. The beef tribunal was one of the most embarrassing times to try to market Irish beef abroad. I said a couple of weeks ago in this Chamber that I was in Wales at a young farmers' discussion group meeting when the beef tribunal was set up. They said to me, quite genuinely, that they found it almost unbelievable we would spend up to £30 million on trying to damage our beef industry. A couple of years later, we face EU fines of up to £100 million which will be levied on farmers. I totally object to the levying of any of these  fines on beef farmers. It was not the fault of any particular farmer.
Mr. Kelleher: Individual farmers should not have to bear the burden of paying beef fines for which they were not responsible. We can point the finger at the beef processors and producers. We can also point the finger at the Department of Agriculture, Food and Forestry.
Mr. Kelleher: That is the idea of debate. The farmers protesting on the  street today have asked for two things. The first is for no fine to be levied on them and the second is for the Minister to ensure an increase in export refunds so that our beef producers will have a reasonable standard of income in the future. My concern and that of the farmers is shared by many people in the industry — workers in meat factories, haulage companies and so on. This is not just about farmers, because this industry has a huge impact on the economy. The Members opposite have more or less suggested that if the money to pay the fine cannot be found, the farmers should be levied instead. I totally reject that.
Minister for Agriculture, Food and Forestry (Mr. Yates): I regret to say I have rarely heard such a poor series of contributions from any Opposition spokespersons as I heard this evening. Senator D'Arcy was the only speaker who addressed some of the real issues involved. It is a rich irony that the sins of seven years of Fianna Fáil administration, which are now being visited on us in the form of beef fines and other issues, should be blamed on me and that such misinformation should be put out in a debate. There is no proposal to levy farmers. A monthly billing system is being put in place for meat processors and it will not be possible for them to invoice it on the slaughter of animals. Some of the remarks made by Senator Rory Kiely in relation to Rathkeale were quite incredible, given there have been convictions in the courts. The alacrity with which Fianna Fáil seems to step forward to defend malpractice in the beef industry never ceases to amaze me.
Mr. Yates: ——in Brussels to Ireland's beef reputation, which I am determined to restore. The steps we announced yesterday, in terms of the new anti-fraud legislation and the reorganisation of the Department, will ensure a basis will be found for a reduction in the fines because of the decisive action we have taken to restore our good name. I greatly regret that some of the decisions taken by the Government in the last few weeks were not decided ten years ago. Such action would have served this country very well.
I am the first to admit that winter fatteners, in particular, have had a very difficult time. I am not responsible for the price of cattle. Senator D'Arcy rightly pinpointed the fact that the difficulties currently prevailing in the beef sector are directly attributable to the first year of managing the GATT deal. Under the GATT deal the quota for volumes of beef which can be exported to third countries had to be reduced from 1.3 million tonnes in 1993 to 1.1 million tonnes. Over the period between now and the year 2000 we must cut the volume of those export refunds by 21 per cent and the value by 36 per cent, which will cause difficulties.
These issues are now decided not at a political level but a technical level. That was agreed by my predecessors, which was a mistake because we could have secured a much better political deal at the time. The GATT deal was most unfortunate. However, we have been on our own on this issue because at recent meetings of the beef management committee no other member state, apart from France, was prepared to give us the level of support I would have liked. They have not experienced a drop in prices. The devaluation of the slaughter premium was absorbed by the meat factories and they could have paid a higher price throughout the period.
The real difficulty in the management of the export refunds was that by mid-November,  60 per cent of the annual quota, namely, 650,000 tonnes, had been prefixed. The Commission saw a situation arising whereby in April or May, before the end of the GATT year in July, there would simply be no prefixations left, so they decided to cut them by 25 per cent. In December we succeeded in getting a restoration of 14 per cent and in February we secured a further increase of 5 and 7.5 per cent. The 7.5 per cent was on fresh male hindquarter cuts which are particularly important to Ireland.
Mr. Yates: Commission sources were active on Monday ringing my office to assure me that the story Deputy Cowen was telling about a rift between Commissioner Fischler and myself was untrue, disingenuous, insidious, mischievous and damaging to the national interest.
Mr. Yates: I am still of the view that, despite the beef fines mess I inherited, we will get a more favourable deal than any other member state in terms of mitigation. That will be decided next week. I am glad to have the opportunity to rectify these matters.
References have been made to the live trade. I am pleased to inform the House about two matters in this regard. The Egyptian market has been very significant. We were kept out of that market because Australian cattle were more competitive. The problem is that Australian  farmers get no premia and they can sell cattle at £30 per cwt. live weight out of Australia. The Egyptian experience with Australian cattle has been unsatisfactory. The cattle are over-fat, so we are now back in the Egyptian market and prefixations have been taken out in the last few weeks for 9,000 cattle. Business with Libya is excellent and we have now agreed with the Turkish authorities in Ankara on the opening of the Turkish market and on a veterinary certificate procedure. I have put in place a series of proactive measures with regard to Libya.
Members of the Opposition spoke about animal transport, but I was the only Minister in the last ten years to do anything about it. We were the first to introduce new rules at national level and within the Union. We also adopted the Australian rules to provide a credible basis for the safeguarding of animals. I cannot be held responsible if an individual exporter does not pay levies to the Libyan authorities and then seeks to blame the Department. I will take swift action to preserve the good name of the bona fide exporters by ensuring that such malpractices will result in delisting. Thus we will have serious people in the business who will provide for the market that exists, especially for plainer types of animals.
When CAP reform was agreed by my predecessor the value of the various premia was extremely beneficial to Ireland; we get a better draw down than anybody else. The rule of thumb is that the price of beef now and the price in 1992 is roughly the same — 98p or 99p per lb. — but the increase in premia is now 25p per lb. Do not think that the Commissioners are fools. They know £370 million is being paid out by my Department in direct income aids and that the sum was agreed at the time on the basis that there would be a fall in the price of beef. Please do not pretend to be unaware of this. That is where the Commission is coming from.
Mr. Yates: We have taken strenuous steps in relation to consumption. Senator D'Arcy referred to this. An Bord Bia had undertaken a strong drive in Britain and Germany and we have established direct links with supermarkets.
I have also taken more rigorous action than any previous Minister in guaranteeing food safety. I have introduced new checks for BSE by depopulating herds, having skull tests carried out on those herds and ensuring that such meat does not get into the food chain. I have taken rigorous action on illegal substances through screening and raids on factories and the publication of details from factories. There is a small coterie of factories which tend to have a higher proportion of residual levels of growth promoters in meat. As a result of these measures we can now give assurances, which could not be given previously, about the quality of Irish beef.
Reference has also been made to the slaughter premium. That is an element of the price proposals we will be discussing in Brussels next Monday and Tuesday under the Italian Presidency. The trigger has been 40 per cent — 40 per cent of a country's kill must take place in the months of September, October and November. We dropped to 35.8 percent in those months of 1995 so we do not qualify. The Commission has proposed to lower the trigger to 38 per cent which means that we still will not qualify. I have made it clear that I will not vote for the broad thrust of the price proposals, although I welcome elements such as abolishing the 22 months premium and so forth. However, I will make my vote in support of the price package contingent on the slaughter premium continuing to be available to Ireland. I assure the House I will be very vigorous in that regard.
The Government has also been supportive through the budget to changes in PRSI and other measures specifically designed to help the food industry. The changes apply not only to the thresholds but also to the rates of PRSI. We also  have given significant FEOGA grant aid under the national food strategy, with a total public investment in the food industry of almost £300 million and, between the private and public sector, and investment of £640 million in new product development, technology and so forth. The big weakness of the Irish beef industry — and my predecessors Deputy Joe Walsh and Senator O'Kennedy did nothing about this — is that 70 per cent of our exports go to third countries. That is why we are so dependent on export refunds. We are in the commodity business and we need to develop a value added food industry that will mean we will be essentially dependent on the supermarket shelves of Europe.
I need no lectures from Senator Kiely or other Members of the Opposition about the beef sector. There are 100,000 cattle farmers in this country and between 13,000 and 14,000 farmers are involved in the winter fattening business. With regard to future increases in income. I never said the day of the cheque in the post is over; I said it had peaked. There is a significant difference. My point, and it applies regardless of who is Minister, is that the increases in incomes over the last three years arising from CAP reform are the result of premium increases. That is now finishing. There are no scheduled further increases. There might be nominal green pound devaluations, but if Teagasc tell me that there are efficiency gains to the value 10p per gallon of milk or 10p per kilogram for sheep and beef production through better grassland management, we must take that very seriously. Future income growth will come from that direction.
The reason winter fatteners had a particularly bad time was the prevailing price of store cattle. At present that price means that those who are in the business of finishing off summer grazing will be in a similar difficulty. Brussels does not regard the prevailing price to be a crisis price. It is regarded as a likely price which will continue for some time.  People should factor that into the price of calves and store cattle.
It behoves me as Minister to give as accurate information as possible so that people know where they stand and not to subsequently point out these difficulties. With regard to prevailing prices. I caution farmers to be careful. I acknowledge that the nature of the premium system is such that some people may receive it and others may not. The system is designed to maximise the draw down for Ireland. If it were altered it could have the effect of reducing the total net transfers from Brussels to the Irish beef sector.
I thank Senators from the Government side for their support on this matter and I assure the House I am continuing to give the beef sector priority attention. When I became Minister there was a crisis in the pig sector. This has been more than adequately resolved and prices of pig meat have increased by 20p per kilo. There was a crisis in the sheep meat sector but we obtained a unique package of £26 million last year which was exclusive to Ireland. We will continue to work assiduously to ensure that the beef sector is protected.
Mr. Townsend: I welcome the Minister. As the Labour Party spokesperson on agriculture I am glad to have the opportunity to speak on this important topic. The problem in the beef industry arose because the EU Commission cut beef export refunds by 12p in the £ and live export refunds by £8.58 per £100. This was completely unexpected by farmers. If anybody else knew it was going to happen, farmers did not know. It came at the worse possible time for fatteners. The reduction started in September when most fatteners would have had their yards full. The EU action has greater effect in this country because we export 85 per cent of our steers and all our live exports benefit from export refunds. The episode was handled in the worst possible way by the EU. This industry is worth approximately £1,700 million to the economy and provides many thousands of jobs.
 I have a copy of the five demands made by the IFA. They seem reasonable and there is little between them and what the Minister is trying to do. The IFA demands immediate restoration of export refunds for beef and live cattle in order to return cattle prices to viable levels and to protect our third country market share. The Government amendment takes care of this.
The second demand is that the balance between carcase beef and live cattle refunds be restored, taking account of the slaughter premium, in order to return competition to the trade. What the Minister has said he will do will go some way towards achieving this. When there were few live exports, meat plants took advantage of farmers and paid them low prices; plants robbed farmers in many cases.
The third demand is that the figure of 40 per cent should be reduced to 35 per cent in order to retain the winter slaughter premium. As the Minister said, this autumn there will be a reduction to 35 per cent and he has already taken measures to have this resolved.
The fourth demand is for full protection of the ten months and 22 months special beef premia. I understand the EU has proposed to alter this and I am sure the Minister will act in the best interests of producers.
The fifth demand is for total rejection of any industry levy to pay for the beef fines. This is important and has been the main topic of conversation in my part of the country recently, especially last weekend. It is no harm to recall that when the Department of Social Welfare screwed up the social welfare system and would not pay women their entitlements, the present Minister for Social Welfare was left with a bill for £240 million.
Mr. Townsend: Who paid the £240 million? It was the general taxpayer, including farmers, the PAYE sector and the self-employed. Who will pay the  more than £60 million which will result from the Blood Transfusion Service Board having screwed up the blood transfusion system? The Minister for Health was left with this Bill. Again, it will be paid by the general body of taxpayers. There is no doubt that some of the beef factories screwed up the intervention system. At the beef tribunal a representative of one of the factory owners was asked why beef was taken out of intervention. He replied that all plants were doing this. What were they doing? They stole container loads of beef from intervention stores.
Mr. Townsend: Workers in these factories would have been dealt with if they were caught bringing a few chops home in their lunch boxes. There is a similarity between the social welfare, blood transfusion and beef issues. We cannot cod farmers, the PAYE sector or the self-employed. There is no other way these fines can be paid except by the general body of taxpayers. Some meat factories were not in production when the robbery of beef was taking place. They should not be asked to pay and it is not practical to ask them to do so.
Mr. Dardis: When Democratic left was referred to, you, Sir, showed admirable restraint and impartiality. The importance of the beef industry is well known and I will not catalogue it. The House is bored hearing figures being quoted. The Minister knows them upside down and inside out. We can take the importance of the industry as read.
We must acknowledge the consequences for the economy as a whole when, as in this case, we are looking at a loss to the Exchequer, through farmers, of £100 million. If it were not for the fines, this amount would come into  the country, find its way into farmers' pockets and benefit the rural economy.
It is disappointing that people were actively encouraged by the State, its agencies and advisory services to invest in capital expenditure in the beef industry by, for example, constructing slatted sheds and investing in winter fattening facilities. They did this well but now they are getting a slap in the face. This investment is seen as not beneficial in many ways because of what was done with regard to export refunds and the abandonment of this industry.
People put cattle in their sheds in good faith. It was only after they put the cattle in the sheds last autumn that many of these difficulties arose; that is the real scandal. Where are the guarantees people were given when the CAP reform package was being debated so vigorously and boisterously? Where are the guarantees about the maintenance of income and compensation? They have been abandoned. I want to know how a beef management committee in Brussels can unilaterally decide, without reference to anybody, that these refunds should be removed.
I make the call the farming organisations and others have made to the Minister to do what he can to ensure that those refunds are restored and I know he will do so to the best of his ability. He has spoken in the past about his commitment to the industry and about this matter being a priority. I accept that, but we must ask how will we do this. I am disturbed by something I read in the Irish Farmer's Journal. It said that recent IFA and ICMSA delegations to Brussels got strong indications that there will be some increase in export refunds, but only for live cattle exports to Egypt this month — possibly at the 15 March meeting of the management committee. It also stated that the Minister told the Dáil last week that the EU Commission was unlikely to increase beef export refunds because of the high level of prefixation in recent weeks. Who is right? Am I to assume  that the IFA and the ICMSA are getting better information from the Commission than the Minister because that is the inference from what I read.
The Minister mentioned the trigger. How can we institute a scheme which says there should be a slaughter premium to encourage winter fattening and then pull the rug from under the industry we are trying to promote? It does not make sense and I am sure the Minister accepts that.
As regards abuses in the industry, we must be perfectly clear about what is going on. There is a whispering campaign abroad that it is anti-national to talk of these abuses and that we should not mention them because it is damaging our industry globally. I believe this matter should be nailed on the head. The people responsible for the abuses are damaging the industry, not those highlighting them. There seems to be some confusion about that.
This afternoon the president of the IFA spoke about the spin doctors and what they were capable of doing. We must be clear about this: the tribunal found abuses. According to Mr. Justice Hamilton's findings, not everybody was vindicated. Some tax was paid and further tax was not paid because of the amnesty which my party, among others, opposed. The report highlights abuses as regards reboxing, stamps and harvesting beef out of intervention. To what extent are the people responsible for those abuses being pursued? Is it possible after this length of time to pursue them successfully? If there were no abuses, why did the Minister announce yesterday that he was setting up a unit in his Department to deal with fraud?
Another question which must be dealt with is who will pay? It was stated again today by that “we committed no crime and we will pay no fine” and that  farmers did not benefit, which I accept. If a fine is levied on the factories, it will find its way into the farmer's pocket. That is a commercial reality about which there is nothing we can do.
The Department of Agriculture, Forestry and Food was culpable in this as it was the intervention agency and it was charged with administering these schemes properly and ensuring that people did not defraud them. That is at the core of the reason this fine is being levied on us. If the Department had done its job properly, this fine would not have to be paid. I believe I am correct in saying that article 8 of regulation 729/70 states that the Community shall bear all losses — from FEOGA funds and so on — except where it is satisfied that the intervention authority is remiss or negligent in suspending, supervising or recovering EU funds.
The situation has improved since the findings of the tribunal report and Mr. Justice Hamilton acknowledged this. I commend the Minister on anything he does to ensure that those procedures are correct, transparent and are seen to work. Was the European Union kept informed of the progress in terms of recovering the losses? The Department is acting on my behalf and that of taxpayers and it has serious responsibilities.
The Minister put proposals before Cabinet yesterday, which I understand were accepted, relating to the black listing of meat companies that “break the law”. I agree this should be done, but we come back to the problem of how we prove they broke the law which seems to be a central issue. If there were no abuses, there would be no need to establish the Minister's anti-fraud unit. The Minister dealt with the question of food safety and traceability. I ask him to do what he can to ensure that the refunds are restored and get the trigger reduced from the 40 per cent to the 35 per cent level. The Minister will be commended by all sides of the House if he is successful.
Mr. Farrelly: I listened to some Opposition colleagues speak about where this problem arose and the fact that farmers would not be too upset if the Minister was no longer in office tomorrow. I spoke to farmers today who had already got their slaughter premiums for cattle killed in early January. If they had had to depend on the former Minister for Agriculture, Food and Forestry, Deputy Joe Walsh, they would not have got them until next year.
Mr. Farrelly: At the time there were no objections to the proposals he made because we were receiving in the region of £370 million in compensation. The Minister informed us that the Minister of the day did not object to the formation of a beef management committee in Brussels which could make such decisions without any consultation with the countries concerned. That decision has left Ministers and countries in a vulnerable position.
On 1 July last the GATT scheme came into operation and in November the decision was made to reduce export refunds when farmers' yards were 75 per cent full. That was grossly unfair to this country given the dependency on beef finishers. Given that many farmers and the beef industry depend on those 14,000 finishers, the scheme is not fair to them because the two subsidies on most animals are gone before farmers buy them. That was not what was intended. Farmers who buy on average 100 animals will find that they can only claim a second subsidy on 25 to 30 animals. The only way to keep these farmers in the business for the long term is to have an area aid scheme for those who are finishers, giving them a certain amount of money per acre. Since a high number of farmers have suckling cows, there may not be enough finishers to buy the store  cattle. I would not like to see what happened to our beef industry in 1974 occurring again. I ask the Minister and his colleagues — I have sent some information to him — to look at the possibility of examining how the people in that sector will be affected and how many of them will be left in this business in the long term if something positive is not done for them.
I found Mark O'Connell's article last Sunday most disingenuous. He made up stories of how the Minister for Agriculture, Food and Forestry was no longer wanted in Europe and that he was at loggerheads with the Commissioner.
Mr. Farrelly: In connection with who should pay for the fine, the point has been adequately made in this debate that the taxpayer at the end of the day had to pay for all the other problems that took place. I ask Peter Cassells if he objected to the taxpayer paying for the problems that occurred in the Blood Transfusion Board or the social welfare payments made to many women throughout the country? There was no objection. The Minister's proposal will not end up with farmers having to pay. If farmers keep saying they will have to  pay, no doubt the beef processors will say they are talking themselves into paying.
Mr. Farrelly: The message I gave to those farmers demonstrating outside this House today was that if they kept talking in this way, they would be sure of getting the bill. I know, as they do, the way matters work in Ireland.
Mr. Farrelly: It is not in the interest of our beef producers to hear the farming organisations talk in this way in connection with this fine. Unfortunately, the taxpayer has had to foot the bill when major payments had to be made because of problems in the past. However, because of the beef tribunal, a substantial amount of money, which was not paid heretofore, is now being paid in tax. It is also known that all these cash payments which were made across the board are no longer being made. People are now being paid in the normal way and, as a result, the tax take has increased. If we got a figure from the Department of Finance for the amount of money paid last year as compared to that paid in previous years, we would find that it had increased substantially. I have no doubt the beef tribunal will pay for itself in a short number of years, with the systems that have been put in place and the regulations that have been brought into being.
Mr. Byrne: I support the motion. We are facing a crisis in our cattle industry similar to that in 1974, when farmers left calves in cattle marts. This is more serious than the Minister seems to realise and we should not be trying to deal with it at this late stage. Members from different parties in this Chamber sent out warning signs last autumn but little action was taken by the Minister and his officials. The message has become clouded.
 Is the Minister spending too much energy on who will pay the £100 million? I know who should pay. The Department of Agriculture, Food, and Forestry has over many years — we have had enough experience of EU regulations since 1973 — failed miserably to stop irregularities in our beef industry. The Minister is now saying that the farmers must pay because of the failure of his Department. Official A and official B brought down a Government a year and a half ago and nearly brought down the present Government six months later. We have too much bureaucracy and nobody is responsible. The buck must stop somewhere. The taxpayer or the farmer will be saddled with this payment and this is wrong. We had a beef tribunal. There should be a tribunal in the Department of Agriculture, Food and Forestry to find out what is happening there.
Senator Farrelly spoke about EU cheques being sent in the post to farmers. Thank God they are coming because thousands of farmers would be on the breadline if it was not for Commissioner MacSharry and ex-Ministers O'Kennedy and Walsh, who fought hard for these payments and were criticised in the process.
I am disappointed that the Minister, a man who comes from a farming background, suggested over the last few weeks that these funds will end. Is he tempting the EU to do this? I am sure we have heard of lack of faith. The Minister should be fighting at EU level to get the last shilling for our farming community so as to keep as many of them on the land as possible. More attention seems to have been paid to this fine, although the Minister did not make much progress in getting it lowered. I have no qualms about laying the blame where it should be put. Irregularities were occurring even during the beef tribunal. Where were the inspectorate then? The buck must stop some place, or will this go on for another 20 years? Is it any wonder we have a national debt? It seems that nobody cares. These people should be made  responsible to the taxpayer if they fail in their duties and it looks like they failed miserably.
There is a crisis in our cattle industry and the Minister is suggesting that farmers will have to pay a levy. This is a little too much. The farmers are angry and they have good reason to be. We are facing a similar situation to that in 1974. Meat factories ripped off farmers during that time as soon as there was a slide in beef prices. That was reflected in fewer jobs being available because it had a negative effect along the line.
Senator Dardis rightly said that many farmers, particularly the younger ones, invested heavily in their holdings, especially in the beef area. They are now being told that this is not a good trade to be in because of the lack of faith on the Government's part. This motion, like the protest that took place outside the House this morning, is trying to strengthen the Minister's hand and let the bureaucrats in Brussels know that we are serious about this because it is an important industry for us.
When we were in Opposition in 1982 and the Government of the day was under Garret FitzGerald, we had to fight hard for up to four weeks to have a debate on the milk super levy. We only wanted it to strengthen the hand of the Minister for Agriculture, Deputy Deasy, at the time. However, the Department let us down again. It went to Brussels with its sums wrong and nobody was found to blame. If someone working in a co-operative did this, he would be fired without a pension. The Department let down the Minister of the day, the country and the farmers; it may even have cost us dearly in our negotiations. We were the laughing stock of Europe. The Department could not get its sums right when we negotiated the milk super levy.
Agricultural schemes have been badly affected by irregularities. The blame for this lies in Agriculture House and has done for many years. It is a national scandal. People who committed no sin are to be penalised as a result. The  finger should be pointed at those who broke the law and also the Department.
In recent years much has been stated about the introduction of new technology to manage headage payments. Thank God it is being introduced. I hope the Minister will not repeat his recent statement that finance will not be made available in this regard. Is it the purpose of such statements to build up confidence or blow it out of the window? I am surprised at the Minister's stop/go attitude, because he is a farmer. We have not yet seen the worst of this problem. Everyone thought that action would be taken in the past two months but very little has been done. There were many flashy, crisp statements from the spindoctors within the Department. These people are employed by every Department and represent a growth industry.
Mr. Byrne: I wish the Government had only one minute remaining because people are beginning to see its members for what they are. The different strands of Government are like goats jumping over a hedge, they do not know which way to go. It is very sad.
Mr. Byrne: I am a member of the IFA and I support the demands it made today. That organisation, the ICMSA and the beef producers are all doing their bit for an industry which is one of our most important. The Minister may not think so, but we know it is important. The Minister is devoting his energy to covering up a mess within his own Department and this represents a national scandal. To quote a former Minister, “It is a thundering disgrace”.
Mr. Belton: I welcome the opportunity to inform the Minister that he was given a poisoned chalice on entering office. Like a sheriff in the wild west, he has been asked to clean up the town. The Minister is doing this job and has introduced various regulations that were not heretofore in place. Senator Byrne stated that the Minister is covering up. What is he covering up? What other Minister was involved in a cover-up?
Mr. Belton: Accusations were made against the Minister with regard to how he is doing his job and what is happening in his Department. If former Fianna Fáil Ministers had done their jobs correctly, these problems would not exist. Everybody is aware of that fact.
Members are aware of the fact that the role of producers and finishers in the beef industry has always been a difficult one. With the intricacies of the system in this country, stock are turned over perhaps four to five times from calf to weanling, store and forward store and finally finishers. The Irish system is very peculiar and contains various pitfalls. In other countries an animal might never change location before being slaughtered for beef. This problem relates at all times to Ireland. The events of last year occurred as a result of arrangements put in place by GATT reforms. When the moment of truth arrived, people were caught out because they bought expensive store cattle. It is outrageous to blame the Minister for this because the engine was already running and the pilot was directing operations on the aeroplane before the Minister came on board.
Mr. Belton: Much has been said in relation to fines and that the EU will withhold moneys which could and should have come to this country. Those fines relate to a previous Fianna Fáil Government's term of office.
Mr. Belton: We are discussing a specific issue. I understand that Senator Byrne must interrupt me because he is under orders to do so. Fianna Fáil's only hope of saving political face is to interrupt. That has been its strategy since the  beef tribunal. The only winner from that tribunal was Saddam Hussein, who obtained £100 million of free beef from Ireland.
Mr. Belton: Saddam Hussein was the real winner. Everyone has forgotten this fact. However, we must wait and see because there may be more trouble in store for Irish taxpayers. The Minister cannot be blamed if this happens.
Mr. R. Kiely: I welcome the Minister. It was reported in a weekend newspaper that he would be in Cheltenham. His priorities are correct. Some of the farmers who protested today in Molesworth St. could not travel to Cheltenham. With current beef prices, they will be lucky if they can afford to travel to the Listowel races in September.
Mr. R. Kiely: The Minister stated that there was no proposal to levy farmers, but yesterday he suggested that a levy be placed on beef processing factories. This caused great concern to farmers because the levy will be passed on to them. During yesterday's debate on the Bovine Diseases Eradication Bill I stated that farmers will have to pay veterinarians for annual testing who in turn must pay VAT on their earnings.
Mr. R. Kiely: Last week I stated that I have no difficulty paying levies or increased levies, but that is false economy for farmers. It is my honest opinion that this represents a bluff. A vet must pay VAT on his earnings, but it is not the vet who is paying; it is the farmer. It is passed on to farmer just as this levy will be passed on to the farmer. I  agree with Senator Townsend. When it was found that women were entitled to social welfare payments, the taxpayer and farmers' taxes paid for it. The taxpayers should also pay for this.
The Minister said I was defending malpractice. I never defend malpractice nor would I dare to defend it. I know some of my own farming colleagues were involved in malpractice. Last year we debated a Bill banning the growth promoters being used by farmers. I mentioned my surprise that one farming organisation was silent and did not support that measure. That is a malpractice with which I do not agree and I do not agree with any malpractice regardless of who is involved.
The Minister also said that most factories could pay a higher price than they are paying at present. It is his duty, as Minister for Agriculture, Food and Forestry, to ensure they pay a just price and do not make an unreasonable profit at the expense of the farmers. I am surprised at the naiveté of Senator Farrelly's remarks about the levy. He said it would not be passed on to the farmers. There is no doubt it will be the farmers who pay it.
The IFA made five demands today. Senator Townsend is of the opinion that the Minister addressed them adequately, but I do not share his view. The IFA asked for the immediate restoration of export refunds for beef and live cattle to return cattle prices to viable levels and to protect our third country market share. The Minister mentioned they were reduced by 25 per cent last November and increased since then. However, the Minister led us to hope there would be an increase on 1  March and that they would be restored to previous levels. That did not happen. What will happen at the next meeting of the beef management committee? Can the Minister be confident that export refunds will be restored to their previous levels?
Senator D'Arcy mentioned the trigger. The Minister said it would be brought down to 38 per cent, which is not enough. Giving a slaughtering premium to encourage farmers to fatten cattle for the winter months seems to be a contradiction. It is not logical that one has to kill so many cattle in non-winter months to qualify for this slaughtering premium. This must be addressed. There is concern about the full protection of the ten and 22 month special beef premium. I was disappointed that the Minister did not deal adequately with that matter.
The beef industry is in a crisis which must be addressed. The odd exercise will never satisfy the farmers. We want action on price to ensure beef farmers will have a decent standard of living. I mentioned some figures earlier. Farmers could lose over £3,000 on 40 cattle which is a large sum of money. Other sections of the community are looking for salary increases while the beef farmers are losing money.
I agree with Senator Farrelly that there should be a scheme or aid for the finishers who buy in the autumn and fatten to sell in the spring. There is no doubt they were let down badly this year. He suggested some area aid. I would like to hear the Minister say he will introduce a scheme to help winter finishers because they are in a bad state this year.
|Belton, Louis J.
Cregan, Denis (Dino). McAughtry, Sam.
Enright, Thomas W.
Farrelly, John V.
Howard, Michael. Sherlock, Joe.
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