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Beef Industry (Continued)

Wednesday, 3 July 2019

Dáil Éireann Debate
Vol. 984 No. 6

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(Speaker Continuing)

[Deputy Michael Creed: Information on Michael Creed Zoom on Michael Creed] Article 1.3 of the implementing regulation provides as follows:

The measures taken by Ireland shall be aimed at reducing production or restructuring the beef and veal sector and one or more of the following objectives:
(a) implementation of quality schemes in the beef and veal sector or projects aiming at promoting quality and value added;

(b) boosting market diversification;

(c) protecting and improving the farmers’ environmental, climate and economic sustainability.

Ireland must notify the Commission, no later than 31 July, of the measures to be taken in accordance with the regulation. My Department is working on the detailed parameters of an exceptional aid scheme in co-operation with the Department of Public Expenditure and Reform and the European Commission. Further details of the aid scheme will be announced in due course following the appropriate stakeholder consultation.

Deputy Joe Carey: Information on Joe Carey Zoom on Joe Carey I welcome the Minister’s efforts in that regard. While the package is welcome, I have been told that the factories should not be the main beneficiaries of it. Will the Minister indicate that that will not be the case? Suckler cow and finisher farmers should be the primary and sole beneficiaries of the package. It is important that the terms and conditions of the scheme be correct. Will the Minister give more details of what has been done in the stakeholder consultation process? How confident is he that he will have it finished and the measures agreed to with the industry by the end of July?

Deputy Michael Creed: Information on Michael Creed Zoom on Michael Creed I have stated repeatedly that the money is for farmers. That is my intention. Within that category, I see two distinct beneficiaries, namely, finishers and suckler cow farmers. The submission to the Commission makes clear our thinking in that context. The case is made on the relative hit both sectors took in comparison with what happened in the previous 12-month period. From memory, the quantifiable losses were approximately €67 million on the finishers' side and €35 million on the suckler cow farmers' side. The submission has been made and it is my clear intention that the beneficiaries will be farmers only. It would be incorrect to have terms and conditions before we have the consultation process. It will take place shortly. The ambition is to have that engagement lead to the formation of a scheme. It is intended to have it approved by the Commission by the end of July. Thereafter, we will invite and process applications. It is intended to get payments out as quickly as possible in 2019. It is a challenging timeline, but we are doing our best to meet it.

Deputy Aindrias Moynihan: Information on Aindrias Moynihan Zoom on Aindrias Moynihan Beef farmers have been under phenomenal pressure for the past year, with Brexit impacting severely on the sector. There has been a 25% reduction in beef prices and incomes. Last week’s Mercosur deal put the tin hat on it. The Minister can understand why anybody involved in the beef sector is angry and under pressure. The scheme was initially announced before the local and European Parliament elections and appeared to be a Brexit relief scheme to aid farmers. Now it is being linked more with reducing production. At what point did the Minister become aware of that element of the scheme? Was it part of the original submission or more recent? While the consultations are ongoing and due to finish shortly, has the Minister set a timeline for when farmers will be paid the money? Will it be paid in the third or fourth quarter of this year? Are funds in place to the make the payments this year?

Deputy Michael Creed: Information on Michael Creed Zoom on Michael Creed On the terms and conditions and supply reduction, I point the Deputy to my original reply. Our submission is on the Department’s website. It contains no proposals for supply reduction. That is a term and condition attached by the Commission. We became aware of it once it was published by the Commission. In previous interventions under the Common Market organisation, CMO, regulation, supply reduction was an instrument used by the Commission to address difficulties in the marketplace. I presume it is connected to the economic laws of supply and demand. Kill levels in the beef industry are high and there has always been a market issue once the level moves above 32,000 or 33,000.

One of the other issues with which we are dealing is Brexit. A hard-deal Brexit will have a different and significant impact. However, we are also dealing with the competitive challenges arising from the currency difficulties.

Deputy Éamon Ó Cuív: Information on Éamon Ó Cuív Zoom on Éamon Ó Cuív The Minister has said he only became aware of the proposal to reduce production when the Commission published the regulation. Is he stating categorically that there was no tic-tacking with the Department about the proposal until the Commission published the regulation? Once again, we are being shown discourtesy by the European Commissioner, Mr. Phil Hogan. The Minister has been given a scheme, about which the Commissioner conveniently forgot to tell us before the recent elections, which requires a reduction in production. Will he give us some indication of his thought processes in that regard?

Deputy Michael Creed: Information on Michael Creed Zoom on Michael Creed My thought process is that it is manageable. We managed it in the dairy industry without damaging the sector and can also manage it in the beef sector. The Department has extraordinary levels of data for stocking densities on all farms. By the creative management of individual farmers’ stocking requirements, it is possible to deal with the issue in a way that will not inflict any long-term structural damage to supply in the beef industry. The first we became aware of the reduction issue was when the Commission published its terms and conditions. As I said, our proposal which is on the Department’s website is clear in quantifying the scale of the challenge and contains no reference whatsoever to supply reduction.

Deputy Martin Kenny: Information on Martin Kenny Zoom on Martin Kenny When will beef farmers receive money from the €100 million Brexit beef fund? What will be the terms and conditions of the scheme?

Deputy Michael Creed: Information on Michael Creed Zoom on Michael Creed The conditionality set by the Commission is in the public realm, but the scheme has yet to be devised. The schemes we have devised, including the beef environmental efficiency programme, are straightforward. Our ambition will be to have the scheme as straightforward as possible for those who have taken the hit, namely, finishers and those who suffered back along the line in producing weanlings with the prices reflected in their sale. The scheme will be devised following the engagement with stakeholders. It will then be approved by the Commission and followed by the invitation of applications. Payments will be made as quickly as possible.

Deputy Joe Carey: Information on Joe Carey Zoom on Joe Carey It is important that the Minister outline a timeframe for the scheme and when farmers can expect to receive payments under it.

Deputy Aindrias Moynihan: Information on Aindrias Moynihan Zoom on Aindrias Moynihan Earlier I asked the Minister to lay out a timeline for when farmers could expect to receive payments under the scheme.

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