ICSA Submission to the Oireachtas Committee on Agriculture
3rd November 2015
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Further Details
Patrick Kent, President, 087 777 3648
Eddie Punch, General Secretary, 087 2303825
ICSA
Unit 3,Gandon Court,
Fairgreen,
Portlaoise.
Phone:057-8662120
Chairman, Members of the Committee
I’d like to thank you for the invitation to appear here today. While we all know that there has been a big fall in milk prices, I want to get the message across that the beef and sheep sectors must not be forgotten.
In fact, many of our members have expressed amazement at how quickly a crisis in the dairy sector was dealt with by the Council of Ministers and the Commission in Brussels with the result that a package of almost €14 million was delivered to Irish farmers. Beef and sheep farmers got nothing from this.
You would think that beef and sheep farmers were in clover. Yet twelve months ago, when beef was in deep crisis, all we got was a beef forum. When Teagasc finalises the income figures for 2014, I can confidently predict that dairy incomes will still be higher than beef, sheep or suckler incomes.
However, let’s not dwell on this.
I want to look now at where we are heading in the next twelve months. On a macro level, we are very concerned at the potential for damage to our sector from a bad TTIP deal – the Transatlantic Trade and Investment Partnership. As we speak, EU and USA negotiators are working behind closed doors to put a deal together. The lead negotiator for the EU is the trade commissioner, Cecelia Malmstrom.
The Department of Enterprise, Trade and Tourism commissioned Copenhagen Economics to do an impact analysis of a potential trade deal for Ireland. Their conclusion was that the beef sector was the likely loser whereas dairy might gain.
However, ICSA recently attended a public meeting in the European parliament under the patronage of Paolo de Castro MEP.
Here, the risks of a bad deal from TTIP became apparent. Many of the other member states are pre-occupied with having their Geographical Indicationsfor products like wine and cheese protected. The risk is that this will trump beef when it comes to the eleventh hour negotiations on the finer detail.
ICSA made it clear in Brussels that the Irish beef sector was very vulnerable. The problem is compounded by the fact that there are several trade deals in the offing. The Canada / EU deal (CETA) is essentially concluded with a big increase in quota for Canadian beef imports. However, what is less well known is that trade talks between the EU and Australia/ New Zealand are getting underway and we must not forget that the Mercosur block (South America) hasn’t gone away either.
The threat of all of these trade deals coming together with concessions repeatedly being conceded on beef imports is an appalling vista for our sector.
Two things stick out. One, we must fight tooth and nail to minimise additional tariff free quotas for beef imports from all these countries. Second, we must fight to protect EU standards of production.
The risk here is that rather than keeping the bar high at the EU standard, there could be mutual recognition of standards which would be very damaging to our beef sector.
What we need from Irish politicians and the Government is that they shout very loud indeed in the coming weeks and months to ensure that any deal does not involve a sell-out for the Irish beef sector. We would be concerned that a fear of upsetting multinationals is weakening our national position on this.
This brings me to another concern which is that our position on GM is leaving us vulnerable on the marketing front. Nineteen of the 28 EU member states decided to opt out of the growing of GM crops by the October 3rd deadline.
Ireland was not one of those. Our neighbours and competitors, Northern Ireland, Wales and Scotland all felt it was necessary to protect their interests in having a clean, green image and to demonstrate that they were in tune with consumer sentiment.
I am also concerned that key markets for Irish produce such as Germany, France and Italy also decided to opt out.
Like it or not, a lot of consumers are concerned about GM production methods. Ireland’s marketing strategy is to develop the origin green ideal but are we in danger of shooting ourselves in the foot on this one? Especially when you consider that exporting beef and sheepmeat to discerning consumers is far more important than any possible change, with dubious benefits, to crop growing systems in this country.
We also have to again consider the way in which the food chain is not working for beef and sheep producers. We have seen over-regulation of farmers but hardly any regulation further down the chain.
In our view, two things are now essential. We need the Commissioner for Agriculture to introduce a robust regulation of the food chain across all 28 EU member states. This means setting up a European Authority or regulator to investigate who gets what from the food chain. In our view, the farmer does all the work and the processors and retailers get all the profit.
The finances of farmers are very transparent but we know nothing of the margins made by multinational retailers when it comes to key products such as beef, lamb and dairy.
This cannot be allowed to continue.
The second area that is essential is closer regulation of the processing part of the chain which could be done at national level. Key points are that we need to monitor much more carefully what goes on in meat factories. Issues such as angle of neck cut and trimming are not being dealt with satisfactorily at the moment.
We believe that factories should not be allowed to also own and control feedlots. We propose that the Oireachtas Committee should consider looking at examining whether this practice is in keeping with competition laws and whether it is possible to legislate against it. For sure, farmers know that factory controlled feedlots are now having a huge impact on the store trade and the beef trade and we are the losers.
We would also propose that there is not enough focus on live exports both for cattle and sheep. ICSA is concerned that live cattle exports have dropped drastically this year (down some 50,000 head or 25% on the corresponding period last year). Overall we will struggle to hit 180,000 total live exports this year compared with 338,000 head in 2010.
Table A (Not for reading)
Year / Total Live Exports / Projected2010 / 338,966
2011 / 214,502
2012 / 160,407
2013 / 208,884
2014 / 236,896
2015 / 157,870 / 180,000
Excessive bureaucracy is also hindering the live exports of sheep.
ICSA believes that the Minister needs to put the same energy into opening live export markets as has been put into getting beef exportsto China and the US.
It is clear to us that success in expanding live exports will be far more beneficial to livestock farmers than any gains in China or the US. For example, it is now time to talk to the Egyptian authorities about clearing the way for live exports.
It is no harm to remind ourselves that dairy expansion is going to lead to a lot of extra calves and it is a matter of urgency to have markets for them.
Also, we must express frustration that the 30 month issue remains unresolved.
On sheep, I want to mention moves to increase electronic tagging by the Department. ICSA remains to be convinced that this will do anything other than increase costs for farmers. We are particularly adamant that there is no justification for electronic tagging of lambs going direct to slaughter in meat plants.
ICSA is also concerned that EID will be very uneconomic for hill sheep farmers who have no choice but to sell low value lambs in marts.
While there is a benefit to farmers buying store lambs, ICSA believes that increased cost around EID must be accompanied by a more practical approach on tagging at inspection time especially for hoggets in the new year.
ICSA is also concerned at suggestions that the Department would consider introducing a single supplier for sheep tags. Competition is essential and in fact, we believe that there should be competition in the supply of cattle tags as well. This is not just about the cost of the initial tags; it is also about the cost and frequency of replacing tags.
Regarding the future for sheep farmers, ICSA believes that more must be done in the Rural Development budget for sheep farmers. We have welcomed allowing sheep fencing back into TAMS but there is a need for a sheep scheme. Suckler farmers have the BDGP but sheep farmers have nothing.
Given the slow roll-out of the RD programme against a backdrop of a CAP reform process, it seems to us that there will be a need to ensure that all funds in the RDP are used. For instance, the recent budget is forecasting a spend of €494 million in 2016. This suggests that for each subsequent year, average spend in the programme will have to exceed €590 million.
ICSA proposes that a sheep scheme could be funded up to €25 million per annum within the RD programme limits, or with a small top-up from exchequer funds. One amendment per annum is allowed to the programme and we need to consider this at the earliest date possible.
We also believe that sheep farmers should be allowed benefit from participation in two knowledge transfer programmes.
ICSA also believes that the recent decision to halve the maximum area allowed under the low input permanent pasture measure in GLAS is the wrong one. Our concern is that the scheme is becoming totally unattractive to many smaller and medium scale cattle and sheep farmers.
ICSA has also been campaigning for a scheme for hen harrier farmers who have been treated very badly over the past number of years and we welcome the possibility of doing something under the locally led environmental scheme. However, we are concerned that this could turn into a bureaucratic nightmare with high consultancy costs.
We need a scheme that will pay farmers for every hectare of designated land. Under GLAS, there is a potential maximum payment on up to 19 ha., but many farmers have more designated ground. A key issue will be whether we can find a more flexible approach on afforestation in the hen harrier areas. We believe that the blanket ban on forestry is not supported by the scientific evidence and we need a less dogmatic approach on this.
Chairman, members of the committee I want to thank you for your time on this and myself and my colleagues are available to answer any questions you may have.