Update: Beef Producer – Agriculture 23rd September, 2014

Parliamentary Question No. 12    
   
 
To ask the Minister for Agriculture, Food and the Marine having regard to beef producer concerns regarding the price paid to the producers and the extent to which uncertainty in the industry has caused severe losses to the sector in the course of the past year, if he will provide consideration to the putting in place of structures to minimise the extent and impact of peaks and valleys in the beef industry in order to ensure a reasonable return for the producer; if all of the factors which have combined to depress the return to producers in recent times may be evaluated in full with a view to resolution; and if he will make a statement on the matter.
– Bernard J. Durkan.
 
 
For ORAL answer on Tuesday, 23rd September, 2014.
 
Ref No: 35154/14 Lottery: 6 Proof: 54
 
 
REPLY
 
The Minister for Agriculture, Food     and the Marine : (Simon Coveney)

I am acutely aware of the pressure being felt by farmers throughout the country as a result of the decline in beef prices over the last 12 months or more. Not only am I aware of it, but I have made addressing the concerns of these farmers a priority for the Government.
 
The deputy is correct in noting that beef prices will always be subject to a degree of volatility. This is the same for most agricultural commodities such as milk prices or cereals reflecting the globalised world in which Irish agri-food produce is traded. As a country that exports most of what we produce, we are perhaps even more susceptible to the highs and lows of evolving prices than some of our neighbours.
 
This volatility has possibly never been more evident as it has been over the last three years. Prices in 2012 and 2013 rose steadily to an unprecedented peak of over €4.40 per kilo last year but have since declined. In looking at these changes, we cannot ignore normal supply and demand factors. This year we have slaughtered nearly 13% more animals than last year and the number of animals slaughtered is 23% higher than at this stage in 2012.   Added to this supply increase, there has been a drop in beef consumption throughout Europe as well as in the returns to farmers notably in the UK also. The combination of these points will inevitably take its toll on prices here.
 
Putting structures in place to alleviate the impact of these price changes, and assisting farmers to be better prepared for these fluctuations, have been central to this Government’s term in office. The €1.2 billion per year secured in direct payments each year forms a constant and secure income for farmers, and this is a particularly important buffer as prices decline. In addition, the need to ensure a viable future for the beef sector has been central to the draft €4 billion Rural Development Plan submitted to the EU Commission in July.
 
While this plan is still under discussion with the European Commission, I am proposing in it a number of elements which will be of benefit to beef farmers throughout the country, including the beef data and genomics measure which will be worth around €49 million per year and should bring about long term improvements to the sector through improving the genetic quality of the beef herd. Also, the continued support under the new agri-environment scheme GLAS and the €195 million per year support for disadvantaged areas should all benefit farmers in the event of fluctuating prices in the future.  
 
These investment supports, together with the actions falling out of the Beef Roundtable, will help to put the sector on the appropriate strategic footing for the future. One such outcome arising from the Beef Roundtable involves better and more timely communication between processors and producers aimed at transmitting early and clearer market signals which bring about more strategically planned sectoral responses. Another key outcome has been my announcement of a public consultation regarding possible establishment of producer organisations in the beef sector. This public consultation has now closed and my Department are currently assessing the responses before deciding on next steps. Producer organisations can play a key role in conveying contractual negotiation powers on groups of farmers which can help to address imbalances in the supply chain.
While I cannot influence the price paid by factories I can of course help to put in place the structures and schemes which will drive on-farm efficiencies. I am confident that these structures in place, funded through this year’s €40m investment, as well as the considerable investment through the RDP will achieve this aim.