Richard Boyd Barrett Urges Redistribution of Beef Sector Profits

Thank you. Deputy Boyd Barrett, question number 60. Minister, I listened to the earlier discussions on the plies of the beef farmers and I heard your responses but just maybe to develop the discussion. I mean I'm not an expert in this area but I've talked a lot to the beef farmers, the beef plan people and so on. But one thing that to me is sort of elementary is according to the CSO there's 2.8 billion euro of profits in the beef sector in 2018, 2.8 billion. But the vast, vast 2.8 billion in profits. And we know because they wouldn't be out protesting in other words, the vast, vast majority of farmers aren't getting those profits. So they have to be going somewhere and the question is are you looking at how we can redistribute the profits that are clearly being made in favour of the farmers? Deputy, I would ask the Minister to answer the question. As the Deputy will be aware neither I nor my department can legally have any role in determining a price for beef or any commodity. He will be aware however that there has been a series of formal negotiations between beef sector stakeholders since early August culminating in the agreement reach on Sunday, September 15th. And the text of that is available on my department's website. The agreement involves a number of interventions which will provide immediate benefit for beef producers as well as a range of strategic measures which seek to address structural imbalances in the sector. Beef producers will benefit from an immediate increase in a range of bonuses. This will increase the level of bonus being paid on certain animals as well as significantly increasing the number of animals which are eligible for a bonus. The cumulative effect is that over 70% of all steers and heifers slaughtered will now be eligible for a bonus on top of the base price paid. A number of actions in the area of market transparency, beef promotion and strengthening the position of the farmer in the supply chain are included in the agreement. These measures set a course towards greater clarity for all stakeholders involved in the beef supply chain, primarily for farmers. My department is also proactively engaging with several potential beef producer organisations which have the potential to strengthen the bargaining power of beef farmers in the supply chain. One of the constant refrains, I'm sure members here have often heard it, is that farmers are price takers. Beef producer organisations enable them to work collaboratively together, control supply of a significant volume of beef and from that position of strength negotiate with processors on the basis of an agreed price into the future and sharing some of the risk around rearing cattle over a prolonged period. Two beef producer organisations have been formally recognised by my department in recent weeks. The Beef Market Task Force has been established to provide the leadership to develop a sustainable pathway for future of the beef sector in terms of economic, environmental and social sustainability. The task force will provide a robust implementation structure for commitments entered into in the agreement with timelines and stakeholder engagement. Furthermore, the Beef Market Task Force will offer a suitable platform for strategic engagement with key stakeholders, including retailers and regulatory authorities. It's been chaired by Michael Dowling. The task force was scheduled to meet yesterday and was adjourned as members of the task force were prevented from attending the meeting. It is in the interest of everyone involved in the beef industry that the work of the task force goes ahead. The task force's remit is to monitor the implementation of the actions arising from the agreement reached on the 15th of September and offers the most viable platform for strategic engagement with key stakeholders. It was a great pity that farmer representatives were not in a position to air the legitimate concerns of farmers at the task force. The plight of the beef farmer has come centre stage is because of protests and people power. And I have to say I commend the beef plan and the other farmers for the protest that they have made to force this issue to the top of the agenda and indeed to make some of the progress that seems to be happening now. But one of the things that was pointed out to me, and I qualify everything I say, I'm not an expert, right? But we do know there are certain people that dominate this sector, right? And I don't mind mentioning their names, Larry Goodman. We know these people, right? And they dominate it. And one of the points that farmers made to me is that in Canada and I think in the United States, people who own processing plants can't also own feedlots and rendering plants, right? They can't control all parts of the chain because that actually allows them to dominate and control the market and have the farmer, the small farmer over a barrel. And they suggested to me that a simple measure that could be taken, it may be not all the answer, but it's a big part of the answer, is for us and for you to signal that you're willing to introduce legislation of a similar kind so that that dominance of these big players cannot persist and that they can't control all parts of the market. I do appreciate the point you make and acknowledge that it's a complex supply chain and one of the things which the task force is enabled to look at is what are other best practices, legal frameworks, etc. The point you make about ruling out ownership of certain enterprises by processors is an interesting one, which though I haven't taken formal legal advice on, I would suspect it may not be legally possible to say that somebody cannot own a particular enterprise here. But, you know, the task force is in a position to consider that now in terms of feedlots, though it has to be said that feedlots controlled by beef processors do not control, no, it depends on what you define as significant, but do not, you know, control the overwhelming majority of cattle that are slaughtered. There are feedlots, and the definition of feedlots is an interesting one in itself, there are feedlots that are owned by farmers themselves and who trade independently, so it's an area that we need to keep constant vigilance in. I do think the task force, because it will have all of the stakeholders, is a very welcome development, and I think it can look at all of these issues and build trust and understanding about issues that have had too much mystique about them in terms of what's happening in the marketplace, who's getting what from the market, and therefore maybe build a relationship between both sectors, particularly primary producers and processors, because the current relationship cannot continue, because the current relationship cannot continue. It's a recipe for a faltering industry into the future. Thank you, Minister. Deputy White Barr please. Deputy White Barr, please. Deputy White Barr wants to see angry scenes, but those farmers aren't out protesting for the good of their health. They're out because they're actually at levels of income that are just not sustainable, right? That's why they're out protesting. And it's very provocative for C&D, Mr Goodman and so on to have injunctions hanging over farmers if they actually are serious about building trust and engagement. and engagement. So I think the government should very clearly say that those injunctions should be lifted, threats of legal action against farmers just fighting for their livelihood should be lifted. But I would urge you to look seriously at the issue because what we're talking about is a financial connection between the processors who dominate the market and the feedlots which will essentially allow them to put stuff onto the market which will then depress the price. It's a little bit like how OPEC operates with the Gulf states you know. Somebody threatens to raise the price somebody else turns on the taps in order to keep the price down and the people who lose out in this case I think are the small farmers whose incomes are pitiful even though we know people like Mr Goodman are making very significant profits. Thank you Deputy Minister briefly please. The state interventions have not been about nor can we interfere in terms of establishing the base price but they have been about supporting incomes and that's where the common agricultural policy has gone for many years now in terms of income support. So whether it is the basic payment that every farmer receives or other supports that they get for example under ANC payments which part of 70% of the country is classified as ANC disadvantaged lands or whether it is specific programs that we run on the rural development program for beef for suckler farmers organics or other new initiatives more recently to respond to the income crisis in beef exceptional aid measures a hundred million euro fund or the beef environmental efficiency program and they're all targeted interventions 120 million extra this year in schemes available specifically targeted to support incomes because we can't and haven't and the consequence of previous support of product prices was butter mountains and wine lakes and all that so we've moved away from that to supporting incomes for farmers when the market doesn't function and it's not functioning clearly now.