Brendan Smith urges urgent aid for crisis-hit pig meat sector

Good to see you in the chair and maybe that's a sign of things to come in the future. I appreciate the Cancorda's decision to allow this subject to be taken this evening. Following a number of parliamentary questions to the Minister of Agriculture, Food and the Marine during the month of January, I also raised directly with Antishuk in this House through questions the origin need to provide adequate government support to the crisis-hit pig meat sector. I welcome the introduction in early March of the 7 million euro support scheme for commercial pig farmers. This sector has been suffering huge losses for some time and we know the very viability of some pig units and farms throughout the country is now threatened. Sadly, in recent times 7% of pig farmers have exited this sector. 10,135 sows are gone from production which equates to a loss of 66 million in exports on an annual basis. Chagas have estimated that for every 1,000 sows destocked there is a total loss of employment of 60 people and a loss of payroll of 2.42 million and 6.5 million in export losses. These are substantial losses in any rural community and already we have witnessed many multiples of those losses in employment and generation of revenue. A number of factors have contributed to this crisis. During the early days of the Covid pandemic there were staff shortages which led to a backlog in processing and substantial market disruption which lowered returns for pig meat. Brexit impacted very severely on the value and volume of pig meat exports to Britain which is by far a most valued and valuable market. Since the start of 2021 the value and volume of those exports fell by 50% obviously causing a severe adverse effect on the sector. African swine fever had a negative impact on the pig market. Coupled with reduced farm gate prices there has been a massive increase in feed prices. The war inflicted on Ukraine by the brutal Putin regime has also impacted very severely on supply of feedstuff allied to other disruptions in global trade over recent times. This sector is worth 1 billion euro to the economy on an annual basis and is the third largest sector within agriculture. It also supports about 8,000 people in employment and makes a very substantial contribution to the rural economy and to the overall national economy. Chagisk estimates that about 30% of foreign pig units are at risk of closure. This is very concerning and measures must be implemented by government with immediate effect to deal effectively with this crisis. A very detailed and well researched proposal has been submitted to the department by the Irish Grain and Feed Association, Meat Industry Ireland and the Irish Farmers Association. This pig stability fund contains a number of proposals containing substantial financial contributions by pig farmers themselves plus immediate government help. France, Belgium, the Netherlands, Poland and Slovenia have introduced direct aid for this sector. Our sector, which is hemorrhaging huge losses at present, needs an immediate package of financial measures. There has been a major rationalisation of the sector over the years. We don't want to see a further reduction in producer numbers which would be damaging to our overall agri-food industry. This sector is very efficient and it is a modern industry. It does not receive any support through the Common Agricultural Policy. I fear that a major destocking could create animal welfare issues. It would also be very damaging to the image of our agri-food sector which has been painstakingly built up over many years with major EU and government support and major investment also directly by farmers and others in the sector. So, Minister, I am appealing again to the Government to introduce without delay an immediate package of measures to ensure that the sector is supported through these very difficult times. and that the crisis that is hitting the sector for some time, that it has tackled head-on. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. On behalf of Minister McConlogue, I want to thank Deputy Smith for raising the issue and I agree it is a key priority for the Minister and the Department and a key sector, a vital sector for the Irish economy. Our big farmers have always been remarkably resilient but the Minister is acutely aware of the unprecedented set of challenges as outlined by the Deputy that they are facing at present. The Minister has been in regular and close engagement with all stakeholders on this matter over recent weeks. The Department is monitoring the market situation closely and is examining all possible measures to assist in supporting farmers through this significant market disturbance. The continued development of the pig meat sector is a priority for this Government given the pivotal role the industry plays in the national economic context. It is the fourth largest agri-food sector and has shown remarkable growth in recent years. The sector supports approximately 8,000 jobs spanning production, slaughter, processing, feed manufacture and services. The pig meat sector across the EU has faced significant challenges in recent times including the impact of the African swine fever in a number of Member States and consequential loss of third-country markets. Obviously this has had a knock-on effect on supply within the single market. We are all aware of the cyclical nature of the commodity markets for which the pig meat sector at this time is compounded by rising input costs. The current situation in Ukraine, as you have stated as well, has exacerbated these challenges. Minister McConnell has had ongoing discussions over recent weeks with the main banks to discuss the current challenges in the pig meat sector and the importance of the ongoing support. He has emphasised the importance of the sector and the importance of the bank support to their customers throughout the current downturn in business cycle. The key message was that farmers experiencing cash flow difficulties should engage with banks as soon as possible to discuss options and that the banks remain committed to supporting their customers in the period ahead. Separately, Minister McConnell met with the Strategic Banking Corporation of Ireland to discuss the Brexit Impact Loan Scheme and the COVID-19 Credit Guarantee Scheme, both of which are financed by the Department of Agriculture in partnership with the Department of Enterprise Trade and Employment. These finance schemes can be used for working capital finance and include features to address the current financial needs of pig farmers. Last month, he announced the pig exceptional payment scheme with a fund of up to €7 million for commercial pig farmers. This is an urgent short-term response to assist producers that would be viable but for the extreme current circumstances and allow space for more medium-term adjustment to market signals. Applications for the PEPs close on 20 March 2022. The first tranche of payments has issued with the remaining applications due for processing as soon as possible. This scheme is part of a wider package of measures to support the pig meat sector, including intensified efforts by Bordea to promote quality-assured Irish pig meat in the domestic and export markets, with dedicated media advertising campaigns underway nationally, as well as EU-funded pygmy promotion programmes running in key export markets. Tagishka has also intensified its dedicated ongoing advisory supports being provided to pig farmers and is actively engaging with pig farmers to explore the options potentially available to them. Furthermore, the Department continues to engage at EU level to ensure a joined-up EU approach to the challenges arising from Russia's illegal invasion of Ukraine, including through the European food security crisis preparedness response mechanism. Last week, the Commission announced the adoption of exceptional support measures across the agriculture sector, along with a communication on food security. In addition, the Commission, in view of the particularly difficult situation in the pig meat sector, has opened a new private storage aid scheme to assist in stabilising the sector. The Department is currently examining the detailed requirements and conditionality attached to the exceptional aid allocation to Ireland of £15.8 million in EU funding. Thank you. Thank you. I thank the Minister of State for his reply. I know that Minister McConnell was in touch with me to say that he is at a Council of Ministers meeting in Brussels, or in Europe today, and he couldn't be here this evening, and I appreciate that. And only last night I engaged with Aunty Shuk and with the Minister for Public Expenditure and Reform, emphasising again my belief that the proposal that was submitted by the IFA, by the meat processors and by the Irish grain and feed association, that needs to be considered, finalised and implemented by the Department. It is a proposal where the sector outlines the difficulties, outlines them very well, very well researched. They outline where government funding could be provided. And also, very importantly, they are outlining what contribution they will make themselves. But it is an immediate crisis. And I know the Department can refer to facilities within the banks through the different Brexit-related funds and that. But I know, for instance, that the banks are not entertaining some of the peak producers. And what I fear is that the smaller scale producer would get less of a hearing from our financial institutions than maybe the bigger producers. So, there has been huge rationalisation over the years. We don't want to lose any more producers. And this is a very sophisticated sector. And, Minister, you used the phrase a very resilient sector. It absolutely has been. And we all know that different sectors in farming face cyclical problems over the years. That goes with weather or market distortion or market disturbance. But the pig sector in particular, it has always endured more cyclical problems than any other sector within farming or the agri-food sector. I know myself when I dealt with the pork dioxin issue in 2008. As a government at that time, when there were particular challenges to the public finances, we put huge money into dealing with that particular issue at that time to ensure that we continued to have the pig meat sector in this country. And that was a good investment by government at the time. We didn't delay on making the decision. The decision was made quickly. The financial support was put in place. And we saved that sector. And in the meantime, there has been a huge return on that government investment at that particular time. And very importantly, we ensured that the good name of the Irish agri-food sector internationally was maintained. And we need to ensure that that continues at this time and that we do not run into any animal welfare issues. Thank you. I suppose specifically to address the issue of the IFA's proposal for a pig stability fund. And this proposal is currently being considered by the Department of Agriculture in conjunction with key stakeholders. And they asked us for a 100 million euro fund to be made available to pig farmers by the department with 50 million to be repaid over a 14-year term through a statutory levy on pigs slaughtered or exported live. And this proposal would have significant exchequer implications but also have state aid implications both in relation to exchequer funding element and the statutory level. Minister McConnell has engaged with the ISA fund to ask that urgent consideration be given to developing a suitable instrument to manage market volatility for the pig sector. And discussions are ongoing with regard to developing a financial instrument as a medium-term solution to help the volatility. As I said, these are cyclical issues and this one might be protracted. On a national level as well, the Pig Roundtable chaired by Minister of State Martin Hayden meets quarterly with a focus on key strategic developments in the sector with reference to the relevant actions set out in key strategy documents including the Programme for Government and Food Vision 2030. And the next roundtable meeting is in early May and that there is also a new pig meat reflection group that has been established at EU level comprising of member states and key stakeholders through civil dialogue to examine the structural challenges facing the sector because it is Europe-wide, it is worldwide in fact these problems. And the group has met twice to date and is scheduled to produce a report in quarter one of 2023. So again, just to reiterate the support of Minister McConnell and the Department Deputy to try and resolve the challenges facing this vital sector to the Irish economy and to Irish agri-food businesses. We all want to seek a solution that is equitable and fair to the producers and to ensure that the sector not just survives but thrives into the future. For their own ideas, Ms. D istedihrism. Amin again! uru fábio 1 over 2