We must cut out the nonsense for suckler cow farmers

22 February 2018

I will concentrate on the importance of the Mercosur negotiations. If their outcome and that of Brexit are not successful from our perspective, it is conceivable that our beef industry will be obliterated. Ireland’s interest in the EU-Mercosur talks is clearly centred on beef. Irish farmers are understandably concerned that the EU may grant significant access to the EU for Mercosur beef. At present, the EU imports 247,000 tonnes of beef from Mercosur countries, representing three quarters of total beef imports. The EU has offered to allow an additional 70,000 tonnes of imports although the trade Commissioner, Ms Cecilia Malmström, seems willing to raise the offer to 100,000 tonnes. Mercosur, on the other hand, is demanding access for an additional 200,000 tonnes. Mercosur negotiators have argued that the additional 70,000 tonnes the EU seems willing to offer represents just two hamburgers per year for each EU citizen. As an average beef carcass yields only 12% of prime cuts, however, that 70,000 tonnes will require the slaughter of 600,000 tonnes of beef. That is actually greater than Ireland’s total beef exports of 535,000 tonnes. While 70,000 tonnes might seem insignificant in an EU beef market of 7 million tonnes, Bord Bia points out that it will create significant competition for Ireland’s high-quality beef cuts in the EU market. The EU’s own research shows that increasing beef imports from Mercosur countries could reduce beef prices by 60%. Since we in Ireland export 90% of the beef we produce, the impact on Irish beef production would be greater. Increased Mercosur imports could lead to a 30% reduction in beef prices of €1 per kilogram. That would cost Irish beef farmers approximately €500 million per annum.

In Mercosur countries the regulation of beef production is minimal. Animal diseases like foot and mouth disease remain prevalent. Most Mercosur countries lack tagging, traceability or movement control systems for livestock and, as a result, cannot guarantee origin or food safety. These countries use branding as the main means of identification, which undermines the credibility of any certification process for beef exports into the EU. Many drugs, including some antibiotics and insecticides, which are banned in the EU are cleared for legal use in Mercosur countries with no controls on purchases or withdrawal periods. In addition, illegal drugs like hormones and clenbuterol are widely available and used in South American beef production. Most Mercosur beef is produced on huge ranches on which workers receive low pay and have poor working conditions.

Irish beef is produced on natural pasture whereas much of the pasture on which Brazilian beef is produced consists of land which was once rainforest, the clearance of which contributed greatly to climate change. The clearing of Amazonian rainforest accounts for 75% of Brazil’s contribution to global warming with 70% of the clearances being attributable to cattle ranching. Irish beef production systems are between two and four times more efficient than those in South America in terms of climate change and greenhouse gas emissions when land use changes are considered. Domestic EU beef production is far more sustainable in terms of carbon and water, with greenhouse gas emissions from Irish suckler beef production estimated at approximately a quarter of emissions from Brazil. While the EU purports to be concerned about the environmental impact of trade, it seems inconsistent to replace sustainable EU beef production for European consumers with products from South America which have a much higher carbon footprint.

While imports of beef to the EU from Mercosur countries are subject to EU food safety standards, the lower labour costs and environmental conditions will continue to give Mercosur producers a cost advantage. That must be considered when deciding what quota of beef imports will be allowed. The most effective way to protect EU beef producers while allowing some market access for Mercosur producers would be to negotiate tariff rate quotas. Under a tariff rate quota system, a limited amount of beef would be imported at low tariff while imports above that level would be subject to significantly higher targets. The threat to the Irish beef industry from increased Mercosur imports would be considerable if the UK were to remain within the EU. Brexit has added a further threat, however. A major argument put forward by Brexiteers in favour of the UK leaving the EU is the possibility of concluding more favourable trade deals with countries or groups of countries. While this is a very optimistic argument, the possibility that the UK will impose tariffs on EU beef after it leaves cannot be ruled out. Were the UK to conclude a deal on beef with Mercosur after Brexit, we could find that beef in Newry is half the price it is in Dundalk. This possibility makes it even more urgent for Ireland to resist any deal with Mercosur on beef which might lower beef prices and farmers’ incomes significantly.

Fortunately, Ireland is not alone in opposing a significant increase in Mercosur beef imports. It should co-operate fully with the other EU member states which oppose the deal. As the French trade Minister, Jean-Baptiste Lemoyne said, negotiators should take their time to get the deal right. Lemoyne said that while France wants an agreement, it will not be rushed into it. He pointed out that a few years are not significant in negotiations which have been ongoing for 15 years. He also stated that France wants the EU to recognise that the market has evolved since the talks began. Lemoyne’s views are shared by others, including Belgium, Romania and Slovenia. Ireland must resist being pressurised to agree a deal which would be very damaging for the beef industry by countries which stand to gain more than we do from an agreement. The Minister has our solid support to insist that the interests of the Irish and European beef sectors are safeguarded fully and protected in the conduct of the negotiations.

I hail from a mainly beef production area. Indeed, my brother is a suckler cow farmer. Longford-Westmeath is at the very heart of that. As such, I am aware of a significant decrease in suckler cow numbers in the past four years. Nationally, beef cow numbers have declined by approximately 6%. We must be truthful and stop codding here. The cause of that decline arises from a number of things, including the number of younger farmers in particular who have gone into milk production. I have seen it happening in my own area and have been warning them about it. I said it at the Committee on Agriculture, Food and the Marine. They have opted to switch to dairy or to have integrated calf-to-beef systems. Large increases have taken place in the eastern and south-eastern counties. In my county, there has been a 3% drop in the number of suckler cows in the past four years. Longford has experienced a decline of just over 5% in the same period. With the removal of milk quotas and a continuing question of profitability, many experts anticipate the decline will be even greater. The advent of the beef data and genomics programme payment may have helped to stem the exit. I sat on an agriculture committee when Fianna Fáil nearly stopped the programme, together with the IFA. Former spokesperson Deputy Éamon Ó Cuív was there. I am 150% behind the programme however. It is worth approximately €80 to €100 per head but it should be increased to €130 or €140 per head. That is important because the only way we are going to increase efficiency is through genetic improvements in herds.

For suckler cow farmers, we must cut out this nonsense. We need to get the price right for them. Guaranteeing meat yield and higher prices for new grades and carcasses would help to boost suckler cow numbers. One has to take stock of the reality and start there. There is a €14 billion hole in the EU budget as a result of Britain leaving, of which €3 billion relates to CAP. There is a hole in the bucket and the only way to fill it is from individual European member states paying extra. We will have to pay more. Even to get them to pay for the €14 billion will be some achievement, in which respect we should not be trying to fool anyone. I will not fool any farmer. Farming or other organisations or political parties can do it, but I will not be part of it. I will tell the truth. I am only telling the truth to my own brother who is in the game.

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