DÁIL ÉIREANN

AN COMHCHOISTE UM THALMHAÍOCHT, BIA AGUS MUIR

JOINT COMMITTEE ON AGRICULTURE, FOOD AND THE MARINE

Dé Máirt, 6 Iúil 2021

Tuesday, 6 July 2021

Tháinig an Comhchoiste le chéile ag 9.30 a.m.

The Joint Committee met at 9.30 a.m.

Comhaltaí a bhí i láthair / Members present:

Teachtaí Dála / Deputies Seanadóirí / Senators Martin Browne, Victor Boyhan, Matt Carthy, Lynn Boylan, Michael Collins, Paul Daly, Michael Fitzmaurice, Tim Lombard, Joe Flaherty, Denis O’Donovan. Paul Kehoe, Brian Leddin, Michael Ring.

I láthair / In attendance: Deputies Barry Cowen and Michael McNamara and Senator Rob- bie Gallagher.

Teachta / Deputy Jackie Cahill sa Chathaoir / in the Chair.

1 JAFM Impact of Peat Shortages on the Horticulture Industry: Discussion (Resumed)

Chairman: Deputy Carthy is attending a meeting of the Committee of Public Accounts and will join this meeting at 10 a.m.

Before we begin, I remind members that, in the context of the current Covid-19 restric- tions, only the Chairman and staff are present in the committee room. All members must join remotely from elsewhere in the parliamentary precincts. The secretariat can issue invitations to join the meeting on MS Teams. Members may not participate in the meeting from outside of the parliamentary precincts. I ask members to mute their microphone when not making a contribution and please use the raise hand function to indicate. Please note that messages sent to the meeting chat are visible to all participants. Speaking slots are prioritised for members of the committee.

The topic for this meeting with representatives from Growing Media Ireland, GMI, is the impact of peat shortages on the horticulture industry. I welcome Mr. John Neenan, chair of GMI, Mr. Kieran Dunne, Kildare Growers Group, Mr. Mel O’Rourke, Commercial Mushroom Producers, and Ms Anna Kavanagh, independent horticulture consultant, who are all appearing remotely. We have received their opening statement, which has been circulated to members. As we are limited in time due to Covid-19 safety restrictions, the committee has agreed that the opening statement will be taken as read so that we can use the full session for questions and answers. All opening statements are published on the Oireachtas website and are publicly available.

I must give an important notice regarding parliamentary privilege. Witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are direct- ed by the committee to cease giving evidence relating to a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where pos- sible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Participants in the committee meeting who are in locations outside the parliamentary precincts are asked to note that the constitutional protections afforded to those participating from within the parliamentary precincts do not ex- tend to them. No clear guidance can be given on whether or the extent to which participation is covered by the absolute privilege of a statutory nature.

This is a very important topic. We discussed it earlier in the year and had a committee meeting on it. We were given assurances at that meeting that there would be an interim report which would be provided to us in early April. The indication was that it would allow home- grown peat to be harvested for the horticulture industry. That has not happened. Members of the committee fully understand the witnesses’ anxiety and the financial pressure they must be experiencing. I and the members of the committee are very interested to hear what they have to say this morning. The idea of importing peat into this country is not only financial madness but also environmental madness. Banning peat cutting in this country makes a nonsense of what we are trying to achieve. The witnesses will have the opportunity this morning to make their presentation and answer questions from members. Then the committee will decide what politi- cal pressure it can apply to try to help their industry.

I will open the meeting to the floor. Senators Paul Daly and Boyhan have indicated that they

2 6 JULY 2021 wish to speak. Senator Boyhan has a particular interest in horticulture, so I will call him first.

Senator Victor Boyhan: First, I welcome the witnesses. I do not intend to take up too much time because I spent a lot of yesterday being mushroomed out with talking about it. The national newspapers today have covered this issue quite extensively. I am very supportive of the horticulture sector and particularly the witnesses’ sector. It is grossly unfair and hypocrisy at its best to talk about bringing in peat or substitute peat from the Baltic states, such as ver- miculite, cocoa shells and so forth. We know they simply do not work. We know from the Teagasc representatives who appeared before the committee that there is really no alternative. I have focused on mushrooms but there is also the general horticulture sector. Peat and milled peat are also used in forestry, particularly forestry nursery stock, and also in horticulture stock, including ornamental stock, and salad and vegetable production.

There is a very mixed message from the Government. I am not in government or in a Gov- ernment party and I am not here to criticise any member of the committee who is in a Govern- ment party because every member of the committee is fully committed to agriculture and horti- culture. How have the witnesses engaged with the Department? What was the response of the Department to the case they made? I would advocate strongly that there should be a ten-year exemption period. Yes, we all recognise that we must find alternatives, but there are no real alternatives. I realise I am preaching to the converted here but I am very conscious of the jobs in Monaghan, Louth, Wexford and the midlands. We talk about sustainability and we discussed the climate action Bill, but this does not make sense. Basically, we have carbon leakage by importing peat substitutes. I thank the witnesses for attending the meeting and I urge them to keep advocating on behalf of their industry. There are huge implications. I have no doubt that we will see aspects of this issue in the courts; I am quite confident we will. I thank the witnesses for persisting in pursuing this. They should mobilise their industry and mobilise their elected representatives to put pressure on the Government. The reality is that the Green Party is part of the Government. It is part of the problem. It might think it is part of the solution but I do not believe it is at this time. We need to shift and apply political pressure and the industry’s pres- sure on politicians so we can have some sort of practical alternative arrangement to support the horticulture industry in the months and years ahead.

Finally, the witnesses have a great ally in Bord Bia. Bord Bia has done a tremendous amount of work in promoting mushrooms. As I said yesterday in the Seanad, I went to a few supermarkets at the weekend and picked up mushrooms from refrigerators in different stores. I could clearly see the proud Irish brand, Bord Bia, on the food products. That is a very strong link and a strong synergy. It is something the witnesses have to capitalise on in this case be- cause I believe Bord Bia will be their ally. It certainly has vast budgets for promoting organics and particularly for promoting mushrooms across the world. I thank the witnesses for taking the time to engage with the committee on this very important issue.

Mr. John Neenan: I thank the committee for inviting us to the meeting at such short notice. As the Senator said, the industry is in a critical stage. Peat supplies have virtually run out and will be finished by the end of September. That will certainly cause major upheaval, with po- tentially up to 17,000 people made unemployed. It will also affect the sector and nurseries that have been in business for two and three generations in rural Ireland, which will be devastating in certain areas. We highlighted the situation previously and we are very disappointed that the Department has not taken the opportunity to appear before the committee to explain its actions. Growing Media Ireland and the other representatives with me today have engaged fully with the working group. We had six meetings and we produced an interim report. That went to the

3 JAFM Minister almost two months ago. There has been no reaction to that, other than saying the Min- ister understands the situation. We are in a critical situation. I will ask the mushroom producers and nursery stock representatives to explain in more detail how it is affecting their businesses.

Senator Paul Daly: I welcome our guests. Like Senator Boyhan, I condole with them on their plight. I see the pure ridiculousness and stupidity of it. I know hauliers who are hauling peat from Drogheda down to the south of the country. We have this climate change and climate action debate in these Houses on a regular basis. The one key message is the bringing of people with us and having buy-in from the community. However, people are watching such ridiculous nonsensical activities as the importation of peat from eastern Europe. Harvesting it out there is having the same effect on the environment and climate as doing it here but then the diesel- burning ships and lorries taking it to and from the port must be taken into account. It just does not make sense. We have been putting on political pressure and we will continue to do so. As GMI said in its submission, it seems to have fallen between the cracks by virtue of there being numerous different Departments, which are able to push the blame, for want of a better word, onto each other. Somebody must step up to the plate and make a decision. I have a couple of quick questions.

I am thinking about how we get a resolution to this going forward. The GMI submission is prescriptive on the alternatives being examined or developed at the moment. In this situation, as in others, just transition has gone out the window and we have put the cart before the horse. We have stopped the peat and now we are talking about scientific experiments and the develop- ment of alternatives. However, of the ones GMI has listed, aside from composting and green waste, none of them seem to be Irish. It would be an import scenario for all of them even if they were up to scratch.

Will the witnesses elaborate a little on green waste? When I saw the heading I thought this was the solution but there are issues and problems with it that GMI has identified. I would like to hear how we might be able to tweak some of them because it seems to be the only real alter- native mentioned, from an Irish perspective.

I would also like to know about a mixture of one or other of the alternatives and peat. If we were going to table saying that going forward, we will only need a percentage of what we did in the past, it might be easier to get a green light. Is there the possibility of using mixtures of any or all of the alternatives GMI has mentioned?

This might be a stupid question but we are here to ask the questions. Is there any possibility of recycling peat between different sector of the industry? Maybe peat that has been used in horticulture could then go to the mushroom industry or vice versa.

I am trying to come up with a strengthened case for minimising the volume of peat that would need to be harvested to keep the sector viable, going forward. As things stand at the moment what percentage of peat is the industry getting from Bord na Móna, from the private sector, or both, when it comes to harvesting? To conclude, it is now July, so even if there was a solution to this issue and the green light was given for peat harvesting by the close of business today, have we missed a harvesting season?

Chairman: There are a number of very pertinent questions there. Ms Kavanagh is indicat- ing.

Ms Anna Kavanagh: The Senator covered a lot of topics there. I hope I get to all of them.

4 6 JULY 2021 Peat is the best growing medium and that is why we have been using it for decades. Irish peat is the best in the world. We have seen that over the decades because people have wanted it. It is medium-decomposed peat and has the best air and water properties. It has a high lignin content so it is very useful for long-term crops. The other thing about peat is that it is a relatively light material with a low pH and low nutrient. The beauty of that is lime and fertilisers can be added to suit any crop. The other thing is peat is not just one product. Peat is brought in, graded and then blended. Even in my days in Bord na Móna there could be up to 1,000 different recipes for growers in Ireland, so the number of recipes worldwide is much higher than that.

Peat will be needed in the phasing out of peat in favour of alternatives in Ireland. The Sena- tor mentioned the alternatives and asked us to say a bit about green waste. Again, from my experience in Bord na Móna, we had a state-of-the-art facility in Kilberry and green waste was produced to a good quality. The important point is that a very good quality is needed for retail products and is even more important for professional products. I illustrate this by saying that if you go out and by a bag of compost and grow your plants, you probably will not mind if they are different sizes and if one dies you blame yourself before anyone else. On the professional side of the business, if I sent a load of compost to Mr. Dunne and he had variance in his plants and lost plants it is all off the bottom line as they are grown to tight specifications. Thus the need for quality on that side is critical. Green waste is also a very heavy material. It is about 500 g per litre. At the moment, green compost could only be used at about 10% to 15% in a mix because of the weight and everything else. It also has a high conductivity, which is the salts in there. There are concerns with green compost, depending on the source, about contamination by glass or plastic and it can even have needles in it. There is also a concern about whether pes- ticides have been used on the crops, grass cuttings, hedge cuttings or anything else that goes in there. There are a lot of issues really. On top of that human pathogens must also be considered.

Going forward and looking at alternatives we must take a more holistic approach where we look at the entire system of production of stuff. With, say, the green waste we can ask if there is anything else we can do to it to eliminate some of these issues. Bord na Móna has successfully used green compost in the hobby market for number of years now, going back to 2005, prob- ably. Bord na Móna was the leader in peat reduction in the hobby market in the UK, so it is not as if Ireland has no experience in this area. However, on the professional side of the business it is an entirely different matter. There plant production is in a critical situation and things must be very closely monitored. To use green compost in professional mixes there would need to be a very high standard.

The Senator inquired about other products. Wood fibre is a good product and is seen world- wide as probably one of the leading products that can be used in peat reduction. Wood fibre can be used, although it has issues with possible nitrogen lock-up. It is a light material and has been used successfully up to approximately 35% in mixes. The big problem with wood fibre is the competition from fuel and other wood industries. It is difficult and the price can be sensitive. It may be possible to have schemes going forward - and this should form part of our research and development - where there would be incentives, subsidies or land put aside to grow crops specifically to produce growing media. That would be one option.

Coir is another product that has been mentioned but it comes predominantly from Sri Lanka. Coir is the outer husk of the coconut. We are talking about taking a product like that and trans- porting it all the way from Sri Lanka, India or somewhere around there. We are talking about taking it from a country where water resources are valuable, even for people’s own use, and asking them to use that water to clean the coir, because it contains certain salts and so on, to

5 JAFM give us a product for growing media. It is also used locally in those countries as soil conditioner and as a fuel.

The Senator mentioned pearlite and vermiculite. Many other products are used as additives. There are other products such as anaerobic digestate and waste materials that should be looked at. Any alternative needs to be fit for purpose and sustainable. What criteria are we using to say that it is sustainable? I feel that we should find out what products are locally available in Ireland in sufficient quantities that we could use in future and rate those products on a scale. In the UK, there was a calculator which looked at energy use, water use, social compliance, renewability, habitat biodiversity and other criteria. It scores each material based on those criteria and comes up with a total score. Peat should also be on that because it will be needed for a long time yet.

Another issue that the Senator mentioned was mixtures. Mixtures can be used. It is unlikely that there will be one material that will be used in future. Peat has been a great product. It is foreseen that we will use mixtures of products. When you start research and development on mixtures of products, it is not a matter of adding A, B and C, and adding 1 and 1 to get 2, or 2 and 2 to get 4. When these products are added, their properties need to be categorised and assessed, then you have to look at how they are put together and assess that product all over again. It is not as simple as putting two products together then making it available. That is where much of the research and development work will happen. All of those combinations and their physical, chemical and microbial characteristics need to be assessed.

The Senator asked about the possibility of recycling peat. That has been done a bit in the past. It is a possibility. With the new technologies, those things are all possible. It is a good recommendation. To my knowledge, Bord na Móna has ceased supply of peat for horticulture at this point, so whatever is available is coming from other producers or from abroad. I agree with the Senator and I cannot believe that we would talk about importing peat. If we are really concerned about climate action, kicking the ball down the road is not the answer. If we are talking about global climate action, then buying peat from abroad is only adding to our envi- ronmental issues and it is not helping in any way. As I said earlier, that peat is not even of the same quality as the peat in our own country. It will decompose faster, which would contribute more to carbon dioxide emissions.

The Senator said that it is now July. I agree and have raised this several times in our work- ing group. The main peat harvesting season is from May until September. We have missed May and June and we do not know what the weather will bring in the next couple of months. We need immediate action. The working group and its industry members have been patient. We have contributed and worked hard in six meetings over four months. There has been much behind the scenes work to contribute to those meetings. We need an answer for the industry at this stage. It is at crisis point, as the Senator pointed out.

Chairman: Those were comprehensive answers.

Deputy Michael Fitzmaurice: I thank the witnesses for coming in. I have a couple of questions. Ms Kavanagh spoke about research and development. Will that take five years or ten years? She has been on the working group. I am a bog man. I made it clear from the start when both Ms Kavanagh’s group and the Department were in that I wanted to know how they would get over the European legislation and do screening for appropriate assessments and so on. Did the working group find a solution to that European legislation and the habitats directive that our now President signed in? Has the working group agreed on a solution that was put to the Minister? We know how much is coming in from other countries. If there is not the will 6 6 JULY 2021 for legislation from the Department, the Minister, Deputy Darragh O’Brien, and the Minister of State, Deputy Peter Burke, which is being blocked by the Department of the Environment, Climate and Communications, it will not happen. It is my experience that when one Minister is talking in the Dáil, another Minister is sitting behind. We need honesty from politicians about where this is going for the whole peat sector. In the witnesses’ opinion, was a solution agreed? They can do all the reports they want and have all the meetings, working groups and BS, to be quite frank about it, but if someone does not make a decision, people will be left where they are. I have seen all this happen before. People will wind down to September and end up missing a year of production, which would be a disaster for many jobs around the country.

Mr. Mel O’Rourke: I will go back to the questions from Senators Boyhan and Daly about peat for the mushroom industry and alternatives. The mushroom industry is based on having a high-quality compost and a thin layer of peat on top of that compost to grow the mushrooms. The industry has been successful. People talk about the horticulture industry in general when it should be divided into subsectors. The mushroom industry is a subsector which exports €120 million worth of product to the UK. We depend on high quality casing material, which is a blend of peat and sugar beet lime or ground limestone. It is different from what is used in the amenity sector in that it is deep black peat that never dries out until it goes onto the bed to grow the mushrooms. The mushrooms absorb moisture from that peat. The peat requirement is only 20% of the growing substrate. For each cubic metre, which is equivalent to a tonne of meat, we grow about 5 tonnes of mushrooms. In a nutshell, the mushroom industry depends on deep-dug peat. There is no alternative in the short or medium term. Research has been carried out in Israel, South Africa and Holland to find alternatives because they have to import peat. We are a net producer of peat and an exporter to most of those countries. In the short to medium term there is no alternative. To return to the point made by Senator Daly, the growing medium that we use in mushroom production can be taken out and used as a growing medium in another area of horticulture or it can be spread on the land for cereal production. It is widely accepted that it is a valuable product for the cereal growing industry, where it is spread on the land. We get a double use from that material.

Chairman: I thank Mr. O’Rourke and I call Deputy Michael Collins.

Deputy Michael Collins: I am-----

Deputy Michael Fitzmaurice: I did not get answers to my questions.

Chairman: I will come back to the witnesses in a moment and they can answer them then. I call Deputy Michael Collins.

Deputy Michael Collins: I am conscious of the difficulties experienced in the past couple of months by nurseries all over west Cork and throughout the country as well which could, probably, lead to a loss of jobs. I am disappointed that there are no departmental officials before us today. While the witnesses are welcome, we are speaking to the converted. The horticulture industry, in particular the nursery stock industry, is in crisis, with raw material prices having increased by more than €1,000 per load. In light of the 30% to 50% increase in costs and re- duced quality, many growers believe that will go out of business. There is no transition plan for the industry.

I ask the witnesses to explain why peat is being exported from Ireland while Irish growers have to purchase raw material from abroad at huge additional carbon footprint, which puts the Irish grower, especially small enterprises, at a disadvantage? Is there a plan for transition for

7 JAFM the replacement of peat for the horticulture industry in this country? What about the peat in the bogs that can never be rewetted and returned to habitat? Why can a licence not be given to those sites instead of leaving the peat there while Irish growers have to bring in peat from as far away as Estonia and so on?

Chairman: I note Mr. Dunne is waiting to come in. Deputy Fitzmaurice asked a few spe- cific questions that were not answered. I ask Mr. Dunne to respond to Deputy Fitzmaurice’s questions as well as the questions posed by Deputy Collins.

Mr. Kieran Dunne: I will try. Deputy Fitzmaurice asked if the working group had come up with a solution and, if so, what it is and if there was general agreement in that regard. There is a general consensus that there needs to be a harvesting of peat in Ireland. That was the view across the working group from Friends of the Irish Environment to An Taisce and from the ex- perienced horticulturists around the table. The short-term solution is agreed. There is general consensus that sub 30 ha. would be possible as a short-term solution and that it would be suf- ficient to supply the Irish horticultural industry until the medium and long-term solution is put in place.

The experience of the working group was very valuable. A great deal of work has been done since our last meeting with the committee on 16 February. Behind the scenes, the work- ing group and the industry have put in a huge amount of effort to try to resolve this issue. Up to seven months ago, we stated that by June we would be in a crisis situation. We waited months for the working group to be put in place. We submitted the interim report in sufficient time to allow for a resolution of the situation. That was two months ago. We have received little by way of solid reaction from the Government. I know that various Departments are doing their best behind the scenes to try to resolve the situation, which is not an easy one to resolve. There is need for fair play and common sense in this process.

Deputy Fitzmaurice spoke openly and honestly about being a bog man. I live in the middle of the Bog of Allen. We are proud of what we have done and what we have built. We are proud of our achievements, people and industry. We are a close-knit community within the horticul- tural industry. We are also very proud of our output, professionalism, exports, employment for local people and our local product for the local market, one that is suitable for the Irish weather and conditions. We are extremely hardworking and provide good paying quality jobs in rural communities throughout the country. This can be turned into a good news story. Instead, we are in crisis. We have survived -18oC frost. We have worked our way through Brexit and sur- vived it with the help of the Departments. Throughout the pandemic, we have remained open and kept all of our people employed. We have put our shoulder to the wheel and put on the green jersey. We cannot be asked to do more. We survived the recession, which was not easy in terms of the banks, overdrafts and loans. We survived all of this. We are very proud of what we do. We are hardworking people throughout rural communities in Ireland.

Bord Bia was mentioned earlier. We are proud of what we have achieved with Bord Bia and the Bloom festival over the last 15 years. We are proud of our horticulture and food industry and the promotion of that through Bloom. We are proud of the new green cities initiative and we are supporting it financially. Who will support Bloom and the green cities initiative into the future? Will it be European produce? If we do not have peat, there will be no produce to sup- port Bloom, which is a fantastic festival and celebration of food and horticulture. We have done our part. I am bitterly disappointed with the lack of process, progress and timeframe in relation to resolution of this issue. There is no real common sense and there are three Departments bat- tling about whose problem it is. We had an exceptionally good, raw meeting with the Minister 8 6 JULY 2021 with responsibility for horticulture. It was an engaging meeting attended by Kildare growers and a number of other consultations. It was honest, fair and raw and we got some reaction, but there is still no progress being made.

Deputy Michael Fitzmaurice: With the permission of the Chair, I would like to ask a ques- tion. Mr. Dunne mentioned sub 30 ha, which is in reference to the High Court case that under 30 ha. does not require planning or appropriate assessment and so on. That relates to the people who could always work. Up to now, they have not been stopped, in my opinion. Is there a so- lution? If somebody has a bigger area, say 60 or 70 ha. - this is the matter I am trying to have clarified by the working committee - is there an agreement that they can take 30 ha. out or is it strictly an island of 30 ha. that is agreed? Mr. Dunne referenced the Minister with responsibility for horticulture. Is he referencing the Minister of State, Deputy Malcolm Noonan?

Mr. Kieran Dunne: No. It is the Minister of State, Senator Hackett.

Deputy Michael Fitzmaurice: She is the Minister with responsibility for horticulture.

Mr. Kieran Dunne: Correct. That goes to the Deputy’s point on the sub 30 ha. If someone has sub 30 ha, that is, 75 acres, is it not a good news story that the rest of his or her peatland would be reinstated and he or she could harvest that area? Is that not common sense? We have removed more than 90% of harvesting through Bord na Móna exiting the industry.

A comment was made about exporting peat. No professionally harvested horticultural peat is being exported at this time. Bord na Móna closed its mixing plant last Friday. It is supply- ing no further peat and is not moving any more peat in the country. We have one professional mixing plant left, which is Klassman Deilmann in Westmeath. If it goes, there will be no pro- fessional mixing plant left.

Chairman: I thank Mr. Dunne for his passionate answers. He has outlined the significant difficulties that are coming down the tracks. We were on Bord Bia when the decision on Bloom was made, and that was a success story for the horticulture industry. I understand his point that its concept would be undermined and made a mockery of if it could not be supported by Irish industries.

Mr. Kieran Dunne: The value of the promotion of Bloom to the horticulture, food and amenity sectors is significant.

Chairman: A number of members have indicated they wish to speak. I call Senator Lom- bard.

Senator Tim Lombard: I am in the conference centre.

I welcome the contributions, which have been informative and given us a great view of the crisis in the industry. The timelines are frightening. By next September, we could be out of peat, which would have an impact on many parts of the horticulture industry.

We have spoken about the working group and the long-term goal of moving the industry in a slightly different direction, but I am lost as to what is happening in respect of ministerial involvement. This is probably one of the main issues I wish to raise. There was an interdepart- mental meeting of three or four senior officials. Is there any knowledge of what happened at that meeting and where the game stands in trying to find a solution? Three Departments have a role in solving this issue. Due to that interdepartmental mix, though, there seems to be little

9 JAFM movement. My understanding is that the remaining number of weeks are crucial. It is unfor- tunate that we do not have officials from all three Departments before us so that we might try to get movement on this. We have to reconsider doing so if possible. I am at a loss as to why the three Departments are not present and why we have not received answers to key questions about the timeline for delivering a suitable short-term plan. From speaking to officials and oth- ers over the past 48 hours, the next six weeks will be crucial. There will be a major confidence issue within the industry, due to which the amazing number of people involved in it could be affected. Given that it accounts for 17,000 jobs and more than €500 million, this is a significant issue.

My understanding is that 90% of our peat imports are of water-based materials, so we are effectively paying to import water. Is there a more effective way of importing peat from the Balkans or Poland?

I have more questions than answers, but I hope that we can get some movement in a short time.

Chairman: Regarding the officials, this meeting was called at short notice at the request of the horticulture industry and no officials were available to us this morning. On my way down to the committee room, I saw that the Minister of State, Deputy Noonan, was taking Commence- ment matters in the Seanad. It is not that officials refused; rather, it was the time factor.

Senator Tim Lombard: Have they given us an indication of when they will appear before us?

Chairman: When we finish this meeting, we will make a number of decisions about how we as a committee will proceed to try to progress this matter.

Deputy Martin Browne: As Mr. Dunne mentioned, one of the difficulties is down to the fact that there are three Departments involved - Agriculture, Food and the Marine, Environ- ment, Climate and Communications, and Housing, Local Government and Heritage. Has any of them been more forthcoming in trying to address the witnesses’ concerns or are they being ignored equally by all three?

Last month, the Minister of State, Senator Hackett, stated that the working group had sub- mitted the interim report to the Department and that the Minister of State, Deputy Noonan, sub- sequently wrote back to the working group. According to GMI’s submission to us, the working group was still awaiting a detailed response to the report. Has there been progress towards the urgent action required? Had the Minister of State any light to shed on the report’s contents or was his just a letter of acknowledgement? What can the working group tell the Government that GMI or the rest of the sector has not told it? GMI has told us of the impact of the peat ban, what growers need and the outlook for the sector.

Mr. John Neenan: I will deal with a number of questions, starting with Deputy Fitzmau- rice’s on whether we had given a solution. We have. The working group had an interim report, but it was not unanimous. NGOs such as Friends of the Irish Environment, An Taisce and one or two more basically wrote their own report. The interim report effectively recommended that peat harvesting continue throughout 2021 under emergency legislation and that legislation on a single system from 2022 onwards be introduced. I am not a legal eagle, but our legal people have advised us that, in the short term, an Act of the Oireachtas could exempt large-scale har- vesting for a limited period, facilitate screening for an environmental impact assessment, EIA,

10 6 JULY 2021 or an appropriate assessment, AA, instead of a full EIA, and release the industry from the re- quirement of a licence for a limited time, that is, 2021. That is a short-term solution. Primary legislation would facilitate a long-term solution exempting large-scale peat harvesting from planning requirements once a licence had been granted or an EIA report had been submitted. The Minister could then amend the Environmental Protection Agency Act to deal explicitly with a retrospective use of peatlands and to cover any planning element that was not included in the Act. We submitted to the working group, which submitted to the Departments, the heads of a Bill that would probably sort out this issue. We had previously submitted them to the Depart- ments last March. We have heard nothing back through the working group.

Senator Lombard asked about the three Departments and the meeting of senior officials. Officially, we have not heard anything about that. Unofficially, we have. Obviously, however, we have received no response.

Regarding Deputy Browne’s question on whether all of the Departments were acting the same, it was felt by officials at the initial working group meeting and the previous meeting of the Oireachtas committee that some action could be taken in the short term and that legislation could be passed within two or three months. By the second meeting of the working group meet- ing, though, that view had changed completely and we were back to three to four years. Even if we had a single system, it was stated that legislation on it could take three years.

Members have asked what this committee can do. Our feeling is that Government Depart- ments do not accept that there is an emergency. They believe there are sufficient alternatives available. That is clearly not the case. The Departments do not appear to understand this. They do not understand what it is like to have a nursery and try to get supplies. What do we tell our employees? It is the same in the mushroom industry. Those Departments and the Ministers concerned do not understand that there is a real crisis just around the corner at the end of Sep- tember. Mr. Dunne mentioned this, but I believe it is even worse than he has said. One of the companies that have supplies and bought some from Bord na Móna has now been threatened with legal action that it cannot take those supplies from stockpiles, which were purchased pre- viously. That is ongoing also. This is a disaster for the horticultural industry, an industry that we need to build up.

Last week I attended a webinar about plants, the health of plants, and the dangers involved in importing plants and peat into Ireland. That does not seem to be taken into account either. The situation is that the Departments do not understand or want to accept that there is an emer- gency going to happen. For some unknown reason they believe that there are alternatives.

At the working group it was mentioned by one of the NGOs that in the short-term coir is almost essential. I respectfully suggest that anybody who advocates for this has read absolutely nothing about coir. As Ms Kavanagh mentioned, we do need to get a life cycle analysis of all the materials that are being used. It certainly appears to be a case of anything but peat. What has happened is unbelievable, that this is not understood.

Deputy Paul Kehoe: I have remarks to make rather than questions. First, I must compli- ment the industry on the way they have approached this over the past number of months. I am aware that the Chairman has stated that the officials were not available. I was a Minister of State for more than nine years and no matter how short the notice the Department had of a meet- ing, some officials in the Department were found to come in to bring some sort of clarity to the situation. I will not say that our meeting today is a worthless exercise but the people we need in front of us today are the Department officials. I know exactly what our representatives from the 11 JAFM industry are going through. Last Thursday I spoke with a Minister - it would be wrong of me to put names on who I spoke with - and I was told, and the contributors were told, that Department officials and Ministers were meeting last Thursday. I looked for an update on that meeting on Thursday evening and I was told yesterday that a solution would be found. If a solution is to be found I believe it is right and proper that Department officials would come before the committee and tell us exactly how they are going to approach the issue.

My background is in the horticultural sector and I studied it in college, so I understand the industry fairly well. It is an absolutely ludicrous situation. We talk about climate change and greenhouse gases but when the witnesses before us today bring a solution to climate change and greenhouse gases the Department and the Ministers say to them “You are doing a great job” while at the same time giving them a kick up the behind. Normally I am very slow to criticise officials because they are the pillar heads in any Department, but they should be coming before the committee here no matter how short the notice.

Mr. Neenan referred to Klasmann, which was mentioned to me also by somebody in my constituency. I want to be very careful on this because I do not want to complicate any legal case but is it true that legal action could now be taken or is being taken whereby Klasmann has stockpiles that will bring the industry through over the next 12 months or even longer, but they are not allowed to travel across the bog to draw in these stockpiles?

Reference was also made to the importance of Bloom. I would like to see Bord Bia taking a more proactive approach on this, in talking to the Departments of agriculture and the envi- ronment, on the importance of the sector. Bloom is not only European renowned; it is a world renowned showcase that occurs in the Phoenix Park annually. It attracts thousands of overseas visitors, trade stands and so on. I am sure they are laughing at us when we talk about some people who are trying to stop the industry in its tracks in doing what it does best.

Perhaps the witnesses could let the committee know about the Klasmann issue. I am not sure if they can say too much about it. I compliment Mr. Dunne on his approach to this. I have spoken with people who were on that group over the past months and I am aware that they have approached this in a very professional manner. It is up to the Ministers of State, Senator Hack- ett and Deputy Noonan, and the Department officials, to step up to the plate and to bring some clarity to this issue. I am in government and I will do whatever I can, as I have been doing over the last months, to bring some solution here. I understand there are environmental issues but I really do believe that a solution can be found here.

Chairman: Deputy Kehoe asked a very specific question about a particular company and a legal case. If a witness can answer that without landing us in bother we would appreciate it. The point Deputy Kehoe made about the officials is extremely important. When this meeting finishes today the committee will have to discuss how we can progress this. We will discuss this when we finish this morning.

Mr. Kieran Dunne: Deputy Kehoe is well-informed on Klasmann.

Deputy Paul Kehoe: I thank Mr. Dunne.

Chairman: That is an experienced answer Mr. Dunne and, as Chairman, I appreciate it.

Deputy Paul Kehoe: I thank Mr. Dunne very much for clarifying that. It is an absolute scandal. I am infuriated by having that fully confirmed. I absolutely believe the person who told me the story to be absolutely 100% right. Mr. Dunne has confirmed this now. It is a scan- 12 6 JULY 2021 dal that Department officials and Ministers would stand idly by while we have thousands of tonnes of peat stockpiled ready to be used and people are not allowed to cross the bog to access it. I find it ludicrous. Maybe if they used helicopters they might be able to bring it in or perhaps they would bring the Army in to do it, and stop people crossing the bog.

Mr. Kieran Dunne: I go back to Deputy Browne’s question on the Departments. We as a group, and I personally, have been in touch the Department of Agriculture, Food and the Ma- rine, and the horticulture sections within that Department, and with the Department of Hous- ing, Local Government and Heritage on a daily and weekly basis. We started out on this issue four or five months ago and we have been fair, experienced, understanding and professional. I must say that all of the Departments have been equal to that. They have not ignored us. The situation is so difficult. They have not ignored us, but we have not made progress. We have not made one ounce of progress moving forward. To be fair, it is not easy to resolve this situ- ation. We have resolved so many other difficult issues that it is not impossible to resolve it. It was mentioned earlier that where there is a will there is a way. All we want is the will. We as an industry have bought into all aspects of government by way of policy, support and working on all aspects of growing our industry, both locally and on the export market, so there is a will on the part of our industry to work together. I work very closely with the Department, and as of 8.40 a.m. - we were on our test call at 8.45 a.m. - there was no further update from the three different Departments, or will we call them the three musketeers? At this point in time there is no progress. I think someone mentioned earlier urgency. There was urgency five months ago, so this is certainly urgent at this point in time.

Deputy Joe Flaherty: I thank Mr. O’Rourke, Mr. Dunne, Ms Kavanagh and Mr. Neenan for an informative and pragmatic overview of the situation in which they find themselves. As a Government representative on the committee, I am both disappointed and somewhat embar- rassed that there has been no progress. When we last met the witnesses, we met departmental officials as well, and maybe I was naive at the time but I felt the working group would arrive at a solution. I thank the Chairman for allowing the witnesses to come before the committee at short notice. Everyone on the committee will agree it is imperative that we get these three Depart- ments in before the committee as a matter of urgency. We will discuss this later, but our work schedule for the remaining days of this Dáil session needs to be set aside until we deal with this issue. As was rightly said, two months of the sector’s harvest have been lost, and unless we get a breakthrough in a matter of days or weeks, the sector will not get any significant harvest this year. Mr. Neenan set out that the sector has put forward its own solution. It sounds workable and pragmatic. I am still not sure whether the working group has fact-checked that proposal or whether it has an opinion on it. We will have to get that from the Departments when we get them in before us because, in the absence of the Departments coming with another viable plan, that seems to be the only plan open to us at the moment.

As for replacements for peat for the horticultural sector, we talk about all the various options but there is no proven option out there. It seems ludicrous, given the strong horticultural sec- tor we have, to suddenly stop supplying peat in the hope that something will magically appear overnight to replace it. There is simply nothing out there, and no business or PLC would make such a decision. For three Departments to procrastinate on this issue in the hope that somehow a replacement product will magically appear seems nonsensical.

I have one question for Mr. Dunne. His view is that Bord na Móna has stopped producing peat. I am based in Longford, and over the past four to five days, I have had numerous calls about Bord na Móna stockpiling large quantities of peat. I am just looking back on my notes

13 JAFM on this. Tonnes of peat are being stockpiled in embankments of 100 m to 150 m at Clooneeny bog on the outskirts of Killashee. The plan is to continue stockpiling it, and over time it will be moved by lorries and sold on. However, it will take months to move the peat that is there and Bord na Móna continues to stockpile it. Clearly, therefore, the company is continuing to oper- ate regardless of what has been said, and that is worrying. It is also worrying that the horticul- ture industry is basically being held to ransom while Bord na Móna, it would appear, continues to operate. If Mr. Dunne could shed any light on that, I would appreciate it.

Mr. Kieran Dunne: I certainly can. It is not my view that Bord na Móna is not moving any peat. That statement came from Bord na Móna at an IFA meeting. The only peat Bord na Móna has at the moment is for briquettes. It is fuel peat, not horticultural-grade peat. I know this from walking the bogs and from the officials in Bord na Móna. Horticultural peat can be stockpiled for a maximum of 18 months or it is not usable. Ms Kavanagh might like to come in on this, but that is what I know from being on the ground. I have hundreds of acres of Bord na Móna bog pretty close to me with same stockpiles but I could not use it. It is purely fuel peat and is not suitable for horticulture.

Ms Anna Kavanagh: I agree with Mr. Dunne. Even the bog he mentioned would not be used for horticulture. I am pretty confident that Bord na Móna has finished the supply of hor- ticultural peat.

Deputy Fitzmaurice asked about research and development and whether it would take five to ten years or whatever else. It is difficult to answer that question. Going on my experience in the UK, where I spent 20 years, it was at the forefront of not using peat and examining peat alternatives and has been doing so since the early 1990s but it has not come up with alternatives to peat. The UK is using a lot of alternatives along with peat in both the retail and the profes- sional market but it has not replaced its more than 5 million cu. m of peat used with alternatives, so there is not a quick fix and we need to see what sustainable, responsibly resourced materials we have. As Mr. Neenan and I said earlier, we need to do life cycle analyses on those materials and need to know whether any of them seem to be as bad as people perceive peat to be, which is not necessarily our view, to judge it from there and then to test and research those products. It is difficult to put an exact year on it. Furthermore, going back to the properties of alternatives, there is no better diluent for those alternatives than Irish peat because Irish peat has the best buffering capacity. It will kind of buffer the inadequacies of some of those alternatives. It is crazy that we are importing peat.

I wish to refer briefly to an article published in the Baltic Business Quarterly magazine on 29 June. It states that Latvia has reported a 35% increase in exports of its peat in the past four years. It is giving Latvia its highest export potential, and 31% of what is used in the EU comes from Latvia. It is also stated in the article that 1 cu. m of peat grows 6,000 young trees, enough to cover 3 ha of land and grow 7,000 seedling plants. That is enough to grow 16 tonnes of cu- cumbers or 32 tonnes of tomatoes. Latvia produces 2 million tonnes, which is 10 million cu. m to 12 million cu. m, of peat. Estonia and Lithuania produce the same amount. The distinction is made between use for power, energy and fuel and use for horticulture. That has been missed here, and I would like to point out that the use of horticultural peat in Ireland represents only 0.12% of Irish peatlands. That contributes to food production and plant production, which is for the well-being of our citizens. There can be an inaccurate accounting of greenhouse gases as well. Peat is part of a circular economy. It does not go to waste when it is finished. The peat that is used to grow plants eventually probably ends up in the soil so it is used in that way. Mr. O’Rourke also pointed out that in the mushroom industry it is used on land to condition soil for

14 6 JULY 2021 cereal growing. We should appreciate that.

Chairman: I have others who want to come in. I thank Ms. Kavanagh.

Deputy Matt Carthy: A Chathaoirligh, I know you have to be diplomatic to a point, but I have to agree with other speakers that it is scandalous that representatives of the Department are not here. I know you have cited the short notice, but any Minister who hears of an industry coming before an Oireachtas committee to report that 17,000 jobs are at risk will make sure that either he or she or senior officials are in attendance if that opportunity is available to them.

Chairman: I already gave the Deputy the answer I was given.

Deputy Matt Carthy: I know, I appreciate that, but the very fact the Department is not here means it does not understand the subject, it does not appreciate the catastrophic situation we potentially face or it does not care. People have been talking about relevant Ministers. It is time the Minister for Agriculture, Food and the Marine takes a hands-on approach to this is- sue because this is an agricultural issue. It deals with farms and farms that need our support. The sector I am most familiar with is mushrooms because it is a key component of agriculture in my own county, Monaghan. It is important that people recognise where it came from. The mushroom farmers of Monaghan generally come from small holdings, historically unprofitable, who did what they were asked and diversified. They found an alternative product which meant they moved from being unsustainable and unprofitable holdings to being key economic drivers for a whole region. Now they are telling us and the Minister that they face an existential crisis.

I do not take any industry verbatim when it comes to outline the issues it faces; one always has to balance that with alternative facts that are available. The difficulty the Government has here is that no alternative facts have been presented. There are only those presented by Growing Media and the others here before us. No one has disputed what they have said to the degree that when the Minister for the Environment, Climate and Communications, Deputy Ryan, was challenged by me and others in the Dáil on the solution, he volunteered that it was the importation of peat from third countries. That is a lunatic position. It is lunacy in economic terms for the operation of the farms I mentioned but even from an environmental perspective, if environmental and climate action concerns were your driving motivator, why would you not take the opportunity to ensure that we have robust environmental rules around the extraction of horticultural peat and ensure that those rules are enforced and monitored in a way that you simply cannot do when a product is imported?

I will reiterate a point that was just made. This goes to the lack of understanding among Ministers in Departments which conflate the use of peat extraction for the use of fuel and energy with that of horticultural peat. We are talking about horticultural peat mass being 0.1% of the overall peat mass in this country. The position that has been adopted is tokenism at its worst. It is doing a huge disservice to those of us who are ambitious and who want to see a robust climate action agenda adopted by the State. It is setting out that our Government’s priority is tokenistic measures that do nothing for the environment but put people out of jobs and farms and companies out of business.

I think emergency legislation is necessary to allow peat extraction to take place this year and next year. What would the timeframe need to be for that to happen? There has been some discussion on alternatives. As well as the Minister’s much-lauded importation of peat, we have heard of composted green waste as an alternative. Coir, the extract from coconuts, and also products such as perlite and vermiculite which are sourced from open cast mines. Can our del-

15 JAFM egates outline the challenges that these alternatives present.

Chairman: Sorry, I know Deputy Carthy was late joining the meeting. The delegation went through the alternatives in detail earlier.

Deputy Matt Carthy: I will get them from the transcript. Thank you. What about the emergency legislation?

Mr. Kieran Dunne: It has to be a fast-tracked approach. The seriousness of the situation is that what happens over the next six weeks will either mean we have secured peat product of our production for 2021 and 2022. It is not just about this season or this month and next month. That will secure our 2022 production. That is a very serious situation. I am told by the Depart- ment that it is trying to get a fast track approach which means that it will not end up in the High Court or in trouble with the EPA or An Taisce. It is trying to pull everybody together to try and resolve this situation. As was said earlier, it is not an easy fix but there has to be a great willing- ness to drive on and get the job done.

Chairman: Can Ms Kavanagh respond to Deputy Carthy? Is it possible to do this with a statutory instrument or must it be legislation?

Ms Anna Kavanagh: I would not really know exactly about the legislation. What we have asked for in the last four months is some way of fast-tracking it. We thought that might be pos- sible by using the less than 30 ha. where one did not need planning or an EPA licence. Whether one needs an environmental impact assessment or appropriate assessment, etc., depends on each individual bog and the conditions around it. The time is running out. That is the concern. People say we have six weeks but by the time something gets up and running and people get out harvesting that time will be lost at this stage. The urgency of this is paramount. It just needs to be done and done now.

Chairman: We will discuss actions afterwards but the committee needs clarity on whether it is legislation or a statutory instrument that can do this. I hope the committee will agree when we discuss this afterwards that we will get legal advice, as a committee, on what measures are in the Government’s power to do in a very short time frame.

Deputy Michael Ring: I thought the environment was a world problem. Whether peat is got in Latvia or any other country, does it make any difference? Why should we import a prod- uct that we have in plentiful supply in this country? I have listened to this debate and I listened to other debates. The guests are welcome. Their industry has been attacked, like a lot of other industries around this country, because of decisions being made by politicians. Deputy Kehoe spoke earlier about officials and the Chairman mentioned officials coming in at short notice. The reason the officials do not want to come in today is because there is no political leadership in this. The political leadership in this is that they do not want peat to be produced in this coun- try. We have a daft situation where we are bringing in peat from Latvia. I fell over a bale of briquettes the other day that came in from another country, and us with more peat in this country than any place else in the world. If it is going to be taken out of some place else in the world, would we not be well to take it out in Ireland? We will have to make political decisions today when this meeting is over. We are going to have to talk. This is a political issue that needs to be dealt with because we will have more problems down the line if this continues. I am getting sick and tired of the direction we are going in. I was not that in favour of voting for the Bill last week. It was either do that or get out of the party and that may have to come at that stage as well. The detail in that has not yet been produced but when it is, it will hurt the Chairman

16 6 JULY 2021 and many other Members. There may come a time when we have to say enough is enough. Enough is enough with peat. Peat should be harvested in Ireland, sold in Ireland and produced in Ireland. Our guests from GMI do not ask the State for anything. They employ 17,000 people nationally in jobs we need in rural Ireland.

I did some canvassing in Dublin over the past two weeks and learned that there are two dif- ferent Irelands. The city Ireland does not really understand rural Ireland and never will. Too many people in government now are from city Ireland and do not understand rural Ireland.

Chairman: I thank the Deputy. I think that was more of a statement than a question. Sena- tor Gallagher, who is not a member of the committee but comes from Monaghan, raised this issue with me over the weekend and has been working hard on it. Deputy Leddin has joined the meeting late, so I will let him in first, followed by Senator Gallagher.

Deputy Brian Leddin: I thank the Chairman. I formally joined the meeting late but I was in transit and was listening throughout. Some of my questions have been answered but for the most urgent one, I do not think there has been a clear answer. It concerns what legislation would need to be amended or what new legislation might be needed. I acknowledge Mr. Dunne ‘s point that this is not an easy fix, although it is nonetheless urgent.

This was signalled perhaps two years ago, when Bord na Móna, for commercial reasons, ended horticultural peat extract. Might more have been done then in order that we would not find ourselves in this position now? I am open to being educated by the witnesses. Is it simply the case that the industry and the operators within would need to apply for planning permission and go through the formal processes of appropriate environmental impact assessment reports and so on? Was that not done and are we now in a situation where that would take too long, given that planning permission cannot be granted quickly?

I might make a point in response to Deputy Ring. I do not think the climate Bill has any bearing whatsoever on this and we should not leave anyone watching proceedings with the impression it has.

Finally, what proportion of harvested horticultural peat was exported in 2019? Can our guests confirm that we are looking for a solution purely for domestic horticultural peat and that we are not seeking to open up export potential as well?

Mr. John Neenan: A number of questions have been raised. Deputy Flaherty asked wheth- er the legislation that GMI submitted to the Government was fact-checked. The working group submitted it to each of the Departments, namely, the Departments of the Environment, Climate and Communications and Housing, Local Government and Heritage, in order that their legal representatives could check it. That was probably at the end of April or early May and there has been no response to that.

Deputy Carthy and the Chairman asked about a timeframe for primary or secondary leg- islation. Emergency legislation can be prepared in a very short period by way of secondary legislation., although ideally, the longer-term solution should be by way of primary legislation. Our legal advisers have submitted heads of those two Bills to both Departments, and we have no difficulty submitting them to the committee after this meeting as well, if members wish.

To respond to Deputy Leddin, the situation has been ongoing since 2012 or 2013. It came to a head in February 2018, when operators first learned of a difficulty with the long-standing- ex emption from planning. GMI and many others believe it was an unintended consequence of an 17 JAFM Act of 2011. In December 2018, operators learned that this difficulty would not be resolved by an appeal to the Court of Appeal. In January 2019, they learned the State had resolved the dif- ficulty by removing peat harvesting from planning control and transferring the responsibility to the Environmental Protection Agency. In October 2019, the court ruled that the legislation was not correct and that there were issues with it and in July 2020, operators learned they could not lawfully resolve the issue within the substitute consent process, which was another problem. In December 2020, operators learned the State had passed a law to remedy the public participation defect in the process. One of our members has had an application in with An Bord Pleanála for more than 14 months, seeking leave to apply for substitute consent, and that has not been dealt with. Another member got leave to apply but that is likely to be challenged in the courts.

I listen to these issues as a member of the working group. The company I work for, Klas- mann-Deilmann, was offered grant aid by the State to develop the bogs in Rathowen, County Westmeath. Part of the grant aid was given on the basis that the company could not sell its product in Ireland or the UK but rather in Europe. Questions are now being asked as to why the State fulfilled that. It was the same with Bord na Móna. People do not know the history of these issues. The board was set up to develop the boglands and create much-needed employment in those rural areas, and to supply energy peat as well. Things move on, and we seem to forget all those aspects and they need to be pointed out. There was nothing wrong with companies exporting peat. As I said, they were encouraged by the State to do so. Klasmann-Deilmann was funded to improve our facilities and our training for all our employees, which we availed of. Now, some companies have commitments to supplying peat, having entered into contracts with some of the multiples. They have to continue with that but it will finish soon.

Deputy Fitzmaurice knows more about the sub-30 ha provision than I do. My understand- ing is that the point about the sub-30 ha provision was raised in the context of moving some turf cutters from one bog to another and they were brought to areas of under 30 ha. The sub-30 ha provision, as Mr. Dunne said, will be a very short-term solution. Imagine the dairy farmers of Ireland were told they could operate with their dairy herd only on 30 ha or less. Would Avon- more, Kerry Group, Lakeland or whatever remain in Ireland doing that? It is crazy when we consider that just over one tenth of 1% of boglands in Ireland are for horticulture.

I am not a legal expert but we are happy enough with the legislation. I would respectfully suggest that it is not Growing Media Ireland that should be providing to the State the solution for a problem. However, we have offered a solution, as well as outlining it.

Chairman: I call Senator Gallagher.

Deputy Brian Leddin: If I may-----

Chairman: I will call Deputy Leddin again in a minute.

Deputy Brian Leddin: I will be very quick. We are here to try to solve the domestic issue. We are not discussing opening markets for export. I want to get clarity on that.

Mr. John Neenan: It is clear from what is going on here today that our primary concern is the Irish horticultural industry. The Deputy said that he was listening and he may have heard Ms Kavanagh and Mr. Dunne explain it is not all the same type of peat from all types of bogs. Some people may export some peat for the hobby market or they may export primarily to the North of Ireland. Some of the peat that goes to the latter comes back into the hobby market here. Today’s discussion is primarily about ensuring that we have sufficient peat for the Irish

18 6 JULY 2021 horticultural market.

Senator Robbie Gallagher: I thank the Chairman and other members of the committee for affording me the opportunity to say a few words. Deputy Carthy outlined how critical the mushroom industry is to County Monaghan. It is vital, particularly to the economy in north County Monaghan where I live. Many families and communities are totally dependent on the mushroom industry. The word “crisis” has been used regarding this situation; I would use the word “emergency”. It is unforgivable that we are a matter of weeks away from a doomsday cliff-edge situation where the economy of County Monaghan will be severely damaged as a result of this.

I have listened to the contributions of the witnesses and the members of the committee which I have found very informative. I would use the term “environmental showmanship”, not just on this issue but in respect of food production in this country, because we do not mind mov- ing the problem so that it is anywhere but here. We are turning a blind eye to carbon footprints and carbon emissions in other countries at the expense of production there and in the context of the issue in question in this country. That is something that needs to be addressed. Unless we get a global response to the problem of carbon footprints and carbon emissions, as Deputy Ring outlined, I am afraid we will be banging our heads against a brick wall. This is a serious issue.

I will confine the remainder of my contribution to questions. The problem, as I see it, is that the matter seems to straddle the areas of responsibility of three different Departments. Is part of the problem that no one is taking ownership of it? The Chairman outlined his efforts in trying to get the three Departments together. Have we reached the stage where we need to get the three Department heads - the three Ministers - together to find a solution to this problem?

Regarding regulations and legislation, how do we compare with other EU states on planning permission, environmental assessments, etc., in respect of peat production? Is Ireland alone in that regard or are we in line with other EU states? I again thank the Chairman for affording me the opportunity to address the committee.

Mr. Kieran Dunne: The Senator asked about getting the three Ministers involved. The Minister of State, Senator Hackett, the Minister of State, Deputy Noonan, and the Minister, Deputy Eamon Ryan, met last Monday week, partly as a result of a meeting with County Kildare growers. The Minister of State, Senator Hackett, outlined our serious concerns based on the “raw meeting” - her words - she had with the Kildare growers. The outcome was that three assistant secretaries are dealing with the issue. As of this morning, however there has been no outcome from those meetings.

Deputy Barry Cowen: I am grateful to have the opportunity to ask a question. Mr. Neenan said that no Department or office of the State has come back to him with their consideration of his submission on the heads of the Bill to counteract the court decision made in 2019. I ask him to provide more detail about the application for leave for substitute consent which spent 14 months with An Bord Pleanála awaiting decision. Again, we see impact of the lack of a statu- tory time limit for An Bord Pleanála to make decisions. We see this in the context of housing, in the commercial sector and now in this sector, which is under immense pressure. Even with the limited options that remain open for application, it is not good enough that an arm of the State has been dealing with this application for 14 months. The Government has committed to a planning reform Bill in the autumn. I call on this committee and others to offer their support to ensure that An Bord Pleanála will be subject to a statutory time period in which to make deci- sions on planning applications. 19 JAFM I refer to the working group and its consideration of the just transition. Notwithstanding the difficulties associated with the national just transition programme, to date at least, the latter has failed to help the workforce and communities in the regions impacted by the acceleration of decarbonisation and the sectors such as the one represented today. The European Commis- sion is devising a just transition programme and up to €80 million will be available. Differ- ent stakeholders, including regions, local authorities and regional transition boards have made submissions to that. The Government is in the process of submitting a territorial plan to the Commission; it may have already done so. We have not had sight of that. I ask the committee to contact the relevant Departments with a view to making that public in order to ensure that we have an input into it. It needs to have the full support of all representatives who will be impacted by such a territorial plan, irrespective of whether it is accepted, rejected or amended. It should not be submitted without our knowledge of its contents. I ask the committee to raise that matter also.

Mr. John Neenan: Let me first deal with Senator Gallagher’s question. In the other Euro- pean countries, there is only a single system; it is either for licensing or for planning. Under EU law, there is no necessity for both. Ireland is an outlier there.

I said the application had been with An Bord Pleanála for 14 months. It has actually been with it for 13 months. An Bord Pleanála is not making the decision because it will be chal- lenged in the courts when it does so.

Deputy Cowen had a question about the heads of the agreement and the lack of a response in that regard. We have received no response from any of the Departments. A request was made to pass it on to the legal officials in the Department and we gave that permission. If they thought it was okay, it was to go to the Office of the Attorney General but we have heard nothing back since.

Deputy Barry Cowen: On that point, Mr. Neenan said there was a high-level meeting be- tween representatives of the sector and the Minister of State, Senator Hackett, the Minister of State, Deputy Noonan, and the Minister, Deputy Eamon Ryan in recent weeks. Was this issue not on the agenda of that meeting? If it was, was a response forthcoming?

Mr. John Neenan: I will ask Mr. Dunne to answer that question.

Mr. Kieran Dunne: We are aware the meeting happened but not of the outcome. We have had little response, other than being told that work is actively being done on this issue and on the serious situation in which we find ourselves. That is generally the information which has come back to us.

Deputy Barry Cowen: Fair enough. I also asked a question on the just transition and ter- ritorial plans.

Chairman: Who wishes to take that query?

Deputy Barry Cowen: Did the witnesses state there has been no discussion concerning alternatives or assistance in respect of the working group? I refer to compensation, alternative products and means by which the industry might survive without this product.

Chairman: The witnesses went through the alternative products and problems in that re- gard at the start of the meeting and Deputy Cowen will find the details he requires in the Official Record.

20 6 JULY 2021 Deputy Barry Cowen: That is fine.

Chairman: I believe Ms Kavanagh will address the just transition aspect but the witnesses went into the detail at the outset on the various alternative products and the issues with them.

Ms Anna Kavanagh: On the just transition, that has been mentioned at meetings because of the extra costs and everything else that will be faced in this regard by growers, peat produc- ers and everyone involved in the industry. Therefore, this aspect has been taken on board and one of our suggestions is that a just transition fund should be made available. We asked that the Minister with special responsibility for the just transition be allowed to come and address our meeting as well but I think he was seen to be involved in other areas. However, the whole issue of a just transition has been mentioned several times and we believe that a fund must be made available as part of the solution. I hope that answers the question for the Deputy.

Chairman: I thank Ms Kavanagh and all the witnesses for appearing before the committee today. They have outlined this issue for us in great detail. Nothing that has been said is new to us. As a committee, however, it is good for us to get a kick up the rear regarding this be- ing not a problem but an emergency for the horticulture sector, as someone said a few minutes ago. I suggest to members that we now close this public session of the meeting. I thank the members for their attendance and I propose that we continue in private session to discuss what this committee can do to try to achieve progress on this issue for the horticulture industry. The clock is chiming at 12 midnight for the sector and this issue must be resolved. If members are agreeable, then, we will close this public session and continue in private session to discuss what action this committee can take on foot of this public session. Is that agreed? Agreed. I thank the witnesses and we appreciate their attendance and the stark information they provided to us.

The joint committee went into private session at 11.15 a.m., suspended at 11.40 a.m. and resumed in public session at 3.30 p.m.

Beef Task Force: Discussion

Chairman: Apologies have been received from Deputy Kehoe. Before we begin, I remind members that in the context of the current Covid-19 restrictions, only the Chairman and staff are present in the committee room. All other members must join the meeting remotely from elsewhere in the parliamentary precincts. The secretariat can issue invitations to join the meet- ing on Microsoft Teams. Members may not participate in the meeting from outside the parlia- mentary precincts. I ask members to please mute their microphones if they are not making a contribution and to use the raise-hand function to indicate they wish to contribute. Please note that messages sent in the meeting chat are visible to all participants. Speaking slots will be prioritised for members of the committee.

The topic of this session is the work of the beef task force. I welcome to the meeting Mr. Michael Dowling, chair of the beef task force, Ms Sinéad McPhillips, assistant secretary in the Department of Agriculture, Food and the Marine, and Ms Maria Dunne, principal officer in the Department of Agriculture, Food and the Marine, who are joining us from the witness room in Kildare House.

Witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter

21 JAFM and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

I now invite questions form committee members for Mr. Dowling and his fellow witnesses.

Deputy Michael Collins: I welcome our guests. I spent weeks with farmers outside the factory gates, protesting for the right to get some kind of proper price for their animals. I wel- come any report. I also welcome the appearance by representatives of the beef task force before us. Perhaps our guests will update us on how they have succeeded to date. There were many issues relating to the fifth quarter. Where have our guests got to with negotiations on the fifth quarter? There is a lot of thought out there that somebody is profiteering from the fifth quarter but it is certainly not the farmer.

At the time of those protests, discussions were happening around the Dáil and the country- side, and outside the gates, that considerable amounts of money were being made on the sale of other animal body parts, not only the meat value alone. Different suggestions were made that some people are making massive profit from other body parts of animals and that should be shared equally with the farmer who brought the animal into the world, fed it and brought it to the factory. The farmer ends up getting the least from the deal.

We must open up as large a market as possible for beef produce, including a market in China. Have we succeeded or are we succeeding in developing the Chinese market or other foreign markets? The more competition we have, the better.

Mr. Michael Dowling: I thank the Chairman for the welcome he has given to my colleagues and me. I will ask Ms Dunne to outline where the Department and Ireland are with regard to the Chinese market.

The Deputy asked about negotiations around the fifth quarter. Committee members will know that we commissioned reports from Grant Thornton on three different topics. One of those was to outline the position around competition law in Ireland. The second report related to the market requirements for beef. The third report related to the price points in the supply chain. Included in the reports we got from Grant Thornton was an attempt to calculate the aver- age price that farmers got for cattle over a two-year period and the price at other points of the chain. It was not possible to get representative data in respect of the price outside Ireland be- cause of the difficulty in getting data from operators outside this country. In respect of Ireland, it was possible for Grant Thornton to state the price farmers received and the price factories received, on average, for the product that was exported. Included in that calculation was a fig- ure for the value of the fifth quarter. Grant Thornton has, effectively, come back with an overall figure for the value of beef at the processing stage and its value at the farming stage. One can be compared to the other. Those figures included all parts of the animal, including the fifth quarter.

I will ask Ms Dunne to talk to us about the Chinese market.

Ms Maria Dunne: Members will be aware that market access for Irish beef exports to Chi- na has been suspended since May last year. Department officials, through the Irish Embassy in Beijing, continue to engage positively with their Chinese counterparts with a view to regaining market access for Irish beef. There has also been engagement at political and diplomatic levels.

22 6 JULY 2021 The Minister for Agriculture, Food and the Marine, Deputy McConalogue, and the Minister of State, Deputy Heydon, had a virtual meeting with the Chinese ambassador to Ireland, H.E. He Xiangdong, in March 2021 at which a number of market access and trade issues were raised. The Minister for Foreign Affairs, Deputy Coveney, raised the issue with his counterpart in the Chinese foreign Ministry in May of this year. Most recently, the Minister, Deputy McCona- logue, has written to the relevant Minister in China, informing him of the revised BSE status awarded to Ireland. The Minister, Deputy McConalogue, noted the strong trade links with China that have emerged in several areas. He also stressed his desire to see beef exports resume and offered the engagement of his officials, as relevant, to try to resolve this issue. We very much hope for and continue to work towards the imminent resumption of trade but we must recognise that the timing of this decision lies with the Chinese authorities.

In the meantime, the Department continues to work to try to gain access to as many new markets as possible. It is also carrying out equally challenging work to enhance and retain ac- cess to existing international markets. Each part is crucial to our mission to expand our global footprint while maintaining our position as a quality food producer and supplier.

Another of our priority markets for beef is Korea. A public consultation on our beef access recently concluded in Korea, following which Ireland’s beef market access is now with the National Assembly for deliberation. It passed to the National Assembly in May. That is a step further down the road because the process has not concluded but it is a positive step towards getting access to another market that the industry has prioritised.

Mr. Michael Dowling: I will ask Ms McPhillips to talk about the market tracking arrange- ment of Bord Bia in respect of the fifth quarter and the US offal indicator.

Ms Sinéad McPhillips: One of the immediate actions under the September 2019 beef sec- tor agreement was that Bord Bia increased its market price-tracking and reporting function. One of the indicators it tracks is a US by-product market indicator. In regard to offal and hide coming from an animal, there are no published prices for Irish or EU hide or offal products. In- stead, Bord Bia produces a regular indicator report on offal markets, which is available from the US Department of Agriculture and which is used broadly as an indicator of how world markets for offal and hide in general are going.

Deputy Michael Collins: I asked about the huge money made on animal body parts, not just the meat value, in other areas. Has the beef task force looked at that? What percentage did Grant Thornton indicate was lost to the farmer on the fifth quarter of an animal?

Mr. Michael Dowling: I do not know that the task force looked at the question of the value of other body parts in addition to the hide and fifth quarter. Grant Thornton did not put a figure on whether farmers were gaining or losing on the fifth quarter. What it was asked to do was put an overall figure on the value of beef to the factories and the farmer. That is what it was asked to do under the terms of reference of the study the task force agreed it should undertake. That was agreed by all members of the task force.

I should say that the task force was commissioned to oversee the implementation of the agreements reached in August and September 2019 and the actions arising out of those agree- ments. There were 30-odd actions between the two agreements. The function of the task force was to examine and oversee the implementation of those actions, and that is what it has been doing for the past two years or so.

23 JAFM Deputy Michael Fitzmaurice: I thank the witnesses for attending. I have a number of quick-fire questions. One of the functions of the task force was to establish the four-movement and 30-month rules and requirements for what we call “specs”. I know Grant Thornton was looking at that. My understanding is that the processors and retailers were asked about this and the different specs that are needed in different countries. Is that correct?

Mr. Michael Dowling: Yes.

Deputy Michael Fitzmaurice: Bearing in mind the market we are in, I killed cattle not too long ago that were overage. No one in Bord Bia was worried about whether they were overage because there is a shortage of cattle at the moment. It seems nobody cares whether they may have had 20 movements or are 40 months old. It is my understanding from research I have done that neither Grant Thornton nor anybody else went out to the consumers - not the retailers or processors but the consumers who buy this meat in the retail shops on a continual basis - to get their views. Is that correct?

Mr. Michael Dowling: The Deputy is correct that there was not contact with consumers as such, but he should understand the reason for that, which is that Irish beef is bought by custom- ers and those customers are generally retailers, food service operators or manufacturers. They are the people who buy the beef and specify what they want. Obviously, it was to them that Grant Thornton had to go because they are the people who are doing the buying.

Deputy Michael Fitzmaurice: With due respect, it would have been no harm to go to the people who buy and eat the beef. That was not done, however. That is it. I will move on.

I have a question regarding the information in the report on offal and the price of carcases. Mr. Dowling stated clearly that Grant Thornton was able to get the facts here in Ireland. Is it the case, however, that some retailers and processors did not co-operate in giving Grant Thornton information on overseas exports?

Mr. Michael Dowling: Yes. The information from the stakeholders in Ireland, including retailers, other purchasers, farmers and factories, was made available. Grant Thornton was not able to get from stakeholders outside Ireland a sufficient amount of data to be able to create representative prices.

Deputy Michael Fitzmaurice: I thank Mr. Dowling for that information. He has been on the task force for a while. In his opinion, what is the reason that the price dropped suddenly in February and cattle were able to go up after that? This did not happen in any other country in Europe. What is his thinking on that?

Mr. Michael Dowling: I do not know specifically why the price fell in February. That point was raised by a number of people on the task force. As the Deputy knows, the task force is made up of people appointed by the Minister but nominated by individual organisations, includ- ing Meat Industry Ireland, MII, which represents processors. A number of members asked that we bring the processors in directly, rather than just having the MII representatives, and talk to them about a range of issues, including, as it turned out, the price situation in February. That is what we did. The processors came in and explained, and their explanation was that there was a very large quantity of beef moved from Ireland to the United Kingdom in advance of Brexit and the cold storages, etc., were full of Irish beef. The demand fell in February and the price fell with it. That was their explanation.

Deputy Michael Fitzmaurice: An application has gone into the EU for protected geo- 24 6 JULY 2021 graphical indication, PGI, status for Irish beef. Is it the task force’s understanding that there will be a premium price for PGI product? Has any work been done to make sure that if we get PGI status, it will mean a higher, premium price for our beef?

Mr. Michael Dowling: The expectation is that PGI status will lead to a premium over and above beef that does not have that status. Obviously, that will only be tested when we get PGI status and the product is on the market with the PGI label on it. The expectation is that it will attract a premium price. The experience generally across Europe is that there is a premium on product that has PGI status.

Deputy Michael Fitzmaurice: In his submission, Mr. Dowling referred to farmers getting €160 million or €170 million extra, if I recall correctly. What moneys is he referring to there? Is that funding coming under the beef environmental efficiency pilot, BEEP, or something else?

Mr. Michael Dowling: I ask Ms McPhillips to take that question.

Ms Sinéad McPhillips: Mr. Dowling referred to €180 million in additional supports for beef farmers between September 2019 and July 2021. In November 2019, approximately 16,000 farmers received payments totalling €15 million under the beef environmental efficiency pilot, BEEP, scheme. In December 2019, payments were made to 32,500 farmers to the value of some €78 million under the beef exceptional aid measure, BEAM, which related to market disturbances and was co-financed by the EU. In November 2020, 27,200 farmers received payments totalling €46.6 million under the beef finisher payment, which was an exceptional payment funded from the Exchequer in respect of market disturbances caused by the Covid-19 pandemic.

Deputy Michael Fitzmaurice: I am sorry for interrupting but it should be made clear that when the €100 million was made available, including the €50 million from Europe, €70 mil- lion or €75 million was paid because cattle prices were on the floor. Some of the schemes Ms McPhillips mentioned existed before the task force was set up. We are seeing a reduction of 5% because of the BEAM scheme. It needs to be noted that we are not getting extra money. Farm- ers have lost €200 per head on the price of cattle. They have received €100, which I believe is 25 cent per kilo. That is not even half the loss. As such, I do not believe that we can say that farmers were compensated fully for their losses. They were not. I understand that there is no money in the Exchequer to do so, but we must be clear on this point when we speak about how much money is being made available.

With all the work that was done, does the Chinese market only account for 3,000 tonnes? At the time of the protest, I had to negotiate to try to get a Chinese group into a plant. Given how much beef has gone to China, it was a waste of time for the beef sector. Is that fair to say?

Ms Sinéad McPhillips: I will conclude the point about payments. It is a factual issue. In November 2020, 24,000 farmers payments totalling €40 million under the BEEP suckler scheme. There is a continuation of that this year.

Deputy Michael Fitzmaurice: Am I correct in saying that no suckler grant was made? In his submission, Mr. Dowling referred to there being talk about a suckler grant and about money being made available, but no suckler cow welfare grant has been paid. I am talking about €200 or €300 to save the suckler herd. None of that was achieved.

Ms Sinéad McPhillips: The BEEP suckler scheme involves welfare actions-----

25 JAFM Deputy Michael Fitzmaurice: I know that.

Ms Sinéad McPhillips: -----and environmental actions. As such, it involves weighing ac- tions. These are new payment schemes that have arisen since 2019. I am just making a factual presentation on them.

The Deputy is correct in saying that a large amount of effort went into opening the Chinese market in 2018. The years 2019 and 2020 were essentially spent opening that market and beginning to see trade. The prospects for that market are bright. Bord Bia identified a signifi- cant demand for quality beef in the Chinese market. The volume might not be great, but it is a significant outlet. As Ms Dunne outlined regarding the Department’s market access work, we are trying to open as many market opportunities as possible. It will then be a matter for trade to follow those opportunities. In terms of diversification from our dependence on the British market in particular, it is correct to open those avenues for trade to the greatest extent we can.

Deputy Michael Fitzmaurice: Mr. Dowling is analysing cattle numbers and the beef sec- tor. Does he have concerns about the number of dairy cattle or dairy beef that will come on the system next year? Does he agree that factories can increase the price when the supply of cattle is short? For example, there is no one banging on his door at the moment over the price because there are €4.50, €4.70 and €4.80 deals being done. What are his thoughts about next year? Does he agree that, when there is a shortage of cattle as there is at the moment, prices can be increased readily and movement rules, age limits and so on seem to go out the window? How is that the case when the specs are so important in other countries and the housewife, househusband or whoever is buying it is so particular?

Mr. Michael Dowling: Regarding next year, one can never be accurate in predicting how prices will go. It is true that, if there is a drop in supply, prices normally increase. That is a function of the market. I do not know what next year will be like. Currently, the indications are that the market should remain reasonably strong going into next year. The work of the task force was not principally about looking at where prices were likely to go. That was not some- thing we were asked to do. We did what we were asked to do, which was to oversee the actions that were agreed in 2019. That work is, to a large extent, done. The market is the market and I imagine that next year will probably be reasonably strong, but I could be wrong.

Deputy Michael Fitzmaurice: I have read most of the Grant Thornton report. The indus- try, retailers and so on have said that they need this, this and this but they do not seem concerned at the moment about the four-movement rule, the 30-month rule or any of the other specs. Is that not unusual if the specs were important before now?

Mr. Michael Dowling: It is unusual if that is the case. The information from the market was that all of the specs were required by some markets but not by them all. The specification of cattle being under 30 months of age is required in virtually all markets. In some markets but not all, there are requirements relating to movements and length of time spent on the last farm. There is a fairly general requirement that the beef should come from quality assured farms. As I understand it, that remains the position.

Deputy Michael Fitzmaurice: I thank Mr. Dowling.

Senator Paul Daly: I welcome the witnesses and thank them for their submission.

I wish to ask about Mr. Dowling’s interaction with Deputy Michael Collins regarding fifth quarter offal. He referenced a Grant Thornton report that was based on the cost per kill. The 26 6 JULY 2021 task force’s submission reads: “the value of beef animals for slaughter averaged over 2018 and 2019, and exclusive of VAT, was €2.2 billion; while the value of sales of beef from Ireland was €2.9 billion; or excluding prepared and preserved products, which may include some element of double counting, €2.7 billion.” Does the report exclude the 10% of beef that is consumed on the island and is included in the slaughter value? We export 90%. If that 10% is excluded and the best case scenario for exports was €2.7 billion, the markup on what the report states is the slaughter cost was more than 50%. Does Mr. Dowling not believe that this highlighted something that the task force should have looked into, given that it was set up on the back of farmers’ protests about how, due to the prices they were getting, it was possible that many of them would not survive in the industry in 2019?

Mr. Michael Dowling: I am not sure that the Senator has got that right. The 10% of beef that is consumed in Ireland was not excluded. It is included in the figures. What is excluded is some product which may have been double counted but that is not-----

Senator Paul Daly: I am agreeing with Mr. Dowling that the 10% is not excluded. That means only 90% of the €2.2 billion in beef was exported for €2.7 billion, which gives a mark- up of 50%.

Mr. Michael Dowling: I do not think that is right but we will come back on the figures in more detail, if the Senator would like.

Senator Paul Daly: Does Mr. Dowling not think it is something the Beef Taskforce should have been pursuing?

Mr. Michael Dowling: We do not follow the point, to be honest. My understanding is that the figures are for the total value of the product, including what is sold in Ireland and what is exported.

Senator Paul Daly: I will give Mr. Dowling the opportunity to forward me clarification on it. It specifically states the value of sales of beef “from Ireland”, which does not allow for the 10% of our beef that we consume domestically. Mr. Dowling can have a look at it and he might come back to me with clarification.

Mr. Michael Dowling: I will.

Senator Paul Daly: In my view, it is glaring that a report would come back with what I clearly see as something having a 50% mark-up post the primary producer. That was the es- sence of what the Beef Taskforce was set up for. I will give Mr. Dowling the opportunity to come back to me when he has a closer look at the figures.

Another issue that came up, and Mr. Dowling responded to Deputy Fitzmaurice on this, concerned the age limit rather than the movement limits. In the veterinary certificates report, 33% of countries said they would accept product from 48 months and even up to 72 months. Were those countries prepared to pay premium price, although they were accepting the older beef? Did the Beef Taskforce question that if they were paying premium, why then would the factories not pay premium to the farmer for the post 30-month carcass, when, based on that report, they evidently had 33% of the countries surveyed as a market?

Ms Maria Dunne: These are the health certificates and the conditions we negotiate with the third-country markets, so they are the bottom line and we cannot export anything that does not fit those requirements. There are eight veterinary health certificates at the moment which

27 JAFM provide for full or partial 30-month age restrictions for Irish beef, and these are for China, Iran, Saudi Arabia, Turkey, Qatar, Switzerland, Egypt and Singapore. In those cases, we have no op- tion and we can only certify meat which is from animals under 30 months. That is the bottom line within those countries.

Senator Paul Daly: However, that is only 67% of the countries and 33% of the countries will, as a bottom line, accept product older than 30 months.

Ms Maria Dunne: Yes, they will, but it is just that we can certify that product into that country. It does not reflect what the customers in that country, that is, the retailers or the food service, want to buy. It just reflects that we can certify into those countries.

Senator Paul Daly: The Department did not pursue that. If post 30-month beef is going in there, is it being sold at premium price or at a similar reduction to what the farmer who provided it has taken?

Ms Maria Dunne: I think that was addressed in the Grant Thornton report and it was not able to find out all that information from third-country markets.

Senator Paul Daly: Okay. In conclusion, will Mr. Dowling elaborate on what contact and dealings the Beef Taskforce has had with the Competition and Consumer Protection Com- mission? There was a lot of talk at the time of the protests before the agreement in 2019, and when we met them on the pickets, many farmers mentioned monopolies and cartels. The Beef Taskforce had contact with the Competition and Consumer Protection Commission and I would like to get feedback on how those deliberations went.

Mr. Michael Dowling: We had the Grant Thornton report on the nature of competition law in Ireland; it is available on the website and it was available to all the task force members. We are also organising a webinar with the Competition and Consumer Protection Commission for the task force and for other stakeholders, if they wish to join in, for 14 July, which is in one week’s time or thereabouts.

Chairman: Will Mr. Dowling expand on Senator Daly’s point that what really concerns farmers out there is what we consider a dominant force in the marketplace? The committee had a couple of sessions in the recent past on organic farming and it emerged at those sessions that there is only one purchaser of organic beef in the country. That is something the Beef Taskforce might raise with the Competition and Consumer Protection Commission in regard to how it al- lowed a situation like that to develop.

Mr. Michael Dowling: As I said, we have organised a webinar and it will be open to us and others to raise that question and other questions with the Competition and Consumer Protection Commission. The Competition and Consumer Protection Commission has looked in the past at the beef industry and has taken a view that there is nothing that required it to take any action. That remains the position as of now but, obviously, it will be open to people to question it dur- ing the webinar, and it is open to any individual or organisation to complain to the Competition and Consumer Protection Commission if they have evidence of malpractice.

Chairman: I thank Senator Paul Daly.

Deputy Martin Browne: In March of this year, there was severe disappointment among farmers’ representatives in regard to the beef price developments over the previous month and unhappiness at the explanation provided by meat industry representatives at the forum on this

28 6 JULY 2021 issue. In April, members of the committee expressed disappointment at the market transpar- ency studies, and the reports failed to identify the division of price among those in the supply chain. In June, at the next meeting of the task force, there was dissatisfaction with the contribu- tion of the meat processing industry, particularly in regard to the sudden drop in base prices in February of this year.

It is precisely because of inconsistencies such as this and the lack of transparency that our farmers want this task force to work properly. Is it not true to say that when it comes to the level of transparency that farmers want, we are not much further along the line? In the Grant Thornton conclusions on the demand for in-spec bonuses, it pointed out that several customers referenced developing market requirements and the fact demands may change over time. When something is being reviewed, we have to look at the weakest point, which may be the most problematic. What is Mr. Dowling’s view on this level of ambiguity about the market demand? Does it indicate to him that there are shortcomings in regard to the demands that are placed on farmers by the processors in regard to in-spec bonuses?

Is there not a fundamental problem with the fact the price paid by the end consumer is not within the scope of the report, and neither were processor-to-processor sales? Why was that excluded? Does Mr. Dowling believe that omissions such as these serve the best interests of small family farmers?

Mr. Michael Dowling: I have referred to the in-spec bonuses and in-spec criteria. I un- derstand people are from time to time disappointed with the price. In terms of transparency, we asked Grant Thornton to go the whole way along the chain. It was not possible to do so because it was not possible for the company to get sufficient information from operators outside of Ireland to do the final bit. It did, however, get significant, comprehensive and representative information in respect of the Irish market and beef that is exported.

It also could not get sufficient information from operators outside of Ireland to get the final bit on what the retailer of food service operator or manufacturer was paying. That is not all that is surprising. There is no compunction on people who are buying Irish beef from Irish proces- sors outside of Ireland to supply information, which effectively means supplying information on their margins. They would normally regard that as confidential and would probably be slow enough to provide it, even in their own markets. That is, therefore, a problem. It is not a prob- lem manufactured by the task force, however. It is a problem of people not wanting to give information they do not necessarily have to give. That is one issue.

Through Bord Bia, we got significant additional indices comparing Irish prices with prices across Europe. In particular, Bord Bia has produced an index providing a composite price based on the internal producer prices in the main markets to which we supply beef. That shows, over a long period, a reasonable correlation between the price being paid in Ireland and the price that would be paid across all the markets we mainly supply in respect of their own beef. Sometimes the exports composite price is above our price and sometimes our price is above theirs. The difference is not all that significant at any stage, however. That provides some degree of greater transparency than was there before the task force came into operation. Ms McPhillips wants to add something to that.

Ms Sinéad McPhillips: The issue of price transparency is not confined to Ireland. As Deputies will be aware, there has been significant work at EU level on improving market price transparency as one of the strands of efforts to improve the position of the primary producer in the chain. As part of that work, Deputies will be familiar with the new EU market observatories 29 JAFM that have been introduced for a range of commodities. Additional price reporting requirements are being introduced through EU regulations and in fact, the Department and the task force sec- retariat will be hosting a webinar with EU officials in mid-July to further explore those issues and see what lessons we can learn.

The new office of the national food ombudsman or regulator will be introduced by primary legislation. The Minister for Agriculture, Food and the Marine has outlined that increased price analysis and reporting will be one of the functions of that office. We would see that there is an opportunity for that office to pick up some of the gaps that have been identified through the work to date and to see what additional price reporting is required to further increase transpar- ency.

I will take the opportunity to revert to Senator Paul Daly on that query on the Grant Thorn- ton figures. I confirm that the €2.9 billion figure includes all sales, including in Ireland. What we are talking about, therefore, is farm gate value for cattle sales of €2.2 billion compared with sales in Ireland or abroad of €2.7 billion, if one excludes the processed products.

Senator Paul Daly: To confirm, it needs to be brushed up on in the context of the report because it specifically states the value of sales of beef from Ireland.

Chairman: I thank the Senator. I call Deputy Carthy.

Deputy Matt Carthy: I thank our guests for taking the time to be with us this evening. I have a number of questions, most of which will only require short answers so I will ask them individually.

Perhaps Mr. Dowling would outline what he considers to be the main achievements of the beef task force since its establishment.

Mr. Michael Dowling: We set out the achievements in the document, which we sent in ad- vance. The effective introduction of the new in-spec bonus system is one. The successful appli- cation for protected geographical indication, PGI, status is another. There is also the immediate written commitment by the industry on several points, including insurance schemes and carcase images; significant input into the application for PGI status, as I mentioned; the establishment of a group to oversee the development of a suckler brand propositioned by Bord Bia; the three substantial reports on market transparency, which add to the knowledge about the sector; and the work Bord Bia has done on improving its indices and creating a new index in respect of the comparison between the composite export price and the domestic price.

Deputy Matt Carthy: What does Mr. Dowling consider the status of the Grant Thornton reports to be now?

Mr. Michael Dowling: The status of the Grant Thornton reports are finalised. One of them - the competition law report - is simply an explanation of what the competition law means in Ireland in respect of the beef sector. The in-spec bonus, at least, in the market requirement re- port, confirms that the market requires all the current specifications but not necessarily that -ev ery market requires them. In general, the under 30 month age requirement is fairly universal, as is the requirement for quality assurance. The requirements in respect of movement and length of time on the final farm are, however, required by some markets and not by others.

The report on price composition shows what the composition is on the chain within Ireland. As I have said repeatedly, however, it does not include what is added to it outside of Ireland.

30 6 JULY 2021 Deputy Matt Carthy: There is, therefore, a big problem here. Universally, farmers I speak to consider the Grant Thornton reports to be fudges, at best, and potentially even whitewashes in the sense that farmers consider them to reinforce the proposition of Meat Industry Ireland, MII. In many cases, the reports acknowledge that they are heavily reliant on the industry for whatever information they contain. Going back as far as 2019 to the beef sector agreement, what measures were taken to ensure that all farmers are aware of their entitlements under that agreement?

Mr. Michael Dowling: At the time, the agreement was widely publicised, particularly in the farming press. All the farm organisations were party to the agreement. I assume that the farm organisations let their members know what was in the agreements to which they are party.

Deputy Matt Carthy: Let me rephrase that. Did the beef task force take any specific steps to publicise the new entitlements that were available to farmers as a result of that agreement?

Ms Sinéad McPhillips: I will respond to that. As Mr. Dowling has said, the farm organisa- tions and the farming press would have publicised all of the actions in the beef sector agree- ments at the time. Since then, after every meeting of the task force, we have made sure that the update reports, the actions, all of the reports and the minutes of the meetings are made available on the Department’s website.

Deputy Matt Carthy: The beef task force has put the minutes on the website to ensure that farmers are aware of their entitlements. That is essentially the response to that. Are the wit- nesses satisfied that the processors are honouring their side of the agreements that were made?

Mr. Michael Dowling: In general, yes. From the farmers’ point of view, the most important element in the agreement was the one that related to the inspect bonuses. As far as I am aware, there is no evidence that that has not been honoured everywhere.

Deputy Matt Carthy: Is Mr. Dowling satisfied that, for example, weighing at processing plants is universally happening?

Mr. Michael Dowling: No. It is happening, but there undoubtedly some factories where it is not happening. We have obviously raised that issue. It has been raised at the task force-----

Deputy Matt Carthy: We can say, then-----

Mr. Michael Dowling: -----by other people as well. May I finish? The answer on the meat factory side is that they prioritised other aspects and there is not a significant demand for it. However, it is available in some but not in all. Therefore, to that extent, that part of the agree- ment is not fully operable.

Deputy Matt Carthy: So essentially, we are saying that the meat factories can pick and choose which aspects of the agreement they consider they are required to implement?

Mr. Michael Dowling: I am not saying that. I am saying that this is what the task force has been told, when the issue has been raised with meat factory representatives.

Deputy Matt Carthy: Is there a mechanism there? An agreement has been in place. It was publicised to a degree. I am not sure if the detail of it has been conveyed to all farmers concerned. What recourse is there, when meat factories do not adhere to their end of that agree- ment?

31 JAFM Mr. Michael Dowling: I am not aware of any other aspect that falls into that category. The recourse is persuasion. We can do nothing more than that.

Deputy Matt Carthy: Mr Dowling mentioned that the protected geographical indication, PGI, status was a success. However, it is not through yet. What estimate has been made by the beef task force in respect of an additional price that will be made available, either in percentage or real terms on a per kilo basis, for those cattle that meet the PGI status?

Mr. Michael Dowling: When I said that PGI was a success, I meant that it was a success to get agreement in the beef task force on the application to be put to Brussels. Obviously, we cannot claim that its outcome will be a success until we get back from Brussels. Nobody is prepared to say exactly what the premium will be. The information that we have is that in general in Europe, there is close to a 10% premium for product which has PGI status, over the equivalent product which does not. Nobody can guarantee that at this stage but the expectation is that there will be a reasonable premium.

Deputy Matt Carthy: What equivalent product is there in respect of PGI status for an Irish grass-fed standard that potentially will encompass 90% of beef? Is there another PGI equiva- lent to which we could compare that, at the European level?

Ms Sinéad McPhillips: I do not think that there is an exact equivalent. We have the experi- ence of Scottish beef and Welsh beef. They have used PGI for many years. They qualified for PGI under previous PGI regulations. These were probably less onerous than what we are facing at the moment. There is certainly a preference there. Bord Bia research would establish that on our main markets, PGI status is likely to have a significant benefit, as Mr. Dowling said. When that PGI application was discussed and agreed with the beef task force, it was also agreed that if and when the PGI is successfully registered for Irish grass-fed beef, an oversight group will be established to ensure that producers have an input into and an understanding of the bonus that arises.

Deputy Matt Carthy: I am aware of the work that the task force has done on the issue of getting the agreement the witnesses have spoken about, as well as the efforts the Department is putting in to bring this PGI application over the line. It would be a travesty if at the end of the day, the PGI status simply became another “inspect bonus” or that in other words, it became a penalty for those who do not reach it as opposed to an additional price for those that do. What, if any, examination or overview was taken to ensure this does not become the case?

Ms Sinéad McPhillips: That concern is the origin of the agreement to have an oversight group when the PGI is registered, in order that there is an understanding and analysis of the benefits flowing from that PGI and that there will be a fair distribution of those benefits along the chain.

Deputy Matt Carthy: On suckler beef and the promotion therein, what needs to happen to deliver an additional price for the suckler product? What work has Bord Bia been doing or has committed to do? What differential is made or can be made? Has the task force looked at and examined the issue of factory-owned feedlots and their impact on the sector and on the overall pricing structures for the beef market?

Ms Sinéad McPhillips: There was an agreement in the context of the task force, that a suck- er brand development oversight group would be established. I chair it myself and stakeholders are involved in that. The purpose of that group is to oversee the work by Bord Bia to develop a

32 6 JULY 2021 suckler brand proposition and to test it in relevant markets. That work is ongoing. Bord Bia has commissioned research in relevant markets where there is an appreciation, or the possibility of an appreciation, for the distinctiveness of suckler beef production and a willingness to pay for that. We expect to have a meeting of that group again before the end of July.

Deputy Matt Carthy: I have a brief question for the chairman of the beef task force on the feedlot beef that I reference. To maintain our image as a green producer of food, would it be useful for the sector were feedlot beef to be labelled as such?

Mr. Michael Dowling: My understanding is the volume of beef that comes from feedlots is not enormous but obviously there is some. It is not eligible for a grass-fed label so to that extent there is a clear distinction between beef reared in a traditional fashion and beef which originates or comes from, in its final stage at least, feedlots.

Deputy Matt Carthy: Okay, I will take that as a “No”. A defining question then is whether Mr. Dowling considers the beef industry to operate with cartel-like behaviour.

Mr. Michael Dowling: It is not an issue for me but the issue has been raised, as I understand it, with the Competition and Consumer Protection Commission on a number of occasions and the latter has not found that it has operated-----

Deputy Matt Carthy: I am coming to it in a minute.

Mr. Michael Dowling: -----in a cartel arrangement. If people feel it does or there is evi- dence then the proper thing to do is to produce that evidence to the Competition and Consumer Protection Commission. As I said, we have webinars lined up with it for the week after next.

Deputy Matt Carthy: Yes, I see that. The difficulty is, and the hope would have been, that a beef task force might have taken on that job because it is simply impossible for a farmer or group of farmers to prove what is apparent to many. Having read the Grant Thornton reports and the CCPC responses of last year that will probably be reiterated to Mr. Dowling, has any- body given him an easy to understand explanation as to how the beef prices across all factories appear so in tune with each other, regardless of the direction they move in? They go up together and go down together with almost minimal variations. What explanation does Mr. Dowling think there is for that?

Mr. Michael Dowling: Nobody has given an explanation per se. I emphasis the beef task force was set up to oversee the implementation of the agreements of August and September 2019. A series of actions were agreed. That is what the task force has been doing. It was not asked to take, or those actions do not include taking, a view as to whether or not there is a cartel operating in the beef sector. As I said, there is mechanism for having that examined and that is where it should be examined.

Deputy Matt Carthy: Why then will the task force have the CCPC before it in a webinar format?

Mr. Michael Dowling: It is for information for the members of the task force, and others, if they are interested, who have been asking for some contact with the Competition and Consumer Protection Commission and we are arranging that.

Deputy Matt Carthy: It is to discuss the issue of pricing or allegations of price-fixing.

Mr. Michael Dowling: Or anything they wish to raise. 33 JAFM Deputy Matt Carthy: There are clearly members of the task force who have the same view as I have of that body’s potential to deliver some transparency.

Mr. Michael Dowling: I do not know whether they have the same view or not but it is obvi- ously an issue for some people, so we are organising the webinar.

Deputy Matt Carthy: Having read the CCPC responses to the allegations that were made previously, and given it did not actually engage with MII before it published its findings, does Mr. Dowling consider the CCPC to be up to the role it has in investigating these matters?

Mr. Michael Dowling: I expect it is.

Deputy Matt Carthy: I have a final point and I will come back in at the end if there is time. Having gone through the number of hearings and engagements he has, does Mr. Dowling see a role for an independent beef regulator? If so what additional powers should it have above the existing statutory bodies?

Mr. Michael Dowling: The unfair practices legislation is being put in place. There will be a food regulator. It is open and the consultation has taken place on what powers should be given to the regulator. That is now a matter to be decided, and hopefully put into legislation, in the second half of next year.

Deputy Matt Carthy: I thank Mr. Dowling for his answers.

Senator Tim Lombard: I thank Mr. Dowling for his contribution so far. He has been involved in the beef task force since it was set up. It is a very significant role. He is doing his best to appease an awful lot of sides in this very important argument.

On 15 September an agreement was made. One of the key issues about that agreement was that it was to include transparency and a long-term plan for the beef industry. That was one of the priorities laid out in that agreement. Does Mr. Dowling think the task force succeeded in convincing farmers there is now transparency in the beef industry, after this process has been gone through?

Regarding the long-term plan which was part of the agreement, does Mr. Dowling think there is the bones of a long-term plan there for the beef industry regarding transparency and price fairness? Has the farming community seen those two goals of the agreement delivered on?

Mr. Michael Dowling: On transparency, there is some improvement on that and with the information which is available. It is a significant improvement. Many farmers probably believe it is not transparent enough but that is as far as it can go at the moment.

The long-term plan will now need very substantial consultation to include the review of the CAP, the requirements from a climate point of view and other matters which were not within the remit of the beef task force. There will be a need for a consultative body for the beef indus- try going forward, beyond what the task force has been able to do because those issues were not ones it had the remit to examine. The CAP issue, for instance, is something that is only beginning to be crystalised now. A consultative process will be required into the future on the longer-term strategy for beef and indeed other sectors in agriculture but it would follow on from the task force rather than being a job for it.

Senator Tim Lombard: On the issue of payments on the grid, there was a proposed re- 34 6 JULY 2021 view in that terminology of the agreement of September 2019. Will Mr. Dowling update me on where that review of quality payments on the grid is at the moment? He might also inform the committee of his view on that update.

Mr. Michael Dowling: Teagasc was asked to do a technical examination of the grid. It examined it in the light of price movements since the original grid was introduced. The conclu- sion was the difference between the different categories on the grid had not changed sufficiently to justify adjusting the grid and that the grid should continue as it stands. Teagasc has looked at, from a technical point of view, whether a different type of comparison could be made, in re- spect of looking at carcases from the point of view of cuts. Teagasc has outlined how that might operate and asked the farm organisations to reflect on it and revert to it on whether they would like to pursue a fundamentally different type of grid. My understanding is that consultation is ongoing and nothing significant has yet come back from the organisations.

Senator Tim Lombard: To reassure farmers that the grid is working effectively and fairly and is not open to any tampering, is the task force satisfied the grid is working appropriately?

Mr. Michael Dowling: Yes, I think so. The expectation was that the price differentials might need to be substantially changed because of price changes in the market since the grid was introduced, but the technical work done by Teagasc indicated that that was not necessary because the changes were not sufficiently large to justify any significant adjustment of the grid.

Senator Tim Lombard: Mr. Dowling spoke about the changes in-spec bonus payments for cattle under 30 months of age and so on. The residency requirement of 70 days has been reduced to 60 days. How was the period reduced? Is there room to move that 60-day period further or is that as far as we will go?

Mr. Michael Dowling: It was agreed as part of the December 2019 agreement. Whether it could be called a concession or not, it arose out of the discussions as part of the agreement. As for whether it can be reduced from 60 days, I do not know. That is a matter for agreement within the industry. The length of time is not the most significant in-spec bonus issue, given that the vast bulk of animals qualify for that under the four-movement rule. There does not ap- pear to be good reason to change it. Nevertheless, it is a requirement, and I suppose under some degree of negotiation in the future, one could see it being adjusted further. Residency is an issue for quality assurance, QA, status, however, and that remains the position.

Senator Tim Lombard: Mr. Dowling mentioned the food ombudsman and the public con- sultation period that opened a few weeks ago, to which I have made a submission. Has the task force, or any of its members or staff, made submissions to the consultation? What our guests’ views on the power the ombudsman should have? What funding mechanism should the office have? Where will it fit in to the new regime of the farming community believing they are get- ting a fair price for the product?

Ms Sinéad McPhillips: I might take that one. The Department has run that consultation re- garding the additional powers to be attached to the new office of a national food ombudsman or regulator. The Senator will appreciate that as Department staff, we have not made a submission ourselves, and Mr. Dowling is acting as independent chairman of the beef task force. Several other organisations in the task force process have made submissions to the public consultation and they are being analysed. We had a useful webinar to present some of the preliminary results of that consultation, for the information of the public and interested people.

35 JAFM Senator Tim Lombard: What do our guests see as the future of the beef task force? What is the lifespan expected to be? Do its terms of reference need to be changed? Does there need to be a complete review of how the beef task force is viewed? The original agreement, set out on 15 September 2019, is almost two years old. What is Mr. Dowling’s personal view on where the beef task force should go and the new direction it should take?

Mr. Michael Dowling: As I said, the task force was set up to oversee the implementation of the September 2019 agreement. Thirty-odd action points arose out of the agreement and their implementation has, largely, been completed, although the task force has one or two issues to tidy up. Beyond that, it has, in my view, completed the work it was set up to do. As we said earlier, two webinars will be held soon on competition law and transparency within the Euro- pean Union and they will cover many of the remaining issues.

I did not set up the task force and I am in the hands of Ministers and so on, but I do not fore- see that under its current remit, it will have a long life. Nevertheless, there will be an increas- ing need for a consultative group for the beef sector’s future strategy, given the CAP changes, the climate demands and other issues. A new consultative group, with a revised remit, will be necessary, but that is not for me to decide but rather a policy decision for the Minister and his officials. I think the current body has, largely, done what it was set up to do.

Deputy Michael McNamara: I thank Mr. Dowling. I am glad we have been able to con- duct this meeting virtually. When I asked the Minister’s predecessor why the beef task force had not been sitting for such a long period at the start of the Covid crisis, I was told it was not possible to meet virtually, so I am glad it is possible.

In the course of the beef task force’s existence, laws have been passed in Spain that effec- tively preclude the sale of agricultural produce below the cost of production. It was a major bugbear of farmers - not just beef farmers but especially them - during the protests that gave rise to the beef task force that they were, in effect, being asked to produce beef below the cost of production. Beef can be produced in Ireland with far fewer carbon emissions than in most other parts of the world but, at the same time, there has been much Government subvention of beef farmers. Every time the Government puts money into beef farmers to try to make up for the fact that processors do not pay adequately for produce, the processors take that into account and cut the price even further. Did the beef task force look at the Spanish law or any examples around Europe? There was a groceries order in Ireland that made below cost selling unlawful. That is slightly different to what has been done in Spain, which has banned selling below the cost of production. Did the beef task force look at that? If not, why not?

Mr. Michael Dowling: It did not look at it. It was not within the task force’s terms of ref- erence. There is an issue with below cost selling. The task force noted that this sort of issue should be referred to the new regulator once the new food office is set up.

Deputy Michael McNamara: Would Mr. Dowling accept that for the office to function properly, it will need to be able to determine the cost of production or to refer that to some other statutory body? We are not talking about below cost selling as previously existed but selling below the cost of production. There will have to be some mechanism to determine the cost of production of beef in this case, though there are many other agricultural and horticultural prod- ucts in Ireland which are regularly sold below the cost of production. That will be necessary. Secondly, it will have to have the teeth to examine issues. There is currently a complete lack of transparency, as Mr. Dowling knows, and commercial sensitivity is regularly cited with regard to who is paying what to whom. If the regulator is to have any effect, it will have to have strong 36 6 JULY 2021 statutory powers.

Ms Sinéad McPhillips: The issue of below cost selling has been raised in some of the sub- missions in respect of the public consultation on the new office of the national food ombudsman or regulator. As the Deputy points out, there is quite a distinction between concepts of below cost selling and selling below the cost of production. Those issues can be considered in respect of the primary legislation attached to that office. Establishing the cost of production, which can vary from farmer to farmer, would be a significant challenge. The second thing that distinguish- es Ireland from France and Spain is that in those countries, farmers are largely selling into their own domestic market. Primary producers therefore have much greater sway in discussions with retailers and final trade customers, whereas in Ireland, 90% of the beef we produce is exported, so the final customers are far away and are much less subject to influence by producers.

Deputy Michael McNamara: I accept that point. We do not import much beef from Spain. It is the other way round. Likewise, we do not export much olive oil to the Spaniards. Every country exports and we all have competitive advantages. I accept that we export a lot of meat and dairy produce. That does not seem to stymie the Spaniards in trying to set the cost of pro- duction. There is much talk about green measures. I accept that they are essential but we need to make sure that farmers are adequately protected in Ireland for producing an environmentally sustainable product and ensuring that they are not expected to sell that product below the cost of producing it. That would seem to me to be the bare minimum. I appreciate the difficulties of setting that and doing so in a way that is compatible with competition law. We are not alone in seeking to do this. Other countries are trying to grapple with this. Spain is one example. The Spanish Embassy is forthcoming with information about Spain’s laws when approached and I thank it for its assistance to me when I was looking for that law. I thank the Chair and our guests for their forbearance.

Deputy Matt Carthy: I want to go back to the 30-month and four movement rules. The task force is essentially putting its hands up and saying that nothing can be done and that these rules are in place. The penalties, as I would describe them because I do not believe they are bonuses, will continue to be in place. Is that a fair reflection of the task force’s position?

Mr. Michael Dowling: Not really. Our position and our information is, to take the under 30-month rule, that for most markets to which we supply any significant amount of beef, that rule is required. If that is the case, then if one wants to supply those markets, then one has to meet that rule. There is no argument about that. Over 30-month cattle can find a market. The issue is whether or not they can find a market with a remunerative price. The advice given to farmers in the UK from their own organisation is that the target for the product being supplied either to retailers or food service manufacturers should be under 30 months if they expect to get the maximum price. That is the position as we understand it, from all the information we get from the market and the Grant Thornton report too.

Deputy Matt Carthy: I am not sure how anything Mr. Dowling said contradicts the state- ment I made.

Mr. Michael Dowling: It does not. The Deputy said that we were happy that all this would go on.

Deputy Matt Carthy: I said that Mr. Dowling said that nothing can be done about it.

Mr. Michael Dowling: If the market says that it wants beef that comes from animals that

37 JAFM were under 30 months at slaughter, then if we want to supply that market at a price we want to supply at, we have to supply beef that is under 30 months. That is my understanding.

Deputy Matt Carthy: It is important to clarify. Mr. Dowling mentioned the market and in a number of instances talked about consumers or customers. He is talking about retailers in this instance.

Mr. Michael Dowling: I am talking about retailers, and food service suppliers and manu- facturers. They are the people who buy the beef.

Deputy Matt Carthy: They buy it to sell on to the next person, who is the actual consumer. Therefore, I think it would be useful to know whether Mr. Dowling has carried out any analysis of whether any of the group that he has just mentioned has labelling systems in place for the end customer that indicate the age or number of movements that the cattle and beef in question went through when they were back home in Ireland.

Mr. Michael Dowling: I do not know. From ordinary experience of seeing beef on shelves both outside and in Ireland, I have not seen references to 30 months or movements on the labels.

Deputy Matt Carthy: Does it strike Mr. Dowling as strange that a retailer would be so specific about what it needs to sell a product but would not feel a need to provide that specifica- tion to the end customer?

Mr. Michael Dowling: I do not know. There are reasons that retailers like to have cattle under 30 months and under certain weights. It facilitates the placement of the product into par- ticular types of cartons, etc. There is a technical reason for it. In addition, retailers have been telling Grant Thornton and others that they believe there are climate reasons beef from younger animals is a better bet than beef from older animals.

Deputy Matt Carthy: There is another reason retailers and processors like it, which is that it allows them to exert more control over the primary producer. In terms of the product, there is a primary producer and the end customer but the people in the middle, whom, I suspect, are making the vast of the profits being made on beef, happen to have a set of specs that allow them to, in many cases, manipulate the price they offer for the primary product, which they can then sell on to the end customer at a substantial profit.

Mr. Michael Dowling: I cannot comment on the profit that retailers make because we have no significant information on it. The margin in respect of the processor is as set out in the Grant Thornton report. I reiterate that as far as I know, the various specs, particularly the under-30- months and quality-assurance requirements, are demanded by a large number of customers of Irish beef and, therefore, if we are supplying it we must meet those requirements. It is as simple as that. They do not have to buy from us.

Deputy Matt Carthy: To return to the establishment of the beef task force, we all recall the protests at factory gates. I am sure Mr. Dowling will accept that the primary cause of the agitation, which led to the establishment of the beef task force, was price.

Mr. Michael Dowling: I agree that the agitation at the time was principally caused by price.

Deputy Matt Carthy: Mr. Dowling’s evidence to the committee is that matters pertaining to price are outside of the scope of the beef task force.

Mr. Michael Dowling: I did not say that. The beef task force was not set up to determine 38 6 JULY 2021 or to try to determine the price. The in-spec bonus changes which took place, which the task force was tasked to oversee the implementation of, were price-related. The increase in the bonus for animals under 30 months, the payment of a bonus for those over 30 months that was not paid previously and the other changes in the bonuses were price-related. That is the price element that came out of the agreement. The other elements that came out of it were set out in the various actions. The task force was asked to, first, oversee implementation of the changes in the bonus system and, second, oversee the implementation of the other 30-months-plus ac- tions. That was the remit of the task force and that is what it has done. It was not asked to things beyond that.

Deputy Matt Carthy: In terms of the remit, the problem from my point of view is that we have beef prices that are potentially manageable if they remain stable. I have heard nothing today which suggests that we are moving to a point where we can prevent the type of major price fluctuations we have seen in the past. In reality, this means that many primary producers will have to endure periods of poverty because they are producing at much less than the cost of production. That is clearly unsustainable. I am not sure how we navigate the work of the task force to bring us to a point where we are providing a stable price flow and a profitable margin into the medium and long term for primary producers. I ask Mr. Dowling to shed some light in terms of the measures which were outlined that will deliver those things.

Ms Sinéad McPhillips: I will respond to the strand of the Deputy’s question on improving the bargaining power of the primary producer in the food supply chain. One aspect of that is beef producer organisations. We are not by any means suggesting that that is the answer to all of the issues relating to the beef sector, but it is one mechanism for which the Department has legislated and provided financial assistance to enhance the position of the primary producer. Our view would be that producer organisations present a significant opportunity to strengthen the position of the beef farmer in the supply chain. There are currently three Department of Agriculture, Food and the Marine recognised beef producer organisations that received recog- nition from the Department in September 2019, October 2019 and May of this year, respec- tively. The Department is engaged extensively, through the task force and separately, with stakeholders in promoting the establishment of beef producer organisations which are exempt from competition law requirements and allow for producer organisations to bargain on behalf of their members. We would strongly support that.

On the next CAP, we would propose that the existing supports be maintained and, perhaps, enhanced to further encourage the establishment of the producer organisations and that consid- eration be given to extension of that support to the sheep sector.

Deputy Matt Carthy: We have a beef sector agreement that was reached in 2019 but that has not been fully conveyed to all farmers. Some farmers have outlined to us that there are major issues in terms of beef price transparency. In real terms, nothing has been proposed to de- liver on that. We have penalties in respect of movements and age and no proposal in that regard. We do have proposals in regard to PGI and promotion of suckler beef but, apparently, no analy- sis as to what the end benefit will be. The CCPC refuses to investigate any of these matters. I would love to be a fly on the wall at the upcoming webinar. Essentially, we are talking about a beef task force that has met on several occasions, the remit of which is essentially to implement the agreement from 2019, and the evidence before the committee is that that agreement is not being adhered to by the beef processors. The witnesses will be aware that many farmers will be watching these proceedings, I am sure in absolute exasperation.

Chairman: Would Mr. Dowling like to comment? 39 JAFM Mr. Michael Dowling: Not very much, except to say, as I have repeatedly stated, that the task force was given a remit and it has carried out that remit. Virtually all of what was agreed as part of the September 2019 deal has been implemented, including the bonus systems which have enhanced the price return to very many farmers. It is not true to say that there are elements that have not been generally implemented, other than the issue of the weighing in the lairage which some factories are operating and which others, for reasons they have explained, are not. Beyond that, the vast bulk of what was agreed as part of the deal in September 2019 has been implemented by the task force, as agreed.

Deputy Matt Carthy: I thank the witnesses.

Chairman: I call Deputy Fitzmaurice.

Deputy Michael Fitzmaurice: I would like to go revisit a couple of issues with Ms McPhil- lips. There are producer groups already operating in the sheep sector and they are working well. There appears to be a resistance to the producer groups among the factories on the beef side. Is it correct that approximately 70% or more of the beef we export goes to the UK for mince?

Ms Sinéad McPhillips: No. Approximately 50% of our beef, overall, goes to the UK by value and volume.

Deputy Michael Fitzmaurice: How much of that is mince?

Ms Sinéad McPhillips: I will come to the Deputy on that in a moment. Does he mean in terms of-----

Deputy Michael Fitzmaurice: Representatives of MII gave us figures indicating a huge volume of mince. My understanding on specifications, and I have done a bit of digging on it with Bord Bia, is that something like 750,000 cuts equates to 250,000 cattle but 750,000 cattle are needed to get enough cuts to be able to cater for demand. If the figure is approximately 50% of our beef, only 250,000 cattle, if they all had the right cuts, would be required for the speci- fications as against what goes everywhere else. I am talking about the full volume of cattle, which is 1.4 or 1.5 million. Is that correct?

Ms Sinéad McPhillips: I do not think the figure for mince could be as high as the Deputy suggested. The issue is that the UK is one of the highest-paying beef markets in the world. Certainly, UK retail is a highly-priced sector. Its preference is for British product in the first instance but Bord Bia research establishes that Irish beef is very highly regarded by UK con- sumers. They see it as almost equivalent to their national preference.

Deputy Michael Fitzmaurice: I have one problem. I am not blaming Mr. Dowling for this but how much did Grant Thornton get for these three reports?

Mr. Michael Dowling: I cannot remember offhand but we can find out.

Deputy Michael Fitzmaurice: The one problem I have is that one report was done on specifications and, whether we like to believe it or not, we have gone to the wrong people. In fairness, some people outside the country co-operated with Grant Thornton. However, on the value of an animal, the fact is there are now people around the world who are looking for many parts of an animal, including gallstones. We talked about the fifth quarter, offal and all the dif- ferent parts but we have no genuine figure for what an animal is worth. We do not know, even though we have gone through three reports because we could not get co-operation. In my view,

40 6 JULY 2021 that report is not finished.

The officials talked about specifications. The person who actually does the survey should be in the shop or outside the door or wherever, in the same way surveys are done to see who votes for whom. Until we do that we are going nowhere because, as has been pointed by Deputy Carthy and others, nothing is written down stating that a certain animal was 36 months old and it was moved five times. At the moment, and I am reiterating this, you can get top dollar for any animal, no matter what it is, because of supply and demand. I am concerned that we have two reports from Grant Thornton that do not seem to be finalised because it said it could not get the information for one and the second, in my view, did not include the people it needed to. If I was sent to Dublin in a lorry to collect 100 cattle and I came home with 70 or 80, there would be queer looking. Grant Thornton should finish compiling those reports in a different way.

Any information can be found out nowadays. It is easy to look at the price of products on the shelf. I will give a very simple analogy. If I am selling to five different companies in five different countries, I know who they are. They are well known and their products are on the shelf. We can walk along the shelf, look at the price of the stuff and see how much it is per kilo. Did the factories give all the information about what they are getting for what they are export- ing from Ireland? Would it be fair to say you would not need to be mathematician to find that out? Did the Department get information from factories in Ireland about what they get from retailers in the different countries they are selling to?

Mr. Michael Dowling: That was not the problem. The problem was what the retailers or food service operators were getting for beef. That information could not be got. The informa- tion on what factories get is compiled. That is how Grant Thornton was able to get the figure for the total value of the product exported from, or sold within, Ireland. That was not the difficulty. It is not as simple as going along, if I understand what the Deputy said, and saying we can find out what the retailer is getting because we can look at the price he or she is charging. First, it is nearly impossible to do that on any sort of representative basis but, second, a big proportion of what we sell goes into food service. Food service product comes out as a beefburger or some other sort of product, which is mixed up with other agricultural products on the plate people buy. It is not an issue that is very easily solved by doing a spot-check of what is on a retail shelf.

Grant Thornton had expertise and it did its best. It could not get the final price but it got the prices in between and that was, at least, beneficial in understanding what sort of gaps there are between farmer price and the price that beef is sold to the final customer, although not the final consumer. To do a survey of consumers to ask them what they think about specifications etc., would not necessarily give any information other than the fact that consumers probably do not know an awful lot about the matter. Producers are not selling directly to the consumer; they are selling directly to people who are either manufacturing, cooking or retailing the beef themselves. They are the people who create and who are the demand for Irish beef. They are the people Grant Thornton had to try to deal with.

Deputy Michael Fitzmaurice: That is grand. I think Deputy Flaherty wants to come in.

Deputy Joe Flaherty: I am okay. I thank the Chair.

Chairman: On behalf of the committee, I thank Mr. Dowling, Ms McPhillips and Ms Dunne for engaging with us on the important issue of the beef task force. As many contributors have said, thankfully, price is in a far better place than it was a couple of months ago. When the price dropped in February, it sent shivers up the backs of primary producers because they

41 JAFM could see no logical reason for it. The world market was going reasonably well at the time and it really shook confidence. Thankfully, in the last two months, we have seen prices rise. As was said, it was getting to a place where people could not see beef farming being viable into the future. I thank the officials for coming today and for answering our questions in what was a fairly intensive session.

I propose we meet in private session tomorrow morning at 10 a.m. for a briefing from the Office of Parliamentary Legal Advisers, OPLA. It relates to Thursday’s meeting with represen- tatives of the horse racing industry. Is that agreed? Agreed.

The joint committee adjourned at 5.19 p.m. until 9.30 a.m. on Thursday, 8 July 2021.

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