Walsh protests to EU over cuts in export refunds

The Minister for Agriculture and Food, Mr Walsh, has protested to the European Commission about cuts in export refunds for beef and cattle to countries outside the EU, introduced unilaterally by the Commission on Friday evening. The cuts will have a significant effect on beef and cattle exports, and Mr John Smith, director of the Irish Meat Association, says they could cost the Irish beef industry up to £25 million in a full year.

Mr Derek Deane, chairman of the Irish Farmers' Association Livestock Committee, has accused the Commission of being devious and underhand in the manner in which it made the reduction, bypassing its own Beef Management Committee.

The cuts amount to 10 per cent on all steer beef, 15 per cent on live cattle and 40 per cent on cows. The decision was taken without reference to EU member states - as the Commission can do - but Ireland, as the EU's largest beef exporter, is affected more than any other state. The EC defends its decision on the grounds that beef prices are high at the moment and because of the high level of pre-fixation licence applications for the allocation agreed under the General Agreement on Tariffs and Trade.

These cuts follow a 20 per cent reduction in export refunds announced in May. In 1999, some 310,000 tonnes or 53 per cent of Irish beef exports went to third countries - non-EU countries - and almost all of this was steer beef. The Republic's high dependence on these markets results from the fact that only about one-fifth of Irish beef production meets the standards of EU supermarket buyers. The total value was around £286 million in the marketplace, together with export refunds of £233 million. While exports are expected to be down slightly in the current year, the effects of the 10 per cent cut will be serious; the Irish Meat Association estimates the cut as costing between 3.5p and 4p a pound.

There will also be implications for live cattle exports. Exports in the current year are expected to top 500,000; last year, the Republic exported some 400,000 head, worth £120 million. Exports to non-EU countries were worth around £30 million. Cow or cow-meat exports are not a major element of beef and cattle exports.

Mr Smith says that export refunds on steers are now £125 a head lower than in the autumn of 1999. At this time of year, three out of every four steers processed in the State are sold to non-EU countries. The volume of unused export licences is quite low and will provide limited protection for meat companies and farmers, he says.

"Fat cattle and cattle with poor conformation will suffer most. These cattle cannot be sold in the EU. Instead, they will have to be exported to third countries, even if the export refunds are at a low level," he says.

Mr Deane says Mr Walsh and his EU counterparts would have to bring some sense back into the Commission's management of the beef market. The "savage" cuts in export refunds over the past year were unnecessary.

The beef industry is worth more than £1 billion to the Irish economy. We are around 1,000 per cent self-sufficient in beef. Some 130,000 farmers are involved in beef production and around 5,000 people are employed in meat processing.