THE Irish beef industry was thrown into confusion yesterday following another body blow, a 10 per cent cut by the EU in export refunds on beef sold outside the Union.
Many factories did not quote at all for beef animals yesterday as the decision was announced by the Irish Meat Association whose spokesman, Mr John Smith, described the decision as a "catastrophe for farmers and factories".
Mr Smith, whose organisation represents the meat factories, predicted that the cut in export refunds which compensated exporters for selling goods outside the EU would lead to a drop of 6p a lb in the price of cattle.
This, he said, came on top of the 4p a lb drop as a result of the revaluation of the Green Pound last weekend which was caused by the strength of the Irish pound.
The decrease could lead to a fall in the value of the average bullock of more than £140 and caused confusion in the already restricted market because of the export refunds necessary to sell more than half the Irish bullocks which did not qualify for EU intervention.
Mr Smith said the cutting of the export refunds was a much more serious issue than the closure of the Egyptian live cattle market and was a knee-jerk reaction by the Commission to heavy applications for export refund licences.
The European factories, he said, had applied for export refund licences for 60,000 tonnes of European beef, and the Commission feared that such quantities might lead to the EU exceeding its GATT commitments to export only 1.17 million tonnes of subsidised beef this year.
In a statement from the Department of Agriculture, the Minister, Mr Yates, condemned the Commission decision and said he was making immediate contact with the Commissioner, Mr Franz Fischler, with a view to having the decision reversed.
Mr Yates said he rejected the Commission's approach to managing the export licence system where past experience had shown that cuts in refunds were not the correct route.
He said he had proposed an alternative approach which would achieve more effective controls of the licensing system while allowing for the refunds to underpin producers' incomes.
The one lesson producers should have learned from the BSE crisis was that there was no need for panic, said Mr Yates. Intervention arrangements were in place, he said, and EU markets were strengthening access to third-country markets.
Mr Brian Cowen, the Fianna Fail agriculture spokesman, was critical of Mr Yates, accusing him of losing control of the beef situation.
The chairman of the IFA's National Livestock Committee, Mr Raymond O'Malley, said the 10 per cent cut was a stab in the back for beef producers, particularly in the context of the severe difficulties in the beef and livestock export markets.
He said the price of beef in the UK was 94p a lb this week, and Mr Yates had to tell the factories this week that Irish farmers were entitled to the equivalent price.
Mr Frank Allen, the president of the Irish Creamery Milk Suppliers' Association, said the cuts were a clear case of kicking Irish farmers when they were down.