IRISH meat plants may soon be slaughtering Irish beef for EU intervention stores again as the growing crisis in the industry has led to a dramatic fall in prices being paid to farmers.
A crucial meeting of the EU Beef Management Committee in Brussels today is expected to reject a call from the Government to increase export refund a rates to try to raise prices.
EU export refunds are paid to exporters in compensation for selling EU produce on low priced world markets. They are vital to maintaining producer prices in Ireland. However, over the past four months, export refund levels have been cut by 36 per cent because of what the EU Commission sees as speculation in beef and live cattle export licences.
It slashed the export refund levels when it discovered that exporters, mainly in the Netherlands, had already drawn enough licences to export 670,000 tonnes of beef to external markets, while EU exporters are only allowed to export 1. 1 million tonnes of produce under GATT.
Most of these licences were taken out at prefixed rates before the Commission cut the rates and Irish beef and live cattle exporters have been buying the licences from the Netherlands to service their markets.
However, market sources indicate that the licences have become so expensive that the meat plants and live exporters have had to cut the price being paid to farmers by as much as 12p per lb to stay in the market.
Commission sources said yesterday it had to regulate the market and could not allow a situation where licences to export the whole 1.1 million tonnes under GATT would be issued only half way through the trading year.
"Nevertheless, there are still people exporting on licences issued later in the year at lower rates and, presumably, making a profit. We also see that the price of cattle in the Union is rising," said one highly placed source.
He also indicated that Ireland could not expect the Beef Management Committee to move today to increase export refunds" gas it had to deal with an EU wide problem, not just Irish difficulties.
One of the ironies of the situation is that, for the first time this decade, Irish cold stores are virtually empty of intervention beef because the system has not been used for nearly three years.
However, cattle prices here have fallen so dramatically since the beginning of December that Ireland is entitled to use the system, even though the meat plants, the farmers and the Department of Agriculture are reluctant to travel such a road.
Members of the IFA's National Livestock Committee last night held a vigil outside the EU Commission offices in Dublin to highlight their plight and to put pressure on the Commission to increase export refund levels.
The IFA president, Mr John Donnelly, accused the EU Commission of "gross mismanagement" of the EU beef market and export refunds. He claimed cattle' farmers had been sacrificed by the Commission with its savage export refund cuts of over 35 per cent since last autumn.