Tuesday, 2 May 2017

Joint Committee on Agriculture, Food and the Marine Debate
Vol. 3 No. 18

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The Joint Committee met at 16:00

MEMBERS PRESENT:

Information on Jackie Cahill Zoom on Jackie Cahill Deputy Jackie Cahill, Information on Paul Daly Zoom on Paul Daly Senator Paul Daly,
Information on Michael D'Arcy Zoom on Michael D'Arcy Deputy Michael D'Arcy, Information on Tim Lombard Zoom on Tim Lombard Senator Tim Lombard,
Information on Martin Kenny Zoom on Martin Kenny Deputy Martin Kenny, Information on Pádraig MacLochlainn Zoom on Pádraig MacLochlainn Senator Pádraig Mac Lochlainn,
Information on Willie Penrose Zoom on Willie Penrose Deputy Willie Penrose, Information on Michelle Mulherin Zoom on Michelle Mulherin Senator Michelle Mulherin.


In attendance: Deputies Michael Healy-Rae and Kevin O'Keeffe.

Information on Patrick Deering Zoom on Patrick Deering DEPUTY PAT DEERING IN THE CHAIR.

Business of Joint Committee

Chairman: Information on Pat Deering Zoom on Pat Deering Apologies have been received from Deputy Charlie McConalogue. Before we begin may I remind members to ensure their mobile phones are completely turned off. I propose that we go into private session to deal with some housekeeping matters. Is that agreed? Agreed.

  The joint committee went into private session at 4.18 p.m. and resumed in public session at 4.30 p.m.

General Scheme of the Greyhound Industry Bill 2017: Discussion (Resumed)

Chairman: Information on Pat Deering Zoom on Pat Deering We are in public session. Before we begin, I remind members and witnesses in the visitors gallery to ensure their mobile phones are turned off for the complete duration of the meeting.

This meeting will deal with pre-legislative scrutiny of the general scheme of the Greyhound Industry Bill 2017 through discussion with the Irish Council Against Blood Sports and the Greyhound Rescue Association of Ireland, GRAI. From the Irish Council Against Blood Sports, I welcome Ms Aideen Yourell, campaign director, and Ms Nicole Matthews, committee member; and from the Greyhound Rescue Association of Ireland, I welcome Ms Una Jansen, spokesperson, and Ms Jessica Reid and Ms Margaret Moran, committee members. I thank them for coming before the committee today to discuss the heads of the Greyhound Industry Bill 2017 and for their witness submissions, which have been circulated to the the members of the committee. These will also be published on the committee website. We will hear a short presentation from each group, which will be followed by questions from the committee members on the heads of the Bill.

Witnesses are protected by absolute privilege in respect of the evidence they are to give to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to 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 asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

Before we begin, I want to put on record my own declaration that the chairperson of the Irish Greyhound Board, Mr. Phil Meaney, who will be coming before us to make a presentation, is a personal friend of mine.

I ask Ms Yourell to make her opening statement and that will be followed by the statement from the GRAI. We will then take questions.

Ms Aideen Yourell: On behalf of the Irish Council Against Blood Sports I would like to thank the committee for inviting us here today to express our views on the greyhound racing and hare coursing industry. The Irish Council Against Blood Sports was founded in 1966 and is a voluntary organisation campaigning for an end to the hunting of wild animals with dogs and other cruel sports that exploit and abuse animals. Greyhound racing and coursing are inherently cruel, resulting in the premature deaths of thousands of greyhounds annually, while in the region of 5,000 hares annually suffer terror and stress by being snatched from the wild, kept captive and used as live lures for greyhounds at coursing matches. England, Scotland, Wales and our near neighbours, Northern Ireland, have banned hare coursing, leaving our Republic as the last outpost for this barbarism.

  Last year there was an opportunity, with Deputy Maureen O’Sullivan’s Private Members' Bill, to rid the country of this wildlife abuse but, regrettably and shamefully, the majority of our legislators turned a blind eye to the cruelty and voted the Bill down. This is despite the fact the majority of our citizens want to see hare coursing outlawed, as borne out in the most recent poll, scientifically conducted for RTE's Claire Byrne programme last February, which showed 64% wanted hare coursing banned.

  Many people seem to think that because the greyhounds are muzzled in coursing, hares are not being injured and killed. This is certainly not the case, as reports from national park rangers, who attend some of the meetings, show. Hares are being struck, pinned down and mauled, and we ourselves have filmed such maulings. Members may have seen the RTE footage of a hare being severely mauled by muzzled greyhounds at the national finals in Clonmel last February. Let us hope that when this issue next comes before the Dail, our legislators will do the right thing and consign this barbarity to history.

  What of the greyhounds themselves? The natural lifespan of a greyhound averages 14 years but, in greyhound racing and coursing, for many, it is said to be a mere three to four years and many are also culled as pups if they are not deemed suitable for the track or coursing. The ones that do go on to race must be winners to survive; if not, they are put down. In fact, the Irish Coursing Club advises greyhound owners not to give away unwanted greyhounds - it says it is better to put them painlessly to sleep. A greyhound trainer candidly remarked: "I've seen dogs being shot. It has to be done as there's too many of them to re-home.” The ones that are not put painlessly to sleep face a cruel fate. In the recent RTE "Prime Time" programme on the greyhound industry, Marion Fitzgibbon of Limerick Animal Welfare, a tireless campaigner who has been rescuing abandoned greyhounds for decades, said:

Very little money is diverted into greyhound welfare, and it’s left to the small charities around Ireland to try and rescue as many of these as we possibly can, but we’re fighting a losing battle. We believe that there are maybe eight, nine, ten thousand put to sleep. They can be killed in all sorts of fashions. We’ve had instances of finding them shot, ears cut off and brutalised, drowned or sold on to live in appalling states.

  I would like to take this opportunity to commend RTE’s "Prime Time" and Sharon Ní Bheoláin for highlighting the dark side of greyhound racing, the doping and the cruelty. This was a great example of public service broadcasting. The public now know where their taxes are going – to fund a cruel, cheating, debt-ridden industry.

  Although it is kept well hidden, the blooding of greyhounds, a common training method in the greyhound racing industry, using rabbits, hares and other small animals, is an open secret within the industry. It is widely believed by greyhound owners and trainers that to keep a dog keen to follow the mechanical lure at the track, it must be blooded. Many will have been appalled at the horrific footage, shown on RTE’s "Prime Time" recently, of a tiny piglet, which was strapped to a moving lure at an Australian training track in 2014, being savaged by greyhounds as part of a blooding exercise. An Irish greyhound handler, working for an Australian trainer, was shown taking part in the cruelty. He is now back in Ireland and is active in the greyhound industry. In 1994, there was a high profile case of blooding of greyhounds at a training track in Donaskeigh, County Tipperary. Well known broadcaster and journalist, Donal MacIntyre, came to the private track to film for a BBC documentary on greyhound racing. Cages of rabbits were brought to the track and the BBC cameraman was instructed to turn off the camera while the blooding took place. However, the camera remained running and the horrific cruelty was recorded. The dogs being blooded were those of a top Irish trainer at that time, whose son was present while the cruelty took place.

  Greyhound commentator and journalist, the late John Martin, who was known for his warts and all assessments of the greyhound industry, wrote in the Irish Independent:

The bald truth is that greyhound racing would not continue to exist without blooding. It follows that, with a constant greyhound population of close on 30,000, blooding must be widespread. Do not expect an admission of that from Bord na gCon. To concede the point would be to accept that they are custodians of a sport whose very existence is based on blooding.

  There are also growing concerns about the export of greyhounds to destinations with low standards of animal welfare and little or no enforcement of whatever weak legislation is in place. It emerged last year that Irish greyhounds were being exported to the Canidrome track in Macau, the only region of China where gambling is legal, with racing five nights a week on a track that is deemed to be too hard, resulting in injuries to dogs. If a greyhound does not finish in the top three in five races in a row, it is destroyed. It is reported that around 400 dogs are killed by lethal injection each year and every greyhound arriving at the track is dead within three years, according to animal welfare groups on the ground there. There are also grave concerns about the export of Irish greyhounds to other Asian countries, including Pakistan, a country where horrendous animal cruelty takes place and where greyhounds are raced in tremendous heat. We have compiled a list of 200 Irish dogs now in Pakistan and we suspect there are many more. Irish greyhounds are also exported to Spain, where greyhounds or galgos are used to hunt hares in the countryside. At the end of the hunting season, when they are no longer needed, they are abandoned, released onto busy motorways, hung from trees, thrown down wells and even burned to death or left with broken bones to starve to death. Deputy Tommy Broughan has recently introduced a Private Member’s amendment Bill to prevent the export of greyhounds to destinations

with poor animal welfare legislation and standards and it is to be hoped this will be addressed in the Greyhound Industry Bill 2017.   There is a serious problem in this country regarding the doping of greyhounds. The Morris review, commissioned by Bord na gCon, and published in July 2016, was particularly damning. It was critical of Bord na gCon's oversight of the problem, stating that the board's current sampling strategy was "too routine" with a perception of "no element of surprise" and that the existing functions of the control committee were "seriously hampered". The RTE "Prime Time" programme cited a number of high profile cases of doping, and demonstrated how easy it was for cheating dog owners to buy performance enhancing drugs online. It is the unfortunate greyhounds that suffer, having hard core drugs pumped into them, which can have long-lasting detrimental effects on their health. It seems Britain, which imports a huge number of dogs from Ireland, view Ireland as the doping capital of the world when it comes to greyhounds.

It simply cannot be denied that cruelty is inherent and endemic in the greyhound racing and coursing industry, with a racing greyhound's life cut short, the killing and abandonment of greyhounds that have outlived their usefulness, the doping of greyhounds, hares used as live bait in coursing, and the use of live animals to blood greyhounds. We believe it is an industry that cannot be cleaned up or rehabilitated. We do not believe that the proposed Greyhound Industry Bill 2017 will see any improvements for the welfare of greyhounds and hares. The cruelty will continue, as will the cheating, but at the very least, there should be complete transparency and accountability in terms of what becomes of an unwanted greyhound, once it is no longer winning on the track or the coursing field. The entire life of a greyhound bred for the greyhound industry should be tracked from birth to death, including to where it is exported. We strongly contend that greyhound racing should not be funded by the people of Ireland, the majority of whom are opposed to the abuse and exploitation of defenceless animals. Instead, that considerable funding should be redirected to the hard pressed and underfunded animal rescue groups, most of which are getting crumbs from the table in grants from the Department of Agriculture, Food and Marine.

Ms Una Jansen: I thank the Chairman for the opportunity to address the committee. I am spokesperson for the Greyhound Rescue Association Ireland, GRAI. I am accompanied by my colleagues, Ms Jessica Reid and Ms Margaret Moran. Our organisation was set up in 2010. We are an entirely voluntary organisation. We were founded as an umbrella group of animal rescues, which were taking in large numbers of Irish racing greyhounds, and people who were concerned about greyhound welfare in Ireland. Our primary purpose at the outset was to promote greyhounds as pets in Ireland and to advocate for improvements in greyhound welfare, and I am pleased that there has been progress in both of these areas in recent years. We believe, however, that we have a lot further to go before we can honestly say that we have a reasonable level of greyhound welfare in Ireland.

Since our organisation was established, there has been a substantial increase in the engagement of the public with animal welfare matters. We have recently witnessed public outrage over the puppy farm scandals and international protests at dog meat festivals in China. An estimated 74% of Irish people use social media and it is thanks to sites like Facebook and Twitter that more and more people are becoming aware of, and interested in, animal welfare. Social media has had a big role to play in the decline of greyhound racing in Ireland. As greyhounds become more popular as pets, public perception of the breed is changing and people no longer view them just as racing dogs. The reputation of greyhound racing has suffered greatly as a result of numerous scandals involving doping, animal cruelty and mismanagement of funds. RTE's "Prime Time" recently aired a feature on the doping of greyhounds within the industry, and several newspaper articles have exposed what has been coined as "the grim underbelly of the greyhound industry". The impact of these scandals has been felt at every track and it is the reason that when somebody suggests holding the work Christmas party at a greyhound track, in almost every office now, there is somebody else who will have ethical reservations.

Along with many individuals and organisations, GRAI has tried for many years to put an accurate number of the number of registered greyhounds in Ireland to no avail, due to the fact that litters, rather than individual greyhounds, are registered with the Irish Coursing Club, ICC, and only details of the individual greyhounds registered-named for racing can be viewed on the IGB and ICC websites. The status of each greyhound named and registered is not always accurate. Greyhounds can be sold abroad, retired for breeding, die of natural causes, be abandoned, or be destroyed legally or illegally, and the data are never recorded. It is unacceptable in this day and age that registered racing greyhounds go missing. A system exists for cattle whereby every head is accounted for and, therefore, we know it can be done. Until a system accounting for every registered greyhound is put in place, we cannot seriously say that we have true concern for greyhound welfare in Ireland.

The IGB and the greyhound industry has received a total of €99.36 million from the public purse since 2010. That is almost €100 million for an organisation that is unable to accurately state the number of dogs involved in the industry. With public funding comes public accountability and a need for transparency in the form of a proper system capable of monitoring every greyhound in Ireland from whelping until death. Greyhound owners must be held accountable for the dogs in their care. If a dog is destroyed, then the owners should provide a certificate from a veterinarian to prove that it was done humanely. If a dog is sold, a change of ownership form should be submitted to the IGB and if an owner or trainer is inspected and he or she cannot account for dogs registered to their care, there needs to be serious and long lasting repercussions for him or her.

Greyhounds continue to turn up in pounds and rescues across the country in their hundreds and the Irish Retired Greyhound Trust, IGRT, has none of the resources required to deal with these dogs. We are told time and again by greyhound owners and trainers that they are not prepared to wait for months for an IGRT place to come up. Greyhounds that are healthy and could be re-homed are being destroyed because there are no kennels to go to. There are many small, independent dog rescues around Ireland doing their best to help out with these dogs but with no financial support from the IGB, it is impossible to keep up with the flood of dogs needing homes. In spite of this, in April 2016, the IGB implemented a €700,000 breeding incentive programme to encourage people to breed more greyhounds. GRAI was deeply disappointed to hear of this programme. In a shrinking greyhound industry, it makes absolutely no sense to increase breeding and it was even more disheartening that no additional funding whatsoever was allocated to re-homing. The IRGT does not even have one re-homing centre; its British counterpart has 65. The trust receives the most recent data available. By comparison, in the same year, the British RGT received £1.4 million. Indeed, the Indecon report of 2014 recommended a significant increase in funding to re-homing organisations but we have seen nothing to date.

There are other issues in the industry which GRAI believes need to be addressed but we believe that the three of most concern are lack of traceability, lack of funding for re-homing organisations and the need for greyhound breeding to be decreased. We appreciate that the issue of exports could not be accommodated in these amendments at this time. However, areas of exports do raise huge concerns for GRAI and we look forward to the progression of the recently proposed amendments for this Bill tabled by Deputy Tommy Broughan. We hope to see deserved time and support given to it. It is most encouraging to see that the Department is reviewing greyhound welfare legislation and we are cautiously optimistic about the results of today's session.

Chairman: Information on Pat Deering Zoom on Pat Deering The heads of the greyhound Bill will be put up on the screen for the benefits of members and they can refer to them if they need to during the questioning.

Senator Pádraig Mac Lochlainn: Information on Pádraig Mac Lochlainn Zoom on Pádraig Mac Lochlainn I thank the groups for their presentations. I will direct my first question to the council. It is clear from its presentation that it has reached the conclusion that there is no future for the greyhound racing industry and it is beyond reform. I would like to tease that out. GRAI appears to be more measured in its outlook with respect to traceability and so on. Perhaps I am wrong but GRAI's view seems to be that if strong legislation is put in place, traceability can be addressed and doping eliminated.  I am sure there is general agreement that we should ban the export of animals to countries that do not treat them humanely but we should first sort out our own practices and ensure they are humane. Is there a happy medium in terms of animal welfare? Does the council believe that greyhound racing should be banned in Ireland? Can it suggest legislative proposals that will address their concerns? I am sure decent people agree with many of its concerns. A high percentage of people in Ireland own dogs and are increasingly concerned about the welfare of dogs. It is unacceptable to have a sport that does not guarantee their welfare. I want to tease this matter out with the council.

I have a similar question for the Greyhound Rescue Association of Ireland. Have I misrepresented or misinterpreted its point of view? Does it believe there is a space for greyhound racing if we address a range of concerns, in particular accountability and traceability, and practices are put in place? Do both organisations believe there is a happy medium?

Chairman: Information on Pat Deering Zoom on Pat Deering I call Deputy Kenny next before we hear the answers.

Deputy Martin Kenny: Information on Martin Kenny Zoom on Martin Kenny I welcome both of the organisations. I was struck by the fact that there is no traceability. We must deal with the issue and consider where it can be applied. Can the delegations give examples of best practice in other countries that have traceability and identify them?

Ms Aideen Yourell: We do not object to dogs racing around a track per se. We are concerned about what goes on behind the scenes. The practice of blooding greyhounds by using small animals shall continue and will never be stamped out. People believe that they must blood greyhounds in order to keep them keen for the track. The practice is well hidden. Perhaps the members of committee saw the very distressing Australian example that was shown in a "Prime Time" programme where people deliberately blooded their greyhounds. They strapped a little piglet to a mechanical lure to attract a dog and let the dog savage it. Such activities are quite normal for these people and, sadly, it is quite normal in this country. Greyhound racing is okay but how they are trained is the problem. I do not know how one can stamp out blooding with legislation because it cannot be enforced as it is done out of sight. What can be done?

Doping will continue because people keep discovering drugs that can beat the system. I know that the Irish Greyhound Board, IGB, has bought a big machine, which is supposed to be wonderful. How can technology keep up and tackle the problem of doping?

Senator Pádraig Mac Lochlainn: Information on Pádraig Mac Lochlainn Zoom on Pádraig Mac Lochlainn What if a range of protections and assurances were built into the legislation? We make laws in this building all of the time. We measure the success of every law by the way that it is enforced. Ms Yourell has expressed her concern about whether suitable legislation can be enforced. Is there a way forward? She has indicated that her organisation is not opposed to the principle of dogs racing around a track but it would like assurances in legislation. I interpreted her presentation as saying greyhound racing is beyond saving.

Ms Aideen Yourell: Yes.

Senator Pádraig Mac Lochlainn: Information on Pádraig Mac Lochlainn Zoom on Pádraig Mac Lochlainn Is Ms Yourell suggesting that we should amend the legislation or that there is no point as the sport is beyond saving?

Everybody is concerned about the enforcement of legislation. When legislation is enacted one is always concerned about whether it will be enforced and implemented but that is a separate argument. Are there suitable amendments? Is there a type of legislation that will address the concerns of the organisation and save greyhound racing?

Ms Nicole Matthews: The global greyhound industry has gone too far to be saved. Let us consider what happens overseas. As many as 40 states of America have banned dog racing and the remaining states have no tracks. Argentina has completely banned dog racing. The industry in Australia is on its knees and it is only a matter of time before the rug is whipped out from underneath the industry. I want to express my thanks to former New South Wales Premier Baird for raising concerns about animal welfare. Cruelty will be a feature of any industry that views animals as entertainment and a way to make a profit.

The greyhound racing tracks in the UK are falling like dominos. Greyhound racing tracks, like the one at Harold's Cross, formed a stable part of the industry in the past but they have now admitted defeat and shut their doors. People who operated within the industry bubble never foresaw a decline. The industry has declined too far to be saved. I shall touch on what has been said about social media. The public worldwide has brought the industry to its knees and it cannot be saved.

In terms of exports, an enormous amount of dogs are still being thrown in on top of an industry that is on its knees, cannot cope, cannot recover and does not have public support. The industry no longer has the support of companies that were once very willing to provide sponsorship. Those companies now know that their business and personal credibility would take a nosedive overnight if they were involved in the industry. They do not want to be associated with the industry in any shape or form.

We are still on top of many issues, including overbreeding. A vulgar amount of taxpayers' money is piled in on top of this issue that is like an abyss. The money acts like a quick catch-up until the next year comes around but the same debts arise again. The industry is never going to recover. We have reached the point where we must admit defeat. The greyhound industry is old fashioned and very cruel. The dogs never win and are never prioritised. The industry's only priority is making a profit, which is how it has always been. The dogs are an afterthought .

I have given a home to two greyhounds so I can talk about how incredibly docile, friendly and sociable these dogs are. The breed has a great nature and personality. I am appalled by what they must endure and have been forced to do all in the name of entertainment. The racing itself takes a toll on their bodies. All of that pales into insignificance when compared with what these animals can give back in a home environment. I have three young kids and I also have a cat and two other dogs. One of my rescued greyhounds is a survivor of the dogmeat trade in China. He came from the underbelly of the slaughterhouses that are located on the outskirts of Shanghai. Due to the horrific demands placed on his body and the conditions he had to endure he was dispensed with. When his previous owner or breeder did not see a return for their training he was sold to the slaughterhouses in China. He was next on the list to be dispatched when he was rescued. My dog's name is Legend and he is the most amazing, friendly and sociable dog but he is just one dog of many that have suffered. I have been around so many greyhounds in high energy circumstances. Greyhounds are an incredible breed. I have witnessed how they positively react to social settings such as public campaigns to raise awareness of their plight. We must no longer view them as money making machines and just view them the same as any other domestic breed.  They are entitled to that. This industry has done them no good. It continues to leave them last on its list of priorities. The industry needs to step back and, once and for all, help this country's rescued dogs in particular. The situation in terms of pounds and rescued dogs is at crisis level. They are depending on public support. I do not know how they manage expenses such as vet bills and neutering dogs on a daily basis.

It should be top of the list of priorities that our dogs are neutered before being sent abroad. This is another horrific side of the industry. Why are all dogs not neutered before being sent abroad? They are being sent to heinous conditions and surroundings and to temperatures that their respiratory systems cannot deal with. Greyhounds are a unique breed in that it has been scientifically proven that high temperatures make their systems overheat at a much faster rate than any other dog. However, our country and our Government ship our unwanted dogs abroad instead of investing in them and helping our country's rescued dogs. The Government should do right by our dogs and our so-called unwanted dogs and help the public perception shift a little bit more. Is that not the very least that we owe these dogs?

Chairman: Information on Pat Deering Zoom on Pat Deering The point the witness is making in answer to Senator Mac Lochlainn is that she feels the industry is finished as opposed to introducing-----

Ms Nicole Matthews: Absolutely. However, that is not only the case in Ireland.

Chairman: Information on Pat Deering Zoom on Pat Deering We are only dealing with the situation in Ireland.

Ms Nicole Matthews: The situation overseas needs to be looked at also. The industry is falling worldwide. There is nothing we can do to pick up the industry. It is on its knees and it is never going to come back because it lacks the public support it needs. Those bridges have been burnt long ago.

Ms Una Jansen: As I mentioned in my opening statement, public perception has much to do with the problems that the racing industry is facing in Ireland at the moment. It is in Bord na gCon's interest to improve things. People will respond to that. Many people have a question mark in their minds over whether the industry is ethical or not. They wonder what happens to dogs after the track. If some reassurances were to be given and if the greyhound industry was to balance things out by giving more funding to rescue organisations and by putting in place a proper retired greyhound trust similar to that in operation in the United Kingdom, people’s concerns would be reduced a little. If the legislation is amended, these changes are implemented and the required measures put in place, it would ultimately benefit the industry both financially and in terms of getting rid of abuses such as drugging and the welfare issues.

Senator Mac Lochlainn’s interpretation of our stance is correct. We believe there is an opportunity to improve things in the greyhound industry.

Perhaps Deputy Martin Kenny could remind me of his question.

Deputy Martin Kenny: Information on Martin Kenny Zoom on Martin Kenny What methods are used elsewhere to guarantee traceability or is there a system in place that the witness can guarantee?

Ms Una Jansen: As Ms Matthews mentioned, there are not many countries where greyhound racing still takes place and therefore we do not have a system which we could use as a template. However, there is a system in this country for monitoring every single head of livestock. It has been in operation for a significant period of time. Micro-chipping has been compulsory since last year and every registered greyhound in this country has a tattoo. Therefore, we have the data and we have the software which can be used to put a proper traceability system into operation. We cannot accurately monitor how we are doing until we have that system in operation. We cannot measure welfare in this country until we can accurately state how many racing greyhounds we have, where they are, and what is happening to them. As there is not a good system in place elsewhere, there is an opportunity for Ireland to be a world leader in this regard.

Deputy Jackie Cahill: Information on Jackie Cahill Zoom on Jackie Cahill I welcome the two representative bodies to the committee. They have put forward very good cases on their respective behalves. I am a greyhound owner and I am a director of a greyhound track.

The point on animal welfare is well made. If our industry is to prosper in the future, more resources must be allocated to dog welfare. This Bill will address that issue. In the past, Bord na gCon has not put enough resources into dog welfare.

A point was made that doping is widespread in the greyhound industry. According to the Indecon report, in 2011 some 0.9% of tested dogs tested positive. That dropped to 0.8% in 2012 and 0.7% in 2013. An analysis of the majority of the dogs which tested positive showed that traces of substances in the dogs’ feed resulted in the positive tests. This has been conclusively proven. Unfortunately, there have been several high profile cases where dog trainers took legal action regarding the test results and proved conclusively that the positive doping test was due to the animal feed. The myth that doping is widespread in the greyhound industry has to be put to bed. The figures are there to show that is not the case.

The other myth is that dogs are not looked after. There will always be exceptions in an industry as widespread as this one. A small minority of owners will not look after the welfare of their greyhounds. However, in the vast majority of cases, dogs are very well looked after and very well minded. It has been said that dogs are money-making machines. In my experience of greyhounds, they are definitely not. The vast majority of greyhound owners look after their dogs very well. If one were to go to a greyhound establishment where a bitch is being whelped, one would see the level of comfort that is provided. There would be an infrared lamp over the pups, the litter under the dogs would be very dry and they would be minded exceptionally well. The owner would get up two or three times a night to look after the pups during their first week to ensure that they are adequately fed and comfortable. A sweeping statement that greyhounds are not being treated well is incorrect. There will always be exceptions to the rule. When this legislation is enacted, hopefully we will be able to root out those who are doing the industry’s reputation no good whatsoever. There have been instances of dogs being stolen from premises and of people poaching dogs. That is illegal and hopefully it can be stamped out.

This Bill will go some way towards addressing the concerns of today’s witnesses. The welfare of greyhounds is paramount for us all. To get public opinion behind our sport, it is essential that the Bill looks after the welfare of dogs. When this Bill is enacted, the myths about widespread doping will be put to bed once and for all. That will be to the benefit of us all.

I am looking forward to working constructively with the witnesses to scrutinise the Bill. When it is enacted, it will hopefully be to the benefit of an industry which I will not put into the graveyard just yet.

Senator Paul Daly: Information on Paul Daly Zoom on Paul Daly I welcome both groups here today and thank them for their presentations. As Deputy Cahill has said, head 2 provides a basis for administrative sanctions as opposed to criminal sanctions for breach of the greyhound racing rules. Would administrative sanctions be sufficient deterrent to those in breach of the greyhound racing rules? The witnesses might also comment on the appropriateness of administrative sanctions as opposed to criminal ones.   They might give us their opinion on what nature of sanctions they would like to see the Irish Greyhound Board applying for welfare-related offences.

Chairman: Information on Pat Deering Zoom on Pat Deering Thank you, Senator Daly. Would Ms Jansen like to respond to the questions?

Ms Una Jansen: I would like to address Deputy Cahill's point on drugging. Until very recently, the Irish Greyhound Board did not have laboratories that were able to test properly for stanozolol, an anabolic steroid commonly used in greyhound racing. Up until this year, the board was only able to test for the presence of a water-based dose in a urine sample. As all greyhound trainers and owners are aware, that steroid does not show up in those tests. It can only be identified in a blood test for an oil-based dose. As the greyhound industry laboratories were not able to test properly for this drug, we did not have accurate figures for its use. Last year, the Greyhound Board of Great Britain issued a statement to its members advising them to exercise extreme caution in buying dogs from Ireland because of the endemic use of this anabolic steroid. Additionally, as is documented in appendix 2 of our written submission, there have been several cases of greyhound trainers and owners, some of whom are extremely high profile, having judgments passed against them for drug use by the disciplinary committee of the Greyhound Board of Great Britain. Until we have laboratories here that can test properly for drugs, we will not accurately know how deep the problem is. We are hearing from greyhound trainers and owners all the time that drug use is endemic in the sport.

I agree with Deputy Cahill's comments on greyhound welfare. Some greyhound owners and trainers treat their dogs extremely well. However, we do have a huge issue of dogs disappearing. Until we have a traceability system in place, we cannot accurately say that welfare is good. While I do not dispute the fact that there are good greyhound owners, we also know that people are getting rid of dogs by shooting them or using bolt guns or are selling them into countries in which adequate welfare legislation is not in place. We need to stamp out these practices in greyhound racing.

Ms Aideen Yourell: As regards the sanctions for breaches of welfare, we have the animal welfare legislation of 2011, which should cover that. I am not sure what the Senator meant by administrative sanctions.

Senator Paul Daly: Information on Paul Daly Zoom on Paul Daly I mean industry-based sanctions as opposed to criminal ones.

Ms Aideen Yourell: Why should they not be subject to the law of the land like everybody else?

Senator Paul Daly: Information on Paul Daly Zoom on Paul Daly That is the question I am asking.

Ms Aideen Yourell: I apologise, yes. I think they should be subject to the law of the land like everyone else and liable to criminal prosecution.

Ms Jessica Reid: On the sanctions question, I believe in some cases it can be harder to make a criminal case, especially for a welfare breach, than to impose an administrative sanction within the industry. We would like to see much higher fines for what are serious issues. We tend to see slap-on-the-wrist type fines of a couple of hundred euro here and there. For a lot of trainers, it is considered the cost of doing business at this point. We would like to see trainers who have significant breaches, whether in welfare, doping or other issues, banned from owning and racing dogs. At the moment, the sanctions are considered laughable within the industry because they are so minute in terms of actual repercussions. Anyone in the UK who is caught with a welfare or doping breach suffers much more severe penalties. This is not reflected in the Irish system.

Ms Una Jansen: We would also like to see follow-on checks of people who have negative findings made against them. For example, if one dog tests positive for a substance, the owner's other dogs should also be tested. There should be routine checks on these people for up to two or three years afterwards to ensure they have not reverted back to that behaviour.

Ms Aideen Yourell: For coursing dogs, positive results are not published online. They are published randomly now and then in the coursing club's newspaper, the Sporting Press. The paper only comes out once a week and is not widely distributed. It is only bought by greyhound people. Notwithstanding that we think hare coursing should be banned, the Irish Coursing Club should be required to publish results online as the Irish Greyhound Board does.

Chairman: Information on Pat Deering Zoom on Pat Deering That is the issue of transparency again.

Ms Aideen Yourell: Yes.

Deputy Willie Penrose: Information on Willie Penrose Zoom on Willie Penrose I thank the two groups for their interesting observations and submissions. The Irish Council Against Blood Sports seems basically to say that the industry is close to being irredeemable, particularly at an international level; that it is beyond the point of rescue and the only way forward is to effectively ban it outright. That is what I take from the witnesses' submission. It is a dangerous precedent to tar everybody with the same brush in the greyhound industry. A lot of owners and so on look after their animals with great care and it is important to make that distinction.

It is important that the legislative objectives of the greyhound industry Bill 2017 should be considered. Implicit in the Bill are the objectives of the Indecon and Morris reports and indeed those of the 2016 report brought forward from this committee, which proposed a number of measures to secure significant improvements in welfare and to deter and cut out this doping, which is rampant - there is no doubt about that. I accept what people are saying about doping in their submissions. The aim of the legislation is to effect a cradle-to-grave level of supervision and protection of animals involved in the industry. That means dealing with traceability, microchipping, dog breeding, sales of dogs, greyhound welfare, puppy farming, smuggling and breeding, which we have read about, as well as the exporting of greyhounds. This Bill is weak on the issue of exporting dogs. Both groups have raised the question and it was very fairly put. Why would we send our greyhounds to countries that have little or no animal welfare legislation? It is a very important point and was well made by both groups. It is addressed in the Welfare of Greyhounds (Amendment) Bill 2017. It would be remiss of us not to focus on the issue and incorporate elements of that Bill when we make a submission. There are detailed measures to prevent cruelty and things like that.

Head 9 in the general scheme of the Bill, which deals with an amendment to the principal Act, allows the greyhound board to use funds to enhance the welfare of greyhounds. Can any of the witnesses comment generally on the need for additional funding to improve racing greyhound welfare? What level of additional funding do they feel is necessary to ensure and secure its enhancement? How would those funds be best employed? I know the Dogs Trust and the local greyhound rescue groups - I see Ms Margaret Moran here - so I am aware of the work they do and the fundraising they must partake in to achieve their objectives.

Abandonment of greyhounds is obviously a huge issue. I know the witnesses are involved in that. Could they give us an outline of the current level of abandonment as they are aware of it? How could we deal with it in the legislation? Are there particular measures that should be included in the Bill to augment or supplement current welfare legislation?  We have about ten pieces of legislation dealing with animal welfare. Some legislation has achieved its objective but others Acts need refinement, upgrading and improvement. We have legislation in place, some of which needs upgrading, but it begs the question put by the witness as to why we should send our greyhounds to places with no animal welfare legislation. We are not in the top rankings, but if our dogs are sent to places with no regulation, it makes the case that this Bill can be significantly strengthened to achieve some of the objectives.

I would not subscribe to banning sport in any industry. Improvements can be made. We recognised the need for improvement when we prepared a report in that regard in 2016. I thank the witnesses for highlighting issues that are enlightening and of help to members in the consideration of this Bill.

Deputy Michelle Mulherin: Information on Michelle Mulherin Zoom on Michelle Mulherin I welcome all the witnesses to today's meeting. Their input has been very important to the pre-legislation scrutiny of the general scheme of the greyhound industry Bill. From my work with animal welfare groups, I know the witnesses deal with greyhounds which is the worst side of the industry. From the discussion, I am aware that many people who breed greyhounds care for their animals and treat them very well. I have no involvement in the industry but I know a few people who own greyhounds who consider their dogs very precious. It is important that point is made.

It is very important that issues are highlighted and the role of advocacy, which the animal welfare groups engage in, serves to make it more socially unacceptable and shameful for people whose mindset is to neglect and abuse animals. We do not want that sort of society and we strive constantly to root out that behaviour but it is a major problem across the board in respect of dogs and other animals. It is a cost to society. It is desirable that we have a proper regime.

Issues have been teased out but notwithstanding reservations about where the industry is at, I understand the witnesses are happy that the Legislature is trying to address issues of animal welfare and work towards that goal. People have a passion for this sport, aside from making money from it.

The witnesses have addressed the importance of social media in highlighting issues. To what extent does social media and people witnessing cruelty at sporting events play a part in achieving prosecutions and convictions? Events are posted on social media, but I wonder if these gruesome images are churned around or does anything come of it? Is there a correlation between these images on social media and the prosecution of an offender? The witnesses have raised concerns about the treatment of animals but how often is this resulting in catching people who are dong wrong to animals?

Chairman: Information on Pat Deering Zoom on Pat Deering There are three specific questions arising from the points made by the two contributors. Does Ms Matthews wish to respond?

Ms Nicole Matthews: I can tie in the concerns raised by both members in my statement. There is an online community of very hard working and passionate people on animal rescue throughout the country. Social media has become an endemic part of contact for everybody in all corners of the country. It is the quickest method to share a message about the needs of an animal in distress. For example, if a dog is in severe distress, it may be located in a county that has foster care on standby. We have collaborated and joined forces to transport greyhounds from one spot to another when they are no longer able to race. As the Deputy touched on, some trainers and breeders care for their dogs and will not be the first to use the bolt gun to assassinate them when they do not run fast enough. These trainers and breeders communicate with the rescue societies and the pounds and those in between to try to offer the dogs some form of rehoming and retirement away from the track. That is only right and is the very least that should be done. On a daily basis, we see a significant number of really badly neglected, malnourished and uncared for animals turning up at the county pounds and tied to the front door or the gates of the rescue premises, often times abandoned after the close of business. Dogs with blue ropes attached around their necks have been found in the bogs, where the bolt gun has been used in an attempt to kill them but has not worked. This issue is very serious and we must tackle the question of making bolt guns illegal. Social media operates on a daily basis to tackle those issues.

Ms Aideen Yourell: Deputy Mulherin raised the question of video footage of gruesome scenes of animal abuse posted online. We go to coursing meetings and we film live hares being mauled and battered into the ground. There is nothing we can do to bring those people to book because it is a legal activity. We cannot prosecute anybody because they are allowed to set greyhounds on hares, pin them down and batter and maul them - try to get one's head around that. What will the Legislature do about that? It is quite definitely cruelty to animals by any yardstick, yet it is exempt from prosecution in this day and age.

On the question of blooding animals, for example, a case was prosecuted in Australia in which an Irishman was involved in such an incident with a piglet - the man is now back in Ireland - and he was disqualified in Australia and the UK. The judge hoped he would be disqualified in other countries, but nothing has happened here to him yet, although I understand there may be a disqualification.

A case was taken to court in 1994, and people were given a sentences of six months, but I am not sure whether they served a day of the sentence because I think the case was appealed.

Chairman: Information on Pat Deering Zoom on Pat Deering Deputy Penrose raised a question on the financial resources required to fund the service.

Ms Una Jansen: If we talk about best practice, we could look at an organisation like the British Retired Greyhound Trust. In my opening statement, I mentioned that they received £1.4 million in 2014 in comparison to the Irish Retired Greyhound Trust which received €200,000. There is a massive discrepancy between that, in spite of the fact that the two industries are of a reasonably similar size. One would like to see an increase in funding. We would like to see the establishment of a retired greyhound trust that is far more organised and has rehoming centres and has much more resources available to it. We would like to see more funding for private independent rescue centres around the country that are struggling to deal with the flood of greyhounds coming into them.

On the statistics, between the years 2010 and 2015, some 2,896 greyhounds were surrendered into Irish pounds. Some 2,497 greyhounds were destroyed in Irish dog pounds and 399 greyhounds were homed or collected via the Irish dog pounds. That does not cover the dogs that we know are disappearing. That does not cover dogs that are being DIY euthanised or that are disappearing or being sold on to disreputable people or being sold for export to countries such as Spain, China, Pakistan and so on.

In response to Senator Mulherin's question, Greyhound Rescue Association Ireland, GRAI, does not really engage too much in sharing gruesome images on social media. I cannot honestly say we would have any experience of monitoring how these images would translate into convictions.

Ms Jessica Reid: I know of convictions not necessarily specific to greyhound, but other animal welfare breaches.  One has to be very careful if one has a situation where one thinks there can be a prosecution. It is advised to keep that off social media because it can lead to a problem with evidence that is given in court, if it is taken as a criminal prosecution. There was a case in Galway with a rescue. A serious case was taken against them and because the case proceeded over a number of years anyone who was involved in seizing the animals off that property, that were taken in horrible situations, could not speak about it publicly for some time. In some cases, if images are being shared it is just for public awareness.

In the case of greyhounds, it comes down to a numbers game. Because we do not know exactly how many dogs are being bred every year, all we have is a registered number of litters to work off, so it is an extrapolation of 15,000 to 20,000 greyhounds being bred in Ireland every year and out of that number, approximately 1,000 greyhounds per year are being re-homed. We know that a certain number get sold on to race in the UK and then a certain number are being sold to other places. We have done the figures as best as we possibly can from the information that is available. One of our biggest issues is the fact that the information is not readily available on a concrete specific number of dogs. We are still looking at thousands if not tens of thousands of dogs - healthy young dogs - that have been euthanised. Some of them are being euthanised privately through vets. Some of them are undergoing DIY euthanasia. There are all sorts of different cases. There is no way we can know how many, given the current numbers of dogs being bred. We know the numbers that are being homed but there is a huge gap in the middle and we do not know what happens to all of them, although we can guess. It is hard to produce numbers based on guesswork because at the end of the day those are always in question. One of our biggest issues is the fact that we cannot get those numbers because they do not seem to be recorded at this point. One cannot tackle a problem properly until one knows the full scope of it.

We know that it happens daily or weekly with rescues. We operate a waiting list of dogs coming in. Trainers contact us to ask if we can take dogs. We put them on a waiting list and try to find spaces for them. However, when we contact that trainer to say we have a spot for the dogs now, we may be told: "Sorry, those dogs are gone. I couldn't wait long enough, so I had them put down." That happens daily in this country. That is where the numbers of hundreds and thousands of dogs that are being lost come from because we physically do not have the space, resources or volunteer time to deal with these dogs that are coming in such overwhelming numbers. Trainers may ring up and say: "If you can't take this dog this week he gets the needle. We already have an appointment to have the dog euthanised with the vet at the end of the week, so if you can't take it by then that is the outcome." One is left with that sort of emotional blackmail.

Individual rescuers are doing this work in their volunteer hours. That is not to say that the dogs are necessarily being kept in bad shape. They can be in good physical condition when they are brought in. It is simply a numbers game. The committee has seen the numbers we have provided of the allocated resources, which are so poorly insufficient for the number of dogs still being bred. They are running in this industry but are not being taken care of at the end of the day.

Deputy Kevin O'Keeffe: Information on Kevin O'Keeffe Zoom on Kevin O'Keeffe I thank the Chairman for allowing me to speak, although I am not a member of this committee. I am supportive of the greyhound sector both in coursing and at greyhound tracks. I fully respect the views and concerns of the two deputations present. I commend their good work in ensuring the welfare of dogs, particularly abandoned animals.

What is the percentage of greyhounds in various dog pounds throughout the country? Are dog pounds full of greyhounds or are there all breeds of dog there? We are scrutinising the legislation and hopefully we will be able to regulate those involved in coursing and at tracks. However, nobody seems to want to regulate those involved in lurching at dawn and dusk in the countryside. Nothing is said about lurchers, which seem to disappear. Those are the people who are clearing our countryside of invaluable hare species. We should discuss the welfare of those dogs because no one is currently watching them.

We are a nation of exporters, including the agricultural and drinks industries. We also produce good dogs so the issue is whether we should provide more controls and regulation over which countries we export them to. I have to laugh because people have given out about some countries to which dogs are exported, yet we have no problem with, or complaints about, doing deals with them in other business sectors. Surely, therefore, what is good for one sector is good for another.

I agree that it is a problem but things have come a long way with drug testing of coursing dogs. I understand that the coursing federation has its samples sent abroad to an independent laboratory for analysis. In case somebody might think there is a quick fix, in fairness there is not.

We got adverse publicity from the RTE programme but, following Deputy Penrose's question, I would like to know what percentage of greyhounds are currently in dog pounds.

Deputy Michael Healy-Rae: Information on Michael Healy-Rae Zoom on Michael Healy-Rae At the outset, I apologise for having to leave but I had to attend another meeting. I was keeping a watchful eye on what was going on here. I thank the witnesses for their attendance and I appreciate the opportunity to say a few words. I appreciate the concerns that have been raised. However, the people I know - and I do not even like to use the term "who are involved in the industry" - are people who love their greyhounds. They love what they do and take care of their dogs. There are genuinely committed people, not blackguards. They would not inflict cruelty on their animals. I am sure the witnesses respect that fact also.

Most farmers are kind to their animals, including sheep, horses and cows. Of course, one may get a rogue person who will not take care of his or her animals or even his or her\ family, but one cannot paint everyone with the same brush. The people I know who train greyhounds for coursing and racing are kind, committed and steeped in the tradition of the sport they are involved in. I am glad to know plenty of middle-aged and older people who have children and grandchildren with an interest in dogs. They will be participating in this sport. I do not call it an industry. They will continue doing so because they like their dogs and the sport involved. That important point should be acknowledged here today.

We all have differing views on the Irish Greyhound Board but I am talking about the people who own greyhounds. As far as I am concerned, they are good people who do their best at all times.

Chairman: Information on Pat Deering Zoom on Pat Deering I will now ask the witnesses to sum up, starting at the top with Ms Jansen.

Ms Una Jansen: I already gave figures on the number of greyhounds-----

Deputy Kevin O'Keeffe: Information on Kevin O'Keeffe Zoom on Kevin O'Keeffe My apologies if Ms Jansen gave those.

Ms Una Jansen: No problem. I will give them again. Between 2010 and 2015, 2,896 greyhounds were surrendered to Irish dog pounds and 2,497 were destroyed there.

Deputy Kevin O'Keeffe: Information on Kevin O'Keeffe Zoom on Kevin O'Keeffe I am sorry. In the context of dogs surrendered to the pounds, how many-----

Chairman: Information on Pat Deering Zoom on Pat Deering The number of greyhounds as a percentage of the overall number of dogs.

Deputy Kevin O'Keeffe: Information on Kevin O'Keeffe Zoom on Kevin O'Keeffe Yes.

Chairman: Information on Pat Deering Zoom on Pat Deering Are those figures available?

Ms Jessica Reid: We do not have those figures readily available, but the number of greyhounds euthanised in pounds is only a small percentage of the number of greyhounds euthanised every year. The majority are probably being done privately by veterinarians. We mentioned the dog pound figures because those are the only recorded ones for greyhounds euthanised in Ireland officially. We have no way of accessing figures for the number of dogs euthanised through other means, for example, vets. These numbers are low as a result. As to the overall number of dogs in pounds, that probably comes down to general animal welfare legislation, but greyhounds are considered separate and an agricultural commodity owing to the 2011 Act.

Deputy Kevin O'Keeffe: Information on Kevin O'Keeffe Zoom on Kevin O'Keeffe They are still dogs.

Ms Jessica Reid: We have major concerns about the lurcher issue, lamping, illegal hunting and poaching, but these matters cannot be brought before the Irish Greyhound Board, IGB, because only registered, tattooed greyhounds are within its remit. Any greyhound-type dog that is found in a terrible condition and does not have a tattoo is pushed into general animal welfare legislation, as there is no way to prove that it is a full-bred greyhound. Many of the dogs in question are considered lurchers, which is a cross-breed of any sighthound, not specifically greyhounds. Many of the lurchers used for that activity are of Saluki and other sighthound stock, possibly bred with greyhounds or other working dogs. We would love to see a large amount of concern for that matter, but it is almost a separate issue at this point because such animals are not within the remit of the IGB if they are not tattooed.

Ms Una Jansen: On the Deputy's second question, we would like to see tighter controls on exports to countries where there is not adequate welfare legislation.

Ms Nicole Matthews: Before we move on, the situation of rescue dogs that are overseas because our pounds cannot handle the influx must be acknowledged. A large number of dogs have been rehomed in Italy, the UK and so on. Cara Rescue Dogs, PAWS and the group that the girls are with, Homes for Unwanted Greyhounds, HUG, have set up a two-way system with other countries where these dogs are viewed as family pets and people are willing to open up their homes once the rescue dogs have been personality traited, had their temperaments, drive and instinct to chase tested and after the best circumstances in which to rehome each dog have been determined.

In this context, we must examine the overbreeding in Ireland. We should not have to look to outside our country to clean up our mess because the overspill is too large to be handled. If the system is overloaded, breeding must be cut back. That must be communicated by the rescue organisations and across the board within the greyhound industry. Given that there is an overspill, we cannot keep the issue in a bubble anymore.

Deputy Kevin O'Keeffe: Information on Kevin O'Keeffe Zoom on Kevin O'Keeffe Are the witnesses saying that when the dogs reach Italy or Shanghai, they are not considered fit for racing or breeding?

Ms Nicole Matthews: They are rehomed as pets. In Italy and the UK where greyhound racing is not conducted, they are taken in as pets. Although our public's support for the greyhound industry has waned and track attendances are down, the connection with greyhounds as pets has yet to be made fully. They still have tags of "vicious", "bloodthirsty" and "out for the hunt". In countries like Italy, they are seen as graceful dogs and a different connotation attaches to them.

Deputy Kevin O'Keeffe: Information on Kevin O'Keeffe Zoom on Kevin O'Keeffe Why do people in Italy take them in if they cannot mind them? How does a dog end up in Italy if it is not wanted there?

Ms Nicole Matthews: It is because we have too many to rehome in our country.

Deputy Kevin O'Keeffe: Information on Kevin O'Keeffe Zoom on Kevin O'Keeffe Yes. Obviously, if one intends to export, one must have a destination for the product.

Ms Nicole Matthews: Yes.

Deputy Kevin O'Keeffe: Information on Kevin O'Keeffe Zoom on Kevin O'Keeffe Who is buying the dogs at the other end?

Ms Nicole Matthews: The rescue organisations are taking them in Italy. For example, there is LAV in Italy and CAGED NationWide and Birmingham Greyhound Protection in the UK. They are taking these dogs from Irish rescue organisations that cannot cope with the overspill of dogs on their premises or rehome them.

Deputy Kevin O'Keeffe: Information on Kevin O'Keeffe Zoom on Kevin O'Keeffe This matter must be revisited. I thank Ms Matthews.

Chairman: Information on Pat Deering Zoom on Pat Deering Are there further clarifications?

Ms Jessica Reid: In our experience, an Irish rescue organisation that is sending dogs abroad works with a partner rescue organisation in another country that would carry out home checks and assess people's suitability for adopting greyhounds as pets. It is done on an individual basis to ensure every dog sent abroad is brought to a home and not sold on for other purposes. It is a requirement for the Irish rescues of which we are aware that all dogs are spayed or neutered before they leave the country so that there is no possibility of breeding in other countries. Department of Agriculture, Food and the Marine regulations on microchipping, vaccinations, pet passports, Balai certificates and all other paperwork for every dog that leaves the country must be sorted with the rescue organisation before a dog is allowed to be sent abroad. These dogs are not being exported to be sold but to be homed as pets. This is done on an individual basis. Each rescue sends six dogs and knows all of their names, histories and personalities so that they can be matched with appropriate homes.

Chairman: Information on Pat Deering Zoom on Pat Deering I apologise for cutting across Ms Reid, but who pays for the export process?

Ms Jessica Reid: That is a good question.

Chairman: Information on Pat Deering Zoom on Pat Deering Obviously, the GRAI has a contact on the other side.

Ms Jessica Reid: An agreement is usually worked out between the two rescue organisations. Most primarily use fund-raising to send dogs across. It probably costs in the region of €300 per dog to prep it, have it spayed or neutered and vaccinated, kennel it and pay for transport fees. This does not include extra medical requirements, for example, broken bones.

Chairman: Information on Pat Deering Zoom on Pat Deering How many on average are sent abroad per year?

Ms Jessica Reid: One of the groups that we are associated with is HUG. We saved 139 dogs last year, and just over 100 of those were exported. Regardless of whether dogs are sent abroad or homed in Ireland, every dog is spayed or neutered, microchipped and vaccinated, leading to a cost of €200 to €300 per dog rehomed. Thousands of dogs need this kind of care and attention before they can have the opportunity to be rehomed.

Chairman: Information on Pat Deering Zoom on Pat Deering What kind of relationship has the GRAI with the owners and breeders? It was mentioned that an owner or breeder could contact it about a dog that needed to be moved on and ask whether the GRAI had room for it. Does the GRAI know every legitimate owner and breeder in the country?

Ms Jessica Reid: We do not, but we have a working relationship with a good few. Most rescues take dogs from certain geographical areas. For example, some take dogs from Cork and Kerry while others take dogs from Limerick.  Obviously, there is a cost to transporting a dog all the way across the country for rescue purposes. We would have ongoing positive relationships with many trainers because, at the end of the day, many of them are very happy to have their dogs sorted and to know they do not have to be euthanized, that there is another option and that there are people in other countries, and even in Ireland, who will see them as pets and be happy to have them on their sofa. When the dogs go to Italy, they are greeted with a red carpet arrival - they literally walk individual dogs down the red carpet to meet their new families and they film it all. It is wonderful to see a place like that, where the dogs are treated with respect and desired as pets. That is what we are working towards here, namely, greater awareness among the public of greyhounds as pets so that they would be seen as desirable pets to have in a family home.

Chairman: Information on Pat Deering Zoom on Pat Deering If members have no further questions, we will conclude this part of the meeting. I thank the witnesses for coming before the committee. The meeting will feed into the overall process. We have had a good engagement and we also have the submissions from the two groups. We will have further engagements in the coming weeks in advance of the committee concluding its report on the pre-legislative scrutiny, which we intend to have completed by mid-June. Hopefully, the legislation will be enacted at some stage later in the year. I again thank the witnesses for coming before the committee to make their presentations.

  Sitting suspended at 5.50 p.m. and resumed at 5.55 p.m.

Agriculture Cashflow Support Loan Scheme: Strategic Banking Corporation of Ireland

Chairman: Information on Pat Deering Zoom on Pat Deering Before we begin, I remind members and witnesses to ensure their mobile phones are turned off for the duration of the meeting.

From the Strategic Banking Corporation of Ireland, SBCI, I welcome Mr. Nick Ashmore, chief executive, and Ms Suzanne Sweeney, head of lending. I thank them for coming before the committee to update it on the agriculture cashflow support loan scheme, which was introduced in January of this year.

Witnesses are protected by absolute privilege in respect of the evidence they are to give to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to 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 are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

I ask Mr. Ashmore to make his opening statement and we will then take questions from members.

Mr. Nick Ashmore: I thank the Chairman and members of the committee for inviting us today. We welcome the opportunity to talk to the committee about the agriculture cashflow support loan scheme and to take any questions members have on this or, indeed, any aspect of the SBCI’s work in the food and agriculture sector. Joining me today is my colleague, Ms Suzanne Sweeney, head of lending at the SBCI.

To introduce ourselves, the SBCI is Ireland’s new promotional finance institution. Between March 2015 and December 2016, working with eight front-line lending institutions, we have supported over 12,500 SMEs with over €540 million in low-cost loans and other forms of finance, using our supply of long-term, low-cost liquidity. This includes significant involvement in the agriculture and food sector. Farming has been the largest sector using this form of SBCI finance, representing 23% of total take-up to date, with more than 5,000 farm businesses having drawn down €141 million in lower-cost SBCI loans up to the end of December 2016. This is in addition to the €150 million that has been made available through the agriculture cashflow support loan scheme.

We first became involved in the agriculture cashflow support loan initiative in July last year, when we engaged with the Department of Agriculture, Food and the Marine on the Minister’s priority to address the impacts of changes in the sterling exchange rate and lower commodity prices on the farming sector, impacts that included very significant cash flow challenges for many farmers. This engagement accelerated with the news of the exceptional aid made available by the European Commission. This was confirmed in September 2016 in Commission Delegated Regulation 2016/1613, providing for exceptional adjustment aid to milk producers and farmers in other livestock sectors. The Department carried out a sector analysis which provided a vital insight into those cash flow challenges. The main findings were that farmers would face a shortage of cash towards the end of the year and into 2017 as a consequence of lower selling prices and-or crop yields, and that they were heavily exposed to costly trade credit and overdrafts to bridge cash flow requirements.

We also engaged with the banks, which confirmed their interest in working with farmers in terms of converting costly trade credit and other capital expenditure borrowings into more sustainable term loans. However, the challenge in tapping into that appetite was to create a more flexible and competitively priced product than what was available in the market at the time and, critically, to address the "red tape" that farmers regularly face when applying for loans. Given the outlook on prices, it was also important that the new product would be available during early 2017.

We had three overriding objectives when we sat down with the Department to the devise the scheme: to develop a product that responded to the liquidity problem that farmers were facing; to do so in a manner that achieved sufficient impact for farmers; and to do so in a way that achieved the greatest possible economic value-add within the parameters we were working in. Alongside the Department, we developed what became the agriculture cashflow support loan scheme by leveraging the €25 million available to us from the Department, which included €11 million from of exceptional aid from the European Commission, alongside the SBCI balance sheet to create a €150 million lending scheme.  While the banks provided the additional cash from their own balance sheets, without which we would not have been able to maximise the impact of the scheme, the SBCI, along with the European Investment Fund’s COSME programme, jointly provided the guarantee required to underpin the flexibility of the loans and their lower cost. Using the funding provided by the Department and its own balance sheet, the SBCI is providing an interest subsidy and a partial guarantee on the loans. The interest rate is 2.95%, which is fixed for the life of the loan. This compares with rates of between 6% and 14% for alternative products such as overdrafts, standard variable loans and merchant credit. Loans up to a maximum of €150,000 per farm are available with terms of one to six years and optional interest-only repayment periods. The loans are unsecured, which has the added advantage of allowing farmers greater flexibility to engage with banks other than their main lender. The loans can be used for future working capital requirements, for example, for feed, fertiliser, trading stock or tax. They can be used as an alternative to more expensive trade credit, to replenish working capital already used on the farm to support capital expenditure and to refinance existing farm creditors. The loans are available to all livestock farmers, tillage farmers, horticulture producers and others involved in primary agricultural production.

The involvement of three major banks with nationwide reach has been a critical factor in the success of the scheme. At a most obvious level, the banks have made significant funding available from their own balance sheets. There is also the fact that most farmers have an existing relationship with one or other of the participating banks, which has greatly facilitated the loan application process. Because of their nationwide spread the banks have played an important role in promoting awareness of the loans through their respective branch networks.

The significance of the scheme is worth reflecting on for a moment, particularly as a precedent for future use of risk sharing and other financial instruments as a means to deliver new policy measures in this space. This is a ground-breaking policy measure in the Irish market and the first use of the COSME programme, which is also part of the Juncker plan or the European Fund for Strategic Investments. Crucially for the SBCI, it represents the first time that the corporation itself has taken on risk sharing with front-line lenders - in this case, AIB, Bank of Ireland and Ulster Bank. This complements the SBCI’s role as operator and manager of the credit guarantee scheme on behalf of the Minister for Jobs, Enterprise and Innovation.

The SBCI will continue to source other European supports and funding to facilitate the delivery of new policy measures in the future as market failures are identified. By building a central conduit for the market for risk sharing and other financial instruments, we can also ensure the efficient flow of European SME supports to the Irish market.

I will now turn to deployment under the scheme. Based on loans that have been drawn down by farmers, to date €60.2 million has been advanced. The average loan size is €32,000. The banks advise that all of the remaining €150 million is committed and is in the process of being drawn down. Based on progress to date, we anticipate that circa 4,000 farmers will benefit from the scheme. In the supporting documentation that we submitted in advance of today’s hearing we have provided a breakdown of the loans drawdown to date by loan term, sector and region. This picture will continue to evolve as the data are reported to us by the banks. As members will see, however, the loans are broadly spread in geographical location and by farm sector.

I refer the committee to slides ten, 11 and 12 at the end of the presentation provided and will briefly talk through the main information on these slides. Slide ten shows the summary of loan deployment to 28 April 2017 broken down by the term of the loans. Loans of more than four years' duration are currently 54% of loans at €32.4 million, which is 41,551 loans. It is worth noting that the average size of a loan is larger at the longer end and smaller at the shorter end. Looking at slide 11 where the sectors are split, we can see that the dairy and beef sectors are by far the largest users of this form of funding. The dairy sector draws down an average loan of almost €37,000. The average beef sector loan is slightly smaller at about €27,500. It is significant that in the other sectors tillage is substantial at 8%, with 90 loans going out there. Slide 12 illustrates the regional split and shows the regional spread to be healthy with loans not concentrated too much in one area. The region with the largest proportion of loans is the south west with 22% and this also reflects our experience on the agricultural investment loans scheme where the south west has the largest share of the borrowing. This would be for investment purposes as well as for working capital.

That concludes my opening remarks and I am very happy to take any questions from members.

Deputy Jackie Cahill: Information on Jackie Cahill Zoom on Jackie Cahill I thank Mr. Ashmore for his presentation. We had an argument at this committee a couple of weeks ago about the term of the loan and how it would affect the subsidy that was put in to the scheme. Part of Mr. Ashmore's presentation around the agriculture cashflow support loan scheme states "An interest subsidy of 2% is paid to the banks each quarter on the outstanding balance of the loans, which is paid in arrears." We got stuck into this with the Minister when he was at the committee a few weeks ago. We could not get our heads around whether there was a pre-determined split to the terms of the loan to ensure the subsidy equated to the amount that was available from the EU to subsidise the scheme. The vast majority of farmers who looked for this loan were looking for as long a term as possible. In my experience of farmers who applied for the loan, there was a concerted effort on the part of the banks to reduce the term of the loan. We can see from the information presented by Mr. Ashmore that 54% of the loans given out so far are for terms of under four years. This is key to the issues we had when the Minister was here and I would like to hear some elaboration on that. There is a subsidy paid each quarter to the participating banks. Were criteria laid down at the start to say that X amount of loans had to be over certain periods or was each case judged on its merits?

I am extremely disappointed at the numbers of pig farmers and horticulture growers who have used the scheme. Only seven pig farmers to date and six horticulture growers have participated. Both of these sectors have been under severe financial strain. In the future hopefully we would get a similar scheme to this one. If we do, we must examine the criteria because I very much doubt that farmers in these sectors did not try to get this money because both sectors are very heavily indebted. The criteria would have disqualified them. Much of that sector's debt would probably have been aged debt and they would not have been able to qualify. Those figures are disturbing. The amount of qualifying participants from both of those sectors is in single figures. Half of the money has been given out at this stage. Given the way in which the scheme closed up so fast, I would have thought that by the end of April, more of the money would have reached farmers' accounts. Is there a reason for the delay or is it purely administrative?

Do the witnesses have an indication as to further demand? The demand was strong and the appetite out there for the scheme was immense. The scheme was closed in a matter of weeks after being opened and €150 million was committed. Is there a handle on what would have been the demand or requests for capital under this scheme if the scheme was still open and being applied for? Is that figure available?

Senator Paul Daly: Information on Paul Daly Zoom on Paul Daly I will be brief because Deputy Cahill has covered most of the issues I wanted to tease out. The entire fund is vouched for at this stage, but why has such a small percentage transferred into farm bank accounts? My key question, which Deputy Cahill has also asked, is how many people were refused? The scheme operated on a first-come first-served basis but how far could it have gone? Such information could give us a better indication of the extant financial woes. Many people sought to be included in the scheme and unfortunately there was not enough funding to facilitate them. Does Mr. Ashmore have any indication of those figures?

Mr. Nick Ashmore: Coming to the first question around the term of the loan and how it affects the subsidy, to be clear, the €25 million funding provided resides with the Strategic Banking Corporation of Ireland, SBCI, and is only paid out to the banks as it is required. They have to prove that they have loans in place that we are covering to justify the receipt of the subsidy. It is scaled to make sure that it reflects the actual loan portfolio and there is no risk of any further funds going to the banks than are absolutely necessary. It is the same if they claim under the guarantee. They have to try first to restructure the loans but we will they pay out for loans that go into default.

There was no predetermined split whereby we were telling them they had to do so many loans of this or that duration. It was really demand dependent, matching the loan term to the use of the funding. The larger loans have a longer duration and equate often to the refinancing of capital expenditure that the farmers have already made. They have used their own cash, their own working capital to buy a tractor or invest in a new facility, and those loans are refinanced out at the cheaper rate to restore their working capital position and inject liquidity back into the business. They tend to be larger loans. The shorter-term loans tend to be refinancing working capital, merchant credit, other creditors and that type of thing, and therefore there is a shorter duration applied, in keeping with the normalised lending approach. Those loans are delivered by the banks, subject to their normal lending criteria and procedures.

What we have achieved with the guarantee is to remove the need for security. While we have added a little bit of bureaucracy with the paperwork on those loans, to meet the information requirements of the Department and the Commission, the fact that there is no need then to append the loans to security over land or other assets is actually a major saving in terms of paperwork and time.

Deputy Jackie Cahill: Information on Jackie Cahill Zoom on Jackie Cahill Could I have a bit of clarification from Mr. Ashmore please? I am sorry for harping on the issue. On the €25 million that was available in subsidy, would I be correct in saying that if 80% to 85% of the loans were over a six year period, the demand on the subsidy would be greater? How was the SBCI able to do its sums, or has it done its sums? Is Mr. Ashmore confident that the €25 million subsidy will cater for the duration of this scheme?

Mr. Nick Ashmore: This is the first time something like this has been done in the Irish context, besides being a new institution. We have to be prudent in underpinning a scheme like this. We could not necessarily make an assumption around the mix of lending and duration within the portfolio. We had to err on the side of caution and we have put aside enough loss reserves to cover full payment of the guarantee under the scheme but also covering the full potential degree of subsidy. Should we find out in due course that the loan book is different from that original prudent assumption, that turn of events may release some cash back to the Exchequer. That funding will go back to the Department of Agriculture, either to go back into the pot or to be available for recycling into a future scheme. Whatever happens, the funding will not go to the banks unless it is absolutely required.

We could not predict going in and still cannot predict at this stage what the mix and duration of the loans will be and what exactly the loan book will look like. We are finding that as time goes on the duration is getting longer, because the longer loans are larger and they take longer to process. The smaller loans are put out more quickly. We are seeing that evolution.

It is a question of trying to balance the mix to make sure we are well covered and can absolutely fulfil the obligations placed on the SBCI in providing this guarantee. Sourcing the European funding from COSME has been a critical piece of that. We are one of the few institutions anywhere in Europe that has been able to apply the COSME programme to the agricultural sector, which is a major step forward and innovation.

In terms of the pig sector and the horticulture sector, it is notable that these loans are larger on average and as we said, the larger loans are taking longer to come through the system. It may well be that we will see more of those sectors coming through later in the drawdowns. As and when we have more data, we will provide a further update, probably monthly from here on out. The banks tend to provide us with the data in batches rather than in real time. We can provide an update in due course. Were there any further questions?

Chairman: Information on Pat Deering Zoom on Pat Deering What did qualify?

Mr. Nick Ashmore: We ask the banks to screen for qualifying criteria. Of all the loans that were presented to the SBCI through the IT system we built with the banks, we did not turn any down for failing the criteria. Trying to track loan applications, formal or informal, at the actual bank branch level or over the phone is very tricky. It is one of the really difficult areas to try to capture that last piece of information. When we structure these schemes, we try to gather absolutely the essential information to deliver the policy measure. Unfortunately, the more information we ask for, the less likely the banks are to work with us and process the loans efficiently. It becomes very bureaucratic and complicated. We do not capture quite the degree of interaction information that the banks have and that we might ultimately like to have. We have really focused on making sure that the loans that are there are qualifying, and are going to the right farmers under the right terms and conditions. That is where we focus our information gathering and our work.

Coming to the question of how far the scheme could have gone, we do not have that information. We can go back and make a further query with the banks to ask them if they have an idea. Ultimately, they did say to farmers at a point in time that they were done. There may have been other applications that could have come after that, but we simply would never know about them. Unfortunately, it is a very difficult question. It would be a great question to be able to answer to feed into further policy measures or actions.

Chairman: Information on Pat Deering Zoom on Pat Deering We have the banks in next week. It is obviously a question we can ask them.

Mr. Nick Ashmore: Yes. It may be something that we can answer with a survey in due course. We have to be very careful about data protection but we could do a randomised survey of farmers.

Deputy Jackie Cahill: Information on Jackie Cahill Zoom on Jackie Cahill Was the SBCI surprised at the rapid uptake of the scheme?

Mr. Nick Ashmore: Yes. We knew we needed a reasonably rapid uptake because we have a time limit. We have to be done and dusted by the end of August to meet the state aid window. We were a little bit concerned that we might end up having to drive the marketing and information. We had the same experience when we started the SBCI. The agriculture community is incredibly financially savvy and interest rate sensitive. They are the first to spot a good deal that helps them and they just went for it. It did catch us by surprise, I have to say, and I think it caught the banks a little bit by surprise as well. It was very well flagged. We worked very hard to talk to the Irish Farmers Association, IFA, the Irish Creamery Milk Suppliers Association, ICMSA, the Irish Cattle and Sheep Farmers Association, ICSA. We made sure we engaged with those stakeholders as much as we could so they were able then to inform their members. We were also helped by the media and Agriland, which got the word out very well.

Senator Tim Lombard: Information on Tim Lombard Zoom on Tim Lombard I apologise for being late. I was detained at another meeting. I welcome the witnesses to this space. It is a very important initiative and it has been very positive. I wish to ask about the duration of the loans. It is becoming an issue with the farming public. In the documentation, 19% of farmers are looking for loans over six years. Was that predetermined by the banks which put together the applications or did the farmers look for the loans to come in at six years? What I am finding is that the farmers who looked at the scheme and were very welcoming of it thought that the first two years should be interest free and the next four years would pay off the principal. When they went to the banks, they got a very cold response and that is why we only have 19% of them qualifying for the six years. What information does Mr. Ashmore have about those issues? Was he just given a fait accompli with the application form or did he have interaction with farmers on the ground? I do not know too many farmers who would be looking to pay off a complete loan in under one year. Most try to spread their liabilities over a period of time and the six year term was money that they thought they would never get so cheaply.  They looked for it but they did not get it.

Is Mr. Ashmore confident that the entire sum will be drawn down? It might be allocated but will it be drawn down by the institutions? I have heard stories of farmers being given approval for these loans but then being told they have to clear their stocking loans, which they have had for many years. They say they will not go near this scheme because they want to retain their stocking loans going forward. Has he information regarding the terms and conditions the banks are applying to these loans in order that farmers can qualify for the loans? The worry is that if some aspects of the terms and conditions are unattainable, the loans cannot be drawn down where the farmers are approved for them, which is a serious issue for the community. Has an audit of the terms and conditions been conducted by the SBCI to ascertain if they are outside the criteria?

Mr. Ashmore referred to security in his presentation. Have the banks looked for security in these cases? Will the SBCI seek an audit to ensure that no security was sought?

Mr. Ashmore hopes the draw down of funds will be completed by August. If not, the money will be returned to the Department or go back into a black hole. Does he expect the money to be fully drawn down? If not, how much does he expect the shortfall to be? Will it be 10% or 5% of the overall amount? It is amazing to be able to access money at an interest rate of 2.95%.

I am not critical in case Mr. Ashmore thinks that. This is one of the most unique schemes that has been introduced for the agricultural community. Given the interest in it, the scheme was closed to applications in under 20 days by the three major banks. That shows how unique it is. This needs to be examined, however, because there is an appetite for money that is made available like this. As policymakers, it is one of the key drivers we need to examine. However, farmers feel short changed by the six-year limit.

Senator Michelle Mulherin: Information on Michelle Mulherin Zoom on Michelle Mulherin I thank Mr. Ashmore for his presentation. I very much welcome the scheme and farmers are benefiting from it. The way the opportunity was grabbed by so many so quickly, while welcome, is also a reminder of the untenable rates being offers by banks for term loans and overdrafts, which farmers and businesses in general have to contend with as they try to keep their operations going. My questions relates to how the scheme is operated by the banks. What interest rates do financial institutions charge for similar products? Does the fact that the banks are in receipt of a 2% subsidy per quarter mean they are effectively generating an interest rate of 4.95% on this money? Compared to their normal operating practice where they draw down money and they pay something back on the strength of that, I presume they are paying the State nothing for this money and are just facilitating the process. Are the State or some European institution getting a cut of this or are the banks just facilitating it?

With regard to terms and conditions, I gather from what Mr. Ashmore said that nobody is being asked to offer security in respect of these loans. I presume this because they are 80% guaranteed by the State. Will he confirm that this is correct? The entire amount was committed within 20 days of the money being offered but, for non-securitised lending, it seems to be taking a long time for it to be released to borrowers.

I was trying to follow the information the SBCI is getting from the banks. Mr. Ashmore said certain information is not captured regarding how many more people might have availed of this if they could have and, therefore, we should try to assess how many farmers were not in a position to avail of the scheme and are now paying the full whack in commercial interest rates. How much are the banks charging on average for a similar product?

He said it creates further complications with the banks to ask them more questions and to glean more information. They are getting a good deal on this in respect of what is being guaranteed and they are still applying the criteria for sound lending while 80% of the funds are guaranteed. They are, therefore, only taking on 20% of the risk. They should be fully co-operative with the SBCI, as an agency of the State, regarding information it might seek about this novel product.

The SBCI was established to provide funding to SMEs and to address the problems persisting with the banks. It would not be in existence if there were not problems with the banks. The SBCI provides low cost funding to financial institutions, which they pass on to SMEs, according to its website. Banks are accessing cheap money currently on the markets and our problem is they are not passing it on yet when the SBCI can access money, they will pass it on subject to terms and conditions. Other than to get us through a difficult period, how can the agency's activities bring pressure to bear on the banks to reduce their interest rates or will they just simply benefit from a scheme the State has set up in response to a difficulty that farmers and small businesses face to which they are not responding?

It is also stipulated that the SBCI provides "market access for new entrants to the SME lending market creating real competition". How does it assess its ability to create competition given there does not seem to be any competition? The banks are doling out this money on behalf of the SBCI but they are still not reducing interest rates. To what extent are new borrowers being facilitated under this scheme as opposed to existing borrowers? How does that tie in with the agency's founding objectives to help farmers and SMEs? Mr. Ashmore might have gathered that I am sceptical about the banks in general based on their track record and the way they operate currently, particularly in view of the fact that they have access to cheap money but will not pass it on.

Deputy Martin Kenny: Information on Martin Kenny Zoom on Martin Kenny Mr. Ashmore is most welcome. It is stated, "The normal lending assessment criteria will apply". A number of applicants with whom I have spoken found it as difficult to access this facility as when they sought other loans in the past when they had to jump through all sorts of hoops. The exception relates to the requirement for security. Most people who have had relationships with the banks will probably have letters of guarantee and security lodged with them for other stuff they are doing. It is, therefore, difficult to ascertain the benefit of that in general.  Certainly the issue is there may be a lot of people who looked at this, backed away and decided it is not for them and is not going to work because if normal lending criteria apply, the banks are setting a very high bar at present and if they are unable to get a normal loan, they will be unable to get this one either. That is one issue I have come across with many people.

The next point is similar to the point raised by Senator Mulherin regarding the SBCI's core business. Is the SBCI doing a lot of work with the agrifood sector and small businesses? There are many people involved in the small agrifood industry such as artisan producers developing small products who are starved of capital and who cannot get off the ground because they find it so difficult to get the banks to deal with them. In respect of the SBCI's small businesses, big plans programme, is the SBCI doing much work with them? Are there opportunities to find more space for funding for that sector?

Mr. Nick Ashmore: I will try to work my way through the points raised. In respect of Senator Lombard's question about duration, we talked about duration earlier. This was really determined by the demand and the use of the funding. The loans are available from one to six years. The duration is determined by what farmers applied for and what they were using the loans for. If those loans were for things like lower-cost stocking finance or working capital, they tended to be of shorter duration because it is about trying to apply the right loan solution to the right use. If it was refinancing a tractor that had been purchased or a piece of equipment, it tended to be of longer duration because it is to finance the purchase of a larger asset. What one sees with the size of the loans is that those loans of longer duration tend to be larger loans as well. We do not have a predetermined expectation of what that mix would be so we wanted to allow for those situations. It concerned the juxtaposition between the banks' normal lending criteria and the normal way they apply loans to farmers. I think there might be a mismatch of expectations given that the scheme was explained in simple terms. With loans of up to six years, farmers are naturally going to apply for the longer term in certain cases. We do not have that split of farmers who applied for longer-term loans and got shorter-term loans and farmers who just applied for shorter-term loans. One feature of the market is that borrowers remain wary of banks. We are still seeing the SME community as a whole, including farmers, pay down debt at a very rapid rate. There is still wariness regarding being in debt to the banks for longer periods. We think there may be a fair proportion of farmers who would only have applied for shorter-term loans because they do not want to be looking over their shoulders for the next six years. They would rather go in, get what they need and get out again. The farmers who tried to get something but did not get what they wanted are more likely to come forward and ask about their situation. We very much recognise that. There are lessons we will learn from this exercise that we will try to apply going forward. As I said, this is the first time we have done a loan scheme of this nature. Many lessons have been learned.

On Senator Lombard's point about it being a unique scheme and being able to use it in different ways, the EU uses these schemes all the time all over Europe and has done so for a long time because many other European countries' banking markets are built on guarantee programmes. Portugal is a massive user in this space. Italy has something like 2% or 3% of GDP in guarantees to SMEs. It is not being used in the Irish model because the banking system grew up here in a different way. It was much more of a relationship-based model and was not built on mutual guarantee schemes in the way that the Italian or French banking systems were. European schemes are often structured this way and go straight through those systems into those markets very efficiently. They do not work the same way here and this is the first time we have been able to get one to really work. It is a great precedent to set. It is a good market to be able to demonstrate to the banks and other lenders in the future that this is how we can do this and it can work really well. Other supports at a European level that can be deployed in this way are available. The European Commission is moving and applying pressure to move away from grants towards the use of these types of financial instruments. In many cases, it can provide a simpler solution. Maybe it is a single application for a long-term low-cost easy loan to fund a piece of capital expenditure rather than a grant application plus a loan application because it is a 50:50 piece. We see other options and ways of doing things in this context that may be more useful or easier to use down the line.

In respect of the point about terms and conditions and whether we can review those, those loans are unsecured. If we find in a situation where a bank has required security that it does not qualify for our scheme, we will withdraw the guarantee. The onus is on the banks to make sure they have met the criteria and have applied the loan and lending in the right way. We have extensive audit rights under this scheme. We will have to see whether we would catch someone at that point but we certainly can include that in our audit criteria and review. We will have to do an audit of this scheme at some point. With measures like this, it is very important that we and the Department assess the impact going in and the impact coming out. We would certainly be supportive of a review after the fact to go back and see whether it did what we wanted it to do, whether it got to the right farmers and how many farmers would say in response to a survey that they wanted to get it but could not. Every farmer's situation will be slightly different. If there are situations where they are not comfortable with the terms and conditions of the loan and have chosen not to draw it down, it is quite hard to legislate for every situation. However, we would be happy to look at any individual situation if anyone wants to bring it to our attention.

We are confident that the scheme will be drawn in time given that a full set of applications is in and we know farmers will not be shy about giving the banks a hard time as to why they have not got their money yet. In some cases, there will be paperwork that takes a bit longer. We are seeing the loans come through in volume at the moment. We hope it will be wrapped up in the next couple of months and fully drawn down. We expect it to be fully drawn down.

In respect of Senator Mulherin's question about other schemes and other interest rates, this funding is comparable with a number of different options. They include overdrafts, the Glanbia MilkFlex product, which relates more to supporting investment loans, merchant credit and standard variable loans. Banks overdrafts are 9% to 12%, the Glanbia MilkFlex fund is about 4.2% and merchant credit is anywhere between 9% and 10% up to 14%. This is quite insidious because many farmers do not actually realise what they are paying in that context. Standard variable rates average somewhere around 6% or 6.5%. This is not comparable with the normal SBCI agricultural investment loan scheme loans, which average around 4.5%, because those are only for investment purposes. They are not for working capital purposes. We had to go down that route for state aid reasons.

The banks are specifically not generating any extra profit out of this scheme. This is designed to be cost-neutral for the banks. That is very important for state aid rules. We had to go through a lot of work with the banks to ensure we had the right mechanisms in place to make sure we could verify that they were not upping the price or doing something to be able to avail of some of the support that was coming through. We operate in the same way. The SBCI is a pass-through entity. We do not make a profit or major return on this. We simply charge on the small amount of administration costs of the scheme and a premium for the small amount of risk we share within the overall scheme. We design it in such a way that it is absolutely neutral from the banks' point of view so they are not making any more money but they are not making less money either.

Senator Michelle Mulherin: Information on Michelle Mulherin Zoom on Michelle Mulherin How is this in keeping with the SBCI's objectives to create more competition in the market when the SBCI is using them to roll out this funding?

Mr. Nick Ashmore: There is a trade-off and it is something we had to deal with when the SBCI was first set up. With schemes like this, there is real impetus to get it to market as quickly as possible. They have this unique asset, which is massive distribution channels. When we started the SBCI with our low-cost liquidity loans, we started with the banks and then started to add competitors after that.  We now have five non-bank competitors to the banks providing SBCI funding into the market and active competition. As a result we have seen a much more active leasing and HP finance market for small businesses. This is the first instance of this one. We would have dearly loved having a non-bank competitor for the banks in this space but these are term loans. In fact, almost all the non-bank competitors in the market that would compete with the banks are focused on asset-based financing, leasing and invoice discounting. It is a real challenge and is one of our core long-term objectives. We would love to get a competing term lender into the market but it is challenging because there are a number of very significant barriers to entry. First, a lender would need a distribution network. Second, it would need the right expertise. Third, it is a small market so a high quality team might seek to set up in the UK or somewhere else.

There were a couple other applicants for this scheme. Unfortunately, they did not meet the qualifying criteria. We very much hope to incorporate a non-bank competitor in a subsequent scheme. It is a question of developing the market over time. Unfortunately, we cannot fix that aspect straight away. We have seen much greater competition where we have brought non-bank lenders into the SME space on the other side. We hope for risk sharing the next time out and then, maybe in time with the credit guarantee scheme, we will be able to work with groups that are not banks to provide real competition. That is the most significant and effective way to address the interest rate premium that Irish SMEs and farmers must pay versus other countries. The Central Bank has carried out very good research on why the premium exists. It concluded that the reason is mainly down to an historic loss rate and profile within the Irish market, which is brutal, to be frank. It also identified another element as being a lack of competition. There are indications, if we can get more competitors into the market in this area, that we should be able to bring down interest rates, but it is not something that we can do very quickly.

We collect certain data from the banks to meet the requirements of the European Commission for the deployment of its funding. We have to collect certain data for the European Investment Fund and the Department of Agriculture, Food and the Marine. We must also collect data for our own purposes so that we can track the loan portfolio and the risk we are taking. We get high level data about the loans and their duration, term, interest rate, credit rating, region, sector and size. All that is standard information. Then we get an update on the status of the loan every quarter. It shows the new balance and whether there has been a change in the loan and that kind of thing. We also have to collect verification that the farmers have made the right declaration that confirms they qualify for the loan and comply with the qualifying criteria provided by the Department of Agriculture, Food and the Marine, for which members may have seen the package provided. The declaration pertains to things like the membership of environmental schemes and other qualifying options which were part of the qualifying conditions for funding by the European Commission. We collect a good data set. We are quite careful that we cannot use the individualisation of that data under data protection rules. Therefore, we cannot survey participants on how they like the loan. We are limited in that context. We can survey, on a random basis, to track that information.

In terms of the normal lending criteria, we focused in this instance on making the loans easier to obtain by reducing the security requirement. It is another thing and much more challenging to change the credit criteria as a result of a guarantee. These guarantees are capped portfolio guarantees. There are two types of guarantees on the market. There is one uncapped. A capped portfolio guarantee says that we will take or guarantee 80% of the losses up to the first 15% of the loans to fail. We set that roughly where we think the loss rate may reach. We have designed this item to use the cash both for the subsidy but also to reserve it for the loss reserve and the COSME guarantee. We do not put them in place because they are nice to have. We put them in place because we think these losses will occur. If loan losses go beyond 15% of the portfolio, the bank is 100% at risk at that point. We are not taking away all the risk, up to 80%. We are only taking it on the first expected loss rate within the portfolio. There are other alternative European measures that provide uncapped counter-guarantees but they are more focused on innovative companies rather than smaller businesses like farms.

I will respond to the questions on the sector in general, the small food producers and food companies. The SBCI broader lending portfolio covers term lending, leasing, vehicle finance, fleet finance and invoice discounting. At the moment the portfolio shows an average loan size of around €40,000. We have a high proportion of micro businesses that actively borrow using that lower cost funding. Within that there is exposure to the food and food production sector. We are also very conscious of the impending impact of Brexit. We are not a policy setting body but a policy delivering body. It is important we understand what is going on in the market. Recently the SBCI actively formed its own research to collate and gather as much research and information on the SME and farming sectors as we could so that we could feed into the policy-making process and understand the issues. We hope that all this will help us design policy measures that are targeted, effective and work in the Irish market.

One of the big challenges is that while there are many supports available at a European level, without adapting them to work in Ireland, it is very difficult to get them to work here. The Irish market differs from the markets across Europe. It is different in the nature of the banking system, the attitude of borrowers to lending and borrowing, their approach to investment and the historical impact of the recession on attitudes and people's relationships with the banks, which Senator Mulherin alluded to. Repairing relationships is a work in progress. It will be some time further before SMEs are really comfortable, stop paying down debt quickly and start to borrow to invest again. At the moment far more of them use their own resources to make investments rather than borrow.

Chairman: Information on Pat Deering Zoom on Pat Deering Mr. Ashmore mentioned the future several times in his presentation. Does he envisage the SBCI being involved in a future scheme? If so, what is the timescale?

Mr. Ashmore also said that no farmer had lost out because of the qualification criteria. Is he aware of the number of farmers, if any, who did not make the cut when it came to the time?

Mr. Nick Ashmore: In terms of the future, we see the SBCI as a long-term part of the financial architecture in this country. It is a flexible and adaptable platform to deploy policy measures in different formats that are appropriate for issues as they arise. What is more, they must be structured in a way that works in the Irish market.

It is difficult to confirm a timescale at the moment. I draw the Chairman's attention to the fact that in the past hour, as this committee sat, the Minister for Jobs, Enterprise and Innovation released a press statement on the fact the SBCI works with her Department, the Department of Finance and other agencies to consider similar measures that would work for Brexit. One measure will work on a cashflow basis and the other will work on an investment loan support basis. They are very much development activities and no concrete details have been confirmed. A decision has been made to progress with developing those types of initiatives. They are certainly not something we will bring to the market very quickly. Typically, as we have seen with the agri-scheme, it can take up to six months to do these things. A lot of work still needs to be done on them.

We do not know the number of farmers who did not qualify for the scheme. We know that all the ones who have come through to us on the system have qualified. One query may have gone back for further information.

Chairman: Information on Pat Deering Zoom on Pat Deering Would people form a queue if the SBCI opened a scheme tomorrow morning?

Mr. Nick Ashmore: Yes, simply because the scheme was priced at an attractive level. It is important to note that the scheme was built off the back of a piece of exceptional aid from the Commission. That aid came not just with cash but with an opportunity to put in a further matching amount from the State. The scheme opened a window in the state aid rules that allowed the funding to be deployed in this way.  That accounted for approximately €21 million of the funding, the remainder of which was allocated to be able to support non-livestock farmers, that is, farmers in horticulture, tillage and so forth. We deployed loans in that sector under the de minimisrules. The state-aid window applied only for that point in time. The lack of such a window thereafter meant we could not, off our own bats, decide to do another scheme like this in the same way. De minimisis an open-ended arrangement but in this case it is available for a much smaller proportion of activity. We found that these exercises need to have a certain amount of scale if they are to work. While we do not how much more demand there would be if the scheme were still open, there would obviously be more demand.

Deputy Michael D'Arcy: Information on Michael D'Arcy Zoom on Michael D'Arcy On the eligibility criteria, Mr. Ashmore indicated that he does not know how many people have been excluded from the scheme.

Mr. Nick Ashmore: What we see are those who have qualified under the scheme. We will guarantee up to €150 million of lending across the three banks and the main concern for us is to ensure we are guaranteeing loans that qualify and meet the terms and conditions. Unfortunately, it is impossible to know how many more there may have been after the point at which the banks decided to close the scheme to new entrants.

Deputy Michael D'Arcy: Information on Michael D'Arcy Zoom on Michael D'Arcy I am talking about the eligibility criteria.

Mr. Nick Ashmore: We designed this to work for every sector. As the exceptional aid only came for livestock farmers - which caught a vast number of farmers - the Department and Minister were very concerned to ensure we made this work for all farmers, not only livestock farmers. The additional funding was provided and the de minimis arrangements put in place for this reason. In the past, we have not used de minimis state-aid options for lending because, for instance, many beef farmers get a lot of emergency fodder in and one does not know from one year to the next whether they will need it. If they have used up their de minimis allocation on a loan, they would be precluded from getting that.

Deputy Michael D'Arcy: Information on Michael D'Arcy Zoom on Michael D'Arcy I am talking about criteria relating to farm partnerships and the green low-carbon agri-environment scheme, GLAS.

Mr. Nick Ashmore: The intelligence we received from the Department was that pretty much everybody would qualify under at least one of those schemes. We have not heard of anyone who has been excluded on those grounds.

Deputy Michael D'Arcy: Information on Michael D'Arcy Zoom on Michael D'Arcy Is Mr. Ashmore stating that nobody is being excluded?

Mr. Nick Ashmore: As far as I am aware, nobody is being excluded. One of the things we should do at the end of this process is conduct a survey to find out if there were instances of farmers who were in those circumstances.

Deputy Michael D'Arcy: Information on Michael D'Arcy Zoom on Michael D'Arcy I suggest such a survey be done now.

Mr. Nick Ashmore: I take the Deputy's suggestion but it would be a little tricky because a great deal of data and information are still coming through.

Deputy Michael D'Arcy: Information on Michael D'Arcy Zoom on Michael D'Arcy If the SBCI were to assess the information that is currently available, it would be able to ascertain whether people have been excluded. If people have applied to one of the three institutions and do not meet the criteria, they will not have an opportunity to secure a good value loan at an interest rate of 2.95%. Mr. Ashmore stated that the intelligence available to the SBCI from the Department indicated that everybody would be covered. It is important to find out, sooner rather than later, whether that is correct.

Mr. Nick Ashmore: While I understand that, unfortunately the eligibility criteria are applied to the European Commission funding, which means that anyone who did not qualify under one of the conditions would not be eligible under the scheme. The exceptional aid came through in the European regulation.

Deputy Michael D'Arcy: Information on Michael D'Arcy Zoom on Michael D'Arcy Perhaps Mr. Ashmore will make the specific regulation available to the committee.

Mr. Nick Ashmore: Yes, I will do so.

Chairman: Information on Pat Deering Zoom on Pat Deering I thank Mr. Ashmore and Ms Sweeney for appearing before the joint committee. It is useful to have an ongoing engagement on this matter. Representatives of the three financial institutions involved in the scheme will appear before us next week as a follow-up to today's highly useful presentation.

The joint committee adjourned at 6.55 p.m. until 4 p.m. on Tuesday, 9 May 2017.


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