Andrew Doyle (Wicklow, Fine Gael)
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The background to this matter is a question I raised in regard to the €7 million competitiveness measures in respect of the food development initiative introduced recently by Government, the objective of which is to improve food sector competitiveness in exports markets. The reality is that unless something is done to address the serious devaluation of sterling, this will count for nothing and will be money down the drain. Mr. Aidan Cotter, chief executive of Bord Bia stated in 2009 that the underlying performance of the industry reflected in an estimated volume a decline of almost 3%, which was impressive when set against current challenges. He also stated that sterling remains the single biggest issue for the industry, adding that it was estimated that in 2009 the depreciation of sterling would reduce the value of exports to the UK by €400 million. The actual figure in this regard was €3.1 billion or 44% of all our exports. This goes beyond food and food exports and is our single biggest exporting indigenous sector, which is hugely dependent on the UK. We cannot devalue or deal with this because we are part of the euro and the restrictions on us in this regard.

I wish to make two suggestions. Will the Minister present a case to the EU for assistance on the grounds that our food sector is at a major competitive disadvantage owing to the devaluation of sterling by our neighbour, the UK? This creates serious trade distortions in respect of cross-Border trade and for our exports. It is a competition issue which should be addressed by the Irish Government and the EU before the food production sector is irreparably damaged and jobs in the sector are lost forever. The second line of support is the availability of a State-backed credit insurance scheme which would assist exporting companies in dealing with increased costs. A similar scheme is already in place in Hungary, France, Belgium, Sweden, Holland, Austria, Germany and Luxembourg. In recognition of the difficulty of exports across the EU, the European Commission has, in response to a parliamentary question by Mairead McGuinness, MEP, simplified the rules and application procedure for countries seeking sanction to put in place a credit insurance scheme.

The €7 million competitiveness measures are supposed to protect jobs and viable companies and businesses across the food exporting sector. Unless we put in place a credit insurance scheme, this will count for nothing. Has the Minister any intention of supporting the food and drinks industry group, IBEC, which has made a strong case for the introduction by Government of a viable export credit insurance scheme? While the Government has introduced all sorts of initiatives, including innovation funds and policies, not one job has been saved or created as a result. This is an indigenous sector. Surely, we can introduce measures already streamlined and approved by the EU to protect an industry worth protecting and which can sustain and create more jobs.

I look forward to hearing the Minister of State's response. 5 o'clock

Tony Killeen (Clare, Fianna Fail)
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I thank Deputy Doyle for raising this matter. Underlying this matter on the Adjournment is of course the effect of currency volatility, in particular in respect of sterling and Irish food exports. As the Deputy will be aware, national currency adjustments are not possible for Ireland or other members of the euro group. While Ireland successfully pressed for targeted EU market management measures in the milk sector in 2009, EU funding is not available to aid the food sector in a single member state. EU state aid rules preclude export subsidies and currency assistance within the Single Market. This has a greater impact on Ireland than on other euro member states as 44% of Irish exports go to the UK, our nearest market and one with similar consumer and retail demands. In the face of this challenge, the industry has shown great resilience. In volume terms exports in 2009 were at 97% of 2008 levels despite a 13% fall in value.

This means we have had to look to a variety of other measures as well as the food industry's own resilience and adaptability in order to sustain this export oriented sector. During 2009, Bord Bia implemented a comprehensive set of promotional programmes and services, which were adopted in consultation with industry bearing in mind the impact of the sterling differential on competitiveness. This included a marketing fellowship programme to support companies seeking market opportunities and assistance in developing and bringing new products to market. A second Bord Bia-Smurfit-UCD marketing fellowship programme will be launched this month. Marketplace Ireland 2010, hosted by Bord Bia in Croke Park, enabled 150 food and drink companies to conduct more than 3,800 meetings with 400 buyers, including 300 from 27 international markets. The feedback from companies is that most expect to do new business. The feedback from buyers is very positive particularly as regards the innovation and breadth of the Irish food sector offering.

Food companies have also benefited from very specific schemes of assistance to industry. Some 21 internationally trading food companies, which were undertaking development expenditure to reduce costs and gain sales in overseas markets, have been approved €14.8 million under the enterprise stabilisation fund operated by Enterprise Ireland. Amounts totalling €13 million have also been approved to 69 food companies under the employment subsidy scheme.

The roll-out of a €100 million fund to support the food industry will commence this year with €9.5 million provided in the Department's revised Estimates for competitiveness and marketing initiatives. Enterprise Ireland will apply €7 million from the fund on measures to enable key exporting companies to adopt sustainable best-in-class lean business practices and to assist them in developing leadership and management capability to best international standards, as recommended in the report of the food expert skills group. Innovation measures will also be promoted. In addition, €2.5 million is being provided to Bord Bia for a variety of marketing initiatives building on marketplace and aimed principally at assisting the industry broaden its export reach.

In terms of the whole food supply chain, Bord Bia is in the process of extending its quality assurance programme to incorporate new environmental criteria that will position Irish food exporters as market leaders and provide a new platform for promotion in the context of the increasingly important sustainability agenda.

The Agri-Vision 2015 report and the Cawley report identified the delivery of safe, high quality, nutritious food, produced in a sustainable manner for high value markets as the optimum road for the future of the Irish food industry. The recommendations spanned the entire food chain from primary production through processing to market access, which is key to developing export potential. Implementation of the action plan is on target.

A focused strategy to chart the direction of agrifood, forestry and fisheries for the next decade to 2020 will be completed by June 2010. A high-level committee from the full food chain - consumers, retailers, consumer food producers, primary processors and farmers - has been appointed by the Minister for Agriculture, Fisheries and Food to undertake this task. A web-based public consultation process has also been initiated, and the output of the Food and Drink Summit - Building Ireland's Largest Indigenous Industry in April, which is being facilitated by the Harvard Business School and hosted by Bord Bia, will also feed into the 2020 strategy.