Dr. Cecil Beamish:

Demand for seafood is growing at a very rapid pace. This demand is linked to global population growth. In 1999 global population levels passed 6 billion for the first time, last year they passed 7 billion and in 2025 they will pass 8 billion. In conjunction with changes in dietary habits and increased demand from Asia, this has led to a rapid rate of increase in demand for seafood. It is generally estimated that global capture fisheries have reached the maximum sustainable output of approximately 80 million tonnes per year. Demand for seafood at a global level will, therefore, increasingly be met through aquaculture production. The Food and Agriculture Organisation of the United Nations estimates that an additional 42 million tonnes of farmed seafood will be required annually by 2030. Aquaculture is already producing almost 50% of the world's seafood. In 2010 global aquaculture production reached 60 million tonnes, with an estimated value of was $119 billion. This was an increase of nearly 8% on the previous year. Production is estimated to have increased further to 64 million tonnes in 2011.

European aquaculture production now stands at approximately 2.5 million tonnes per annum. This accounts for around 4.2% of world aquaculture production. Countries within the European Union produce approximately 1.2 million tonnes of aquaculture product. In the European aquaculture context, salmon has been the main species to be developed. Demand for salmon has been growing very well. The current size of the farmed salmon market is approximately 2 million tonnes. Demand in this regard is still developing. In Europe, which is considered to be a mature market, demand for salmon has been growing by around 7% per annum for the past ten years. The Russian market for salmon is growing at 27% per annum. Close to 60% of world salmon production involves farmed salmon. Much of this comes from Norway, Chile, the UK and North America. It is estimated that the Atlantic salmon market will continue to grow by 4% per year in the period 2013 to 2020.

Norway is now the world's largest producer of farmed Atlantic salmon, generating more than 1.2 million tonnes in 2011. More than 838,000 tonnes of that, with a value of 29 billion krone, was exported. Norway has been developing its industry since the early 1970s. It was targeted as a means of restoring the livelihoods of rural fishing communities whose economies have become depressed on foot of a decline in wild fisheries. Norway's initial production was less than 500 tonnes. This was largely generated by small family businesses and sold to local markets. In recent decades the industry has developed very rapidly and some vary large multinational companies are now operating in it. Farmed fish has become Norway's fourth largest export commodity after oil, gas and metals.

Within the EU, the UK produces farmed Atlantic salmon in significant quantities. The vast bulk of this is generated in Scotland, which is the largest farmed Atlantic salmon producer in the EU and the third largest globally. In 2011 Scotland produced 158,000 tonnes of farmed salmon, worth £584 million. Scotland did not begin farming salmon until the 1970s. In 1971 it produced 14 tonnes of farmed salmon. This had increased to 40,000 tonnes by 1991. By 2001 it had increased again to 138,000 tonnes. Farmed salmon is now Scotland's largest food export product.

To set the context for any discussion we might have on aquaculture, we must compare the situation in Ireland with those which obtain in Norway and Scotland. Ireland commenced salmon farming in 1974 and in 2012 we produced just 14,500 tonnes of farmed salmon. The fact that Irish aquaculture production has not grown but has a substantial opportunity for growth was recognised in Food Harvest 2020, which the Government has adopted as its food strategy document. Food Harvest 2020 identifies ways in which the seafood sector can increase turnover to €1 billion and employment to 14,000 full-time equivalent jobs by 2020. Food Harvest 2020 also calls on the aquaculture industry to play its part by expanding the volume of its production by 78%. It seeks that the relevant State agencies, Bord Iascaigh Mhara and the Marine Institute, should continue research and development work in the areas of offshore aquaculture and alternative species aquaculture.

In the context of the Food Harvest 2020 recommendations, BIM has begun to consider new fish farming production areas in deeper waters. This is a response to the fact that the Irish aquaculture industry has previously been constrained, in part because more than 80% of its operations are located in inshore areas governed by EU environmental directives, primarily the Natura directives. The concept is that situating the larger aquaculture operations in deep waters would place them outside Natura areas, thus minimising impacts, simplifying licensing requirements and taking account of the necessary environmental limitations. This has led to an examination of potential sites by BIM and the Marine Institute and also to a consideration of oceanographic and other data which indicate what sites might be most suitable for allowing Irish aquaculture to expand, given the opportunity.

BIM estimates that one deep-sea salmon farm could potentially produce 15,000 tonnes of organic salmon, generate more than €100 million in exports and create 500 direct and indirect jobs. In view of growing international demand for salmon, it is perceived that there would be significant interest on the part of operators to run such a farm. In addition, there would be scope for expansion. I am seeking here to establish an economic context for any discussion we may have in respect of aquaculture.

The aquaculture operating in a marine environment is subject to a variety of regulatory regimes which seek to ensure that it is operated properly, is located well and that its impact is minimised. In recent years, a key feature of aquaculture regulation has been compliance with the EU birds and habitat directives. Those directives apply to special areas of conservation, specially protected areas, the latter having particular relevance for birds. Most aquaculture in Ireland is carried out within either special areas of conservation or specially protected areas. In 2007, the European Court of Justice declared that by failing to take all measures necessary to comply with the EU habitats and birds directive in respect of the authorisation of aquaculture programmes, Ireland had failed to fulfil its obligations under that directive. This required a significant re-thinking of policy. In negotiations with the Commission to address the judgment, the process was agreed with the European Commission on how to move forward to implement a licensing system in those specific areas which would be in compliance with the Natura and birds directive.

That process includes data collection in 91 bays and estuaries around the coast. That data collection was a major exercise. It would not be possible otherwise to move to a situation where decisions could be made in compliance with the habitats and birds directive. The data collection covered both the seabed, the water column and migratory species, whether fish, sea mammals or birds. It required the development of a time series of data to allow for judgments to be made, the analysis of that raw data and the setting of individual conservation objectives for each of those areas by the National Parks and Wildlife Service.

Appropriate assessments had to be carried out on each licence application or fishery plan against the detailed conservation objectives which were then set on the basis of the data available to the National Parks and Wildlife Service. The completion of the appropriate assessments can then lead to determinations on the licences and on the management of the fisheries on the basis of the appropriate assessment.

The Department of Agriculture, Food and the Marine, has been working with the Marine Institute, BIM and the National Parks and Wildlife Service, to achieve compliance through a multi-annual work programme to build up that profile of data. A key factor of that work programme is the identification of prioritised bays, based on the number of aquaculture sites, the availability of scientific data and other factors. That work is ongoing and is a significant financial, administrative and scientific investment by the State seeking to resolve the issue and to move to a situation where aquaculture decisions can be made in compliance with the habitats and birds directives and to allow the continuation and, where appropriate, the development, of the aquaculture industry in those locations.

A regularly arising issue is the backlog of licences which has built up over a period of time, largely due to the decision on the Natura compliance. The low number of licences issued since 2007 is a result of that decision and the requirement to build up a complex system which is in compliance with the Natura directives. Initiatives were taken during the period. Last year, 115 licence determinations were made by the Minister for licence applications in non-Natura areas. This year, the expectation is that this number will be exceeded and that for the first time it will include determinations in Natura areas.

The appropriate assessments have been completed at this stage in respect of Dundalk, Roaringwater Bay and Castlemaine in County Kerry. In respect of Castlemaine, the public notice phase of the licensing process has concluded and the process of finalising licensing determinations is at an advanced stage. That largely affects the mussel industry in Castlemaine.

BIM has submitted an application to the Department for an aquaculture licence for the cultivation of fin fish near Inis Oirr in Galway Bay. That application and its accompanying environmental impact assessment statement is being considered under the provisions of the 1997 Fisheries (Amendment) Act and the 1933 Foreshore Act. They provide for extensive consultation with stakeholders and also for a general period of public consultation. The public consultation stage of the assessment process in respect of the application is now closed. A total of 410 valid submissions were received by the Department. As the application is under active consideration as part of a statutory process, it would not be appropriate to publish the submissions in advance of a determination in respect of the case. All aspects of the Galway bay application are currently being examined by the Department in conjunction with its scientific, engineering, technical and legal advisers. All submissions received as part of both the statutory consultation stage of the process and the general public consultation stage, will form an integral part of the Department's consideration of the application. There is extensive consultation associated with that process.

It is also important to clarify that as the application is under active consideration as part of a statutory process, it would not be appropriate for me to comment on the merits or otherwise of the application, pending the completion of the formal assessment process by the Department. The application process is governed by legislation and must not be subject to parallel discussions which could be misconstrued as indicating any predisposition on the licensing authority in respect of the application. It should also be noted that the legislation provides for possible appeal of any ministerial decision to the Aquaculture Licence Appeals Board, an independent authority for the determination of appeals against decisions of the Minister.

I refer to other deep water sites. A site off Inisturk in County Mayo is also being examined by BIM for suitability as a deep sea site. Other aquaculture licences which have been the subject of recent comment include an application received by the Department from Marine Harvest Ireland, a large aquaculture company operating in Ireland, for an aquaculture licence in respect of a proposed salmon farm at Shot Head in Bantry Bay. That application is under consideration by the Department in accordance with the legislatory framework. As that application is under consideration it would not be appropriate for the Department to comment.

Another issue which arises about discussion on fin fish aquaculture in particular is that of sea lice, a natural organism living in the marine environment which lives on approximately 40 different wild species of fish in the sea. Sea lice are a permanent feature. Control of the sea lice is an issue for aquaculture and it continues to be part of the overall regulatory process applying to aquaculture. Control protocols are in place and these are operated by the Marine Institute on behalf of the State. These include inspections of farms by the Marine Institute, a total of 14 inspections per year. The results of those inspections are made public. The inspection regime is independent. When the inspection finds a sea lice level on a farm or site is above what is known as a trigger level, a mandatory treatment is ordered. The protocols have been the subject of detailed investigation and testing by the EU Commission in response to a complaint from a member of the public in respect of the effects of sea lice on wild salmon. In October 2012, the Commission closed its investigation of this complaint in the State's favour, following its examination of all relevant matters. The Commission also indicated it regards the sea lice protocols operated in Ireland as representing the best international practice.

During the period when licences have not issued during the data collection process on the bays covered by Natura, a parallel process was done to upgrade the licence instruments that would be applicable once the new system came into being.

The new aquaculture licence scheme provides a much more comprehensive set of obligations and rights for licence holders to ensure that operations are fully compliant with all relevant obligations.

I shall outline the key features of the new licences. There is a move to a standing stock biomass for fin fish as a means of measuring production capacity at an aquaculture site. There are enhanced provisions on environmental monitoring. There is greater clarity on the requirements for operators with regard to operational conduct and monitoring. There is the possibility of group marking of sites for navigational purposes so that a significant number of operators can work in tandem in an area. Specific provisions cover company registration, dissolution, tax certificates, payment of fees, etc. The new licence templates are also specific to particular sites so are a more targeted instrument than previous ones. The Department held a number of information seminars for industry when the new templates were introduced.

I hope I have put things in context for members regarding the overall global aquaculture sector, the demand for aquaculture products, international development of the industry and the regulatory regimes in place to develop aquaculture in Ireland. The sector will play a much bigger part in seafood production in Ireland and globally and that is what the Department has seen in all countries.