Oireachtas Joint and Select Committees
Tuesday, 24 March 2015
Joint Oireachtas Committee on Agriculture, Food and the Marine
Annual Report 2013: Bord Iascaigh Mhara
I remind members and delegates to ensure their mobile phones are switched off completely for the duration of the meeting as they interefere with the broadcasting of proceedings.
I welcome from Bord Iascaigh Mhara Mr. Michael Keatinge, interim CEO; Mr. Donal Maguire, director of aquaculture development services; Mr. Donal Buckley, business development and innovation director, and Mr. Connie Kelleher, director of corporate services. I thank them for appearing before the joint committee to discuss the annual report of Bord Iascaigh Mhara for 2013.
By virtue of section 17(2)(l)of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, 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.
I invite Mr. Keatinge to make his opening statement.
Mr. Michael Keatinge:
I thank the Chairman and members of the joint committee for allowing us to come before them to present our annual report for 2013. As the State's seafood development agency, Bord Iascaigh Mhara, BIM, is tasked with the conservation and development of the seafood sector. We employ 123 persons, some of whom are part-time. Our current staff number is one hundred and fourteen and a half full-time equivalent positions, a reduction of 30% on the number employed in 2009. Despite this reduction in numbers, I am glad to report that 2013 signalled the start of an ambitious corporate plan by BIM entitled,Capturing Ireland’s Share of the Global Seafood Opportunity 2013-2017. This strategy is consistent with the Government’s wider strategy for the agrifood sector. This tailored plan includes ambitious targets and encapsulates a clear vision for the seafood sector. Put simply, we are intent on growing a thriving seafood industry. We will do this by expanding the raw material base, adding value and developing efficient supply chains that together will deliver on the Government’s targets for the seafood sector and create sustainable jobs. We believe that by delivering on these objectives seafood sales can be increased to in excess of €1 billion. We can add up to 45,000 tonnes of new raw material to the seafood base and thus create up to 1,200 jobs.
Our strategy informs the business plan for BIM up to 2017 and beyond. More specifically, it involves working closely with the industry to take advantage of current and future market opportunities through enhanced sustainability which we believe is central to everything we should do, increased competitiveness, greater industry scale and expansion of the raw material base, all underpinned by appropriate levels of training and professionalism throughout the sector.
I would like to set out in more detail the five key strategic objectives of the plan.Our first concern is to add valueto the fish we land, be it farmed or caught in the wild. The demand for seafood is growing and in the next decade projected to grow by 42 million tonnes per annum according to the Food and Agricultural Organization, FAO. The major factors contributing to this growth are the increasing world population, the growth in spending power in Asia and the preference in that region for seafood. The growing demand for seafood in Asia may be expected to have a knock-on effect in traditional markets in Europe which are now almost 65% dependent on imports. BIM is confident that the combination of these factors is creating new business opportunities for the Irish seafood industry. If the industry is to gain advantage from this prospective growth in demand, it is imperative that it expand output if it is to compete in the global marketplace. Therefore, it is essential that additional sources of raw material are sought to generate the expanded levels of new and innovative value added seafood products that will be needed to capitalise on the emerging market opportunities.
The second objective is the scaling of the sector.BIM firmly believes there is a big opportunity to grow the sector from its current turnover level of approximately €850 million to in excess of €1 billion.
To do this, we need large-scale operators. The seafood industry employs up to 11,000 in fishing, fish farming and fish processing and these jobs are located in peripheral coastal regions. Family owned firms are dominant. There are 180 registered seafood companies with processing facilities in Ireland. A large proportion of this number are small scale firms, with a turnover ranging from €3 million to €10 million. In addition, there is a significant number of artisan scale operations supplying dispersed local markets such as shops and restaurants. This is in contrast to a typical European competitor which has a turnover in the order of €50 million.
Compounding the lack of scale is our geographical position on the periphery of mainland Europe. In reality, this means that it can be very difficult for Irish seafood companies supplying perishable product to compete with much larger European counterparts in the marketplace. This is particularly relevant when dealing with buyers from large continental companies that require daily delivery arrangements. In the next five years BIM will lead the sector in its efforts to build scale and create the necessary level of competitiveness to compete in the long term and realise its capacity to grow revenue and generate jobs. Appropriate scale, particularly in defined product categories, will enable a company or a group of companies working collaboratively to invest in marketing, research, advanced business and monitoring systems, all of which will open access to new markets and improve company profitability. BIM commenced this work in 2012 with the route to market programme and in subsequent years, through the implementation of this strategy, will continue to work with the industry on an ambitious business development strategy.
The third objective concerns the critical supply of raw materials.There is a big future in processing in Ireland and adding value to catches must be at the heart of it. To do this, we need to increase the volume of raw material supplied by various means. When one looks at the global market, it is clear that Ireland is a small player in the world seafood scene. As a consequence, Irish seafood companies cannot and should not try to compete on a cost basis against cheaper third country produce such as pangasius or tilapia which are heavily imported into the European Union. If we are to maximise the return from our precious seafood resource, we need to differentiate Irish seafood products from those of lower cost producers. The need to move from commodity trading, with the exception of some pelagic species, is of paramount importance to the Irish seafood industry. In addition, the need for added value products is driven by younger generations of consumers who are demanding more convenience in product presentation and meal preparation. This is a feature of newly emerging markets in Asia and elsewhere, as well as in traditional European markets. A strong focus on maximising additional value will ensure the industry will be able to keep abreast of this trend and, ultimately, protect market share and ensure long-term financial sustainability. The facilities at the Seafood Development Centre in Clonakilty will critically support this priority objective.
Our fourth objective is sustainability.Anything we do in the sector must take into account the sustainability of stock. Thus BIM’s priority to enhance the sustainability of seafood has due regard to the Europe 2020 strategy which sets the agenda in creating a resource efficient Europe. It also reflects Government policy on how Ireland can achieve a resource efficient, low carbon and climate resilient future.
Our programmes are likewise informed by the new Common Fisheries Policy, CFP, with its focus on the broader maritime picture, as advocated by the Integrated Maritime Policy, IMP, and its environmental pillar, the marine strategy framework directive. The new policy is based on exploiting fisheries resources sustainably. Ecological sustainability is, therefore, a basic premise for the economic and social future of European fisheries and the development of the wider seafood sector. The CFP will provide critical support for the long-term sustainable future of Ireland’s seafood sector and ensuring it can retain access to and grow the resource base on which the industry is dependent. Through our development initiatives, we are intent on growing the seafood sector by applying green economy principles that align the preferences of environmentally conscious consumers, while maximising renewable resources to reduce waste and input costs and embrace assured food production systems.
Consumers worldwide want to know from where their seafood is coming and are concerned to ensure the seafood they consume is sourced responsibly. In this context, specific projects undertaken by BIM include consideration of the potential for branding using appropriate quality assurance standards, together with certification from organisations such as the Marine Stewardship Council, as well as organic or eco-labelling. BIM is geared towards assuring all products covered by its schemes are sustainable, safe and traceable. It also ensures its assurance schemes are aligned with the Bord Bia origin green programme. The sustainability positioning provided for by the origin green brand initiative permits participant companies to engage directly with the challenges of sustainability, reduced energy inputs, a minimised carbon footprint and a reduced environmental impact. In turn, this secures better prices for the food and seafood sectors.
On our fifth objective, if we are to grow the sector, it is imperative that those involved have the requisite skills to enable them to maximise opportunities. In common with other business sectors, the seafood industry needs a regular supply of suitably trained and skilled personnel to work on board fishing vessels, on fish farms and in processing plants. BIM has a long established record of providing the industry with vocational training to attain appropriate qualifications to work as crew members, skippers and engineers on fishing vessels and this vital service continues. Building on this tradition, our strategy marks the introduction of a new era of professionalism in the sector. The provision of accredited training services, allied with a new approach with third level institutions, will secure the seafood sector’s place in the modern economy. The new approach will ensure the skills development work BIM undertakes for the seafood sector is accredited to National and European Framework Qualifications in order that our actions will be fully compatible with the requirements for portable qualifications and lifelong learning progression.
BIM’s national fisheries college, with locations in Greencastle, Castletownbere and Dún Laoghaire, is equipped to deliver a broad range of Department of Transport, Tourism and Sport and FETAC accredited courses. They include certificates of competency training courses for fishing vessel deck officers and on engineering, as well as short duration courses on safety, radio, first aid and other nautical skills. In addition, BIM’s mobile coastal training units provide short courses on safety, radio, engineering and navigation skills at ports around the coast, offering industry practitioners convenient access to necessary training. Courses related to product handling for seafood processors and traders are provided at the Seafood Development Centre in Clonakilty.
An integral component of the new strategy is the promotion and development of business management skills in the sector through leadership programmes and the introduction of new seafood business management courses with selected third level institutions aimed at attracting potential seafood graduates into the sector. The provision of appropriate skills and training for the sector will underpin the drive towards competitiveness which is the central focus of the strategy.
I will now deal with some specific issues highlighted in the report. Market performance in 2013 demonstrated that lack of supply, one of the key issues, was a problem. It resulted in a decline in sales from €822 million in 2012 to €810 million in 2013. In 2013 BIM applied for a licence for an organic salmon farm off Galway Bay. If successful, the intention is to lease the site to a reputable operator with the necessary capital and expertise to ensure the farm will be run to the strictest of regulatory practices. With the farm in place, up to 15,000 tonnes of high quality Irish farmed salmon could be produced every year, worth a minimum of €100 million annually and with an average flow of about €14.5 million directly to the economy.
Sustainability is a key growth issue. As we have seen in our success in the Chinese market, there has been an increase in the size of the middle class and a trend towards quality, sustainably caught and farmed seafood. With Ireland's reputation for clean waters and quality seafood, Irish seafood can demand an excellent price in new and existing markets, but, labelling and traceability are crucial. We have developed a range of internationally accredited standards, including the BIM responsibly sourced standard, to further increase sustainable fishing and operational practices for the wild catch and processing sector that underpin Bord Bia’s Origin Green charter.
In addition, the seafood sector has realised the benefits of running processing operations in a more sustainable manner and, with assistance under BIM’s green seafood business programme, is benefiting from substantial cost savings through greater management of energy and transport usage.
In 2013 coastal communities played a pivotal role in BIM’s fisheries local action group or FLAG programme, funded under Axis 4 of the European Fisheries Fund. The programme empowers local communities to look at new ways of adding value to the fishing and marine activities in their areas, with a view to generating additional revenue and employment. This successful programme provided grant aid for 41 projects in 2013, the first year of operation, totalling €95,069, but generated an investment of €178,974. A number of the fisheries local action groups are implementing their respective strategies through a diverse range of projects that will add value to their local communities’ infrastructure and business.
Safety at sea and the necessity for safety training remained a key priority for BIM in 2013. Following the launch of its enhanced safety training programme, we have a comprehensive safety training programme that also provides grant aid of up to 60% towards the cost of purchasing personal flotation devices, fitted with an integrated personal locator beacon. The programme complements BIM’s basic safety training programme and the fleet safety grant aid scheme ensuring crews receive the best safety training and safety equipment to help save lives at sea.
In 2013 the Seafood Development Centre in Clonakilty, County Cork assisted 29 seafood companies with new product development, branding and labelling advice, sensory panels, pilot testing and equipment and product upscaling. We also made a significant investment in new technology for the centre, including a new breading-cooking line to generate a range of new products. To encourage greater participation in the pelagic sector in value added innovation, BIM and Letterkenny Institute of Technology signed a memorandum of understanding to create stronger industry links with the third level sector, including access to culinary development facilities, science and culinary graduates.
It is clear from similar challenges other food sectors have faced and the limits within which we can do business in the current economic climate that we need to think outside the usual parameters of the seafood sector to build industry scale. BIM is facilitating and proactively pursuing investment opportunities and strategic alliances at home and internationally to generate the necessary capital and resources to ensure the sector can compete effectively. The growth and longevity of the sector is our primary goal. We are looking forward to delivering on the potential of the sector in the years ahead.
The presentation is challenging. In the course of his contribution Mr. Keatinge stated, "We can add up to 45,000 tonnes of new raw material to the seafood base." Allowing for the fact that there are strict quotas, will he indicate from where the additional 45,000 tonnes will come? One can create more sales by increasing the added value of the product, but Mr. Keatinge also talked about increasing volume.
Mr. Keatinge referred to the creation of an additional 1,200 jobs, in addition to the 11,000 employed in fishing, fish farming and fish processing. Would it be possible to give the joint committee a breakdown of this number and the locations of those employed in fishing, fish farming, and fish processing? For example, a man could be fishing out of Killybegs Harbour, but the processing plant could be in a different location. We need to know the specific detail.
Mr. Keatinge referred to product upscaling. I know a little about upscaling because I have seen it happen incredibly successfully in agriculture and forestry.
However, it is fair to say that, in many cases, indigenous companies which upscale, rather than bringing in companies from outside, actually have a longer shelf life because they are less likely to move. When the representatives of Bord Iascaigh Mhara refer to upscaling of processing companies, are they referring to existing companies or displacing them with multinational companies which may come and go? Could Bord Iascaigh Mhara achieve the same result in other ways, allowing for the constraints in sourcing raw material? No matter what way we look at it, if there is not enough raw material available, companies cannot upscale.
What about market collaboration? In other words, could groups of processes sell collaboratively? In that way, from a market supply point of view, there would be a continuous supply. On the other hand, we could retain companies in the size appropriate to the areas in which they are located. That is of great importance. We saw a fantastic example in the mussel industry in Scotland where all mussel producers began to operate in a co-operative. I gather they had Tesco tied up.
Yes and when the retailers tried to bring in Dutch mussels, it simply did not work. Still, they are all operating as independents in this operation, which is important. The BIM officials will be addressing the question of extra supplies.
The BIM officials referred to the application in Galway Bay. They will be aware of the major reservations about that application. When we visited Scotland, the people involved in the fish farming industry there seemed rather surprised that BIM was thinking of something of that scale in waters as warm as those in Galway Bay. Will the officials confirm that they are still hell-bent on following the plan, despite the great reservations in the region, particularly in respect of wild salmon, and in view of the attitude of the Department of Communications, Energy and Natural Resources? In other words, even official agencies are sceptical about this. It is all likely to wind up in the European courts if BIM secures permission. Will the BIM officials confirm whether they are still hell-bent on pursuing this project or whether there has been a rethink?
Since we are discussing licensing, has BIM had discussions with the Minister in respect of the fact that most of the fish farms around the country are operating on licences that are actually out of date? I know that they are legally entitled to continue until new licences are issued. Does BIM consider it satisfactory that existing fish farms are actually operating on licences that are only in place by grace and favour of the law? In other words, they are operating without a licence, but they have permission to do so until the new applications are granted. What discussions has BIM had with the Department on bringing a little order to this sector and ensuring those who are operating fish farms have current licences?
I am underwhelmed by the fisheries local action group schemes. It always seems to me that people think they can promote rural Ireland with a few million euro here and there. However, when it comes to urban Ireland, €300 million, €400 million or €1 billion does not seem to go very far. How much money is involved in FLAG schemes all around the coast? To be honest, it is not a major player on the ground and it has never seemed to me to be a major player. If BIM gives €500,000 to people, they are not going to turn it away, but I do not see it as a major player.
Two things are not mentioned in the BIM report. First, BIM administered a scheme to repair storm damage to pots for lobsters and shrimp last year. Will the BIM officials indicate how many people applied, how many were paid and how the scheme shook out? How many were caught by the fact that BIM required fishermen to have original proof of purchase of the lobster pots? This was proving very difficult in many cases. Will BIM give detailed numbers of the beneficiaries of the scheme? How much was paid out? What were the barriers in accessing the scheme?
BIM has grandiose plans, although it seems to be moving backwards rather than forwards in actual sales which have fallen from €822 million to €810 million.
It is important for all of us to realise there are two great factors in our lives. One is growing the economy in order that we can pay for the services people want. The other major factor is brought home to every Deputy who goes home every weekend, that is, the fact that we run the country for the people who live in it. Approximately 80% of boat owners have boats less than 10 m. The greatest number involved in fishing are actually small operators who live in coastal communities. The reality is they are trying to get from €5,000 to €7,000 and not to have the dole man come after them. They are not thinking about grandiose plans involving billions of euro. They are simply wondering how they can meet their bills next year and how they can hold their communities together. I see no mention in the document of what we are going to do for them.
I am particularly surprised that there is no reference in BIM's annual report to the work done by this committee on coastal communities in which we highlighted the specific issues faced by this major sector in terms of human beings trying to eke out a living from fishing and the sea. Seaweed is not mentioned either in it. I see no mention of whether it is Bord Iascaigh Mhara's intention to act on the strong cross-party recommendations which had the backing of every political party and none, in the form of Deputy Thomas Pringle, represented in the Oireachtas. Where are we in dealing with that issue? In this country we seem so hell-bent on the macroeconomy that we forget this is all about ordinary human beings who are trying to survive and make a little more. They are beset by more and more regulations. Even if BIM implements its plan, if we do not do anything about the small operators on the ground, nothing will change. Communities are being destroyed. I am disappointed, therefore, that there seems to be little in BIM's report that will do anything in line with the report put together by the Oireachtas. I am surprised that there was no reference in the statement made to the important work done by the joint Oireachtas committee over a long period, work which had all-party support.
I thank the BIM officials for the report. I have almost identical concerns to Deputy Éamon Ó Cuív about the plight of over 80% of those involved in the industry. This affects every little coastal pier in the west, the south west and on the east coast. Much of the local economy depends on what is produced by the small operator. There is nothing coming either from the Government or BIM's report which will help in any way in that regard. The word being used in reference to the industry and fish stocks is "sustainability". While it is laudable to have sustainability of fish stocks, there is certainly an absence of what will sustain rural coastal communities.
Another question was asked by Deputy Éamon Ó Cuív about FLAG schemes. I hope I am reading this incorrectly. Reference was made to grant aid for 41 projects totalling €95,000 in 2013. In the scale of things, that is a minuscule amount.
I have argued consistently in my own community and the wider constituency that if used properly, benefits will come from it. What is missing - I do not say this lightly, certainly at the two meetings BIM officials attended - is BIM's credibility among coastal communities. People have lost confidence in it and the wider policy of successive Governments on the survival of coastal and fishing communities.
Mr Keatinge said the demand for seafood was projected to grow by 42 million tonnes per annum, according to the Food and Agricultural Organization. I assume that is to meet the demand of the increasing world population. If there is a fish stock sustainability problem, I presume the delegates are talking primarily about fish farming. I presume the Galway Bay project proposed by BIM which is projected to produce 15,000 tonnes per annum has been factored in to the supply. Last year the Chairman of the joint committee, Deputies Michael McNamara and Éamon Ó Cuív and I travelled to Scotland to meet people associated with the fishing industry and they were alarmed by the proposed Galway Bay project. During the storms early last year fish farms and fish escapes in the south suffered damage. However, if the project had been up and running in Galway Bay, it would have been catastrophic for coastal communities in the south. BIM proposes to entice a reputable operator to operate the project. I do not know how that will benefit the majority of coastal communities. I do not believe everything will go to plan, as there are too many difficulties and the various agencies are not in agreement. They are in opposition to each other, which can lead to a project not succeeding.
In practically every coastal village there is an opportunity, if resources are invested in the right direction, to develop the fishing fleet by helping people through difficult times. There is also potential for the growth of the organic sector. Have the delegates from BIM ever looked at the possibility of onshore fish farming? Everybody to whom I have spoken from BIM and other sectors is in opposition to it because of the cost factor which would include the cost of pumping water and electricity. Has anybody considered taking a joined up approach to marine issues, wind farms and so on? Is any effort being made by BIM to conduct a pilot scheme in respect of onshore fish farming? If something like it were to work and be sustainable economically, it could create opportunities in many areas.
Small farmers who are struggling to survive have the opportunity to avail of the farm assist scheme. Those who are not making a viable income from their holding can resort to that scheme until they get out of their difficulties.
It helps to sustain them on their land and avoid the social consequences of their leaving their area. Has any thought been given to introducing a similar assistance scheme for fishermen? Mr. Keatinge has referred to boat owners and crew members. Could the social insurance scheme be tailored in such a way that fishermen would be encouraged to sign on when they have no work, rather than being treated as self-employed persons with no such rights? Just after Christmas there was a period of 12 or 13 weeks during which the 80% of fishermen engaged in onshore fishing could not work. Has any thought be given to initiatives to sustain that sector in order that we keep as many people as possible in coastal communities who will contribute to the local economy?
I thank Mr. Keatinge for his presentation on the 2013 annual report. I have a number of questions and would also like to have an opportunity to follow up on the responses given.
The outturn for 2013 showed a deficit of €500,000. To what does this relate? Why was there a significantly reduced turnover in the operation of the ice plant and a significant rise in costs?
Ireland has an appalling record in using EU funding to support communities that have lost out because of declining quotas. Under the last European Fisheries Policy, I do not think we drew down any funding, whereas other countries such as Spain drew down billions of euro. We have drawn down money for decommissioning but nothing to support communities or fishermen who can no longer fish. That has been one of the disgraceful aspects of our fisheries policy.
In relation to the FLAG, fisheries local action group, programme, I know that the committee met officials from the Commission in Brussels. One of the points they made concerned how unimaginative Ireland had been in the development of the programme and how we had not capitalised on it. How does Mr. Keatinge see the programme developing in the next few years? He said 41 project applications had been funded under it in 2013. How many applications for funding were submitted in 2013? How much money was available to be dispersed in that year? Over the lifetime of the Common Fisheries Policy how much funding will be available for the programme?
Deputies Éamon Ó Cuív and Martin Ferris mentioned that 80% of those involved in the fishing industry were fishermen with boats under 10 m. In the annual report there seems to be no mention of them or how they are being supported. Perhaps the reason is that one of the main priorities of BIM is upscaling. How will this develop? Is it BIM's policy to encourage partnerships or rationalisation in the seafood sector? I come from Killybegs and have seen a great deal of rationalisation in the fish processing sector there which has led to major job losses through modernisation and mechanisation. This is called progress, but it is very hard to explain to my constituents when they see massive grant aid being announced for processors who are shedding jobs. I understand the argument on the need to be more competitive in order to survive, but will Mr. Keatinge outline how he sees the process of upscaling developing? How will it work in tandem with supporting small communities to remain viable within the fishing sector?
I am very interested in hearing how the delegates see us sourcing additional raw material, given the experience of quotas around the country. I note that BIM has signed a memorandum of understanding with Letterkenny Institute of Technology on an innovation centre in Killybegs. How do the delegates envisage it developing? Will BIM be proactive in talking to processors and encouraging them to become involved? In 2011 Mr. Keatinge was in Killybegs for the big announcement of the creation of 120 or 130 jobs through seafood value added development. Four years on how many of these jobs have materialised?
I am largely in agreement with previous speakers, perhaps because of our common experience in developing the report on coastal communities and following our trip to Scotland, where we saw a fishing sector which had achieved the scale Bord Iascaigh Mhara would like to achieve but which also manages to sustain communities in a way that does not seem to be a priority for BIM.
I am not from a fishing background; I come from east Clare on the River Shannon and an agricultural background. However, about a year and a half ago I held a meeting in west Clare, where people come from a fishing background. They were overwhelmingly negative about BIM and the lack of support from it for communities. Although I appreciate that there is a general tendency at meetings for people to express negative views, I did not hear very much that was positive about BIM.
I do not disagree that we need to grow the sector from its current turnover level of €850 million to in excess of €1 billion. However, in the next sentence of his opening statement Mr. Keatinge says that to do this, we need large-scale operators. It seems that the broad policy of the Department of Agriculture, Food and the Marine is all about large-scale operators. Smaller operators are seen as an inconvenience that must be tolerated because of the Common Agricultural Policy and even that policy is interpreted to the greatest extent possible to suit large-scale rather than small operators. BIM seems to mirror this; as it is within the remit of the Department, that is possibly not an accident. Is BIM doing anything to bring small producers together to train and help them to develop existing enterprises? These producers are grounded in their communities and less likely to be mobile, take off and use flags of convenience.
The other issue Deputy Thomas Pringle raised concerned the fisheries local area group, FLAG, programme. I recently travelled with the Chairman to attend meetings at the European Commission. The Commission was very much in agreement with Deputy Thomas Pringle - I do not know if he will be pleased or disappointed to hear this - on Ireland's failure to use the Common Fisheries Policy to develop and support coastal communities. As a matter of fact, I have rarely heard Commission officials being as critical of any sector in Ireland as they were about the failure of the FLAG programme. They were very open in saying Ireland was pretty much at the bottom of the pile. What does BIM intend to do about this, if anything?
The delegates mentioned sustainability as a key objective and that consumers wanted to know that the produce they were eating was sustainable and from where it had come. One of the mechanisms European consumers increasingly utilise is protected geographical indications. There are very few such indications in Ireland in the food sector, but the few that we have are in the fishing sector. Is BIM doing anything or does it plan to do anything in this regard? There is scope to do a lot.
The downside of the fact that Ireland has not developed its fisheries sector in the way other European states have is that we have a lot of very small producers and small boats, the great majority of which are under 10 m. The upside is that they all engage in sustainable fishing; they are not able to wipe out an entire species. About 24 hours would be the maximum length of time they could be at sea before coming back into port. Is there anything concrete being done to develop geographical areas of origin to help them to market their produce? The product is sustainable, high end and meets all of the catchwords and so on. It needs to reach markets in Ireland on the east coast where the population is concentrated but also in the south east of England, Ìle-de-France, Germany and other placee. What is BIM doing in that regard?
I concur with Deputy Éamon Ó Cuív on the scepticism in Scotland about the size of the proposed organic salmon farm in Galway Bay. It seems to be unparalleled in Scotland where, being much more northerly, ocean temperatures are cooler. In his opening statement Mr. Keatinge said, "It is our intention to lease the site to a reputable operator with the necessary capital and expertise to ensure the farm will be run by the strictest of regulatory practices." Who is the reputable operator? It is quite clear from the wording used that the intention is to lease the site to a particular operator and I have heard there have been discussions. Has BIM been party to discussions with this reputable operator? Given that the intention is to lease the site to an operator, how on earth can we claim that the farm will generate a wages flow of around €14.5 million, particularly if all the processing will be done outside Ireland? Is there any linkage with processing in Ireland and, if so, where exactly on the island of Ireland or in the Republic of Ireland will it be undertaken? The money generated, at least on finfish farms, is mostly in processing. Most of the profit and added value is generated there. This might not be a matter for BIM but for the Department. Is there any linkage between licensing and processing? Is there any conditionality that the licensing be subject to processing near the site of the farm in order that the communities that look out at the salmon cages and forgo opportunities to develop their areas for other purposes will at least have the benefit of the processing taking place and wages being paid in them?
Mr. Michael Keatinge:
I will try to go through them systematically and will call on my colleagues to help me.
From the outset I suggest we look at a country such as the Netherlands to see what might have happened had we not been diligent in the fishing sector. In essence, it now has a handful of boats, fewer than 20, which are among the biggest in the world. It has taken its entire industry and concentrated it in 20 supertrawlers. It is to the credit of Ireland that we have maintained a fleet of 2,200 vessels. If I were to travel to Italy, Spain, Greece or even Norway, I would find an industry dominated by large numbers of small vessels. My normal job is as head of fisheries and training in BIM and has been for some time. I am looking at the 2013 report. In that year we provided 142 grants for fishing vessels. Last year we provided 1,500, of which I would say 95% were for boats under 20 m.
We introduced the new safety scheme to provide life jackets with a fitted locator beacon, I hope for everybody who goes to sea. There must never again be a tragedy like the one in Waterford which involved the loss of three brothers.
Every fisherman can avail of a life jacket.
As the pot replacement scheme was introduced in 2014, it is not technically covered in my report. I can get the figures for the Deputy concerned, but I give him my personal assurance that nobody was turned down because of bureaucratic issues. We put the scheme in place and the onus on the applicant to swear an affidavit and tell the truth, which we would then honour. If there is a person who believes he or she not been able to avail of the scheme, I assure the Deputy that I will personally look into the matter because it was our absolute desire that nobody should fail to gain access to the scheme last year.
Mr. Michael Keatinge:
In the light of the downturn in the economy we placed caps on our grants. Instead of giving one person a very large grant, we decided that there would be a cap on the amount of grant aid available, depending on the size of the operator; for example, smaller boat operators received a smaller grant. That was part and parcel of allowing us to move the number of grants from 142 in 2013 to 1,500 in 2014. While messages sometimes are lost, I genuinely think we are sensitive to the needs of the wider sector. We have lost more than half of our fisheries development staff, but we still maintained a presence in all counties around the coast to ensure there was some connectivity between us, as an agency, and local communities.
I am disappointed that the European Commission is painting us in a poor light when it comes to the FLAG programme. I accept that the scheme was late in being delivered, but 2013 was its first year and €91,000 was a paltry sum. The following year we were up to over 450 grants, although I accept that the money still appears small. Later this week the new European maritime and fisheries fund will be put out for consultation. All of the different programmes, including negative ones such as decommissioning but also the FLAG programme, will be the subject of public consultation, the result of which will determine the level of funding to be allocated to the FLAG programme from 2016 onwards. It has been our intention to increase the moneys available by a factor of ten. Time will tell if that is delivered, but it is beyond my capacity to change it.
Deputy Michael McNamara and I received clarification on this point from DG MARE which told us there was more flexibility in both this fund and the RDP. As it is a co-funding measure, funding can be drawn down from more than one source. Is that correct?
Mr. Michael Keatinge:
I stress that a pot of money is allocated to Ireland under the European maritime and fisheries fund and that it is fundamentally a zero sum game. One allocates within that fund and makes choices as to which areas are prioritised, but it will be open for public consultation from this Friday, 27 March.
Mr. Michael Keatinge:
I am expecting something in the region of €39 million in total for fisheries and training from the European maritime fisheries fund over the lifetime of the CFP.
I wish to address the issue of additional raw material as it is a fundamental point. Deputies are absolutely correct that were we to take the principle of sustainability, we would not be able to take more fish from the sea. Since 2013 Ireland has been able to achieve an 80% quota of boarfish stock. That alone has brought in excess of 50,000 tonnes of new raw material to Ireland. Off the coast of Ireland in 2014, 1.5 million tonnes of fish were taken. In the Irish economic zone over 500,000 tonnes of fish were taken, somewhat less than 250,000 tonnes by us. The State has made a huge investment in improving fishing ports such as Killybegs and Castletownbere, but we need to get foreign boats to land. We can add value by providing for seafood processing and supplying vessels with a range of services. Ireland must reposition itself in this regard. The notion that we can go to Brussels, renegotiate the CFP and massively increase our quotas is one for consideration on another day but certainly not in my lifetime. We must secure greater use of the resources being taken off the Irish coast by capitalising on our new infrastructure.
Britain will not leave the European Union. The British are too clever, but they know how to negotiate. They know how to say they are heading out the door, only to come back in to do a deal, but they will renegotiate on the fundamental issues. In this context, would there not be an opportunity for us to renegotiate on the fundamental issue of the irrationality and unfairness of the CFP?
If the fish being caught off the Irish coast were landed in Ireland, the knock-on effect and added value would be astronomical. This would be the case even if only the big Irish boats landed their catches. However, there seems to be no sense of loyalty or patriotism in this regard. Killybegs is one of the finest ports in the country with fantastic infrastructure.
Mr. Michael Keatinge:
I think that is so. On the landings in Killybegs, the vast majority of fish caught by Irish vessels are landed in Ireland. Some of the big pelagic boats will, in some years if the mackerel are further north, land it in Norway and Scotland. I accept that, but, of late, that number has come down significantly. Nowadays blue whiting, mackerel, horse mackerel and others are predominantly being landed in Ireland. In 2013 we were able to secure an extra 65,000 blue whiting landed by Norwegian and other non-Irish vessels, which actually meant the plants in Killybegs were running well into the spring. We need new thinking on this issue.
The quota is a political battle, not one for BIM to fight, but we must focus on obtaining value for the huge resource that is available. Deputy Martin Ferris made the point eloquently that the fish in question could secure the future of coastal communities. The increase in the raw material base of 45,000 tonnes can be made up from three areas. The first is increased access to non-traditional species such as boarfish, with which we have done well, having achieved more than 80% of the quota.
Mr. Michael Keatinge:
Somebody from the institute probably would be better placed to answer that. However, the three areas from which I look to see increased raw material supply coming are first, non-traditional species such as boarfish, second, foreign landings and third, aquaculture production. These numbers are achievable.
There were several questions on scaling the sector and I will ask some of my colleagues to come in on some of these points. However, the overarching point I will make is it is not the intention of Bord Iascaigh Mhara, BIM, to replace the entirety of the Irish processing sector with two or three megacompanies. That said, however, I believe the farming tradition has shown us that one must have some companies of sufficient scale if one is to compete at international level. This can be done in a number of ways. Is it our intention to entice in foreign companies? Certainly not. That is not what we have been about. Have we looked at creating groupings in areas such as accessing new markets? I will ask my colleague, Mr. Donal Buckley, to talk a little about the work we have been doing into China. It is a really good example of where we are going in this regard.
Mr. Donal Buckley:
Perhaps I can talk at several levels above the way we look at scale. We look at scale when we look at export companies as we need significant size to be able to compete effectively. Since 2010, the processing sector has added €146 million in exports and that has created more than 340 jobs in coastal processors. A good example is the work we are doing in China. Somebody asked about consolidation and rationalisation and our model is to create co-operation and alliances. For example, in China, we have assisted companies to create joint ventures where they have brought together the resources and have stopped internal competition and giving away value. Rather they are trying to get efficiency and the marketing. This has been highly successful. We started with a couple of million euro two or three years ago, and this year, we will be up at €24 million. It is adding this sort of value and, to convert what creating growth means in terms of jobs, for every million euro of revenue growth we get, we will get three to four direct jobs and six indirect jobs in pubs and in the local economy. Overall, that is ten jobs per million euro and that is why we are driving on with growth. Moreover, growth comes from both the volume and the raw material with the value added. As for value added, we do a lot in our new seafood product development centre in Clonakilty, where we help companies convert their ideas into good business through new product development or packaging or how they take them to market.
I spoke about exports and another level pertains to the domestic economy and how we look at helping companies. Again, we bring companies into our seafood development centre to give them skills. These are either technical skills, such as filleting the fish in small processors or, in respect of retailers, how they present their fish and how they handle the quality. Some of my colleagues ran a seaweed workshop a couple of months ago at which 200 small-scale entrepreneurs came in to ascertain how they might develop their business. All these activities are driving the overall sector upwards. It is not just a case of one size fitting all but is a roadmap whereby all companies can advance their business. This is what we are trying to do regarding scale for exporting and regional companies that can build their resources and can add one or two employees per business.
Mr. Michael Keatinge:
I thank Mr. Buckley. I will make one other point in respect of fisheries local action groups, FLAGs. Last year I mentioned that we had gone from a small number of 41 projects in 2013 up to 450 projects last year and no eligible project was turned down. We have set an upper limit on projects but I hasten to add, regarding the FLAG structure we have put in place, that one reason they are looking at us in Europe is we did take a different tack. If one considers the United Kingdom, there is a FLAG in Cornwall but one then goes approximately 100 miles up the coast to the next FLAG, after which one goes round the corner up the east coast to the next FLAG. England has approximately six FLAGs, probably covering less than 15% of its coastline. I believe we stood up and told the European Commission that we would not follow this model. Everywhere on the Irish coast can be part of a FLAG with the obvious exception of the major urban areas, where technically one simply cannot operate.
However, we extend it right into Howth and then start it again just south of Bray. It was a different approach and I stand over it. To me, it is crucial that no single area along the coast should be singled out specially and told it will get preferential treatment. Any person living in a coastal community should be able to access FLAG funds and that is the model we have delivered. Anybody living in a coastal area should be able to put himself or herself forward for inclusion on the FLAG committee or board. In association with the FLAGs, we also have developed regional inshore fisheries forums. Again, that is taking from the work of this joint committee to give a new voice to inshore fishermen and consequently, the FLAGs now sponsor the regional inshore fisheries forums. They then send two members each from the six regions to the national inshore forum.
For the first time since 2009, when our lobster management plan in a sense collapsed, we have inshore fishermen getting a new voice in how fisheries are to be managed in the future. Let me be clear in this regard. We are here dealing with lobster, crab, scallop and a lot of stocks that, by and large, fall outside the day-to-day remit of the European Commission. Essentially, they are managed by Ireland and we believe fundamentally that this management can only operate successfully if a bottom-up approach is taken. Despite what the Commission may have told members, I challenge the Commission to come here and let us show it what we have done. In Ireland, we are unique in Europe, in that every coastal community can be part of a FLAG and every FLAG has a regional inshore fisheries forum and each such forum can send delegates to the national forum in Dublin. As a result, for the first time the quota management committee, which for many years was the preserve of the big vessel owner, now has two members from the national inshore fisheries forum. Inshore fishermen now are represented on quota management. The operational programme for the new maritime fisheries fund will meet for the first time in May. Inshore fishermen now have two seats specifically representing the inshore small-scale boats. We are making changes and it is very important that as the management team in BIM, we are answerable to this joint committee and give its members an assurance and guarantee that it is not the policy of BIM to turn its back on the coastal small-scale operator. In fact, it probably is the very opposite. I give the personal assurance that it remains our priority.
I will move on to the area of aquaculture.
On a rough count, more than ten counties are involved. It is a million euro per county divided by five years. As it really will be seven years, one is talking about €200,000 per area or per county per year stretching from Kinvara to Leenane.
Does Mr. Keatinge know how long is the Wild Atlantic Way? It is 2,500 km long and that only extends from Donegal to Cork. I have been at this rural development caper for 30 years and there always appears to be this belief, I do not know whether it emanates from Brussels, the Department or wherever, that one can do things really cheaply and get magnificent results in rural areas and that one needs all the billions in the cities for investment. It is just as expensive, if not more expensive, to do any significant development in rural areas and serious money is needed. While I really welcome the representation on the various committees, as regards €200,000 per year to be given out in County Galway, if one divides that among the ten regions in County Galway, one now is down at €20,000. The average GAA club in rural Ireland turns over approximately €100,000 per year and it must be put at that scale. Somebody must tell Brussels that this is an utter joke in money terms.
The Commission's criticism was not of the structure or where the members come from but of the failure to deliver projects that provide employment in coastal areas. BIM can bring in whoever it wants from whatever community but it needs to deliver projects that create employment and sustainable development and there are very few of them along the Irish coastline.
Mr. Michael Keatinge:
On that matter it is worth noting that almost half the entire budget is allocated to Spain. Ireland gets less than 3%, which is a very small amount.
I echo Deputy McNamara’s point. We need perhaps to ask ourselves how best to use this money. I was proud to serve on the Leader committee for the islands’ Leader group, Comhar na nOileán. We share the Deputy’s concern that we can end up with several projects but ultimately wonder what they amount to. Going into the new European maritime fisheries fund, we must encourage a real conversation with coastal communities, asking what we are about and what we are trying to achieve.
Whether the budget is €1 million or €100 million what counts is how it is spent. I would be the first to say we have not always got the best projects. That is not a criticism of local entrepreneurship in coastal areas but perhaps we need to have a new conversation about how we spend whatever money we are given, and I appreciate that ours is one among many agencies the Government has to fund. It is more important to find the best way to spend that money. I accept that has not always been the case but there have been some wonderful projects.
Turning to aquaculture, my colleague, Donal Maguire, can answer some of the specific questions. The Galway Bay project is the subject of a licence application that is now with the Minister, awaiting a decision. While I am happy to talk about aquaculture generally I want to be careful not to say anything that might reflect on the Minister’s decision process. That might be inappropriate for me. It is important that we discuss the wider issue of aquaculture and where it is going. I believe aquaculture can provide new opportunities in coastal areas. It is my understanding that all the processing for finfish farming is done locally in Ireland. My colleague, Donal Maguire, can confirm that.
While Donegal and Kerry are both in the Republic of Ireland Donegal is not local to Kerry in my understanding of local. If one is talking about developing or seeking to develop fish farms further in a particular area communities can legitimately ask why they were left out of this fish farm if it is going to be processed in another place.
I will hand this over to Mr. Maguire for clarification. He should please bear in mind the specific questions about the scale of that project and the reaction of people in Scotland and the question about the lease arrangements or proposals.
Mr. Donal Maguire:
I have a fairly good note of the questions and will attempt to go through them. I will answer Deputy Ó Cuív’s questions first which included many of those points. To answer his specific point, the application remains outstanding so on that basis we are pursuing the project and await the Minister’s determination. He also mentioned that several salmon farm licences have run their course and are awaiting consideration for renewal under the Sea-Fisheries and Maritime Jurisdiction Act 2006. It is not an ideal situation but it does provide a legal cover to continue to operate and that is the important point. With regard to the scale of the project we have been discussing I am very familiar with the Scottish salmon farming industry having worked in it for many years.
I am very aware of how it operates. A water body the size of Galway Bay on the west coast of Scotland would already have 30,000 or 40,000 tonnes of salmon production. Galway Bay was unusual in not having any production which made it possible to have a large operation. While in Scotland there may not be a single operator in one location at that scale, within a water body of that size there would be multiples of that level of production.
There are now two farms operating on the island of Faroe in Norway that are bigger than the one we have proposed. Already the technology is moving along and other countries have moved to consider this. What might have been seen as an adventurous approach is becoming commonplace in other countries.
In answer to the questions about storm damage, fortuitously during the worst of the storms the Christmas before last we had a waverider buoy located on the sites which gave us direct measured information on the real wave climate during that one in 100 years storm. Reassuringly, the wave climate was within a couple of centimetres of what had been predicted in the environmental impact study. On that basis the equipment that was specified in the study, all things being equal, should have been up to the job of containing the fish and surviving the storms. What happened was what we predicted would happen and the equipment proposed in those studies would have been specified to deal with a wave climate of that magnitude. We have real, heavy duty, factual evidence because the measuring devices were on site.
Deputy Ferris asked some very searching questions about recirculating aquaculture systems, RAS, or pump ashore systems as they are commonly known. BIM is very much abreast of what is happening in that area. We have several systems operating in Ireland already. This boils down to whether we can have large-scale seawater systems for the production of big volumes of table fish. We already have very successful RAS-type systems for the production of juvenile salmon. High value juvenile or small volume fish work very well in these systems. BIM has grant-aided several of them and we are very pleased with their operation. We have recently assisted in the production of two major studies, one a feasibility study by an individual who is considering establishing one of these farms and another a theoretical study. We are finding that the technology for large-scale food production in these systems is not yet at a point where it can be seen either as reliable or as economically viable. We are watching it very closely, if we think there is an opportunity there we will immediately get involved in it.
To respond to Deputy McNamara’s questions, I have mentioned Scotland.
Mr. Donal Maguire:
There is some difference in water temperature and in the environment in which salmon are grown. The salmon farming industry off the west coast of Ireland started at exactly the same time as the industry in Scotland, almost within a couple of years. The Norwegian industry mirrors that. Farms such as the Clare Island farm have been operating consistently successfully for 35 years. We can farm salmon very successfully off the west coast of Ireland. There is no question about that. It has been demonstrated year in year out. In recent years the Scots have suffered the same environmental disadvantages as the Irish in terms of amoebic gill disease and other issues. We are all dealing with the same issues. There is no doubt because of the availability of very deep sheltered sea water in Norway it is easier to farm salmon there than in Ireland but we can do it very successfully. By using organic certification, which was developed here - this was the first country to do it and is still the leading country – we can do it profitably and sustainably. There is no question that we can be very successful at farming salmon.
Mr. Donal Maguire:
Typically, it makes far more sense to process the fish as close to the point of landing as possible because that gives maximum shelf life in the market, for example, if the Galway Bay project were to come to fruition those fish would be processed in Rossaveal.
For example, just recently a farm was restarted in Kilkieran Bay in Connemara and this is now processing directly in the local Kilkieran Éisc plant because it makes economic, biological and marketing sense to do so. Those fish will be processed as close as possible to the location and where facilities exist to do it.
The Deputy asked a question about operators. We have to be very careful about this. In the event that we are successful in getting a licence - we accept that is a big "if" - we will need to have a tendering process which will have to be uncontaminated as well as open and free. We have no preference for any particular operator and there is no preferred operator. We have taken advice on how to maintain our position so as not to contaminate the process.
Mr. Donal Maguire:
No; certainly not. We have been rigorous not to contaminate the process in any way.
In setting up such a contract we would of course include a weighting in it. This would favour an operator who brought forward a business plan with a proposition which would favour as much local employment as possible, which would favour local processing as close to the point of landing as possible and which would bring about those desirable outcomes that we want to happen. The only reason BIM got involved in this or any of these projects in the first place is to generate local employment, local wealth and extra raw material. That is why we want to do it.
If I can return to this issue because it is very important. It seems to be very black and white that a licence would be issued on BIM's recommendation. Can Mr. Maguire explain why, in four years of this Government, not one salmon licence - either a renewal or a new licence - has been granted by the Department? If it is as black and white as Mr. Maguire says, why has the Department not been granting licences? What representations has BIM made to the Department to speed up that process for all the people - not just for one fish farm - who have been delayed?
Mr. Maguire is correct in that it is not illegal to continue farming with an expired licence. However, that does not mean that the operator has a licence. Will Mr. Maguire confirm that the fact of the situation is that a large number of finfish farms are legally fishing but do not have a current licence because the licence has expired? Can Mr. Maguire confirm that BIM is waiting for the Department to say "Yes" or "No"? Does this not cause significant concern and uncertainty for the operator because the answer might be "No" instead of "Yes"? It amazes me that even in the simplest cases of renewal of old licences it is impossible to get a decision. There is something rotten in the state of Denmark in this situation. The Department is the regulatory body but it cannot make up its mind even on a simple case, never mind making up its mind on the Galway case.
Mr. Maguire did not address the issue I raised. Both the Department with responsibility for natural resources and Inland Fisheries Ireland have, time and again, expressed major doubts and opposition to BIM's proposal. I think it is extraordinarily bad practice. I saw it happen when we were in government and I was absolutely furious about it. It is a case of two Departments of the one Government and two Government agencies at loggerheads which are likely to wind up in the European Court on opposite sides. They should resolve their differences first. What has been going on to resolve the differences between BIM, the mother Departments and the two agencies before the taxpayers' money is wasted fighting each other in the European Court with our money?
With regard to BIM's proposal in Galway Bay, how many jobs are projected for the farm and how many jobs projected in processing?
The representatives from BIM are entitled to answer the question about whether they have made representations to the Department. They can only speculate as to the reasons for the delay because they cannot answer on behalf of the Department.
Mr. Donal Maguire:
It should be noted that BIM is not the licensing authority in this regard. As the Deputy is aware the history is complex. I refer to the negative judgment against Ireland in the European Court of Justice in 2007 where the Irish system was found to be non-compliant with the requirements of the birds and habitats directives. In the meantime a number of other issues have arisen. The Department is working very hard to attempt to bring the licensing system into compliance and BIM plays a major part in that initiative, along with colleagues in the Marine Institute and other agencies. I agree with the Deputy that it is unfortunate that the operators find themselves in this situation. It is difficult from our point of view, in so far as we cannot give them the assistance we would like to give because they are not fully licensed in the sense that the Deputy refers to. This makes for a very difficult situation all around.
The second issue raised by the Deputy was the question of the attitude of the Department of Communications, Energy and Natural Resources and IFI, Inland Fisheries Ireland, with regard to both the Galway Bay project and salmon farming in general. It is a very difficult situation. IFI, unfortunately, has a history of objecting to every single salmon farm application that has every been lodged. It has a particular point of view. We take our science and technology advice from the same quarter as the Minister for Agriculture, Food and the Marine, which is the Marine Institute. The institute is clear that the central issue is that of sea lice and the interaction between farmed salmonids and wild salmonids and that the sea lice are a minor and irregular component. This is what has decided our position.
I remind the Deputy that they have always been at odds. It has not really mattered what Government was in place. Let us be frank here. We put questions that can be answered by the representatives from BIM. The Deputy has asked a political question on which we can only speculate. I have given everybody latitude and I ask the Deputy not to abuse it.
Mr. Michael Keatinge:
It would be unfortunate, even possibly untrue, to say that BIM and Inland Fisheries Ireland are at loggerheads. I do not believe we are. I met with my colleague, Dr. Byrne, some weeks ago and we have had a long and open discussion about how we can better align. The central issue, bluntly, is that there is concern and we would be silly to say that we are not aware of it. Of course we are deeply aware of the emotive issues that surround salmon farming in particular. I reiterate that if we forgo this opportunity we will do so at the cost of jobs and at the cost of economic activity and development. I have discussed the situation with Dr. Heffernan in the Marine Institute and with Dr. Byrne, who addressed this committee and said that Inland Fisheries Ireland is not opposed to aquaculture. Inland Fisheries Ireland, I believe, wishes to see sustainable aquaculture developed. The real challenge facing us in Ireland is to create a new dialogue about being the best at sustainable aquaculture and operating to the highest standards. If we could channel our energy into that and help to overcome the uncertainty and doubt that clearly exist in some communities in respect of aquaculture, we could do something very positive for local communities.
I wish to make a few comments at this stage.
If the marine harvest forum initiated last year is to be implemented and if targets are to be set, as has happened with Food Harvest 2020, that forum should provide an opportunity for discussion and dialogue to take place.
Other members also had questions. Deputy Ó Cuív had questions and Deputy McNamara apologised for having to leave, but he wanted to ask about geographical regions of origin. Does Deputy Ó Cuív have another question?
I asked how many processing jobs there would be on the farm, but would like to add to that. How many of those jobs will go to people currently resident on any of the three Aran islands, who are totally and bitterly opposed to this project?
Mr. Donal Maguire:
In all fairness, we cannot accept that the islands in their entirety are opposed to the project. Our evidence - I have been out there many times and have made many presentations on the project - is that there is definitely a difference of opinion. Some people are opposed to it, but others are strongly in favour of it.
We cannot suggest how many of those currently resident on the islands might get jobs. We certainly see a situation, as we saw on Clare Island, where many natives of the island would return if the opportunity to work on a farm presented itself. That has been the evidence on Clare Island and I imagine something similar would happen with regard to the Aran Islands project if it is successful and proceeds. I will send the Deputy a detailed breakdown of the jobs if that is acceptable. We have that detail and will forward it to him.
Mr. Michael Keatinge:
I would like to make a final comment on this that is important to bring to the attention of the committee. In Ireland, approximately 70% of all the seafood we eat is cod or salmon and 60% of that is imported. That is a telling indictment - that as a seafood nation we are that heavily reliant on imports.
Another point we make continually, and I will come back to it again, is that we should channel our energy into creating a structured approach to aquaculture and striving to do so in an organic, environmentally sensitive and sustainable fashion. I believe we should take this approach and that these are the discussions BIM is and should be having with its colleagues in the Marine Institute and in Inland Fisheries Ireland. We must realign the national conversation around aquaculture and say there can be jobs, but they must be done properly. That is where we need to focus the debate in the future.
The Chairman mentioned the agrifood strategy 2025 and setting challenging targets within that is important. We come back time and again to the fact that we have a limited quota and that stocks must be fished sustainably. Therefore, we come back to the three issues I have raised: additional foreign landings from the 1.5 million tonnes taken off our coastline; targeting previously unused quota; and the discard ban that will come in over the next couple of years, from which new opportunities will arise. New opportunities will also arise from aquaculture.
I would like to address a number of other questions. I will ask Mr. Buckley to address the question on the Letterkenny Institute of Technology. Deputy Pringle asked about the accounts and there was a note asking about ice plants that Mr. Kelleher can respond to. I ask Mr. Buckley to speak now about the new relationship with the Letterkenny Institute.
Mr. Donal Buckley:
First, we signed a memorandum of understanding, MOU, in 2013 with Letterkenny Institute of Technology. We are fully behind developing a seafood programme in the Killybegs campus. I am on the governing body in the Letterkenny institute and since the signing of the MOU, we have started a graduate programme that employs culinary graduates in our development centre and seeds them into industry. We have also developed a Masters programme. These are practical activities.
We are using the facilities in Killybegs for workshops. We had a workshop in May with the pelagic community there. The vision for the institute, and I am aware of the local issues, is that a bio-marine ingredients project will come to fruition next year. We will then have the ability to get the campus behind and supporting development and science graduates in research and development. There may also be opportunities for graduates to get involved in some of the technical aspects of this cutting-edge new facility.
The Deputy also asked about the jobs announced in Killybegs. I can only represent the seafood sector around Killybegs, but the pelagic sector and the shellfish community around Killybegs has grown fairly significantly.
Mr. Donal Buckley:
I did not say they were just in the pelagic sector. I said there were some jobs in the pelagic area. I agree the pelagic area is a commodity area, but there are also shellfish communities and whitefish activity. We look at the overall jobs in the Killybegs hinterland and get our numbers there. We have gone out to the companies and verified numbers with our teams on the ground and there are approximately 70 to 75 jobs.
When the grant aid is announced for a company, a number of jobs is placed against that grant aid, but there is no requirement on the company to create the jobs. It is not a condition of the grant aid.
Mr. Donal Buckley:
We go back to the companies every year and examine their activities with our team so as to sustain progress. The creation of jobs is not a specific requirement attached to the grant aid, but we believe from what the companies come up with and from their development activities that these jobs are in place. I can only work with the evidence of our team on the ground and with what see in the companies' activities and the sector. Clearly, the sector is growing. We have explained about extra processing, boarfish and blue whiting. The shellfish community in Errigal, for example, has grown significantly and lots of new jobs have been added.
If a company receives grant aid of "X" amount to support eight jobs, there is no requirement on that company to create eight jobs. The grant aid is not linked to the creation of those jobs. This looks nice in an announcement and it is great for a politician to be able to announce jobs, but there is no requirement for these jobs to be created or for them to materialise on the completion of the funding.
Mr. Donal Buckley:
The companies are examined and there is a system of evaluation of the grants. A company getting a grant must meet certain criteria, such as adding market value, development and employment creation. If companies grow, our experience is that we get from €3 million to €4 million in additional growth in activity, adding more indirect jobs in the community. The 75 jobs I mentioned refers to direct jobs. I cannot say more than that.
Mr. Connie Kelleher:
Deputy Pringle asked about the accounts deficit. The deficit in 2013 was approximately €500,000. However, in comparison with 2012, we were down by about €1.6 million in grant aid. In other words, our grant aid revenue was down. As my colleagues have been saying, we none the less continued our investment in capital and current expenditure as far as the system would allow us. We ran a deficit, but we brought in an opening surplus and ended with a smaller closing surplus.
Every penny of the grant aid we had, and more, was used for the benefit of people at a current level and a capital level. In 2013 we had some additional fixed-asset expenditure which we did not have in the previous year. The figure of €217,000 is listed, as distinct from approximately €30,000 in the previous year. That all plays into it. There were reduced revenues and increased spending.
I was asked about ice plants. We had a loss in that year of approximately €58,000. That was basically because we had more or less fixed costs but reduced revenues. The revenues for that year were down by €66,000 on the previous year. I will update the committee on what has transpired since that time. The revenues have increased. We have trimmed the costs further and we now have profits. From recollection, one year later it was up to €90,000 and it was approximately €65,000 after that. I will confirm the exact amounts to the committee afterwards. We have gone into a profitable state. The reason for some of the increased expenditure is that a lot of our ice plants are quite old and they need a lot of expenditure. We are currently preparing a business plan and looking at the future of the ice plants because they need serious re-investment. I hope that answers the Deputy.
Mr. Michael Keatinge:
We are almost finished. I do not have the 1972 BIM report with me. I used to carry it around. The fact is sometimes forgotten that we landed 25,000 tonnes of fish in that year. Last year Irish boats landed 250,000 tonnes of fish. It is an evolving industry. Of course Killybegs has gone through its ups and downs and probably will always go through ups and downs being the commodity-type fisheries operation that it is, but we must not lose sight of the fact that it houses probably one of the best, most modern fleets in Europe. While this is not to take from the role of the more than 2,000 small vessels, the 20 or so very large vessels that effectively run much of that operation are world class. They have developed new fisheries since we joined the EU for things like horse mackerel, blue whiting and boarfish among others. What we are now landing would be the envy of many others. Scotland has-----
Mr. Michael Keatinge:
There will always be this relentless pursuit of competitiveness, not driven by BIM but driven by market forces. It is our job to help industry adapt to that but I do think that working with the industry closely, by encouraging foreign landings and looking at new opportunities Killybegs has weathered the storm of change and has come out a strong and vibrant port. It is the envy of many other fishing countries and I think it will remain so. In the whitefish sector, a significant investment in the new piers has been made in Castletownbere and there is a successful whitefish fleet operating out of there. A large investment has also been made to upgrade the port facility in Rossaveal. It has its problems. We see a problem even with the prawn stock in the traditional grounds west of the Aran Islands. They are the things we must grapple with, but overall I would have to put it to the members that we are coming through these changing times and we are evolving an industry that is capable of competing with the very best.
One very important point was made by the Deputy on Ireland's unique position and our ability to present a green, organic, healthy, quality image for seafood and the wider food sector. We commend the work being done by Bord Bia to develop the Origin Green initiative. We fully participate in that. We have developed quality assurance schemes that complement what Bord Bia does for the farming sector. One can now get an ISO-65 standard operating in Ireland if one is producing anything from lobster to mackerel. There are opportunities. I will invite Mr. Maguire to reflect on the Clare Island experience in terms of protected geographic indicators, PGI.
Mr. Donal Maguire:
Certainly. One of the few PGI standards we have is on Clare Island. Clare Island salmon has a PGI. They have not used it that much because they found that using the organic certification has been a better route in the marketplace.
Certainly from the farmed fish point of view, going down the organic certified route has turned out to be of more interest to the market and a better route to profitability than necessarily pursuing the PGI route.
I wish to make a personal observation in response to some of the comments. It is all down to distribution of the quotas. When a very small number of vessels is the beneficiary of a national quota then one has a serious problem. The committee heard there were 60,000 dairy producers 15 to 20 years ago and now there are 17,000. One could ask whether that is beneficial to the country and what the social consequences are for affected areas. The same is true of fishing. The mackerel quota has been ring-fenced. Approximately 23 boats have the entire national mackerel quota. The herring quota is now being ring-fenced. At the same time, 2,000 vessels are struggling to survive. The policy is wrong. Far more people would benefit if the quotas were fairly distributed. The observation was made that last year Irish boats landed 250,000 tonnes of fish compared to 25,000 tonnes of fish in 1972. The reality is that many more people were involved in landing 25,000 tonnes of fish than currently land 250,000 tonnes. How many vessels did Mr. Keatinge say there are in Holland?
I wish to make two quick points. Mr. Buckley referred to LYIT in Killybegs and the engagement with the pelagic sector. What has the level of engagement been? Are there projects in the pipeline or are people actively looking at projects in that regard?
In terms of the €12 million expenditure on the FLAG scheme, is the funding from the European Maritime and Fisheries Fund, EMFF, or is it expenditure? That is an important distinction.
Mr. Michael Keatinge:
I must stress that to use the old cliché, it is a zero-sum game in the context that we get a finite pot and therefore if we push down in one area we push up in another and so on. That debate will be an important one. I understand the initiative is being launched this Friday and it is important that there be engagement in the debate.
Mr. Michael Keatinge:
It would not be fair to say that as an agency we are constantly grappling with the budget as we get a good budget from the Government and it is our job to use it wisely, but ultimately how much is directed at a specific area is a matter of policy as distinct from a matter for BIM.
Mr. Donal Buckley:
I will respond to the question on activity in Killybegs. There are three levels of activity. We spoke about blue whiting. There are approximately 1 million tonnes of blue whiting off the Irish coast in different forms. Our intention is to attract in additional foreign landings into processors in Killybegs to produce fillets. Killybegs processors have made significant investments in that regard supported by State grant aid. That allows us to produce fillets and commodities for Africa. Second, the option we are also considering is protein surimi products, which are high value added. It involves producing various imitation products one sees on the market, such as crab sticks.
Bio-marine ingredients are a real game changer. Seafood proteins, in particular in Asia, are really important. We are leading the charge with these new products. We have looked at the markets and have got a very exciting response from them in terms of proteins. These will go into health and nutritional products, high-end pet care items and ingredients in other food products. It also enables one to produce high-quality oils which come out of this new boarfish resource which is a difficult fish for human consumption but which works very nicely when one breaks it down into these high-end ingredients and protein oils. That is in fruition and in planning and is likely to yield significant new employment and a new facility in Killybegs in the next year to 18 months.
The third aspect is commodities in Killybegs. We are really trying to open up more value-added activities. Next month we will have a workshop in Killybegs in which we will look at futuristic ideas and try to work with processors on what more they might do with the product in terms of more value and more employment. We think Killybegs is quite open to these possibilities and would be very confident about the future not only in regard to the existing resource and existing employment but in growing the sector significantly. I hope that gives some confidence in the sector.
Mr. Michael Keatinge:
Some 20 years ago, Ireland had no blue whiting quota and ten years ago, every blue whiting we landed went straight to fishmeal. I am not saying it was entirely down to BIM but there was co-operation with the local industry to move some of the blue whiting into freezing for human consumption, then to move it on into filleting and to suirimi and to look at the ultimate bio-ingredients where one is getting a very high-value yield.
It is an evolving landscape and it will be that way forever but I hope BIM is playing its part, working with the sector to help it to adjust to those challenges and make those changes become reality.
I thank the witnesses for their attendance, presentation and answering many questions from what I think they will accept was a small number of very informed members. We had a forthright engagement in which the witnesses engaged fully. We must accept they answered every question put. Perhaps not every answer was to the satisfaction of members in so far as there are differences in viewpoints but, none the less, they answered them.
I am conscious of the fact this is the 2013 report and that 2013 was 16 months ago. With everybody's co-operation, I hope the committee will be able to discuss the 2014 annual report in this calendar year rather than in the next one, although the next calendar year might be a bit hectic.
I would like to make some observations in conclusion. The sub-committee, which I chaired, included members from the Joint Committee on Arts, Heritage and the Gaeltacht and the Joint Committee on Transport and Communications because of the cross-over. It focused on the smaller fleet in the context of trying to protect dispersed rural communities along the coast and on the islands. A very pertinent point was made in terms of looking at Holland and what might have been if there had not been any intervention. There is always that pull to rationalise and to consolidate at a cost to rural communities, the environment and animal welfare in the case of animals and perhaps similarly in the case of fish. That is why the report made recommendations and the inshore fisheries forums are certainly a step in the right direction. The marine conference held last year was planned but we would have recommended that sort of forum be established.
In the context of keeping many smaller operators in place so that island and rural communities can survive, if one wants to keep them small but to sell large, one must collaborate. That is the one thing we learned from the shellfish people, in particular Scotland. Is there merit in looking at co-operatives to a greater degree? I am a layman and have nothing to do with aquaculture.
Mr. Maguire referred to a body of water with 15,000 tonnes. If that was broken down, along the Norwegian or the Scottish lines, into 5,000 tonne parcels, could it be an alternative model? I am just raising that. Could we look at establishing co-operatively owned fish farms which would give the people of the community a sense of ownership of them?
In Galway, people have been given shares in some of the wind farm projects, so everyone gets a benefit. There is a likelihood that processing would take place nearby, notwithstanding all the reasoned, rational and business reasons one would do so anyway.
We did not really mention shellfish farming but it seems to have a role. The people we met in Scotland had a distribution depot on the ring road around Glasgow and they controlled the supply chain to all the major multiples, which is a bit of reversal but it certainly seemed to be effective. We were in Oban. We also visited the equivalent of our Marine Institute, Scottish Marine Science, which was doing a lot of research on multi-species aquaculture fish farms, where one species fed off the waste and one had a cleaner and more natural environment. Along with other matters, that is probably one for the future. We should keep a watchful eye on this.
I thank members for sticking with us.