Johnny Brady (Meath, Fianna Fail)

There is no doubt this will be not only a year of great change for Irish agriculture, but also one which will be equally rewarding for the industry. Reform of the CAP will substantially free farming from the burdens associated with paperwork and allow it to reach its full potential in the marketplace.

Farmers want to be engaged in important and worthwhile economic activity which serves both markets and consumers. As a result, they want to be in a position to secure the rewards the market offers for their produce. They do not want to be restricted in the scale of operation by production quotas and stocking limits. Instead, they want the freedom to respond to market demand and supply and to the specifications of the open market sought by retailers and consumers. This is what the new CAP offers.

I firmly believe the new CAP arrangements will allow agriculture to develop in a sustainable and profitable manner. The single payment scheme will provide farmers with a basic income that will allow them to decide their own business preferences, which will in turn influence the strategic needs of the sector as a whole.

We are facing a period of major adaptation at both farm and processing levels, but also for the administration which supports the sector. The Government will continue to lead the change agenda in order for agriculture and the agri-food sector to develop. For many farmers, decoupling will be an opportunity to make new choices. With their direct payments no longer linked to the volume of production, they will be free to farm and to align their farm enterprises to meet the needs of the marketplace rather than be driven by grant or premium support schemes. This will not only benefit farmers but will have a broader added value for the food supply chain which will ultimately be for the good of all consumers.

Having outlined the general position regarding decoupling, I now want to focus on the outlook for the beef and sheep sectors. Deputies will be aware that beef production is extremely valuable in the overall economy. The annual value of beef exports amounts to €1.5 billion, representing almost 25% of total Irish agri-food exports. These are impressive figures by any standard and underline the overall importance of the sector to the economy.

Last year we exported a total of 475,000 tonnes of beef. Some 258,000 tonnes of this were exported to the United Kingdom and 170,000 tonnes to the rest of the European Union. It is particularly encouraging to see the growth in our beef exports to these high value markets. In recent years that has been the key success of our beef marketing strategy which has seen a dramatic shift in the level of EU market penetration at the higher value end, mirrored by reduced dependence on third country trade which, nonetheless, remains a significant part of our strategy.

Russia continues to be our main third country export market with a total of 41,000 tonnes exported there last year. Small quantities of Irish beef were exported to Egypt, and Algeria re-opened its markets for fresh and chilled Irish beef last October. Efforts are being made to have frozen beef accepted there as well and the prospects are positive. These markets are important outlets for specific cuts of Irish beef at particular times of the year. We continue to exert huge efforts, politically, diplomatically and at trade level, to re-open international markets and to maintain as broad a spread of markets as we can.

As with beef, decoupling in the sheep sector will bring sheep producers closer to the dynamics of the market. Competitiveness will be the key at both producer and processor level in maintaining and growing market share. The year 2004 was an excellent year for the sheep meat sector with throughput at export plants 16% higher than in 2003. Demand was buoyant on the home and export markets and the outlook is most encouraging in the medium to long term with continuing strong home demand and the opening of new markets in Tanzania and Algeria. France remains the principal export market for sheep meat, with last year's exports ahead of those of the previous year. Irish lamb competes successfully on the market against lamb from New Zealand and other countries. I see no reason it should not also continue to command the loyalty of Irish lamb consumers on the home market.

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