Brendan Smith (Cavan-Monaghan, Fianna Fail)

Last night, my Government colleague, the Minister for Agriculture and Food, Deputy Coughlan, outlined clearly and in precise terms what this Government and the Department are doing to promote the sustainable development of a competitive, consumer focused agri-food sector at every level. I listened patiently to Opposition attempts to create the impression that no investment has been made in developing the industry and that nothing has been done for the consumer in terms of labelling. That is total nonsense.

Before addressing those specific issues, however, I want to return to the matters raised by Deputy Enright regarding the closure of the Carlow sugar factory and Minch Malt in Banagher, County Offaly.

Minch Malt Ltd. is Ireland's largest maltster with an annual capacity of 125,000 tonnes. It sources quality malting barley directly from 3,500 Irish farmers for its malting plants at Athy and Banagher. The company is to close its malting plant at Banagher and its two intake points at Tullamore, County Offaly, and Borrisokane, County Tipperary. The company has given its reason for closure as competition on export markets in Russia, south east Asia and South America, to where it has traditionally exported 50,000 tonnes annually. It is retaining its principal plant in Athy.

The recent decision by Greencore to rationalise its operations by closing its sugar plant in Carlow, consolidating all of its sugar manufacturing in Mallow, was a commercial decision taken by the company in the light of increasing competition in the industry and as a consequence of the forthcoming reform of the sugar regime. The rationalisation programme involves an investment of €20 million to €25 million in Mallow, which demonstrates a commitment to the maintenance of an efficient sugar processing industry in the country.

To facilitate the one factory operation, I understand beet from the Wexford region will be diverted to Wellingtonbridge for transport to Mallow by rail. The company also plans a new rail depot to be established in the Carlow region to assist beet growers make their deliveries, and it is understood that a planning application will be submitted to Carlow County Council shortly.

A number of Deputies understandably referred to the nitrates directive. We are in discussion on that with the European Commission. Having put a well thought out package of proposals to the Commission before Christmas, drawn up with the assistance of Mr. Denis Brosnan and input from many sources, including the farming organisations, we were disappointed that it did not find favour with the Commission. The Minister, Deputy Roche, has also indicated his disappointment because it was a balanced package that met with general agreement.

We met the farming organisations again recently and officials have begun discussions with the European Commission. They have made it clear that we will defend our proposals on their scientific merits. We will all have to work hard for a successful outcome. We are not only facing what I understand could be very substantial fines but we also have to safeguard our continuing CAP funding. Negotiations will soon begin on the next round of rural development funding covering the rural environment protection scheme, compensatory allowances, forestry and the early retirement scheme. I am convinced that our position in those negotiations will be made very difficult if we are still in contention with the Commission about the nitrates directive.

Criticism was levied at the level of spending under the specific food related measures in the national development plan. As the Minister, Deputy Coughlan, said in her contribution last evening, the national development plan contains an indicative public funding allocation of €358 million for the food industry by means of a series of measures covering capital investment, research, technology and innovation, marketing and promotion and human resources. Despite a slow start due to delays in getting EU state aid approval for some measures and difficulties in 2001 arising from foot and mouth disease, progress has been good and, in some cases, exceptional. By the end of last year, a total of €187 million had been awarded under the various measures and I am confident the momentum that has built up will be maintained for the remainder of the plan.

On the food labelling issue raised by a number of Deputies both last night and tonight, I want to be very clear. In her contribution last night, the Minister, Deputy Coughlan, gave a comprehensive account of the exceptional progress that has been made in implementing the 21 recommendations of the Food Labelling Group. I repeat that the Department and the Department of Health and Children are currently examining the legislative measures necessary to extend the labelling rules on origin that currently apply to beef and poultry meat, sheep meat and pigmeat. We are also exploring measures for mandatory labelling of origin of all meat in the food service sector. The issues arising concerning products which come within the scope of the EU definition of substantial transformation will be considered in this context.

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