Brendan Smith (Cavan-Monaghan, Fianna Fail)

I welcome the opportunity to discuss the 2007 abridged Estimates. The provision of more than €54 billion for supply services reflects an ongoing commitment to strategic infrastructural development and the improvement of critical public services within the overall context of responsible government and good governance. Within this context, it is clear that support for the agrifood sector continues to form a vital part of the strategic development framework. When capital carryover is taken into account, the 2007 provision for the Department of Agriculture and Food will be €1.658 billion. This represents the highest ever allocation for the Department and reflects the fact that agriculture remains a central part of economic, social and cultural life.

My colleague, the Minister for Finance, has outlined the dramatic expansion in the economy in the past eight years. Between 1997 and 2005 the economy grew at an average annual rate of 7%, the rate of unemployment fell from 10% to around 4.25%, while the number in employment expanded to more than 2 million. Even in the context of such a rapidly expanding economy, the agrifood sector contributes 8.5% of employment and some 8.5% of exports. However, while I am confident that agriculture will continue to make a vital contribution to the economy, that does not mean the future will be free from challenges. Greater competition than ever before, increasing consumer expectations and a heightened awareness of the environmental consequences of all economic activities, including agriculture, mean that public investment in the sector must be more focused and discerning than heretofore if it is to contribute to the long-term viability and profitability of the sector.

The 2015 action plan outlined a path for the future development of the agrifood sector. Recognising that we are entering into a period of lower EU subsidies and increased competition, it set out a programme based around the three themes of innovation to meet the demands of a fast changing food market, competitiveness at farm and processor level with high value EU and world markets and a focus on what consumers in high value markets want in terms of food safety, animal welfare and environmental responsibility. The 2007 Estimate for the Department of Agriculture and Food is consistent with these aims.

Under the heading of innovation, we want to encourage investment in research and development. The food industry has become a high technology sector and we need to be at the forefront of developments if we are to compete in sophisticated markets. Some €13 million has been provided for the food institutional research measure which funds pre-commercial research by public research institutes to support innovation in the food industry and underpin food safety. In addition, €6 million has been provided for the research stimulus fund programme which provides grant assistance on a competitive basis for agri-production research, including agri-environment, non-food crops and agrifood economics, and which fosters inter-institutional collaboration. Funding for the kind of research that represents an investment in the future competitiveness of the industry simply could not be provided without the public support offered through the Department of Agriculture and Food. These funds come in addition to the more than €128 million provided in grant aid for Teagasc to fund its research, training and advisory activities in 2007.

In terms of competitiveness, the €42 million for an expanded marketing and processing scheme includes provision for new and vitally important investment programmes for the dairy, beef and sheepmeat processing industries. Together, these schemes will involve €150 million in State support and are intended to stimulate some €420 million in gross capital investment necessary to equip processors to develop their strengths and ensure their long-term viability. It is essential these key sectors set standards internationally if they are to survive the full blast of global competition in the coming years.

Similarly, we need to put in place the necessary incentives at farm level to encourage structural change and promote investment among the most progressive farmers who will become increasingly important in the future. Our draft rural development programme 2007-13 which provides for public investments of €6.8 billion contains important actions on farm structures, on-farm investment and a new suckler cow measure. The abridged Estimate for 2007 includes almost €900 million for rural development and farm waste management measures. This total includes more than €9 million for capital investment in the horticulture, organics and potato sectors.

While generous supports are in place for organic farmers in REPS, it will be possible from 2007 for registered organic farmers to obtain organic support payments without having to be members of REPS. With regard to consumer focus, it is important to understand that schemes such as REPS and the animal welfare dimension of the proposed suckler scheme not only deliver real environmental benefits but also underpin production systems that deliver the kind of products our customers in Europe are demanding. We are also providing an additional €4.1million to assist Bord Bia in delivering its strategic vision plan to develop strategic market intelligence and more focused marketing activities in high value EU markets and the emerging markets of the Far East so as to ensure we not only produce the right products but that we also sell them successfully in a crowded market place.

The contribution of the Department of Agriculture and Food to the World Food Programme has been increased to €8.5 million. This contribution is an important part of Ireland's overseas development aid commitment and helps to provide food in the most efficient and direct manner possible to some of the neediest people in the world.

In summary, this is a well thought out and integrated package which flows from our in-depth consideration of future strategies in the 2015 plan. It provides support for the agrifood sector that exacts a price in terms of increased research and development, investment in improved facilities at farm and processing levels, the maintenance of food quality and safety standards and an improved environment. This is the kind of strategic focus required to further the evolution of the agrifood sector at this critical time. I am satisfied that the 2007 Estimate for the Department of Agriculture and Food maintains this focus and will make a significant contribution to the delivery of these strategic aims in the coming year.

The themes in the Agri Vision 2015 action plan include innovation, competitiveness and a focus on consumers. We are implementing the commitments laid out in the plan. Given the very substantial funding committed for the next year and that committed in the rural development plan for the period 2007 to 2013, we are satisfied we are providing resources sufficient not only for the food industry to maintain its market share but also to grow that share in the EU and Asian markets. Bord Bia is opening new outlets for the top-quality food products of companies throughout the country. All Members are particularly aware of the contribution the food industry is making to development in all the regions. Approximately 600 food companies, mostly of small to medium size, are contributing not only to the national economy but are also providing jobs throughout the regions. It gives me great pleasure to commend the Estimates to the House.

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