Brendan Smith (Cavan-Monaghan, Fianna Fail)

I am aware of the difficulties being faced by the vegetable industry and I am also aware, as the consultants outline, that it is an efficient industry, well positioned and operated by professional, expert growers who have been strongly supported by the Government over the past decade or so. The fresh vegetable sector is valued at around €80 million within an overall horticulture industry of €300 million per annum. While there has been a consolidation of grower numbers over the last number of years, production has remained relatively steady. As is common in all sectors of the food industry, the vegetable sector has experienced strong competitive pressures from highly concentrated retail chains and this has resulted in static or falling prices.

I recognise that the horticulture sector has potential for substantial growth and development. As outlined in the Agri-Vision 2015 action plan, my Department has committed itself to providing strategically targeted grant support for horticultural projects in production, processing and marketing to improve the overall development and competitiveness of the sector. Under the new rural development programme 2007-13, substantial funding in the order of €50 million has been earmarked for the sector and I intend to launch the first phase of the scheme as soon as the programme is cleared under EU rules. This scheme follows from the grant support provided in the 2000-06 NDP horticulture scheme, under which grant aid amounting to €20 million was paid to producers in addition to the €11 million provided to the sector under the NDP marketing and processing scheme. Taken together, these two schemes have leveraged an investment of over €90 million in the sector since 2000.

Another key to stabilising producer incomes and arresting the decline in numbers in the vegetable sector is participation in the EU producer organisation scheme. Producer organisations provide their members with opportunities to concentrate marketing, reduce production costs and stabilise prices. In effect, they provide a mechanism for producers to work together to strengthen their position in the marketplace by becoming part of a larger supply base, thereby strengthening their negotiating power with the multiples. The proposals for the reform of the common organisation of the market for fruit and vegetables, which were presented to the Council on Agriculture and Fisheries on 29 January, identify strengthening the role of producer organisations as the core part of the strategy for improving the competitiveness of the fruit and vegetable sector in the future. In addition to increased funding for some actions, the proposals include measures for crisis management organised through producer organisations and enhanced aid for measures both within and outside the producer organisation framework to promote consumption of fruit and vegetables, particularly by young people.

I should also add that the Irish food dude programme, which receives considerable funding from my Department and is aimed at increasing the consumption of fruit and vegetables by school children, is being adopted by the EU Commission as a model for this promotion measure in the reform proposals.

Since 2000, some 20 Irish producer organisations have benefited from EU funding amounting to €24 million. With proposals now on the table for greater flexibility in the EU rules governing the formation and operation of producer organisations, I hope to see them playing a much greater role in supporting Irish producers of fruit and vegetables. Currently, the number of vegetable growers involved in producer organisations is relatively small but I encourage all growers to consider the potential benefits which membership could bring to their enterprise. The supports offered through the producer organisation scheme and the NDP will minimise the threats to the vegetable sector, allowing it to prosper and develop.

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