Tony Killeen (Clare, Fianna Fail)

My Department works closely with the Department of Enterprise, Trade and Employment and our respective departmental agencies on issues confronting the food and drinks industry. The economic downturn, rising costs and currency exposures have translated into sudden and severe deterioration in trading conditions. One of my key priorities is to ensure a policy and support framework that will facilitate the food sector in maintaining competitiveness and its contribution to the economy. In this context the Government has established a cabinet sub-committee and interdepartmental group on economic recovery. Arising from the work of these groups, the Department of Enterprise, Trade and Employment launched an enterprise stabilisation fund, which is run by Enterprise Ireland, to allow for meaningful additional assistance to be provided to basically sound internationally traded companies that would otherwise struggle to survive the global downturn. The fund operates in conjunction with the banks to provide direct financial support to eligible, internationally trading enterprises which are undertaking development expenditure to reduce costs and gain sales in recession hit overseas markets. It complements the banks' commitment to SMEs under the recapitalisation scheme and should facilitate much of the restructuring that is needed for viable companies selling on the home market. Other issues affecting the competitiveness of manufacturing industry, including the food industry, will continue to be addressed by the Government.

Within my direct area of responsibility, I should point out that my Department and the development agencies have supported capital investment, marketing measures and food research to sustain the food and drinks industry. Grant aid has been awarded under the dairy and beef and sheepmeat investment funds, which are operated by Enterprise Ireland on behalf of my Department, to improve efficiencies and added value from processing.

In dairying, 19 projects were awarded €114 million for investment of €286 million. Five of these projects have been completed and three are well advanced. Grant aid amounting to €30 million has been paid and a further €30 million is expected to be paid by the end of 2009. Grant aid of €69 million awarded in the beef and sheepmeat sectors is expected to contribute to investment of €168 million and contribute to a net increase in sales and exports of €400 million as well as a net additional 800 jobs by 2012.

Additional information not given on the floor of the House.

With regard to small businesses, my Department awarded grant aid of €16.7 million in December 2008 for capital investment in marketing and processing to 66 horticulture, livestock marts and small meat sector enterprises. This is expected to contribute to investment of €70 million and will assist the businesses to improve efficiency, add quality and value, produce innovative products and develop new markets.

Our food and drinks industry continues to need export markets in which it can trade competitively. An additional €2.5 million has been provided to Bord Bia to identify market opportunities within the EU and work with the industry on developing new products. The transfer to Bord Bia of responsibility for fish marketing from 1 June will produce synergies for food and seafood companies. EU co-funding of €235,000 over three years has been made available to Bord Bia for programmes to increase sales of quality assured EU pork, offal and beef products.

A key ingredient of sustainability is innovation to improve competitiveness. In research and innovation Enterprise Ireland provides a range of measures to support industry directly and my Department funds research programmes in the agri-food, seafood and forestry sectors, which provide a basis for future commercialisation. Funding for the food graduate development programme has been approved for a further two years to provide specialised business skills to postgraduate students engaged in food research funded by my Department. My Department, through the RELAY project, is working with Enterprise Ireland and technology transfer offices at the food research institutions to maximise commercial potential of this research.

Retail trading conditions are a particular concern for the industry and where action at EU level is important to secure balance. The European Commission is planning a review of anti-competitiveness in the food chain, including the dairy and pigmeat sectors, and measures to aid transparency on food prices through possibly an EU observatory on food prices. I have supported Commission proposals to improve communication between farmers, buyers and consumers about agricultural product qualities and the coherence of EU agricultural product quality policy instruments, including how products are described and this development may lead to the use of what is termed "place of farming" on agricultural products.

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