Seán Sherlock (Cork East, Labour)

The Labour Party welcomes the proposals contained in Food Harvest 2020 and that eminent persons such as Seán Brady chaired the group that comprised a wide array of stakeholders involved in the agrifood, fisheries and forestry sectors.

The report is worthy of support in that its key action recognises the need to ensure the maximum possible resources are employed to drive an export-led economic recovery and the development of a smart economy. There is a sense in which food and the agrifood sector has taken a back seat in the past 20 years because of the Government's blind faith in the construction industry. I am glad this rearguard action has come at a time when there is a latent realisation that agriculture is vital to the country's needs and its future development. The report's aspirations are a return to basics with clear targets and a vision set out.

The agrifood sector has seen a shift over the past several years from commodity-based supply to a brand-centred and consumer-focused approach. That, in itself, presents challenges. How will we ensure the shift from a commodity-based supply to adding gross value to food produce?

The Government's claim that the smart economy will be the foundation for economic renewal is still nebulous. One can apply smart economy principles to the idea of food and food production but it needs to be fleshed out more. The Food Harvest 2020 report points out the smart economy will ensure the primary producer will have higher value output and reduce costs while maintaining higher productivity. It also claims the food industry will have more targeted research and development components, will collaborate more and will respond to the market in a more enhanced fashion. These are wonderful terms which I would readily endorse but how will this all happen? There should be a follow-up document to flesh out this language, which is a little too nebulous. There should also be concrete action plans for implementing the policy, if we are to support it. We support the aspirations in the document. From a consumer's point of view, the smart economy can facilitate a more informed choice and lead to more innovative product ranges. There must also be an educational component in the policy. When we talk about the smart approach, we must include a greater partnership between industry and science, fostering the entrepreneurial culture and innovation and the need to ensure that the agrifood sector's position within the smart economy is recognised and acted on in real terms.

The Labour Party agrees that we have an opportunity in this policy document to deepen the link with green issues. Our natural environment and the fact that we have a grass-based agricultural system comprise one of our greatest comparative advantages, but the mere recognition of this fact is not sufficient. We must develop a deeper approach to what it means. We talk about Ireland being a green country and the opportunities arising from that comparative advantage, but how do we take that aspiration forward? The opportunities arising from the green economy are clear from the points of view of primary producers, the food industry, consumers and the country. There are very transparent methods of production and full traceability in food production. This should be a comparative advantage relative to third countries that are trying to export into the European Union. The fact that it is a grass-based agricultural system means we have natural resource benefits, as outlined in the document, but a greater role for agriculture in the economic recovery requires that European Union funding for that aim be enhanced or at least preserved at current levels.

We welcome the document and the global context outlined in it. There will be massive demand for food due to population growth. As the document states, the world's population in 1999 passed the 6 billion threshold and is due to reach 7 billion in 2010. By 2025, it is expected to reach 8 billion. That presents a massive opportunity for this country. Given the increasing desertification due to climate change in other regions and peripheral nations, Ireland's grass-based agriculture should mean it is well placed to benefit, particularly within the dairy sector where we anticipate Ireland becoming a major global player. When we consider the dairy sector we traditionally think of brands such as Kerrygold. Liquid milk is a major commodity but the CAP proposals that are due to be published in November by the European Commission will pose a threat to the national envelope of approximately €1.3 billion that Ireland receives. If there is a reduction in that budget, it could cause challenges for the dairy sector and undermine the policy the Government is seeking to roll out under Food Harvest 2020.

The Irish Co-operative Organisation Society, ICOS, is holding its national conference this week and one of the issues it will address is how the dairy sector will prepare for the end of milk quotas. This will present a challenge for co-operatives in Ireland. The question is whether the co-operative movement in its current form will be well placed to meet the twofold challenge of the increase in the global population, and the increased demand that goes with it, and the post-milk quota situation. Will Ireland be able to make the changes necessary to ensure the amount of milk being produced can be increased by the anticipated 50% which is deemed possible under a quota free regime? Everything we use is home produced and net inputs and outputs are local. In an increased market for dairy products, there should be a net benefit to the Irish economy as a result. This will obviously add to growth figures.

One of the matters due to be discussed at the ICOS national conference is the cost of preparing for higher milk output. How will the relationship between farmers, who are shareholders, and their co-operatives continue in the post-quota situation? What will the nature of that relationship be after 2013 and will farmers be able to embrace the challenge? I believe they will. Many people in the dairy sector are vying to gear up for that eventuality, but there is also a generational shift in that regard. There will have to be a common mechanism to regulate milk production and it must have an all-island approach. Whether it is an all-island or one Ireland approach is a matter of conjecture but we believe there should be a deepening of the relationship between the two parts of the island to achieve such a common mechanism.

There must be a consensus between co-operatives with regard to the potential for the dairy sector and this can only come from the people who own the co-operatives. It will probably require a change in mindset and a more lateral view as to how we can look at the market strategically. It has been suggested that Ireland could become another New Zealand or that perhaps Ireland should ally itself with New Zealand to create a type of duopoly to control milk supply from grass-fed cattle. This is necessary to compete in a global market and we should not be ashamed to look strategically at how that can happen. There is a critique of the New Zealand model in that land ownership structures are more fluid there than they are here, which facilitates the existence of that model. Here it is a little more difficult due to the greater ties to the land, but that is a challenge which should be examined. The key point is that we should take a more lateral view in terms of how to gain a greater foothold in the global dairy market. If forming strategic alliances is required, we should at least examine the possibilities even if they do not come to fruition. We must take a more lateral view in forming our strategy.

According to Food Harvest 2020, there will be an increase in the global population. The question for Ireland is how to maximise that potential. The theory is that the dairy sector must consolidate further and traditional behaviours must be examined with a view to ensuring that we increase our milk supply to cater for that demand. The success of Food Harvest 2020 will be predicated on ensuring that more young farmers enter the sector. This should become a priority. In yesterday's Irish Examiner there was a report by Macra na Feirme indicating that less than 7% of Europe's farmers are under the age of 35 years. The Food Harvest 2020 report puts emphasis on giving young people access to farming but the educational aspect of that must be examined more deeply. If the strategy is to be successful, it must be based on a clear and unambiguous need to provide active measures to ensure participation rates by younger people.

There is a suggestion that if there were specific schemes for young people under the new CAP, it would go a long way towards addressing the challenge of ensuring a throughput of new farmers. The policy would bear fruit arising from that. Members are familiar with the adage that it is hard to teach an old dog new tricks. If there is a throughput of young farmers, they would be better able to adapt to new methods and will bring forward the policy as necessary. One of the key deficiencies in the report is the lack of a coherent chapter on education. It is all well and good to have the targets of increasing the value of the primary output in agriculture, fisheries and forestry by €1.5 billion or 33% compared to the 2007 to 2009 average, increasing the value added in agriculture, food, fisheries and wood products by €3 billion or a 40% increase on 2005 and having an export target of €12 billion for the sector, representing a 42% increase compared to 2007 to 2009, but if that is to be achieved there will have to be a more fundamental educational input for the reasons I have outlined. Even though innovations are taking place in the beef, dairy and wood sectors, if the age profile of farmers is higher there will be a lag time in reaching those targets. It will be necessary to increase the throughput of younger people who are educated specifically to achieve those targets.

If the overall vision is based on acting smart, thinking green and achieving growth and if the Department is trying to prioritise research and development, improve skill levels, increase best practice, foster creativity and improve consumer preferences, this can only be achieved to a certain extent under the current paradigm. In other words, the underlying assumptions need to change. The Labour Party's view is that there has to be a route and branch review of the educational aspects of how to proceed. We acknowledge that centres of excellence like UCC, which have specialist knowledge food production, should be incorporated into the roll-out of this policy and become active stakeholders. We also need to overhaul subjects such as agricultural science at second level. A farming-related model or a food-related model-module of education could be introduced into the leaving certificate curriculum to develop, foster and create the aspirations outlined in the overall vision. We believe that the younger people start, especially in second level institutions, the more of an opportunity there will be to create the coterie of food and agribusiness entrepreneurs needed to sustain the policy. If it is a 2020 strategy, it has to be implemented on the basis of ensuring that we start now and we start at second level to ensure more people are brought through the educational system with a focus on food production and all that entails.

There are major challenges in the fiscal and economic context. The report issued by the Oireachtas Joint Committee on Enterprise, Trade and Innovation under rapporteur, Deputy Arthur Morgan, and Chairman, Deputy Willie Penrose, examined what is required to expand employment in the agrifood sector. It takes a deep view of what needs to be done and one of the areas it examined is the role of co-operatives. I referred to the ICOS model and to its meeting this week to discuss how to improve the co-operative movement and the need for greater consolidation. One of the aspirations in the Morgan report is to ensure an important role for co-operatives. It states:

The Government needs to support the Co-operative enterprise from start-ups to employee buy-outs in the agri food sector. Co-operatives have a long tradition in the agri food sector in Ireland where some businesses, which started out as local co-ops have gone on to be multi-nationals and market leaders such as in the areas of dairy products. The Co-operative Movement has played a central role in the economic development of rural Ireland. Co-operative enterprises create many benefits for business, employees and communities.

That aspiration should be incorporated into the strategy.

The development of a new generation of co-operatives, particularly for organic foodstuffs, must play a role in creating new jobs in the agrifood sector. Establishing a co-operative may be the most viable option for starting a new business and government policy needs to reflect this. The Labour Party will stand over that aspiration and we believe that it needs to be incorporated into a government policy where one goes back to first principles. There is a need for greater consolidation within the co-operative movement in the dairy sector where scaling upwards will achieve a greater export market without losing core principles and deepening relationships with the local market.

There is massive scope in this area but there is also a role, for instance, for enterprise development agencies to assist in the process of adding value to the industry. The Morgan report outlines how access to expertise and capital for ventures and projects, which provide economic benefit but which may not happen if left to market forces alone, can be increased. In other words, State involvement is vital in this process.

Improving skill sets is one of the aspirations in the growth and competitiveness chapter of the Food Harvest 2020 document. It acknowledges the role of Teagasc, the Marine Institute and universities and other third level institutions and states they have a crucial role in creating and disseminating new knowledge. If one owns an existing business and if one wishes to retrain, there are programmes which are tailored to one's needs. For instance, a programme in UCC is aimed at people working within the artisan food sector and it is designed to try to encourage them to add value to their products and to learn new business skills. However, there is a cost component to doing the course and, very often, people working within that sector are operating on tight margins and find it difficult to get funding for courses such as this.

If we want to concentrate on education and to try to upskill people or get a more educated coterie working within the food sector, barriers cannot be put in their way. UCC is oversubscribed for the course it has designed for the artisan food sector. Some people cannot access the course because they are on marginal incomes within their own food businesses and they cannot afford the fees. If we are serious about adding value in the sector, it needs to be ensured institutions such as UCC, which provides courses, are not impeded from doing so for want of grant aiding people within the food industry who want to do the courses. It is a common sense principle and, notwithstanding current economic constraints, they could be provided with interest free loans, for example, but there should be a guarantee that people will not be impeded from upskilling because of the fees.

Increasing knowledge is important to add value to output within the sector but despite the wonderful aspirations in the Food Harvest 2020 document, it will fail as a policy if it does not allow for a proper educational component. Access to courses is vital and if we are to deepen the involvement of entrepreneurs in the agrifood sector, educational establishments should be able to take people in without impediment. There should not be a barrier to entry to courses.

Post-primary school enrolments will also increase significantly to reach 334,500 by 2018. Traditional subjects such as English, Irish, Maths, French and so on remain and there is still not an emphasis on science or agriscience subjects. The Labour Party believes in the policy but for it to work, the Government needs to deepen the educational tie-in and the only way to do so is to foster a culture of entreprenuerialism in young children at second level and to develop an education model that reflects the fact that we have always been an agricultural country, we have always had strong ties to the land and even though we have become urbanised in our thinking, we are never too far from the land. The land will get us out of the economic morass but we need to think more laterally about that.

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