Martin Ferris (Kerry North, Sinn Fein)

The first part of this report makes the point that while this country has huge advantages in terms of our status as a producer of internationally recognised good food, there is no room for complacency. Irish agriculture and Irish farmers face considerable challenges over the next number of years, not least from the current review of the Common Agricultural Policy. It is vital, therefore, that we have a coherent approach to the negotiations that will take place and that the outcome which will shape CAP after 2013 protects the interests of Irish farmers. It is also vital that we have in place a strategy that will ensure that this country is capable of adapting to whatever changes come about as a result of the reform.

My party agrees with the vision set out in the report of a dynamic sector capable of achieving sustainable growth. My colleague, Deputy Arthur Morgan, recently submitted a report, which was adopted by the Oireachtas Joint Committee on Enterprise Trade and Innovation, on the agrifood sector. The report addresses many of the issues which are the focus of this report and there are considerable areas of agreement. However, much of the way in which the agrifood sector develops in the future will depend on the strategy put in place by the Department and that, in large part, will depend on political considerations, although there are considerable areas of agreement on what needs to be done across all parties in the House and within the sector itself.

I said the same in regard to the last reform of CAP, which came into effect in 2003. My party supported decoupling when all other parties in the House sat on the fence, as we and many within the farming sector saw the advantages of a situation where farmers were guaranteed a certain level of income security allied to the opportunity to branch into new areas of production that were not dependent on EU subsidies.

I also pointed out at the time that the success or otherwise of the reforms would depend on the strategy in place at domestic level to cope with what were radical changes. Unfortunately, this has not been properly addressed since 2003.

A report, which I submitted to the Joint Committee on Agriculture and Food on the future of farming and fishing in the west, which was unanimously adopted by the committee, highlighted the problems faced by farmers in the western counties. Through an extensive survey it also showed a high level of pessimism on the part of western farmers, even with the advent of the single farm payment. Many believed that they have no future in farming and this is especially true of smaller scale family farms. This has been reflected in the continuing haemorrhage of people from the land. While there are those who would claim that this is a natural process, none of us wishes to see a situation whereby the number of farmers in the country is reduced to well below 100,000 before 2020, as forecast by several studies on farm viability. Not only would this have detrimental social effects and a massive impact on already disadvantaged and declining rural communities, but it would also have implications for the country's future as a key food producer, especially in the context of the EU and global food security, as referred to in this report. Therefore, we must have a strategy not only to ensure we have a successful and dynamic food sector, but also that we retain the maximum possible number of people on the land and that family farms survive not as struggling dependants on direct payments, but as viable and dynamic individual farm enterprises tied in with an overall dynamic food sector.

Much of the way forward to achieving this has been highlighted in Deputy Morgan's report on the agrifood sector. We must recognise that food production and processing are the major indigenous economic sectors, as underlined in the Food Harvest 2020 report. As a result, they are not as dependent on or as subject to volatile international trends as, for example, certain manufacturing sectors in which decisions made far away can have devastating impacts on employment here. Agrifood is a sector largely in our own hands which produces a product for which there will always be a significant and relatively stable demand. Indeed, the demand for food, especially for safely produced food, will grow over the longer term. This has been referred to already in the debate on the CAP reform and it was one of the key issues mentioned by Commissioner Ciolos when he was here some weeks ago to address the agriculture committee. Unfortunately, other commitments prevented me from attending the committee that day but I have read with interest his remarks, especially those which referred to food security and the need to preserve Europe's capacity to meet demand.

The report and all proposals and discussions on the future of the food sector here must be placed in that context. As the section on future growth illustrates, expanding and developing the food sector has the potential to boost the return to the primary producer, the farmer, boost exports and expand the involvement of small and medium enterprises, hence of employment with all the benefits that brings in terms of the economy in general and living standards.

The report sets ambitious growth targets for 2020. It maintains that the value of primary output in the agriculture, fisheries and forestry sectors can increase by €1.5 billion or 33% compared to the 2007-2009 average. Likewise, the value added in the agrifood, fisheries and wood products sector can increase by €3 billion or 40% compared to 2008, with exports reaching €12 billion. If these targets were met they would represent a considerable boost to overall economic growth and provide one of the key engines to bring us out of the current mess. However, achieving these targets could also be negatively impacted upon by the current policies being implemented within the agricultural sector and society overall.

It is clear that future economic growth will not come about through austerity measures, which drive people onto the dole, to poverty and to emigration. Nor will future economic growth come about through destroying training and research and development. We have already seen significant cuts in these areas within the agricultural sector. As Deputy Morgan's report points out, these are key areas if we are to take advantage of the opportunities that undoubtedly exist.

Another key area is that of credit and we are all familiar with the problems which small and medium enterprises and farmers have had and are currently experiencing with the banks in terms of accessing the credit necessary to allow them to invest. Quite simply, if the research and development and the training is not in place and if the capital is not available for investment, then the ambitious targets outlined in this report are not worth the paper they are written on. In regard to credit, it is ironic that in the survey conducted among enterprises within the agrifood sector by Deputy Morgan, the major reason cited by the lending institutions for refusing to lend was a lack of capital. For the most part, these were the same lending institutions which handed out money hand over fist to developers and speculators, who were clearly acting on a wing and a prayer or in many cases simply bluffing on the allegedly ever increasing values of property. However, businesses which employ people and which actually produce goods for which a demand exists and which have viable businesses plans are for the most part refused the credit they need to kick-start or to expand. Clearly, this is a key area which must be addressed if the agrifood sector is to grow, which it clearly has the potential to do.

Food Harvest 2020 addresses the issue of credit and regards the restriction of credit as a key factor inhibiting growth and development. Among its proposals are that the banks should consider the use of mechanisms such as chattel mortgages and invoice discounting. However, these are followed by a proposal that the Department ought to consider the use of State supports to the sector with a view to further promoting competitiveness and sustainability. The report also suggests that the Government should consider the specific needs of the food and beverages sector in its deliberation on an export credit insurance scheme. Perhaps the emphasis on State support and encouragement suggests that the authors of the report are not overly optimistic regarding a change in the policy of the banks. However, the effective State control of banking ought to ensure that whichever Government is in power ought to be able to force the banks to change those policies where they are clearly in conflict with the best interests of the overall economy.

The report refers to the use of renewable energy sources and this is something that has not been adequately addressed by the current Government despite the involvement of the Green Party. It has set ambitious targets for the replacement of energy generated by fossil fuels by renewable sources but it has done little to achieve those targets. Farming is obviously a key focus in all of this given the possibility of having on-farm wind generators and of encouraging farmers to grow energy crops. My party has also published proposals on the use of the former sugar factories as processors of sugar beet as an input into bio-energy production.

Regarding marketing, the report highlights the significant proportion of our food exports that go to other EU states and still, overwhelmingly, to the UK. Exports to the UK will fall significantly by 2020 according to the report although they may remain at a high level. Exports to other EU states will rise and the overall level of exports to the EU is forecast to be approximately 75% of total exports. Exports to North America, Asia and the Middle East will also increase albeit from a relatively low level.

In that context and to return to the CAP reform post-2013 it is vital that these markets and, in particular, exports to the rest of the EU are protected from any potential challenge from third countries. This relates not only to the economic factors related to the Irish food sector and overall economy, but also to the issue of food security, the preservation of which on a domestic and EU level is intimately dependent on food production in the country. Any major threat to the country's food exports and growth in food exports would completely undermine the targets set in the report for future development and growth of the agrifood sector in general.

The reputation of Irish food as clean and healthy is also key and in that context I hope we are not browbeaten or enticed into embracing a policy of allowing genetically modified food to be produced here. Several studies have demonstrated that EU consumers are hostile to GM food and it would be the height of madness were we to abandon that advantage on the basis of spurious arguments presented by the GM companies and their self-interested spokespersons here. By retaining the image that Irish food is safely produced we can maintain a clear advantage over our competitors.

There is also the issue of the relationship between producers, processors and retailers. The report notes that future growth must entail a better return for farmers as primary producers. Over recent years, however, we have witnessed significant pressures on the price paid to farmers, with the percentage of the final consumer price that accrues to farmers steadily falling.

That also raises questions of the control farmers have over the processing and marketing aspects of the sector, which many contend relates to the changing nature of the processors that were once run as co-operatives. Farmers might examine the whole area with a view to returning to the co-operative concept in a modernised form to enable them to secure a better return for their produce. Co-operatives founded all over this country were undermined when they were transformed into PLCs, which are all about profit at the expense of the producer.

On retaining and expanding markets, the report again covers some of the same areas as Deputy Morgan's report. I note the reference to reducing input costs through greater efficiencies in energy, transport and a reduction in the regulatory burden, which was one of the main areas identified in the Morgan report by people involved in the agrifood sector. Other key areas are linkages, better marketing techniques and improved research and development.

The report deals with issues in the specific sectors of beef, sheepmeat and cereals that I do not have time to address in detail. The common theme in all sectors appears to be the need to maintain or to improve the quality of the product and to ensure that it is price competitive in respect of rival producers, and in particular other exporters to EU markets. Regarding cereals, the report recommends greater diversification into other crops and into biomass, all of which have proven markets that could open up for Irish producers. That needs to be addressed within the context of overall strategy around Ireland's place within the reformed CAP. Not enough has been done to encourage farmers to take advantage of whatever new production opportunities exist since the introduction of decoupled payments.

Towards the end the report deals briefly with the seafood sector. There is massive potential here, particularly to increase the level of higher value added domestic processing for export. Unfortunately, seafood is subject to the overall restrictions on a sector which, unlike agriculture, has certainly seen no benefits as a consequence of EU policy. Quite the opposite. We are still witnessing the harmful effects of the manner in which the Irish fishery is administered from Brussels to the detriment of Irish fishermen. The unfair distribution of quota and other restrictions have held back the development of what had and still has the potential to be an area of growth but that will not happen until we secure a meaningful reform of the Common Fisheries Policy to redress the gross imbalance in quota allocation within what ought to be Irish waters.

I welcome the opportunity to debate this report and hope that whoever is in government over the coming period will adopt the ambitious targets it sets out and put into place a strategy capable of achieving them. I do not believe the austerity measures being implemented by the current Government and seemingly also favoured by two of the main Opposition parties are the way forward. We need imaginative policies that will stimulate domestic growth. Agrifood is the main indigenous economic sector and one that has the potential for growth even at the present time based on the global demand for food. We can take advantage of that if we are prepared to encourage development rather than drive the economy further into recession by pursuing the type of policies in place at present.

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