Martin Heydon (Kildare South, Fine Gael)

I too am delighted to get the opportunity to speak on this motion. I welcome the Minister's positive comments on the progress to date in the negotiations albeit that they are at an early stage. There is agreement in the House that agriculture and the agrifood sector are good news stories at a time when we have few such stories. The sectors offer an opportunity to drive economic recovery and export-led growth.

The negotiations on the new Common Agricultural Policy proposals will be some of the most important undertaken by the Government and officials this year. They offer us the opportunity to ensure the vital role of the Common Agricultural Policy in promoting sustainable and competitive food production is maintained and that an acceptable European Union budget is available to continue to support that role. The proposals to be published by the European Union in October will set the framework for the development of those industries for the next five years. I am pleased that the Minister has taken not just an active role, but almost a lead role in the negotiations. Too often in the past Governments have sat back and allowed EU directives and policy to be negotiated regardless of the consequences. The way forward is to be on top of the issues, to formulate policy and fight our corner as best we can in advance so that we get the best outcome for the country.

To put the Common Agricultural Policy in context, I wish to highlight its importance to the economy, not just the agricultural sector. In the five years from 2007 to 2013, this country will have received a total of €12 billion in payments under the Common Agricultural Policy. That represents a staggering 85% of total funding from the European Union in that period and 1.4% of the total European Union budget.

The Common Agricultural Policy is a critical part of current industry funding and needs to be protected to allow the agricultural sector to grow to its full potential and realise the spin-off benefits for other aspects of the economy that are possible. Given that savings of more than €150 million to €200 million still need to be found in the Department this year, it is even more vital. No farmer wants to survive on direct payments. I made the point in the House previously. Farmers wish to reach a point where their produce generates an optimum return. Until we get to that stage, the Common Agricultural Policy regime is critical. Average farm incomes in 2010 were €17,770, just over 50% of the average industrial wage. Direct payments from schemes such as the Common Agricultural Policy represent 98% of average farm incomes.

If we can continue to develop our agricultural and food sectors, I firmly believe they can be a strong element of our home-grown recovery. The combined agriculture and agrifood industries support jobs and local economies all over the country. Almost 15% of total employment comes from these industries with 300,000 jobs either directly or indirectly related to agriculture and food. Farmers spend almost €8 billion annually on agricultural inputs and living expenses, the majority of which are purchased in their local areas. One statistic that emphasises the pervasiveness of the agriculture industry is that every €100 of agricultural output produces an additional €73 of output, creating a total of €9.25 billion in the economy.

Before getting involved in politics I was a young farmer. I benefited greatly from the receipt of installation aid which helped me to push through my ideas and grow the enterprise when I took over the family holding. I am encouraged by the proactive efforts of the Minister in highlighting the plight of young farmers. Those who came after me did not receive installation aid as it was removed by the previous Government. That was a kick in the teeth for many young farmers who are the future of the sector. The Food Harvest 2020 targets are ambitious. It is only by encouraging young farmers and putting them at the heart of policymaking that we will reach the targets.

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