Séamus Kirk (Louth, Fianna Fail) | Oireachtas source

I thank Deputy Ó Cuív for tabling the motion and facilitating this debate. When one contributes at this stage in a debate, one always runs the hazard of entering the realm of repetition. However, it bears repeating that the agriculture industry is worth in the region of €24 billion annually to the economy. Over 7.4% of those in employment are involved in the industry. Agriculture truly is the engine of the rural economy.

The Minister's predecessor, Deputy Smith, brought forward Food Harvest 2020, which set out very ambitious targets for an industry which clearly has the potential to grow. When the arrangements relating to milk quotas were put in place in 1983, a member of Fine Gael was Minister for Agriculture. It is worth reflecting on the impact those arrangements have had on the development of agriculture in Ireland in the intervening period. If a milk quota system were not in place, what would be the position with regard to the dairy sector at present? Would that sector be a much expanded one and would there have been huge capital investment in it? I accept that capital investment of the type announced by the Kerry Group yesterday might not have occurred but would investment on a smaller scale have taken place in different parts of the country? Would such investment given rise to benefits such as greater spending in local economies and increased employment throughout the country?

The major bugbear when it comes to agriculture is price volatility. That fact is not fully appreciated by those who tend to have either a critical or a benign attitude towards the industry. The Common Agricultural Policy provides a vital safety net for the industry.

Some of the best milk prices were paid during 2011, but by April this year the price had suddenly taken a nose dive. Agricultural economists say the graph is moving in the right direction, price-wise. However, we should examine the origins of this hoped for increase in the price of milk. Is it happening because of serious climatic difficulties in the United States or because the dairy industry there had to cull to cut back the number of cows in its very large dairy units? If that is the main reason, we can quickly appreciate why there is price volatility. If there is a change in US climatic and market conditions, what will be the implications for the dairy industry here?

A cheap food strategy is being pursued in the Common Agricultural Policy area. Because of the growth of the global population, all projections point to a gradual increase in the price received for agricultural products. In the best of years, the return on capital investment in the beef and cereal sectors is moderate to poor. The range of mainstream enterprises associated with agriculture are capital intensive by nature. Anyone in the business of comparing the returns on money spent in different areas of economic activity will discount investment in agriculture because of the poor return on money spent, which is a great pity. Professor Jim Phelan's analysis of the industry researched and produced a number of years ago graphically illustrated the importance of the agriculture industry to the well-being of the national economy. I suggest this document be distributed much more widely. Anyone who has not read it should do so because it provides a much clearer understanding of the industry.

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