Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

First, I will respond to some of the comments made by Deputy Creighton. I can assure the Deputy that the mistakes of the past in respect of public sector pay will not be repeated. However, it would be extraordinary to suggest that we would look at unwinding some of the restrictions which were imposed on Government over the past six to eight years in terms of required savings across the public sector without talking to public sector unions. To suggest that we would not talk to them about how to unwind those restrictions in an orderly and well-managed way is to suggest that we would do it without consultation. All that the Minister for Public Expenditure and Reform has said he intends on doing is to discuss with public sector unions how we can unwind over time some of the restrictions of the past while maintaining the focus on reform, change, better performance and modernisation of the public service.

We had a detailed discussion at Cabinet on this issue this week. I can assure anyone who may have doubts that we recognise the sacrifices made and performance changes made in the public sector in the past number of years in an effort to find a way forward for Ireland in very difficult times. The cost of running my Department is about €80 million to €90 million less per year now than it was when I first took that office. More than 4,000 people worked in the Department of Agriculture, Food and the Marine. The figure is now approximately 3,300. The Department is providing a better service to farmers now than it ever has. There has been a constant rolling agenda of reform in the public sector, led by the Minister for Public Expenditure and Reform. This will continue in terms of better performance and in looking for new, better and more modern ways of doing things. However, it also has to return a dividend to the people in the public sector. As the economy grows, they have to benefit from that growth in terms of their take-home pay and so on. I can understand why people might raise concerns but I assure Deputy Creighton that we do not intend to and will not repeat mistakes of the past. Any approach towards public sector pay that this Government will back will be sensible and sustainable from a financial management point of view. That is what is needed.

The response to the spring statement by many people yesterday has surprised me. It is almost like people were expecting budget day yesterday and a whole series of new announcements. Similar to what happens in other countries, the spring statement sets a context around which specific budgetary decisions can be made in the future. It also sets out a vision for where the Government intends to take the country over the medium term. That is what yesterday was about. It was about spending a short amount of time reminding people how far we have come as a country as a result of the sacrifices of families, businesses and the public sector and so many others, and some people are still making those sacrifices, in order to correct extraordinary mistakes that were made in the past and which resulted in Ireland being pretty close to bankruptcy as a country.

Now the country is on a firm footing again. Our economic and commercial foundation is strong. Last year we were the fastest growing country in the European Union and will be again this year. As of today unemployment is back under 10%. It was close to 16% four years ago. We are able to borrow money. There is a queue of people who want to invest in Ireland. Some people may raise issues about a focus on foreign direct investment as a source of economic growth but I remind them that the sector that I am in charge of is far from being focused on foreign direct investment. The agrifood sector is by far the most important indigenous sector in the Irish economy. It has performed extraordinarily well through very difficult times over the past four years. The Government is driving a very ambitious growth agenda in the agrifood sector. It is central to growth now and in the future across the broader economy.

The agrifood sector is the largest indigenous industry. It contributes €26 billion in turnover and generates 12.3% of merchandised exports. The sector accounts for approximately 170,000 jobs or 9% of total employment. It makes a particularly significant contribution to employment in rural areas. Under the Food Harvest 2020 strategy, which to its credit was put in place by the last Government but is being implemented by this one, we have set out a strategy for smart green growth across a hugely important indigenous sector.

Working with industry leaders, we have set ourselves stretch targets to be achieved by 2020. Not only this, but we have a clear business map to get there. The targets include a 33% increase in the value of primary agriculture from €4.5 billion to €6.1 billion; an export target of €12 billion, a 42% increase from a baseline figure of €8.2 billion a number of years ago; and a 40% increase in value added from the 2008 baseline. In addition to these value increases, the dairy industry has targeted a 50% increase in milk production by 2020 now that the cap on milk production through quotas has been lifted. Under the direction of the Food Harvest 2020 high level implementation committee, these targets are continually monitored, tracked, assessed and reported on annually under the milestones for success reports. Progress to date provides tangible evidence that the structured and collaborative approach between the State and industry works well.

By the end of 2014, the value of all primary output increased significantly to €5.977 billion, virtually reaching its target of a 33% increase. Export performance has been strong at €10.5 billion, more than halfway towards achieving the 2020 target of €12 billion and representing a 45% increase since 2009. Compare this with other products manufactured in Ireland and exported by indigenous companies. In the past four years, there has been a 5% increase in the value of those exports. In the agrifood sector, the increase has been 45%. Value added has also increased to more than €7.5 billion, which means it is more than two thirds of the way towards the 2020 target.

Given that the final comprehensive review of Food Harvest 2020 - Milestones 2014 - was published last September, I decided that it was an opportune time to look to the future and to consider what the agrifood industry could achieve in the next decade. We are entering a profound change and it is vital that the optimum strategy be identified to meet the challenges ahead and to embrace this major opportunity for growth and expansion. We want the agrifood sector to have a ten-year horizon for targets constantly. The certainty in terms of policy and funding that this approach provides to investment and planning has been strong in the context of Food Harvest 2020. The same will be the case for our 2025 targets. I have appointed Mr. John Moloney to chair the 2025 agrifood strategy committee, which consists of leading figures from that sector. It is tasked with reporting back to me by the end of June with its considered recommendations on how best to maximise the opportunity that is open to us and to optimise the sector's contribution to economic development and job creation in an environmentally sustainable way. I look forward to that report.

The removal of quotas at the end of this month will signal one of the greatest opportunities for many decades, not just for agriculture, but for rural Ireland generally. Food Harvest 2020 outlines an ambitious growth target of 50% in dairy production by 2020, the largest increase of any EU member state. This will lead to the creation of an estimated - estimated not by me but by independent assessors - approximately 15,000 jobs across rural Ireland. Research suggests that an extra 300,000 dairy cows will be required and the existing herd will need to increase its yield significantly to meet the Food Harvest 2020 targets. While traditional markets such as the UK and the EU will naturally remain important for the dairy sector from an exports point of view, it is abundantly clear that significant market opportunities exist for the sector in new markets outside the EU in the medium to long term. In 2014, we exported dairy produce across a range of commodities and other value added offerings to 130 countries.

In preparation for the anticipated major increase in milk output, virtually all of the major players in the sector have been ramping up their capital and human investment. At industry level, Enterprise Ireland has supported the capacity and capability development to cater for increased volumes and to move dairy exports up the product value chain. A strong indication of the positive outlook for the dairy sector is demonstrated by the fact that capital investments of more than €729 million are planned by key players in the industry in the 36 dairy and IMF projects supported by Enterprise Ireland. These include a €185 million investment by Glanbia in Belview, spending by Kerry Group of more than €108 million on a global food innovation centre in Naas and spending by Dairygold of €120 million in Mallow and Mitchelstown. Enterprise Ireland estimates that these investments will contribute more than 1,600 direct jobs and up to 4,500 indirect jobs to the wider economy.

Deputies have suggested that the Government is relying and overly focused on foreign direct investment, FDI, for growth. It is worth noting that the three largest investments by Enterprise Ireland companies were all made in the agrifood sector in the past three years, namely, the Kerry Group, Glanbia and Dairygold projects.

At farm level, there has been considerable investment. A 2015 Teagasc-Bank of Ireland study showed that dairy farmers invested almost €2 billion in the 2007-13 period. Just under half of that investment was in buildings, partly driven by grant incentives, but almost €70 million was invested in milk quota in that period. In addition to the investment associated with expansion, dairy farmers are likely to undertake their normal investment in items such as machinery and in land improvements. In the 2007-14 period, investment in these averaged at approximately €140 million per year.

Agriculture is in a better place than we have ever seen it. Our agricultural colleges are full and, in terms of levels of ambition, education and qualification, the quality of the people entering the sector is higher than it has ever been. Young companies in the sector are more numerous. Innovation, technology and design in agriculture and agrifood are also stronger than they have been in as long as I can remember. On top of this, the Common Agricultural Policy, CAP, is providing funding and policy certainty and the rural development programme is contributing more than €4 billion in support of the type of new thinking that is required, namely, smart, science based and green and sustainable.

A number of people have raised concerns about the sustainability of our expansion plans. I will reassure them by saying that Ireland is the only country in the world that is planning and delivering a roll-out of a sustainability audit system, not only at farm level, but at food processing and manufacturing levels. We are doing this through the Origin Green and rural development programmes. All 17,000 to 18,000 dairy farmers have, through their farming organisations, effectively signed up to a sustainability audit system that will measure carbon footprint, water management, protection of biodiversity, animal welfare and so on.

We are planning in a visionary way to expand and modernise agriculture and the food industry in the next five to ten years, as has been happening for the past six years or so, in a way that is exciting and attracting a new type of person to food science and agriculture. Whether one is a beef farmer measuring a herd's carbon footprint using an internationally certified carbon calculator model, a sheep farmer, a dairy farmer or involved in pigs or poultry, we aim to benefit significantly from the opportunities that exist for Irish food internationally, and we will.

6 o’clock

There also is a significant opportunity for development in the marine sector.

I look forward, as Minister for Agriculture, Food and the Marine, to continuing to work with all the relevant industries. People in the various sectors are looking forward with real optimism to a period of sustainable growth into the future.

See this speech in context