Trevor Sargent (Dublin North, Green Party)
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Question 110: To ask the Minister for Agriculture and Food if her Department has carried out an analysis of the impact of high energy prices on farmers and the food industry; the steps she plans to take to ensure that these business people have a secure and affordable supply of energy in the future; and if she will make a statement on the matter. [33032/06]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The cost of fuel and energy, driven by international oil prices, is an issue for all parts of the economy, including farmers and the food industry, and is the subject of regular analysis by, among others, the Competitiveness Council in its annual reports. Such studies underline the need to use inputs in an efficient manner and to maintain and, where possible, improve productivity. The Central Statistics Office analyses changes in agricultural inputs and issues the agricultural input price index on a monthly basis. The costs of all agricultural inputs as measured by this index increased by 4.5% in the 12 months to September 2006, the latest figure available. Two of the major factors in this annual increase of 4.5% were the increases of 9.2% in the cost of motor fuels and 4.4% in the cost of electricity. However, international oil prices have eased in recent weeks and this has impacted on fuel prices for farmers and others.

The Government recently issued a Green Paper outlining its policy options on achieving its three objectives of security of energy supply, environmental sustainability and economic competitiveness. The Green Paper puts forward energy policy options for the next decade and beyond designed to meet the needs of consumers and business to support and sustain our economic growth. A 20% increase in energy efficiency by 2020 is a key target of the Green Paper. My Department contributed to the Green Paper and supports its aim to develop an energy policy framework to 2020. We particularly welcome the commitment to prepare a national bioenergy action plan by end 2006. The agriculture and forestry sectors have an important contribution to make in this area and I am working closely with ministerial colleagues, as part of the ministerial task force, to oversee preparation of this action plan. This will ensure a cohesive approach to the development of this sector across Departments, State agencies and relevant stakeholders.

Trevor Sargent (Dublin North, Green Party)
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While the Minister of State is relieved energy prices have reduced a little, I hope he is not taking that as a trend because, unfortunately, that will not continue. The overall pattern is an increase in energy prices.

Has the Minister of State evaluated, for example, the comments of Cadburys, a major player in the dairy industry, which cited energy costs as a central factor in the decision to close plants and cut jobs in Coolock and Tallaght, County Dublin, and Rathmore, County Kerry? Does that point to the need for the Department to contribute more directly in the formulation of energy policy in, for example, encouraging farmers to become more involved in microgeneration, net metering to harness wind and anaerobic digestion projects? There were worries about contamination regarding anaerobic digestion but I hope those have passed. Have the impediments to the development of anaerobic digestion been removed entirely?

The Department of Enterprise, Trade and Employment published a report on the food and beverage sector, which stated it accounted for 8% of exports. Is the Department of Agriculture and Food contributing to such reports to ensure energy costs are a significant factor in seeking alternatives to the high energy system developed by the State to improve energy efficiency and the availability of renewables? Will the Department have to push for a later target than 2020 because we must look beyond fossil fuel dependency? The farming sector offers huge potential to meet the energy needs of the State, if embraced wholeheartedly.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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In the Agri-Vision 2015 report published earlier this year by my Department, we emphasised the factors that have to be taken into consideration in the development of the food industry and they include the increasing cost of oil, the volatility of oil supply and the need to reduce emissions. Over the past 18 months, the Minister for Agriculture and Food and I have met different people involved in the food industry and they have, understandably, repeatedly raised the cost of energy issue with us.

My constituency, which I share with Deputy Crawford, has embraced wind energy generation. Deputy Sargent will recall visiting my parish between Bawnboy and Ballyconnell in August 2001 for the opening of a wind farm. In the meantime, significant development has taken place in my own county in this area. The Minister is a member of the Cabinet task force, which has placed a major emphasis on the need to generate alternative energy sources. The Green Paper is ambitious and practical and it lays out a framework to reduce our dependence on current energy sources. At the same time, we will ensure incentives on both the supply and demand sides. The Government has invited submissions on the Green Paper and it is proposed that the national bioenergy strategy and the White Paper on energy policy will be published by the end of the year. The Government has asked individual organisations to submit their proposals on the Green Paper. A five-year excise relief programme, valued at €200 million, is under way. A capital grant aid programme for bioenergy development will be introduced while a bioheat grants programme provides grants for commercial scale wood biomass boilers. We also envisage the establishment of the single electricity market in 2007 and the completion of the North-South gas interconnector project by 2011.

On the recent visit by the Commissioner for Agriculture and Rural Development, Mariann Fischer Boel, to Ireland, both the Minister and I raised the need to give greater incentives to farmers who want to diversify into the cultivation of energy crops. We are providing capital grant assistance towards harvesting equipment as well. There is a need for further incentives both on the supply and demand sides and we want to encourage more farmers to go into this form of crop production. I attended a meeting organised by Teagasc on the Leader programme in my own county a few weeks ago. I initiated the meeting, which was attended by 250 farmers who expressed an interest in this new form of farming. There is widespread interest but we must ensure we capitalise on it while, at the same time, ensuring the incentives are sufficient to generate business in this new form of farming.

Trevor Sargent (Dublin North, Green Party)
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I am glad the Minister of State and the Department is conscious because that is a good start.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I did not say that.

Trevor Sargent (Dublin North, Green Party)
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The Minister of State said it is very important that we are conscious of the issues overall.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I said that in visiting all food companies over the past two years, even before energy became a key issue in recent months, we were conscious of the substantial burden on industry due to energy costs.

Trevor Sargent (Dublin North, Green Party)
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I welcome the Minister of State's reply.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The Deputy should not minimise the word "conscious".

Trevor Sargent (Dublin North, Green Party)
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It is reassuring though. Will the Department recommend net metering to the Department of Communications, Marine and Natural Resources? For example, farmers in Australia, who have benefited from net metering, can get into wind harvesting more readily because it is not as big a deal, cost wise, to get connected to the grid as it is in Ireland. Anaerobic digestion projects received a setback because of BSE and other scares. Have all the impediments to such projects been lifted?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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When introducing the farm waste management scheme, we made funding available for anaerobic digestion projects. We have asked farmers' organisations and businesses to come up with proposals. Substantial grant assistance is available to help people develop viable projects. The other matter can be considered in the context of the publication of the Green Paper and is a matter for the Department of Communications, Marine and Natural Resources in the first instance. The Deputy's query can be fed into the general discussion following the publication of the Green Paper.

Trevor Sargent (Dublin North, Green Party)
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What of the farmers in Australia?

Mary Coughlan (Donegal South West, Fianna Fail)
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We do not have time to go to Australia. We will be busy for a while.

Trevor Sargent (Dublin North, Green Party)
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I am not suggesting that. The Minister should lift the telephone.