M J Nolan (Carlow-Kilkenny, Fianna Fail)
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Question 7: To ask the Minister for Agriculture and Food the policies she has in place to sustain the dairy, beef and sheep processing sectors; the progress to date; the outlook for the future; and if she will make a statement on the matter. [40273/06]

Michael Finneran (Longford-Roscommon, Fianna Fail)
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Question 11: To ask the Minister for Agriculture and Food her plans for investment in the dairy, beef and sheep processing sectors. [40269/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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I propose to take Questions Nos. 7 and 11 together.

In keeping with commitments given in the agri-vision 2015 action plan, in recent months I have announced investment packages totalling €150 million to support the development of the dairy, beef and sheepmeat processing sectors. A total of €100 million is earmarked for the dairy sector, while €50 million is being provided for the beef and sheepmeat sectors. This substantial grant assistance, which should trigger investment in excess of €400 million, is yet another clear indication of the Government's commitment to the continued development of a modern, competitive, innovative and market-focused food industry.

Financial support will be made available towards the cost of the construction and acquisition of buildings, new machinery and equipment and will significantly assist the industry in improving efficiency and competitiveness. I commend the positive response in recent years of the dairy, beef and sheepmeat sectors to the challenges presented in an ever-changing market. This has made a major contribution to the enhanced status and reputation of Irish produce abroad. The Government has striven to lead that progress and to assist stakeholders by adopting pragmatic, if ambitious, policies in supporting the development of the sectors.

The investment schemes will be managed by Enterprise Ireland which will evaluate the suitability of investment projects submitted for grant assistance. I launched the dairy investment fund in September 2006 and the closing date for applications was Thursday, 23 November. The dairy fund will support Annex 1 dairy projects in which the inputs and outputs consist of, at a minimum, 75% Annex 1 products. I was pleased to be informed by Enterprise Ireland that the dairy investment fund was over-subscribed. An evaluation committee comprising representatives from Enterprise Ireland, my Department and other experts will select the projects to be grant aided following a detailed technical and commercial analysis of each project.

While the scheme for the beef and sheepmeat processing sectors was announced as recently as 8 November, there has already been a very positive response from the industry and I expect significant progress to be made fairly quickly. At present I am in consultation with Enterprise Ireland and expect to be in a position to publish the full eligibility criteria and terms and conditions of this scheme in the near future.

M J Nolan (Carlow-Kilkenny, Fianna Fail)
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I welcome the Minister's reply and the Department's commitment to the agricultural sector and to the dairy, beef and sheepmeat sectors in particular. Genuine concern exists within the farming sector regarding the future of farming in general and that of the dairy sector, which has been so good for Irish agriculture in recent years, in particular. Farmers and farm organisations seek a Government commitment to invest significantly in this sector in order that farmers can encourage members of their families to engage in farming and to avoid issues that might discourage farm families from continuing to farm.

I am also pleased to note the Minister has involved Enterprise Ireland in this sphere of investment because one must consider the bigger picture. Can the Minister predict, post 2013 or 2015, where these three agricultural sectors will be?

Mary Coughlan (Donegal South West, Fianna Fail)
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It is with some concerns that we have introduced our AgriVision 2015 document. With the background of the world trade talks, competitiveness and many of the pressures within the manufacturing sector, it was decided that we would support primary processing, Annex I, on the basis that we need to encourage and support this export-orientated sector to be competitive and to possess the standards under which they can afford to be competitive. It was under this drive, particularly in the dairy sector, that such an investment has been made.

If we change our product mix, and if we develop the product qualitatively and can deal with a number of opportunities at innovation level, we also will have opportunities to exploit a market which, as Deputy Nolan correctly stated, has been good to Ireland and to Irish farming. If we do not reach a particular level of exports, we will not survive in the future. The methodologies and policies on which we are working to ensure that happens are ones such as the quota exchange that is taking place in the reform of the quota regimes, supporting some of the concerns expressed on the implication of statutory instruments and, most particularly, that the processing sector would get an investment to afford it the opportunity to be competitive, to innovate and to look towards the market and the consumer. The harsh reality is that when the present Common Agricultural Policy reform is changed, Irish farmers and producers must be in a position to move on from some of the existing structures. We provided this significant investment to allow that to happen. Having spoken to a number of company chief executives, I am aware that there are fine projects which will allow us be more competitive and give us more product mix.

Denis Naughten (Longford-Roscommon, Fine Gael)
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I am glad to see that the Minister's backbench colleagues are coming in to support her. It is either that Deputies Upton and Crawford and I are doing a good job or there is a lack of communication within the Fianna Fáil Parliamentary Party — I do not know which is the case.

We all agree on the need for reform within the processing sector in this country and I hope these funds will spur on such reform. The concern I would have in that regard is that clear criteria were not laid down on the structure under which these funds will be distributed. I am afraid this could end up being a lost opportunity. I genuinely hope I am wrong in that regard, but I have concerns about the structure of the dairy fund and I hope clear criteria on the meat processing funds, both in sheepmeat and beef, will be laid down to ensure that the maximum reform possible will take place. What is the current status of the Malone report recommendations on the sheep industry, which is close to my heart, and when will they be implemented?

Mary Coughlan (Donegal South West, Fianna Fail)
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I sincerely hope Deputy Naughten will be wrong because my view is that the dairy investment fund will create significant opportunities for the sector. At present, Enterprise Ireland deals with Annex I products and manufacturing produce. Primary processing has now moved from Enterprise Ireland. Enterprise Ireland has been targeted at additionality, research and innovation. My view — this fund is being channelled through my Department — is that there is a considerable opportunity within the primary processing sector and that is why it amounts to 75% of Annex I. Our approach is two-pronged. One is straight primary, Annex I. The other involves considerable opportunities within Enterprise Ireland at innovation, research and new product line. These, married together, will provide significant opportunities for the companies.

The criteria were set down. I acknowledge it was a short timeframe, but this must be done in the confines of state aids and that was the issue. We had to get the applications submitted within the existing state aid rules. The changes in state aid could mean that a number of companies would not be eligible and that is why we had to move it.

The criteria for the beef sector and the sheepmeat sector are being dealt with and we hope to have them fairly soon. We have met with the industry on a number of occasions to ascertain its needs and worked with Enterprise Ireland, and will see how we can marry both of those criteria.

There are issues in sheepmeat. We need to take what could be our only, and last, opportunity to develop a sheepmeat sector which will survive and be competitive. The Malone report, as Deputy Naughten will be aware, was launched and I have put together an implementation group. I would hope to receive its outcome quite soon. At present there is much unrealistic talk because people have forgotten that we are in a decoupled system, and a number of Members on all sides of the House are being pressurised to perform miracles on a number of issues. Some of these are well founded and within the confines of the recommendations of the Malone report. Others fall far beyond it. I will be considering that report fairly soon with the chairman with a view to putting together a number of proposals that, hopefully, would support an industry which is extremely important, as Deputy Naughten will be aware from his part of the country.

Johnny Brady (Meath, Fianna Fail)
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I welcome the €150 million that the Minister has invested in the dairy, beef and sheep sectors. We all understand the importance of having a modern processing sector because this is an exporting country.

The small processing sector is an area about which I have been extremely concerned. I refer not only to small butchers but also to farmers going into other alternatives. These should be encouraged. There is a cheese factory in my constituency which has gone from strength to strength, and any assistance or help possible should be given to those who want to get involved in alternative types of farming.

Mary Upton (Dublin South Central, Labour)
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I noted that the chief executive of the Irish Dairy Board commented recently that our input in cheese production is far behind that of the rest of Europe. Are there any specific initiatives in that area? Clearly there are many opportunities. We are importing vast amounts of cheese, which surely could be produced locally. These have the potential to be of a high quality. Why is there not much greater investment in the development of the cheese processing industry, where there are opportunities to develop many new varieties?

Mary Coughlan (Donegal South West, Fianna Fail)
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I agree with Deputy Upton. Mr. Coakley's views are ones we would hope to reflect in this dairy investment scheme, where we are looking at a vision for, and new opportunities within, agriculture. As Deputy Upton will be aware, my view is that in the milk sector there are still opportunities for exploitation of the baseline produce whether in protein, healthy living or looking at new alternatives on the high-tech side or, equally, in cheese production. Mr. Coakley's views have been more than helpful and the dairy investment scheme will reflect a number of those initiatives. From hearsay, quite a number of people are looking at cheese development. Deputy Upton is correct. How is it that an Irish company is the largest producer of cheese in the United States of America? We, in Ireland, should be involved in cheese production.

In answer to Deputy Brady, we have enjoyed much success in the small and artisan food sector. Under the Minister of State, Deputy Brendan Smith, an additional €4 million has been made available to An Bord Bia, which is looking at providing a centre of excellence, particularly supporting artisan and small food producer development and linking with what has happened in Leader and county enterprise boards. There are still niche markets and small opportunities for people in the sector. I note that at any of the awards ceremonies and shows here, in the UK and elsewhere that I have attended recently, many of our excellence awards came from people, particularly in the cheese sector, who are small dairy producers who have innovated to create another type of employment for themselves. Much strength has been gleaned by a number of these companies coming together under Cáis. There are niche opportunities which can provide a suitable income for people linking with the food and tourism strategy in this country.