Trevor Sargent (Dublin North, Green Party)
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Question 3: To ask the Minister for Agriculture and Food if her attention has been drawn to the threats to the vegetable industry identified by consultants (details supplied); the way she will respond to these threats. [9281/07]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I am aware of the difficulties being faced by the vegetable industry and I am also aware, as the consultants outline, that it is an efficient industry, well positioned and operated by professional, expert growers who have been strongly supported by the Government over the past decade or so. The fresh vegetable sector is valued at around €80 million within an overall horticulture industry of €300 million per annum. While there has been a consolidation of grower numbers over the last number of years, production has remained relatively steady. As is common in all sectors of the food industry, the vegetable sector has experienced strong competitive pressures from highly concentrated retail chains and this has resulted in static or falling prices.

I recognise that the horticulture sector has potential for substantial growth and development. As outlined in the Agri-Vision 2015 action plan, my Department has committed itself to providing strategically targeted grant support for horticultural projects in production, processing and marketing to improve the overall development and competitiveness of the sector. Under the new rural development programme 2007-13, substantial funding in the order of €50 million has been earmarked for the sector and I intend to launch the first phase of the scheme as soon as the programme is cleared under EU rules. This scheme follows from the grant support provided in the 2000-06 NDP horticulture scheme, under which grant aid amounting to €20 million was paid to producers in addition to the €11 million provided to the sector under the NDP marketing and processing scheme. Taken together, these two schemes have leveraged an investment of over €90 million in the sector since 2000.

Another key to stabilising producer incomes and arresting the decline in numbers in the vegetable sector is participation in the EU producer organisation scheme. Producer organisations provide their members with opportunities to concentrate marketing, reduce production costs and stabilise prices. In effect, they provide a mechanism for producers to work together to strengthen their position in the marketplace by becoming part of a larger supply base, thereby strengthening their negotiating power with the multiples. The proposals for the reform of the common organisation of the market for fruit and vegetables, which were presented to the Council on Agriculture and Fisheries on 29 January, identify strengthening the role of producer organisations as the core part of the strategy for improving the competitiveness of the fruit and vegetable sector in the future. In addition to increased funding for some actions, the proposals include measures for crisis management organised through producer organisations and enhanced aid for measures both within and outside the producer organisation framework to promote consumption of fruit and vegetables, particularly by young people.

I should also add that the Irish food dude programme, which receives considerable funding from my Department and is aimed at increasing the consumption of fruit and vegetables by school children, is being adopted by the EU Commission as a model for this promotion measure in the reform proposals.

Since 2000, some 20 Irish producer organisations have benefited from EU funding amounting to €24 million. With proposals now on the table for greater flexibility in the EU rules governing the formation and operation of producer organisations, I hope to see them playing a much greater role in supporting Irish producers of fruit and vegetables. Currently, the number of vegetable growers involved in producer organisations is relatively small but I encourage all growers to consider the potential benefits which membership could bring to their enterprise. The supports offered through the producer organisation scheme and the NDP will minimise the threats to the vegetable sector, allowing it to prosper and develop.

Deputies:

I advise Deputy Sargent that we are over time on this question.

Trevor Sargent (Dublin North, Green Party)
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I have not even opened my mouth.

Deputies:

I am not suggesting the Deputy is at fault.

Trevor Sargent (Dublin North, Green Party)
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May I put my question?

Deputies:

I am merely trying to dissuade Members from——

Trevor Sargent (Dublin North, Green Party)
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Speaking.

Deputies:

——making Second Stage speeches.

Trevor Sargent (Dublin North, Green Party)
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What I will say is far from a Second Stage speech. I will, however, put several pointed questions with regard to this very important matter.

Given that 40% of the field vegetables in this country are grown in my constituency, I am keenly aware of the current crisis. However, after hearing the Minister of State's reply, I do not think he appreciates the issue. What does he mean by "consolidation of grower numbers"? The decrease by 14% in the number of jobs in field vegetables does not sound like consolidation.

It is not a matter of competitiveness, as the Minister of State would allege, but of prices. Does he realise that an increase of 25% is needed in the price of vegetables if the industry is not to collapse within the next three years? That warning was made to me by people involved in the industry. Has he any proposal for the farmers whose costs are increasing and who will go out of business without a 25% increase in prices? The price of field vegetables, and cabbage in particular, is decreasing, but all I hear from the Minister of State is that growers should get their act together. That is not the solution because they already have their act together in terms of efficiency.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I am aware of the challenges that face the industry. I have had the opportunity to visit Deputy Sargent's constituency of Dublin North on a number of occasions, where I met smaller growers as well as larger processors. It is almost one year since the Deputy accompanied me to an establishment in Ballyboughal which had received an investment of €7 million.

This report draws on a range of internal research by my Department and Teagasc to outline the challenges as well as the investments made by large and small enterprises over the past several years, particularly in respect of north County Dublin. When I presented awards to the horticultural sector 12 months ago, I asked growers to become involved in producer organisations. The mushroom sector, with which Deputy Crawford and the Acting Chairman, Deputy Kirk, are very familiar ——

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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It is dead.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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——has gained significant benefits from forming producer organisations in terms of strengthening the bargaining power of individual suppliers. The rest of the vegetable sector has not availed of the opportunities offered by producer organisations but direct grant assistance is available from the EU and administered by my Department for them to do so.

Deputy Sargent and his Dáil colleagues in Dublin North are aware of the challenges which face individual farmers and enterprises. If they are to operate more effectively in the market, they will have to make better use of producer organisations to combine their strength. Only a small number of farmers are currently involved in the Dublin Meath Growers Society and the other producer organisation in north County Dublin.

The proposals we have put to Europe will allow us to develop an even better system for funding producer organisations under the next NDP. The process will be simplified and more beneficial to individual growers. As I noted in my earlier reply, we have allocated substantial amounts of funding for on-farm developments in this sector between now and 2013.

I met the people who commissioned this report, the farmers and their representatives, and the Minister and Department officials have maintained contact with them. Before the end of this month, I will convene a major forum at which all stakeholders will be able to debate the difficulties, challenges, weaknesses and opportunities in the industry. This forum will be led by my Department and will represent an important start.

Trevor Sargent (Dublin North, Green Party)
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I acknowledge the Minister of State's argument with regard to producer organisations but does he accept that a considerable degree of co-operation already takes place, co-ordinated by the IFA? Everything possible is being done. Does he agree that Departments, such as the Department of the Environment, Heritage and Local Government, have a role to play in providing alternative outlets to the six main retail firms which are essentially squeezing producers? Farmers' markets formed part of the recommendations in the report to which he referred but I do not see them being developed in areas such as north County Dublin, which is ironic given that is home to most of the country's field vegetable production. Will he enlist the help of the Department of the Environment, Heritage and Local Government and local authorities in providing an alternative to the six main retail firms? When he accompanied me to Ballyboughal, we observed the large retailing and packaging side of the industry rather than the growers who are being forced out of business. We need to help these growers.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Since 2002, mushroom growers have drawn down €22 million under the auspices of their producer organisation whereas fruit and vegetable growers have only drawn down €2 million. I accept there is a need for individual producers to have stronger muscle so that they obtain the return on their produce to which the are entitled and which they need to ensure the fruit and vegetable industry remains strong and viable.

Farmers' markets are important and I have had many exchanges with the Deputy about them. I visited England last September with IFA representatives and farmers from north Dublin. We visited farm shops, in particular, and I would like that concept rolled out in Ireland. We met individuals who have plans to roll-out farm shops in north Dublin and Meath and we passed their planning concerns to the Department of the Environment, Heritage and Local Government in mid 2006.

Trevor Sargent (Dublin North, Green Party)
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I look forward to following that up.