Andrew Doyle (Wicklow, Fine Gael)
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Question 28: To ask the Minister for Agriculture, Fisheries and Food if he has had discussions with the Department of Enterprise, Trade and Employment with regard to the difficulties facing the food and drinks industry; his views on the way forward to sustain employment and production in the industry; and if he will make a statement on the matter. [26301/09]

Tony Killeen (Clare, Fianna Fail)
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My Department works closely with the Department of Enterprise, Trade and Employment and our respective departmental agencies on issues confronting the food and drinks industry. The economic downturn, rising costs and currency exposures have translated into sudden and severe deterioration in trading conditions. One of my key priorities is to ensure a policy and support framework that will facilitate the food sector in maintaining competitiveness and its contribution to the economy. In this context the Government has established a cabinet sub-committee and interdepartmental group on economic recovery. Arising from the work of these groups, the Department of Enterprise, Trade and Employment launched an enterprise stabilisation fund, which is run by Enterprise Ireland, to allow for meaningful additional assistance to be provided to basically sound internationally traded companies that would otherwise struggle to survive the global downturn. The fund operates in conjunction with the banks to provide direct financial support to eligible, internationally trading enterprises which are undertaking development expenditure to reduce costs and gain sales in recession hit overseas markets. It complements the banks' commitment to SMEs under the recapitalisation scheme and should facilitate much of the restructuring that is needed for viable companies selling on the home market. Other issues affecting the competitiveness of manufacturing industry, including the food industry, will continue to be addressed by the Government.

Within my direct area of responsibility, I should point out that my Department and the development agencies have supported capital investment, marketing measures and food research to sustain the food and drinks industry. Grant aid has been awarded under the dairy and beef and sheepmeat investment funds, which are operated by Enterprise Ireland on behalf of my Department, to improve efficiencies and added value from processing.

In dairying, 19 projects were awarded €114 million for investment of €286 million. Five of these projects have been completed and three are well advanced. Grant aid amounting to €30 million has been paid and a further €30 million is expected to be paid by the end of 2009. Grant aid of €69 million awarded in the beef and sheepmeat sectors is expected to contribute to investment of €168 million and contribute to a net increase in sales and exports of €400 million as well as a net additional 800 jobs by 2012.

Additional information not given on the floor of the House.

With regard to small businesses, my Department awarded grant aid of €16.7 million in December 2008 for capital investment in marketing and processing to 66 horticulture, livestock marts and small meat sector enterprises. This is expected to contribute to investment of €70 million and will assist the businesses to improve efficiency, add quality and value, produce innovative products and develop new markets.

Our food and drinks industry continues to need export markets in which it can trade competitively. An additional €2.5 million has been provided to Bord Bia to identify market opportunities within the EU and work with the industry on developing new products. The transfer to Bord Bia of responsibility for fish marketing from 1 June will produce synergies for food and seafood companies. EU co-funding of €235,000 over three years has been made available to Bord Bia for programmes to increase sales of quality assured EU pork, offal and beef products.

A key ingredient of sustainability is innovation to improve competitiveness. In research and innovation Enterprise Ireland provides a range of measures to support industry directly and my Department funds research programmes in the agri-food, seafood and forestry sectors, which provide a basis for future commercialisation. Funding for the food graduate development programme has been approved for a further two years to provide specialised business skills to postgraduate students engaged in food research funded by my Department. My Department, through the RELAY project, is working with Enterprise Ireland and technology transfer offices at the food research institutions to maximise commercial potential of this research.

Retail trading conditions are a particular concern for the industry and where action at EU level is important to secure balance. The European Commission is planning a review of anti-competitiveness in the food chain, including the dairy and pigmeat sectors, and measures to aid transparency on food prices through possibly an EU observatory on food prices. I have supported Commission proposals to improve communication between farmers, buyers and consumers about agricultural product qualities and the coherence of EU agricultural product quality policy instruments, including how products are described and this development may lead to the use of what is termed "place of farming" on agricultural products.

Andrew Doyle (Wicklow, Fine Gael)
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That is all very fine but last week the Joint Committee on Agriculture, Fisheries and Food heard a presentation from Mr. Jim Power. He highlighted the fact that 100,000 jobs are in jeopardy because of unfair trading circumstances. Last week's report from Food and Drinks Industry Ireland highlighted our cost base in waste, energy and labour, but also the need for fair trade legislation to outlaw current practices. This will drive down the profits. While everybody else has to show their margins, the retailers do not publish theirs. There is no legislation in place to underpin it. There is no sheriff. This is the wild west of the sector. It is worth €11 billion nationally, and nobody is policing it.

Unless we do something it will be too late. These jobs create extra jobs. It is estimated that 230,000 people work in this sector. One can talk about schemes, initiatives and Cabinet sub-committees, but people are losing their jobs every week and others are in danger of losing their jobs. The Minister mentioned initiatives for companies that are sound and trading abroad. There are hundreds of smaller processors trading in this country. In this week's Irish Farmers Journal Dr. Pat Wall made the point about country of origin. He said that is not a buy Irish campaign. There is a serious resistance on the part of the Government and the Department of Agriculture, Fisheries and Food to initiate a country of origin campaign and that, in itself, is educational.

Trevor Sargent (Dublin North, Green Party)
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There is no resistance in the Government to country of origin labelling. We would introduce it overnight if we did not have the resistance from other member states. We are working on that and I will not give up on it. Deputy Doyle is right. A very serious situation confronts the food and drink sector and I talked about the quicker element of the response, which had to be brought about by special permission of the European Commission to allow for temporary state-aid rules in December 2008.

Deputy Doyle referred to the wild west. The Food and Drink Industry Ireland report uses a less colourful but equally accurate term when it says the grocery sector is dysfunctional due to excessive retail buyer power. We are working on the legislative approach with the Department of Enterprise, Trade and Employment and the EU because there are other countries in the same boat as ourselves. We need a code of practice and a retail ombudsman, and those can be brought in before the legislative approach runs its course. We are working on these aspects with the Department of Enterprise, Trade and Employment.

Andrew Doyle (Wicklow, Fine Gael)
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I seek clarification. I welcome the fact that the Minister has said there is a legislative approach. On last Thursday's Order of Business I asked the Minister for Finance whether he had any plans to bring in fair trade legislation and he said he did not. On foot of today's report, the Competition Authority's remit seems to be all about competition in the grocery sector being healthy in the short term for consumers, but there is nothing about competition for producers or transparency in how their prices are set and driven down on a whim. I have heard of invoices being reduced a further 20% by one of the major retailers this week. It is a carte blanche approach across the board and one has no say in it. That sort of behaviour cannot be allowed to continue.

Trevor Sargent (Dublin North, Green Party)
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The report by the Competition Authority, as its name suggests, puts much emphasis on competition but it points out that exporters will frequently price to the market. The retail sector is being shown to have a selective approach to what it means by competition in any one market and will play to its strengths and have higher margins in some areas than others because it considers it can get away with it. The information is not available.

Andrew Doyle (Wicklow, Fine Gael)
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There is no fair trade legislation.

Trevor Sargent (Dublin North, Green Party)
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That is why we need a retail ombudsman. I heard the Tesco representative on "Morning Ireland" this morning. He did not give a "Yes" or "No" answer when asked about a retail ombudsman. Consumers, the Government and the industry need to come together and recognise that unless we have transparency and an end to this dysfunctional operation of the retail sector, the suppliers will not be around for much longer.

Andrew Doyle (Wicklow, Fine Gael)
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He effectively said, "No".

Trevor Sargent (Dublin North, Green Party)
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He did not answer the question, but he will have to do so.

Andrew Doyle (Wicklow, Fine Gael)
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He did not answer the question but he effectively said, "No".