Tom Hayes (Tipperary South, Fine Gael)
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Question 8: To ask the Minister for Agriculture, Fisheries and Food his views on the increase in malt imports; and if he will make a statement on the matter. [16995/10]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I presume the Deputy is referring to recent reports of imports of malt from the UK by a major Irish brewer. This is a private commercial matter for the company in which I have no role. However, since my Department has had a long association with the malting barley industry in Ireland, I am naturally interested in developments in this area. With regard to its decision to use imported malt, I understand the company continues to source 90% of its malt requirement for their brewing operation in Ireland and its commitment in this regard is unchanged.

The past decade has seen significant changes in the malting barley industry in Ireland. My Department's association with the growing of malting barley began with the introduction of a Guinness-initiated programme of breeding and trialling, dating back to the early 1900s, to improve the varieties of malting barley available to Irish growers. This association was formalised in 1971 when my Department and Guinness agreed to share the operating costs of the programme. The programme ceased in 2002 with Guinness withdrawing from it.

A number of other significant developments also took place in the brewing industry in Ireland at that time. These changes resulted in a new operating relationship and cost structure arrangement between my Department and the malting industry on the programme of variety breeding and trialling. The malting industry and my Department collaborate in identifying the most suitable barley varieties for malting through the official Department variety evaluation programme. The industry pays an annual fee to the Department for providing this service.

The past decade has also seen increased focus and discussion between maltsters and growers' representatives with regard to the prices being paid. However, this is a matter exclusively for the growers and the malting companies. Irish grain growers have a well established track record of producing high quality malting barley which has been facilitated by the breeding and trialling programme to which I have referred and I am confident they will continue to produce this high quality product.

Michael Creed (Cork North West, Fine Gael)
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I thank the Minister for his reply, which was somewhat reassuring. Tillage farmers have had a difficult few years and recent media reports about the levels of imports of malting barley have given rise to concern. Will the Minister remain vigilant on this issue in order that this industry can be retained at its current level?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I agree with the Deputy that the cereal industry has gone through a difficult time. Top quality product is grown here. I spoke to the chief executive officer of Greencore regarding his company's termination of its interest in this business in Ireland. Greencore is still in negotiations with the IFA regarding redress for farmers whose contracts have been terminated and an appeals mechanism is being established. The Minister of State is also conscious of difficulties that have arisen for farmers in his area and in other counties. I assure the Deputy we will remain in contact. My officials met a number of farming organisation representatives yesterday about the issue of cereals and the growing of malting barley.

Seán Sherlock (Cork East, Labour)
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I am also reassured by the Minister's reply. Given the alleged breaches of contract, will a mechanism be introduced to facilitate the compensation of farmers for loss of contract? Potentially, the company has abused its dominant position by allegedly breaching contracts. What is the Minister's view on that?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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One of the issues brought to my attention by farmers at one stage in regard to pricing is the disagreements between the farming organisations and Greencore Malt about the price paid for the crop over a number of years. Apart from considering the price to be too low, the fact that Greencore Malt only set the price at harvest time placed the farmer in a more vulnerable position than usual as well. Deputy Connick and I spoke to the chief executive officer of Greencore about the issue and the company has been in contact with the IFA.

Michael Creed (Cork North West, Fine Gael)
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The Minister could facilitate forward selling.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I am not privy to the negotiations and how they have progressed but I hope there will be redress for farmers whose contacts have been terminated. I understand consideration is being given to the establishment of an appeals mechanism. It is an important product for an important Irish brand. Any of us who sample the product can always attest to its quality. We are proud that the raw material is grown to a high standard in our own country.

Seán Sherlock (Cork East, Labour)
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Not if one is loyal to Beamish.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I mean no disrespect to other good products.