Dáil debates

Wednesday, 12 May 2010

Adjournment Debate

Malt Barley Industry

9:00 pm

Photo of John BrowneJohn Browne (Wexford, Fianna Fail)
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I thank the Ceann Comhairle for taking this matter on the Adjournment and I welcome the Minister of State, Deputy Connick.

I raise the issue of the growing of malting barley and the future of farmers, particularly in the south-east. Counties Wexford, Carlow, Kilkenny and Kildare are renowned for growing top-class malting barley. Due to the recent Greencore rationalisation plan, last year's figure of 11,000 malting barley growers is down to 500 this year. All farmers producing under 80 tonnes were dumped by Greencore. Recently the malt side of Greencore has been sold off as well, so it is a double whammy for farmers, particularly in the south east. The 500 who were left had high expectations that they would have a viable malting barley industry for the future, but while there were 130,000 tonnes for Minch Malt last year the figure this year is 75,000 tonnes.

However, I have raised this matter on the Adjournment to question the commitment of Diageo-Guinness to Irish farmers growing malting barley because of a situation that has developed in recent weeks. The south east is renowned for growing malting barley and yet Diageo-Guinness has been sidestepping the local supply. I know for a fact that it has been sourcing malting barley in the UK from a company called Crisp and taking it by lorry to St. James's Gate in Dublin, which is amazing considering the amount of malting barley and malt that is available in Athy at present.

I should like to know where we stand with Diageo and the prospect of it continuing to take malt for the future, and malting barley from Irish farmers. It has shelved its new proposed brewing facility at Grange Castle, Clondalkin and it has not given any great commitment to the farmers as regards the future. I believe it is a shame that it is now importing barley malt from the UK when there is an adequate supply in this country. As a result of the importation of the malt, the Athy malt plant was closed for three weeks, which is an amazing situation.

I understand Diageo-Guinness is again taking malt from Athy but I would like the Minister of State to ensure that we have a strong commitment from the company in this regard. Guinness has always been Irish through the generations and it now seems strange that while Guinness is still promoted as being produced from Irish malting barley, supplies are being sourced from England and indeed, Europe, at the present time.

The other area I should like to raise in relation to malting barley is the fact that Heinekan, which now owns Murphys and Beamish, is purchasing no malt at all in Ireland, and yet it, too, is promoting its product as being Irish to the core. I ask the Minister of State to have discussions with the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith and the Minister for Enterprise, Trade and Innovation, Deputy Batt O'Keeffe, because both of them are relevant in this case.

As the Acting Chairman appreciates there is a substantial number of jobs in Dublin at St. James's Gate and we want to see Diageo-Guinness continuing to provide jobs and product in Ireland. We also want it to produce the product but from the adequate amount of malt that is available in this country at the present time.

Farmers in the south east have lost the beet industry in recent years. If they were to lose the malting barley crops in the future, this would have devastating effects on them, in Wexford and the adjoining counties as well. I ask the Minister of State to have discussions with both Ministers as well as directly with Diageo-Guinness as to where it is going in the future, wherein stands the commitment to the 500 growers - reduced from 11,000 - and about the future of the Athy plant.

Photo of Seán ConnickSeán Connick (Minister of State with special responsibility for Fisheries and Forestry, Department of Agriculture, Fisheries and Food; Wexford, Fianna Fail)
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I am taking this Adjournment matter on behalf of my colleague, Deputy Brendan Smith, Minister for Agriculture, Fisheries and Food. At the outset I should like to thank Deputy Browne for putting down this important matter for discussion tonight. I share his concern as I have seen the impact of the Greencore decision and the difficulties it is now imposing on farmers, not just in Wexford but in the south east in general.

The maintenance in the first instance of an efficient and viable crop sector in Ireland is very important for the well-being of the agrifood industry. Indigenous production of cereals, horticulture and bio-energy crops is, of course, an important part of primary agricultural production in Ireland. In addition to generating an income for our tillage farmers, the cereal sector is a key source of feedstuffs for the livestock sector and, as a consequence, a significant stakeholder in the safety of the food chain. Annual cereal production in Ireland has fluctuated around 2 million tonnes in recent years. It is desirable to try to sustain this level of production in order to avoid over-dependence on imported cereals.

The Department operates a range of services aimed at improving the efficiency, quality and viability of cereal production. These services include seed certification, seed testing and recommended lists of varieties. In addition, Teagasc provides research, training and advisory services for cereal producers. The value of all these support services is reflected in the fact that Irish cereal producers have consistently achieved some of the highest yields in the world.

At present, up to 130 cereal varieties are undergoing testing in the Department. This results each year in a number of new and improved varieties being recommended to farmers and industry due to their suitability for malting, milling or bread-making, as the case may be. While the largest portion of the wheat crop grown in Ireland is used as feed for the livestock industry, a significant acreage of the crop meets the high-quality requirements of the milling industry. The crop variety testing programme includes extensive evaluation of new varieties for bread-making and biscuit-making quality.

Each year a number of new oat varieties are evaluated under the crop variety testing programme. These are mainly used in the production of specialised feed, and only those assessed as having high grain quality characteristics are recommended for cultivation. The demand for organically grown oats for inclusion in breakfast cereals continues to increase. The Department carries out a number of organic oat cultivation trials each year to identify varieties most suitable for this market. There is strong interest among commercial organic growers in the results of these trials.

The Department has had a long association with the malting barley industry in Ireland, dating back to the beginning of the 20th century with the introduction of a Guinness-initiated programme of breeding and testing to improve the varieties of malting barley available to Irish growers. This association was formalised in 1971 when the Department and the company agreed to share the operating costs of the programme. The programme ceased in 2002, mainly because of the withdrawal of the brewing company. However, the company continues to purchase malt manufactured from Irish malting barley.

The malting industry and the Department continue their collaboration in identifying the most suitable barley varieties for malting through the official variety evaluation programme. Quality issues have arisen recently with regard to protein levels in Irish malting barley, which has resulted in the importation of a small quantity of specialised malt by the company involved. Officials of the Department have been in communication with grower representatives regarding this protein deficiency issue.

The Department also continues to support the development of the horticulture sector in Ireland. This support has primarily been provided through the grant aid scheme of investment aid for the development of the commercial horticulture sector under the National Development Plan 2007-2013. The Minister of State, Deputy Cuffe, announced last Friday a grant aid package of €3.8 million under the scheme for 2010.

Funding provided under the scheme underpins capital investment on farms to promote the specialisation and diversification of on-farm activities, improve the quality of produce and ensure the application of environmentally friendly practices. This investment contributes significantly to the growth and development of the horticulture sector across all areas, including the protection of crops, field vegetables, nursery crops, mushrooms, soft fruit, apples and beekeeping. Additionally, aid for the horticulture sector continues to be available under the capital investment scheme for the marketing and processing of agricultural products.

Further financial support continues to be available to those producers who participate in the producer organisation scheme. This EU scheme provides an important mechanism for growers to become part of a larger supply base, to concentrate marketing and improve quality. Bord Bia continues to provide support to the horticulture sector in its efforts to develop new markets through assistance in the areas of product innovation and marketing skills.

The Department has also been providing support to farmers for the production of bio-energy crops. A pilot bio-energy scheme was launched in 2007 to support the planting of miscanthus and willow by providing assistance to farmers up to a maximum of €1,450 per hectare to cover 50% of establishment costs. Grants were paid in two instalments: 75% following establishment of the crop and 25% in the year after establishment. The pilot scheme supported 364 farmers in the planting of some 2,500 ha., consisting of 2,100 ha. of miscanthus and 360 ha. of willow, to the end of 2009, at a cost of some €2.9 million.

A new bio-energy scheme, co-funded by the EU under the rural development programme, was launched in February 2010 to build on the progress made during the pilot phase. Under this scheme, farmers receive a grant up to a maximum of €1,300 per hectare to cover 50% of the establishment costs. This reflects the reduction in crop establishment costs since the launch of the pilot scheme. It is expected that a further 850 ha., consisting of 470 ha. of miscanthus and 380 ha. of willow, will be planted under the scheme for 2010.

Deputy Browne will be aware that in February this year the Minister launched a major initiative to draw up a long-term strategy for the agri-food, forestry and fisheries sector. I assure the Deputy the position of the crop sector will be examined in this context.

The Dáil adjourned at 9.25 p.m. until 10.30 a.m. on Thursday, 13 May 2010.