Dáil debates

Thursday, 21 October 2010

Food Harvest 2020 Report: Statements


1:00 pm

Photo of Brendan SmithBrendan Smith (Minister, Department of Agriculture, Fisheries and Food; Cavan-Monaghan, Fianna Fail)
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I welcome the opportunity to discuss the Food Harvest 2020 report in Dáil Éireann. This is the first opportunity I have had to congratulate Deputy Andrew Doyle on his appointment as Fine Gael spokesperson on agriculture, fisheries and food. I look forward to working with him over the next few years. I also take the opportunity to compliment Deputy Michael Creed on his work as spokesperson for his party over the past number of years.

I do not need to emphasise to the House the important role played by the agri-food, forestry and fisheries sector in the Irish economy and rural society or the contribution it can make to our national economic recovery. If we make the correct decisions now, the harvest will be great. The 2020 report provides a comprehensive and considered roadmap for the development of Ireland's most important indigenous sector.

Over the past decade, the Irish agri-food, forestry and fisheries sector has been competing successfully on the world stage and has demonstrated its capacity to perform as a major player in the global food and drink market. Currently, 85% of our food and fish output is exported to more than 160 countries, which provides a sound and well-established footing for this home-grown industry to be one of the central components of the export-driven recovery. This multi-million euro export industry has undergone continuous development over the past decade and has turned the various challenges encountered into growth opportunities. Such dynamism has enabled the agri-food sector, our largest manufacturing sector, to flourish and to steadily increase the value of exports.

In the last two years the sector has faced new challenges due to the global downturn and unfavourable exchange rates. However, there are significant signs of recovery this year and in the medium to longer term the sector will be presented with tremendous opportunities because of rising food demand in global markets. In this context, it was clear that a new strategic vision was needed to ensure that this valuable sector continued to develop to its full potential and be to the forefront of our economic recovery. Therefore, last February I appointed the 2020 committee to prepare a blueprint for the development of the sector into the next decade. This industry-led committee was a diverse, focused and effective group. Its report, Food Harvest 2020, which was presented to Government in July, reflects the wide-ranging expertise of the committee members. It builds on the comprehensive analytical papers prepared by my Department and relevant State bodies as well as the ideas that emerged from the public consultation process and the input of the Harvard Business School and senior farming and food industry figures at a Bord Bia-sponsored conference at Farmleigh.

As expected, the report is very detailed. It provides more than 200 recommendations and suggestions towards which the Government and private enterprise will work. The key focus of Food Harvest 2020 is to show how the industry can capitalise on the expanding market opportunities. These opportunities arise from the actual and projected increase in food demand due to rising world population and increasing wealth, matched with our ability to produce high-quality products using environmentally sustainable production methods.

A global increase in demand for food will inevitably follow the current surge in world population, which is forecast to reach 8 billion by 2025. Growth in demand for dairy produce is likely to be a particularly strong element due to rising global incomes, which presents an opportunity for our dairy sector. The ending of EU milk quotas in 2015 presents the sector with a once-in-a-lifetime opportunity to significantly increase our milk output, achieve a change in the scale of our dairy sector and capitalise on the significant cost advantage of our environmentally sustainable grass-based production system.

Besides outlining the opportunities, Food Harvest 2020 sets a number of challenging but achievable growth targets. The principal targets include the following: increasing the value of primary output of the agriculture, fisheries and forestry sector by €1.5 billion, which is a 33% increase on the 2007-09 average; improving the value added in the sector by €3 billion, a 40% increase compared to 2008; achieving an export target of €12 billion for the sector, a 42% increase compared to the 2007-09 average; increasing milk production by 50%; and adding 20% to the value of the beef sector. In addition, the report points out that we must improve our cost competitiveness by 20% relative to our competitors, and industry spending on research and development must also double.

These are unquestionably ambitious targets, but the sector has real substance: it has the capacity, it has high-quality products, and it has a growing market. I firmly believe we can achieve these targets and I am fully committed to my role in realising this vision. I am aware that it will require a high level of commitment and collaboration from all players in the sector. It is my intention to harness the commitment, ability and positivity that pervades this sector and ensure that we all do what is necessary to achieve these targets.

Food Harvest 2020 gives us a roadmap and a framework for future expansion, which is best expressed as smart green growth. The phrase "green growth" implies the creation of a strong link for consumers between Irish food, high environmental standards and sustainable production.

This link between 'green' and Irish should be used as a springboard for growing our industry.

Irish food has always been associated with green, natural and sustainable food production based on our extensive, low input, grass-based production systems. Added to that is our abundant supply of fresh water, which is the envy of producers elsewhere, and the important role that our family farms play in maintaining our rural landscape with its rich biodiversity. All these factors combine in affording real marketing advantage, as they fit well with the growing consumer awareness of the environment, animal welfare and ethical production methods. This constitutes a key competitive advantage for us, provided that we can demonstrate to our international customers that our production methods really are more sustainable than those of our competitors.

I am not referring here to a superficial marketing ploy, nor indeed one which will be achieved overnight. To be successful, we must be able to substantiate fully our green credentials and base our environmental credibility on well founded research. We will have to adopt environmentally sustainable practices at all levels throughout the food chain to meet internationally recognised standards. This will take time and commitment but is necessary to underpin our environmental sustainability and avoid any suggestion of mere, what may be termed, "green-washing".

The good news is that we are not starting from scratch. We already have an established green image and we farm to environmental standards that go beyond the basic requirements of good farming practice. Indeed, Bord Bia already employs the theme "Ireland the Food Island" for its marketing campaigns. There are good grounds for building on this image to differentiate, market and obtain a premium price for our food produce.

Another avenue to be explored is the creation of an umbrella brand for Irish food and drink, based to a large extent on sound environmental credentials. This would have the dual purpose of harnessing Ireland's existing green image and also building a national brand to differentiate Irish products from its competitors. Such a brand image could also be linked to a wider tourism strategy. This idea certainly has potential and it is one which I would most definitely like to see developed further. However, I recognise, as did the Food Harvest 2020 committee, that its realisation will involve detailed consideration and planning as well as considerable realignment of industry, producer and State resources.

Acting smart is also central to the approach recommended in Food Harvest 2020. Acting smart means that our principal focus must be on ensuring competitiveness and sustaining growth. It implies being innovative and at the top of our game in availing of best practice options and lean manufacturing techniques. It involves investing in research and marketing, rethinking business relationships and creating more effective business models.

Smart growth will involve all industry stakeholders in examining and updating their own skills, processes, products, markets and relationships to ensure that they can deliver long-term sustainable growth. The Government has consistently supported the growth and development of the agri-food and fisheries sector and will continue to facilitate business expansion but fundamentally, sustainable growth and job creation will result from the efforts of industry stakeholders themselves.

All parties must act in collaboration and play their part in achieving this growth. Primary producers will need to accelerate their uptake of emerging technology and best practice options in genomics, animal health and husbandry. The industry-led Food Harvest 2020 committee emphasised that consolidation and rationalisation of processing capacity is critical to maintaining competitiveness and future viability.

This is an industry with real strength and real opportunities. The challenge is to build on our existing knowledge and capabilities to ensure that we remain at the forefront of the industry. We are fortunate in that our best farmers are technically advanced and that cutting edge technology is already being used to add value to much of the food that we produce. The significant State investment in food research and centres of excellence over the years has paid dividends and has been a major resource for the Irish food industry. However, active industry collaboration and increased research investment will be critical to the development of innovative food products, such as nutraceuticals and other functional foods.

I have established a high level implementation committee and I chair its meetings to ensure that the implementation process results in a convincing and effective joined-up approach by State agencies. I also want to give a clear message to the participants and to our citizens that this task is a priority, that it is national rather than sectoral, and will involve all stakeholders. At our inaugural meeting of 16 September, I emphasised to the committee that its key function was to direct and take whatever action was necessary to successfully implement 2020 strategy. At that meeting we agreed on the processes which will best realise the sector's full potential advance.

I am very conscious of the critical timeline for the dairy sector and of the importance of ensuring that the current opportunities are fully realised. I have already established the dairy expansion activation group and given it a specific remit and timetable for action. By the end of November, this small group of farmers, processors and Teagasc officials will submit an initial road map to the high level committee highlighting the key milestones from the production and processing perspectives, identifying obstacles to implementation and how these should be overcome. The next meeting of the high level committee is scheduled for 10 November and will deal with the beef sector, brand Ireland and the sustainability agenda, and competitiveness.

I wish to share the remaining ten minutes of my time with the Minister of State, Deputy Cuffe.

Photo of Ciarán CuffeCiarán Cuffe (Minister of State , Department of Agriculture, Fisheries and Food; Minister of State , Department of Transport; Minister of State , Department of Environment, Heritage and Local Government; Dún Laoghaire, Green Party)
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Smart green growth summarises the view coming from the industry on where we want to go with Irish agriculture in the ten years ahead to 2020. Given the overview just provided by the Minister, I want to focus on a couple of aspects of the Food Harvest 2020 report and then address horticulture and organics, which are my areas of specific responsibility.

The Minister said that will have to adopt environmentally sustainable practises at all levels throughout the food chain to meet internationally recognised standards. This approach, as articulated in the report under the "Think Green" heading, has the potential to provide real benefits to both our environment and the profitability of Irish agriculture. By putting in place truly sustainable agriculture production systems, we will ensure that our domestic food production will become resilient and in a better position to cope with the adverse affects of climate change and the reduction in availability of oil. All countries will have to come to terms with coping with these changes. By planning and adapting now to meet these challenges Irish agriculture can get a head start on its competitors and by providing robust certification of sustainable production, Irish food produce can achieve a real dividend in the marketplace.

I am aware that Bord Bia is working closely with the Carbon Trust in this regard and I look forward to learning of the outcome of their efforts. Both the Bord Bia commissioned "Pathways for Growth" and the Food Harvest 2020 report recognise the potential value of building a strong "Brand Ireland" image. This approach can benefit all, but in particular would help those involved in the artisan and speciality food sector. This weekend I am attending the Terra Madre conference and exhibition in Turin, where Bord Bia is working with Irish producers to promote food produce from this sector and I look forward to learning more on how we can continued to develop in this important area.

The horticulture sector has performed well over the past decade and has grown to be a significant entity within the overall agricultural industry. Horticulture now contributes around €370 million, including potatoes, to farm output. It makes an important economic contribution in supplying the domestic market, providing employment opportunities and foreign trade earnings. In addition, the sector generates significant additional jobs in ancillary sectors such as distribution, retail and landscaping.

The area and proportion of production under protection from the weather has increased significantly. Improvements in the quality and presentation of Irish produce over the past decade have also been significant and quality of output, hygiene and food safety have all become critical issues for the sector. The industry is labour-intensive, employing approximately 18,500 people across the food and non-food areas, and employment is broadly based across the country.

Ireland is estimated to be 24% self sufficient in fruit and 85% self sufficient in vegetables. These figures are based on produce which can be grown domestically. Significant quantities of fruit, such as tropical and citrus varieties, must be imported as well as large quantities of ornamental plants. Mushroom production, with a value in excess of €100 million, is the only domestic crop where there are significant exports, with more than 70% of production being exported to the UK.

My Department continues to support the development of the horticulture sector. Support has 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. Funding provided under the scheme underpins capital investment on farms that will encourage environmentally friendly practices, improve working conditions, improve the quality of produce and promote diversification of activities. This investment contributes significantly to the growth and development of the horticulture sector across all areas, including the protected crops, field vegetables, nursery crops, mushrooms, soft fruit, apples and the beekeeping sectors. In addition, 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 on marketing and improve quality. My Department also provides funding to Bord Bia and Teagasc towards their work in the horticultural industry.

Horticulture continues to offer considerable potential for future development but the sector has been experiencing particular challenges in recent times, not least from the strong competitive pressures imposed by the highly concentrated retail marketplace, the supermarket multiples and from competitively priced imports. In addition, difficult growing conditions due to adverse weather experienced during 2008 and 2009 impacted on growers' returns. This was further compounded by significant damage to crops and plants arising from the severe frosts experienced in early 2010. As we all know it was a long tough hard winter and the people who know that best are those working in the farming sector. The general economic downturn has also impacted on the sector. Demand for production from the amenity sector has fallen significantly owing to the slowdown in the construction sector.

The Food Harvest 2020 report recognises that the sector and the food service market offer opportunities to replace imports with home-grown seasonal produce, to supply our organic market and to diversify in order to meet ethnic food demands. Bord Bia will continue to provide support to operators in the horticulture sector to develop new markets by way of assistance in the areas of product innovation and marketing skills. Bord Bia is also involved in a number of campaigns to promote demand for horticultural produce including the incredible edibles initiative, which is an educational initiative for primary school children that is funded by industry and Bord Bia and facilitated by my Department. It aims to increase fresh fruit and vegetable consumption as part of a healthy diet and we need such initiatives at a time when there is a growing focus on the impact of obesity not just on older people, but also on our children.

Further to the recommendations and proposals contained in the horticulture section of the Food Harvest 2020 report, I intend to establish shortly, within the overall implementation framework for Food Harvest 2020, a horticulture action group to oversee implementation of the findings relating to the sector. This group will play a key role in determining how best to organise implementation of the recommendations in this important and complex sector. The group will, in turn, report back to the high-level committee, established and chaired by the Minister, Deputy Brendan Smith, which is responsible for the overall implementation of the report. As the report itself recognises, it is also vital that the future potential of horticulture is considered in tandem with the other general farm and agriculture industry level recommendations set out in this important document.

I also intend that Forás Orgánach will play an important role in the implementation process. Organic farming and organic food are in a particularly good position to benefit from the implementation of the recommendations. Organic food production is currently the most sustainable agriculture production method. Organic produce is already certified to the most exacting standards. As this certification is already in place, organic food and food products are in an advantageous position to exploit the strategies as outlined in Food Harvest 2020 and Bord Bia's Pathways to Growth. Opportunity abounds in the domestic organic retail market. It is currently worth €94 million and a large portion of this produce is imported.

Shortly, the Department of the Environment, Heritage and Local Government, for which I also hold certain responsibilities, will publish the new national action plan on green public procurement. This action plan on public procurement for food will make particular provision for organic food in accordance with the commitment in the renewed programme for Government.

Apart from the domestic market, major export opportunities for Irish organic produce are to be found in the major European markets. For example, the UK market is estimated to be worth £1.85 billion and the German organic market is worth €5.85 billion. Bord Bia ran a trade workshop recently during national organic week to help producers devise strategies to exploit this lucrative market. I would encourage more farmers to consider making the switch to organic and we are helping out with the conversion process.

Food Harvest 2020 offers Irish agriculture an opportunity to establish real resilience in food production and position our produce to exploit the premier lines in international markets.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I wish to share time with Deputy Crawford.

Photo of Jack WallJack Wall (Kildare South, Labour)
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Is that agreed? Agreed.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I welcome the Food Harvest 2020 report prepared by the Department of Agriculture, Fisheries and Food. The Minister has outlined the backdrop of the global increased need for food and the limited number of places on the planet that will be able to produce it. In light of all we have heard in recent weeks about the state of our economy, when we see an industry with the potential to grow, we certainly need reports like this, but we also need action. The report presents a constructive catalogue of actions which need to be taken to develop Ireland's agrifood sector.

The Taoiseach has said more than 4,000 jobs could be created by increasing milk output by 50%, beef output by 20% and other sectors equivalently. I am very glad that the Government has woken up to the fact that the humble cow produces €1.1 billion worth of milk. Everyone accepts we can develop our agrifood sector and increase exports from €7 billion to €12 billion. All the additional economic activity and tax take that would create would be very welcome given the current budget deficit.

While we can create thousands of new jobs in food companies and on farms, asking the farmers to double their production is not going to be enough, and asking farmers to be green and smart is not enough. We need to be smart in the way we organise what we, as legislators, do from here. Smart farmers are looking at whether they can survive another collapse in the price of milk and continuing low prices and volatility in other sectors in recent years which brought the average farm income down to €11,968 according to Teagasc. Smart farmers are wondering whether they should recommend their son or daughter to choose farming as a career path or look for an alternative. Smart farmers are wondering why the income at which a farm is considered viable in the Food Harvest 2020 report at €14,908 is only just above the poverty level. While I am not trying to be critical of the report, it is a fundamental weakness to base its projections from this point.

Having a brand has been mentioned here and is certainly addressed in the Bord Bia Pathways to Growth document. We have a brand and we have a green image on which we need to capitalise. Everyone along the way needs to benefit and be seen to be given a fair deal. We produce lots of grass; it is a natural resource that no other country has to the level we have. We have no oil, iron or coal, but we have 4.4 million hectares that is still fit for growing the best of diary cows, cattle, sheep and crops, and it has not been built on, poisoned or compromised. Grass provides the food for more than 80% of agricultural output and is the raw material for the multi-billion euro dairy industry. It is what gives us a competitive edge on our European competitors. The significant growth which is identified in the Food Harvest 2020 report and the consequent jobs in the rural farming sector need to be explained and we need clarification on the actions that need to happen.

We still have skilled, hard working, innovative workers on the land, who believe in the future of agriculture or they would not have stuck with it in recent years. They believe in the value of high quality product and have made significant investments of time and money on infrastructure to sweat their asset as much as they can and to turn it into real income. We can develop a smart economy on the basis of a manufacturing industry.

I spoke to third year students from two schools who were visiting the Houses this morning. I encouraged them to consider careers in the food science technology area. If we are to create high-end jobs, those are the areas in which people will have to be specifically trained in research. The technology developed from such research can be sold to other countries and this will enable us to develop a smart economy in this area. We will not develop a smart economy that will create any level of work from simply talking about having a smart economy. It must be built from the ground up.

Our agricultural output has grown since we joined the EU in 1973. Although dairy farmers have increased output per cow by 14%, the price received from their investment and effort by dropped by 22% since 2000. The Celtic tiger certainly has not benefited most farmers, rather it passed them by. The average farm income in 2009 was lower than it was in 2002. I am not sure if any other sector can claim to have lost income during the Celtic tiger years. As every self-employed person is aware, if one cannot pay one's costs, one's business will close. Smart farmers are asking how €5.4 billion of farmers' debt or investment, depending on the way one views it, will be paid if EU supports are cut, no alternative is offered, and the prices farmers get do not cover their costs.

Why are farmers in debt? Why are farmers going out of business and leaving farming despite Ireland's competitive edge? What about the bill of €4.9 billion for imported food and drink? What is the Minister doing about this? The Minister is exhorting the farmers to double their bets in regard to 2020 vision, with no attempt to analyse the real problems facing the sector. Does he accept that realising what is contained in 2020 vision starts with himself? It starts with his Department. The first smart action that needs to be taken is to examine the way the Department of Agriculture and Food does its business. We have seen the painful results of the property boom where growth without a plan becomes a cancer that eats up our resources. The most urgent issue is the impending cuts to the budget. Has the Department prepared any costings for implementing the 2020 vision? Has it any idea what is the available budget for it?

There are already 10,000 farmers in receipt of farmers' dole or farm assist costing almost €100 million. If the figure of €14,000 odd is taken as being a farm income, the number I mentioned will at least double. All that would result from that would be the transfer of funds from one Department to another and a lowering of farmers' self-esteem to a point where they will no longer be motivated.

I welcome the action plans mentioned by the Minister at the end of his contribution. However, the Minister seemed at one stage to be presiding over an economic crisis like an absentee landlord with an attitude of let them sort it out themselves, let them emigrate. It is no longer enough for the Department to be an EU scheme processing division.

Just as the Central Bank forgot about its role in managing Ireland's money supply when the EU took over monetary policy, the Department has forgotten about strategic planning for the Irish agrifood sector when the EU took over agriculture policy. When will the Minister realise that the agrifood sector needs a leader who will face facts, who will lead a co-ordinated strategy for survival, as well as expansion? Even while negotiations are taking place on the reform the Common Agricultural Policy, Ireland needs a leader who will work with all those in the business to prepare multiannual plans for stocking land, shelves and shopping baskets, which are vital to create jobs and generate income; and to eliminate the volatility in the marketplace and the price and income projections for those who have €5.4 billion of debts to honour. We need a leader who must come clean about grant aid and account for every euro of taxpayers' money, who will reorganise a team to the maximum efficiency and who will innovate.

Fine Gael's priorities in the agrifood sector are based on a decent standard of living for those producing and working in that sector; a sustainable, innovative production cycle based on sustainability, animal welfare and the environment - I agree with some of what the Minister of State, Deputy Cuffe said, although not all of it - it is a scarce resource, but we have plenty of it and we should manage it. We should give serious consideration to developing a brand denoting a labelled, certified high quality product. That is the type of product we produce but there is no point in having it unless we tell everybody we have it. Marketing is key to the development of this sector. If we are to achieve its growth, we want to guard against not having anywhere to sell it. A term used in the document Pathways for Growth is the phrase "co-opetition" rather than competition whereby people in the production end do not see themselves as adversaries but as partners. As I mentioned previously, a person said to me at the National Ploughing Championships that we should establish an OPEC-type organisation of food exporting nations, of which there are not that many of us. The key to achieving growth is to be able to sell our product. That cannot be emphasised enough. To develop high-end jobs in this the sector, we must put smart money into smart research, which will allow us to be ahead of the game in innovation. When we developed the sugar beet industry, we developed a sector of expertise in Armer Salmon with the production of machinery to sow, spray and harvest sugar beet. That is an example of how one develops a smart economy.

I will list the priorities in this sector, which colleagues may deal with later. They are CAP reform, fair trade and ensuring young farmers gain control of the land although not necessarily land ownership. This will take innovative and imaginative thinking not only by the Minister's Department but by people in the Department of Finance and the Revenue Commissioner on how to make that happen and to encourage it. Some tax incentives are good, although not all are. We should examine the granting of enhanced stock relief if we are to have a level of expansion, otherwise people will have a paper profit with a tax bill that bears no relation to their income. These are practical measures that must be examined across the Departments. Sectoral development is also required.

I will mention only one sector, that of forestry, due to the time I have remaining. We have acknowledged that forestry is an important sector. We have 9% land cover under forestry with a target of 10,000 hectares per annum to reach a 17% target, yet the funding for the sector has been cut. If ever there was smart investment, it would be in the forestry sector. We cannot strangle this sector, which provides jobs in wider industry outside agriculture. I appeal to the Minister to make every effort to ensure funding for it is not cut before it begins to develop.

Photo of Seymour CrawfordSeymour Crawford (Cavan-Monaghan, Fine Gael)
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Farm income fell nationally by 40% between 2008 and 2009. In wetland areas the fall in income was much more, but thank God weather and prices have been much better this year.

I thank the Taoiseach for agreeing to have a debate on agriculture but, to be blunt, it was not the debate I had asked for. The two main issues I raised were the delay in area aid payments to such a large number of hard-pressed farmers and the difficulties in the pig industry resulting from the massive increases in feed prices and, on the other hand, the decrease in the returns by 6% to 8% per kilo.

I admire the Minister's ability to get positive press comments. I note a comment that 75% of applicants received payments within 15 days. That sounds good but, to be blunt, it means very little to 25% who have not been paid. My telephone is hopping off the hook with calls from people who have not yet received their area aid payments and they realise it will be a serious problem for them regarding their single premiums. Many of these people submitted their applications last May. The last telephone call I received before I came into the House was from a farmer in west Cavan with an fairly extensive farm. He had a dual claim on his file, which was sorted out last May but he still has not received his area aid payment and therefore he will not get a single premium. Furthermore, two groups are talking about bringing him to court because of the delay in obtaining payments from him and they have no guarantee as to when they will get them. While the Minister has made some changes, it is essential as many as possible are paid as quickly as possible. It is now over 12 months since I spoke to the Minister regarding the serious banking problems faced by many in the pig industry. He claimed then he was leading a group to deal with the issue but some viable pig farms still depend on long-term credit from their feed suppliers 12 months on. This is, in turn, puts pressure on the feed industry while the farmers end up paying an added premium for the necessary feed meaning they cannot afford to shop around, as the Minister for Health and Children, Deputy Harney, would advise them to do.

The report recommends a 50% increase in dairy production in the next ten years. However, nothing has been done to provide the necessary marketing for any such increase. Only last Tuesday, some of the main dairies pointed out they are holding milk prices for September, yet current quota levels have been met. There is no point in farmers producing 50% more milk while getting 50% less for the finished product as happened in 2009. I support the idea of producing more but it must be organised with a proper marketing structure. Will the Minister accept it is nothing short of a national scandal that liquid milk farmers only receive 23% of what the consumer pays for their high-quality and high-cost product? This cannot continue. A litre of water which costs nothing to take from the ground costs more in the shops than a litre a milk. The Competition Authority has worked only one way, that is, against organised producers trying to get a reasonable income and in favour of Tesco, Dunnes Stores and Asda, which continue to rip off all agricultural producers. Some of these stores, such as Tesco, also repatriate massive profits to their home countries.

The Minister can no longer ignore the urgent need to introduce legislation to create a level playing pitch in these areas. If action is not taken, such as in labelling, we can never hope to create the environment for the important and achievable proposals mapped out earlier by the Minister. If the Minister does not deal with the nitrates directive constructively, the pig, poultry and intensive dairy industries will not only be unable to expand, but will see further decrease in their production capacities. An extension is desperately needed to retain the current nitrates regime for a limited time. Strong constructive steps need to be taken to utilise chicken litter and pig slurry as alternative energy sources. Deputy Doyle has suggested the high number of major pig and poultry farms in Cavan and Monaghan could lead the way in this new energy source.

Over a year ago I brought it to the Minister's attention that farm waste management grants were still not paid to some farmers after they had installed waste disposal structures on their farms. This was due to a change of personnel in the Department and views on particular waste management structures even though many of the farmers' neighbours received full grants for identical structures. This has gone beyond a joke. Many of these farmers have young families and are in a vulnerable position with capital and credit facilities. Will the Minister resolve this unfair station?

According to Teagasc figures, farm incomes dropped by 40% last year but those applying for farm assist grants hit a bureaucratic stone wall with little or no understanding of their plight. Those who had their applications turned down must wait 18 months for an appeals hearing. The Minister must ensure these matters are dealt with quickly and fairly.

Many in my constituency are concerned about the lack of funding for the proposed 10,000 hectare increase in land given over to forestry. In 1995, some 25,000 hectares were planted with forestry. While capital is scarce, it must be found to increase our afforestation programme. It will assist our reductions required by climate change regulations. For the first time in the State's history, Irish firms are exporting timber products to Britain and France. It is one sector that can help drive growth in exports.

I appreciate what the Minister has done for those left in the mushroom industry. There used to be up to 500 farmers in mushroom production but it is now down to between 70 and 80. The massive investment made through the years by hard-pressed sectors in the agriculture industry, such as pig and poultry producers and mushroom growers, must be recognised. It is important the banking system is geared towards helping them out in these current economic difficulties.

Photo of Séamus KirkSéamus Kirk (Ceann Comhairle; Louth, Ceann Comhairle)
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The Deputy has exceeded his time.

Photo of Seymour CrawfordSeymour Crawford (Cavan-Monaghan, Fine Gael)
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I do so without apologising, a Cheann Comhairle, because it is a subject about which I am extremely passionate. I am not doing this just for the sake of media coverage; I am doing it because I have worked with these farmers and know the efforts they have put in. I hope the Minister for Agriculture, Fisheries and Food, Deputy Smith, will sort out the issues I have raised.

Photo of Seán SherlockSeán Sherlock (Cork East, Labour)
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The Labour Party welcomes the proposals contained in Food Harvest 2020 and that eminent persons such as Seán Brady chaired the group that comprised a wide array of stakeholders involved in the agrifood, fisheries and forestry sectors.

The report is worthy of support in that its key action recognises the need to ensure the maximum possible resources are employed to drive an export-led economic recovery and the development of a smart economy. There is a sense in which food and the agrifood sector has taken a back seat in the past 20 years because of the Government's blind faith in the construction industry. I am glad this rearguard action has come at a time when there is a latent realisation that agriculture is vital to the country's needs and its future development. The report's aspirations are a return to basics with clear targets and a vision set out.

The agrifood sector has seen a shift over the past several years from commodity-based supply to a brand-centred and consumer-focused approach. That, in itself, presents challenges. How will we ensure the shift from a commodity-based supply to adding gross value to food produce?

The Government's claim that the smart economy will be the foundation for economic renewal is still nebulous. One can apply smart economy principles to the idea of food and food production but it needs to be fleshed out more. The Food Harvest 2020 report points out the smart economy will ensure the primary producer will have higher value output and reduce costs while maintaining higher productivity. It also claims the food industry will have more targeted research and development components, will collaborate more and will respond to the market in a more enhanced fashion. These are wonderful terms which I would readily endorse but how will this all happen? There should be a follow-up document to flesh out this language, which is a little too nebulous. There should also be concrete action plans for implementing the policy, if we are to support it. We support the aspirations in the document. From a consumer's point of view, the smart economy can facilitate a more informed choice and lead to more innovative product ranges. There must also be an educational component in the policy. When we talk about the smart approach, we must include a greater partnership between industry and science, fostering the entrepreneurial culture and innovation and the need to ensure that the agrifood sector's position within the smart economy is recognised and acted on in real terms.

The Labour Party agrees that we have an opportunity in this policy document to deepen the link with green issues. Our natural environment and the fact that we have a grass-based agricultural system comprise one of our greatest comparative advantages, but the mere recognition of this fact is not sufficient. We must develop a deeper approach to what it means. We talk about Ireland being a green country and the opportunities arising from that comparative advantage, but how do we take that aspiration forward? The opportunities arising from the green economy are clear from the points of view of primary producers, the food industry, consumers and the country. There are very transparent methods of production and full traceability in food production. This should be a comparative advantage relative to third countries that are trying to export into the European Union. The fact that it is a grass-based agricultural system means we have natural resource benefits, as outlined in the document, but a greater role for agriculture in the economic recovery requires that European Union funding for that aim be enhanced or at least preserved at current levels.

We welcome the document and the global context outlined in it. There will be massive demand for food due to population growth. As the document states, the world's population in 1999 passed the 6 billion threshold and is due to reach 7 billion in 2010. By 2025, it is expected to reach 8 billion. That presents a massive opportunity for this country. Given the increasing desertification due to climate change in other regions and peripheral nations, Ireland's grass-based agriculture should mean it is well placed to benefit, particularly within the dairy sector where we anticipate Ireland becoming a major global player. When we consider the dairy sector we traditionally think of brands such as Kerrygold. Liquid milk is a major commodity but the CAP proposals that are due to be published in November by the European Commission will pose a threat to the national envelope of approximately €1.3 billion that Ireland receives. If there is a reduction in that budget, it could cause challenges for the dairy sector and undermine the policy the Government is seeking to roll out under Food Harvest 2020.

The Irish Co-operative Organisation Society, ICOS, is holding its national conference this week and one of the issues it will address is how the dairy sector will prepare for the end of milk quotas. This will present a challenge for co-operatives in Ireland. The question is whether the co-operative movement in its current form will be well placed to meet the twofold challenge of the increase in the global population, and the increased demand that goes with it, and the post-milk quota situation. Will Ireland be able to make the changes necessary to ensure the amount of milk being produced can be increased by the anticipated 50% which is deemed possible under a quota free regime? Everything we use is home produced and net inputs and outputs are local. In an increased market for dairy products, there should be a net benefit to the Irish economy as a result. This will obviously add to growth figures.

One of the matters due to be discussed at the ICOS national conference is the cost of preparing for higher milk output. How will the relationship between farmers, who are shareholders, and their co-operatives continue in the post-quota situation? What will the nature of that relationship be after 2013 and will farmers be able to embrace the challenge? I believe they will. Many people in the dairy sector are vying to gear up for that eventuality, but there is also a generational shift in that regard. There will have to be a common mechanism to regulate milk production and it must have an all-island approach. Whether it is an all-island or one Ireland approach is a matter of conjecture but we believe there should be a deepening of the relationship between the two parts of the island to achieve such a common mechanism.

There must be a consensus between co-operatives with regard to the potential for the dairy sector and this can only come from the people who own the co-operatives. It will probably require a change in mindset and a more lateral view as to how we can look at the market strategically. It has been suggested that Ireland could become another New Zealand or that perhaps Ireland should ally itself with New Zealand to create a type of duopoly to control milk supply from grass-fed cattle. This is necessary to compete in a global market and we should not be ashamed to look strategically at how that can happen. There is a critique of the New Zealand model in that land ownership structures are more fluid there than they are here, which facilitates the existence of that model. Here it is a little more difficult due to the greater ties to the land, but that is a challenge which should be examined. The key point is that we should take a more lateral view in terms of how to gain a greater foothold in the global dairy market. If forming strategic alliances is required, we should at least examine the possibilities even if they do not come to fruition. We must take a more lateral view in forming our strategy.

According to Food Harvest 2020, there will be an increase in the global population. The question for Ireland is how to maximise that potential. The theory is that the dairy sector must consolidate further and traditional behaviours must be examined with a view to ensuring that we increase our milk supply to cater for that demand. The success of Food Harvest 2020 will be predicated on ensuring that more young farmers enter the sector. This should become a priority. In yesterday's Irish Examiner there was a report by Macra na Feirme indicating that less than 7% of Europe's farmers are under the age of 35 years. The Food Harvest 2020 report puts emphasis on giving young people access to farming but the educational aspect of that must be examined more deeply. If the strategy is to be successful, it must be based on a clear and unambiguous need to provide active measures to ensure participation rates by younger people.

There is a suggestion that if there were specific schemes for young people under the new CAP, it would go a long way towards addressing the challenge of ensuring a throughput of new farmers. The policy would bear fruit arising from that. Members are familiar with the adage that it is hard to teach an old dog new tricks. If there is a throughput of young farmers, they would be better able to adapt to new methods and will bring forward the policy as necessary. One of the key deficiencies in the report is the lack of a coherent chapter on education. It is all well and good to have the targets of increasing the value of the primary output in agriculture, fisheries and forestry by €1.5 billion or 33% compared to the 2007 to 2009 average, increasing the value added in agriculture, food, fisheries and wood products by €3 billion or a 40% increase on 2005 and having an export target of €12 billion for the sector, representing a 42% increase compared to 2007 to 2009, but if that is to be achieved there will have to be a more fundamental educational input for the reasons I have outlined. Even though innovations are taking place in the beef, dairy and wood sectors, if the age profile of farmers is higher there will be a lag time in reaching those targets. It will be necessary to increase the throughput of younger people who are educated specifically to achieve those targets.

If the overall vision is based on acting smart, thinking green and achieving growth and if the Department is trying to prioritise research and development, improve skill levels, increase best practice, foster creativity and improve consumer preferences, this can only be achieved to a certain extent under the current paradigm. In other words, the underlying assumptions need to change. The Labour Party's view is that there has to be a route and branch review of the educational aspects of how to proceed. We acknowledge that centres of excellence like UCC, which have specialist knowledge food production, should be incorporated into the roll-out of this policy and become active stakeholders. We also need to overhaul subjects such as agricultural science at second level. A farming-related model or a food-related model-module of education could be introduced into the leaving certificate curriculum to develop, foster and create the aspirations outlined in the overall vision. We believe that the younger people start, especially in second level institutions, the more of an opportunity there will be to create the coterie of food and agribusiness entrepreneurs needed to sustain the policy. If it is a 2020 strategy, it has to be implemented on the basis of ensuring that we start now and we start at second level to ensure more people are brought through the educational system with a focus on food production and all that entails.

There are major challenges in the fiscal and economic context. The report issued by the Oireachtas Joint Committee on Enterprise, Trade and Innovation under rapporteur, Deputy Arthur Morgan, and Chairman, Deputy Willie Penrose, examined what is required to expand employment in the agrifood sector. It takes a deep view of what needs to be done and one of the areas it examined is the role of co-operatives. I referred to the ICOS model and to its meeting this week to discuss how to improve the co-operative movement and the need for greater consolidation. One of the aspirations in the Morgan report is to ensure an important role for co-operatives. It states:

The Government needs to support the Co-operative enterprise from start-ups to employee buy-outs in the agri food sector. Co-operatives have a long tradition in the agri food sector in Ireland where some businesses, which started out as local co-ops have gone on to be multi-nationals and market leaders such as in the areas of dairy products. The Co-operative Movement has played a central role in the economic development of rural Ireland. Co-operative enterprises create many benefits for business, employees and communities.

That aspiration should be incorporated into the strategy.

The development of a new generation of co-operatives, particularly for organic foodstuffs, must play a role in creating new jobs in the agrifood sector. Establishing a co-operative may be the most viable option for starting a new business and government policy needs to reflect this. The Labour Party will stand over that aspiration and we believe that it needs to be incorporated into a government policy where one goes back to first principles. There is a need for greater consolidation within the co-operative movement in the dairy sector where scaling upwards will achieve a greater export market without losing core principles and deepening relationships with the local market.

There is massive scope in this area but there is also a role, for instance, for enterprise development agencies to assist in the process of adding value to the industry. The Morgan report outlines how access to expertise and capital for ventures and projects, which provide economic benefit but which may not happen if left to market forces alone, can be increased. In other words, State involvement is vital in this process.

Improving skill sets is one of the aspirations in the growth and competitiveness chapter of the Food Harvest 2020 document. It acknowledges the role of Teagasc, the Marine Institute and universities and other third level institutions and states they have a crucial role in creating and disseminating new knowledge. If one owns an existing business and if one wishes to retrain, there are programmes which are tailored to one's needs. For instance, a programme in UCC is aimed at people working within the artisan food sector and it is designed to try to encourage them to add value to their products and to learn new business skills. However, there is a cost component to doing the course and, very often, people working within that sector are operating on tight margins and find it difficult to get funding for courses such as this.

If we want to concentrate on education and to try to upskill people or get a more educated coterie working within the food sector, barriers cannot be put in their way. UCC is oversubscribed for the course it has designed for the artisan food sector. Some people cannot access the course because they are on marginal incomes within their own food businesses and they cannot afford the fees. If we are serious about adding value in the sector, it needs to be ensured institutions such as UCC, which provides courses, are not impeded from doing so for want of grant aiding people within the food industry who want to do the courses. It is a common sense principle and, notwithstanding current economic constraints, they could be provided with interest free loans, for example, but there should be a guarantee that people will not be impeded from upskilling because of the fees.

Increasing knowledge is important to add value to output within the sector but despite the wonderful aspirations in the Food Harvest 2020 document, it will fail as a policy if it does not allow for a proper educational component. Access to courses is vital and if we are to deepen the involvement of entrepreneurs in the agrifood sector, educational establishments should be able to take people in without impediment. There should not be a barrier to entry to courses.

Post-primary school enrolments will also increase significantly to reach 334,500 by 2018. Traditional subjects such as English, Irish, Maths, French and so on remain and there is still not an emphasis on science or agriscience subjects. The Labour Party believes in the policy but for it to work, the Government needs to deepen the educational tie-in and the only way to do so is to foster a culture of entreprenuerialism in young children at second level and to develop an education model that reflects the fact that we have always been an agricultural country, we have always had strong ties to the land and even though we have become urbanised in our thinking, we are never too far from the land. The land will get us out of the economic morass but we need to think more laterally about that.

2:00 pm

Photo of Martin FerrisMartin Ferris (Kerry North, Sinn Fein)
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The first part of this report makes the point that while this country has huge advantages in terms of our status as a producer of internationally recognised good food, there is no room for complacency. Irish agriculture and Irish farmers face considerable challenges over the next number of years, not least from the current review of the Common Agricultural Policy. It is vital, therefore, that we have a coherent approach to the negotiations that will take place and that the outcome which will shape CAP after 2013 protects the interests of Irish farmers. It is also vital that we have in place a strategy that will ensure that this country is capable of adapting to whatever changes come about as a result of the reform.

My party agrees with the vision set out in the report of a dynamic sector capable of achieving sustainable growth. My colleague, Deputy Arthur Morgan, recently submitted a report, which was adopted by the Oireachtas Joint Committee on Enterprise Trade and Innovation, on the agrifood sector. The report addresses many of the issues which are the focus of this report and there are considerable areas of agreement. However, much of the way in which the agrifood sector develops in the future will depend on the strategy put in place by the Department and that, in large part, will depend on political considerations, although there are considerable areas of agreement on what needs to be done across all parties in the House and within the sector itself.

I said the same in regard to the last reform of CAP, which came into effect in 2003. My party supported decoupling when all other parties in the House sat on the fence, as we and many within the farming sector saw the advantages of a situation where farmers were guaranteed a certain level of income security allied to the opportunity to branch into new areas of production that were not dependent on EU subsidies.

I also pointed out at the time that the success or otherwise of the reforms would depend on the strategy in place at domestic level to cope with what were radical changes. Unfortunately, this has not been properly addressed since 2003.

A report, which I submitted to the Joint Committee on Agriculture and Food on the future of farming and fishing in the west, which was unanimously adopted by the committee, highlighted the problems faced by farmers in the western counties. Through an extensive survey it also showed a high level of pessimism on the part of western farmers, even with the advent of the single farm payment. Many believed that they have no future in farming and this is especially true of smaller scale family farms. This has been reflected in the continuing haemorrhage of people from the land. While there are those who would claim that this is a natural process, none of us wishes to see a situation whereby the number of farmers in the country is reduced to well below 100,000 before 2020, as forecast by several studies on farm viability. Not only would this have detrimental social effects and a massive impact on already disadvantaged and declining rural communities, but it would also have implications for the country's future as a key food producer, especially in the context of the EU and global food security, as referred to in this report. Therefore, we must have a strategy not only to ensure we have a successful and dynamic food sector, but also that we retain the maximum possible number of people on the land and that family farms survive not as struggling dependants on direct payments, but as viable and dynamic individual farm enterprises tied in with an overall dynamic food sector.

Much of the way forward to achieving this has been highlighted in Deputy Morgan's report on the agrifood sector. We must recognise that food production and processing are the major indigenous economic sectors, as underlined in the Food Harvest 2020 report. As a result, they are not as dependent on or as subject to volatile international trends as, for example, certain manufacturing sectors in which decisions made far away can have devastating impacts on employment here. Agrifood is a sector largely in our own hands which produces a product for which there will always be a significant and relatively stable demand. Indeed, the demand for food, especially for safely produced food, will grow over the longer term. This has been referred to already in the debate on the CAP reform and it was one of the key issues mentioned by Commissioner Ciolos when he was here some weeks ago to address the agriculture committee. Unfortunately, other commitments prevented me from attending the committee that day but I have read with interest his remarks, especially those which referred to food security and the need to preserve Europe's capacity to meet demand.

The report and all proposals and discussions on the future of the food sector here must be placed in that context. As the section on future growth illustrates, expanding and developing the food sector has the potential to boost the return to the primary producer, the farmer, boost exports and expand the involvement of small and medium enterprises, hence of employment with all the benefits that brings in terms of the economy in general and living standards.

The report sets ambitious growth targets for 2020. It maintains that the value of primary output in the agriculture, fisheries and forestry sectors can increase by €1.5 billion or 33% compared to the 2007-2009 average. Likewise, the value added in the agrifood, fisheries and wood products sector can increase by €3 billion or 40% compared to 2008, with exports reaching €12 billion. If these targets were met they would represent a considerable boost to overall economic growth and provide one of the key engines to bring us out of the current mess. However, achieving these targets could also be negatively impacted upon by the current policies being implemented within the agricultural sector and society overall.

It is clear that future economic growth will not come about through austerity measures, which drive people onto the dole, to poverty and to emigration. Nor will future economic growth come about through destroying training and research and development. We have already seen significant cuts in these areas within the agricultural sector. As Deputy Morgan's report points out, these are key areas if we are to take advantage of the opportunities that undoubtedly exist.

Another key area is that of credit and we are all familiar with the problems which small and medium enterprises and farmers have had and are currently experiencing with the banks in terms of accessing the credit necessary to allow them to invest. Quite simply, if the research and development and the training is not in place and if the capital is not available for investment, then the ambitious targets outlined in this report are not worth the paper they are written on. In regard to credit, it is ironic that in the survey conducted among enterprises within the agrifood sector by Deputy Morgan, the major reason cited by the lending institutions for refusing to lend was a lack of capital. For the most part, these were the same lending institutions which handed out money hand over fist to developers and speculators, who were clearly acting on a wing and a prayer or in many cases simply bluffing on the allegedly ever increasing values of property. However, businesses which employ people and which actually produce goods for which a demand exists and which have viable businesses plans are for the most part refused the credit they need to kick-start or to expand. Clearly, this is a key area which must be addressed if the agrifood sector is to grow, which it clearly has the potential to do.

Food Harvest 2020 addresses the issue of credit and regards the restriction of credit as a key factor inhibiting growth and development. Among its proposals are that the banks should consider the use of mechanisms such as chattel mortgages and invoice discounting. However, these are followed by a proposal that the Department ought to consider the use of State supports to the sector with a view to further promoting competitiveness and sustainability. The report also suggests that the Government should consider the specific needs of the food and beverages sector in its deliberation on an export credit insurance scheme. Perhaps the emphasis on State support and encouragement suggests that the authors of the report are not overly optimistic regarding a change in the policy of the banks. However, the effective State control of banking ought to ensure that whichever Government is in power ought to be able to force the banks to change those policies where they are clearly in conflict with the best interests of the overall economy.

The report refers to the use of renewable energy sources and this is something that has not been adequately addressed by the current Government despite the involvement of the Green Party. It has set ambitious targets for the replacement of energy generated by fossil fuels by renewable sources but it has done little to achieve those targets. Farming is obviously a key focus in all of this given the possibility of having on-farm wind generators and of encouraging farmers to grow energy crops. My party has also published proposals on the use of the former sugar factories as processors of sugar beet as an input into bio-energy production.

Regarding marketing, the report highlights the significant proportion of our food exports that go to other EU states and still, overwhelmingly, to the UK. Exports to the UK will fall significantly by 2020 according to the report although they may remain at a high level. Exports to other EU states will rise and the overall level of exports to the EU is forecast to be approximately 75% of total exports. Exports to North America, Asia and the Middle East will also increase albeit from a relatively low level.

In that context and to return to the CAP reform post-2013 it is vital that these markets and, in particular, exports to the rest of the EU are protected from any potential challenge from third countries. This relates not only to the economic factors related to the Irish food sector and overall economy, but also to the issue of food security, the preservation of which on a domestic and EU level is intimately dependent on food production in the country. Any major threat to the country's food exports and growth in food exports would completely undermine the targets set in the report for future development and growth of the agrifood sector in general.

The reputation of Irish food as clean and healthy is also key and in that context I hope we are not browbeaten or enticed into embracing a policy of allowing genetically modified food to be produced here. Several studies have demonstrated that EU consumers are hostile to GM food and it would be the height of madness were we to abandon that advantage on the basis of spurious arguments presented by the GM companies and their self-interested spokespersons here. By retaining the image that Irish food is safely produced we can maintain a clear advantage over our competitors.

There is also the issue of the relationship between producers, processors and retailers. The report notes that future growth must entail a better return for farmers as primary producers. Over recent years, however, we have witnessed significant pressures on the price paid to farmers, with the percentage of the final consumer price that accrues to farmers steadily falling.

That also raises questions of the control farmers have over the processing and marketing aspects of the sector, which many contend relates to the changing nature of the processors that were once run as co-operatives. Farmers might examine the whole area with a view to returning to the co-operative concept in a modernised form to enable them to secure a better return for their produce. Co-operatives founded all over this country were undermined when they were transformed into PLCs, which are all about profit at the expense of the producer.

On retaining and expanding markets, the report again covers some of the same areas as Deputy Morgan's report. I note the reference to reducing input costs through greater efficiencies in energy, transport and a reduction in the regulatory burden, which was one of the main areas identified in the Morgan report by people involved in the agrifood sector. Other key areas are linkages, better marketing techniques and improved research and development.

The report deals with issues in the specific sectors of beef, sheepmeat and cereals that I do not have time to address in detail. The common theme in all sectors appears to be the need to maintain or to improve the quality of the product and to ensure that it is price competitive in respect of rival producers, and in particular other exporters to EU markets. Regarding cereals, the report recommends greater diversification into other crops and into biomass, all of which have proven markets that could open up for Irish producers. That needs to be addressed within the context of overall strategy around Ireland's place within the reformed CAP. Not enough has been done to encourage farmers to take advantage of whatever new production opportunities exist since the introduction of decoupled payments.

Towards the end the report deals briefly with the seafood sector. There is massive potential here, particularly to increase the level of higher value added domestic processing for export. Unfortunately, seafood is subject to the overall restrictions on a sector which, unlike agriculture, has certainly seen no benefits as a consequence of EU policy. Quite the opposite. We are still witnessing the harmful effects of the manner in which the Irish fishery is administered from Brussels to the detriment of Irish fishermen. The unfair distribution of quota and other restrictions have held back the development of what had and still has the potential to be an area of growth but that will not happen until we secure a meaningful reform of the Common Fisheries Policy to redress the gross imbalance in quota allocation within what ought to be Irish waters.

I welcome the opportunity to debate this report and hope that whoever is in government over the coming period will adopt the ambitious targets it sets out and put into place a strategy capable of achieving them. I do not believe the austerity measures being implemented by the current Government and seemingly also favoured by two of the main Opposition parties are the way forward. We need imaginative policies that will stimulate domestic growth. Agrifood is the main indigenous economic sector and one that has the potential for growth even at the present time based on the global demand for food. We can take advantage of that if we are prepared to encourage development rather than drive the economy further into recession by pursuing the type of policies in place at present.

Photo of Margaret ConlonMargaret Conlon (Cavan-Monaghan, Fianna Fail)
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I thank Deputy Aylward for agreeing to share a few minutes of his time with me. Last night I spoke on credit for small and medium-sized enterprises during Private Members' business. I welcome the way we are positioning Ireland to be successful in selling goods and services abroad and the way we are winning global investment and attracting visitors from around the world. I lauded the Government's approach in its latest integrated trade, tourism and investment plan, which included a number of targets relevant to agriculture. We want to increase the number of export-focused jobs and the value of exports. In difficult times our exports are holding up and doing well. We want to ensure this continues. We want to diversify into other areas and markets. This plan will help farmers and firms expand their market share overseas and will boost food exports. The policies and initiatives are not standalone but part of an integrated Government strategy to get our economy moving in the right direction. Agriculture is Ireland's most important indigenous industry. It will play a crucial role in our eventual recovery from the current situation. It played an important role in the past and the old saying is that when the farmer is happy, everyone is happy. When the farmer has a good harvest, he gets good yields and payment and money is distributed through the local economy as the farmer pays bills. It is a major boost to the local economy.

Food Harvest 2020 provides the crucial framework for agriculture. I am a Deputy from a primarily rural Border constituency and agriculture plays a significant role in the local economy. I welcome the vision for agriculture as outlined in Food Harvest 2020. I come from a farming background and my husband is a farmer. I understand the considerable complexities of the agricultural industry, which are recognised in the Food Harvest 2020 report. The report outlines the key actions needed to ensure the sector contributes to export-led economic recovery and the full development of the smart economy. These are two areas I have advocated in this Chamber while speaking on other issues. The report is exhaustive in its targets and recommendations. I welcome some of the contents. I welcome that the implementation group will be convened in different formations to allow farmers, co-ops and food companies to contribute to the implementation process. That is important.

The ending of milk quotas in 2015 will give us the opportunity to grow our milk output. A target of a 50% increase in milk production by 2020 has been set. We have had significant investment in dairying and we must harness the investment. In my constituency, the pigmeat sector is important and has contributed approximately €300 million to farm output in 2009. A target of 50% growth in the value of output in the pig industry is achievable. Poultry farming is also extensive and is synonymous with my region. The output value of poultry production is approximately €150 million annually. The sector is entirely domestically focused. There are opportunities in the industry to reduce costs and achieve greater efficiency. If these opportunities are available, there is potential for a 10% increase in the value of poultry.

Agriculture will play a significant role in our recovery and while some may say that targets outlined are ambitious, we have the potential to meet targets. We need a positive, can-do attitude. I want to see brand Ireland at the heart of our markets. We must build on our strengths, of which the agrifood sector is one. It will continue to remain at the forefront of international company competitors. The targets for smart, green growth can be achieved.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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As a farmer and the father of a young farmer, I am enthusiastic about the prospects that Food Harvest 2020 presents for those engaged in farming and the agrifood industry in Ireland. The exhaustive and detailed report was launched in July. It is an indepth and provoking document and a report that is vital underpinning the future of the sector and enhancing the livelihoods of the agricultural community and those involved in the agrifood sector. Its wise implementation has far-reaching consequences for agricultural activity and the impact which the sector will make on national and international consumer markets. The report provides a new vision and a valuable, workable framework for concentrated activity in the next ten years in this country in the areas of agrifood, drinks, fisheries and forestry. This is, without doubt, our single most valuable indigenous industry and it is imperative that we get our future priorities right so that we can achieve sustainable growth, expansion and prosperity for everyone within this vital sector.

We can never underestimate the intrinsic worth of agriculture and agrifood to this country nor can we underestimate the great complexity of the sector and the various factors which impinge on its activity and its progress. I am pleased that the Food Harvest 2020 report reflects the complex nature of the farming and agrifood industry and that it captures the many and varied challenges we face and the opportunities that we can unlock if we are to harness the full potential of the sector in the coming decade. In particular, Food Harvest 2020 justly recognises the unique and special position which agriculture occupies in this country and its pivotal importance to the Irish economy as a whole. Prosperity within agriculture is not just particular to those active in the industry but it touches the well-being of the entire economy and the entire nation.

I welcome the report because it identifies graphically the enormous potential which exists and it illustrates clearly the vast potential for the sector to grow even further if we adopt the correct approach and apply the various concrete recommendations. We can all work on this together, Government and private enterprise alike. We are all stakeholders and all of us have a significant role to play in realising our objectives in a successful way. I am pleased to hear the Minister say that he will give a meaningful involvement to all stakeholders in the process of implementing the recommendations of Harvest 2020.

Food Harvest 2020 is the result of considerable expertise and long hours of serious deliberations. It represents a modern, enlightened strategic vision for the future of Irish agriculture and agrifood. The blueprint it affords is a compelling one. The expert committee clearly and firmly believes that these sectors can and will deliver real and tangible returns over time. The detail of the report demonstrates that Irish agriculture and agrifood can and will be at the vanguard of our economic recovery and our return to much-needed economic growth in as short a period as possible. That must be the overriding consideration at this time. In order to achieve that ambition and to translate the aspirations into reality, it is essential that we make the proper and informed decisions now without unnecessary delay. The 2020 report is comprehensive and insightful. It stands as a realistic and pragmatic roadmap which we can follow if we are to develop and prosper successfully within these essential sectors.

The report underscores some of the challenges which confront us on the road to future growth and prosperity but, more importantly, it illustrates exactly how we can set about achieving the goals and targets we are setting ourselves. We must be absolutely confident, convinced and sincerely committed to our aims. The committee has said that Ireland can grow its exports of food and beverages by one third to achieve a value of €12 billion every year. It believes we can increase the value of primary production by farmers and fishermen by €1.5 billion and that value added through processing can be increased by €3 billion. These are substantial figures but they are realistic and attainable with the right attitude and measures.

When milk quotas come to an end in 2015, we have a golden opportunity which we can seize to increase milk output by an estimated 50%, which is the equivalent of 2.75 billion litres of milk. That could improve primary output value by €700 million with substantial additional increases downstream. Relative to our competitors, we have to improve our cost competitiveness by 20%.

There is a renewed acceptance that the agribusiness industry is crucial to Ireland's economy, not just in terms of employment and trade but also as a catalyst for investment and growth. The sector as a whole has an annual output of a staggering €24 billion. The agrifood industry overall accounts for more than 163,000 jobs in the country or 8.2% of total employment. It accounts for approximately 8% of GDP and is worth almost 10% of exports with a total value of approximately €9.2 billion. We rely heavily on exports which absorb more than 80% of dairy and beef output. The value of Irish meat and livestock exports reaches almost €2.5 billion, underlining that the meat sector is a significant element in our economy.

Food Harvest 2020 is an inspired first step towards progress over the next ten years. I encourage farmers and the industry alike to study the document, reflect on its ambitious objectives and embrace the spirit and the letter of the recommendations in full. I accept there are significant challenges ahead and that there will be obstacles. However, this report identifies those challenges and it provides us with the essential equipment to anticipate the obstacles and to enable us to surmount them in an intelligent and forward-thinking fashion. I welcome this intelligent and inspiring report. I look forward to seeing the fruits of our dedication and collective national efforts over the next ten years. I know it will be well worth it.

Photo of Shane McEnteeShane McEntee (Meath East, Fine Gael)
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I am pleased to have an opportunity to speak on agriculture. It is my first time to speak on the subject since I moved from the transport area. After the news of recent days it is a pleasure to talk about agriculture which depends on two things, namely, weather and a good price. In the past four to five years the farming community and those employed on farms got neither. It has been a good year for farming weather-wise, whether one is involved in dairy, beef or tillage.

I come from a rural area. I was a dairy farmer from the age of 14 to 47. This is the first time an upbeat feeling has been evident in the farming community when farmers call into a shop or pub for a drink. Money is there now. We will have to start again in the way we did when we joined the European Community in the early 1970s. We must start at the bottom. Five or six years ago when the economy was flying one could not get a person to drive a tractor or milk a cow. Small farmers in the area of north Meath where I come from and over the border into Cavan locked up their slatted units and went to work on the buildings. They have moved back now.

The best saying I have heard is from a friend of mine, namely, there is great money in farming if it were not for the bills. That was always the case. In the past three years the bills were not paid. There is a great opportunity given the good price for tillage and that some crops have been bought forward for next year. The dairy and beef sectors have also held their own. I advise the Minister that under no circumstances should the budget affect anyone in the agrisector. Although people in the sector have had a good year, they have waited for the past two years for that money, be it the person who sold the seed or the fertiliser. I urge the Minister, and Deputy Aylward and his colleagues, not to jeopardise the one industry that is beginning to create employment.

Last week I sent in a request to extend the slurry spreading season. There was a certain amount of uproar at home because a couple of contractors in my area and the men who work for them said they had another two weeks worth of work. We must start afresh and examine all aspects of farming. It is necessary to re-examine the prohibition on the spreading of slurry from October to January.

Food is what it is all about. The world's population is growing. In the past 25 to 30 years this country has been forced into producing the best food in the world. At times, we as farmers did not like the regulations and having the Department coming in on top of one but that is the regime in place and we are used to it. The ending of milk quotas presents a significant opportunity. Milk herds are worth much more now because other countries that got out of the industry are now buying stock from this country. I recall that when we first joined the European Union the man who worked on our farm got £7 a week. Almost within the space of six or eight months his wages went to £70. We started to buy luxury goods such as cheese from Holland.

There is an opening in eastern Europe for our products. Deputy Johnny Brady is present in the Chamber. There is an opportunity to bring in Bord Bia and for those we trust to sell our products abroad to put a programme before us for the next four years. Irish food has a great name everywhere. If there is an increase of €1 billion in sales this year compared to last year, that is just the start. Quotas are being abolished and the dairy herd will be allowed to produce more milk, and the fact that quality of beef determines the price paid for an animal is starting to work in our favour because the quality of animals in our fields is far higher than even ten years ago.

The weather has been favourable this year. If the weather had not held out, farming would have been gone but it stayed fine, quality was good and farmers are being paid. As a result, their suppliers are being paid and the small shops and retailers are being paid. We must, however, be ruthless in protecting the price paid to the food producer. We had a habit of squeezing the farmer to the limit, allowing him to earn a bare week's wages. If a farmer gets an extra €10,000, he will not spend it on a new kitchen or a new car, he will spend it upgrading his farm. That is why it is crucial that farming should be left alone in the budget. It should be left as it was. Payments are being graded out and it cannot be done overnight.

Sheep farmers had a rough year, even though there are great prices, because thousands of lambs were lost in the early spring because of abortion. This must be highlighted, perhaps up to €2 million in exports was lost because of that. In my area one farmer lost his entire flock of lambs and half of his sheep died, 100 lambs at €100 each, a loss of €10,000.

The agricultural organisations, the Oireachtas committee and An Bord Bia must be strong and let things get back to previous levels. Farmers were not well paid when the economy was flying but people will now milk a cow, lift the eggs and look after sheep and that is where we must start. A farmer runs more than a farm, he runs a business and he must account for every cent spent. If a farmer has a turnover of €200,000, it is the same as a shop in the parish and he must be looked after.

I urge the sale of Irish food. I have been on one trip since I was elected, to Kiev in the Ukraine. It is not in the EU but those countries are now in the same position as we were 30 years ago. It is a fantastic nation that wants educated people but those people have never been able to buy luxuries. All of those countries now are coming out of recession quicker than us. We must be ready when the quota system is abolished and people want to buy luxury food, because be it poultry, pigmeat or beef, we have it. We have the units for hens, pigs, beef, dairy and sheep and thankfully our tillage men got a great opening this year. Now is the time to bring in those selling our products and give them this responsibility. The hard work that has been done in the industry to overcome bad weather and bureaucracy has paid off and no one can point the finger at us about the quality of our food. We had a slight blip in the pig industry but it was sorted out quickly and has since picked up.

Deputy Johnny Brady knows farming much better than me, and Deputy Sargent is interested in vegetable growing; we should all get together and get those we depend on to sell our products to do their jobs and promote Irish food. The economy will recover and agriculture is the sector that will lead the way.

Photo of Johnny BradyJohnny Brady (Meath West, Fianna Fail)
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The agrifood industry is ideally placed to play a very significant role in this country's economic recovery. The sector directly employs more than 150,000 people and its economic benefit is felt throughout the country. With the economy relying on an export-led recovery, the agrifood sector continues to generate exports of goods worth up to €8 billion to more than 160 countries around the world annually. As the Taoiseach said on the occasion of the launch of the Food Harvest 2020 report, this country's future economic growth will be driven by the export of goods and services, stimulating activity and employment throughout the rest of the economy. The agrifood sector is "the embodiment of the type of export-led recovery which the Government is pursuing."

Food Harvest 2020provides the agrifood sector with a blueprint for the next decade and captures the considerable complexity of the sector. It underlines its unique and special position within the Irish economy and it illustrates the potential which exists for this sector to grow even further.

With more than 200 recommendations, the Food Harvest 2020 report is very detailed. The Oireachtas committee is convinced that the agrifood sector can deliver real returns and be at the forefront of this country's economic recovery. The report shows that Ireland can grow its exports of food and beverages by one third to €12 billion annually, while also increasing the value of primary production by our farmers and fishermen by €1.5 billion and value added in processing by €3 billion. These are ambitious and challenging targets but they are also achievable.

The broad welcome to the report is indicative of a confident and ambitious sector which wants to move forward and harness the full potential which will undoubtedly arise from the inevitable increase in demand for food following surging global population growth. In 1999, the world's population crossed the 6 billion threshold for the first time; in 2012, it will reach 7 billion and by 2015, 8 billion. At the same time, in some of the world's most populous countries such as Brazil, Russia, India and China, economic development is creating new consumer audiences who demand new and diverse food solutions.

Substantial investment in agriculture, marine and food research over the past decade, including record levels of Government investment, has allowed Irish producers and food companies to build up wide-ranging expertise, particularly in the key dairy and beef sectors. The vitality of those sectors is demonstrated by the fact that Ireland exports 85% of dairy products and more than 90% of beef production. Through investment and innovation, meat and dairy, our traditional export sectors, have been strengthened and safeguarded.

The aim now must be to build on the success of the past and to meet the competitive challenge of the international marketplace. The agrifood industry has real strength and real opportunities and the challenge is to build on its knowledge and capability so that it remains at the forefront of our international competitors. The Food Harvest 2020report provides a road map to guide the agrifood sector and inform its development, particularly one so central to the Irish economy.

The 2020 committee has set out a vision based on smart, green growth. There is a renewed interest in the agrifood sector among the wider society and a growing recognition of the role it can play in our economic recovery. Food Harvest 2020 sets a number of challenging targets across all the individual sectors, from beef to dairy, horticulture to organics and seafood to forestry and bio-energy crops. The challenges and the opportunities vary from sector to sector, but each has its contribution to make to the development and growth of the wider Irish agrifood sector.

We are all aware of the impending abolition of EU milk quotas in 2015 and the 2020 committee has made a series of recommendations which, if acted on, have the potential to deliver a 50% increase in milk production, which would enhance the primary output value of the sector by about €700 million. I welcome the fact that the Minister for Agriculture, Fisheries and Food, Deputy Smith, has already acted on one of those key recommendations by establishing a dairy expansion activation group.

Photo of Cyprian BradyCyprian Brady (Dublin Central, Fianna Fail)
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The Deputy has one minute remaining.

Photo of Johnny BradyJohnny Brady (Meath West, Fianna Fail)
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This small group is composed of farmers, processors and Teagasc, is chaired by Dr. Sean Brady and will address specific actions to be taken to realise the targets for dairy expansion set out in the report. The report also targets a growth of 20% in the output value of the beef sector by 2020 and makes a series of recommendations to ensure the sector's potential is realised. Irish beef and livestock production makes an important contribution to the overall economy, with a current annual output value of some €1.9 billion.

Some of the other ambitious targets identified in the report include a growth in output value of 20% in the sheep sector, 50% growth in the value of output in the pigmeat sector, a potential increase of 10% in the value of poultry output and increased revenue to €1 billion and employment to 14,000 full-time equivalent jobs in sea fisheries and aquaculture.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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Tá áthas orm deis a bheith agam labhairt ar an Food Harvest 2020. Given the figures, there is no doubt that agriculture is key to our future, in particular our economic recovery. The increase of 8% in food and drink exports in the first half of the year compared with last year highlights this fact in the face of recessionary talk. The figures stand for themselves, but it is not enough to dwell on the 150,000 jobs or the €24 billion output. We need to consider the trends and recognise that, within the figures, people are losing out because of market pressures that are squeezing farmers out of business. I am familiar with some cases of this.

The 2020 report's template is good, as it focuses on smart green growth, as the Minister of State, Deputy Cuffe, mentioned. I agree with the Minister, Deputy Smith, in that we sell our food and drink as coming from a clean, green food island, but we must not allow the green wash talk to stand without rigorous verification to ensure our product comes from the highest environmental standards. For this reason, Food Harvest 2020 is not enough and we need to go beyond what it details. For example, it refers to dependence on the family farm and the family farm being critical, but many family farms are under pressure and quite a number of families have left farming because of the economies of scale. People in the horticulture sector with whom I am familiar in north County Dublin, County Wexford and many other areas where horticulture is important have left. So much for defending the family farm.

Not the Government, but the multiples and factories are calling the shots. I agree with the report, in that we need more producer groups, but this will not tackle the issue while the rampant discounting of fresh produce is allowed to gather momentum and to devalue the work that goes into producing the best fruit and vegetables in horticulture and all other agriculture sectors. The same goes for the meat and dairy sectors, although milk has had a bit of a bounce this year and I hope that will continue.

Horticulture is being killed off by the discounting of fresh produce. I attended the opening of an extension by the Dublin Meath Growers Society, but the rug was pulled from under the society by a large multiple. Groomes Fresh Produce faced similar problems last week, but Total Produce has come in to save those jobs, luckily enough. This is the pressure in question. Across the water in the UK, as few as three growers, a couple of which are losing money, operate on the same acreage that grows horticulture in Ireland. I do not want to stand over a situation in which we are reduced to three people in horticulture. It is hardly plural.

To this extent, the House must send the clear message that the discounting of fresh produce by the multiples is tantamount to treachery and treason because it causes the seeds of the demise of our horticulture industry to be sown. It also comes down to us to go beyond the 2020 report and to call for direct routes to markets and ways for farmers to earn a living that do not put them in hock, essentially in bondage, to the multiples. Where it is not working out for farmers, they need options. Currently, they can find none and this is the only show in time. All options - selling directly to hotels, farm shops and farmers markets, engaging in product development, changing their ways and going organic - need to be set out. Where getting new business opportunities up and running is concerned, farmers markets are as important in every town as the county enterprise board.

The 2020 report does not mention them, but the opportunities for Ireland in terms of GM-free foods also need to be recognised. Some 60-70% of European consumers want GM-free produce. It is available for sale, but the Irish Grain and Feed Association must guarantee to supply it. This is what patriotism is about. We play to our strengths and sell internationally. We are an exporting country, but we need to be able to export what consumers want.

Photo of Noel CoonanNoel Coonan (Tipperary North, Fine Gael)
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Tá áthas orm freisin cúpla focal a rá ar an páipéir Food Harvest 2020. "It is an ill wind that does not blow some good" is an old saying in the country. In this instance, the good blown by the economic crisis is that it has returned agricultural production to its key role. It is important to the Irish, European and global economies. The ongoing CAP reform presents another opportunity. In the process of the reform, we must be mindful of the importance of food production and food security in Ireland, Europe and the world.

I welcome the document as published and its targets. It returns agriculture to an important role. Some of its targets are to increase the primary output of agriculture, fisheries and forestry by €1.5 billion, a 33% increase on the 2007-09 period, and increase the value added output of agricultural food, fisheries and woodland products by €3 billion, representing a 40% increase on the 2007-09 period. It also sets an export target of €12 billion for the sector, a 42% increase on the 2007-09 period.

Other parts of the document bring challenges to mind. Last year, the value of Irish food and drink exports declined by 12%, just under €1 billion, to €7.12 billion. Setting targets for increased production in the years up to 2020 in a year in which exports declined means the increase will not be easily achieved. Targets must be reached and much work must be done. However, the outlook is positive. Given world population trends, a population expansion of 40% has been forecasted. As such, food production must increase by 40% by 2030 and by 70% by 2050. Combined with this are other opportunities, such as the production of agricultural crops for the alternative fuel and bio-energy sectors and for the production of electricity through anaerobic digestion. There are huge, wonderful and challenging opportunities for the agricultural community in the years ahead to 2020 and this document helps to focus on that. We must also strike a warning, however, when we speak on food security and food scarcity. The land to be made available for alternative energy crops poses a risk to food security and production. There is an important balance to be achieved in that respect which will require new awareness and a new ability on the part of legislators and Government as we move into the future.

When we set those challenges and look at the opportunities we must be very mindful of what has happened in the past and how we will protect agricultural Ireland and, in particular, the 128,000 holdings in the country. We see some of the mistakes that happened and the difficulties that exist and must get our own house in order. I give the example of economic pressure on farming at present and the single farm payment for which the date has come and gone leaving many people unpaid. There is the disadvantaged area scheme for which many farmers have not been paid yet. These are farmers who have entered into obligations with their bankers and creditors and with co-ops. We must be more professional and deliver those payments on the agreed date, in full and on time. To give the digitisation of maps as a reason for delays is simply not good enough. It is unprofessional and a bad way of running our business. These payments should have been made correctly since the previous payments of last year and should have been paid throughout the spring and summer. It should not be left until farmers are about to be paid. Serious questions hang over that.

I refer to the farm waste management scheme which the Government cut in order to achieve savings. It was not included in the McCarthy report because the cuts were made prior to that report. The Government also closed the REPS 4 environmental programme and replaced it with an agri-environmental option scheme, AEOS, after some delay. That will save €20 million this year. We all welcome savings but not at the expense of driving farmers off the land.

The nitrates directive is a very important part of the CAP negotiations but when left to our Government to implement it we are sadly lacking. This week is a prime example. Farmers cannot spread slurry this week in Ireland but in Northern Ireland they can do so. This is one of the best weeks we have had this year but we cannot go out and spread slurry. When 2 January comes, however, farmers can go out and spread away even if it is spilling rain, or there is a foot of snow on the ground or a flood forecast. We must look at the calendar farming issue. We should be driven by environmental and weather factors not by calendar dates. This is another area in which we need to improve.

The future of industry is its youth, the young people, the farmers of tomorrow. We must look at the farm gate schemes which were slashed by the Minister in recent years. I refer to the installation and farm retirement schemes, the disadvantaged area scheme and rural environment protection schemes, REPS, all of which were slashed. This poses a serious question concerning the good of agriculture. We must examine that. If we are to achieve our targets for 2020 we need to look at some of the mistakes and awful things we have done to farming in the past.

This expert group and Teagasc must become more proactive in finding solutions to some of the problems I mentioned, namely, agriculture-related problems and the issues that are reducing farm productivity, production and output. The malting barley and feeding barley sector depend on Teagasc or the experts to come up with a way in which increased nitrogen levels can be used to increase production. We need that increased production if we are to become competitive with our rivals, especially those in Northern Ireland and the United Kingdom. We also need to look again at restrictions in regard to the calendar months. Look at the restrictions in winter ploughing and green cover, for example. It is crazy that there are times of the year when one cannot plough although the weather is ideal for ploughing or drilling. If the weather turns bad and ploughing is not feasible people desperately try to do it and get in crops in order to reach deadlines. I would like the Minister of State to explain that to me. People living in the North of Ireland can spread slurry but if one lives one field on the other side of the Border one is in trouble as it is illegal to spread it. One could end up in jail, never mind losing the farm payments which are so vital to Ireland and the farming community.

On the positive side, one can look at the targets for protection which must send a signal of confidence and give hope to farmers. One can take the point of view that food harvesting targets for 2020 give a 50% increase in output for dairy, a 20% increase in beef production and 50% in pig production. Those are massive figures which give hope and confidence. However, if we do not have young people coming into agriculture serious questions are posed.

I intended to mention organic farming and other points but do not have enough time. I shall finish on the subject of bureaucracy and red tape. The report advocates reducing the burden of red tape on business and lays major emphasis on competitiveness. Three years after promising to reduce unnecessary costs of business compliance by €500 million, only 4% of this promise has been achieved by the Government. That is in the report. Agri-food business has been strangled by duplication and overlapping of compliance measures which need to be addressed urgently. My fear is that although this is a great report the Government has neither the confidence nor the ability to drive it and achieve its aims.

Photo of Cyprian BradyCyprian Brady (Dublin Central, Fianna Fail)
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The Minister of State, Deputy Seán Connick, has ten minutes.

3:00 pm

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 thank the Deputies who spoke for their engagement with Food Harvest 2020, which we must all agree is critically important to the future of the agri-food sector. I wholeheartedly agree with the sentiments expressed by my colleague, the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, and others today on the potential of the agriculture, food, fishing and forestry sector. This remains Ireland's most important manufacturing sector, accounting for over 6% of GDP and approximately 7% of national employment. This sector is the primary outlet for the produce and output of the country's 128,000 family farms and includes approximately 650 food and drinks firms with a wide geographic spread throughout the country. We hear much these days about stimulus. There is broad agreement across the House that the agriculture sector is in itself a stimulus for the economy. One must recognise that as the report does.

The transformation which this multi-million euro export industry has undergone during the past decade has been quite remarkable. Consider that in the early 1990s the sector was largely commodity based and underpinned by market support mechanisms but today it is a market led and more consumer-focused industry adept at capturing market share for value added produce. Of particular note has been the development of the sophisticated prepared food industry, including seafood, whose exports are valued at over €1 billion and for which the UK remains our largest market. Furthermore, and very importantly, the overall sector is estimated to account for approximately one third of the net flow of funds from primary and manufacturing industries due to the high proportion of indigenous raw material and services used and the low net profit repatriation.

I was struck by the positive attitude from rural families at the recent ploughing championships. There is also a renewed and growing recognition in the wider community of the role that agriculture, fishing and forestry can play in our economic recovery. After a few very difficult years, the immediate outlook for the agri-food sector is improving, with estimates of a €300 million increase in farm output compared to 2009. I realise there is considerable concern in regard to the Common Agricultural Policy, CAP, and to the Common Fisheries Policy, CFP. The Minister and I are working extremely hard with our MEPs to make and state the Irish case at European level, for and on behalf of the Irish agricultural sector. The value of exports during the first five months of 2010 was almost €3 billion, more than 8% higher than a year earlier. The rate of recovery has accelerated as the year has progressed, with exports in May some 23% ahead of the same month in 2009. This is good news for farmers, their families and the whole rural economy and gives a positive but realistic platform to think about the future of the sector.

This is good news for farmers, their families and the whole rural economy. It gives a positive but realistic platform for reflecting on the future of our sector. Indeed, my late father always famously said that when the farmer had money, everybody had money, because the farmer spent it.

Photo of Noel CoonanNoel Coonan (Tipperary North, Fine Gael)
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Those were the rich farmers in the south east he was talking about.

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 was surprised to hear Deputy McEntee say the farmer kept the car. In our experience he bought the new car, the new tractor etc. The money trickled down.

I should like to address in particular forestry and fishery aspects of Food Harvest 2020 and give an indication as to how I see these sectors contributing to the overall growth targets. In the forestry sector I am delighted to announce the roll-out of the autumn planting programme, 1,000 hectares, which I have instructed my officials to allocate today. That is good news for the forestry sector, particularly in the autumn planting season. That is coming on the back of the extra 6,000 hectares planted already this year. This takes us to a total of 7,500 hectares which it looks as if we will plant for 2010. The sector is currently playing a very important role in Ireland's economic recovery, especially in the export market. It is contributing to the ongoing development of an indigenous and renewable energy source. Enormous expertise has been built up in the sector and I have been delighted over my recent months in this position to get to know many of the people working in the industry, from the nursery workers to the foresters, and indeed the companies involved in thinning, as well as those involved in the new biomass industries that are starting to appear.

I was very struck by the number of small businesses I encountered at the ploughing championships. These were small companies of between four and eight people employing people in a whole new sector. I wish them well and continued success and hope this sector will continue to grow. The current upturn in timber prices is a welcome boost to the sector and the forestry owners already committed to forestry. The prices remain buoyant and the saw-milling sector is working extremely hard to increase its share of the export markets through innovation, competitiveness and co-operation, all the key principles in Food Harvest 2020.

Later this evening I shall be in Deputy Doyle's constituency in Wicklow where we are announcing the RDS forest awards, and I hope to see him there. Again, it is in recognition of the hard work being put in by people within the sector.

On the specific recommendations in Food Harvest 2020, my Department was involved in the formation of a number of the producer groups and continues to facilitate these groups, which are now supporting farm forestry owners in achieving economies of scale and to develop sustainable markets. Teagasc also provides key guidance and knowledge in this matter and it is crucial for the processing sector and the renewable energy sector that this resource is mobilised.

Another significant return from the State's investment in forestry, some €1.25 billion since 200, reflects the crucial role our forests play in combating climate change. Over the five year period 2008-12 the Kyoto-eligible forests – planted since 1990 – will sequester an estimated 11 million tonnes of carbon dioxide and this has a net value of €165 million, assuming a carbon credit price of €15 per tonne of CO2. By 2020 Ireland's Kyoto-eligible forest could be sequestering up to 4 million tonnes of CO2 per annum. This is a significant contribution towards achieving Ireland's Kyoto climate change commitments. Timber is a sustainable, renewable, carbon-neutral source of energy and plays a key role in the displacement of imported fossil fuels. This in itself also helps to address environmental issues.

My Department is also contributing towards the development of the forestry sector through its investment in forestry research, development and promotion, all key components of the approach recommended in Food Harvest 2020. There are currently three reviews on forestry issues underway in my Department: a review of the national forestry policy, a review on the grants scheme and a review of Coillte. The recommendations from these reviews will assist me in developing a strategy for the future. The recommendations in Food Harvest 2020 will also provide a useful framework from which to maximise returns from forestry in the decade ahead.

Turning to the seafood sector, this is an area I have been able to visit in the last couple of months. Our six fishery harbours have enabled me to meet the wide variation of industry representatives, and I have garnered a new respect for those people who work extremely hard under very difficult circumstances in this sector. However, we must acknowledge that enormous work has been carried out and we can see the improvements right around the coastline, from Killybegs to Castletownbere, Rossaveal and Dunmore East. Recently I was in Howth and my last harbour to visit will be Dingle, which I hope to do in the coming weeks.

I have been surprised by the amount of investment we have seen there. I am talking about hundreds of millions of euro and there is infrastructure now in place that will last for many generations. Perhaps RTE might do a "Prime Time Special" on the work that has been carried out on all these harbours and piers, because it is something of which many people are not aware. To see the level of expertise and the development that has taken place is somewhat astonishing.

I have also been in the happy position in recent times to announce there will be €900,000 for small harbours and piers around the country. Again, that is something that will boost the harbours around the country in terms of our inshore fishermen, in particular, as well as marine tourism. This latter is becoming more important in our fishery harbours and we are working closely on this in terms of the tourism aspects.

The prospects for the seafood sector at both global and European levels are very favourable, especially in the medium to long-term. It is estimated an additional 30 million tonnes of seafood will be needed by 2030 to meet the food demands of the growing world population. This increased demand offers great potential and opportunities for Irish seafood companies.

In tandem with this growing consumer demand there is increasing focus, particularly within Europe, on sustainable production and seafood maintenance, biodiversity and avoidance of damage to the marine environment.

I am acutely aware of the difficulties within the aquaculture sector and am working extremely hard with my officials in this regard. Indeed, I sit on the marine co-ordination group set up by An Taoiseach, which is trying to break down the barriers and address the issues of concern we have with the European Parliament in relation to restrictions on mature sites and having the appropriate assessments in place to allow our aquaculture industry to develop and grow. Much of this work is at an advanced stage and I am focusing hard to ensure we break down these barriers to get the industry back up and running and to ensure we have the cleanest waters possible right around the coast and with the best and highest quality seafood we can deliver into a market in which we know we have enormous potential to grow and to create jobs.

These factors were highlighted in Food Harvest 2020, which included 15 specific recommendations on seafood designed to capitalise on the growing economic opportunities available for growing this high-value, labour intensive and rural orientated sector. At EU level our dependence on imported seafood is quite alarming. More than 65% of seafood consumed in Europe is imported. This clearly presents opportunities for Ireland to develop its seafood sector, with an emphasis on the EU market. Currently, around 85% of our seafood is delivered in basic fish format without maximising added value. This commodity approach leaves us in a position of very much undifferentiated price takes, dependent on buyers who can move their purchases easily. It is essential that our seafood products are processed, developed, packaged and marketed to realise more reliable markets and better prices.

BIM has made considerable progress in assisting the seafood sector in being more innovative. Since its launch in 2009 in excess of 60 companies have used the innovation facility at its seafood development centre in Cork. This means the facility is well on its way to delivering its ambitious target of €100 million in additional value added sales over the next five years. We really believe this target is achievable and we even hope to exceed it.

This Government continues to provide financial assistance to the seafood sector through the Irish national seafood programme, which I launched with the Minister, Deputy Brendan Smith, in July this year. This programme provides Exchequer-funded support to the seafood sector to develop new products and processes, innovate, add value to products, maintain and improve environmental and food quality standards and improve our cost efficiency. On 24 September I announced grants totalling €1.75 million to 15 seafood companies under the programme for investment projects, worth €6 million. This again was to protect jobs and increase potential for further employment within the sector.

In these economically troubled times this financial support represents a significant vote of confidence by Government in the potential of the seafood sector. Together with the Minister, Deputy Smith, I also launched the BIM strategy 2010-12, Delivering on the Potential of Irish Seafood, in July this year. This three year strategy will be delivered by BIM. Its shorter timeframe and targets are designed to contribute to the achievement of the targets in Food Harvest 2020, and the level of progress achieved will be a valuable marker of the efficiency of the actions being taken under that report's recommendations. Again, this strategy aims to create 600 additional jobs across the Irish seafood sector, develop an additional €15 million in value added seafood sales, differentiate 40,000 tonnes of seafood, worth approximately €120 million as eco-levelled and of Irish origin, increase aquaculture capacity by approximately 10,000 metric tonnes – worth an estimated €18 million in new sales – and deliver 3,500 training places to the seafood sector in more than 30 coastal locations annually.

Some reservations have been expressed today about the implementation process, and I will deal with that point. Let us take the recently announced dairy expansion group as an example, although the work we are doing in the aquaculture sector is also relevant. There is a clear need to take immediate and commercially sensitive decisions to make sure that we expand production and that we have sufficient and competitive processing capacity. With that in mind, the Minister, Deputy Smith, set up the dairy expansion group, with representatives from Teagasc, which has expertise in maximising output; farmers, who are able practitioners and are best placed to assess the advice given and use it to increase production; and industry CEOs, the key movers in ensuring streamlined and competitive processing capacity. In November, this group will report back to the high-level committee chaired by the Minister with its decisions. The Deputies can see that we are making progress in this sector.

This is a focused action group representing the key actors along the food chain. The members' task is to work collaboratively and constructively and arrive at the necessary decisions within a short timeframe. This type of cohesive and directed action group is one important way to achieve the desired buy-in by participants to ensure that the outcomes envisaged in Food Harvest 2020 are achieved.

Photo of Cyprian BradyCyprian Brady (Dublin Central, Fianna Fail)
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I remind the Minister of State that his time expired some minutes ago.

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 know. I thought I could run on until 3.30 p.m. I could go on for another couple of minutes.

Photo of Cyprian BradyCyprian Brady (Dublin Central, Fianna Fail)
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The Minister of State had ten minutes.

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 will finish up in two or three minutes. This is an important area.

Photo of Cyprian BradyCyprian Brady (Dublin Central, Fianna Fail)
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I understand completely.

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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Following on from my meeting of 16 September, my Department has collaborated with each of the agencies that have a role in the implementation of Food Harvest 2020. As a result, responsibilities have been allocated for recommendations, and lead and contributory roles have been identified for cross-cutting issues that require collaboration. A major concern for me is to ensure a joined-up State response that will build upon the momentum of the publication of Food Harvest 2020 and that the priorities of implementation are identified and agreement reached on how the major issues are to be dealt with. It is important that we act on this report and that it does not end up sitting on a shelf. That is what everyone in the Chamber and, indeed, in the industry, wants to see.

I thank all Deputies for their suggestions and their active engagement with this important debate. It is obvious that there is great loyalty towards this sector in the House, as well as an interest in ensuring that this indigenous sector flourishes. Much hard work has already been done to get us to this stage, and this is continuing. The Minister and I look forward to the continued co-operation and support of Deputies as we work to support and develop this sector in the difficult economic times that lie ahead. I am sorry for running over time, but this is such an important sector that we must take the opportunity to give a comprehensive report when we can. This sector will be one of the main contributors towards ending our economic difficulties.

Sitting suspended.