Wednesday, 1 December 2010
National Recovery Plan
Question 9: To ask the Minister for Agriculture; Fisheries and Food his views on the specific measures in the Government's proposed National Recovery Plan affecting the agricultural sector; if any analysis has been carried out by him in consultation with the Department of Finance with regard to the proposed tax changes; and if he will make a statement on the matter. [45524/10]
The national recovery plan published by the Government recognises that future policy must be focused on areas where competitive advantage can be achieved and it acknowledges the contribution that Irish agriculture and the Irish agrifood industry makes and will continue to make to help boost competitiveness and increase employment in the economy. Exports by this sector amounted to approximately €7 billion in 2009, representing half of all exports by indigenously-owned firms. During the first five months of 2010, the value of exports was more than 8% higher than a year earlier, at almost €3 billion and the rate of recovery has accelerated as the year has progressed with exports growing by 14% in the third quarter. The sector is also highly labour intensive and is a vital part of the rural economy.
The plan rightly acknowledges Food Harvest 2020 as a comprehensive and considered roadmap for the development of Ireland's key indigenous sector. Ireland can grow its exports of food and beverages by one third to €12 billion annually. We can increase the value of primary production by our farmers and fishermen by €1.5 billion and value added in processing by €3 billion. The ending of milk quotas in 2015 represents an exceptional opportunity to grow our milk output by an estimated 50%. We can, and must, improve our cost competitiveness by 20%, relative to our competitors. All of these issues have fed into the development of the national recovery plan and are key elements which contribute to our return to economic stability and growth.
Regarding the Department of Agriculture, Fisheries and Food, the plan identifies the level of departmental savings that have to be achieved over the period 2011 to 2014. The Department will be required to achieve savings of €75 million in 2011 and a further €120 million over the following three years. Based on the savings that have been identified for 2011, decisions on expenditure across all subheads will be finalised in the context of the 2011 Vote for the Department which will be announced on budget day, 7 December. While the overall savings to be achieved in the following years has been identified, specific decisions on individual programme expenditures in those years have not been taken. Such decisions will be taken as part of the annual Estimates process in each of the years 2012, 2013 and 2014.
We do not have many options and there are limited areas with potential to pay back the money we are supposedly getting at a cheap interest rate of 5.8% in the bailout. However, agriculture is one area with potential. I am concerned by the responses of Deputy Connick to this question and the Minister to an earlier question about not putting road blocks in the way of this sector to allow it to continue to grow. It will be essential that an environmental scheme remain in place to allow people to finish the work they started. It will be imperative that stock relief and other tax reliefs are retained to allow the industry to grow.
Is the team over there prepared to fight the corner for Irish agriculture to ensure that on the other side of next week's budget, we have no noose around the neck of Irish agriculture? I acknowledge the growth. The euro will probably weaken soon. However, we have €75 million to save for next year, so the Minister should ensure that the savings are in the streamlining of bureaucracy-----
I was asked if we are prepared to wear the green jersey and fight the fight. We have been fighting the fight for a number of months in the agriculture sector. The report published and launched by the Minister earlier this year, Food Harvest 2020, clearly outlines the views of the Government on the prospects for agriculture and fisheries, so we see that as a vital driver of the Irish economy. Savings are required across all subheads and across the various divisions. We have been lobbied intensively by farmers across the country about the various schemes and we are hopeful that we can protect them. However, until we see the figures that we are dealing with after the budget, rather than the overall capital figure, we cannot give any indication as to what is likely to happen. We are fighting to ensure that we maximise the return right across the various subheads and sectors.
I do not dispute the Minister of State's sincerity. I am concerned when I look at reports that recommend a slash and burn approach, such as the taxation report, the McCarthy report and so on. These are very simplistic and they do not stack up against the likes of Food Harvest 2020, Pathways to Growth by Bord Bia and common sense. It is very easy to take a slash and burn approach to this budget. It has to be done in a different way when we are trying to achieve savings. The gates need to be opened for the industry and roadblocks should not be put in their way.
I will not disagree with the Deputy's point. We are supportive of the agriculture industry. We are trying to deal with it within a capital budget that will be presented next week. Subject to the budget and to the announcements on the day, we are not in a position to come forward and confirm any of the amounts under the various subheadings. According to the report of the national recovery plan, a huge amount of the savings can be made under the administrative subheadings. Much work has been done on this and a huge proportion of the cuts will be in that particular sector, and hopefully this will improve the situation on red tape.