Bernard Durkan (Kildare North, Fine Gael)
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Question 6: To ask the Minister for Agriculture; Food and the Marine his proposals for the future development and extension of the beef, lamb, pig, meat, poultry and dairy sectors in this country with a view to maximising employment and exports thereby contributing to natural economic recovery; and if he will make a statement on the matter. [31734/11]

Simon Coveney (Cork South Central, Fine Gael)
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This ties in with the previous question where Deputy Durkan raised the issue of how agriculture can be a driver for economic growth within the Irish economy. On assuming office, I stated clearly that as far as I am concerned, my Department is a major economic Ministry. It can and will provide a major good news story in terms of job creation, wealth creation and economic growth in the next four or five years.

From a pricing point of view, the price of lamb, milk, poultry and pigmeat has rarely been as strong as it is now. Moreover, the demand for what we produce is stronger than ever. The global population reached 7 billion in recent days and will continue to increase. The diet of much of the developing world, where most of the growth is happening, is changing from a carbohydrate-based diet, consisting predominantly of rice and maize, to a protein-based diet comprising the foods which we produce so well in this country. In that context there are great opportunities for further growth and expansion and the maintenance of strong pricing. That is why we have a very ambitious blueprint for expansion and growth which enjoys the support of farmers, processors, food companies, politicians, agents of the State and academics. We are all working to the same agenda. It is probably the first time that has ever happened in terms of Irish agriculture. To be fair to the last Government, it was responsible for producing the Food Harvest document. We are determined to deliver on it month on month, not just every two or three years.

Whether it is dairy, beef, pigmeat or lamb, our objective is to increase volume. To that end, we will have to support specific industries that are weak. We also seek to add significant value to the products we are producing. The opportunity to do so in all of these sectors is there and waiting to be delivered upon.

Additional information not given on the floor of the House

In addition to being Ireland's largest indigenous industry, the agrifood sector is characterised by a high output multiplier, low import content and a significant regional impact, with attendant direct and indirect economic benefits which are heavily weighted towards rural communities. Measured in terms of export earnings, the economic reach of the industry can be gauged from the fact that food and drink exports were worth €7.9 billion in 2010. This strong export orientation means the agrifood sector will be pivotal to our plans for economic recovery. The broad strategy for maximising the employment and export potential of the agrifood industry is set out in the Food Harvest 2020 report launched in July 2010. It provides a roadmap for the future development of the specific sectors identified by the Deputy.

Beef production is the predominant activity on Irish farms with more than 100,000 holdings involved in supplying the raw material to an industry that employs almost 8,000 people and produces an exported product worth more than €1.5 billion in 2010. The prospects for 2011 are even better with the value of beef exports expected to grow by 9% to upwards of €1.7 billion for the year. The Food Harvest report offers a vision for the long-term development of all the main food industry sectors. In regard to the beef sector specifically, an industry-led activation group reported earlier this year.

This report suggests there is market demand to support growth in the suckler and dairy herds. Maximising beef output potential from the national herd is contingent on a number of factors, not least the price of beef on EU and international markets. In light of current and future market developments, it is essential that a co-ordinated approach is taken by stakeholders to improve efficiency at farm and processing level, breed better animals, maintain high standards of quality and food safety and maximise the market potential of Ireland's unique natural advantages.

We are already seeing results in, for example, the areas of innovation and collaboration. Bord Bia has secured accreditation for its beef carbon footprint model. It is now part of the beef and lamb quality assurance scheme, making it the first such scheme to include environmental criteria. Plans are in train to extend this model to other products and to include additional environmental benchmarks on water and biodiversity. This is as an important practical step towards the goal of creating an umbrella Brand Ireland identity as recommended in the 2020 strategy. On the production side, Teagasc is working with the processing industry on research projects investigating dairy beef production and on optimal young bull production. My Department continues to make a substantial financial contribution to the Irish Cattle Breeding Federation to support its efforts to improve breed quality.

In recent times, there have been many positive signs pointing to a recovery in the sheep sector. Last year the average factory price for heavy lambs was approximately 17% ahead of 2009 levels and this trend is continuing in 2011, with average prices for the year to date running almost 10% ahead of 2010. Another encouraging sign is that for the first time in over a decade, 2010 saw a halt in the annual decline in sheep numbers, with numbers increasing by 1.3%. I am hopeful that 2011 will be another good year for sheep farmers.

The long-term future of the sheep sector will depend on its ability to meet the needs of the market. To do so successfully it must focus on competitiveness, innovation and the demands of the consumer. The Food Harvest 2020 strategy sets a target of 20% growth in the output value of the sheep sector by 2020. This is achievable given the right policy framework and favourable market conditions. Particular actions have been identified in the Food Harvest 2020 report covering the areas of farm competitiveness, the processing sector and marketing.

The sector has benefited from several key supports in recent years, including €7 million from the 2009 single farm payment national reserve under the uplands sheep payment scheme and €54 million for the three-year grassland sheep scheme which commenced in 2010. These measures have provided a much needed boost to sheep farmers' incomes. The grassland scheme in particular is proving to be a valuable support mechanism by improving income and confidence in the sector. In addition, Bord Bia will spend up to €1 million this year on the promotion of sheep and lamb at home and abroad, and Teagasc has allocated almost €1.5 million for sheep research for 2011. I remain committed to supporting this valuable industry and monitoring its progress closely.

The pig industry is a valuable component of the overall agrifood sector and has a farmgate value in excess of €300 million. The sector supports approximately 7,000 jobs including production, slaughter, processing, feed manufacture and services, which are dispersed around the country. Prices during 2011 are higher than in both of the previous years and currently stand at €146.10 per 100 kg, some 9.3% ahead annually, while production has increased by more than 8%. Exports for the first six months of 2011 reached almost 84,000 tonnes, an increase of 23% compared with the same period in 2010. The value of this trade, at some €196 million, is 18% ahead year on year. All markets have registered an increase with trade outside of the EU more than doubling. My Department and its agencies will play a central role, along with industry, in ensuring the Food Harvest targets are met.

The farmgate value of Irish-produced poultry meat is approximately €120 million. The sector supports approximately 6,000 jobs both directly and indirectly. Despite considerable competition from imports, the domestic industry has proven to be quite resilient in recent years. The majority of Irish product is consumed in this country with exports focussing largely on by-products. The target in the medium term is to increase the share of the Irish poultry meat market being supplied by Irish producers. The development of high standards of food quality has been a particular focus for my Department and its agencies. To this end, Bord Bia is developing and enhancing policies with regard to poultry quality assurance. Food Harvest 2020 has targeted a 10% increase in the value of poultry output. Work towards this target will be aided by several initiatives which have been taken in the areas of animal welfare, disease surveillance and food safety.

From a dairying perspective, the Food Harvest report sets an ambitious target of a 50% growth in milk production by 2020 compared with the average for the 2007-09 period. The realisation of this target will be dependent on the achievement of maximum efficiency at production and processing levels. The report's recommendations focus on changes needed in milk processing, on-farm competitiveness, the transfer of technology and knowledge to dairy farmers, and in research and development and marketing.

The dairy expansion activation group has got the implementation ball rolling in the dairy sector. Earlier this year it produced a roadmap setting out 55 actions that are required to achieve the 50% increase in milk production. These are broken into four categories, namely, on-farm production, efficiency in the milk processing sector, the development of market opportunities and general agriculture policy. Dr. Sean Brady, who chaired the dairy expansion activation group, is continuing to facilitate the process of implementation and to monitor progress. All stakeholders are being encouraged to discharge the responsibilities assigned to them, and the response is being monitored and reported upon.

In so far as international trade is concerned, I have been extremely active in developing relationships in new and expanding markets in order to build the type of confidence in Irish production and control systems which will provide a platform for long-term trading relationships in the future. As part of that effort, I hosted a visit from the Chinese Vice-Minister for Agriculture earlier this year and signed a mutual co-operation agreement in the agrifood sector. In addition, my Department has engaged with a range of third countries, including Australia, the Philippines, South Korea, China, Turkey, Egypt, Algeria and others, with a view to opening new markets and expanding the presence of Irish food products in existing markets. Bord Bia continues, through its marketing and promotional activities and its quality assurance schemes, to consolidate the position of the Irish agrifood sector on the domestic market and to expand its presence in EU and third-country markets.

Food Harvest 2020 is the key strategy document for the development of the agrifood sector in the next decade. I am chairing a high-level implementation committee to ensure the actions necessary to facilitate the development of the agrifood sector are taken.

Milestones for Success, the first annual progress report on the implementation of Food Harvest 2020, was published in July. More than 90% of the 215 initiatives have been commenced. A great deal of effort has already been made by all stakeholders and there is a strong commitment to delivering results. A good start has been made and I am confident the momentum generated by that good start will be carried forward.

Bernard Durkan (Kildare North, Fine Gael)
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This is a replica of questions on this industry that I and other Members have tabled over many years. To what extent, if any, has the Minister engaged with the stakeholders in the beef, lamb, pigmeat, poultry and dairy sectors with a view to identifying specific targets and employment increases that could be gained as a result? To what degree, if any, has it been possible to determine in the present economic climate precise targets for expansion in respect of volume, which is most important as the Minister has correctly pointed out, as opposed to merely relying on price increases? Is it intended to set out specific targets in this area? It is generally accepted that the growth areas of the economy at present will be the means by which the country can work its way out of its present difficulties.

Simon Coveney (Cork South Central, Fine Gael)
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The Deputy is correct - there is no point in having broad aspirations about growth. That is why anybody interested in the agrifood sector should read the Food Harvest 2020 document, which is a very easy read. It is specific in the targets. It is not specific on employment because it is very difficult to calculate direct employment creation in a number of these sectors. It is easier to gauge employment in the seafood sector. In this year alone we have seen an extra 272 jobs in seafood processing which has been supported through grant aid. There will be a 26% increase in exports to France, the country to which we export most seafood. That is linked to some of the work we are doing on processing.

In some of the other areas we are quite specific. Dairy should have 50% growth in volume and there should be a 40% value increase across all the sectors by 2020. The initial Food Harvest 2020 document planned for a 20% increase by value in beef exports and we have subsequently upgraded that. The specific beef activation group that is monitoring the progress of Food Harvest 2020 has subsequently given me a report suggesting that we upgrade that target to a 40% increase rather than a 20% increase because of the increase in beef prices that has happened. If the Deputy wants specifics, he should look at the document, which is very specific. It is also specific on how we get there. I chair an implementation group that meets every second month and reviews delivery on the targets set out in the document. This is a working document that is changing all the time and is very much driving the industry forward. The proof of that is that this year we will export an additional €1 billion worth of food. We will go from just under €8 billion worth of food exports last year to just under €9 billion this year, which is phenomenal growth given the recession.

Michael Moynihan (Cork North West, Fianna Fail)
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I believe everybody has bought into the vision for agriculture and the food industry. Regarding the extra €1 billion worth of food exports, there is some concern within the sector that the increase is down to price increases rather than increases in the amount we are producing. Does the Minister have figures to indicate if it is the volume that has increased or if it is down to the prices we are getting?

Simon Coveney (Cork South Central, Fine Gael)
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It is both. I do not have exact figures on the breakdown. However, the average price for beef, for example, is 15% to 18% higher than the average price last year. Even though the tonnage of beef exported has reduced slightly, the value has increased because of prices. In the case of beef it is more about an increase in the price of beef rather than an increase in volume. However, in other sectors - certainly in the seafood sector - it is both value and volume, as is the case in the dairy sector. I can get the Deputy the exact breakdown if he wishes.

Michael Moynihan (Cork North West, Fianna Fail)
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I appreciate that.

Bernard Durkan (Kildare North, Fine Gael)
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Regarding the increases in prices as opposed to volume, can any action be taken to engage with the various stakeholders to identify areas where the industry might overheat which might in turn result in market resistance leading to a downturn in that element of the economy? What steps could be taken unilaterally or under the aegis of the EU to ensure that would not happen?

Simon Coveney (Cork South Central, Fine Gael)
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I have some figures to hand. In the first six months of 2011, exports of pigmeat reached 84,000 tonnes, an increase 23% on last year. Lamb prices are approximately 10% higher than at this time last year and demand across key export markets is strengthening and medium-term forecast is good. Sheep supplies to date in 2011 are running 1% higher than last year. I already gave the figures for beef. Dairy prices remain strong with global prices well ahead of last year - milk is 34 cent per litre in Ireland. The Commission forecast is for global production to continue to increase steadily but for prices to remain at high levels, well above the average for the past decade. The value of dairy exports has increased by approximately 37% in 2011. The export increase reflects increased prices and increased volume.

Michael Moynihan (Cork North West, Fianna Fail)
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Does the Minister have a breakdown?

Simon Coveney (Cork South Central, Fine Gael)
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The dairy figure is very significant and makes up most of the growth we are discussing.