Áine Collins (Cork North West, Fine Gael)
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I welcome the opportunity to speak on this topic as it is very important. I ask the Minister to consider re-opening funding for the agrifood and horticulture sectors under Leader funding. This comes under Axis 1 of Leader funding, which currently only supplies funding for bakery products. It is important that we look again at this issue. The provision of Leader funding is about supporting rural businesses and communities and it seems ridiculous that in a country that promotes itself on the quality of its agricultural products does not support local food businesses. I hope the Minister of State can address the issue of how Ireland's operational programme for rural development can allow funding to be made available to small, micro and medium food businesses under the Leader programme.

The general consensus among Leader groups is that there is a huge demand for seed funding to produce food products, that there are great markets for them at home and that they have huge export potential. The Government's emphasis on exploiting our reputation as a producer of high quality food products could be converted into enormous incentives to create jobs but lack of sector funding is holding up the process. Farming is doing well and, in fairness to farmers, they are the first to reinvest their profits locally and look at the quality of their produce and adding value to them. This will be particularly important in view of the abolition of quotas in 2015. Helping the sector would result in the creation of jobs and be of real benefit to the economy and the balance of payments.

It is essential that Leader groups have quality funding to encourage small-scale agrifood businesses. Hugely successful brands such as Clonakilty Blackpudding products and small cheese companies have developed during the years with Leader programme encouragement and funding. It was under the previous Administration that the funding ceased and I know the Government will take a different view. In my own area of Cork north west a number of really good small businesses produce high quality food produce, but they need help in expanding their offerings and looking at new markets. IRD Ballyhoura manages Leader funding. It told me this morning that huge numbers of people came to it for funding, but it cannot help these applicants, one of whom is McCarthy's Butchers which supplies products to Harrods of London and Selfridges, yet it cannot get money for a local unit to expand its produce. If the business was based in Cork city, Cork City Council would provide a food unit. This is a big issue. O'Leary's Butchers in Millstreet has won many awards for its venison sausages, but it cannot get support either. There are real job opportunities available. We must, therefore, look at this issue. In Kanturk Ardrahan Farmhouse Cheese which is hand produced from the milk of the farm's cows has won many awards, placing it in the top three at the world cheese championships in four events in recent years. Charleville cheese and Newmarket cheese are also well known products, the production of which could be expanded.

Food production is important and world demand for food produce is steadily growing. The potential of this sector was highlighted over the weekend by the visit of the Chinese Vice President. There is huge potential for Ireland to win supply contracts into China in future years. With 450,000 people unemployed, we need to increase the level of job creation. Some 70% of new jobs will be provided by new businesses. This is where we need to look and there are real possibilities in the food production sector.

The horticulture and food sectors are closely connected. In my own town of Millstreet I tried to establish a community project to grow lettuces in polytunnels. Land was donated, but we were unable to get funding from the local Leader company. A local jobs opportunity with a good market was lost as a result. I am sure the same story could be told in every town in the country. I understand the Leader companies have money available, but do not have projects into which to put the money. I, therefore, ask the Minister of State to look at this matter in a favourable manner.

Fergus O'Dowd (Louth, Fine Gael)
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The rural development programme 2007-13 is divided into four axes. Axis 1 deals with the competitiveness of the agriculture sector; Axis 2 aims to improve the countryside and the environment, while the objectives of Axis 3 are to support the diversification of the rural economy and improve quality of life in rural areas. Axis 4, or the Leader axis, provides support for the use of a bottom-up approach to development which ensures local people are involved in decision making, thereby facilitating sustainable development in a more inclusive way. In Ireland the Leader approach is used to implement Axis 3 measures.

A significant number of projects funded under the previous Leader+ programme 2000-06 and the diversification and business creation measures of the current rural development programme, RDP, involve support for enterprise initiatives that add value to agrifood products. Basic agricultural products are listed in Annex 1 to the EC treaty and commonly called Annex 1 products. Under the main Rural Development Regulation 1698/2005 support-grant aid for adding value to Annex 1 products is facilitated under Axis 1 of the programme. At the start of 2011 Ireland was notified by the European Commission that support-grant aid for adding value to agrifood products was not eligible under Axis 3 but rather under Axis 1 as detailed in the regulation. As a result of this, grant aid under Axis 3 of the RDP for this activity is suspended.

A significant part of enterprise activity in rural areas focuses on food and food-related businesses. The continued provision of support for these businesses is critical as we look to ways to generate employment in rural Ireland. The Department of the Environment, Community and Local Government is aware of the seriousness of this issue and has been working with the Department of Agriculture, Food and the Marine on an ongoing basis since the issue was identified in order to reach a solution.

It should be noted that although there are many agrifood products that Axis 3 of the RDP has been unable to support since the issue was notified in early 2011, the Leader programme can and does continue to offer substantial support to certain food processing enterprises in rural areas. Examples of activities which are being funded and will continue to be funded include the production of chocolate, ice cream and bakery products. Support is also provided for farm shops and farmers markets.

I am not in a position to make an announcement on additional funds for the projects referred to at this time, but I reassure the Deputy of the ongoing efforts to achieve a solution which I hope will be found in the near future.

Áine Collins (Cork North West, Fine Gael)
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I am glad to hear this matter is being looked at and hope we will receive a more favourable answer in the near future. I cannot emphasise enough the importance of this enterprise in rural communities and the opportunities we are missing out on by not having this funding. I thank the Minister of State for his time.

Fergus O'Dowd (Louth, Fine Gael)
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The Minister for the Environment, Community and Local Government and I are fully aware of the value of the agrifood business and acknowledge the valuable contribution Leader funding is making. Considerable amounts of money are spent on RDP programmes. This year there was an increased allocation of €34 million for the Leader programme, bringing the total allocation in 2012 to €96 million. The RDP provides direct and indirect support for enterprise development through diversification into non-agricultural activity, with a programme allocation of €16.6 million. There is an allocation of €45.4 million for the encouragement of tourism activity measures. These measures are aimed directly at providing support for the creation of on-farm employment opportunities in non-agricultural activities and services and the provision of support for rural tourism initiatives. Working in conjunction with these direct support measures are indirect support measures which include substantial financial resources of more than €29 million for training and information services. The Leader programme can and does continue to offer substantial support to some food processing enterprises in rural areas. The Minister hopes to be in a position to make further funding available in the near future. I hope some of the products that are so popular in Harrods can be sent to the north east, as we would he happy to try them. It sounds as if they are of a very high quality.

Áine Collins (Cork North West, Fine Gael)
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I thank the Minister of State.