John Browne (Wexford, Fianna Fail)

I thank Senator John Paul Phelan, ably supported by Senator Bradford, for raising this issue.

The reform of the CAP, which was concluded in Luxembourg last year, was the most fundamental reform since the inception of the policy. It offered a new framework within which the agriculture and food sector could face up to new global challenges. The effect of the reform has yet to be felt across the community, though here in Ireland we are well advanced in the process of changing from the traditional system of farm supports to the single farm payment.

Beginning next year, farmers who were previously constrained by the premium system to retain animals in order to maximise premium uptake will be free to alter their production patterns. The single payment will continue to be available irrespective of the level of production. That results in farmers having the new freedom to alter production. They will make that decision based on the market returns available across all sectors of agriculture production and from within their own general resources of investment and skills. Many of the 300 farmers engaged in deer production in Ireland will have the cushion of the single farm payment and will have the range of choices available to all farmers in how best to invest this decoupled payment.

The deer population in Ireland currently stands at 48,500 animals. This has increased by 10% since 1994. Almost 800 tonnes of venison are produced annually in Ireland for both the domestic and export markets in Denmark, the UK and the US. Fallow deer is exported to Denmark while red deer is supplied to the supermarket chains in Ireland and the UK and also to hotels and restaurants at home and in the US.

I am very much aware that the industry, in common with other sectors, must continuously face up to the pressure of severe competition from larger lower cost producers from abroad. New Zealand-farmed deer and wild deer from Scotland represent the main competition on the export market. Such competitive forces are factors of international trade and their implications are felt across the production chain where costs of production must be constantly scrutinised and kept under control. This is no different from any other form of agricultural production where the returns in the market are critical to future levels of overall investment.

Irish venison is a specialised high-quality product that has established good quality markets at home and abroad. Clearly there are constraints on the industry in terms of productive capacity. However, deer farming is stronger structurally now than it was ten years ago and the average deer enterprise has increased in scale from six to ten hectares while the average breeding herd has risen almost two-fold, from 48 to 88. Over the years Teagasc has provided an advisory service to deer farmers and also supports the Venison Industry Board, which is the main representative body in matters relating to deer farming and the development of markets for venison.

In addition, the Department makes grant aid available to farmers for investment in housing and handling facilities for deer under the alternative enterprises scheme established pursuant to the national development plan. The type of investment eligible for grant aid under this scheme includes housing, feed storage facilities and waste storage facilities. Support is also available for handling facilities as well as water supply.

The Department is currently conducting a review of the alternative enterprises scheme with a view to making proposals as to how the scheme might be made more effective. My officials met with representatives of the Venison Industry Board last August and their views will be taken into account in the completion of the review.

I am strongly of the view that deer farming as an alternative enterprise to the more traditional and established farm enterprise will provide a valuable new outlet for a greater number of farmers who will assess the future direction of their farm enterprise. They will look to future returns from the marketplace and take these into account in assessing the investment needs of their farm and the opportunity and costs that may lie elsewhere. It is clear that not only is the deer sector more structurally sound now than it was ten years ago but the same is true of its financial base. While there may be fewer enterprises today they are larger, more specialised and moving towards quality-assured, high-value product outlets.

I will bring the views of both Senators to the review committee which is currently working on alternatives and strongly present the case.