Pearse Doherty (Sinn Fein)

Cuirim fáilte roimh an Aire go dtí an Seanad chun an cheist tábhachtach seo, ó thaobh cúrsaí talmhaíochta, iascaireachta, coillte, bia agus ólachán de, a phlé.

Agrifood is a very important topic, one on which my party colleague, Deputy Arthur Morgan, is preparing a report for the Oireachtas Joint Committee on Agriculture, Fisheries and Food. With his assistant, Ms Kathryn Reilly, he is putting the finishing touches to the report which will be submitted to the committee next year. I draw the Minister of State's attention to it.

The agrifood sector is very important to the entire economy. It is the largest Irish-owed productive sector, accounting for almost 50% of exports from Irish-owned manufacturing enterprises. Given its regional spread, it plays a significant role in the spatial distribution of development and employment. Unlike other sectors of the economy, it is multifaceted, with growers, producers and farmers at farm level, complemented by primary processing and added-value ancillary services and industries. Employment in the sector accounted for 179,200 jobs, or 8.5% of total employment in 2008, according to figures taken from the CSO's quarterly national household survey. However, in an industry survey by Agri Aware, farming, the food industry and service industries that depend directly and indirectly on agriculture were found to provide approximately 268,000 jobs. This represents one in seven jobs in the economy. The fact that one in seven people is in employment either directly or indirectly because of the agrifood sector means we cannot continue merely to refer to it in soundbites. This is the time for action; unless the Government takes the sector seriously, we are at risk of losing one of our greatest wealth generating industries.

There is optimism about the future of the sector to stimulate the economy. We know such optimism is rife but the practical initiatives required to create the basis for a prosperous indigenous industry are deficient. There are challenges facing the sector in Ireland. Among these are: changes to the Common Agricultural Policy and WTO arrangements which will fundamentally change the economics of supply and production in Ireland and the European Union. Increases in business and regulatory compliance costs, coupled with a deflationary consumer food market, mean that manufacturer margins are being eroded. This leads to products and services being sourced from other low cost jurisdictions. In addition, the increased concentration levels and buying power of multiple food retailers, coupled with changes in distribution arrangements, are inhibiting Irish cost recovery.

In its document, Building Ireland's Smart Economy, the Government advocates the agrifood sector as a major economic stimulus. My party and I agree. The sector is dependent on rural and indigenous enterprises and businesses. However, with just two pages dedicated to this issue, there are no realistic proposals in the document to address how the Government will support the sector. With a series of proposed cuts to be announced presently in the 2010 budget, how is the sector supposed to develop further?

The creation of new employment opportunities using indigenous resources should be the main focus of the Government. It should include actions to develop new rural enterprises and promote the development of new products and processes. The agrifood sector is indigenous, has a regional focus but is international in orientation. The value of the sector is most readily visible in local economies, for which the value of production and processing, to which job alternatives are few, is unparalleled. In 2008 the sector accounted for 10% of total merchandise exports, amounting to a figure of nearly €8.6 billion. Similarly, on average, it has accounted for around 9% of total exports. Since Ireland is seen as a green island, there should be greater efforts to capitalise on this image and expand our agrifood exports.

The embedded nature of the food sector in our economy is demonstrated by the fact that in the period between 2000 and 2008 there was an increase in the Irish raw materials sourced by the food and drink sector but both total manufacturing and total manufacturing excluding food, drink and tobacco witnessed a decline in Irish sourced raw materials. The Irish economic expenditure is beneficial not only for the national economy but for local economies from which these raw materials are sourced.

The agrifood sector is an industry with low profit outflow from the country and low import requirements. However, Bord Bia estimates that as much as 90% of poultry and 60% of pigmeat sales at food service level consist of imported products. That is accentuated by the fact that import growth to date has been strongest in the meat, vegetables and prepared food categories with per capita increases by 50% to €1,070 from 2000 to 2007. The lack of initiatives to address these problems is symptomatic of a Government that is willing to talk up the industry but has very little interest in doing anything for it.

The aquaculture sector is crucial for the local economy in Donegal but that sector is tied up in bureaucracy and administration. While in theory there is enormous potential to expand exports and create ancillary services and employment onshore, in practise it is not happening. While we are an island, we might as well be surrounded by a desert for all we are able to capitalise on our resources at sea. We are all aware of the difficulties with licences and the artificial barriers being created by legislation. The implementation of European Union directives is creating difficulties for fishermen who just want to get on with their jobs.

There must be renewed focus on this area by Government if we are to lift the local economy in those areas which were once thriving but which, as a result of administration and red tape, have now seen a huge valuable sector for the Irish economy become a shadow of its former self.