Andrew Doyle (Wicklow, Fine Gael) | Oireachtas source

I thank the House for inviting me to discuss the horticulture industry. The horticulture sector makes a very significant contribution to Ireland's gross agricultural output, with a farm gate output of €400 million in 2015. In terms of gross agricultural commodity output, horticulture is positioned third after beef and dairy. The sector makes an important economic contribution and generates significant ancillary employment in areas such as preparing and packaging produce, distribution, retail, garden design and landscaping. At retail level, Irish consumers spend on average €1.2 billion on fresh fruit and vegetables and potatoes, second only to dairy produce. On the non-food side of horticulture, the Irish consumer spends €512 million on plants and cut flowers for the home.

Two sectors of Irish horticulture in particular are important sources of foreign revenue. Three quarters of all mushroom production, or €100 million, is exported annually. Almost €14 million of non-food horticultural products, such as nursery stock, cut foliage, bulbs, flowers and Christmas trees, are also exported, mainly to the UK and Northern Ireland.I am keenly aware of the challenges these sectors now face and, in particular, the mushroom industry following the aftermath of the UK referendum decision to exit the EU, particularly in light of recent fluctuations in currency. In 2015, the Irish mushroom sector had an estimated farm gate output value of €137 million with the UK accounting for 83% of Irish mushroom production of some 61,000 tonnes. Most Irish mushroom growers are members of CMP, Ireland’s largest fruit and vegetable producer organisation. This EU funded scheme provides a mechanism for producers to work together to optimise production costs, stabilise prices and strengthen their position in the marketplace by becoming part of a larger supply base. CMP draws down significant EU aid each year through its operational programme which provides invaluable support to its members. On 15 October, €1.57 million was paid to CMP.

Budget 2017 underpins the Department’s mitigation efforts through strategic investment in key areas of the Department, in its agencies and in the agrifood sector. From providing access to an innovative low interest agri-cashflow fund of €150 million to agri-taxation measures designed to strategically smooth income fluctuations, budget 2017 provides a robust, pre-emptive response to the Brexit challenge.

In addition, the Department of agriculture, along with the various State agencies, in particular Bord Bia, Teagasc and Enterprise Ireland, are working closely with the industry to provide the necessary support and assistance. Bord Bia has provided currency and negotiation workshops specifically targeted at the sector, which has been well received by the mushroom industry. In addition, Bord Bia is also investing in a market development programme which will assist companies dealing with currency and trading difficulties.

Under the Food Wise 2025 plan, the Department has set ambitious targets for the horticulture sector, principal among these is the plan to grow the value output of the sector by a further€500 million and deliver 1,000 full-time equivalent jobs. This plan focuses on improving sustainability, efficiency, growth and competitiveness. The market is increasingly international and competitive, and ongoing development of the horticultural industry is dependent on its ability to maintain and extend competitive advantages in this environment. Central to achieving this growth is the investment in the development of new technologies that create more sustainable production systems. The Government’s commitment to achieving these targets is demonstrated through the State-funded scheme of investment aid for the development of the commercial horticulture sector, which provides grant aid at 40% on approved costs associated with capital investment in a broad range of specialised horticultural equipment and buildings that contribute to at least one of the scheme's objectives. All sectors within the horticultural industry are eligible for this competitive grant aid scheme which is normally heavily over-subscribed. The budget for the scheme in 2016 was €4.3 million and approvals were issued to 154 applicants, which will facilitate grower investment costing approximately €13.5 million. Funding for the 2017 scheme has recently been announced. We are awaiting final approval but €5 million is the figure that has been indicated. The scheme is now open for applications. This competitive grant aid scheme represents the main source of State funding for horticultural producers and is vital to improving growers’ competitiveness and the quality of output, as well as allowing growers innovate and diversify production.

As mentioned earlier, the horticulture sector will have access to the €150 million low interest cashflow support loan fund, providing access to highly flexible loans for up to six years, for amounts up to €150,000 at an interest rate of 2.95%. There is also an option for the first three years to be interest only. Earlier this year, the Department of Jobs, Enterprise and Innovation introduced the grocery goods regulations under the Competition and Consumer Protection Act 2014. The five main retail multiples control over 90% of the market for fresh fruit and vegetables in Ireland. Their dominant position, combined with a very competitive retail environment, can have a significant impact on producer prices. Key elements of the grocery goods regulations are the requirement for written contracts to be in place between regulated entities. The grocery goods regulations are not about setting price or prohibiting below cost selling or certain practices within the food chain. They are aimed at ensuring there are no surprises and that contract terms are honoured. These regulations are enforced by the Competition and Consumer Protection Commission. The EU Commission is also examining the issue of relationships in the food chain and there may be initiatives at EU level in the future.

The Government places a strong value on the importance of Ireland’s horticulture industry and continues to support it through the implementation of the Food Wise 2025 plan, which sets out the practical ways in which aspirations for growth can be made tangible and the sector supported as it strives for new levels of success in the decade ahead.