Donie Cassidy (Westmeath, Fianna Fail)
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Question 129: To ask the Minister for Agriculture and Food her plans for the horticulture sector here. [26163/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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The horticulture sector is a very dynamic one that has grown to be a significant entity within the overall agricultural industry. Farmgate production is now close to €300 million with retail sales of €650 million. Demand for processed and semi-prepared produce has increased dramatically over the last number of years and is expected to continue. The horticulture sector is also very labour intensive with some 10,000 people employed across the production and distribution chain. My Department will continue to contribute directly to this sector by providing plant health services, enforcing quality standards and through grant assistance.

A very significant contribution towards the development of the sector is made through the grant aid schemes for capital investment on farms under the national development plan. The scheme aims to promote the diversification of on-farm activities, improve the quality of products, facilitate environmentally friendly practices and improve working condition. Since 2001 over €8 million has been paid to 400 horticultural producers to upgrade or develop new facilities. This grant aid has been a major catalyst for investment and growth in a sector which is making a very significant contribution to the rural and national economy. This year a €6 million grant package will fund projects to the value of over €17 million. All areas of horticulture are eligible for the scheme, covering mushrooms, protected crops, nursery crops, field vegetables, soft fruit, apples, seed potatoes and beekeeping.

Demand in the consumer and food service sectors is buoyant, both for fresh and prepared chilled produce and convenient value-added products. The retail value of prepared horticultural produce was estimated to be €59.8 million in 2004, representing a two-fold increase on 2001, and there are real investment opportunities and challenges for development of this sector. For the first time this year, projects in the fruit and vegetable sector have been prioritised in the scheme of aid for the marketing and processing of agricultural products, which supports capital investment to enhance competitiveness and added value.

In addition, horticulture producers benefit from EU aid under the producer organisation scheme. Over €6 million will be paid to 12 recognised producer organisations this year. The development of producer organisations under EU regulations has made a very important contribution to the development of the sector as it enables producers to benefit from their combined strength in the production and marketing of their product.