Kathleen Lynch (Cork North Central, Labour)
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Question 79: To ask the Minister for Agriculture and Food her plans for development of new outlets, including non-food uses, for agricultural and forestry products; and if she will make a statement on the matter. [38381/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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The development of new markets for Irish food produce is primarily the responsibility of the food industry. However, my Department, in co-operation with the statutory food promotion agency Bord Bia, will continue to assist the industry to identify markets for Irish agricultural and food produce in the EU and internationally, to build on existing markets by extending the value-added component, to identifying market segments with growth potential and to innovate to retain consumer and buyer interest.

As provided for in the National Development Plan 2000-2006, the main objectives of the food institutional research measure, or FIRM, are to provide a base of information and expertise in generic technologies that supports innovation and product development in the food industry, and to assist consumer protection by ensuring that product development is underpinned by attention to food safety and quality. General calls in 2000 and 2004 and a targeted call in 2001 covered the development of technologies to build a more competitive, innovative, consumer-focused and sustainable food production and marketing sector; development of the scientific knowledge to underpin effective food safety practices at all stages in the food chain; consumer foods technology; innovation in functional foods; cheese diversification; production of new food ingredients; new technologies for added-value meat products.

Non-food uses for agriculture and forestry products is an area my Department is giving particular attention to in light of the reformed CAP. Under the reformed CAP, an aid top-up of €45 per hectare was introduced for production of energy crops. It is subject to a maximum guaranteed area of 1.5 million hectares for the EU as a whole. Any agricultural raw material, with the exception of sugar beet, may be grown on the areas covered by the aid, provided they are intended primarily for use in the production of either biofuel or electric and thermal energy from biomass. To avail of this aid, crops must be grown on eligible land, not on set-aside, and the aid will be paid only where there is a contract between the farmer and the processing industry, or where the processing is undertaken by the farmer on the holding. This is a coupled aid, so the farmer must grow the crop in order to be eligible for the top-up.

Energy crops such as oilseed rape, wheat and sugar beet can be used for the manufacture of liquid transport biofuels. Forestry by-products are a rich source of wood biomass for heat or energy generation while various farming by-products such as meat and bone meal and tallow can be used for energy or heat generation and biodiesel manufacture respectively. For the purposes of contributing to the development of policy on biofuels, my Department in conjunction with COFORD and Teagasc has examined the potential of energy crops, wood biomass and farming and food by-products. In general, the production of energy crops for biofuels will have to be demand led and production by farmers will only occur if the economic returns are greater than those offered by traditional crop enterprises. The scheme announced earlier this year by the Minister for Communications, Marine and Natural Resources, who has overall responsibility for energy policy including the promotion and development of biofuels, for mineral oil tax relief on pilot biofuel projects has stimulated the production of oilseed rape for biofuel. The announcement in yesterday's budget of the excise duty relief scheme to cover, when the relief is fully operational, around 163 million litres of biofuels per year should further stimulate the production of crops for the manufacture of liquid biofuels. This is a very welcome development.

The exploitation of wood resources for energy purposes, mainly for heat or electricity generation, offers significant potential. There are also significant opportunities for using by-products of farming and food processing for bioenergy purposes. Approximately 140,000 tonnes of meat and bone meal is produced annually and its use in place of fossil fuels could reduce carbon dioxide emissions by up to 19%. I wish to encourage further research to assist the development of biofuels and have arranged for research projects on biofuels and other non-food uses of crops to be included in the latest call under my Department's research stimulus programme. Details of the successful projects will be announced shortly. To encourage the growing of sugar beet as an energy crop, the EU Commission intends to amend the relevant regulations in 2006 to allow sugar beet to qualify for set-aside payments when cultivated as a non-food crop, and to be made eligible for the energy crop aid of €45 per hectare.

In addition to the traditional market for timber, Ireland's forests also provide a number of other non-timber benefits including carbon sequestration, wood energy, biodiversity conservation, recreation and tourism. A recent publication by COFORD, "Markets for non-wood Forest Products", states that markets do exist for a variety of other non-wood forest products such as game, fruit, fungi and foliage and that these are at a very early stage of development in Ireland. The forest service of my Department is active on a number of fronts to develop forestry to its full potential, including this area of non-timber benefits and products. The forest service is funding a number of pilot projects in the area of wood energy, including an integrated forest-to-energy project in County Clare. Other initiatives are also being planned. COFORD, the forest research and development agency under my Department, is also to the forefront of promoting wood energy. The forest service also funds the neighbour-wood scheme which offers considerable support to groups, including local authorities, to work in partnership in developing appropriate woodland amenities in and around villages, towns and cities. Such amenities, designed and equipped for public access, recreation and enjoyment, impart a wide range of benefits to the surrounding communities.