Dinny McGinley (Donegal South West, Fine Gael)
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Question 26: To ask the Minister for Agriculture and Food if her attention has been drawn to the depression in the sheep industry sector at present and the fact that the sheep population is in serious decline; the action she proposes to take to alleviate these difficulties; and if she will make a statement on the matter. [18560/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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The sheep sector plays a very important role in the agricultural sector in Ireland and makes a very valuable contribution to the economy. I am aware that the sector has been affected by various factors in recent years. Two major factors should be mentioned, the outbreak of Foot and Mouth Disease in 2001 and the reform of the CAP leading to the Single Farm payment. The former disrupted supply and distorted prices and it has taken some time for the market to normalize. The reform of the CAP decoupled premia from production and led to high disposals in 2004 and 2005 of ewes which were no longer required for premia purposes.

There is general agreement in the industry, however, that changes need to be made to ensure that the market provides adequate returns. It was decided that a study group should be established, which was representative of all interests, to draw up a development plan for the future. The sheep industry strategy group was established in December 2005 under the chairmanship of Mr. John Malone, former Secretary General of my Department. All sectors are represented in the group including the processors, producers, Teagasc, Enterprise Ireland, Bord Bia and my Department.

Its report, whose publication is imminent, is expected to cover all aspects of the sector, including production, breeding, price, product development and promotion for different markets and consumer preferences. I will study the report and take whatever action is appropriate to further develop and secure the long-term future of the sector.