Written answers

Tuesday, 6 February 2007

Department of Agriculture and Food

Agrifood Industry

10:00 am

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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Question 150: To ask the Minister for Agriculture and Food her views on the falling number of fresh produce growers and the corresponding loss of farming skills here; her plans to reverse this decline; and if she will make a statement on the matter. [3708/07]

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
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The fresh fruit and vegetable sector is a very important sector that is capable of further substantial growth and development. Last year farm gate production was valued at around €230m with the domestic retail market valued at around €1 billion. However, producers have for some time faced strong pressure from the highly concentrated retail chains, which play a major role in setting prices, and from imported produce. As a result of these pressures, there has been consolidation of grower numbers which has been compensated somewhat by an increase in scale of enterprise.

My objective for horticulture is to develop a competitive sector with the maximum number of producers and in the Agri-Vision 2015 Action Plan my Department committed itself to providing grant support that is strategically targeted at horticultural projects in production, processing and marketing to improve the overall development and competitiveness of the sector.

Under the 2000-2006 NDP Scheme of Investment Aid for the Commercial Horticulture Sector my Department has paid grant aid amounting to some €20m to producers while under the NDP Capital Investment Scheme for the Marketing and Processing of Agricultural Products a total of €18.7m has been awarded to operators in the fruit, vegetable and potato sectors. Taken together, these two schemes have leveraged an investment of over €110m in these sectors so far in the new millennium. Under the new Rural Development Programme 2007-2013, it is anticipated that further substantial funding will be provided. This Programme remains to be cleared by the EU Commission and must also fulfil EU State aid criteria.

Another key to arresting the decline in producer numbers is participation and working together in Producer Organisations (POs). POs provide their members the opportunity to concentrate marketing, reduce production costs and stabilise prices. The proposals for reform of the Common Organisation of the market for fruit and vegetables, which were presented to the Agriculture Council on 29 January, identify a strengthening of the role for POs as the core part of the strategy for improving the competitiveness of the fruit and vegetable in the future. The proposals include measures for crisis management organised through POs and enhanced aid for measures both within and outside the PO framework to promote consumption of fruit and vegetables particularly by young people.

Since 2000, twenty Irish POs have benefited from EU funding amounting to €24m. With proposals now on the table for greater flexibility in the EU rules governing the formation and operation of POs, I hope to see them playing a much greater role in the future in supporting Irish producers of fruit and vegetables.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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Question 151: To ask the Minister for Agriculture and Food if she will ensure adequate contracts exist between multiple retail buyers of fresh produce and growers to ensure a reasonable price is paid to farmers and to ensure sufficient security of produce sale is in place to allow crop plans to be implemented; and if she will make a statement on the matter. [3709/07]

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
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I have no role in establishing contractual relationships between multiple retail buyers and growers of fresh produce and a move on my part to do so could contravene EU competition law.

However, I am acutely aware of the difficulties faced by many producers in trying to meet the higher and higher quality standards and conditions of supply being demanded by retailers but at lower prices. This is not sustainable in the long term and I would also remind retailers, given the growing consumer demand for quality local produce, of the importance of helping to maintain a reliable local production base.

One of the most important instruments for counteracting the influence of the multiples is the EU Producer Organisation scheme. These organisations enable growers to join together and concentrate their supplies within a planned production/marketing strategy, thus enabling them to face up to pressures from the retail sector.

Proposals for reform of the EU common organisation of the market in fruit and vegetables, as presented to the Agriculture Council on 29 January, were formulated by the Commission with the express aim of enhancing the role of producer organisations and helping them to assume a stronger role in the determination of market prices. My principal objective in the negotiations on those proposals is to ensure that the most flexible arrangements possible are put in place for producer organisations, so that more Irish producers are attracted to use this valuable instrument.

The radical changes that the horticulture sector in Ireland, as in other EU countries and beyond, is undergoing in terms of competition and rapidly changing consumer lifestyles, smaller households, new demands for convenience and 'ready-to-go' foods represent opportunities as well as challenges for the sector. Under the 2000-2006 National Development Plan my Department provided on-farm and near farm investment aid of €20m and €10.56m respectively to the sector to improve marketing and processing.

Bord Bia which comes under the aegis of my Department has been active in providing producers with market research, support for quality assurance and promotion opportunities to complement the expertise provided by Teagasc's training and advisory services.

Preparation and packaging facilities have been modernised and supports for the organic sector, which is an important component of the horticulture market, have been increased. The mushroom sector has adapted to meet increasing competition on export markets. On the domestic market producers and growers have expanded the range of high premium crops such as strawberries and peppers, which are now being produced in Ireland on a commercial scale.

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