Róisín Shortall (Dublin North West, Labour)
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Question 240: To ask the Minister for Enterprise, Trade and Employment the efforts he is making to respond to the recent substantial increases in the cost of food and reports that food prices for basic items look set to rise further. [4007/08]

Micheál Martin (Cork South Central, Fianna Fail)
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I am aware of the recent increase in the price of a range of foods in the last number of months. Whilst the December 2007 Consumer Price Index as published by the Central Statistics Office shows that although the annual rate of inflation fell to 4.7% in December down from 5.0% in November, the price of food and non alcoholic beverages increased by 6.3% in the year.

Rising food prices are being experienced across the world due mainly to a number of factors including climatic, economic and demand reasons. A recent report by the Organisation for Economic Cooperation and Development and the United Nations' Food and Agriculture Organisation has identified that the rapid expansion of the global biofuel industry is causing fundamental changes to agricultural markets and is likely to keep the prices of agricultural commodities high over the next decade. A rise in input and transportation costs consequent on increased fuel and energy prices has also contributed to the increase in biofuel production. Adverse weather conditions which have seen a two-year drought over large parts of Australia and an unusually wet summer over much of Western Europe in 2007 together with a drought in South-Eastern Europe has had consequent effects on food yields. This has coincided with an increased demand for meat and dairy products in significant developing markets such as China and India. Notwithstanding the global rise in food prices, Government policy in relation to the food prices, remains focused on ensuring that there is a competitive market in groceries as ultimately it is competitive markets that will benefit consumers and the economy as a whole.