Ruairi Quinn (Dublin South East, Labour)
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Question 59: To ask the Minister for Enterprise, Trade and Employment his views on reports of recent substantial increases in the price of a range of food prices and forecasts that food prices will rise further by the end of 2008; if he is satisfied that sufficient protection is available to protect consumers against unwarranted price increases; and if he will make a statement on the matter. [8337/08]

Micheál Martin (Cork South Central, Fianna Fail)
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The January 2007 Consumer Price Index as published by the Central Statistics Office shows that although the annual rate of inflation fell to 4.3% in January down from 4.7% in December, the price of food and non alcoholic beverages increased 6.7% in the past 12 months.

It is an undisputed fact that rising food prices are being experienced right across the world. These increases have been precipitated by a number of different factors including climatic, economic and demand reasons. The Organisation for Economic Cooperation and Development and the United Nations' Food and Agriculture Organisation have identified that the rapid expansion of the global bio fuel industry is causing fundamental changes to agricultural markets and is likely to keep the prices of agricultural commodities high over the next decade.

The loss of significant tracts of potential food-producing land has pushed up the cost of the animal feed used by dairy farmers. This has also coincided with surging demand for meat and dairy produce in India and China, as their economies and diets become more westernised. Nearer to home, persistent rain in Ireland last Summer had a significant effect on crops such as cabbage, cauliflower and broccoli with up to 50% of some growers' yields being severely affected. Grain prices in Ireland continue to rise with the realisation that wheat harvests in most regions did not deliver as expected which in turn has increased the price of barley.

In terms of food prices into the future, it is likely that the demand, economic and climatic reasons which underlie the recent price increases may continue to be experienced for some time. Notwithstanding the pressure that these factors will continue to bear on food prices, a number of commentators have suggested that in the short-term at least, higher prices are likely, other things being equal, to lead to some increase in food production and a consequent moderation in prices. Maize prices, for example, have fallen since the spring of 2007 in response to increased plantings, though they remain well above 2006 levels. The EU has removed the mandatory set-aside quota for cereal sowings in autumn 2007 and spring 2008 and this is expected to boost production by around 10 million tonnes. Teagasc have forecast that cereal prices will fall by around 20 per cent in 2008, though they will still be 40-50 per cent higher than in 2006. They have also forecast that wholesale milk prices may decline by around 7 per cent in 2008, though again remaining significantly in excess of those in 2006.

Notwithstanding the global rise in food prices, national policy in so far as the price of food to Irish consumers is concerned, is focused on promoting a competitive grocery market and raising consumer awareness in relation to the need to get the best value for money when doing their grocery shopping.

Whilst clearly the recent increases in the price of a variety of staple foods is a matter of concern, I am confident that the measures in place to allow consumers to make informed choices about the grocery items that they buy together with the work of bodies such as the Competition Authority and the National Consumer Agency will help to ensure that consumers do not suffer from unwarranted price increases when doing their grocery shopping.