Ciarán Lynch (Cork South Central, Labour)
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Question 83: To ask the Minister for Agriculture, Fisheries and Food the action that is being taken to tackle rising inflation in food; and if he will make a statement on the matter. [43974/08]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Changes in food prices are primarily a function of market forces operating at international, EU and national levels. Consistently strong economic growth in developing countries is a major driver of changing world food demand towards high-value agricultural products and processed foods. Slow-growing supply, low stocks, and supply shocks at a time of increasing demand for feed, food and fuel have led to price increases globally. Biofuel production has also contributed to the changing world food equation. In common with the EU, Ireland is not impervious to this evolving change in context.

It should be noted that rising input costs, at both producer and processor levels, have fed through to put upward pressure on food prices. Pressure on input prices, in particular energy and raw material, including feed, costs, have combined with strong competition on world dairy and cereal markets in increasing producer prices over the recent past. In this respect, recent developments in terms of declining oil prices and increasing levels of global production, particularly for cereals, must be viewed positively. In addition, the recent package of reforms of the CAP, which will deliver an additional 500 million litres of Irish milk quota in the coming five years and the maintenance of milk market supports, is also very positive in the Irish context.

Recent data indicates that food and non-alcoholic beverage prices actually decreased by 0.1% in the month but increased by 4.6% in the year to October 2008. This compares to an increase of 4.4% for the year to October 2007. This rate of increase in food prices has moderated somewhat in recent months having peaked at 9.3% in March 2008. These trends mirror the trajectory in food prices as evidenced globally and across Europe throughout 2007 and into 2008.

In October 2008 Ireland's rate of food price inflation was below both the Eurozone and EU averages as measured by the EU's Harmonised Index of Consumer Prices (HICP).