Michael Creed (Cork North West, Fine Gael)
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Question 1225: To ask the Minister for Agriculture, Fisheries and Food the progress made on the programme for Government proposal to work with growers to continue to support import substitution in the fruit and vegetable sector; and if he will make a statement on the matter. [47688/08]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The EU prohibits national supports which are targeted at import substitution. The fruit and vegetable sector contributed approx €213.7m to farm output in 2007, an increase of 14% over 2000. Figures are not yet available for 2008 but a significant change is not expected. The sector has considerable potential for further development but it is experiencing strong competitive pressures, particularly from the highly concentrated retail chains and from imports. The mushroom sector, 90% of whose production is for export to the UK, is currently facing serious problems because of the developments in the sterling exchange rate.

Under the National Development Plan 2007 –2013, exchequer funding is being provided for the horticulture sector over the period of the plan. This will continue the modernisation process for on-farm investments, and marketing and processing facilities that was initiated in the 2000 –2006 NDP. The new scheme for the development of commercial horticulture was approved by the EU Commission under State Aid rules in October 2007. In 2008 almost €6m was paid out to 137 producers. The scheme for 2009 was launched in December 2008 with a closing date for receipt of applications of 16 January 2009. In addition, the EU Producer Organisation (PO) Scheme provides an important mechanism for growers to achieve greater bargaining power in the marketplace by becoming part of a larger supply base. The Scheme has more flexible terms with effect from 2009 and it is hoped that this will attract more growers to join POs. Since 2000, twenty POs have benefited from EU funding amounting to €29.4m.