Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Question 52: To ask the Minister for Agriculture, Fisheries and Food the assistance he is providing to assist the pig industry through its current difficulties; and if he will make a statement on the matter. [12574/11]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Question 72: To ask the Minister for Agriculture, Fisheries and Food the multiples or supermarkets that he invited to meet him in relation to difficulties in the pig sector; the multiples or supermarkets that attended; and if he will make a statement on the matter. [12573/11]

Simon Coveney (Cork South Central, Fine Gael)
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I propose to take Questions Nos. 52 and 72 together.

The pig industry is a valuable component of the overall agri-food sector, and has a farm gate value in excess of €300 million. The sector supports approximately 7,000 jobs including production, slaughter, processing, feed manufacture and services and these are dispersed around the country. Production, prices and exports grew significantly during 2010 and the impact of this growth was felt at all levels of the production cycle.

Having said that, I am aware of the difficulties currently being experienced by the sector. While returns have improved in recent months and are forecast to improve in the medium term, the biggest issue for producers at the moment remains feed costs, most notably cereals and compound feed. Pig producers are especially affected by the increase in cereal prices since June 2009, given that cereals account for 70% of feed. This is reducing margins to below the long-term average, a situation which may have an impact on production decisions in both the short and medium term. Difficulties in maintaining credit facilities with suppliers and banks are exacerbating this situation.

The Teagasc Pig Advisory Service estimates that the cost of production averages some €1.47 per kg, with feed accounting for €1.16 of this. Non-feed costs account for, on average an additional €0.50 per kg. These non-feed costs are often herd specific and vary between producers. Larger scale producers are better positioned to avail of economies of scale. Pigmeat prices currently stand at €142.70 per 100 kg, an increase of over 10% year-on-year and are expected to continue to improve as 2011 progresses, while cereal output is expected to increase by mid-year.

Both of these developments should improve the position for pig producers. Teagasc Advisory Services are working with producers, feed suppliers and banks to advance a number of initiatives to help pig farmers through this difficult period. As you are aware pig prices are a function of the supply and demand dynamics in the market place and my Department has no role in how they are arrived at.

The 'Food Harvest 2020 Report ', which was published in July 2010, sets out the vision for the future of the food industry including the pig sector. Ambitious targets have been set in relation to sow productivity, the size of the national herd, together with a 50% growth in the value of output by 2020.

I recently met with many of the stakeholders including producer representatives, some processors and Tesco Ireland and discussed many of the issues currently affecting the sector. I invited stakeholders to consider any suggestions or proposals they may wish to make and to advance them through the Food Harvest 2020 Implementation Process.