Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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Question 398: To ask the Minister for Agriculture, Food and the Marine his views on the proposals for the grain sector in 2012; and if he will make a statement on the matter. [39866/11]

Simon Coveney (Cork South Central, Fine Gael)
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Ireland is a deficit market for cereals, and prices here are greatly influenced by world market conditions. The maintenance of an efficient and viable cereals sector in Ireland is clearly very important. Not only does the sector generate an income for our tillage farmers but it is also a key source of feedingstuffs for our livestock sector. Harvest 2011

The most recent Teagasc Crop Report estimates total grain production to be in the region of a record 2.4 million tonnes. This is well above the long-term average production of 2 million tonnes. The highest national yield in more than 20 years has been recorded in winter and spring barley and the spring oats crop. It represents a 17% increase on the 2010 harvest figure mainly due to the combination of increased area planted and exceptional yields. Increased growing costs and land rental cost would balance out the grain sale benefits for most growers.

In line with world and EU markets, cereal prices in Ireland peaked in February of this year, with barley at €226/t and wheat at €239/t. Current prices have levelled off with average prices for barley at €183/t and wheat at €183/t. Over two thirds of Irish grain is used for animal feed purposes and the remainder is used as a raw material for the brewing, distilling and flour milling industries. Spring barley is the main cereal crop grown by farmers and is used for the malting, seed and feed industries.

Winter and spring wheat, winter barley and winter and spring oats are the other important grain crops produced for the agri-food industry. My Department operates a range of services aimed at improving the efficiency, quality and viability of cereal production. These services include seed certification, seed testing and recommended lists of varieties. In addition, Teagasc provides research, training and advisory services for cereal producers. The value of all these support services is reflected in the fact that Irish cereal producers have consistently achieved some of the highest yields in the world.

CAP Reform Proposals

The CAP Reform Proposals are the main reforms facing agriculture in general and the cereal sector in the coming years. The greening measures in the proposals will have a direct effect on the cereals sector. Two of the three greening proposals will apply directly to cereal farmers, those relating to Crop Diversification and Ecological Focus Areas. Under the proposed Crop Diversification measure, farms with over 3 hectares of cereals will be required to grow at least 3 crops, with any one crop occupying a minimum of 5% of the arable area and a maximum of 70% of the arable area. Cereal farms will also be required to set aside 7% of the area as an ecological focus area.

In order to minimise the impact of the reforms on the Irish cereal sector, these issues along with a number of other aspects of the reform proposals will be subject of ongoing discussions with the EU Commission and other Member states.