Bernard Durkan (Kildare North, Fine Gael)
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Question 236: To ask the Minister for Agriculture, Food and the Marine the extent to which he expects the prospects for Irish lamb producers to expand over the next five years; the most likely factors to affect the industry; and if he will make a statement on the matter. [40049/11]

Simon Coveney (Cork South Central, Fine Gael)
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I am very pleased to see that the Irish sheep sector continues to show positive signs of renewal. Last year we saw a halt in the decline of sheep numbers. Provisional estimates for June 2011 from the results of the Crops and Livestock Survey confirm that after successive years of decline in our national flock, the trend has been reversed, with our total sheep numbers increasing by 3.5% on those in June 2010 to 4.8 million. Significantly there was a 4% rise in the number of younger ewes being used for breeding, which reflects a sense of confidence amongst farmers in terms of rebuilding breeding stock numbers which will ultimately lead to an increase in through-put. Whilst it is still too early to provide an accurate estimate for the 2012 lamb crop, it is estimated that it will be up in the order of 1-2%.

In addition to the rise in sheep numbers, average prices to date for the sheepmeat sector are also up by 9% on last year and the outlook for the sector in 2012 is both upbeat and positive.

The market performance of the sheep sector, in common with other agricultural sectors, is a function of supply and demand. The long-term future of the sector will depend on its ability to satisfy the market and in order to do this well it must focus on competitiveness, innovation and the demands of the consumer.

The Food Harvest 2020 Strategy includes specific recommendations for the sheep sector. It envisages that over the coming years, demand for sheepmeat on the European market will outstrip production levels, which could provide opportunities for exporting countries such as Ireland. This should provide the potential for better returns, provided the industry can continue the market and product diversification which has been evident in recent years. At producer level there is likely to be improved price prospects, provided an increased focus on production, efficiency and product quality is evident. Based on a renewed commercial focus by the sheep sector, building consumption on the domestic market and through the implementation of the recommendations of Food Harvest 2020, the industry has targeted a growth in output value of 20% by 2020.

The recommendations of the report focus on farm competitiveness and the processing sector. On the farm side, they emphasise the importance of the continuance of the application of on-farm labour efficiencies and new technologies, breed improvement and the production of a quality product. On the processing side, the focus is on efficiencies, innovation and improved product range.

In recent years the sector has also received a number of key supports, including €7 million from the 2009 Single Farm Payment National Reserve under the Uplands Sheep Payment Scheme and €54 million for the three year grassland sheep scheme which commenced in 2010. These measures have provided a much-needed boost to sheep farmers' incomes, which should encourage them to stay in the sector. The Grassland Sheep Scheme in particular is proving to be a valuable support mechanism in terms of improving income and confidence in the Sector.

Bord Bia will also spend up to €1m this year on a promotional strategy for the Irish sheep sector which addresses the issue of safeguarding the future of the sector in the following ways:

· By encouraging Irish consumers to buy more Quality Assured lamb.

· By collaborating with its French and English counterparts in a campaign to reverse the decline in consumption of lamb on the French market, which accounts for over 50% of our exports.

· By working with individual exporter to increase the amount of exports to higher value markets such as Germany and Scandinavia and thereby reduce Ireland's dependency on the French market.

Teagasc has also allocated almost €1.5 million for sheep research for 2011.

All of these initiatives and supports have benefitted the sheep industry.