Written answers

Tuesday, 31 March 2015

Department of Agriculture, Food and the Marine

Cereal Sector

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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357. To ask the Minister for Agriculture, Food and the Marine the extent to which he is satisfied in respect of the future prospects for the cereal growing sector over the next eight years; and if he will make a statement on the matter. [13364/15]

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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As I indicated to the Deputy only a short time ago on this matter, the maintenance of an efficient and viable cereals sector in Ireland is clearly very important to the well being of the agri-food industry. Indigenous production of cereals is of course, an important part of primary agriculture production. In addition to generating an income for our tillage farmers, the cereals sector is a key source of seed production, grain for the milling and malting industry and feeding stuffs for the livestock sector. The long-term average cereal production in Ireland is in the region of 2.2 million tonnes per annum and it is desirable to sustain this level of production in order to avoid over dependence on imported cereals. The 2014 harvest is estimated in the region of 2.5 million tonnes, well above the long-term average production of 2.2 million tonnes.

Since Ireland is a deficit market for cereals, prices here are greatly affected by world prices and supplies. Despite lower direct and overheads costs, the lower value of output led to lower incomes in 2013 and 2014. Cereal prices are highly sensitive to global supply and demand and volatility in prices is likely to become a constant feature of Irish cereal prices in future and grain producers should factor such fluctuations into their planning and marketing strategies.

My Department operates a range of services aimed at improving the level of production, quality and viability of the Irish cereal sector. These services include seed certification, seed testing, variety testing and the publication of recommended lists of varieties, research funding through the ‘Stimulus’ competitive research programme and funding for the quality assurance scheme. 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 cereals producers have consistently achieved some of the highest yields in the world. Teagasc estimates the area planted for 2015 winter crops at: wheat (55,000 ha); barley (75,000 ha); oats (8,000 ha), while comparable areas for 2014 were: wheat (64,000 ha); barley (60,000 ha); oats (10,000 ha).

Food Harvest 2020 outlined a number of challenges facing the cereal sector in the coming years including price volatility, climatic and disease issues, high input prices, small and fragmented holdings and the cost of rented land. However, the report also pointed to positive projections for cereal prices as markets are relatively well-balanced and world cereal prices are projected to be higher than in the last decade.

It is known that global grain production is struggling to meet the increasing demand for food, feed and industrial uses. In addition to a rising global population creating a bigger demand for cereals, an increasing demand for meat is disproportionately increasing grain demand even further. It is predicted that global demand for cereals will reach 3 billion tonnes by 2025 compared with 2.3 billion tonnes currently.

The European Union is one of the largest grain producers in the world and plays an important role in both exporting and importing cereals, oilseeds and their derived products. Europe consumes around 414 million tonnes of grains and derived products per year, catering for food, feed and industrial needs: 339 million tonnes of these agricultural goods are produced in the EU and 75 million tonnes are imported from third countries. Despite EU producers’ efforts to increase their productivity, demand outstrips supply and thus EU operators are dependent on imports from the world market.

The primary growth in requirement for Irish cereals in the years ahead is likely to be for animal feed, given the targets for increased livestock output proposed in Food Harvest 2020 and the lifting of milk quotas which is expected to give rise to a considerable expansion in the dairy herd, as well as an increased level of feeding and production per livestock unit. However, considerable potential also exists in grains for the drink industry such as malting barley and recent significant investments by the large brewing and distilling companies here in Ireland are proof of such potential. Further, it is envisaged that there will be increased demand for Irish oats milled for human food for the home and export markets and in this context, the success of the Agribusiness sector in securing, long-term contracts with US-based Foods companies to supply milled Irish oats to a premium Irish oatmeal brand in the US market, is particularly welcome.

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