asked the Minister for Agriculture the role the Government envisage for the Irish Sugar Company in the development of a food industry in this country; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Food Industry.
5.
Government policy on the food industry has been set out in the national economic plan presented in Building on Reality and in the White Paper on Industrial Policy. The strategy as elaborated in these documents is to encourage the industry, including Siúicre Éireann, to seek out and exploit opportunities for the production of consumer-type products especially for export. Essential features of the strategy are that all concerned learn the lessons of past commercial failures, that development is based on identified market needs and that activities operate on the principle of commercial viability.
Is there a specific Government policy in relation to the Irish Sugar Company, in particular Erin Foods which has virtually been dismantled? Does the Minister consider that dismantling an existing vegetable processing industry is self-defeating because of his stated intention to establish a food processing industry in this State?
The mandate which the Government have given to the Sugar Company is that they must operate on a commercial basis. There are very generous grants available to private enterprise to become involved in the food industry. Indeed these grants can be as much as 50 per cent when one takes the contribution by the IDA and FEOGA into account. If the Sugar Company or any other semi-State commercial bodies think that they can make a go of such a project, the Government will give them their full blessing.
Is the Minister saying that the Government are not accepting any responsibility for the Irish Sugar Company or their subsidiary, Erin Foods, and that they will not invest the necessary capital which the company require to become viable?
The Sugar Company depend on the Government for their capital expenditure but the Government have pointed out to the company that the capital proposed for investment will have to be invested in such a way as to ensure that the company retain commercial viability.
(Limerick West): Does the Minister agree that the Sugar Company are not the appropriate firm to promote the food processing industry?
I would not like to go as far as that. They had an unfortunate experience in the food processing industry but that does not rule out the possibility that they might become viable in that field in the future.
(Limerick West): Is the Minister further aware that the Sugar Company over the years neglected the food processing industry because they allowed their expertise, machinery and equipment to become obsolete?
I do not think it fair to criticise the Sugar Company in this regard. Their methods of operation had gone out of date and they found it impossible to reinvest to get the type of operation going which was needed to compete with other enterprises. It has been obvious for a long time that their methods were very much out of date and that they could not hope to compete on an open market.
(Limerick West): Has the Minister any plans to ensure that the necessary finance will be made available to the Sugar Company to update their equipment?
We have always told the Sugar Company that money would be made available if they became viable. That has always been a prerequisite as far as State subvention is concerned.
Is the Minister satisfied with the Government's approach to the development of the food processing industry, especially in regard to vegetables, as the acreage is in decline and has been for a number of years? The one remaining Erin Food factory in Thurles is now obliged to import the product they require for packaging in order to remain open. Does the Minister not see that the Irish Sugar Company, which was established by the State, is the ideal vehicle for leading the development of the food processing industry? Does the Minister agree that the Government have an obligation to invest the money required to develop that industry?
That would be true if the company could attain commercial viability. The food processing industry generally in this country has moved ahead in leaps and bounds in recent years. We tend to think of food processing as consisting only of vegetables but the meat and milk processing businesses have advanced substantially. The vegetable processing industry is particularly difficult because of the small domestic market and the tendency is for joint conglomerates in Britain and on the Continent to unload their excess production on to the markets here, making it extremely difficult for native industries to compete. That is the real difficulty and it would take an exceptionally efficient and streamlined operation to offset those imports.
Is it not a fact that Erin Foods were prevented from selling their produce on the home market——
Not to my knowledge.
——by Government order from their inception?
Would the Deputy quote dates?
I do not have that information with me but I will send it to the Minister.
Do please, because this is news to me.
A final supplementary.
Is it not a fact that when that company should have been making great strides in the food industry, that was the time when we imported most food products? Now we are expecting private enterprise to take over where this company has failed.
I have answered that question. The fact is that their machinery and methods of operation were very out of date, particularly in recent years, and they could not hope to compete on the open market. Quite a few new enterprises have entered that area with great success. Two or three years ago the Department identified areas where products which were being imported could be produced and processed at home. This meant there has been tremendous stimulus in the food processing industry.