asked the Minister for Agriculture and Food if the development and expansion of primary processing facilities in the beef industry is justified in view of the almost certain reduction in the availability of live cattle.
Ceisteanna—Questions. Oral Answers. - Primary Processing Facilities.
8.
Projects aimed at increasing cattle slaughtering capacity are not eligible for State assistance.
With regard to the likely trend in cattle numbers I would refer the Deputy to my reply to a question on this subject on 9 December, 1987.
I should like to know if the primary slaughtering aspect of grant-aided projects that are before the Department qualifies for grants. Is that aspect of slaughtering covered when a package is presented to the Department?
Projects to modernise abattoirs are considered only where they are part of an overall project to increase the degree of processing in a plant or otherwise contribute to increasing addedvalue. I am referring to plants that are modernised to achieve USDA licence standards.
Will the Minister accept that in the light of the present and developing problems about raw material supplies there is a case for attaching grant conditions which would be related to putting an onus on the grantee, a group, establishment or otherwise, to increase supply in the area subject to the grant aid?
The IDA have attached conditions to all their grant-aided projects.
What type of conditions?
Conditions in relation to supply and to the degree of addedvalue and the degree of added processing in the country.
Will the Minister indicate the range of conditions in relation to supply that are attached to those grants?
The main condition is that they will have to increase the downstream processing. Grants are not available for primary slaughtering facilities.
What is the position in relation to supply?
In relation to supply, any projects that have been grant-aided are not dependent on increased supply. As I said in the course of my reply on 9 December, and earlier today, it is not possible to increase numbers overnight. There is a natural gestation period and after several years of decline it will ake some time to increase numbers. The IDA grant aids relate to modernising the industry so that we will be internationally competitive and increase the degree of added value. The whole thrust of the policy is to get the fundamentals beyond the farm gate and into processing, packaging and presentation in Ireland.
The Minister has missed my point. I am referring to the condition in the letter of sanction relating to the grant which would put some onus on the grantee to be involved, financially and otherwise, in efforts to improve the supply of raw material. Otherwise, as is hinted in the question, the money may be wasted. Is there an onus put on the grantee to contribute towards a solution of the problem of shortage of raw materials?
Projects which are grant-aided are grant-aided on the basis of current supplies of raw materials and not on increased supply. To get an increase in numbers, the meat industry are involved with the financial institutions and the farming organisations in preparing a suitable package. That is desirable.
I recommend that such a condition be considered for the future.
Would it not be better if State money was invested in increasing the size of our national herd instead of being put into facilities for processing which are already adequate?
I do not accept that we have adequate processing facilities. For many years we put a lot of emphasis on increased production and what we are doing now is modernising the processing end of the industry. We want to correct the weakness there. I have no doubt that the confidence that will follow from that will lead to an increase in numbers.
Are we creating any new jobs out of the State money that is being pumped into the processing industry?
The Deputy will be aware of the recently announced IDA programme for the food industry over the next five years. The figure indicated there is an increase of 5,000 jobs in the food processing industry.
A net increase. Does that take into account those who lose their jobs in the other factories?
Is it not true that there is a very acute shortage of raw material for the existing meat processing factories at the moment and that this position will worsen in the new year?
I think everybody accepts that we have a declining cattle herd and that it would be very desirable to get the numbers up. I have said that genetically it is not possible to get that done overnight. We are modernising the processing end of the industry because that is not as up to date and modern as it should be.
You are putting the cart before the horse.
You are forgetting the supply situation.
For years we have been concerned with improving and increasing supplies. Particularly now when there is pressure on intervention and on third country markets we have to get a modern industry in the country. I believe that is the right end to start at.
In view of the Minister's admission that we have an over capacity in the processing area would it not be much better if he had given the millions he gave to one operator, namely the Goodman outfit, to farmers to produce the stock that would fill the capacity we have at present? Is he aware that many factories are at present operating a three day week?
I did not say there was an over capacity. I said there was an inadequate and less than modern processing industry in the country and that I believe the important place to start is at the market place, that having modernised the processing and marketing part of the industry, the confidence that will result will ensure that we will have increased numbers at production level. For years we had been trying the other way round, to increase production while leaving a weakness in the processing and marketing end of the industry.
(Interruptions.)
Let me dissuade Deputies from persisting in raising questions when the Chair has obviously given a great deal of latitude. I am calling one more supplementary question from Deputy Stagg.
Would the Minister agree that it is totally unrealistic to expect the State to fund directly to farmers in the form of grants the production of the raw material we are talking about? Does he not agree also that the modernisation of the processing facilities for the raw material available is the right way to go about creating added value that will create jobs and additional wealth?
I accept the thesis put forward by Deputy Stagg.