Dáil Éireann debate -
Friday, 10 Jun 1988

Vol. 381 No. 10

Estimates 1988. - Vote 33: Agriculture and Food (Revised Estimate).

Minister for Agriculture and Food (Mr. O'Kennedy)

I move:

That a sum not exceeding £153,762,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1988, for the salaries and expenses of the Office of the Minister for Agriculture and Food, including certain services administered by that Office, and of the Irish Land Commission, and for payment of certain grants, subsidies and sundry grants-in-aid.

The Estimate is for a gross amount of some £330 million. However this represents only a minor part of the total spending by my Department. As part of ongoing support from the EC for Irish agriculture my Department oversee and supervise a large number of support measures and special aids which are fully funded by Brussels. These measures will result in expenditure of some £840 million being paid by my Department in 1988 to farmers and agri-business. In addition the Department spend some £460 million funded from borrowings on the purchase of products into intervention. The services being provided by my Department, including staff costs, are vitally necessary to meet our EC obligations and to maintain well-established standards for our agricultural exports. There is much continuing misconception regarding the staff numbers employed in the Department. In that regard I must reiterate that the Department are involved in disbursing funds in the region of £1,630 million and staff costs must be viewed in that overall content and not just in relation to the voted moneys.

The past year has seen a remarkable turnabout in Irish agriculture. The slide in farm incomes was not only halted but was well and truly reversed. It would have been difficult to believe that this was possible at the end of 1986 when farmers' confidence was at a low ebb. The year's achievements in agriculture have been all the more remarkable given the restrictions in the operation of the Common Agricultural Policy.

The indications now are that in the first year in office of this Government farm incomes increased by over 20 per cent. This boost in farm incomes is responsible in no small measure for the upward revision in GNP growth for 1987 to 5 per cent and I am glad to say that the trends in 1988 are showing further significant increases.

A major element in this income increase is the reversal of the so-called price/cost squeeze. Up to last year farm input prices have risen more quickly than farm gate prices for the products sold by the farmer. Between 1980 and 1985, agricultural output prices rose by 35.6 per cent while input prices rose by 47.5 per cent. Recently this trend was reversed. Farm output prices were particularly strong last year and increased in real terms for the first time since 1978.

A further element in the substantial increase in farm incomes has been the steady decline in interest rates over the year. In addition, inflation has been at its lowest level in two decades. The general economic signals coming through this year are more positive than they have been for many years and have brought considerable benefits to the agricultural sector.

Looking to the future, I feel there is still scope for an increase in farm incomes this year. The reductions in the national quota will probably cause some reduction in the volume of milk output. However, I am very happy to report that market buoyancy in the dairy sector is such that further increases in milk prices are imminent. Indeed one major co-op yesterday announced a retrospective rise of 1p per gallon from 1 May and a further 2p per gallon from 1 June. I expect that the general increase will be of the same order.

It is also likely that there will be an expansion in other sectors — sheep, poultry, crops etc. On the inputs side, there should be a further reduction in volume, particularly feeding stuffs and fertilisers, as farmers make more economies in the usage of farm materials and services. It is a bit early yet to be predicting the outturn for 1988. Still I think we can expect agricultural output prices to show further increases even though the downward trend in input prices of the past two years appears to be levelling off.

There is no reason why farmers cannot build on the achievements of this year despite the difficulties that lie ahead. The expansion of the agriculture and food industry is a central element of the Government's Programme for National Recovery. It is of crucial importance to the economy as a whole in the years ahead that agriculture maintains the momentum generated in 1987. In the EC context, the European Council at its meeting on 11/12 February last decided on a range of issues designed to strengthen the Community's ability to act arising from the entry into force of the Single European Act. From an Irish viewpoint the main issues decided on were a larger and more equitably designed financial base for the Community, a doubling by 1992 of the Structural Funds for the less developed regions, including Ireland, and tighter budgetary discipline and management, including stabilisation measures for a number of sectors. The European Council also laid down an overall guideline for agricultural expenditure, provision for its growth over the next four years and separate arrangements to deal with monetary fluctuations and to dispose of existing stocks. These latter parts of the agreement are crucial for the future of Irish agriculture as they ensure a reasonable level of financing for the CAP well into the nineties.

The doubling of EC Structural Funds should benefit farmers and rural areas generally in a special way. Ireland has obtained substantial amounts under the various funds heretofore and it is certain that we can look forward to a greater flow of funds in the years ahead. In my own Department we are considering urgently how to ensure that we get maximum benefit from the enlarged funds. We are examining how to make greater use of the existing structural schemes and also new initiatives such as integrated rural programmes aimed at encouraging broadly based development in rural areas. While agriculture will remain the cornerstone of rural prosperity, it must be accompanied in the future by other enterprises. The enlarged Structural Funds can provide the impetus for such diversified development.

The Commission's proposals on farm prices and related measures for 1988-89 represent a continuation of the restrictive approach which has applied to CAP expenditure in recent years culminating in the European Council's conclusions on stabilisation measures and application of tighter budgetary controls. I will be heavily engaged this coming week in the final stage of these negotiations and I hope that we can achieve some improvement on the very restrictive proposals of the Commission. The outcome of the Uruguay round of the GATT negotiations, which are likely to extend over the next few years, will be crucial to the future of international trade in agriculture and further reform of the CAP will have to be carried out in tandem with these new developments. Our concern must be to secure a continuing return to our farmers and a commitment by all trading partners to bring about a better balance between supply and demand in the short and longer term.

As regards disease eradication I have been impressed by the enthusiasm and commitment shown by the new management board in setting about its task. This bodes well for the achievement of the Government's target of reducing the levels of bovine TB by one half over the new four year programme. The Government's approval of my proposal to maintain their commitment to the funding of the scheme over that period is a particular source of satisfaction to me. It should bring to an end the continual uncertainty and dissatisfaction about the resources to be made available in any year and allows all the parties concerned to co-operate in removing the remaining obstacles to eradication.

I should now like to refer to the main areas of agricultural production, starting with dairying. Intervention costs continue to be a substantial burden on the Exchequer. However the position has improved enormously on the dairying side. No skim powder has been taken into intervention either this year or last year and all our stock and virtually all the Community stock has been disposed of. As regards butter, the situation has also improved dramatically. Intake has fallen considerably from the levels experienced in 1986 and in early 1987. So far this year only 2,200 tonnes have been taken in while disposal of the order of 60,000 tonnes have been achieved. The infamous food mountains as far as dairy products are concerned are fast disappearing. The Community now has virtually no stocks of skim powder. Butter stocks, which exceeded 1.3 million tonnes at the beginning of 1987, are rapidly being reduced to normal levels and are currently below a half million tonnes.

These rather dramatic changes reflect changed circumstances in the milk sector and a greatly improved environment on international markets. We had an exceptionally good year in the export market in 1987 and 1988 looks like being better. Our milk industry has broken free from its former dependence on intervention. There is now an eagerness in the industry to broaden its range of products and to embark on new projects. Practically all our major co-operatives are involved in rationalisation and modernisation projects. What is particularly encouraging is that these involve value-added products. In recent weeks a number of significant projects have been announced and there are more in the pipeline. This has been helped by the improved financial performance of milk processors during 1987 — the reality is that processors cannot develop or expand unless they have the financial resources. Another major factor is the availability once again of FEOGA grants for projects from the milk sector. It must also be recognised that the improved economic situation, with inflation and interest rates at exceptionally low levels, has had a major influence.

Recently, the Commission through Management Committee procedure reduced the level of aid for a number of support schemes including the aid for skim milk used in casein manufacture. Prices for skim powder have been very buoyant and in that sense it was to be expected that the support measures would come under review. However, the levels of reduction sought by the Commission were quite draconian. I immediately made direct contact with the Commission and I am pleased that they eventually agreed to reduce the cutbacks by approximately a half which has been a matter of relief for our dairy co-operatives and Bord Bainne. Overall, the reductions must be balanced against the improvements which have occurred on the international market and falling production of skim powder in the Community.

The broader question of rationalisation and amalgamation among co-operatives remains unresolved. This is an issue which will not go away because the facts are that our industry is highly exportoriented and must compete in a very demanding and competitive international market and in a market which is becoming increasingly dominated by a smaller number of larger firms. Therefore, we must have the kind of structures which will enable us to survive in that environment and to compete with the large scale operators.

At farm level dairying continues to be a very important and attractive enterprise. The strengthening of international markets and the improving balance in the Community's milk regime have been translated into improved returns for farmers. Dairy farmers have received very worthwhile increases over the past year and indeed during recent weeks. The reality is that dairy farmers are now receiving very good returns for their milk. For the short term at least the quota system is here to stay. Dairy farmers must maximise their returns within their permitted quotas and this involves adopting systems of production which are most suited to their own individual circumstances.

I have endeavoured to introduce some flexibility into the quota system and to make provision for farmers with small quotas and others with particular difficulties. The milk quota restructuring scheme which I negotiated as part of last year's price fixing package has met with a good response. Under this scheme, and under the temporary leasing scheme I recently announced, special priority has been given to small quota holders and young farmers. I am satisfied that this is a very effective attempt to manage the consequences of the quota decisions which are imposing quite severe restriction not just in Ireland but throughout the Community. I want to put on record that the small farmers and young producers can be assured that they will remain my priority in the context of the quota free arrangements.

The cattle and beef industry had a reasonably satisfying year in 1987. Although cattle numbers declined, there is strong evidence that the fall has bottomed out. The yearly decline recorded at the December 1987 livestock enumeration was some 47,000 head compared with a decline of 153,000 head in the previous year. I am glad to be able to say that now the national beef cow herd is recovering. The fall in beef cow numbers has been reversed, cow slaughterings over the last 18 months have shown a significant decline. They reduced by 13 per cent in 1987 and were down 18 per cent in the first four months of 1988 as compared to the same period last year. Artificial inseminations so far this year are showing a substantial increase on last year. In the first four months of this year they were up 12 per cent on the same period last year. The very good cattle and, in particular, calf prices so far this year should give further encouragement to farmers to increase the breeding herd.

Another encouraging development is that there are signs that the quality of our national herd is improving. Inseminations of continental breeds were up from 14 per cent in 1983 to 32 per cent in 1987. This clearly indicates that our producers recognise that there is a stable market for beef from quality cattle.

There were satisfactory developments also in the processing industry. Live exports continued to fall and cattle slaughterings at meat export plants were one of the highest ever recorded. Exports of beef in carcase weight equivalent terms increased by 4 per cent while exports to the United Kingdom increased by about 13 per cent. Exports of vacuum packed beef increased by 50 per cent with exports in this form to the United Kingdom increasing by over 70 per cent.

The salaries of the Department's staff at meat export plants are charged to subhead A1. These staff are performing an essential task in ensuring that our meat exports are wholesome and produced under the most hygienic of conditions and all importing countries require veterinary certification to that effect. Our task is to make certain that the highest possible standards are achieved at our meat plants. In this way we can ensure the wide acceptability of our meat products on world markets at premium prices. Receipts of £6.5 million from inspection fees are provided for under subheads M27 and M30 towards the cost of providing this service to the meat industry.

Sheep farming is an expanding area and one in which I am glad to say that there is still considerable growth potential. Although budgetary stabilisers have recently been applied to the sector, the common organisation of the market for sheepmeat continues to afford Irish producers important support through the ewe premium and producers can look to the future with confidence. The Commission proposal to have a single ewe premium based on a single income loss for the entire Community ignores Ireland's dependency on export markets and the fact that our prices are at the lower end of the Community range. This, therefore, is a proposal which I will resist since it is imperative that producer income is protected in the move to a single market.

Last July, I was pleased to be able to announce a major plan for the development of the slaughtering/processing sector of the pigmeat industry. The plan involves a total investment, including contributions from the State and from FEOGA, of up to £140 million by 1992 and is designed to create a number of centralised slaughtering units licensed to the highest EC and USDA standards.

Increasing pig output from the existing 2.1 million to 3 million by 1992 is crucial to the success of the programme. The report of the study group recently presented to me outlines a number of measures for achieving the necessary expansion. At my request the group have now initiated discussions with the various sectors of the industry so that a specific action programme can be agreed upon and set in motion as quickly as possible. I feel that the pigmeat industry is on the threshold of a new and brighter future. Much, however, remains to be done and it is in the interests of all to ensure that the sector achieves its full potential.

After two bad harvests and continuing pressure on returns to producers, the area under cereals decreased by 7 per cent in 1987. However, production in 1987 increased by nearly 8 per cent over 1986. Production of malting barley increased significantly. The quality was generally good and markets were available at premium prices both at home and in Europe. Producers are looking to malting barley to help offset some of the reduction in their returns as a result of cuts in support prices.

Cereals were the major target of the European Commission's efforts to reduce the cost of the Common Agricultural Policy. The stabiliser measures agreed recently by the European Council — a maximum guaranteed production threshold and an increase in the coresponsibility levy — may seem harsh, particularly as Ireland does not contribute to any significant degree of support costs. The new measures are, however, mild compared with the first draconian proposals from the Commission.

On the positive side, the Commission have agreed to tackle, in the context of the ongoing GATT negotiations, the problem of increasing imports of cheap cereal substitutes. A scheme is also being devised to encourage the use of additional cereals in animal feed. The proposals for set-aside of arable land being discussed at present will benefit some cereal producers.

I am glad we are proceeding with the reinstallation of the installation aid scheme for young farmers. I submitted details of this scheme to the European Commission some time ago, and I hope their approval will be forthcoming in the near future. It is my intention that the revised scheme should apply retrospectively to 1 April 1987.

Two notable improvements are being included in the 1988 schemes for disadvantaged areas. The first which I announced recently is the extension of headage payments at the higher rates of £70 and £66 to suckling cows kept by dairy farmers throughout the disadvantaged areas. I estimate that up to 12,000 farmers will, as a result, get higher grants in 1988 and this improvement will make a vital contribution to increasing beef cow numbers. The second innovation is the payment of grants of £32 or £28 on the non-thoroughbred brood mares registered in the Irish horse register. This will encourage growth in the numbers of horses kept by farmers in the areas.

I am providing £23.1 million under subhead B4 for agricultural research, training and advisory services. This is an increase of £3.1 million on the original £20 million allocation and is mainly in lieu of the local contributions by county councils for agricultural services which arrangement is now being terminated arising from the Teagasc legislation.

The food and drink industry is of particular importance to the Irish economy in terms of production, employment and exports. Approximately 23 per cent of all those employed in manufacturing industry are engaged in the food and drink sector. Exports in 1987 of drink and agrifood products accounted for close to £3 billion which represents about one-third of all our exports. In order to fully exploit the potential of this sector it is essential to increase the added-value input through further processing. Over £200 million of food imports can be substituted by home-produced products and the achievement of this target will result in a significant benefit to our balance of trade.

I am sorry to have to rush through this estimate and give what is only a brief summary of the current position of what is a vital and healthy sector of the Irish Government's programme — agriculture and food.

What I have said is only a brief summary which will enable the House to debate the issues. In conclusion, we have seen what can be called extraordinary and beneficial changes in agriculture in the past year, despite the adverse market and other factors to which I referred earlier. I am confident that we can build on the achievements and that the agriculture and food sector will continue to play its pivotal role in the development of the economy as a whole.

I recommend to the House the adoption of the Estimate.

Mr. J. O'Keeffe

It is now very clear that agriculture has been abandoned by the present administration. In the meantime, the focus continues on the development of the food sector as the flagship of Irish indigenous industry. This latter approach is one with which I entirely agree, but there is a major fundamental flaw in Government strategy. Very simply, vast sums of money are being expended on the development of the food sector in the sure and certain knowledge of insufficiency of raw material supply. Commonsense alone would dictate a twin-track approach which would provide parallel incentives for production with those available for processing. Despite this, the Minister continues to preside serenely over a continuing disastrous fall in the national cow herd numbers. To compound the problem, he has reversed engines on his previous statements and now makes a ludicrous defence of his position by stating that this issue does not, in fact, constitute a crisis.

It is very clear indeed that there is a crisis facing the beef industry because of shortage of supply. The reduction in our milk quota in the past two years has major implications for the beef industry through reducing dairy cow numbers and thereby calf supplied for the beef herd. Cow numbers have fallen by 100,000 over the last couple of years. A further cutback in dairy cow numbers of 200,000 is in prospect over the next four to five years. Accordingly, the massive investment which has taken place and which is due to take place in beef processing will be an utter waste unless urgent measures are taken to build up cow and cattle numbers. The Minister now refuses to recognise this fact. He did give some indication last year of at least a recognition of the problem. However, his actions in failing to produce an acceptable suckling scheme, coupled with his avowed intention to decimate the advisory and research services, provide confirmation both of his inability and his unwillingness to face the problem.

Fine Gael have proposed a radical comprehensive action plan to increase beef cow numbers over the next five years. The implementation of this programme will result in at least 1,000 additional jobs in the meat industry, extra beef exports of £200 million a year and viability for 20,000 to 30,000 farm families. No additional Exchequer spending is involved. Yet, the Minister has refused to take on board these proposals. For this reason alone he stands indicted before the people and on his departure will leave a legacy of lost opportunities as his main contribution during his tenure as Minister for Agriculture.

There is the danger that a similar contradiction in policy will apply in relation to the pig industry. Again, substantial incentives are available to update our processing facilities. The Minister mentioned tying up the negotiations earlier on last year under the special programme; this has been negotiated by his predecessor, Deputy Deasy. He should have been a little gracious and mentioned that fact. However, the programme is in place. The real problems facing our pig producers are not being faced. It is difficult, if not impossible, to see how the targeted increase in output can be achieved unless and until the Minister faces these issues head on. A cohesive scheme to improve our static production figures must be at least as important as the drive to update and improve our processing facilities. Apart from his refusal to devote any resources or devise any effective policy initiatives to cope with these major problems, the Minister has demonstrated a determination to decimate the services whose purpose it is to support farmers' own efforts in achieving increases in production, improved quality and better onfarm efficiency.

The ACOT/AFT debacle will stand as a further monument to the Minister's total lack of commitment to the development of agriculture to meet the challenges of the nineties and into the 21st century. Hasty decisions, lack of planning, concessions to bureaucratic control, delays in introduction and processing legislation and an insistence in maintaining departmental structures at the expense of the front line services have characterised the Minister's approach to the merger. If Teagasc happen to make an effective contribution to agriculture in the years ahead it will be in spite or rather than because of the Minister's best efforts.

The hollow ring of Government rhetoric is nowhere more evident than in their announcements on rural development. Where is the Government policy for rural development? Eight months after the statement in the Programme for National Recovery that a pilot scheme would be set up we have had the recent announcement from the Minister outlining the 12 areas involved. The very minimum that was to be expected in the announcement was a substantial statement about both the philosophy underlying this move and the detail of how and when it is to be implemented. Unfortunately, we were disappointed on both counts. The whole concept of integrated rural development originated from the failure of conventional development strategies to have the desired trickle-down effect on disadvantaged areas and regions. An essential prerequisite to such approach is the decentralisation of institutional structures and devolution of decision making.

Later this year we are to have 12 coordinators who will report back to the Department of Agriculture and who in the course of their work will find themselves in some kind of administrative limbo. We have been told that there is an urgency in preparing programmes and projects to avail of the enlarged structural funds. In this situation the absence of any detailed philosophy or vision in the Minister's statement is utterly disturbing and disappointing. Very simply, the doubling of the structural funds will be of no advantage to us in rural areas unless we have clear policies and established programmes to take advantage of the opportunity.

To some degree the absence or otherwise of such a philosophy is not the crucial test. After all, actions speak louder than words. The reality is that in the autumn of 1988, one year after the announcement of the pilot IRD programmes and the merger of ACOT and AFT, there will be 500 fewer staff in these organisations, with the declared intention of reducing that number by a further 500. Very many of these people were agents for rural development in the real sense of the word. In their place the Government will in the course of time establish 12 people unattached to any organisation and scattered around the country in politically sensitive areas. On that basis it is now very clear that those who were expecting results of any consequence from such an approach will be gravely disappointed.

Similarly disappointed are those who were expecting action in relation to the proposal to re-classify all existing less severely handicapped and mountain sheep areas to more severely handicapped status and the extension of the disadvantaged areas boundaries. Decisions in this regard were made by the last Government and the proposal for reclassification was lodged with the EC last year. It is now very clear that the present Government are dragging their feet on both counts. Those who had legitimate expectations of income support through cattle headage and otherwise will be left waiting. Their concerns are obviously not the concerns of this Government.

Similarly, concerns expressed about the need for pollution control measures and for incentives in support of these have not been matched by action on the part of the Minister. The revised western package was piloted through the European Commission by Commissioner Peter Sutherland last year after its formal approval by the Council of Ministers. There was a tremendous brouhaha in Castlebar to announce the details, but the Government have been criminally negligent in failing to put the necessary regulations in place so that the benefits of the revised package can be availed of. Nowhere is this more obvious than in regard to pollution control. Most farmers accept their responsibilities in this regard, but they are being denied the opportunity to commence work because the grant structure has not been put in place. The Government will bear a heavy measure of responsibility for any consequences which accrue as a result of this neglect on their part.

Furthermore, the appalling delay in paying farmers their legitimate entitlements under the existing grant schemes is inexcusable. On 1 January last a sum of £9 million was properly due and owing to farmers under the various grant schemes which remain outstanding and unpaid by a Government which had the gall to say that their books were balanced. I am aware of instances of farmers waiting for upwards of 12 months for payment of such grants due to them. Apart from the obvious unfairness of the situation, particularly to farmers relying on temporary bridging overdraft facilities, this approach smacks of dishonesty.

Young farmers seeking payment of installation aids are in a similar position. Furthermore, the ill-advised decision of 1987 to axe this scheme, followed by the U-turn last January to reintroduce it, has had the follow-through effect that the reintroduced scheme is not yet in place. When will the Minister shake the bureaucratic dust off his file, if only to restore what was in place before he came into office? He cannot blame the European Commission for such delays since the proposal was only sent to Brussels for formal approval last month.

Speaking of the European Commission recalls the bulldog-like efforts of the Minister's predecessor to secure the maximum benefits for Ireland in various EC negotiations during his tenure of office. I recall the shallow criticisms of his efforts from the then Opposition and I do not intend to indulge in the same behaviour in relation to the present Minister. My attitude is that a Minister representing the country in serious negotiations on our behalf is entitled to our full support. However, he will be judged on his efforts after the completion of negotiations and in this regard it must be said that the failure of the Minister to secure a national grain quota will have devastating repercussions for our cereal producers in the years ahead. The Minister's half-hearted efforts in the present farm price talks give rise to no great confidence in his ability to secure a successful outcome.

This short debate on the estimates allows for a brief assessment of the attitude of the Government towards the development of agriculture and the food industry. Clearly, the Government regard agriculture as a soft target. There is a reduction of £33 million in the Vote which, at 18 per cent, is six times the overall average decrease. Within the Department, this huge reduction is managed in such a way by the Minister to ensure that the bureaucratic structures of the Department are kept fully in place and protected. Therefore, it is not surprising that the Minister's record is one of total non-performance and complete inability to tackle the needs of our main productive sector.

On the question of staffing, the Minister referred to a continuing misconception in this regard. However, he does not give us any information in regard to numbers. Where is the information in relation to the audit? Where is the information underlying the Taoiseach's statement to the IMI Conference in Killarney when he admitted that there was overstaffing in the Department to the tune of 500 people? The Minister has refused to publish that audit and he has been very tardy in replying to Dáil questions on the subject, so much so that those of us seeking information on the audit have been denied it. All the Minister could say today was that there is a continuing misconception. If that is the case, it is solely as a consequence of the Minister's inaction. Let us have a full, clear and open debate about this matter, which would be fair to the Department. There are continuing stories about 90 people sitting at their desks with nothing to do for the past 12 months and about which the Minister seems to have done nothing. That is damaging to the Department and that is why we should know the facts.

The Minister also referred to the increases in farm incomes and gave reasons for it. However, he ignored the main reason for the increase which was the marvellous weather. Thank God for it and — unlike some of my Opposition colleagues — the Minister might give some credit to the man above and give Him his due and proper place——

Mr. O'Kennedy

Some people do not recognise Him.

Mr. J. O'Keeffe

I will not have God eliminated from this equation and it would have been more gracious of the Minister to have given credit——

Mr. O'Kennedy

I did not want to offend the Progressive Democrats.

Mr. J. O'Keeffe

The Minister's record, since he came into office, has been disastrous. I appreciate that he has to make the best defence possible of his tenure to date. I hope, without any great confidence, that in the remainder of his tenure of office he will make some effort to deal with the major serious problems facing our main productive sector, agriculture.

Mr. Gibbons

The attempt to control public spending must be welcomed but we have a long way to go before we receive any benefits. However, it is a change from the Fianna Fáil of the early eighties.

In considering the Estimate for the Department of Agriculture and Food one could not be blamed for thinking that there is a major element of self-preservation involved. Considering the cuts in other areas of agriculture, it seems ludicrous that there is only a cut of 2 per cent in general administration. It seems the administration in the Department is above accountability and cannot be questioned. It is high time the staffing audit for the Department of Agriculture and Food was made public.

The massive amount of money spent on administration does not reflect the service to farmers. Will the Minister list the achievements of An Bord Glas, which cost £168,000, over the past year? Surely the Department, with all their staff, do not want yet another board to submit yet more reports to collect more dust? The cut of 2 per cent in administration is matched by the massive cut of 44 per cent in AFT and ACOT which provided a vital service to farmers. This will prove to be a major mistake in our most important industry. It means that large areas of work will cease. Do we stop training the next generation of young farmers? Will there be reduced research? What about the huge reduction in staffing levels? This will have an inevitably disastrous effect on efficiency and productivity and we will be left with nothing more than the remains of an advisory service.

I should like to examine the industry, sector by sector. Dairying gained most from our membership of the EC and it is the most profitable sector in spite of the surpluses of dairy products. Of course, the sector is not without its difficulties; the super-levy has created problems, not only for the small milk producer but also for the producer who was not fully developed by 1983. Unfortunately, the trend is for small milk producers to get out of the industry for one reason and another. It is inevitable that milk production will be concentrated in fewer hands. Milk production will be vital to small milk producers because the Government have a social obligation to try to make it easy for them to continue in milk production. If they do not, the opportunities in other sectors are not viable and they will have to leave the land. The margins in other areas do not allow small farmers to continue.

The only other alternative for the small farmer is to get into beef production. I welcome the recent announcement by the Minister in relation to increasing grant payments on beef herds in disadvantaged areas. However, beef producers' margins are greatly eroded because of the ban on growth hormones and the reduction of VAT refunds. Not only is it important that we encourage farmers in disadvantaged areas to increase their cattle numbers, but it is also extremely important to encourage farmers in the lowland lying areas to increase their stock. There seems to be a perception here that farmers not in the disadvantaged areas do not need help. I ask the Minister to consider offering incentives to farmers in low lying areas to increase their cattle numbers.

One of the biggest scandals in agriculture is the shortage of cattle and most people are now beginning to realise that unless we increase our cattle numbers we cannot possibly hope for agriculture to play its part in helping to get this country out of its economic crisis. We have to get our cattle numbers up to the levels of the late seventies and until we do this we need not expect the additional jobs we have heard so much about in the past year to be created.

I would now like to deal briefly with the sheep sector, which offers us unrestricted opportunities for expansion and we should avail of these in every way possible. We would not want to abuse the French market and it is important that we breed the quality lamb which they require. That is just one opportunity for expansion which is available to us.

Cereal production in this country is nearly finished, in my opinion. We do not contribute in any way to the massive surpluses in the EC. Despite these surpluses there is an increase in cereal substitute imports into the EC, and it is time that the Commission tackled this problem. Cereal farmers in this country are facing extinction and until some positive steps are taken I foresee a very dark future ahead for cereal farmers. I consider the set aside proposal which we hear so much about as a nonsense because as it stands at present it is very unattractive. Until a serious stand is taken by the Minister on behalf of cereal farmers, it is going to compound the problems which agriculture already faces. There is no place to which these cereal farmers can go. They cannot get into beef production because of the shortage of cattle and the outlook is very bleak.

Pig production is being taken over by big companies such as Avonmore. This is regrettable because farmers involved in pig production are not able to compete with the big co-operatives such as the one I have just mentioned and they come under extreme pressure when cartels are formed to keep the prices of pigs down. The margins in pig production are very limited.

Let me now say something about farm pollution, which we hear so much about and which is a very topical subject at present. I welcome the Minister's announcement that grants are now going to be made available to farmers in disadvantaged areas, but the Minister should also realise that most pollution is caused in low lying areas where the vast amount of silage is made. Generally in disadvantaged areas a large amount of winter fodder is hay and it is high time that grants were made available to try to alleviate the problem. Pollution cannot be controlled in a couple of months; it is going to take years to come to grips with it on most farms. Farmers are now expected to control pollution and in some cases farmers are being told to get out of silage altogether. That is a very negative approach and it is up to the Minister to try to make it as easy as possible for farmers to come to terms with pollution.

We have to improve the quality of our fruit and vegetables and it is vital that we do this if we are to compete with our European counterparts.

An Ceann Comhairle

Let me advise the Deputy that he has some five minutes left.

Mr. Gibbons

I have concluded, a Cheann Comhairle.

Mr. Stagg

In addressing this Estimate I wish to place very clearly on record my appreciation and that of my party of the position of land, agriculture and farming. We see the agricultural area as the greatest natural resource available to us and the Labour Party's socialist policies include in a very important way agriculture. These policies are aimed at the creation of jobs and wealth and agriculture would play a primary role in that regard. This would be to the benefit of farmers and their families and workers in the downstream industries in processing and providing other services. Therefore, socialists do recognise — let this be clearly understood — the potential, the massive potential, of agriculture. I want to lay to rest and explode the myth that the Labour Party are in some way a threat to farmers and their families. We want to assure farmers and their families that Labour Party policies will give them security of tenure on their farms from both a legal and economic viewpoint. That being said, I want to recognise the false perception, and the reason for it, of an anti-farm bias on the part of the Labour Party. This arises from demands made by the Labour Party and the trade unions for an equitable tax return system. I want to deplore the incident outside this House where farmers, quite legally and rightly, demanding a just tax system were foolishly attacked by people who were misinformed about the nature of the demands being made by these small farmers. I call for what I see as a natural alliance between small farmers and their families and the PAYE sector. There is a natural alliance there with common interests and I believe this would be desirable in trying to narrow the divide between town and country and city and country.

The Labour Party support the Irish Creamery Milk Suppliers' Association's campaign for the introduction of a land tax as an alternative to the present tax on accounts system. The tax on accounts system penalises small and family farms by driving them into the hands of accountants to prove that they have little or no taxable income. In many cases farmers pay out more to accountants than they do in tax. The only beneficiaries of the present system are large farmers and ranchers who can afford an army of high powered accountants who exploit loopholes and avoidance mechanisms to reduce the tax yield on large farm incomes. This is why the IFA are so strongly opposed to the land tax. It is the small and family farms which lose out under the present system.

The crisis in Irish agriculture, which is widely recognised, arises from the lack of investment, under capitalisation and low inefficient production. A comprehensive land tax would facilitate a more planned approach to agricultural production by taxing land rather than production. This would mean that the large inefficient farmers would pay a higher proportion of the tax than the efficient ones. It would also lead to certainty in the tax system and allow farmers to engage in long-term investment planning by being able to calculate their tax liability years ahead.

A comprehensive land tax on adjusted acreage would yield considerably more revenue with no compliance costs for farmers. This would be a better deal for both small and family farms and PAYE workers. The Labour Party have already tabled a motion in the House calling for the reintroduction of the land tax. The Labour Party will do everything possible inside and outside the Dáil, to advance the case made by the ICMSA for an alternative land tax. The additional revenue accruing from such a land tax would render it possible for the Minister to introduce a more realistic Estimate in this House for his Department.

The structures of Irish farms warrant urgent and effective attention. In this regard, I want to issue a plea today to the Minister for the reinstatement of the Land Commission. The Land Commission has been described as dead but not buried. The Taoiseach in a reference to the Land Commission in this House said that he refused to bury the corpses of others. Therefore, what we are demanding is a Lazarus-like resurrection of the Land Commission; we want it given back its teeth, purpose and role The Land Commission was one of the most effective vehicles for the structuring of Irish land that had ever existed. We want to see distribution of the land, of ranches that are under-utilised, mainly in the midlands, to family size farms. We want to see that unused land taken up and given to farmers. We are most anxious that the distribution of land is not dictated by market forces which will result always in the large, rancher-type farmer getting bigger and the small farmer being left out. There has been no such distribution catered for in this Estimate, another reason for its not being acceptable to us.

The AFT/ACOT conversion to Teagasc normally would have been very acceptable to my party and to me as spokesperson on Agriculture. However, this £20 million cut device — which is what it effectively turned out to be — will result in loss of jobs, not just ordinary jobs, although of course some of those will be lost as well, but the loss of experts badly required in agriculture who will no longer be available in the numbers and quality required. There will be a loss of service. Again, those who will suffer first in that regard will be the smaller, poorer farmers.

There will also be a loss of worker participation arising from the provisions of the Bill establishing Teagasc whereas previously workers were entitled to representation on the board that was their employer. This has now been excluded. There is a loss of democracy involved in the provisions of the Agriculture (Research, Training and Advice) Bill, 1988, through the abolition of the county committees of agriculture who had offered to operate without cost but who were chopped by the Minister under the provisions of that same Bill. There will be a loss of training, advice, research and development arising from its implementation. Henceforth the position will be that the big boys who can afford to buy the services will continue to do so and the smaller ones can go to hell.

That appears to be the attitude permeating the agricultural policies of the present Government. The passage of that Bill probably constituted the most backward step since the foundation of this State. It amounts to a war on small farmers and will have the effect of wiping out very large numbers of them. As somebody emanating originally from an area in which Fianna Fáil had the strong support of small farmers, it appears to me that Fianna Fáil have lost their soul. If I could accept everything else contained in the Estimate the disastrous effects of that Bill — and I say disastrous deliberately — would lead to our opposition to this Estimate.

I also want to ask the Minister to undertake a detailed re-examination of the CAP by his Department. I believe that the Common Agricultural Policy has been a failure not alone from the point of view of any of its objectives outside farming but from the point of view of those set for itself. It has not provided adequate farm incomes. It has not provided cheap food; in fact, food arising from it is very expensive. It has created a mountain of food which is an international scandal. There are examples of that in my constituency, where there is 76 per cent unemployment among principal breadearners, where there is a colossal warehouse — an ugly building which in my view should not have received planning permission for its construction in front of a housing estate — and where food is stored that the people in the houses across the road cannot afford to buy. In fact, what the Common Agricultural Policy did was to transfer very large resources, provided, by and large by PAYE workers, to the fat cats in agriculture. There was an old saying in my part of the country that there was no need to rub the fat pig's arse in lard. Effectively the Common Agricultural Policy did that. That has been to the detriment also of the other desirable programmes organised by the EC, because of the massive resources being transferred to agriculture, with the fat cats getting the lard.

Fianna Fáil have betrayed the fundamental and historic struggles of Irish people — the basic tenet that land would be for the people. They have betrayed their long-standing policies and special constituency in that regard. By way of the programmes envisaged in this Estimate they are putting in place measures to drive out small, family farms. In pursuance of those policies they will prove to have been more effective than were the bailiffs and sheriffs with the battering ram. That is highly regrettable. I would ask the Minister, and particularly the Government party, to re-examine the effectiveness of the policies they are pursuing. As I have pointed out, all of these considerations will lead to my party opposing this totally inadequate Estimate and the unacceptable plan contained therein for agriculture.

Minister of State at the Department of Agriculture and Food (Mr. J. Walsh)

The expansion of the food and beverage industry is a key element of Government policy. That policy is that the future of the food industry should be guaranteed by changing the emphasis from a production-led attitude to a market-led one, through the creation of value-added consumer-ready products for identified markets at home and abroad. This policy will render the industry less vulnerable to changes in EC policy, enabling it to compete with the best our continental partners can offer.

In order to lay the groundwork for this change of attitude and policy the Office of Food, in conjunction with the IDA, prepared a five-year strategy for the development of the food and beverage industry. This strategy, published last Christmas, clearly set out firm policy guidelines and charted the course for IDA grant support for the food sector over the next five years. Key elements in assessing business potential in this overall area are soundly-based market plans and product development capacity. I can say clearly that support in the future will be less in the form of grants or hand-outs in relation to fixed assets and very much more in the form of State investment in total business, that is management, key marketing strategy and identified outlets for products. The strategy aims to increase exports by £350 million and to create 5,000 new jobs by 1992. The potential areas for net job creation are the beef industry, pigmeat industry, the poultry and sheep meat sectors.

Further expression of the Government's commitment to the food sector is evident in the recently published consumer survey by the IDA, in which my Office was closely involved. That survey identified 28 new food products where growth potential exists and highlighted and potential for substituting approximately £250 million worth of imports of food products into Ireland. This will be of considerable advantage, particularly to smaller Irish companies, who are seeking a specialist product and an outlet for it, initially on the home market, hopefully graduating to competitive European and world markets.

Opportunities in this area will provide a great scope for progressive Irish companies to meet the challenges of international competition on the home market and prepare them for launching their products on the world market. The successes already achieved by the Irish food and drink companies on the international market demonstrates that the best of Irish products can become world leaders in specialist areas. We all know of unique Irish products which were launched in the past decade from a relatively modest base that are now market leaders in many countries. In order to lay the foundations for 1992 and to take the food industry into the next millennium we have a clearly defined strategy for the future of food and in the recently published IDA consumer products publication.

I was very pleased to perform the official opening of the National Food Centre recently. Product development and research into new areas and trends in industry is absolutely crucial for the development of a modern food industry. The new food centre at Dunsinea, along with its sister centre at Moorepark, will provide the essential back-up and the R and D support necessary for a developing food industry. The graduates and research and development workers in both of those centres will be available in their laboratories and processing halls in the centres to work confidentially with the industry; or, if the industry want to have the work done in factories in their own locations, the research workers at both of those centres will be very glad to do the work at those factories.

During the past 12 months I have emphasised over and over again the importance of quality products and the essential requirement of quality right through from production to the finished product. I was glad to be associated with the introduction of the Abattoirs Act, which I am delighted to say has passed all Stages and will be fully operational by the end of this year. That Act and the regulations under it will provide important assurances not alone for Irish consumers but for our customers right throughout the world. Under the Abattoirs Act each domestic abattoir will be licensed by the Department of Agriculture and Food; and there will be super-vision and inspection of all slaughterings, including health marking of carcasses by veterinary inspectors employed by local authorities. This will mean that the meat which we eat will be subject to stringent health and hygiene regulations and standards. This is important because regrettably in recent years there were instances which were of no credit to the meat industry or food industry. It is important for the image and picture we hold to the world that we clearly demonstrate in the home market that we have standards which will enable us to achieve the highest possible quality products. This is important for the domestic market as well as for our export trade.

The Abattoirs Act represents an important milestone for the Irish meat industry because for the time legislation has been introduced which is specifically geared to the meat business. Up to now the rules governing the preparation and sale of meat on the home market were contained in some 80 individual sets of local authority by-laws which dated back to the last century. It is important that these regulations have been brought up to date. The trade now have a modern Act to operate under and one in whose formulation they were very closely involved through the Irish Master Butchers Federations, the Irish Meat Wholesalers Association and the Irish Domestic Meat Traders Association. I consulted with these and other bodies prior to and right through the passage of the Act through the Oireachtas and their helpful and responsible approach to the legislation was very much appreciated. Those consultations are ongoing in the drawing up of regulations under the Act. Most of our abattoirs are owned by family butchers, many of whom have been in the trade for generations. These people know and accept that fresh ground rules have to be established. They are aware also of the challenges facing them both now and increasingly from 1992 onwards when they will be part of a single European market.

The ground rules have been laid and solid foundations have been prepared for the food industry. I believe the Government can be well pleased with their record in promoting the sector since coming into office. More than anything else the general economic climate had to be put right first so as to maximise investment in the industry. It is most encouraging that the key indicators are coming right; inflation is down to less than 2 per cent; interest rates are down to their lowest levels for 20 years, and not alone are we surpassing previous Irish performances but more importantly relative to our competitors in Europe, in both inflation and interest rate terms, we are doing historically important work. While this is the most effective way to facilitate investment decisions in general, I believe it was important for the Government to signal very early on that they meant business in relation to the development of the food industry. In the Finance Act, 1987, we changed the capital allowance system for food processing, which was specific to the food industry, to give them an additional kick start which will take them into the next decade.

During the past year we have been most successful in relation to the uptake of FEOGA grants and we have been maximising that area. Regrettably, during the previous decade there was something of a scandal in that the uptake of FEOGA grants or the drawing down of money was not as efficient or effective as it should have been. However, with greater selectivity in the applications for FEOGA grants during the past year a record £20 million was made available to the food industry and during the next few weeks a further £10 million will be made available for the development of the Irish food industry. The food industry have not been slow to react; in fact, there has been an enthusiastic response to this new environment which had major investment programmes totalling almost £600 million undertaken in the past 12 months, most of which are now on stream. Additionally, there was an increase of 30 per cent in food exports during the past 12 months, an increase from some £1,900 million to £2,500 million. It is most encouraging that the major organisations in the food industry have responded to this new climate and new support for this critical industry.

The beef industry is one area where there is considerable scope for development, especially in the value-added sector. I am glad that in the first three months of this year artificial inseminations were up by over 40,000 head which is over a 12 per cent increase. A greater number of farmers are being more careful to ensure that they will have a much higher ratio of calves per herd. There will be a badly needed increase in the number of beef cattle coming onstream to avail of our processing capacity. Several of the players in the beef industry are marching forward with major development plans and this will have a dynamic effect in stimulating increased exports and increased value to the economy.

In the pigmeat sector a major modernisation programme costing over £140 million has been undertaken. Already two plants are up to USDA standards and more will come onstream. Here again, the plan is to increase the size of the pig herd from around two million to three million. I have no doubt that Irish farmers and pig producers will respond to a profit margin. If they know there is a strategic plan to ensure long term profitability, they will respond.

In the dairy industry as well, there is a very valuable investment programme. Structural reorganisations have taken place and there is a degree of dynamism in the dairy sector which will be quite important for the future. The dairy area will come right up to world standards. Our expertise and technology in that area is second to none. The dairy sector will make the most of the limited volume of milk we have now by converting it into the most remunerative products. There is tremendous potential for development in the food industry and the rewards for this development are great. We have great assets and advantages in this area. We have a unique location for a progressive food industry. My office door is always open to the industry or to anybody who has a contribution to make to the development of this industry which is so important to our economy.

Mr. Hegarty

This is a very important debate. The Government were slow enough to give credit where credit was due in this area. Listening to the Minister of State one would think that everything that has happened in the food industry happened when he became Minister of State. It should be acknowledged that a lot of the ground work for the new body was done before the Minister came into office. I set up the new body and put the structure into place and I did not get much credit for it at the time. It is important to say for the record, that what is happening now is good but that I was very much involved in the setting up of the structure. I am glad it is working out.

On the positive side, the whole dairy scene is the only bright spot on the horizon due mainly to the co-ops and the farmers. If there is improved marketing, the credit must go to the co-operative societies. If there is less food going into intervention it is because people like Mitchelstown Creameries are pushing their products further and further and are developing new ranges of products. The same is happening with Waterford, Avonmore and Kerry Co-operatives. Belatedly, people have realised that intervention is not the marketplace. For far too long the soft option was taken. They did not need a marketing team so everything went into intervention.

One area which gives cause for concern is that some of the major co-operatives have gone too far into developing one product. Casein might be an example. Over-investment in one product for export makes them very vulerable. A change in the market or a change in Government policies abroad could have severe repercussions for us.

In a recent parliamentary question to the Minister I was disappointed the Minister did not take up the option to discuss my real concern about nuclear fall-out. Only the other morning, the Minister of State, Deputy Walsh, had to cope with a radio interview on nuclear fall-out, with regard to our milk powder becquerel levels. That is a matter for concern. The Minister said that he had no record of this. The report on the "Morning Ireland" programme recorded our problems in the food industry. We know that the food was sent back. That is something totally outside of our control. Although it might be embarrassing for some of his colleagues, the Minister and his colleagues should raise this with the Council of Ministers and ensure that the polluter pays. In the northern hemisphere we have a very real problem. The countries in the southern hemisphere will use nuclear pollution as a marketing ploy. As soon as they start getting their products off the ground they will tell people not to touch anything from the northern hemisphere because of nuclear contamination. We should address ourselves to this problem.

Recent successes in the beef industry can be attributed only to the people involved in the industry. The progressive people, for instance Dawn Meats, long before now recognised that there was a market other than intervention and that we have a place at the top in that market. When I introduced the bull breeding legislation I got a lot of media criticism for insisting that we should have the highest quality beef. I was ridiculed for that measure and it was regarded as not being serious legislation. However, the result is that we now have top quality cattle. That legislation has resulted in us steering away, as I advised at the time, from Holsteins. We do not need the American-type Holstein here. We have more milk than we are allowed to produce. Let us hold on to what we have. Britain does not have it any more. They talk about British Friesians, but they are not Friesians they are British Holsteins. We should hold on to our beef industry which gives us a guaranteed place at the top of the market in Europe. That is where we will stay as long as we maintain quality.

I have views on hormones. One can say that natural hormones do not cause any problems but our customers in the European marketplace — and no amount of talk will change their minds about this — do not accept that because of recent and not so recent experiences. If the housewife says: "I want hormone free meat", then so be it, we give her hormone free meat. That is the reason I agree with that decision. We must give the housewife what she wants.

We were talking about a 20 per cent increase in farm incomes. The grain farmers have not had a 3 per cent increase much less a 20 per cent increase. The grain farmers are going through a very bad time and I would like that that would be noted. There is absolutely no light at the end of the tunnel for tillage farmers. I had hoped and I suggested to the Minister at the time of the negotiations that we should look for the lifting of co-responsibility levies on items such as malting barley and wheat for bread, and, indeed it could be extended to all grain. Because we are an island nation we have to be self-supporting in grain in an emergency, but we are not being encouraged to do this. We are exporting malting barley, for instance of which we cannot produce enough, and yet it is levied. That is not fair, it is not right, and something should be done about it. We were talking about setaside for good tillage land, but that is not on either. Where it might be on would be in the very wet poorer land if we could convince the EC that instead of trying to make grassland out of bogland they would consider giving us the setaside moneys to develop that land into forestry. That would be the natural thing to do with that land, and I have said that before in this House. If we could get all that wet land into forestry then the owners would have a reasonable income which could probably be supplemented by the State and in due course they or their families would benefit from the results of that forest.

I turn now to my own particular area, horticulture. I am glad that the Minister of State with responsibility for horticulture is present. He has a difficult task. I do not underestimate it. I had it myself and I know what it is all about. I would like to see him concentrating a little more on the potato scene. I am disappointed with some of the reactions from An Bord Glas. I would ask the Minister to restructure that board and have it properly set up because the statements emanating from them do not ring right. Today, for instance, one of their members was talking about potatoes and saying: "We will go to the EC and we will get permission for a producer group". We have a producer group. We have a national potato co-operative going through terribly tough times. For goodness sake get it back on its feet. As the Minister said previously in this House, you cannot compel farmers to limit their potato acreage. There is no quota for potatoes; they can grow all the potatoes they wish and they are quite free to do so. But the important thing to remember is that when all of them decide to grow too much potatoes in the one year there is chaos and then only half enough grow them the following year. The only people who are capable of doing that are the farmers themselves. That is why that type of operation must be encouraged by the Minister. I compliment him on offering them — and this was something we did in our time too — a part of the cost of a market co-ordinator. There are plenty of IFA branches throughout the country from which to structure this. It is a pity that somebody like Colm Warren, who is so taken up with the commercial horticultural side, which is so successful, could not be found for the potato side where farmers could be advised about quantities and varieties. There is no point in growing varieties if they are not the varieties that people want. That is something that should be addressed because this past year has seen chaos in the industry from the point of oversupply and the supply of the wrong varieties. If the processor gets into business in 1989, in the Cork region, I think he will take care of the long term problem of potatoes and will make potato growing very attractive indeed.

I am glad that some attention is being paid to amenity horticulture. This is an area that ties in with the forestry. It seems to be falling between two stools — forestry and horticulture. With all the new bungalows and because local authorities are becoming more involved in trying to brighten up our towns and cities and indeed, our dual carriageways there is a great future for amenity horticulture and forestry. Perhaps the Minister would go back to the Minister for Finance and appeal to him to reconsider the 25 per cent VAT on the import of shrubs and seeds.

In relation to pollution, the farmer has a major task and an expensive one. I am concerned that since the Government have decided to get rid of An Foras Forbartha who will now police the whole farming scene? Will it be the local county manager or the local county engineer? If there is a dispute as to whether it is the local authorities or the farmers are to blame, who will be the judge?

A figure of £200 million for imports has been tossed around. I do not think that is on, but let us concentrate on the things we can do well. When we get our potato processing plants going that will take care of about £40 million worth of potatoes, but do not try to compete in areas where we cannot compete. There is room for looking at some new crops — for example, flax. There is some scope in the area of health foods. If the housewife is looking for lean cuisine or weight watcher foods then she should be supplied with them. That is a challenge for us. I am concerned about too much attention being paid to organic farming. Organic farming has a certain role and there is scope for it. If some people require that product we should give it to them, but there is an underlying danger that anything other than organic may be regarded as less than pure food and it is something about which we should be careful.

Finally, this House should concern itself realistically with the Third World. We talk about quotas, intervention and food stacked away. When an emergency breaks out we are told that we do not have the type of food that these people can eat. Surely, in between times, we should be producing a certain amount of food for these people. It is all very well to say it is better to teach them to fish than to give them fish. But they need fish and food for a very long time. If the Community of which we are a partner can spend billions on armaments, most of which are unnecessary, surely their collective responsibility should be towards the Third World and towards giving a proportion of what they produce annually by way of grain, which would be ideally suitable, and milk powder to the Third World. We are basically in support of the Estimate and I wish my colleagues in the opposite benches well.

Minister of State at the Department of Agriculture and Food (Mr. Kirk)

I would like to deal in particular with horticulture, which is one of my main responsibilities in agriculture. My objective as Minister for Horticulture is, with the co-operation of everybody involved, to develop the horticulture industry to reduce substantially the imports of fruit and vegetables coming into this country, to increase exports of these products and by so doing to improve the country's balance of payments position and, of course, to find employment for more people.

In doing my work I am very conscious that I am depending on the co-operation, goodwill and hard work of everybody connected with the industry. The people connected with the industry cover a very wide range, beginning with the staff who specialise in horticulture in the Department of Agriculture and Food. That staff now comes under the Office of Horticulture which has been established in the Department. From there we go to An Bord Glas, still on an interim basis but doing excellent work and about this I shall be saying more in a moment or two. We have the people involved in research and advisory work, the main elements of which will soon be brought together by the merger Bill under the new authority Teagasc which is now approaching the final long stages on its way through the Oireachtas.

We have some very good horticultural producers. In a few product lines we have had worthwhile achievements. However, there is much ground to be made up if we are to achieve the progress which I hope for and which I am determined to do everything I can to bring about. Ministers and State agencies have an important part to play but the solutions must be found from the bottom up. That means that producers, all of them, everywhere in the country in all lines of production, must have a much better and keener appreciation of the road along which success lies. Going that road means paying attention to quality production and, equally importantly, paying attention to marketing. Good quality products produced for a determined market is the way to success. This is a matter not only for individual producers but very much a matter for producer groups, of which we still have a great lack in this country for the great bulk of our horticultural production.

That in brief is a summary of my outlook on how we shall achieve success in horticulture. I now propose to give in some detail an account to the House of the work which An Bord Glas have been doing. I should like to mention the position as regards the legislation to set up the board on a statutory basis. The legislation is at quite an advanced stage and it is intended to bring it before this House as quickly as possible. If the statutory board continue to work that has been achieved by the interim board it will have been a very worth while innovation in the area of horticulture. I would like at this point to take the opportunity to pay tribute to Deputy Paddy Hegarty, my predecessor in the Department, who had special responsibility for the development of horticulture during his time there. He made a significant contribution to the development of the industry and I am grateful for the words of encouragement we have had from him here today.

As soon as An Bord Glas were set up last year one of the first decisions was to set about a very detailed examination of the problems of the industry and make recommendations as to how these problems might be resolved. In all the board set up seven commodity teams and on each team were eight or nine people each eminent in a particular commodity. The seven areas examined were: potatoes, field vegetables, mushrooms, processed fruit and vegetables, protected crops, hardly nursery stock, amenity horticulture and fruit and bee-keeping. The reports of the seven teams were some months ago put before An Bord Glas who have since then been very actively going through the different reports and recommendations in great detail. At present the board are about to produce an action plan for the industry to cover the next five year period.

As regards the legal position of the board, draft legislation is very advanced and I hope to be in a position to say something about that in the not too distant future. It has been necessary, of course, before bringing in the legislation about An Bord Glas to await the completion of the legislation in regard to Teagasc because there will obviously be a connection between the two bodies.

An Bord Glas, of course, have been involved in other activities in the past 12 months. I rightly felt that, while planning for the industry as I have described was a major task, it also saw the need to become involved quickly in current activities. For that reason in September of last year the board, in co-operation with ACOT and tomato growers, organised a very successful tomato campaign covering the months of September and October. Growers were encouraged to continue heating their tomato crops so as to maintain high quality and packaging of the crop was improved so as to present consumers with an Irish product which could complete on a equal footing with imports. As Deputies will be aware, tomato production in this country has declined considerably over the last ten years. From an annual production of 28,000 tonnes of Irish tomatoes in 1979 we fell in recent years to something well below half that figure. An Bord Glas, therefore, in deciding last year to pay special attention to tomatoes, were involving themselves in a sector which could benefit from help. I am glad to say that the effort of last September-October was successful and growers who participated in the promotion got a price premium of up to 15 per cent for their tomatoes. Over 40,000 trays, each weighing 12 lbs., of high quality tomatoes were marketed and wholesalers and retailers were enthusiastic about the quality and presentation. Indeed, during the two months September and October of 1987 imported tomatoes virtually disappeared from the wholesale market. An Bord Glas are planning to repeat this exercise in June this year and I hope to have the opportunity to launch the campaign shortly.

I shall have more to say shortly about potatoes, but An Bord Glas have also involved themselves in a promotion for Irish potato chips. The restaurant here in Leinster House and the restaurant in the Department of Agriculture and Food played a prominent part in that promotion campaign. The board also conduced what was regarded as a very successful campaign for ware potatoes in Dublin and surrounding areas in March of this year.

Another product which An Bord Glas concern themselves with is onions, a product for which we are far too dependent on imports. Indeed, the import level is in the region of 77 per cent or 78 per cent of all onions consumed and it illustrates graphically the problem that exists in this area. An Bord Glas in co-operation with ACOT have arranged a demonstration of onion plots in locations in Counties Kerry, Kilkenny, Louth and Meath. Our intention is that the latest production techniques will be demonstrated on those pilot plots and potential growers for the 1989 season will come along, see how it is done and, we hope, participate. All the indications are that we will have a number of very worthwhile onion growing projects under way for the 1989 growing season and I hope it will make a major contribution to the urgent need of import substitution in this area.

The board were also active in the processed fruit and vegetable sector. In co-operation with ACOT, meetings were held between processors and producers. The results were good and this year additional acreage has been contracted for in the case of peas for processing, vegetables for processing and strawberries and raspberries. I am particularly encourged with the development in this area where the processors are prepared to go out and look for additional acreages to be grown. The prospects look very promising indeed and that should lead to greater output and, in turn, to the creation of much-needed jobs.

I would like to mention a few cases where there has been very satisfactory progress. An area which is not always thought of immediately one speaks of horticulture is the trade in nursery stock. This business is showing remarkable progress and in 1987 there was an increase in exports amounting to 85 per cent in volume and 53 per cent in value.

The most notable success, of course, the country has had in regard to horticulture has been in the mushroom sector. Mushroom production increased in 1987 by 24 per cent in what is very much a labour intensive area with the consequent creation of much-needed jobs. Exports are a very important part of this industry and in the past year additional export markets were opened up in Scotland and the north of England. For the first time also in 1987 our mushroom exporters began to sell directly to supermarkets in Britain. This was a very worthwhile development. Also in proof of the forward development of this industry was the production of spawn for mushroom growing for the first time in this country in Navan. Spawn is, of course, a most important basic requirement for the industry.

In the few minutes I have left I would like to move on to a very important area in horticulture and that is the potato growing sector. I am glad to report that for 1988 there is a projected increase in the acreage of seed potatoes being grown of 20 per cent. That is very significant for an area that has, unfortunately, been in decline for a number of years past. For the first four months of this year import levels of ware potatoes have been at their lowest level for many years. I am not claiming any credit for that but it is a good omen and should encourage producers considerably. Part of the reason for that was the fact that there was a considerable volume of potatoes available during 1987 Community-wide.

Members will be aware that in recent days we have identified a number of areas where initiatives will be taken. We have made application to the European Commission for the doubling of the grant aid for potato storage. In the months of April, May and June, at the end of the main crop, the quality of potatoes tends to deteriorate because of poor or inadequate storage facilities. We reckon there is a need for additional storage space to accommodate 80,000 tonnes and that the capital investment for that will be about £8 million. Being realistic I do not think that type of money can be found in the potato industry and, consequently, we have sought additional aid. I do not know what the result of the application will be but I am sure Members will agree that we should seek the aid.

We have made application to the European Commission for an extension of the producer group regulation applicable to potatoes. There is a need to get the general organisation of marketing right and to do that we need such assistance. We have made an offer to the IFA to part-finance the appointment of a market co-ordinator for the potato sector. Such an appointment is needed and I hope that they will agree so that we can pull the industry together. We are also planning to produce a video on the industry. From the point of view of the primary producer and those involved in presentation and marketing, it is important that such a video is made available for advisory and educational work. I have no doubt it will prove invaluable to those who are dealing with the primary producers. The video will deal with the need to get the product right, to eliminate as far as possible such matters as the mechanical damage factor, the need for proper storage and the need to present the product properly.

Imported apples are also a problem. We are satisfied that the new varieties such as Idared, Johnagold and Katje, which are being grown successfully in the apple growing areas of Kilkenny, south Tipperary and Waterford, offer great potential to replace the French Golden Delicious on our markets. We will be encouraging the planting of additional acreages of apples. It is unfortunate that under the FIP regulation we are precluded from giving grant aid except where there is grubbing out or replacement. I am glad to say that the prospects are reasonable and I hope that the trend of planting more apple trees will continue.

Mr. Durkan

I should like to compliment the Ministers of State for their constructive contributions this morning. The Minister took on board divine intervention as being part and parcel of his policy. However, notwithstanding that, we will be constructive in our criticism. The food and agri industry represents the best prospect for economic and employment expansion for this country over the next 20 or 30 years. Whether we make a success of it will depend on how we go about our business. With the advent of the internal market in 1992 we should be preparing to cater for the needs of a consumer population of the order of 320 million. That represents the biggest opportunity we have ever had. It also represents a possible threat from competition and a great risk. It is important that the Minister, and his successors, and the industry, should realise what we are facing. They will have to make the right decisions to ensure that that industry survives in a very competitive market place.

It should be noted that in the year to the end of March last we imported almost £1 billion worth of food products of one type or another. That is an exceptionally high amount of food imports. I should galvanise all of us, the Government, the Opposition, the dairy industry, the beef industry and those involved in horticulture, into believing and accepting the magnitude of the market and the need to support, buy and promote home produce. After 1992 it will not be as easy to be as parochial as we have been in the past. We will have to accept the stiff competition from the rest of Europe on our own doorsteps. Companies have not recognised that yet.

Deputy Hegarty referred to consumer demands and said that they were the most important matters we will have to face. Their demands and requirements, even though they may change from day to day, must be catered for. If we do that we will improve and expand and as a result our economy will grow. If we do that we will be under constant threat and challenge from elsewhere. Those who challenge most often in the marketplace of the future will be most likely to succeed. It is difficult for a country the size of Ireland to prosper if our food imports amount to £1 billion annually. We should try to tackle that problem and supply the home market. I accept that we cannot produce some of the products but we can produce many of those we import. Having dealt with the home market we should move on to tackle foreign markets.

Some of our co-ops are competing very successfully on foreign markets while others are slow to get off the ground. Our meat processors are competing on foreign markets very successfully. They recognise what they have to do to compete on those markets. The phasing out of intervention is probably the most worthwhile thing to happen to the industry in the last five to six years because greater emphasis has to be placed on marketing and selling as opposed to the easy option of placing products in intervention. The whole concept of the Common Agricultural Policy, intervention supports and so on, was introduced to try to ensure a constant supply and a reasonable recompense for producers. The system got bogged down along the way and people took the easy option but we should not forget that at a time when stocks in Europe are decreasing at a fast rate we need to retain some stock in intervention at all times for emergencies. We have had to deal with emergencies in the past and I have no doubt they will arise in the future. It is important that the stock in intervention is not kept for many years and at a great cost to the Community. It would be better to have a reasonably fast turnover while at the same time ensuring that sufficient stock is kept for emergencies.

It is important that the stocks in intervention at any given time are pollution-free, radiation-free and hormone-free. There is no benefit to be gained from storing supplies of contaminated food products. The contamination might not be very serious but it might have a serious effect on our markets if released onto European or world markets. If we are interested in protecting those markets we should try to ensure to the very best of our ability that whatever goes into intervention and whatever is released onto the marketplace is of the highest possible quality so that nobody will come back to us now, in two years' time or in four years' time and say the levels of radiation or the toxins in our products were of an unacceptably high level. We should not allow that to happen. There is absolutely no excuse for it. We have our own means of testing our food products and there should be no reason for anybody from outside of this country to be able to come forward and say that our standards are not as high as theirs or that they are unacceptable to them.

We must also accept that those in the marketplace have a vested interest in coming forward and casting aspersions on the quality of our products. When we are talking about selling our food products either at home or abroad there is more than one aspect to be taken into account. Apart from the competition and the quality, we also have to recognise that the people in the market place who are competing with us may indulge in negative advertising which will be to our detriment.

I welcome the recent IDA plans to further expand certain aspects of the food industry. Announcements have been made by the Department of Agriculture and Food in recent times as to the potential that is there and the jobs that are to be provided in the future, much more so than the jobs that are being provided. I suggest that the time has now come to let us have a look at the jobs that have come on stream in the meat processing area. Let us have a look at those jobs now as opposed to telling us what will be there in 1992 or thereafter. We need to do something about that now.

The Minister in his speech referred to the new system of funding from Europe, the changes in relation to FEOGA guidance grants and the need to develop alternatives to the traditional agricultural pursuits. That is extremely important and is something that cannot be adequately dealt with in a short space of 15 minutes. Suffice it to say that other European countries have copped on very quickly to the alternatives that are available. While one market might be over-supplied, in the areas of tourism, recreation and amenities, there is an ongoing demand in the consumer-oriented society in which we live. There is a need to meet that demand and we are very well placed to do so. We have the natural amenities and it is up to ourselves to explore, exploit and sell them and meet the requirements of the people in the European bloc to which I referred earlier.

The Minister also referred to the reintroduction of farm installation grants and the retrospective payment to 1 April 1987. That is something which——

Mr. Farrelly

The U-turn.

Mr. Durkan

——we on this side of the House repeatedly asked for. A constructive U-turn like that is very important and very welcome. I would encourage the Minister to continue along that road in a constructive fashion and he can rest assured he will certainly receive the support of all sides of this House.

Mr. Farrelly

They should pay what is owed at least.

Mr. Durkan

I wish to mention one other point which is very important. There is a need to cop on to the idea of value-added products. A typical example is the humble spud. It can be boiled, fried, mashed, crisped, chipped, powdered or baked. Anybody who attended Punchestown Racecourse not so long ago during the Punchestown Festival——

Mr. Farrelly

Another McCreevy.

Mr. Durkan

Unfortunately I was unable to attend because of business in this House but I heard what went on there. Anybody who attended that festival would have known that the humble potato, on which we put very little value when boiled, when baked and sold to the consumer had a value of £1 or more. If we do a rough calculation we will find that an eight stone bag of potatoes which costs about £8 to £10 could cost as much as £300. That is what value-added means. It is one of the things that all our food processors have to become aware of as a matter of urgency. While it might not be so easy to sell a sack of potatoes to the consumer on the street, by dividing it up, giving it a different name and a new brand and targeting a certain area in the market, the possible increase in the value of that product is amazing. That is only one product and every other product is the same. I would ask that in the future our food processors would take note of that single example.

Mr. Leonard

We are debating this Estimate on agriculture at a time when there is a return of confidence in agriculture. That return has come about primarily as a result of the measures the Government have taken, with the reduction in bank interest charges which caused such a problem to the development of agriculture over the years and with the fall in inflation. There are areas which are still of concern to us such as the cattle herd which has dropped to a dangerously low level. While the fall in numbers has been arrested it will take a considerable time to get it back to the level which we would require. A survey was carried out on our entry into the EC which showed that at that time the number of our cattle herd — about seven million —— was higher than it is now. The projection was that it would increase by the nineties to about nine million and would level out thereafter at about ten million. We have not much more than half that number at present. We are depending on store cattle, beef cattle and slaughtering. Beef will continue to be one of the main value-added products, thus leading to job creation.

The previous speaker remarked, and I agree wholeheartedly with him, that agriculture seems to be one area where there is an opportunity for development and for increasing exports. However, the major areas of production remain static. There is now the added problem of a restriction on milk production, at a time when we were expecting to increase production. We are curtailed in our numbers of cattle and we have not enough calves. Cattle are being purchased by producers who are not in the dairying or production sector and they are charged so much that they will have a very small margin of profit. We are left with milk, beef, pigs and poultry. Added to that we have what has been one of the biggest success stories in agriculture over the years — and I am very pleased to be able to say I was very closely identified with it from the beginning — that is, mushroom production. This industry is providing a great many jobs and is going from strength to strength. However I hope it will be monitored at departmental level so that if more people come into the industry, they will not upset the present structure which was arrived at after much painstaking work by the mushroom producers in the initial stages.

There has been a great deal of talk about alternative farm enterprises. We hear a great deal about deer, cheese, angora goats and so on, but we should not concentrate on these enterprises because there is only room for very limited expansion there. We will have to look at areas like seed potato production, flax growing and so on, areas where there is plenty of room for expansion.

In a constituency like mine, the small family farm is under continuous threat. Many of these people are involved in poultry and mushroom production. They have been very successful because the traditional areas of production are being whittled away. The Minister mentioned the structural and regional fund. Last February's summit was the most successful since our entry to the EC because we got a doubling in the structural and regional funds. When we get this money to implement the integrated programmes, I hope the local input from the voluntary, youth, farming and other kind of development organisations will play a big part in monitoring that fund.

A few weeks ago I visited a rabbit processing plant, Blaney Meats. This was one of the first IDA grant-aided plants. It has the most up-to-date refrigeration and killing line system I have ever seen and I have visited most poultry and pig plants in this country; 960 rabbits are processed every hour but the problem is a lack of veterinary know-how. The producers have been grant-aided from the international fund to the extent of 30 per cent. This is very satisfactory. But what is needed is that a veterinary inspector and some of the producers go abroad and examine all aspects of this industry in other countries. Some of these people will be meeting departmental officials shortly and I hope they will be given a sympathetic hearing. There are approximately 100 producers from Louth to Donegal who are involved in this alternative enterprise.

Mention was made of the seed potato industry. This is an area with terrific potential and room for expansion and I have spoken about this many times in this House. The Irish Marketing Potato Board is already in existence. I was very glad to hear the Minister of State, Deputy Kirk, saying there had been an increase of 20 per cent in the acreage under seed potatoes, but this increase was from a very low base. I know from reports I have read recently that the market is there. I am sure that, with the Minister of State's drive, this industry will develop along the proper lines. Before I came into Dáil Éireann I was involved in the potato industry. I visited Perth, Scotland, in 1969. At that time there was massive expenditure by the British Potato Marketing Board providing storage. What we need for our potato industry is storage and we must get EC funding to provide it.

Another area causing concern in my constituency is pig production. This has been a major source of income in my area for the last 50 or 60 years. We had two killing and processing plants in Monaghan town. One went out of business because of rationalisation in the western region — a Castlebar co-operative — and the second, through trading difficulties, closed temporarily. Between the two firms, 150 people have been out of work since last summer. Last week the owner of the second factory decided to pay redundancy and offered the plant for sale. The problem is that the IDA appear to have adopted the Danish system. They seem to think there should be no problem transporting pigs 40 or 50 miles to a meat plant. They seem to be hell bent on setting up a new green field structure and do not seem to be concerned about the butchers who are out of work or the producers who have been in this line of business for many years. That is not acceptable to the people of the area, and the IDA and any others who have that idea in mind should think again.

Another alternative is flax. Tribute has been paid to Deputy Hegarty who was Minister of State at the Department of Agriculture, and I would like to pay a tribute to the present Minister and his Ministers of State, because what we have found over the last 12 months is that if we have a suggestion to make, it is given very carefully consideration. I am sure the same applied when Deputy Hegarty was in the Department. He set up the flax trials in Cork but unfortunately this work was carried out by a private company and little information was available, and the little information that was available was not helpful.

Donegal, Cavan and Monaghan were traditional flax growing areas during the war. Herdman's of Sion Mills, Derry, who announced an £18 million extension to their factory, will require flax. This will provide a great opportunity for flax growers. I ask the Department to set up trials in Cavan, Monaghan and Donegal similar to those set up by the private company in Cork. The initiative already is being taken in Donegal by the development officer. There have been a number of meetings there and with the Department. There is a substantial subsidy involved of £100 per acre and I hope that other areas will grasp this opportunity.

About six or eight months ago I drew the attention of the Minister to the restrictions on milk production in my constituency. The dairy farmers there are approachable and they would discuss matters with the Minister. As a result of a reduction in their milk quotas and improvements in milk yields, the farmers were left in the position that seven or eight cows out of a 25 cow herd would have had to be disposed of. I suggested at that stage that they be allowed a cattle headage grant for suckling cattle, even in the case of dairy herd owners. The Minister's announcement of a few weeks ago is very satisfactory to men such as those. Up to now in the more severely handicapped areas payment were restricted to ten dairy cows, at £32 for the first eight and £28 for the next two cows. In the less severely handicapped areas there were no headage payments to farmers on any of their animals.

Under the present scheme, in the more severely handicapped areas the payment is still restricted to ten dairy cows, but suckler cows and dairy herds are allowed £70 on the first eight cows and £66 on the next 22. In the less severely handicapped areas the payment is £70 on the first eight cows and £66 on the next 20 cows. That is the most positive approach to increasing cattle numbers and recognising the problems of these small farmers and dairy farmers who had been unable to avail of cattle headage grants and had to dispose of very good cows, reducing their farm income severely. This positive step is in line with the thinking of the present Government in many other areas where recognition has been given to the problems that had been damaning the farmers for so many years.

The Minister mentioned that there would be a reduced payment for putting stock into intervention and this is one of the more satisfactory aspects. Intervention, while necessary, was one of the real drawbacks to our development. There were the lazy manufacturers who would not go out to sell their produce, dumping it into intervention at a massive cost to the State and to the EC. That was the cause of EC surpluses. Practically all the beef we are producing can be taken up by the British supermarkets who are ready for it at a premium price, which is very satisfactory. I hope that if intervention must be used in the future recognition will be given to those farmers and manufacturers who had the initiative to go out and sell their produce. They did not get that recognition.

Mr. Farrelly

I welcome the opportunity to speak in this debate. A number of regrettable things have happened during the last 12 months. It was hoped that the Estimate presented here would have provided much more money for very important areas whose budgets had been reduced drastically by the present Government. When I reflect on the Minister for Agriculture and Food, Deputy O'Kennedy, I am reminded of somebody who, having bought a farm, comes down the country from the Law Library every two months. He looks around, sees a serious problem, gets somebody else to look after it and goes back to Dublin. Sir Michael sends down his two Ministers of State to find out the problems and, if the problems are too severe, he will not go down near the patch of land he bought.

In connection with the overall position over the last 12 months the Minister produced a proposal to amalgamate ACOT and AFT, with a budget which was £15 million less than that of the previous year. He presided over one of the largest reductions in allocations to the research and development programme in agriculture and left several thousands of small farmers with no possibility of any advisory services. The majority of those small farmers would be unable to pay for such services. As we all in this House know, the average farm income is well below £5,000.

The Minister has announced the reintroduction of the installation grant. I would like to know how long ago it was that the application was made for the reintroduction of this aid, which should not have been abolished in the first place. He tells us now that payment will be retrospective to 1 April of this year, which is very welcome. Regarding those whose applications have already been approved, there are people in my constituency, a few, who are eligible for this grant and who have been waiting eight months for their money. The Government should not be hindering people who want to develop and have made many improvements to their farms entitling them to all lines of grants — installation aid, headage payments, or whatever. The Government are holding back this money to buttress the balance of payments at the end of the quarter and it is the same with all the Department that are responsible for paying out grant aid. Something positive should be done about this. This money should be paid out when it becomes due.

With regard to the disadvantaged areas, as everybody in the House is aware and none more than the Minister of the Department, an application had been made and Minister O'Kennedy told this House that it had been made on a certain date close to the end of the administration of the previous Government. Nobody disagrees with that. We all accept the date on which it was made. During the price negotiations last year there was goodwill on the part of EC Commissioner Andriessen to negotiate, if there was a willingness on the part of our Government, to include the less severely handicapped areas in the category of disadvantaged areas because of the serious amount of bad weather that Ireland had experienced in the previous two years. This Government had then no commitment in that regard. Is there a commitment to having the inclusion of the less severely handicapped areas put on the agenda during the price negotiations this year?

We all heard about, and some of us saw, the launching at Castlebar of the allocation of extra moneys for the Regional and Development Funds, which we all welcomed. Nine Ministers were present. Within six weeks of that event an application still had not been made to Brussels for the money. I believe that since then that application has been made. Deputy Leonard had been before then defending the indefensible at a meeting one evening in Monaghan. His two colleagues, the two Ministers in Cabinet, did not appear. They appear only when there is good news and lottery money to give out. That is the fact. Will the application be on the agenda during the farm price negotiations? There are many farmers who are depending on the Minister to do that job for them.

In connection with An Bord Glas, the Minister of State mentioned that he intends bringing in legislation to formulate new policies in this area. There seems to be conflict in that one of the nominees to the board is a very big fruit and potato importer into this country when there is a scarcity of those commodities. He appears to be in conflict with the potato growers here. Can this matter be sorted out positively before the board is finally organised and before the legislation comes before this House? There should not be business people on a board who are in conflict with the home producers. That would not solve anything or improve relations between them. If this is to be run in a businesslike way, conflict should not be created in these areas.

There are serious problems in regard to pollution and the majority of grants to combat the problem were provided by the Government from 1973 until recently. I am not saying that the Minister blames farmers for pollution but many people have said that that is the case. Unfortunately, the grants which were approved by the Department are inadequate at present. The Minister for the Environment paid lip service over the last couple of months to this issue. He said that local authorities will ensure that the law is implemented. Nobody disagrees with that but there is no point in paying lip service to the problem without making grants available. Farmers are on to me every day of the week — I am sure the same is true in relation to many other Deputies — asking when the percentage grants will be available because the cost of treating and avoiding pollution is enormous. The farming community are willing to help to solve the problem and they do not want to be polluting their areas. Will the Minister do something positive in this regard?

The farm classification officers, having had a year's holiday, paid for by the State, have now returned to the Department. The Minister blamed the Opposition for the problem but we did not suspend the work of the farm classification officers. The Minister and the Government did so in a pre-election promise in 1987. Even though the farm tax was not continued, classification of the land should have gone on to find out who owns it. Many people own land over and above the 250 acre deadline set in regard to farm classification.

I noticed from the reply of the Minister for the Environment to a question this week that legislation will not be introduced to abolish this measure. That seems to indicate that the Government are thinking of introducing a property tax, and the farm tax would be part of it. Another U-turn will not make much difference. The Minister is smiling——

Mr. O'Kennedy

I have cause to smile.

Mr. Farrelly

I am glad the farm classification officers are working and I am sure they would all prefer to have been in that position over the last year rather that sitting around with nothing to do. The money paid to those officers last year would have kept the Ombudsman's office going for many years.

The Minister also referred to the increase in CBF levies. Because there are one or two members——

Mr. O'Kennedy

Or three.

Mr. Farrelly

——of the IFA on the board does not mean that the IFA themselves agree with it. Is the Minister withdrawing total Government support in this area when the levies are increased? If not, we want to know the extent of Government funding to the operation and if they are doing away with it we would like to be told. There is no point in saying one thing in the House and then perhaps having a conference in Castlebar attended by seven, eight or nine Ministers to announce something else.

Mr. O'Kennedy

I will do it myself the next time.

Mr. Farrelly

The farming community were not pleased with the way the last public relations exercise was carried out at the expense of the taxpayers.

Tomás Mac Giolla

I wish to thank Deputy Farrelly for giving me some of his time to contribute to this debate which is so important for the whole country, not just for those in agriculture. Agricultural land is part of the assets of the whole country and it affects all workers because it is a vital part of industrial development. Governments have been very lethargic in this regard since we got our independence. It should have been an area of dynamic development but instead it has been one of decay. Departure from the land, lack of development and productivity have deprived hundreds of thousands of people of jobs over the years because this is the area where the greatest number of jobs can be created.

We are now importing hundreds of millions of pounds of foodstuffs each year and even farmers are going into the local market town to buy vegetables which come down from the Dublin market in big articulated trucks. Over the years, I have continually harped on the failure of the Government to develop horticulture. The Irish Sugar Company developed this area and set up Erin Foods but they were sold to Heinz-Erin during the Government of Mr. Jack Lynch. In Holland, 4 per cent of the land is under glass. I am not suggesting anything like that but 4 per cent of our agricultural land could be devoted to horticulture and if that were done we could create up to 20,000 jobs on the land in production and twice that number in the processing sector. This is an area we have to get into as we need to have alternative products and alternative markets.

In Holland 75 per cent of horticultural and agricultural produce is processed in that country, some of it on the farm. The food processing sector in Holland, half the size of Ireland, employs 136,000 people. Over 100,000 more people are employed in the food processing sector in Holland than in Ireland. When we entered the EC it was expected that many industries in the industrial sector would close down but we had great hopes that there would be tremendous development in agriculture and that the downstream industries which would be created as a result would more than compensate for the firms which would be forced to close down in the industrial sector. With our entry to the EC a new language was created which those outside agriculture could not understand — we had MCAs, the green £ and intervention payments. The end result was that there was no increase in productivity, fewer people employed on the land and indeed fewer farmers. Farmers were forced off the land and there was no increase in the number of downstream industries. Bigger farms were created and there was a significant increase in dairying but overall there have been no new significant developments.

The intervention system has led to a lack of marketing and a concentration on two products — beef and dairy products. We have seen a cessation of production in a whole range of products for the home market. We are now facing a crisis in production, cropping and marketing. Despite hundreds of millions of pounds being poured into agriculture by the Government and the EC, the level of productivity is abysmal and we are seeing a declining number of jobs and lower returns in taxes and rates to the Exchequer. In 1979 farmers paid £52 million into the Exchequer in taxes and rates. Last year they paid only £35 million into the Exchequer. The figure should be well over £100 million now almost a decade later but instead it has dropped.

Farmers are paying less in taxes than CIE workers. From figures which were given to me by the Minister it can be seen that the workers in CIE pay more in taxes and PRSI than all of the farmers put together and this despite having received increased incomes from the EC. It is time that workers made their voices heard on the way agriculture is being developed. They must not rely on those in the EC or the IFA to do what is right for agriculture. Not every farmer, given the various hand-outs, will necessarily do what is right for agriculture if left on his own.

What is needed is a development plan for agriculture. We have called for the establishment of an agricultural development authority as we believe that a single Government agency is vital if there is to be development in the agricultural sector, particularly at this time when enormous changes have taken place in a sector which is so vital to the economy. This authority would have the responsibility for stimulating investment, farm modernisation, the diversification of production into different crops, the development of food processing, production and marketing which is being ignored at present and which is now more important than ever with the change in the intervention system. It would also take over the role of the State in respect of land use policy, research and development and training and the Agricultural Credit Corporation in terms of finance and investment. In addition, the disease eradication schemes and the various grants for structural development of the land would be administered in accordance with the priorities of the authority.

In future all State aid should be related to farm development plans, national production priorities, value-added production and employment potential. In reply to a question it was pointed out that over £340 million is paid out annually in aid to the agricultural sector and direct grants and subsidies paid to farmers amounted to £82 million in 1982, £97 million in 1983, £151 million in 1984, £181 million in 1985 and £173 million in 1986. This is at a time when the return to the State was £35 million. Where did this money come from? It came out of the pockets of those paying taxes. That is why I say that aid to agriculture should be related to farm development plans. Grants should not be paid without any reference to what the farmer is doing.

The new authority would be the executive authority of the State in this sector and have on its board representatives of the farm organisations, trade unions, the various development agencies and the State. It would be similar in structure to the IDA but would have a specific development role in relation to agriculture, and food and land use in general. The authority would examine the possibility of growing different crops and the industrial use of agricultural products. Let us take the woollen industry, for instance. Because of the payment of grants and subsidies sheep numbers have increased and, consequently, there is an increase in the amount of wool available. However, sheep do not seem to be thought of in terms of wool; it is regarded as a by-product which you send over in any state at a cheap price to Britain. There are no processing facilities in this country and we end up having to import that wool for our own woollen industry. There is now an increased interest in Irish linen. Such an authority could also be looking at that, would be developing the production of flax, facilities for its growing, and the many other areas of agricultural production and development.

Mr. O'Kennedy

I am reluctant to interrupt Deputy Mac Giolla but he is using the time I need to reply.

Tomás Mac Giolla

It is just 1.20 p.m.

Acting Chairman (Mrs. Barnes)

1.20 p.m. is the designated time for the Minister to reply.

Minister for Agriculture and Food (Mr. O'Kennedy)

I am sorry to have had to interrupt Deputy Mac Giolla. But in view of the order of the House and the fact that there were a number of major points raised to which I need to reply, it is imperative that I have the full time available to me.

I am amazed to hear the misrepresentation being made by some Members of the House, particularly by the Fine Gael spokesman, in relation to the actual position in agriculture at present. I regret that Deputy J. O'Keeffe is not here to listen to my reply to the points he raised. Because of the misstatements he put on the record I shall have to reply formally to a number of the points he made.

Deputy J. O'Keeffe says that there is a disastrous position in Irish agriculture at present. I have to say that if Deputy O'Keeffe's definition of "disastrous" is an increase of at least 20 per cent — and in my view it will be even more — in the income level over what it was when Fine Gael were in Government, then that is a very strange definition of disaster. The farmers, with whom Deputy O,Keeffe should consult, would not share his opinion; they do not experience disaster now as they did four years ago. I am not interested in the past, but that is a wrong presentation at a time when there is a new confidence, buoyancy and determination among farmers. It is not helpful, even from the point of view of the Opposition, for Deputy O'Keeffe to describe that as disastrous.

Deputy O'Keeffe has also blamed me for the "disastrous decline" in the national herd. Here again I have to say that that is turning logic on its head. I stated in the course of my introductory remarks that the annual decline, recorded in the December 1987 lifestock enumeration, was 47,000 head compared with a decline of 153,000 in the previous year. Already in the course of the year in which I assumed responsibility there was a drop of three-quarters in the decline in lifestock numbers. What I do need to put on the record is that, of course, the decline in the national herd is something about which I am very concerned. However, that decline is a consequence of the failures of three years ago. One does not press a button and suddenly produce a three-year-old bullock for slaughter. It is because of the failure of the Government of which Deputy J. O'Keeffe was a member to take any action three years ago that we saw a constant decline in our national herd. The good news now is that there is a definite arrest in that decline.

I will accept blame for that which is within my responsibility, but to be blamed by the Fine Gael spokesman for the failures of a Fine Gael Minister three years ago is carrying the matter too far. As I have pointed out, the reality is that that trend is being reversed. We are seeing a drop in slaughterings of 20 per cent, an increase in inseminations of between 13 per cent and 14 per cent even within the first few months of this year, and it is my opinion that another month will show an increase of the order of at least 15 per cent. That adequately demonstrates that what is happening now within the area of my responsibility is very positive. It adequately illustrates the confidence of farmers, a confidence they clearly did not have three years ago when the previous Government allowed the national herd to go into decline. If I am to be blamed, please do not blame me for not having the power of miracles to suddenly produce three-year-old bullocks now to make up for the failures of the previous Government. I should not be blamed for taking action the previous Government failed to take.

There is now in place a western package I spent some considerable time negotiating. There are increased levels of payment, particularly special support for anti-pollution drives in the west. I am sure the last man who would want to hear Deputy O'Keeffe's comment this morning would be Commissioner Sutherland — that that package was concluded by him. Commissioner Sutherland does not need a distortion of fact like that. He would be embarrassed by it, because it is simply not the case. I negotiated the package with the Commission — there is no question about that; it is the reality — and, having done so, I put it through the Council. I do not think it fair to Commissioner Sutherland that the Fine Gael spokesman should contend that Commissioner Sutherland put it through the Council, because that is not the case. Commissioner Sutherland has sufficient reputation without having that kind of distortion placed on the record. That package, because it is badly needed, will be of considerable benefit. Do not blame me for the fact that over the past four years nobody did anything about pollution in the west. I agree, but the fact that I am now doing something about it should not constitute a criticism of me.

In relation to the whole structural development of agriculture, I say: yes, it is time for an integrated rural development programme. There was no sign of such over the last four or five years; there is now. I want to state specifically that we are the first country in the EC ahead of the decision of the Council of Ministers, or even of the Commission itself, to introduce a pilot scheme, in advance of a decision which probably will not be taken until next year. Am I to be blamed for moving faster than the others, because that is what I am doing? And we have got special sanction for this pilot programme for integrated rural development. If Deputy J. O'Keeffe had made even the most casual inquiries in Brussels he would have learned that if Ireland is exceptional at all, either in relational to the western package or to the integrated rural development programme, it is that we are the only country moving ahead of decision. I should in fairness say that my officials have been out in Brussels constantly, and their Brussels counterparts over here, and that both have been deligent in relation to this. God knows, there was some unwarranted criticism voiced this morning in relation to the Department generally. As Vice-President Andriessen would say, it is our country's experiences that will be used by the Commission when they draw up their comprehensive programme.

Those are the facts that must be put on the record whether they be in relation to the western package or to the extension of the disadvantaged areas. The fact is that the Commission refused within four or five weeks the applications submitted in the course of the last general election campaign by the previous Government. I was in Government only a few weeks when the word came back from the Commission: this application is not acceptable, full stop. Am I to be blamed for that? The Commission gave good reasons for their not accepting that application. It was an ill-conceived and hastily put together package. That being said, I am much more concerned with the future than the past; but I do not want to be blamed for the failures of the past. I will accept criticism where it is justified.

The reason I want to put these facts on the record is that we are now in a position of real vigour and buoyancy in the agricultural sector. It is significant that nobody commented on what I said in relation to agricultural incomes which I believe, even as we talk, are being enhanced vis-á-vis dairy and milk prices and that milk prices will rise again another 2p or 3p during these very days. Therefore, is it any wonder we have a 20 per cent increase in farm incomes? I want to see them remain that way. Nobody wanted to comment on the fact that because this Government have put so much emphasis on the agri-food industry in the last few years our exports in the food sector have increased by 60 per cent. We have laid such emphasis on it that we can demonstrate in the way we attack world markets that we are now the largest exporter of beef in the whole of the EC though being one of the smaller member states. We are the biggest exporters of almost all dairy products in the EC; obviously, we are not the largest in cheese, but are moving in that direction. We are the biggest exporters of skim milk powder. We are moving rapidly to adopt a dominant position in world markets.

In the face of all those signs, in the face of such buoyancy in agriculture and the agri-food sector — where we will produce another 1,200 jobs over the next few years, even in import substitution, as my collegues, the Ministers of State mentioned this morning — it does not do anybody a service to describe that scenario as a disaster. I had hoped for a serious analysis this morning. I did not expect plaudits or cheers but if we had a serious analysis we could learn something from it. Having regard to the experience of Irish agriculture during the past number of years, it is very clear that not alone is it back on its feet again but I believe it will never again be brought to its knees like it was during the past five years because it is going to be a strong and vigorous industry and will actually be the strongest agricultural and agri-food sector in all of Europe. That is our plan and that will be the result.

Mr. Durkan

Careful now Minister, you said you were looking forward.

Mr. O'Kennedy

Obviously this is a major and comprehensive area and I regret that time does not enable me to go into more detail. However, I think the facts speak for themselves and those facts very definitely spell out success and not what Deputy O'Keeffe tried to convey this morning.

Vote put and agreed to.