I wish to express my gratitude to you, Sir, for giving me the opportunity to discuss this matter with the Minister on the Adjournment this evening. I will give a brief outline of the background. The development of the mushroom industry has been spectacular, to say the least. In 1980 the value of mushroom production was £5.4 million, last year it was £33 million and the projected figure for 1990 is somewhere in the region of £48 million. This has to be looked on as an extremely dramatic development. The market for fresh mushrooms is the real growth area and the processing of mushrooms accounts for somewhere in the region of 15 per cent to 20 per cent of total production.
Our share of the UK market is increasing. In 1987, for example, it was 8.8 per cent but by 1989 it had grown to something around 11.5 per cent — I think that figure is slightly understated. When you translate that into production at home it means that more than 75 per cent of our produce is sold on to the UK market. This is a truely frightening figure.
Industry sources have told me that if the value of the Irish punt goes beyond 95p sterling, we will have a crisis on hands. That means that tonight we have a crisis on hands. I am not exactly sure of the closing price of the Irish Punt this evening but I reckon it is worth about 97p sterling. Companies who have been absorbing the loss of profits caused by the weakness in sterling are now passing that loss on to the growers and have told them so in no uncertain terms in the past week. If this continues it will most definitely lead to disastrous effects.
I want to give the House an indication of what has been happening to the industry in the recent past. Western Mushrooms, Roscommon, are in very serious trouble at this point, indeed I am not sure if they are still trading, I did not check it out today. In Claremorris, eight growers have gone out of business already. In Carbury it is projected that 18 growers will be forced out of business very shortly. Wexford have lost 26 growers in the past 12 months. Indeed industry sources in Monaghan have informed me — this is the area I know best — that if sterling remains at its present level, not to mention if it gets worse, the average price to growers will be reduced to the level of basic costs and even below it. They have informed me that a drop of 2p or 3p in the pound sterling will achieve this and they have projected that that is already in the pipeline and will be the case in a day or two.
Growers are still paying off their original investment, which is quite large. I suppose in Monaghan terms it would be described as huge — £10,000 per house — and that does not include site development costs which in some cases could be £25,000 or thereabouts. The normal basic unit is three houses, below that you cannot function at all. Therefore, the investment could be anything up to £50,000 for that kind of development. The optimum size is five houses, which gives an indication of the type of development we are talking about. The small farmers in County Monaghan, and they are the people who have been involved in this, have laid their futures on the line in developing this industry. They made the investment, and while they certainly got assistance, they carry the responsibility. They are in no position whatever to handle what is happening at present. Even established growers are in no position to keep their heads above water.
There are many reasons for this. One reason is that last summer was very fine. One would think that would be good for the mushroom growers, but in fact it was the reverse. They had very poor crops because they could not control the heat. Growers were looking to the February, March, April period to make a recovery but that recovery is not on the way and will not happen. Indeed I was informed today that one grower had to sell his car in order to prop up his business. I am not being sensational, I have been told that reliably. It looks as if we will have casualties and the scale of that scenario depends on the Government. For the sake of the mushroom industry I hope that sterling recovers quickly. That would be the most desirable outcome at present. If it does not recover, I want to know what contingency plans the Government and the Minister have to deal with this matter. Indications are that the uncertainty which has centred around the British Prime Minister and her activities and attitudes, will continue to bedevil sterling.
Neither the Minister nor any of us have any control over that. There is an urgent need to draw up a short-term emergency plan to support the industry. What I would like to know is whether the Government plan to step in to put in place immediately a fund to support the growers to see them through the present crisis. Indeed I demand, on behalf of the growers, that the Government immediately do so. If they fail to do this the flagship of the horticultural industry will collapse before their eyes. Those of us on the ground know that these are the facts. I have been approached by people who are looking for social welfare assistance at this time. This is extremely sad. The Minister must respond and it must be adequate. I await his reply with interest this evening.
I have been speaking about what I hope is a short-term crisis but we will not know if this is the case until certain circumstances evolve. There is a grave need to overhaul and revamp the industry with whom the Minister of State was in close contact recently. I met him in Monaghan one day in February and I later discovered he was there on a serious mission, to discuss with mushroom growers the extent of the problem. I am also aware that he is concerned about this matter.
The Minister of State will further be aware of the lack of technology, particularly among growers. Most growers cannot afford to instal coolers, and this is one of the reasons they sustained such heavy losses last summer. Ninety-three per cent of growers have no cooling systems. Obviously they do not need such a system in the winter but in a fine summer they are totally and completely vulnerable. The level of research and development carried out by Teagasc on behalf of the industry is inadequate. Its scale is far too small and this must be drastically improved. Many of the older houses need to be upgraded as many of them are well over ten years old. They need to be recovered and the fibreglass renewed. I have been reliably informed that a grower with old housing stock would need to spend about £4,000 per house to bring them up to standard. I understand that in America and Europe mushroom houses have a central unit for environmental control and this enables the producer to monitor environmental changes and therefore produce better crops more efficiently. We have not even begun to consider such a unit here yet.
In relation to markets, we have all our eggs in one basket as more than 75 per cent of our production goes to Britain, as I said. This would now seem to be a foolish and unsustainable policy. We need to diversify as a matter of urgency and look for new markets. We need to make inroads into the French and German markets in order to provide a healthy base for the industry in the long term. The mushroom sector is the flagship of the horticultural industry and if we are not careful we will have a Bord Glas but it is quite possible that we will have no glas and that would be a shame. Therefore what needs to be done?
There must be a contingency support fund for growers to keep them in business through the present crisis. We must also introduce a system of grant aid to enable growers to bring old housing stock up to standard and grant aid must be extended to cover the introduction of essential new technology. Teagasc also need to increase their investment in research and development and they must do so very quickly. We also need to engage in aggressive marketing in order to get a better spread and control the development of the industry. Even now there are too many companies competing in the one market. Indeed there was price cutting in January with the result that companies were suffering. Here I am talking about export markets but if we do not take these steps the mushroom industry will die and the Government will be held responsible for this. That would be a shame. I await the Minister's reply with interest.
