Dáil Éireann debate -
Thursday, 13 Feb 2003

Vol. 561 No. 3

Written Answers. - Food Industry.

Emmet Stagg

Question:

43 Mr. Stagg asked the Minister for Agriculture and Food the measures he is taking to address the widening gap between the price the farmer is paid for produce and the price the consumer pays in retail outlets; and if he will make a statement on the matter. [3853/03]

Damien English

Question:

58 Mr. English asked the Minister for Agriculture and Food the measures he plans to take to ensure that producers get a fair margin for their product; and if he will make a statement on the matter. [3955/03]

Minister for Agriculture and Food (Mr. Walsh)

I propose to take Questions Nos. 43 and 58 together.

In the single market situation food products are sold freely and governments do not have the power to set the levels of mark up at different stages of processing and sale. The Competition Authority established under the 2002 Act does however, has a statutory role in relation to ensuring that markets operate freely and this includes the retail sector. These considerations aside, I am conscious of concerns expressed both by producers and consumers that food prices have increased and that these increases, though less than in many non-food sectors, have not benefited producers proportionately.

The factors determining producer returns and retail prices are complex. In the case of commodity sectors supported by the common agricultural policy, the return to the producer is only partly made up by market prices. Direct aids to producers which are financed by the European Union and which have been increased to provide a measure of compensation for reductions in EU reference prices, constitute a significant proportion of producer income with the balance coming from the market. That market is mainly abroad as in the case of the major commodity sectors, over 80% of Irish production is exported.

On the retail side, markets have become more sophisticated and processing standards have risen. The growth in prepared foods has been major and this is now the fastest growing sector within the food industry. For this reason comparisons are more complex to make than before. The Deputies will be aware that in our free market economy I do not have a role in determining domestic prices. However, this Government, through its policies for development of the food sector, has improved the capacity of the food sector to compete in a rapidly changing market place. The measures supported under the currency of the national development plan, embracing capital investment, research, marketing and promotion, emphasise the fact that the keys to future success are competitiveness and market orientation. A yardstick of the success of these measures is that the annual output of the food industry is some €14 billion per annum including exports valued at some €6.6 billion.