Bernard J. Durkan
Question:98 Mr. Durkan asked the Minister for Agriculture and Food his plans for the development of the meat, cereal and dairy industries here; and if he will make a statement on the matter. [4204/03]
Written Answers. - Food Industry.
In relation to the beef and lamb sector, the overall strategy for the development of these sectors is to ensure that they achieve their full potential, thereby maximising their contribution to the national economy. This includes action on a range of fronts to address competitiveness at production and processing level and to adopt a comprehensive strategic marketing focus.
The main marketing focus for beef involves moving up the value chain at EU level through increased penetration at retail level in the UK, increasing exports to other core continental markets, targeting growth in European developing markets and developing niche opportunities. In addition, an important element of the marketing strategy is to broaden the spread of third country markets.
In the context of broadening markets, improvement in the quality of cattle will be encouraged through the introduction by the processing industry of appropriate price differentials to reward producers for quality production. The introduction of such differentials will be a condition of eligibility for grant-aid for capital investment related to slaughtering capacity. My Department will also progress the introduction of mechanical classification in order to facilitate the introduction of a differentiated pricing structure. Better breeding will also be encouraged through the activities of the Irish Cattle Breeding Federation, ICBF, and Teagasc. At the processing stage, the main strategy is to encourage the production of value added products.
A revision of the sheepmeat regime has seen the introduction of a fixed rate premium, which has helped to underpin returns to producers. Better breeding practices have resulted in an improvement in the quality of sheep production. The national sheep identification and tracing system, NSIS, provides a modern and comprehensive traceability system for the sector. These developments will underpin producer returns and broaden market opportunities.
An Bord Bia, which has primary responsibility for the promotion of beef and lamb, continues to assist the industry in its efforts to seek new markets and maximise returns from existing markets.
In regard to the developments of the pigmeat industry, a strategic study on the island of Ireland was commissioned jointly by my Northern Ireland counterpart and myself, to access the current state of the industry. The main findings of the report identifies rationalisation of slaughter capacity, scaling-up of plant size and better capacity utilisation as necessary prerequisites to positioning the industry to compete on national and export markets and to bring it into line with international best practice.
There were other recommendations, such as improving the reliability and consistency of supply to the secondary processing and catering sectors, as well as the development of the value added sector and promotion of supply chain agreements.
While most of the findings of the study are very much matters within the control of the industry, my Department has been working with the production and processing organisations to further progress the matter, and this initiative is continuing.
In the case of the cereals sector, my Department operates a range of services aimed at improving efficiency, quality and viability of cereal production, including the seed certification, seed testing, recommended lists of varieties etc. This is apart from the advisory, training, research and development services provided by Teagasc. All of these services provide a valuable contribution to the improvement of efficiency and competitiveness, and have ensured that Irish cereal producers have consistently achieved some of the highest yields in the world.
An important part of cereal producers' incomes is represented by the EU arable aid payments. My Department continually strives to ensure that these payments are issued promptly, and we have now reached the stage that over 90% of these payments are issued with one week of the commencement date for payment date laid down in EU regulations.
In order to improve the quality and safety of grain, and to relieve pressure at commercial intake points at harvest time, I made provision under the national development plan, for grants for the development of grain storage on farms.
These are just some examples which demonstrate the commitment which my Department has and will continue to have, to the development of the cereals sector.
At production level, I have introduced many changes to the milk quota regime which have been extremely successful in achieving my overall objective of putting milk quota definitively in the hands of committed active producers, at the lowest possible cost. Due largely to these changes, in the last three years alone, about 460 million litres, 105 million gallons, of quota have been redistributed under milk quota restructuring schemes. In addition to improving access to quota, I also addressed the issue of cost of quota and the need to allow all producers the opportunity to develop their business. The maximum price of milk quota has been reduced by almost 30% since 1999, and is now at a level that is attractive to those considering leaving production and affordable and economically viable for those who wish to expand. In combination with a lower price, it has been possible to significantly reduce the real cost of restructured quota to producers, by the introduction, through the agreement by my colleague the Minister for Finance, on tax concessions on the purchase of quota.
The benefits of this policy are already evident in the structure of the industry and it is my intention to continue this in order to further improve that structure and to allow the industry to remain competitive into the future.
At the processing level, I have commissioned a study of that sector, in conjunction with Enterprise Ireland and the industry. The overall aim of the study is to contribute to a coherent strategic development plan for the sector, which will make recommendations on actions to improve efficiency and long-term competitiveness. The study will focus on examining the existing structure of the dairy processing industry, the market opportunities for dairy products and the product options to exploit these opportunities.
The dairy study will be completed shortly and I expect that it will contribute to the development of the type of dairy industry that can continue to grow and expand in the face of increased international competition.
Questions Nos. 99 and 100 answered with Question No. 33.