Seanad Éireann debate -
Wednesday, 20 Feb 1991

Vol. 127 No. 12

Adjournment Matter. - Potato Industry.

Mr. McGowan

The wording of my question is: The need for the Minister for Agriculture and Food in view of the serious plight of Irish potato growers, to press for an EC policy to protect the industry. The Minister has been trying hard to bring order to the potato industry and I thank him for his commitment to the industry. The fault does not lie with the Minister or with the chief executive officer and the special adviser, Mr. Sean O'Shea. The Minister has tried to bring the potato industry under control and to develop it but he has not been successful.

With the establishment of An Bord Glas the Minister made provision for the development of the potato industry and the seed potato industry. The industry is in a sad state and this was admitted in the Horticulture Development brochure issued some time ago. The Chairman of An Bord Glas recognised that. Following an examination of the report which An Bord Glas furnished, the board noted with concern the considerable steady decline in the Irish seed potato acreage and production. The area of seed potato certified which averaged 6,000 hectares in 1960 was down to 4,000 hectares in 1970 and 3,500 hectares in 1980. It is estimated that the number of hectares has been under 3,000 since 1989. The direction taken by the Department in looking after a few producers is misguided.

I have hands-on experience of the potato industry. I come from a county where the economy and income of many small holdings depends on the production and sale of potatoes. How will the economy be put in a good healthy state when we are importing a large tonnage of potatoes? Our climate and soil are ideal for growing potatoes. We are disease-free and can produce good quality seed and ware potatoes.

There has been very good support for grading potatoes and for forming cooperatives. However, the efforts being made at the moment to support grower groups will never succeed. The farming organisations have failed to put forward sensible policies to the Minister and An Bord Glas. What alarms me is a proposal by the IFA to advise the Minister to establish the growing of potatoes on a quota basis. This would devastate the industry. If the Minister for Agriculture and Food adopted the recommendation of the IFA and introduced a quota system, it would be very short-sighted. The quota system in Ireland does not present a happy picture. There is no quota system in Europe for war potatoes. How could we embark on a quota system when our borders and frontiers are open to imports? It would be the death-knell of the industry here.

I call on the Minister to give a clear indication that he will not under any circumstances embark on a quota system for growing potatoes in this country. A quota system might be helpful to the few people who are already doing well. Unfortunately the industry will not survive and progress if the Department and the Minister only look after a few people. Recently, the Minister announced extensive support for growing potatoes and for buildings to house potatoes especially in disadvantaged areas. That applies to my county. The Minister should look at the value of funding grower groups because they have not worked. I have watched the potato industry for a long time and watched the North County Dublin growers form a co-op. One must ask why that co-op failed. The answer is quite simple: there has never been a successful co-operative growers group.

Recently in Donegal, outside the town of Raphoe one producer has been successfully established with EC aid. In reality that is not a co-operative and it is not a producers group. That is a one-man effort and it does not reflect progress in the industry. The Minister should recognise that the best and most effective contribution he can make is to help individuals, first, with proper grading facilities and, secondly, with proper storage facilities.

Those of us who have a feeling for the industry and who would dearly love to see it survive went to Holland to look at the Dutch storage facilities. They have cooling systems which maintain potatoes up to the month of July. Potatoes are imported here in June and July that have been properly stored while our growers have no such facilities. They cannot compete and, therefore, cannot survive much longer. The Minister's intentions and those of his Department are quite good. It is right and proper to ask for a change in direction at this time. The funding and support that is available should be channelled to individual growers. There should not be any question of a quota. That would not be entertained by the mass of people who have commitments and intend staying in the industry.

On small holdings the potato was the traditional crop. A number of senior people in the EC have paid tribute to the small family farm in Ireland. I am not one to make gloomy predictions but the small tillage farm will find it nearly impossible to sustain any members of the family who work on it. The individual must be helped. The Minister comes from a farming background and that is his strength. He knows what tillage is about. That is important.

We should press the EC to establish a potato policy but that will be difficult because the Dutch, Belgians, French and others who are successful and have the industry on a firm footing will oppose any such policy. I cannot see the Dutch being too anxious to support such a proposal. Since all other forms of agriculture and horticulture are controlled and supported by the EC, I cannot see how the potato industry and potato growers will be excluded.

I urge the Minister to continue to look for a potato policy even though it might be a hard uphill fight. That is basically what I want to say. I want to be brief and not repetitious.

I welcome the Minister's efforts and the encouragement he has been given. Support should be available to individual growers to provide proper storage and grading facilities. There are many potato inspectors, some from the Department of Agriculture and Food and some from An Bord Glas, who have a wealth of knowledge but they are nearly redundant at the moment because the industry has failed. I call on the Minister to take the potato industry by the scruff of the neck and save it. If he does not do so, then we are in serious danger of losing what was a traditional industry.

I ask the Minister to respond positively and not to allow the IFA to persuade him to adopt a quota system, and I say that as a fully paid up member of the IFA. That would be the death knell to the industry. I confidently hope the Minister will not respond to that request.

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

I am glad of the opportunity to speak on this matter. Perhaps at a later stage we could have an opportunity to debate the potato industry at greater length.

I am well aware that from time to time potato producers can be badly hit by low market prices. However, although producer prices have been on the low side during the current season, the situation is not quite as serious as the Senator would suggest.

Yields of earlies were at an all time high, the crop having been planted and grown in ideal conditions. Despite worthwhile levels of exports having been achieved, the market was over-supplied to the end of the year. Arising from this over-supply, prices became depressed and have been slow to recover, though a recovery has been noted in recent weeks. This over-supply continued despite repeated appeals to producers to regulate supplies to the market. Following the dry summer, main crop yields were about average and quality was generally quite good.

On the question of an EC potato policy, the position is that potatoes are the only major agricultural product in the Community not governed by a common organisation of the market. However, protection is afforded by means of customs duties on imports from third countries, ranging from 15 per cent to 21 per cent. There are also EC agreements with certain early potato producing countries, for example, Cyprus, etc., which allow imports of quantities, or quotas, at preferential rates of duty during certain specified periods when they do not have a significant impact on the domestic market. In addition, imports from third countries must comply with EC plant-health requirements.

In addition, EC grant aid is available and, indeed, has been widely availed of by the Irish potato sector over a number of years, for potato projects involving processing, marketing and storage facilities. Limited grant aid is also provided to the potato sector under the farm improvement programme.

The question of establishing a common organisation of the market for potatoes was considered in Brussels back in the seventies. The main provisions included marketing standards; measures encouraging the setting up of producer groups; measures aimed at keeping the market stable, composed essentially of a stabilisation fund for the withdrawal of excess produce from the market and measures for the regulation of trade and nonmember countries incorporating a reference price system for new potatoes. However, there was insufficient support in the Community for this measure.

The matter was raised again in 1987 but there was no progress. The main stumbling block, as I understand it, would be the cost of supporting the market. More recently, the farm organisations COPA-COGECA were reported to have submitted proposals to the EC Commission for what they describe as a "lightweight" regime and I understand that these proposals are being considered by the Commission.

It is true that the total area under potatoes in this country has declined steadily over the past 15 years and now stands at 26,000 hectares with production in the region of 700,000 tonnes. However, improved methods of cultivation and storage mean that the market demand can be met by a lesser area planted. This also explains the reduction in the number of producers over the years.

Potato production is now tending, although gradually, to be concentrated more in the hands of commercial growers. This shift from the smaller fragmented growing pattern is paralleled by better cultivation practices and an improvement in quality and should facilitate efforts to bring better organisation to the sector in the future. There will continue to be room for the small grower who is prepared to keep pace with consumer demands for quality produce.

While the organisation and rationalisation of the potato industry is primarily a matter for commercial interests, Government policy as a reflected in the appointment of a Minister for Horticulture and the establishment of An Bord Glas, is to create a framework in which the sector can develop its potential and encourage this development.

The Senator, and indeed all other interested parties, will by now be aware of the two programmes published by An Bord Glas for the development of the ware potato and seed potato sectors. Real progress has already begun. Potato imports for the three year period 1988-90 averaged 54,000 tonnes per annum, whereas imports for the preceding three year period averaged 64,000 tonnes. A marketing co-ordinator has been appointed and is being co-funded by An Bord Glas and the IFA.

An EC Producer Group Regulation has recently been extended to potatoes. Under this scheme aid is available towards the formation and operation of potato producer groups over a five year period. The aid is paid on the basis of 5 per cent in the first year, 5 per cent in the second year, 4 per cent in the third, 3 per cent in the fourth year, and 2 per cent in the fifth year. Those percentages are based on turnover.

In the past month I launched a scheme under the operational programme for rural development. This new scheme is aimed at potato growers and enterprises with investments above £5,000, that is, smaller scale projects than catered for under the existing FEOGA aided scheme for projects in marketing and processing. This scheme will provide financial assistance in respect of approved investments for storage and storage related equipment; ventilation and insulation for existing stores; packing, weighing and related items; de-stoners; sulphuric acid sprayers and seed fumigation equipment.

Applications for aid under the first round of this scheme are to be made to my Department before 31 March.

I find cause for concern in regard to the seed potato sector. Seed exports have declined over the past two decades from upwards of 30,000 tonnes in the late seventies to about 10,000 tonnes at present. Seed production is located largely in County Donegal where prevailing climatic factors provide a suitable growing environment. In addition, there exists there a long tradition, technical experience and equipment for seed potato production.

I have already referred briefly to the programme which An Bord Glas has drawn up for the development of the seed potato sector. I can assure the Senator that I am taking a strong personal interest in the seed potato scene and I am anxious to ensure that the problems of the seed sector will be addressed as a matter of urgency.

In relation to the point the Senator raised on the question of the establishment of a quota regime, I dealt with that comprehensively at the recent potato conference organised by Teagasc and the IFA. I clearly set out the difficulties I would envisage with the establishment of such a system. I see very obvious difficulties, particularly in the number of growers we have and the free movement of produce within the Community. It would create obvious difficulties in the marketplace.

The Seanad adjourned at 10.25 p.m. until 10.30 a.m. on Thursday, 21 February 1991.