Seanad Éireann debate -
Thursday, 7 Nov 1996

Vol. 149 No. 5

Adjournment Matters. - EU Area Aid Grants.

Mr. Sherlock

I thank you, a Chathaoirligh, for allowing me to make this urgent case on behalf of Universal Dehydrates Limited in Midleton, County Cork. Some 50 jobs will be lost and the farmers growing peas for green harvesting will also lose out unless something is done. The workers are making a plea to the company management. I am advised that management will not reverse any decision it makes. Some 165 farmers are in danger of not having their contract with the company renewed in 1997, following the company's decision to transfer production to France unless green harvesting peas are included in the scheme.

There are 150 jobs at the Universal Dehydrates plant and 50 will be lost because area aid is not paid to farmers growing peas for green harvesting while farmers growing peas for dry harvesting are included in the scheme. I am also told that dry harvested peas are used for animal feeds. Pea growing in the Midleton area and previously in Mallow is vitally important to the economy of the area. It is incredible that area aid is available for animal feed but not for food destined for human consumption. It is unfortunate that this anomaly was not pursued earlier. It seems it was included in the programme for a short time, but an objection lodged by the UK meant it was excluded. I am advised by management that it has drawn up a plan for FEOGA investment with the backing of IDA Ireland.

Universal Dehydrates supplies 45 per cent of the home market while 55 per cent is imported. Why is there a restriction on the export market which started when the factory was owned by East Cork Foods? When the food section was set up by Erin Foods and East Cork Foods, which was a subsidiary of the Sugar Company, a restriction was imposed on the company to serve either the home market or the export market. This must be examined.

The management has been involved in consultations to try to get the Minister's backing for the plan it has drawn up for FEOGA investment with the backing of IDA Ireland. This is vitally important to develop the industry and retain the 150 jobs there. I appeal to the Minister to support the application.

Minister of State at the Department of Health (Mr. O'Shea)

I thank Senator Sherlock for raising this important issue.

Area aid under the EU support system for arable crops is confined, in the case of peas, to those which are harvested in a dry state. Vining peas, which are harvested at a green stage and subjected to air or freeze drying, are not eligible for area aid. The Minister for Agriculture, Food and Forestry has already raised this matter with Commissioner Fischler with a view to having vining peas included in the area aid system. The Commissioner explained in a detailed and comprehensive written response the reasons this was not possible. These were that as vining peas had never been covered by a previous support régime, payment of compensatory aid under CAP reform was not justified as was the case with cereals and other eligible arable crops for which previous price supports were either reduced or abolished; the inclusion of vining peas in the arable support system would create distortions in the market and had been opposed by producers in the major production regions of the EU; and the introduction of an end use obligation, such as dehydration, would jeopardise the protected status of arable area payments under the GATT agreement.

The Minister would have to point out that the exclusion of vining peas from area aid was not the main or even a significant factor leading to the decision by Universal Dehydrates Limited to discontinue the air dried operation. This decision was taken for commercial reasons since this part of the business has never been profitable in Ireland. The company has stated that 50 jobs will be affected but it is hoped that many of these will be saved.

The Minister also mentioned that the freeze dried frozen division, which provide direct employment for up to 115 people in Ireland, continues to be profitable and has real potential for expansion. The Department and Forbairt remain at the disposal of the company to discuss its plans with a view to possible assistance. I assure the Senator that his points will be brought to the attention of the Minister for Agriculture, Food and Forestry.

Mr. Sherlock

That part of the business was never profitable because one sector got area aid grants while the company had to pay an equivalent amount to the growers. This increased the price the company usually paid. I thank the Minister for the commitment to follow up the submission made by the company.