I am delighted to set out the Government's strategy for the seafood sector. Generating total annual revenues of more than €702 million and providing employment for approximately 11,000 people, the seafood industry is an important indigenous industry. It makes a significant contribution to the national economy in output, employment and exports, and to the economic and social viability of the coastal regions in which it is located.
Although the industry recorded progress as a result of investment made under the National Development Plan 2000-2006, it is in a transitional phase, facing a range of developmental challenges mainly related to declining fish stocks and a consequent structural imbalance at catching and processing levels. Profitability in the sector is weak and investment in research and development and value-added development in the processing sector has been historically low. As a result, the industry is not well positioned to take full advantage of prevailing market opportunities.
Against this background, the then Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, and the then Minister of State at the Department of Communications, Marine and Natural Resources, Deputy John Browne, invited Dr. Noel Cawley, along with Mr. Joey Murrin and Mr. Ruán O'Bric, to form a seafood strategy review group in June 2006. Its aim was to investigate the industry and make recommendations on how its future might be secured. Dr. Cawley was appointed as chairman of the group and Bord Iascaigh Mhara, BIM, provided the secretariat.
Between July and October 2006, the group consulted widely with fishermen, fish farmers, fish processors, marketers and other stakeholders in the seafood industry. Four public consultative meetings were held at venues in Wexford, Kenmare, Killybegs and Galway. The group considered more than 80 written submissions from interested parties and convened 19 ordinary meetings, including discussions with representative organisations and groups from the fishing, fish-farming and seafood processing sector, to determine its findings and recommendations. Discussions with industry stakeholders were dominated by concerns over declining fish stocks and falling quotas for most fish species, the perceived lack of even-handed conservation and enforcement for the fishing activities of all fleets in Irish and EU waters, and the impact these factors were having on the viability of Irish fishing vessels and fish processing plants.
In its determination the group formed the view that all stakeholders and the EU and Irish Government must face up to the inescapable fact that the scientific evidence, largely borne out by industry experience, is that 75% of the stocks in the waters around Ireland are harvested beyond their safe biological limits, even though these waters are potentially among the most productive in the EU. From discussions with industry and the then Department of Communications, Marine and Natural Resources, the group found broad agreement on the need to scale up fleet decommissioning in the whitefish sector. It concluded that vessels over 18 m long should be identified for decommissioning and that radical change in quota management arrangements should also take place.
The group identified critical developmental challenges facing the industry which need to be addressed. These include the need to ensure a competitive market-focused strategy is adopted throughout the industry; to develop value-generating strategies to ensure that the maximum possible return is achieved for each tonne of fish landed and produced; to address the issues of overcapacity, fragmentation, weak profitability, lack of innovation and poor performance levels within the processing sector; to enhance management, technical, marketing and commercial capability across all industry sectors; to achieve greater balance between the catching capacity and resource availability, requiring further managed industry restructuring and right-sizing; to define and establish stakeholder-supported, commercially aware quota management policies and procedures; to establish a policy position, supported by an appropriate regulatory framework, to encourage market-led investment in, and expansion of, the aquaculture sector; and to ensure that industry practices are environmentally sustainable in the long term and are cognisant of the role of and need for conservation.
Despite these challenges, the industry has a positive future based on the growing demand for seafood. Across all major markets, seafood enjoys an extremely positive image associated with a healthy lifestyle. Consumers are increasingly aware of the enormous nutritional and health benefits to be obtained from eating seafood products and are developing a greater understanding of the range of fish on offer. In addition, enormous untapped opportunities exist to develop new seafood product offerings and to explore the benefits yet undiscovered for marine-based functional food products. In addition to our existing trade, further developing the perception of the natural goodness of fish, providing convenient pre-prepared offerings and supplying eco-friendly, organic and environmentally responsible products all represent significant market opportunities.
A key challenge for the Irish seafood industry is to exploit these favourable market conditions to generate the maximum value for each tonne of product landed. The group concluded that decisive and radical action is called for at national and EU level to safeguard the seafood industry, the fish stocks and the future viability of coastal communities. This, it stated, would entail adopting environmentally-friendly conservation measures and an equally compliant approach by Irish and EU vessels.
The cost of inaction now would be incalculable in years to come, when the country would be faced with further and possibly irreversible stock depletion and dismantling of the same coastal communities which, directly or indirectly, have come to depend on the industry for their livelihood. To address this situation, the group set out its vision for a sustainable, profitable and self-reliant industry that will maximise its long-term contribution to coastal communities based on fish stocks restored to sustainable levels in a healthy and diverse marine environment. An essential element in the achievement of this vision would be a further sharp reduction in fishing capacity and effort, more effective management and conservation of fisheries and a substantial role for aquaculture in meeting the increasing demand for seafood in the marketplace.
The group concluded that achieving these objectives would require a significant increased financial commitment by the State between 2007 and 2013 while at the same time the industry would undergo a painful adjustment process which together would secure the long-term future for all concerned. In its report to the Minister, the group made 49 recommendations incorporated under ten core themes and concluded that value generation in the seafood sector could result in increased sales to €911 million by 2015 if the recommendations were adopted.
The seafood strategy review group produced a vision for the Irish seafood industry that by 2013 all sectors of this industry will have evolved such that the industry can be described as a competitive, profitable, market focused industry capable of sustainable economic growth and recognised as making the maximum economic contribution to coastal rural communities and to Ireland as a whole. This vision calls for an innovative and co-ordinated approach to the marketing of seafood which would capitalise on its healthy and nutritious image and maximise value at every point in the supply chain.
The group envisages the emergence of a commercially focused self-reliant industry with market forces driving success, centred on delivering strategic development priorities. These include the positioning of Irish seafood in the international and domestic marketplace as a premium quality offering, with positive environmental attributes, supported by superior customer service, effective key account management practices and enhanced branding and promotional activity, thereby justifying premium prices, and culminating in the development of a robust seafood island proposition.
We should build a track record and reputation for being ahead of the competition by delivering market-led innovation, including new product and packaging development, enhanced processing techniques, quality schemes, product labelling, etc., with a view to increasing the percentage of sales and exports in the higher value seafood and convenience food categories. This will require significant and concerted investment in basic and applied research and development and in fast-tracking the time to market of new products.
The group recommends a restructured and more integrated and efficient industry, with a processing sector comprising fewer but larger-scaled and more profitable operations, and a national fleet that has been right-sized in line with the sustainable exploitation of the available fisheries resource base. The vision calls for addressing certain critical factors along each stage of the industry value chain, that undermine industry competitiveness and the ability to command a premium price in the marketplace. It also requires significant uplift in technical and business management skills and competencies, through investment in bespoke training and development programmes.
We need a catching sector operating under a new fisheries management regime, comprising both a quota management system and a fleet management and licensing system that is equitable and transparent, incorporates effective control and delivers biologically sustainable stocks while ensuring economic viability and stability for vessel owners. Significant development and expansion of the aquaculture sector is needed within clearly defined Government policies, output targets and an efficient licensing regime, and supported by an aquaculture development programme. The group recommends the holistic and balanced development and exploitation of in-shore fisheries for the benefit of the seafood, leisure and tourism sectors alike, based on an integrated in-shore fisheries management strategy. Key stakeholders should adopt an environmentally conscious, responsible and compliant approach to all activities within the industry and so operate in a mutually respectful manner.
These development priorities will be delivered under the aegis of BIM through certain measures in the seafood development sub-programme, seafood marketing, processing, human resources and training development, aquaculture and sea fisheries. The national seafood strategy and the National Development Plan 2007-2013 reflect the group's findings.
There is a reference in Chapter 8, under the marine and coastal communities programme, to the recommendations of the Cawley report and to the fact that €216 million is earmarked for the seafood development sub-programme. A further €118 million may be made available over the life of the plan, depending on the willingness of the sector to undertake and co-operate with, in a verified manner, changes in the industry. After the Taoiseach launched the report in January 2007 a seafood strategy implementation group, SSIG, was established comprising 20 representatives from all sectors of the seafood industry and State organisations, chaired by Dr. Noel Cawley. The SSIG's remit is to advance the delivery of the recommendations set out in the report of the seafood industry strategy review group, Steering a New Course. The implementation schedule covers the ten core themes incorporating the 49 recommendations contained in the report.
Since its inaugural meeting in June, the SSIG has held meetings in July, September and November. Progress to date on the recommendations has included the preparation of a fleet decommissioning scheme, developments in the aquaculture sector and ongoing work on development of a step-up programme for the seafood processing sector.
In the aquaculture sector, the problems encountered in Ireland are common to other EU producing countries. In the EU, the Directorate-General for Fisheries and Maritime Affairs has indicated that it is setting out a new strategy for the encouragement of sustainable aquaculture in the community and to address some of the difficulties the sector is encountering.
The main recommendation from the review group for the aquaculture sector is the need to develop a comprehensive and sustained fact-based communications programme, run by State agencies with industry support, to engender greater acceptance of aquaculture as a sustainable and legitimate activity by other stakeholders in the coastal zone. The decommissioning scheme, which is in final preparations, will withdraw capacity permanently from the whitefish sector of the Irish fishing fleet.
During the consultations with industry the need for continued restructuring of the demersal fleet emerged as the most pressing challenge facing the catching sector. Recent economic analysis carried out for this sector indicates that whitefish stocks generally and available quota in particular would have to be 45% greater to yield a viable return for the vessels now in the demersal sector.
The situation facing the whitefish sector means there can be no expectation of increased catches in the short term. On the contrary, reducing fleet capacity, developing long-term management plans and introducing effective technical measures supplemented with strong control and enforcement will drive thinking on fisheries management for many years to come. On this basis and taking into account the current capacity of the polyvalent and beam trawl segments of the fleet, it is appropriate that, in total, 14,318 gross tonnes should be decommissioned, of which 3,178 gross tonnes has been scrapped to date. The 2007 decommissioning scheme sets itself the target of removing a further 11,140 gross tonnes from the whitefish fleet. This represents the full programme of decommissioning recommended by the seafood industry strategy review group and provided for in the national development plan.
The process of decommissioning is complementary to the whitefish fleet renewal programme delivered over the past eight years. The latter has seen the safety and operational standards of a large section of the whitefish fleet vastly improved while decommissioning has removed some large, old, and less safe vessels that are every bit as demanding of resources as their modern counterparts. The completion of this twin-track approach involving renewal and restructuring is vital to the future success of the catching sector and it will deliver ultimately a smaller fleet that is modern, efficient and safe.
The first stage in addressing the issues of low profitability and scale in the processing sector takes the form of a step-up programme. This programme, which is being developed, is specifically aimed at Irish companies engaged in both primary and secondary seafood processing and has four key objectives. It will encourage and incentivise restructuring within the processing sector, prioritise and accelerate support for developing seafood businesses where there is good potential for the creation of sustainable long-term value, increase the value generated within the sector in accordance with the overall national strategy target of €911 million in sales value by 2015, and improve profitability and competitiveness levels across the sector through the pursuit of efficiencies in operational processes and fast-tracking technology transfer.
I am committed to the implementation of the national seafood strategy and I look forward to working closely with industry on its delivery. The seafood industry must address a range of structural and supply related challenges but when these are successfully addressed we can capture the clear and growing opportunities within the sector. We now have the plan which I firmly believe will ensure that the future of coastal communities dependent on fishing and aquaculture is secured for this and future generations. I look forward to hearing the views of the Members of this House on the implementation of this project.