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Seanad Éireann debate -
Wednesday, 20 Jul 2011

Vol. 209 No. 11

Agriculture and Fisheries: Statements, Questions and Answers

The next business is statements and questions and answers on agriculture and fisheries. I welcome the Minister to the House and ask him to address agricultural issues first.

I thank the Acting Chairman. My understanding of what we are trying to do today is that I will make an initial 20-minute presentation about the Government's approach to agriculture ranging from how the Common Agricultural Policy is panning out and the approach we are taking to reforming it in Ireland's interests to addressing the challenges we face domestically and the opportunities to expand the food industry in more detail and then we will have a question and answer session for an hour. I am happy to try to answer questions Members have, regardless of the area or detail involved. I hope they will take——

Does the Minister have a copy of his speech?

No, I have a speech with bullet points but I will speak in more general terms rather than reading a script because Members will find that more useful.

I would like to map out the overall context in which I am planning an ambitious expansion of the food industry, increasing primary food production and adding value to raw products before they are exported from Ireland. All of the growth in the food industry will be accommodated by increasing exports. Up to 85% of all food currently produced is exported and we must persuade consumers or major purchasers to buy it.

Food Harvest 2020, one of the good programmes put in place by the former Government, was drawn up by stakeholders in the industry including farmers, processors, large food companies, academics, my Department and its agencies. This report has more credibility than some documents written by Departments because it is realistically based on what is commercially feasible, providing a good blueprint for growth and expansion in the food sector. Food Harvest 2020 proposes to increase food output by 33%, although my personal view is that is an understatement of what will happen, and to add value to that food product in the region 40%. If achieved, a significant number of jobs will be created in addition to wealth creation within the foodsector.

The food sector is a good news story for the economy. While there are some immediate pressures on many of the small food companies, of which I hold an optimistic view, because of what has happened at Superquinn, there is a strong market outside of Ireland that we need to plan to service. The economics underpinning this are simple. In 1960, the world's population stood at 3 billion. By 1990, that figure was 6 billion and now it is just under 7 billion. Each week 1.5 million extra people are on the globe and they need to be fed. Populations are moving from self-contained rural locations into urban ones and demanding to be fed in a different way. Diets are shifting from being carbohydrate-based, such as rice and pasta, to protein-based, such as meat and dairy products, foods Ireland is good at producing. These global trends in food demand will create many opportunities for protein-based food-exporting countries.

Ireland, however, could miss the boat. In the dairy sector due to the milk quota system in place since 1984, New Zealand has overtaken the entire EU in milk trading. In 2000, New Zealand had 19% of the global dairy market while the EU had 38%. In 2012, New Zealand will have 27% of that market while the EU will have 24%. In 1983, New Zealand produced the same amount of milk Ireland did. Now, it produces three times more, some 16 billion litres, while Ireland produces 5.3 billion litres. This highlights the growth potential in this sector. Such growth in dairy output did not happen without some pain, however. Supports for the dairy industry in New Zealand were removed overnight, causing much pain in the industry. We need to learn lessons from this so that when the EU removes the milk quota in 2015, it will be able to provide for the transition. It will be a new opportunity for growth and expansion for the dairy sector in volume and value terms and we must ensure we avail of it in a way that keeps the family-farm structure intact.

This is an ambitious project, which we have a blueprint business plan to deliver, agreed by the industry and policymakers. I am trying to provide the political leadership to set quarterly targets to ensure Ireland's food sector is on the pathway to growth. It will mean the dairy industry must prepare for significant expansion in volume production. It is important the beef industry does not become the by-product of the dairy industry, particularly if suckler cow herds are not supported. There is a danger as the excitement grows in the dairy sector that male calves will simply become its by-product. Currently, half of the beef herd comes from the dairy sector and the other from suckler herds. That balance must be keep intact to ensure Ireland can target the high-end premium beef market abroad; that is the market at which suckler herd beef, as opposed to male calves from the dairy sector, is targeted.

We are trying to up-skill dairy farmers to ensure their farms are efficient and profitable within existing resources and the straitjacket of the quota system. We have expanded and supported farmer discussion groups at which dairy farmers are paid to meet and share information on best practice about eight times a year. The preliminary results of these meetings have been exciting. The dairy farmers in question have seen between 2% and 5% improvement in their farms' profitability, a significant figure in one year. We want to put a similar discussion model in place for the beef sector. When it comes to efficiency there can be a chasm between a good and not-so-good beef farmer. While beef prices are strong, many of the suckler herd farmers are losing money and relying on grant payments — be they single farm payments, disadvantaged area payments, suckler cow premium scheme etc. — for their income. We must move on from this.

Regardless of what sector is in question, the Department is increasingly moving into the realm of trade. I am trying to open up new business opportunities and trade partners for Irish agribusinesses. Already I have promoted lamb exports to Jordan. In the autumn, I will visit North Africa to open political doors for the expansion of an Irish dairy company there. Several weeks ago, we signed a basic trade agreement with China and hope to be signing a memorandum of understanding on food trade. My Department is not just responsible for agriculture and primary food production but also supports and assists the expansion of food trade between Ireland and other countries. Last year, we sold €3.6 billion of food to the UK.

We also imported food worth €2.7 billion from the United Kingdom, much of it liquid milk from Northern Ireland. This valuable trade relationship with our nearest neighbour allows food producers to tap into a large population which this country lacks. Ireland, North and South, is an island of 6 million people which produces sufficient food to feed 36 million people. By 2020, we intend to produce enough food to feed 50 million people. In light of population increases and demands for a different type of diet, an issue to which I alluded, I do not envisage any problems with market demand.

How does European agricultural policy fit in with the issues I have raised? Regardless of whether we like it, food production and farming are reliant on European policy. For this reason, the Food Harvest 2020 plan must be in sync with European policy. This gives rise to a number of dangers as limitations being imposed on Ireland could rein in the potential for growth and expansion in Food Harvest 2020.

I propose to speak for a few moments on the Common Agricultural Policy because farmers would like to know what the current position is and what are the potential threats and opportunities of the CAP. Until about six months ago, most people believed the budget available in the European Union to support the Common Agricultural Policy would be cut dramatically. There was a strong political view, one I have never shared, that spending 40% of the European Union's budget on agriculture and the food industry did not make sense in the context of the many other challenges the Union faced. The agricultural budget is the Union's only economic sectoral budget. All other EU budgets provide support for domestic budgets, for instance, in research and development, regional policy, infrastructure development and so forth. The European Union's agriculture budget is different, however, as it supports an industry by promoting food security and production in the EU.

There has been a political realisation in Europe that the issue of food security, namely, investment to ensure the continent can feed itself in future, has moved up the food chain — Senators should excuse the pun. Europe's reliance on food imports to feed consumers is unsustainable. For example, it is not sustainable to continue to import 70% of the fish consumed in the European Union. Many of the countries from which we currently import will experience food crises in the not too distant future. Events, such as the decisions by Russia and Argentina to effectively ban exports of grain and beef, respectively, will be repeated elsewhere. Food producers in both countries are now required to supply the domestic markets before exports can take place. The number of such cases will continue to increase in future and we will have more bilateral trade agreements such as those signed between Brazil and China.

The assumption that Europe can simply import its additional beef requirements from Brazil does not make sense when one examines trends in the beef trade. The European Union must move on from its luxury position of being able to produce as much food as it likes in a sustainable manner and import the rest from wherever it is available, whether chicken from Thailand or beef from Brazil. The reason Europe must move on is that there will be competition to access food resources and food producing countries will have options available to them as to where they can sell their food. We should not assume Europe will continue to enjoy current levels of buying power and dominance in the years ahead.

This is the reason the Common Agricultural Policy is much different from the policy being debated ten or 15 years ago when the purpose of the CAP was to deliberately limit supply to keep prices for European food produce high. That was the correct approach at the time given the higher cost of producing food in the European Union where traceability, animal husbandry, disease control and other standards and regulations are much more stringent than elsewhere. The higher cost of producing the quality food we, in Europe, insist on having forced the European Union to create an artificial internal market for food in terms of price and value. While this has been a successful approach, the economics of food have changed as a result of demand being driven up and food prices outside the European Union. In some cases, external food prices now exceed food prices in the EU.

The debate continues to focus on identifying how we can maintain price stability in the European Union to ensure primary producers are paid a fair price for their produce, the Union contributes to feeding the world and sufficient food is available for the population of the EU as it finds it more difficult to access food products on other markets. The debate has changed owing to a growing realisation of the importance of food production. Countries such as Ireland, which exports 85% of what it produces, predominately to other European countries, will have an important role to play in meeting the food security challenge facing the European Union.

On 20 June, the first draft of the financial perspectives — essentially the European budget — for a seven-year period beginning in 2013 showed that the allocation of funds for the Common Agricultural Policy will remain more or less intact. I would love to claim credit for this decision and say the new Government changed the position of the European Union on retaining the CAP budget. However, it is the bigger picture that is changing the way in which the CAP budget is perceived. Taking inflation into account, the budget will reduce in real terms year on year. However, under the current proposals the amount Ireland will receive under the Common Agricultural Policy in terms of single farm payments and under the second pillar, which consists of support schemes such as the Leader programme, will be maintained in each of seven years covered by the CAP.

I am reasonably pleased with the draft financial perspectives. They are a good starting position. Ireland will make a strong case for increasing the CAP budget, taking account of inflation, through the period of the next CAP and while an agreement to this effect has not yet been reached, we will fight for that position. If an agreement on the draft financial perspectives for the Common Agricultural Policy had been done six or eight or 12 months ago, the starting position would have been significantly worse because at that time the amount allocated for the Common Agricultural Policy was expected to be reduced by 25% or 30%.

I will briefly refer to a number of issues arising from the Common Agricultural Policy and Senators may ask for greater detail in the question and answer session. As there are many more member states in the European Union than at the time the previous policy was agreed, demands are correctly being made to have the funds available under the CAP redistributed. In other words, some countries are doing much better than others under the current Common Agricultural Policy. Central and eastern European countries, in particular, are demanding equalisation and refusing to agree a budget for the next CAP until such time as equalisation is provided. There will, therefore, be a redistribution of funds from countries which are doing well from the budget to countries which are not doing so well because they have only recently joined the European Union. Ireland agrees that this change is necessary and has done considerable work to produce an equation which would enable the Commission to measure how countries are faring in terms of the first pillar, that is, the single farm payment, and the second pillar, that is, other funding provided under the CAP.

Essentially, what we have been proposing is that one should calculate single farm payment on the basis of eligible area. This country is more or less on the mean or average payment. It was slightly under it according to a calculation some months ago but more recently it was slightly over it in terms of current pillar one, single farm payments. It does not appear that we are facing any significant shift out of this country to compensate countries that have not done as well traditionally. That is good news, and it is testament to the good work of the economists in my Department who have worked hard to convince the Commission on how best to calculate who is doing well and who is not.

The second and more sensitive issue for this country is redistribution of funds within member states. A lot of countries now argue that we should forget the history of how single farm payment has been calculated and distributed and that we should simply give a payment on the basis of hectarage. In simple terms, one would get a certain amount of money per hectare farmed to support one's income to reflect the fact that producing food in Europe is more expensive than producing food in other parts of the world. That would cause considerable problems for this country because the way in which single farm payment has developed and is now calculated is based on previous headage payments, area payments for arable farmers and premium payments received by farmers. The most productive farmers in this country generally get the most in terms of single farm payment. One would see a significant redistribution of money from the productive agricultural areas in terms of yield per hectare to the less productive parts of the country in terms of supports. Perhaps some people want that but it will generate a big debate within the agricultural community.

What we are seeking at the moment is flexibility. Once a national envelope of funds is decided by the European Commission, we seek that the Government be able to decide the most appropriate way to spend the money within the country to pursue the goals we have for agriculture and food production in terms of expansion, growth and added value as well as its social responsibilities to keep people on the land in parts of the country that do not have the capacity for growth and expansion, such as large parts of the disadvantaged area in the west, north west and south west. I would like to have the flexibility to do that. It would be totally inappropriate for the European Commission to decide how money is redistributed in this country.

The other controversial element of the Common Agricultural Policy debate is what is called a "greening element". What the Commission is currently moving towards — we will see the colour of its money at the beginning of October when we have a draft document to consider — is that single farm payment would be broken into two payments, that people would get two thirds of their payment automatically and they would get the remaining third as long as they were abiding by certain environmental standards for farming. The Commission is developing an insistence on sustainable farming that is sympathetic in terms of climate change and sustainability arguments. What we do not know currently is the threshold that will be put in place for farmers to meet in order to get their full payments but it appears that what many farmers currently do will qualify them for the payment. For example, if one is a dairy farmer, a percentage of one's holding may have to be under permanent pasture because that is a good carbon sink. If one is an arable farmer one may be required to have a rotation plan or a break crop between wheat, barley and other cereals, which is what many farmers do already. What we have said to the Commission is that it should bring its greening proposals forward but it should keep them simple, make it simple to understand and simple for governments to enforce and it must also ensure it is not too expensive from the perspectives of time or bureaucracy for farmers or business people.

I am conscious of the time. It is 12.15 p.m. and I wish to provide for a full hour of questions and answers. The opportunities for this sector, despite the challenges we currently face for many food suppliers, is a very exciting one. We have a basis for growth which has been put in place over many years. We have some of the best food companies in the world with bases outside of this country. They already have a foothold in many markets that can be the basis for expansion and growth in those markets. We must build on that to ensure our primary producers, as well as the food companies that employ so many people, are given the opportunity to exploit the extraordinary growth in demand for the kind of premium foods we can produce on this island. That can be a real driver of growth in the economy because of the number of people employed and the communities it supports. We are talking about more than 200,000 people in that regard.

I will speak in more detail about the fishing sector and the opportunities for seafood in due course. I invite questions on the food and agrifood sector.

Before I call Senator Ó Domhnaill I wish to point out that when he has asked his first question, Members may ask related questions to ensure we do not repeat the same questions but use the time to the best effect. Exactly 59 minutes remain. I ask Senators to be as brief as possible.

Do I take it that we ask one question at a time?

Yes, one question at a time and related questions are to be asked together. We will then move on to Senator Comiskey for the next question.

There are many questions to be asked. The format we are adopting is a good one. I thank the Minister for affording us the opportunity to ask questions in this format. I will be as brief as I can.

The Common Agricultural Policy is crucially important post-2013 to Irish agriculture. The first goal that must be achieved is a guarantee that the envelope will be at least as great as the current envelope and that we get our equal share of that based on what we have achieved from 2007 to 2013.

The Minister referred to the Commission giving member states more of a role in deciding how the budget is dispersed internally within member states. Would it not be a good opportunity to give more scope to the Department of Agriculture, Fisheries and Food to support areas that require additional support and areas that are not as viable? There may be benefits attached to working with the farming organisations. I would welcome the Minister's view on that. Perhaps he could provide an update as well on the ongoing discussions at the European Council of Ministers meeting and whether he foresees further discussions on the decision on the allocation for each member state.

I welcome the Minister to the House to speak on issues relating to his brief. As the Fine Gael spokesman on agriculture in the Seanad I wish to refer briefly to the 2020 strategy and the Common Fisheries Policy. I compliment the IFA on its food showcase last night. It was a lesson for all of us on what we can do with Irish agriculture and food products.

This country has great potential——

We are all on a learning curve. Senator Comiskey is the next person to ask a question. I apologise for interjecting but he should ask a supplementary question to the one asked by Senator Ó Domhnaill. The Senator is the next person to ask a general question. I am seeking a supplementary question to the question Senator Ó Domhnaill asked. The Minister will reply to that and we will then move on to another question. Senator O'Neill indicated that he had a similar question.

We could let the spokespersons ask a question each and take related questions after that.

That would be a shame. The system you have put into place is ideal. I am loath to change it and have the spokespersons making speeches.

There will be no speeches, only questions.

Okay. I will take a related question.

My questions relates to the future of the CAP. The Minister recently had a meeting with Commissioner Ciolos. Perhaps he would give us as much information as he can about that. I am aware that as some of the information is sensitive, he cannot give us all of it, but could he give us an idea of what is emerging with regard to the CAP?

With regard to the CAP and the new agri-environment options scheme, AEOS, will the Minister explain why organic farmers are being treated differently, and less favourably, than other farmers, given that the organic farming scheme is not on a par with AEOS and thus not comparable? Why does Ireland currently only have 1% of its land dedicated to organic farming when there is an EU-wide emphasis on organic farming as a sustainable and responsible production method?

I welcome the Minister. I compliment the Leader on putting this format in place. Questions are preferable to people making speeches; we will learn more. Senator Ó Domhnaill raised the CAP and certain disadvantaged areas. Will it be the Minister's policy to defend the payments in those areas? In the eastern part of Ireland and even Cork, where the Minister and I are from, farmers receive larger payments. Will those payments be defended or will there be a change whereby some of them could be moved to the disadvantaged areas? The Minister referred in his statement to the 2013 to 2020 period. Agriculture is the only sector in the world that has not received an increase with inflation but the costs have increased in terms of fertiliser, fuel and other requirements. I welcome the Minister's statement that he will try to get an increase related to inflation. Perhaps he will comment on defending the payments in different areas.

To deal with the last question first, we want to ensure that it is Ireland that decides how single farm payment money is distributed in future. My preference would be to ensure that we keep payments as close as possible to where they are at present. There is an argument, which has some currency, around consideration of recoupling some payments or some element of single farm payment, particularly in the beef sector. I believe that suckler beef farming, in particular, needs support more than some other sectors at present. We are examining whether it makes sense to make the case for the partial recoupling of some payments to support the beef sector. However, the Senator can rest assured that I am certainly not advocating a wholesale redistribution of funds from one part of the country to the other. That would cause carnage in Ireland and would mean the productive sector would be unable to reach the potential that it is being planned to meet.

On Senator Ó Domhnaill's question about the financial envelope, we know what the starting position is. It is a good starting position, given the context of where we are coming from. When I was a Member of the European Parliament people were talking about halving the agriculture budget; therefore, the starting position is good. We must ensure we can build on that. There is also a series of other funds outside the CAP envelope that is available to the food sector in terms of research and development, exploiting new markets, research on climate change and food security, which is a huge issue on which I would love to answer questions.

The basic CAP envelope is for single farm payment, pillar 2 money, regional development, rural development and so forth. There is also a research budget, which is in a separate category. It is a substantial budget that is now available to the agrifood sector. It is time we started talking about the agrifood sector rather than talking about farming in isolation from the food industry. We are successful in this area. Whenever I speak, I talk about being a Minister with responsibility for agriculture, food and the marine. This is a food industry that collectively must expand and grow. When farmers produce a litre of milk, they must do so with the consumer in mind. When they produce high quality beef cattle from a suckler herd, they do it because they will get more money because a consumer in some part of the world will pay more money for that meat. This is about everybody in the food supply chain understanding that we need to be better than any other country at producing food because we must find a home outside Ireland for all the extra food we produce. We do not have the luxury that other countries enjoy of having big domestic markets. It is important to emphasise that point.

We will know the Commission's CAP proposals in early October. As regards the flexibility the Senator said was necessary, my view is that the initial draft is likely to contain a set payment per hectare and we will have a hell of a job changing that. That is my anticipation at present but we are making strong representations to the Commission on that issue and I believe it understands our position. There is a view among many new member states that historical payments such as single farm payment are almost a dirty concept, because they developed in a way that could never be possible in those states given that they did not have historical payments. This is also about the education of some member states which were not historically part of the CAP.

I met the Commissioner, Mr. Dacian Ciolos, for breakfast yesterday with a number of other Ministers. He is a very approachable person and I believe he has a good understanding of agriculture in Ireland. He is a slightly quieter than some of the other Commissioners, and does not operate with the type of ego many of the Commissioners have. However, he is actually quite effective and the proof of that is the result of the budget debate within the Commission.

Senator Healy Eames spoke about AEOS versus organic farm schemes. AEOS is not about organic farming. It is about encouraging commercial farmers and farmers who are farming on hillsides, such as in constituencies like the Senator's. It is about giving them a payment in recognition of a change in farm practice that is in the interest of the environment. The calculation of AEOS payments is based on the financial cost to the farmer of changing his farm practice to protect the environment. Whether we take the route of supporting organic farming is a separate argument.

Schemes such as the rural environment protection scheme, REPS, and AEOS are about persuading farmers, whether they are involved in intensive production or farming in commonage areas, to farm in a way that is environmentally friendly. We put the set of rules in place regarding the targets they must meet to get their payments. Those rules must be approved by the European Union because 75% of funding for AEOS comes from the EU.

That is acceptable. The view is that——

Sorry, I cannot allow supplementary questions from the Senator because of time constraints.

——the organic policy is not as favourable financially as the AEOS. That is my point.

Yes, and we do not get as much money from the EU for it. With regard to the 1% of land in Ireland being organically farmed, I would like to see that increased but that will be a commercial decision for farmers. The price premium one can get for certain organic products, although not all products, will drive an interest in a certain amount of organic farming and I am happy to encourage that. I believe I have answered most of the questions on the overall Food Harvest 2020 targets.

I welcome Fr. Gerry Comiskey, who is in the Visitors Gallery.

I refer to the destocking of commonages which took place in 1998 and which, in many cases, was not necessary. A review is taking place and I wonder if it could be speeded up in order that farmers in those areas would have an opportunity to get stock back on to the hills before the breeding season starts this year.

I support Senator Michael Comiskey. I refer to the gorse fires in west Donegal and other areas earlier this year. The Minister of State, Deputy McEntee, visited the areas and conceded that if sheep had been on the hills, the grass would not have been as attractive for fires.

Traditionally, farmers who were asked to destock from the hills were paid €240 per hectare under REPS. They are now paid a fraction of that, €75, under the agri-environment options scheme. Can it be increased to €150? What attempts are being made in Europe to reach agreement on that? Are there ongoing discussions to seek that agreement? Will the agri-environment options scheme be reopened in 2012? Regrettably, the budget was cut a little this year, even though it was provided for in the 2011 budget. Some 10,000 places were agreed under the national recovery plan but we will not go over that ground.

I will be brief and will not be tempted into a debate on the agri-environment options scheme by Senator Ó Domhnaill because I know many other Senators want to ask specific questions. A commitment was given in the budget last year for a new AEOS with a budget of €50 million, which was not budgeted for. That is a fact. What was budgeted for was €34 million, which was the cost of AEOS I. I have had to put an AEOS II in place, on which we will spend approximately €22 million or €23 million, and I have had to finance that by making savings elsewhere. They are savings people will see around budget time. Some of them are pretty unpalatable but that is the reality. It is important to put the record straight.

In regard to the destocking of commonage, it is important to state that understocking commonage areas can be as damaging to biodiversity, which is what drives this, as overstocking. Hillsides in Ireland, as in other parts of Europe, rely on livestock in order to keep certain species down and to ensure weeds do not take over. In some parts of the west what was previously grazeable farmland for hill sheep or hill cattle is now unfarmable because of understocking.

That is why we are in the middle of an assessment of commonage areas to look at appropriate stocking rates. The likely outcome of that is we will encourage farmers to increase stocking rates on hillsides, in some cases quite significantly. I hope they will be able to do that and that may be a qualifying criteria for some of the payments which they may be eligible to draw down next year. They may be required to increase stocking rates to encourage active farming and the responsible management of quite a sensitive environment on hillsides and mountainous commonage land.

As regards increasing the AEOS payment for eligible land from €75 to €150, which was also a promise made previously without any grounds in terms of getting agreement from the Commission, I initially said that because I wanted to maximise the number of people who could get on to the AEOS, I would keep the payment at €75 rather than increase it to €150. I have since met the IFA and a number of the farmers concerned and I said I would look at it again, which we are doing, in the context of our overall expenditure review. If we are to prioritise giving a little bit more money to commonage areas, which are mature and are eligible for increased payment, and, most important, if we can get sanction from the European Commission to increase that payment, because 75% of it comes from it — even if I wanted to do this next week, I could not do so because we do not have that sanction — we will look at that in the context of the overall budget in terms of where we are trying to take agriculture and what areas we are trying to support even with the limited, shrinking budget. That is as open as I can be about it.

I thank the Minister for agreeing to be the canary in the mine in regard to all of this. We had hoped for Minister's questions to be a routine part of our work. I refer to the impasse in regard to Leader funding for small food projects such as those we saw in their magnificence last night in the Shelbourne Hotel and previously at a Tesco function. I know there is an impasse and that it is difficult but I have been asked about it over and again by various companies, specifically in regard to the so-called food tent at the ploughing championships which appears to have fallen victim also. The Minister expressed enormous support for the food industry, which is very welcome, but the specialist food industry must also have support. In a sense, this seems to have arisen almost by accident.

I refer to the environmental impact assessment. I received the Minister's briefing note this morning, specifically in regard to the reduction of drainage from 20 hectares to 0.1 hectares. There is much concern among farmers in that regard.

My question is primarily on food production. I welcome the Minister and I am delighted to take part in this debate. The food production side is always of great concern to me. I am a chef by trade — that is my background. I am a small producer in Shannon. I do not have time to find markets or to access the world market so who gets it to the world stage to showcase it in terms of tasting, sampling and identifying a market?

In a pre-budget submission, the ICMSA identified a trillion dollar market in the US for ready meals. Do we have somebody over there saying the American market wants 100 million pizzas next year and that this what we need to get to the market? Who is doing that work? Have we a co-ordinated research and development facility from a food perspective? Are there marketing people and chefs involved in identifying the markets and perhaps putting ready meals together?

Senator Trevor Ó Clochartaigh's background is in fishing. We have a fantastic organic food product but we need one group or agency to co-ordinate things from when something is caught at sea or reared on the land, prepared by a chef, put into a package and brought to the market.

If there is a trillion dollar market, such as that identified by the ICMSA, we need to know what people in America are looking for and what product we need to send there. As the Minister rightly pointed out, I have no doubt that the largest employment creator in this country over the next five to ten years could be our food sector if we do things right. That will be done under the Minister's stewardship.

Is there one group getting the product from the small producer, to which Senator O'Keeffe referred, or the major producer, taking it to China, showcasing it and creating a market for the producer who does not have the capital or time to do that? We have the product but we need to get it to the market.

Everyone was struck by how wonderful the food feast was last night, which was hosted by the IFA and Good Food Ireland in the Shelbourne Hotel. What struck me——

The Senator should not mind what struck us but should ask questions.

I am coming to the question. What struck me was how important it is to taste test before one purchases and how important it is to let the country know what is available, both domestically and internationally. Is Bord Bia doing something like that? Why would it not do so at our ports of entry? It could be done on a smaller scale than I have outlined. Last night, I met a chocolate manufacturer who does not sell to shops but has a wonderful product. This links with what the two previous speakers said.

Amendment No. 18 to the Environment (Miscellaneous Provisions) Bill, which is due in the Dáil on Thursday, deals with EU regulations on land reclamation. Could that be delayed until the end of the year in order that all parties can agree a workable outcome? If the Bill, with the amendment, goes through it will hinder farm efficiencies.

Senator, you should not discuss the business of the other House.

This question is linked. If the Bill goes through then the removal of a ditch could involve applying for planning permission and producing an environmental impact statement. That is madness.

It will not involve planning permission.

Farmers will incur huge costs. This is an unreasonable EU directive. Can it be delayed until there is more agreement in order that farmers are not put in an untenable position?

The Food Harvest 2020 report was launched a year ago yesterday by the former Minister, Deputy Brendan Smith. It is a blueprint for driving the agrifood and agriculture sector. How often does the high level implementation group established then meet and what recommendations made in the report have been implemented?

I have two brief supplementary questions. Senator Susan O'Keeffe referred to the birds directive and special protection areas. These are causing major concerns in the agriculture industry. I accept that this is an EU directive, but I ask the Minister to try to gain a derogation on what is proposed. The directive will have major implications for drainage of wetlands, removal of hedges and ditches or even opening a gap.

Senators Tony Mulcahy, and Susan O'Keeffe spoke about food production. During the week, we saw Superquinn being taken over by Musgraves. Three major supermarkets now own 70% of the grocery retail market. Will the Minister make sure that multinationals will not further squeeze Irish agriculture? Certain supermarkets have demanded hello money, etc. This cannot be allowed to continue. I hope the Minister will put sanctions in place to ensure that Irish food stays on supermarket shelves.

I have a number of questions about the land reclamation amendment to the Environment (Miscellaneous Provisions) Bill, which will come before the House. Can the Minister outline the area of land above which an application for consent must be made if a farmer wants to restructure his holding, carry out land drainage or remove field boundaries? Can he give a commitment that the new legislation will not add further compliance costs and bureaucracy to agriculture?

Can the Minister explain how further growth and expansion of the sector, as set out in Food Harvest 2020, can be encouraged if measures in the proposed legislation will encourage farmers not to carry out on-farm improvements? Can he explain his understanding of wetlands, as defined in the proposed Planning and Development (Amendment) (No.2) Regulations 2011 and outline how his proposed regulation will impact on farmers? Will farmers who want to cut turf on their own bogs find themselves in the ridiculous situation, if the proposed planning and development regulations are introduced, of having to apply to their local authority for planning permission and submit an environmental impact report, which may cost outrageous amounts of money?

I share the concerns about the land reclamation measure in the environment Bill. However, my question relates to Leader programme funding. The previous Minister, Deputy Éamon Ó Cuív, sent applicants for Leader programme funding around the houses in seeking matching funding. Can the Minister clarify that there will be matching funding in order that all the money available from the European Union for Leader programmes will be drawn down?

Is the Minister happy with the cohesion process and the way the Leader programme is being delivered by companies throughout the country? I draw his attention to the Gaeltacht. Meitheal Forbartha na Gaeltachta is having particular difficulty. Is the Minister happy with the way Leader and other programmes are being delivered through that company?

I congratulate the Minister on his eloquent presentation. He is a hands-on Minister. Many of his decisions must be political decisions, and not left to Departments.

The biggest issue facing the agrifood sector is financing across the industry in the next 12 months.

Senator, do you have a question?

I must set my question in context.

We do not have time for Second Stage speeches.

It is fine to talk about pathways to growth, but we need financing. It is not available for small and medium-sized companies and they will not be able to meet the potential demand.

We need a question to be brief.

The most important issue in the industry, and the whole economy, is the financing of small and medium-sized businesses. The Government is not dealing with that issue. There are fine plans but nothing is happening on the ground. I agree with the Minister that the growth in our population creates potential for growth. We must get adequate management training——

This is not related to Leader programme funding.

——for a new group of people who can manage these companies. The standard of management is not sufficient to meet world demand and to innovate. There is a lack of management skills and crisis funding in the agrifood industry.

I will try to deal with the questions on an issue by issue basis. I cannot go into detail on environmental impact assessments and the land reclamation amendment in the Environment (Miscellaneous Provisions) Bill that is coming forward, because the detail is not agreed yet. There is much concern among farm organisations, and rightly so. There is also much frustration in my Department, rightly so, because we are being forced to reduce thresholds significantly from where we have been in the past. We have shown much good faith in an effort to satisfy the Commission. It is the Commissioner for the Environment and not the Commissioner for Agriculture who is seeking this.

New thresholds will be applied for removing ditches, draining wetlands and increasing field size by removing boundaries. They will be outlined in the new section to be inserted in the Environment (Miscellaneous Provisions) Bill. We do not have an option, or I should say we do have an option. We can do nothing and get fined about €4 million a day. That is the option. We will not win a court case against the Commission on this issue.

It has been suggested that we seek a derogation. We have already looked for more time. The Commission has taken a hard-line approach to the issue, which is regrettable. Agriculture has been dragged into an environmental issue, rightly so, because farmers have a responsibility for the environment. What is being asked of my Department is unreasonable but we need to put something in place to ensure that we meet thresholds that will result in Ireland avoiding EU fines. That is the vulnerable position we are in. We are not in a strong negotiating position. That is unfortunate but it is reality.

I have been trying to keep the threshold as high as possible. I have tried to keep the length of ditch as long as possible before a Department inspector must give sanction. A departmental inspection would not cost anything but I have also tried to keep the length of ditch as long as possible before an environmental impact report is required. That might cost thousands of euro and failure to do so might criminalise a farmer.

Much of this is already required of farmers under cross-compliance if they are to draw down single farm payment. What is being proposed is what I have outlined be extended into law and that it would be illegal to remove a ditch without following due process.

I agree that the thresholds need to be changed. However, the extent to which it is being demanded that thresholds be reduced is not appropriate. I wish to make clear that no one is seeking planning permission or even a departmental inspection in respect of opening a ditch — as in opening a gateway. I am not happy with regard to the thresholds we are being asked to implement. However, our hand is being forced to some degree in respect of this matter.

The position on Leader programme funding is complex. Essentially, most of the funding from the European Union comes under pillar 1, which relates to the single farm payment. Pillar 2 funding relates to rural development programmes. There are different annexes within pillar 2. Under what is traditionally described as annexe 3, we were able to provide financial support predominantly to small food companies in order that they might expand and grow, explore markets and undertake research and development in the context of developing products such as cheeses, yoghurts and ice creams and in respect of establishing micro-breweries, etc. Our goal in this regard is to promote food entrepreneurship. The provision of this funding has proven to be quite successful.

Some of the Leader programme structures in place are very good, while others are not. We should be careful in the context of uttering generalisations regarding how Leader programme funding is managed. Some of this funding is managed very well by those who understand their communities and the people who live in them.

Supporting food-based projects is no longer possible under annexe 3. In other words, even if we provide co-funding we cannot fund food projects under annexe 3 to pillar 2. If we are going to fund food projects under rural development funding, we are obliged to use annexe 1. Annexe 3 is predominantly delivered by the Department of the Environment, Community and Local Government, even though my Department draws down the funding from the European Union. Annexe 1 funding is all drawn down and delivered by my Department. The targeted agricultural modernisation schemes, TAMS, are funded under annexe 1.

These schemes provide capital grant aid for poultry and pig farmers to allow them to upgrade their units to meet new animal husbandry standards set down by the European Union. They also provide grant aid for dairy farmers to upscale their facilities in advance of 2015. Furthermore, they provide grant aid for sheep farmers to allow them to put in place new pen and collection facilities. In other words, the funding provided is aimed at upgrading rural agricultural infrastructure to improve animal husbandry and food production. I will not be taking any more applications under TAMS until I know how much money I will have to spend next year.

If we are going to fund food projects through the Leader programme, we are going to be obliged to do so under annexe 1. There is already a commitment of funding relating to the latter under TAMS. We are trying to identify a way whereby we can switch from annexe 3 to annexe 1 in order to that we might be in a position to fund food projects. We are also seeking to discover which Department would be the appropriate one to provide matching funding in order that we might draw down moneys under annexe 1.

Traditionally, the Department of the Environment, Community and Local Government has always provided matching funding in respect of food projects. However, annexe 1 funding is managed by my Department. There is an element of toing and froing involved between the two Departments.

I am only too conscious of how important this matter is for many small food companies which are only starting out and which would have anticipated, in their business plans, obtaining funding through local Leader programmes. The companies are now discovering that such funding has stalled. We are trying to resolve the matter and we are hoping to achieve some form of resolution in the coming weeks. We cannot allow matters to drift any longer than that.

On food production and the question of who is responsible for identifying markets, we need to move away from the fairly simplistic idea that one person produces the food and that it is another's responsibility to identify a market for it. We must begin from the other perspective and try to identify what consumers want and where they want it. We must also identify the premium product that is demanded in respect of which the producer can obtain a premium price and then try to discover how this product can be produced.

There is a change in attitude among food producers, particularly those in the dairy sector. This change is being driven by price but also by the necessity of identifying new markets. It is being assisted by the co-op sector because farmers actually own co-ops which buy and then need to sell on milk. It is not just about milk, however. It is also about all the other sectors. There are only approximately 17,000 dairy farmers in Ireland but there are 128,000 farm families. Dairy farmers, therefore, constitute only a small minority.

In the context of the food we are producing, Bord Bia has a responsibility to carry out a great deal of consumer research in respect of establishing what consumers want and where they want it in order that we might meet the demand. It has been doing a good deal of strategic thinking in this area. Matters under consideration include hosting beef tastings in Germany, which has been happening a great deal in recent months; implementing a carbon labelling scheme for beef here, in which respect it has been anticipated that consumers will want to see evidence relating to the carbon footprint of the beef that is being produced if they are going to be obliged to pay a premium for it at some point in the future; seeking to attract representatives from the primary production and processing sectors and major companies such as Kerry Group, Glanbia, etc., in order that they might brainstorm in respect of the markets that need to be targeted; and, before returning to me, seeking resources to focus in on certain areas and identify where offices need to be established. In many ways, Bord Bia is driving the business plan relating to Food Harvest 2020 from a strategic point of view.

That brings me to the point Senator Ó Domhnaill raised in respect of the high level implementation group for Food Harvest 2020. I chair that group, which has already met on three occasions if not more. As stated, we are setting targets for the short as well as the long term. We have already revised the targets for the beef sector. Food Harvest 2020 contains a target whereby the value output relating to beef coming from Ireland should be increased by 20% by 2020. We have already upgraded that target to 40%. We asked the beef subgroup that is attached to the Food Harvest 2020 implementation group to examine the position relating to the beef industry and to return with revised recommendations because of our view that the 20% target to which I refer was not very ambitious. The subgroup did so and produced a detailed document which forms the basis of its revision of the target relating to beef.

A great deal is happening in the context of the hands-on implementation of Food Harvest 2020. The latter is a set of targets.

It is more than that.

The Minister to continue, without interruption.

It contains a great deal of background information which makes the targets to which I refer credible. It also provides business plans in respect of how those targets might be achieved. We are trying to implement Food Harvest 2020, as well as upgrading it on a quarterly basis. We are seeking to upgrade it because markets and prices change. One of the reasons we altered the target relating to beef from 20% to 40% is because we have already achieved a 10% increase in the output value of beef because the price of the latter has increased. As the price of food rises, so too does the value of exports. This means that targets must be revised upwards. If there were a collapse in prices, we would be obliged to revise targets downwards.

Food Harvest 2020 is a living document. The advantage is that everybody buys into what it envisages. It does not matter if it is Glanbia, Greencore, Kerry Group, Dawn Meats or some other company, everyone subscribes to it. When we held a conference on Food Harvest 2020 in recent weeks, every player in the food industry in Ireland was present, with the exception of a small number who could not, for predominantly valid reasons, be there. That conference was a phenomenal success.

Next week I will be launching Food Harvest 2020, one year on. This will allow us to review what we have achieved in the first year and to identify whether we are on target and to indicate the targets that have been upgraded since the original document was put in place. As a result, people will be able to see how Food Harvest 2020 is developing on a month by month, year by year basis. There has already been movement in respect of approximately 90% of the 217 requirements contained in Food Harvest 2020. It is a living, working document which drives the policy direction of the Department.

If it is acceptable to Senators, I will not comment on the turf debate. That is the area of responsibility of the Minister for Arts, Heritage and the Gaeltacht, Deputy Jimmy Deenihan, rather than me. It is being driven by the European Union and, unfortunately, Ireland is seen as a country with which the Union must take a hard line in terms of turf-cutting. Having said that, the problems in this regard are sometimes exaggerated in that we are talking about a relatively small percentage of bogs in respect of which significant restrictions are being imposed.

The financing of the food sector is a problem, just as every small and medium-sized enterprise in the State is experiencing problems. We have spoken to representatives of several banks about financing for the food sector and farming. There must be a dramatic investment programme, both on farms, which is covered by the capital programmes, and also within food processing. As I said, there has been no investment in dairy processing in terms of volume increase since the mid-1980s when we began operating within the straitjacket of milk quotas. The EU must plan for and finance a dramatic investment programme to deal with the increased volumes of milk that will come its way, perhaps before 2015 and certainly after it. Likewise, the investment programme for poultry and pigs units, because of the increase in standards being imposed by the European Union, requires significant investment. We have provided matching funding for much of that investment, but the problem is that producers cannot access bank funding. However, there is an increasing acknowledgement of these realities among both Irish-owned banks and foreign banks, including RaboDirect, which is one of the largest agricultural banks in the world and is seeking to increase significantly its share of the Irish market. I expect to see funding made available for viable agricultural projects.

As regards small food companies, as in other sectors there is huge frustration with the banking system at the lack of credit and overdraft facilities and the other factors that are a significant impediment to growth and expansion for businesses. I will not solve the banking problem today——

It is part of the Minister's job.

Yes, it is. I have spoken to all the major banks about this issue and we are pushing them as hard as we can.

This new format of debate is excellent and one we should encourage. However, it might not work so well if we did not have a Minister like the Minister, Deputy Simon Coveney, who seems to be well on top of his brief and is willing to respond to our questions. I am impressed by much of what he has said today.

The Minister is in an impossible situation in respect of one issue, an old hobby horse of mine which I have raised on many occasions. The Minister spoke about consumers driving agricultural production. However, I will present a hypothetical situation in order to illustrate the difficulties that may arise. Suppose I come to the Minister as an entrepreneur who wishes to open a food processing factory. I see myself importing chicken from Thailand, because that is what suits me best, and the other ingredients from South America and Africa. As a person in the food processing business, I want to get into the added-value food area, and importing these foodstuffs is what best suits my business objectives. I suspect that such a person would not receive a great deal of encouragement or enthusiasm for his proposition from any Minister for Agriculture, Fisheries and Food.

However, the reality is that there is great potential in added-value food production. It does not have to be Irish food, which is a different business altogether. For this reason, there must be a decoupling of food and agriculture within the Department. To illustrate my point, I remind Members that when McDonald's opened its first restaurant in Ireland some 20 or 25 years ago there was an outcry that the company was using Dutch potatoes. The Minister at the time, and many others, howled in outrage that a company looking for business in Ireland should be offering chips which came from Dutch potatoes. The company responded, just as the Minister has said, that it was a question of pleasing its customers, for which purpose these particular potatoes were more suitable than Irish potatoes. For the first few years of its operation in the State, McDonald's only used imported potatoes from Holland. Gradually, however, to address this problem, Irish farmers changed their processes in order to produce the potatoes McDonald's wanted and the company subsequently switched to using Irish potatoes for their chips.

There is a separate business to be explored, offering huge job opportunities, in the added-value processed food business, which need not necessarily be based on Irish produced products. However, the Department has an impossible task in this regard. As I said, I doubt that any Minister for Agriculture, Fisheries and Food would have a positive response for anybody who approached it with a view, for example, to opening a factory to produce chicken products, soups and pizza toppings to sell around the world using imported foodstuffs. There would be little enthusiasm for the proposal because the foods being used are imported.

I am not arguing that the encouragement of value-added food processing projects based on imported foodstuffs should be our sole objective but there is an opportunity to develop and support food businesses which are independent of Irish produced food. How will the Minister find a way to overcome that problem? Perhaps he can reassure me that there is no clash of interests in this regard and that the types of ventures to which I referred would be welcomed by the Department. The Minister used all the right words and phrases, like "consumers" and "consumer driven", but I am concerned that he will be unable simultaneously to support Irish produced food and value-added food processing ventures. How will he solve that problem?

On the same issue, I welcome the recent passing of legislation to extend country of origin labelling. On Senator Feargal Quinn's points regarding added value along the food chain, my concern is that the longer the food chain, the greater the chance that something will go wrong. If a commodity is travelling through several countries and value is being added along the way, there is a greater risk to the consumer by the time he or she purchases that product. Does the Department propose to take any further action in regard to country-of-origin labelling, particularly in respect of substantial transformation?

In regard to poultry, the Food Safety Authority of Ireland carried out a survey in December 2008 to examine the quality of raw chicken sold loose in butchers and other retailers. It found that 8% of this produce had no sell-by date and in 23% of cases, the use-by date was unrealistically distant if the product were to remain unspoiled in the consumer's fridge. The survey also found that imported poultry is often flushed with carbon dioxide to extend its shelf life artificially. Is any action proposed to be taken to ensure information is readily available to consumers in respect of raw poultry products which are sold loose?

On the same issue of food supply and food demand, one of the largest companies in the country is Coca-Cola, based in Ballina, which buys in all its caramelised sugar product from France. None of it is manufactured in this country. There must be a joined-up approach, under the leadership of the Department of Agriculture, Fisheries and Food and including Enterprise Ireland and all the relevant State agencies, with a view to establishing a research and development facility within the State which would support farm organisations, producers and those who may wish to establish food industries from incubation right through the product development chain.

There is great potential in this area. One of the largest companies in the south west is seeking to purchasing a plant worth €200 million in the United States in order that it can import a particular raw material. We must examine how some of these raw materials can be produced in Ireland. For instance, there is no reason that we should be importing casings for the sausage meat industry. There are immense opportunities to be exploited but it requires a joined-up approach and a research and development facility focused specifically on the food sector in order to ensure we can cater for consumers' needs from what is produced in Ireland.

In the case of the fishing industry, 220,000 tonnes of fish are landed into Ireland, but 68% of that is exported. It gives an example of where we are.

In order to comply with the Order of Business for the day, we must conclude by 1.15 p.m. We must allow the Minister time to respond to the recent questions. I will allow a final question.

The contributions from Senators Feargal Quinn and Pat O'Neill pose the question of achieving a balance between produce sourced inside and outside Ireland. There are significant benefits, including jobs and so on from Senator Quinn's suggestions but, equally we must ensure we take care of our own producers. Tesco was slaughtering 50 Irish organic cattle and they then began to source the cattle in Argentina, reducing the number of Irish cattle to one or two a week, now the number has increased to 30 per week. Has the Minister considered imposing certain limits on multinationals, that they use 70% Irish produce and 30% sourced abroad. We need to find a solution in order that there is respect for the home producer and at the same time respecting entrepreneurship.

Senator Kelly is indicating.

It is grossly unfair that some Members have been in three or four times and others have not spoken. It is a bad start. The same courtesy should be extended to everybody.

Will the Senator allow me to speak? I will take his question

That is not the point I am making.

A specific question, please.

It is not related and I make that quite clear.

I understand. There is no need for it to be related because we have taken the related questions. Let us remember this is a new experiment and it will obviously need tweaking.

A matter of grave concern to many farmers is the fair deal scheme, which I often refer to as the unfair deal when it comes to the farmer because the family farm is under threat once an elderly person goes into a nursing home. Has the Minister for Agriculture, Fisheries and Food any plans to discuss this with the Minister for Health and to exempt farmers from the process. They were exempt under the nursing home subvention scheme.

I call Senator D'Arcy. I understand, I was not in the Chair, that some Members have spoken a number of times, but this is a matter for the Leader to address.

I apologise to the Minister. I understand that Chinese agents have been scouring the EU market for bacon to meet the increased demand in the next six months from China. Is the Minister happy with the level of pig stock in the country and that we have a robust supply to meet demand? Are pig producers being encouraged to produce when the factories are not releasing the price they will pay?

We are running out of time, and I understand Senator Mullins has not spoken. I am entirely in the hands of the Leader.

Are there plans in the Department to promote the awareness of anaerobic digestion as a means of treating slurry and generating energy?

I had my name down to ask questions, may I ask one question?

The Chair is in the hands of the Leader on the Order of Business. The Minister has only two minutes to reply.

There are a series of topics that we have not had the chance to cover, for example, a soft landing for milk producers, the threat of superlevy fines. If Members have specific questions, I invite them to e-mail me and I will try to give as full an answer as I can.

In response to Senator Quinn, ultimately we must give consumers what they want, because they have the buying power and they spend money. If given the choice and all else being equal, consumers want to buy Irish produce, not always because it is Irish and that is a growing driver for choice, but because they associate it with quality and a food production system they understand. Some people do not care where food comes from, if it looks good and it is cheap they will buy it. That is a market that needs to be catered for and we need to ensure that consumers are given food at a price that is competitive with prices in other parts of the United Kingdom and Europe. There is a growing sophistication on the part of consumers, and research backs this up, in that they like to know what they are buying and where it comes from. In time they will be asking more questions around issues such as its carbon footprint and what farm it comes from.

Some products are being sold with a code on the packaging which people can enter on a website and get information on the farmer who produced the food. That is taking it a little bit far, but there is a growing awareness and knowledge of the food chain among consumers. This will continue to grow as information becomes available. Take the example of McDonalds, which is the largest buyer of Irish beef, with the possible exception of one of the major supermarket chains. One in six burgers consumed across the European Union is made from Irish beef. In case people think I am biased, it is the same in Burger King. The fact that it is Irish beef is displayed in every shop. Consumers are reasonably happy with these products.

The ideal scenario is that we grow the percentage of Irish produced food in Irish food outlets and in retail stores because it is the best and most competitively priced food available. That needs to be the primary driver, rather than trying to impose quotas on multiples. Imposing quotas of having to buy two thirds Irish is no way to build a food industry. One of the reasons Ireland should be able to do this is that 85% of everything we produce needs to beat the competition based on other people in other countries saying we must buy our own homegrown produce. That is the case whether it is Irish beef in Germany, Irish lamb in Italy or Irish seafood in France. They are the largest markets for our produce with the exception of the UK. People eat Irish mussels in Paris because they are the best mussels. Organic Irish produced farmed salmon is the most sought after salmon in the European Union. I will talk about fish later.

We need to concentrate on encouraging but not forcing the home market to buy Irish food. However, that misses the point that the home market is only 15% of the food market, the other 85% is about being competitive enough to compete abroad and win market share and be better than other produce on the shelf, in the factory or in the restaurant in order that consumers actually chose it. Our aim is to be the best at what we do. Let us consider what New Zealand has achieved. It has made some mistakes, but in terms of its growing market share, it has succeeded because it produces quality food at competitive prices and it does things well. That is the case with its entire food chain. It is not just farmers, it is also food companies, co-operatives, etc. That is what Ireland needs to be about.

We do not have enough pigs to meet the demand in the Chinese market. If we had pigs on every acre at a stock rate that would be unacceptable to the European Commission, we would still not be able to feed Beijing, never mind all of China. In the pig and poultry markets we need to decide what segments of the market we are targeting to give us added value and premium prices so that pig producers get more from what they produce. We are not in the volume business and we cannot compete with other parts of the world in terms of mass production. We have family farms and we can improve economies of scale by getting farmers to work in partnership, but ultimately food produced in Ireland is about a premium product that it can command more on the supermarket shelf because it is special. This involves traceability and husbandry and other matters we can promise. The Irish brand is about a promise. That is why Chinese consumers in Beijing are choosing New Zealand or Irish infant formula. They do not trust the infant formula produced in the dairy industry in China because of scandals of the past. We need to build on the hard earned brand and the promise that gives Ireland a stable and safe reputation for producing food. The evidence is that consumers will pay a little more for that if we target market cleverly.

In the home market, we must be competitive with imports. Our relationship with the UK is a good example. Not all Members were present in the Chamber when I said that last year we exported €3.6 billion of food and imported €2.7 billion. That balance is pretty good for 4 million people but we are still importing a lot of food. If we are concerned about food excellence and giving consumers choice, we must import products we cannot produce competitively or products we are not good at producing. We must concentrate on what Ireland is good at and for which Ireland can put a premium brand in place in terms of selling abroad and finding new market share.

There is an idea that we do not have research facilities for food but that is incorrect. The week before last I launched a significant research project on cheese that is co-sponsored by Teagasc and the Irish Dairy Board. It is located at Moorepark, outside Fermoy. In Clonakilty, seafood research and seafood added value is another example. We have given grant aid to the fish processing sector. We are doing a great deal to add value, skill and intellectual capital to the food sector by how we spend money. I am encouraging more private sector involvement in research programmes and development programmes for food. Partly this is because we cannot afford to do it all ourselves due to shrinking budgets, but also because it is in the interests of the private sector to do so. I will launch an exciting dairy project with Glanbia in September. It involves upskilling farmers on running a business from a financial and accounting point of view as well as farming. That is the kind of partnership we need to create with the private sector, which should be co-funded.

I want the brewing industry to form discussion groups in place for malting barley farmers, just as we have done for dairy farmers. This will ensure we are producing malting barley efficiently. The benefit to the brewing sector, including Diageo and Heineken, is that it will have a stable supply. We seek the same situation in respect of beef. If we are to set up beef discussion groups, which I want to do to upskill the farmers, I want co-financing from the big beef processors. It is in their interest to do so and I will demand it because the State cannot afford it anymore. This concerns creating partnerships on research, developing an industry, fulfilling targets under Food Harvest 2020 and everyone contributing and benefiting. This relates to finance and intellectual capital.

Will the Minister make a statement on fisheries, given that we have eaten into ten minutes of the time allocated to agriculture?

I can revert to the Senators on aerobic digestion and the fair deal. I will speak to them afterwards or provide them with a written answer.

I ask the Leader for guidance on this point. We have gone over time and questions have not been answered.

We only have until 2.15 p.m to deal with fisheries. Perhaps the Minister can give us a short outline at the beginning and we will deal with questions. We have eaten into the time. Members complained about not getting to contribute and ask questions. Some Members contributed three or four times and we must legislate against it in future in order that we allow others in. Everyone will have a chance to contribute on the topic of fisheries if everyone asks one or two questions rather than making speeches.

From the point of view of the Chair, I repeat that there should be specific questions rather than Second Stage speeches. It is in everyone's interests, as the Leader has pointed out. This is an experiment and it is in the interests of the House that we do this as best we can and as effectively as we can.

I hope to contribute to fisheries questions. Rather than contributing three or four times, perhaps Members can bunch their questions and be specific rather than having a debate. That is the way to proceed. I have great regard for the Leader but Members should ask five questions and then sit down rather than hopping in and hopping out. Otherwise, it will be totally unruly.

The Minister's statement will answer many of the questions. Rather than the Minister making a statement, we can ask questions first.

I was just responding that the Committee on Procedure and Privileges can examine this.

I will be as brief as possible on fisheries in order that we have as long as possible for questions but there are significant matters happening in fishing and I would like to give a broad outline to Members. Yesterday, I was in a European Council meeting debating the initial draft produced by Commissioner Damanaki on the reform of the Common Fisheries Policy. I should have said that Ireland is in a hugely influential position on the Common Agricultural Policy and the Common Fisheries Policy because the timeframe for getting agreement on both will spill over into the Irish Presidency in the first half of 2013. The aim of the EU is to have a deal done on both by the end of next year but everyone recognises it is unlikely that target will be met. Budgets have been set in anticipation of this. Ireland takes the Presidency of the EU for the first six months of 2013, which gives us a fantastic opportunity to be the dealmakers on the Common Fisheries Policy, the Common Agricultural Policy and the financial perspectives for the overall EU budget. It is a great opportunity for us to restore our reputation as a country that can put positive deals in place as opposed to being associated with the difficulties the EU has.

Yesterday was the opening debate on the Common Fisheries Policy after much shadow-boxing. On a bilateral basis with Commissioner Damanaki in public and in private, I have set out some of the concerns we anticipate from the Irish perspective in respect of the Common Fisheries Policy. Some of those concerns remain, even after the debate yesterday, and I will set out one or two of them that are significant.

The Commissioner is planning to reform fundamentally how the fishing industry operates across the European Union. She wants to change the way in which quota is allocated. At present, quota is a national asset and it is up to the Government, in consultation with the fishing industry, to allocate quota in a way that best suits the coastal communities, the fishing industry and the protection of fish stocks. If we do not protect fish stocks, we will have no fishing industry in the years ahead. Each year, we fight for our share of quota in December and the Government allocates quota to fleets in a complex negotiation structure with the industry. There is a reasonable degree of certainty and consistency from the perspective of the fishing industry because cuts in quota are always anticipated before the December discussions. The Commissioner is saying there are too many boats in fishing fleets across the EU and we do not have the quota to satisfy demand. The proposal is to give quota to boats and allow them to trade quota among themselves. In other words, if somebody wants to get out of fishing they can sell or lease on the quota allocated to them to another boat owner.

The Commissioner wants to see the industry consolidate into smaller numbers of bigger boats which will be easier to manage in the future. She states that a quota will only be able to be transferable — she is calling them fishing concessions but essentially they are quotas — within member states. That makes some sense from an economic, efficiency, stock management and business point of view but it does not make much sense in terms of the other elements we need to protect as politicians or in terms of keeping fishing communities viable and intact because what we will see in Ireland is consolidation into two or three fishing ports. The others will be unable to survive, be they the onshore businesses around processing and adding value, or the fleets themselves.

Of much more concern to me is that the Spanish fishing industry, which is the biggest in Europe, has a fleet that is too big for its quota and the Spanish want to be able to buy quota from elsewhere to meet demand for catch. My big fear, and the fear of my Department — there are many well informed people in my Department who understand the industry very well — is that we will not be able to limit the transfer of quota to boats within the member state and that we will see the transfer of what was Irish quota in the past out of Ireland into Spanish, French, Dutch, British fleets and so on. As a result our ports will never see those fish. That would be the start of the end of the Irish fishing industry.

We are very concerned that the Commission has not put in place safeguards we believe are credible to ensure the transferability of quotas within member states and that quota does not move out of Ireland. It is something about which the industry is also very concerned. I am very concerned about, and I have been blunt with the Commission on this aspect. It will be a major point of debate and disagreement in the next 18 months or so.

However, we have some allies. We have managed to convince both Germany and France that transferring and essentially privatising quotas is not such a good idea because once it is taken out of state control as a state asset, control is lost and cannot be retrieved. The Commission is saying that if we want to get quota back from someone they have to be given 15 years notice. That makes no sense.

Quota in Ireland is a national asset. Nobody owns it, including trawlermen. We own it as a State. We allocate it to our fleet. There are flaws in the system but it is a better option for us to continue with a system or a revised system along a similar model to what we have currently than change to a system which lets the market decide who gets quota. In that scenario people with the most money will buy up quota from elsewhere. The transferability of individual transferable quotas, ITQs, or individual transferable concessions as the Commissioner now refers to them, poses great threats to the Irish industry and we must argue for a change of tack on that issue.

The second issue on which I strongly agree with the Commissioner but not her approach is that of discards. We have an indefensible position whereby hundreds of thousands of tonnes of fish are being caught, killed and thrown back into the sea because fishermen do not have quotas to catch them. A number of different problems arise in that regard. There are what are called juvenile fish, in other words, fish that are not marketable because they are not big enough to sell but they are the same species as one has a quota to catch. In some fisheries we catch up to four or five juvenile fish and kill them before we can land one marketable adult fish. That makes no sense on any level in terms of stock management or anything else.

The second problem with discards is that one catches in mixed fisheries another fish for which one does not have a quota to catch. For example, if someone has a quota to catch haddock and whiting in the Celtic Sea and they are catching cod in their net in that mixed fishery, which they will do, but they do not have a quota to land cod they have to dump cod over the side. That is happening as we speak because there is a huge increase in cod numbers in the Celtic Sea. We have adult, marketable, valuable fish being thrown over the side and at the same time we are talking about trying to reduce the number of discards.

The Commission is proposing that, over time, we will ban all discards. Trawlers would have to land everything they catch on shore. That makes some sense for what I would describe as clean fisheries. If someone is only catching one species and they over-catch on a certain catch it makes sense that they land the extra. They do not get paid for it but they are forced to land it. At least they know it is being caught.

The position on mixed fisheries is more complex. They cannot land everything they catch because they do not have a quota or they may be catching fish that are outside of quota and protected. We must have much more discussion with the industry on the way we deal with the discards issue but we must do something fundamental in terms of changing the current scenario where I would estimate up to 300,000 to 400,000 tonnes of dead fish are thrown over the side each year in Irish waters. We catch approximately 1.2 million tonnes of fish each year. There is probably more than that caught but there is a quota to catch that number.

We are working with the industry and the industry is responding to put in place pilot projects on discards, particularly in what is called the biologically sensitive area, which is the Irish box off the south coast of Ireland. We will be examining pilot projects on discards in fisheries such as, for example, monkfish, megrim and hake. We have already agreed with the French a pilot project to allow juvenile fish escape in the cod, whiting and haddock fishery in the Celtic Sea. France has signed up to that. Yesterday in the Commission, outside the discussion on the Common Fisheries Policy, we got agreement in principle from the Commission that it will increase the total allowable catch for cod in the Irish Sea this year. It will revise the quota as long as we put the juvenile fish escape measures in place, which is a square net at the back of a trawled net to allow juvenile fish to escape.

The industry is leading with these initiatives. Fishermen are often painted as people who do not care about discards or stock management and who are only in fishing for the immediate and short-term quick buck. My experience of those in the fishing industry is that they are much more sophisticated than that. They have put in place stock management programmes that have worked, and cod in the Celtic Sea is one of the good examples of that because it was the fishing industry which asked for what are called set-aside areas at sea where there would be no fishing to allow for breeding, growth of fish and so on.

Other issues arise around the Common Fisheries Policy. These include the regionalisation of decision making; ensuring that fish imported into the European Union are produced to the same environmental standards that we have here to ensure we do not put our people at a disadvantage; and a series of other issues that I do not have time to get into now but on which I will answer questions if Senators wish.

In terms of what we are doing as regards Food Harvest 2020, the fish sector plays a major role in the expansion of the food industry. Senator Quinn spoke about landing non-Irish produced fish into Ireland. That is being encouraged. We had practically the entire French fishing industry in Clonakilty recently and we told them that the highest quota for white fish in Irish waters is in French hands. They are catching huge volumes of fish. They predominantly take all that fish back to France to get processed.

Most of the French fishing industry is owned by French multiples, which are big companies rather than family owned vessels. We decided that we would bring the processing sector from all the ports in Ireland as well as many of the harbour masters to meet French fishing interests in Clonakilty to try to encourage them to land fish close to where it is being caught, which is here in Ireland, because the current price of fuel means it is very expensive for them to steam back to France every time they fill up their hulls. If we can do that, we can have an impact on the volume of fish landed in Ireland. Some 240,000 tonnes were landed here last year although 1.2 million tonnes are actually caught in Irish waters. The jobs in the fishing sector are in processing. If we can double the volume of fish being landed in Irish ports and have those fish processed, graded, packaged and marketed here, there will be very exciting potential for towns such as Killybegs, Rossaveel, Dingle, Castletownbere, Dunmore East and all the other fishing ports that are important and have fish-processing facilities.

My final point on the potential for growth concerns aquaculture. We had a brief conversation on this during our debate some ten days ago. If one considers how the world, not just Ireland, will be fed in ten years and what other countries are doing to provide seafood to their populations, one will note that Europe is way behind. We are still putting wild sea stocks under considerable pressure by trying to catch as much as we can within the limitations. In most countries outside the Union, however, large populations are being fed on farmed fish. China consumes 93,000,000 tonnes of fish each year, 75% of which is farmed. In the European Union, only a fraction of what we eat is farmed, yet most of the fish we import is farmed. Some 70% of what we consume is imported.

Some countries are making significant progress expanding aquaculture and fish farming. Scotland, for example, produced 150,000 tonnes of farmed salmon last year and this volume is growing. Ireland produces 12,000 tonnes. Norway produces 1 million tonnes of farmed salmon and aims to produce 2 million tonnes in five years. Unless Ireland does something about this, it will be producing only 12,000 to 14,000 tonnes, despite our extraordinary natural resources which suit aquaculture.

We have a big stumbling block to get over, namely, the fact that practically all our harbours and bays are in Natura scheme areas, or special areas of conservation. We must go through a long and difficult process even to licence aquaculture, but we are examining in an ambitious way the possibility of facilitating aquaculture outside the bays. I refer to offshore aquaculture which can produce very large volumes of high value fish for markets with very strong demand. We are working with the Marine Institute, BIM, my Department and the industry to make this happen. I hope there will be some announcements on how we can proceed in an environmentally responsible and sustainable way in the early autumn. We must work with the fishing industry rather than against it when addressing the question of fish stocks.

I will take questions at this stage because I do not want to speak for too long.

I am pleased the Minister is present to touch on this issue because the proposals of the Commissioner last week will do nothing for Irish fishermen. The Irish stance needs to be very strong. If the Minister is strong in his negotiations and wears the green jersey, we will support him every step of the way from this side of the House.

I will refer to the Common Fisheries Policy review and the proposals of the Commissioner last week, and ask questions thereon. The mandatory transferable quota rights being talked about would be detrimental to Irish fishermen. Giving quota rights to big companies would do nothing to protect the smaller fishermen around Irish coasts. I hope the Minister will fight tooth and nail against the suggestion of the European Commission.

Greater regionalisation was promised by the Commission but we now know from the Commissioner's report last week that she is diluting the promises and going nowhere near meeting the promise to have the regionalised plans required by the industry. A one-size-fits-all approach will do nothing for the coastal communities and smaller fishermen around Irish shores. I hope the Minister will deal with this in a very strong manner with the Commissioner.

I partly welcome the establishment of a separate regime for smaller fisheries. However, the proposals in the Commission's report give no recognition to boats under 15 m in length. Considering that over 80% of the Irish fleet comprises boats under 15 m, we need special recognition for our smaller vessels. I hope the Minister will fight on behalf of 80% of the Irish fleet in his negotiations with the Commissioner.

The question of trade sanctions needs to be dealt with at European level and I acknowledge the European Parliament is dealing with it. My colleague, Mr. Pat the Cope Gallagher, MEP, is working hard to introduce trade sanctions on the fishing of mackerel by the Faroe Islands and Norway. Those two countries have allocated to themselves over 300,000 tonnes of mackerel that they fish, which is 47% of the catch within the European Union that is regarded by scientists as safe.

It is Iceland, not Norway.

It is the Faroe Islands and Iceland. Iceland is negotiating with the European Union and the Commission with regard to accession and supports. Trade sanctions must be brought to bear on both Iceland and the Faroe Islands. I hope the Minister has some light to shed on this.

I am glad Councillor David Alcorn, who is from the coastal community, is present today to hear this debate and the Minister's response. An alarming statistic, on which the Minister has touched, is that 88% of the fish caught within Irish waters are caught by foreign boats. This means Irish boats are only catching approximately 12%. Considering all the restrictions within the European Union, this is having a detrimental effect on our industry.

I ask the Senator to try to ask a question because time is limited.

I have touched on three or four questions and have two final ones. Will the Minister consider replacing the criminal sanctions system applicable to minor fisheries offences with an administrative sanctions system to bring Ireland into line with other European countries? Will he consider reopening salmon fishing on a restricted, managed basis for island fishermen on a pilot basis over 24 months in order that the industry can prove itself and carry on from there?

I was hoping we would confine our remarks to questions and that we would have a maximum of three minutes for questions. I will be very brief. The Minister has addressed questions on Commissioner Damanaki's proposals relating to discounts and transferable quotas. He might address also the Hague preferences pertaining to the whitefish fleet. When will he be announcing decisions on the allocations for and management of the mackerel fishery, in respect of which there is to be a quota increase of 10%; the boarfish fishery, which involves a new quota species; and the Celtic Sea herring fishery?

I will group as many questions as I can if they are as specific and detailed as those of the Leader.

I acknowledge the presence in the Visitors Gallery of my former colleague from the fishing community, Councillor Alcorn. I congratulate the Minister on his jobs initiative in Killybegs six weeks ago. It was launched in conjunction with LYIT, Donegal County Council and various agencies. Is this predicated on our maintaining our national quotas? If quotas are split up, plans for the jobs initiative in Killybegs could be compromised.

I agree with Senator Ó Domhnaill on the privatisation of quotas. It is the wrong approach and it is against the ethos of the European Union to split up national quotas and place them in private ownership. This allows any company throughout the world to manipulate the stocks. Regarding the Faroe Islands and Iceland, does the Minister agree that whatever needs to be done must be done to bring this issue to a head as otherwise there will be a free-for-all in the north Atlantic?

An increase in fish farming is the way forward. I was in France recently and I noticed Norwegian fish being marketed in the larger supermarkets. Irish fish is just as good and this is an opportunity.

The issue raised by Senator Ó Domhnaill is ironic. We are speaking about the privatisation of the fishing industry on a Europe-wide basis whereas for many years the Government in which he was involved privatised Irish quotas. Will the Minister examine this issue as it is within his remit? A total of 87% of the Irish quota is fished by 23 boats, mainly based in County Donegal as it happens. If this were to be redistributed in a more equitable fashion there would be more work in Rossaveel, Castletownbere, Dingle and other processing plants. Most of the fish caught by these ships is not processed in Ireland. This issue is completely within the Minister's remit as it concerns the Irish quota.

What options are available to us given the Europe-wide nature of the quotas? Under the Lisbon treaty have we handed over our power of veto on the individual transferable quotas issue? If Spain, Portugal and other countries gang up on us what can the Minister do? Ireland is a small country and we do not have many friends in Europe at present. Has the Lisbon treaty scuppered our chances to veto an issue such as this?

I am based in Connemara and I speak to fishermen every day. What is being done by officials in the Department to criminalise fishermen is scandalous and needs to be addressed immediately. It appears the way sanctions have been put in place by the Department regarding catches and paperwork criminalises people for making very small administrative mistakes.

How will the new Common Fisheries Policy benefit fishing communities and the aquaculture industry in Ireland?

In the interests of brevity I will keep my contribution to questions. Will the Minister examine harbour dues because I believe there are anomalies throughout the country as anything between €15 and €300 is charged per night by various harbour masters? How many applications have been made for the renewal of aquaculture licenses and for new licences? The Minister cannot be blamed with regard to the operational programme for fisheries, which was to run from 2007 to 2013 but has not yet been put in place, as it is now 2011 and he has been in office for only a couple of months. The blame for this must lie with the previous Administration.

I agree with the Minister that fishermen are the best people to preserve fish stocks because they do not want to make a killing one year but have no income the next. Does the Government hold quota kilowatts and tonnage? My understanding of the discussions on the Common Fisheries Policy is that the EU wants to hand back decision-making to national governments to tailor local conditions. Would this enable the Government to allocate tonnage and kilowatts in its jurisdiction?

A member of the Sneem Fishermen's Co-op is in the Visitors Gallery. The Minister received communication on an issue concerning this group and I ask him to re-examine it. These men borrowed €340,000 on the promise of a grant of €109,000 from BIM and the previous Administration which they never received. I understand from the Minister's reply it cannot be dealt with retrospectively but in the interests of good will, fairness and natural justice something should be done for them.

I welcome the Minister. As a new Senator I have not heard many Ministers speak with such enthusiasm, commitment and gusto. The Minister has great knowledge of his brief. I have complimented him previously on his performances on radio and television.

The Minister mentioned the need to upskill farmers throughout the country. I have a question about shellfish farmers whom I watch from my back door. I am the Member of the Oireachtas who lives closest to the water; I live on the water. My son is a shellfish man and I wonder about the laborious methods they use. Is upskilling available for shellfish and oyster farmers?

As an island nation we have opportunities in the shellfish industry to export throughout Europe, because what is being done is only a fraction of what could be done. The area in which I live is a designated shellfish area but there are effluent discharges from Northern Ireland and the towns on the lough. What can be done to minimise the discharge into the waters of important designated shellfish areas?

Earlier the Minister highlighted the huge potential in the food and dairy industries to generate economic activity. How many jobs are directly associated with the fishing industry? How does the Minister see this number increasing in the coming five years during the lifetime of the Government? Where does he see the real potential to grow economic activity, add value and, ultimately, increase employment?

To answer Senator Mullins, I have a figure in my head but I do not want to give him the wrong information. However, I can tell him that seafood produce sold out of Ireland is worth approximately €700 million and we want to increase this to more than €1 billion by 2020. This is a very modest target and we will be significantly above it if we do what I hope to do with regard to aquaculture and foreign landings.

As we see stocks improve and recover it is hoped the allocation of total allowable catches to our fishing fleet will also increase. If one adds up the processing and aquaculture sectors and the fishing industry as we understand it, the on-sea industry, we can create thousands of jobs. It is important not to oversell this, but we are discussing coastal areas and thousands of jobs in coastal communities would be hugely valuable. The Killybegs jobs initiative project is part of this. This was not my initiative.

I was approached by a number of business people and representatives of the KFO, the county manager, Letterkenny IT and BIM who said they could do something to create a significant number of jobs in Killybegs and add to the town being a driver for the Donegal region. They asked for policy support and not money for a number of initiatives and some of them are under way. They have had follow up meetings since then.

Senator Ó Domhnaill referred to individual transferable quotas, ITQs, but my views in this regard are well known. I am sure the Commissioner sees me as a problem child in this regard but I am not reassured by what I have been told and I am concerned at any new system that would require countries to facilitate the transfer of quotas between boats. There is anecdotal evidence to suggest that people have been waving cheque books in Castletownbere and fishing ports on the Bay of Biscay seeking to buy quota to get ahead of the policy. That is worrying and it is not the direction we should take in the CFP.

I agree with greater regionalisation. The proposals on regionalisation do not meet the expectations that followed the Green Paper published a number of months ago. There are also a number of problems with the approach to regionalisation adopted in the draft report. For example, if we manage fish stocks in the western waters, who enforces the rules if the Commission does not? Regionalisation raises practical problems on which we need more comprehensive answers. With regard to decision-making on stock management and recovery plans, more regionalisation is needed in terms of the input for the management of the stocks in Irish waters.

With regard to mackerel fishing, I rarely deliberately target countries outside the EU for criticism and it should not be done lightly but the attitude that Iceland and the Faroe Islands are taking to targeting mackerel stocks is disgraceful. The EU has worked hard in the past ten years to build up this hugely valuable stock. It is the most important stock for the domestic fishing sector. Mackerel fishing is worth €3 billion to the Union. The stock has increased and it has been one of the success stories of stock management.

It has increased to such an extent that the feeding grounds of mackerel have expanded into Faroese and Icelandic waters and the response from the Faroe Islands and Iceland has been to try to fish as much of it as they can in as short a period of time as they can because it is so valuable. A tonne of mackerel is worth between €1,200 and €1,300 whereas most white fish cost €300 a tonne. Mackerel is caught in massive volumes by our fishermen and those of other states. In the past few days a Peruvian registered vessel, the Lafayette, which has the largest processing capacity in the world, entered Faroese waters. There is so much mackerel being caught in these waters that they cannot process it. They have had to bring in floating processing factories such as the Lafayette, to catch as much as they can before this madness is stopped.

All the international scientific study of mackerel stock suggests not more than 600,000 tonnes of the fish should be caught this year but more than 1 million tonnes will be caught. The Faroe Islands previously had an agreement with the EU and Norway — Norway is the good guy here working with the Union — under which approximately two thirds of the quota was transferred to the Union and less than one third to Norway with 5% retained by the islands. The Faroe Islands and Iceland have both applied to themselves a tonnage of 150,000 each in mackerel out of a supposed catch of 600,000. In other words, they propose to give half the catch to themselves. That is an act of hugely irresponsible stock management and it will butcher a valuable resource from which everybody should gain. The implications for Ireland are massive because, as a result of what is happening, when I visit Brussels in December to renegotiate next year's mackerel quota for our fleet, we are likely to experience a significant reduction because of what is happening in Faroese and Icelandic waters when it should increase as the stock expands.

What is happening is unacceptable and the Union has tried diplomacy for 18 months to resolve this issue but that has not worked. Iceland and the Faroe Islands are ignoring the entreaties. There was an attempt to reach a deal a number of months ago but people walked away from the table. I proposed at last month's Council that the Union impose trade sanctions on Iceland and the Faroe Islands. Initially this would involve a ban on all imports of mackerel products. If nothing happened as a result of that, we would ban the importation of all pelagic species, including fish meal, into the Union and we would scale it up if there was still no response after that. I secured support from the vast majority of members around the Council table and from the Commissioner who said that by October she will have proposals to introduce sanctions. We are making progress but, unfortunately, where the Union is concerned, the wheels move slowly and, in the meantime, our stock is being damaged. We are taking the issue seriously. Ireland has only so much muscle but I have led the debate on this at EU level and I have been as proactive and aggressive as I can because that is required.

In response to Senator Cummins, because of the good news story that is mackerel, we hope to have an increased quota for this year, which will be allocated in the autumn. The decision I had was whether I should reopen the allocation of the stock between the pelagic fleet and the polyvalent fleet, which is a contentious issue. That is something on which I must make a decision. I am slow to take on too many reviews at the same time, particularly when we do not know the potential mackerel quota reduction in December. We could go through a difficult process that splits the fishing industry to allocate a 10% increase in mackerel quota this year and then end up with a 10% reduction in December and find that the process was undertaken for nothing. I am cautious about doing that because it is contentious.

I hope there will be a decision on boarfish within the next ten days. We are trying to ensure people who have a track record of catching boarfish and who have helped to develop this aspect of the industry and the science relating to what I hope will be a valuable stock in the years ahead will get preferential treatment but that a decent quota will be available for boats that want to experiment with this stock to ascertain whether it would be viable for them. This is the first year we will have quota for boarfish and we will have 22,000 tonnes. We are trying to get the balance right but people will always disagree.

Celtic Sea herring is also a good news story. We are likely to secure an increase in quota and we do not face the same time constraint as we do on boarfish and mackerel. Early autumn will be decision-making time on herring.

The issue of moving from criminal sanctions to administrative sanctions is addressed in the programme of Government. A former Deputy and party colleague, Jim O'Keeffe, drafted legislation to do that when he was in opposition.

Advice has been received from the Attorney General's office but introducing such legislation is not as easy as we hoped. It is still a commitment in the programme for Government and we are exploring legal ways of overcoming these difficulties. It will not happen as quickly as we would have liked, however. We will work with the Attorney General's office to make some progress on it.

There are 23 very large vessels in the pelagic fleet, most of which fish out of Killybegs, that catch large amounts of mackerel and herring. Their owners have invested significant sums of money to be in that position and provide an efficient way of catching, processing and selling fish. Killybegs is an efficient operation. Mackerel catches are allowed for other vessels. The quota is split between the pelagic fleet and others by 87:13. I have an open mind on examining a more effective and equitable way of allocating quota. However, I do not want to be putting people out of business at the same time. It is not as simple as the suggestion of sharing out the quotas more evenly. Some vessel owners have economies of scale they need to meet to pay for their machinery. The polyvalent fleet is the largest and it is allowed a small part of the pelagic catch.

Reviewing the Common Fisheries Policy will force us to deal more creatively with issues such as discards, which are unacceptable. It will require us to be more constructive to achieve a sustainable yield from existing fish stocks and ensure they are not reduced. This is about managing the stocks to ensure there is a fishing industry in the future. Developing and expanding aquaculture will be a significant element for the first time in the CFP. I hope we will be able to secure financial assistance to develop aquaculture in Ireland.

There is an issue around harbour dues which is being reviewed. My Department owns and operates six fishing harbours which are commercial operations. We need to listen to the argument of those who claim the dues are too high while ensuring the harbours pay for themselves. This is about balancing commercial reality. These harbours are not the same as privately run ones which are run commercially and we need to take the public good into account when setting harbour dues. However, we need to have a return from them. The purpose of the review of harbour dues is to get consistency across all six departmental ports. Rents charged on properties in these ports are also another issue. An independent arbitrator will decide on what a fair rent is for these premises.

Is the Government holding back on fish quotas? They are often held back to cover by-catches. For example, when allocating the 22,000 tonnes of boar fish quota, 5% will be kept for by-catches. If a fisherman did not catch a specific species but caught some boar fish, that 5% will cover his bringing them ashore rather than discarding them. These reserve quotas are used before the end of year, regardless.

I cannot give a commitment on the Sneem fishery without examining it in more detail. I hope Senator Sheahan will give me more details about it later.

There seems to be a misunderstanding about salmon fishing which I do not control. There is an anomaly around the management of inland fisheries which includes salmon. It comes within the remit of the Department of Communications, Energy and Natural Resources. It is a call for the Minister, Deputy Rabbitte, not me. I met the fishermen in Donegal who had lost their pots after a storm. I have sympathy for their arguments but we need to be careful that by reopening a salmon fishery we do not set a precedent. Once it is done for one community, there will be an avalanche of applications from other communities pleading special cases. Why should those on the Aran Islands be treated differently to those living in Allihies?

Bord Iascaigh Mhara is responsible for training in the fisheries sector. There is a staffing problem with training deckhands and skippers. I am not sure what courses are available for upskilling fish farmers but I will get in contact with BIM about it.

Does the Minister have any control over individual transferable quotas, ITQs?

That has nothing to do with the Lisbon treaty. The Common Fisheries Policy will be decided at Council and I hope we will achieve unanimity in agreeing it. In the meantime, the way Ireland has always done its business in the European Union is not by voting against proposals. Under qualified majority voting, QMV, we have three votes at Council. The way to get things done in Europe is to build alliances around an argument and win it. That is why we are speaking to the French, Germans and other member states concerned about what may happen as a result of implementing ITQs. One looks for big partners around which one creates a coalition to win one's argument. There are those member states which want to go down the ITQ road. Europe is not about taking a stand, refusing to budge and losing a vote and then claiming the structures are unfair. It is about using the existing mechanisms to win the argument by getting a majority behind it. Ireland has been good at achieving this both in the European Parliament and European Council.

Ireland, a country of 4 million people, has influenced the direction of the debate about the review of the Common Agricultural Policy, which affects 500 million people. This shows we are punching way above our weight in influencing major policy decisions. We will continue to do this with the Common Fisheries Policy. I will probably spend every second week until the middle of 2013 or perhaps even later outside the country meeting Ministers from other member states, as I try to put together deals and persuade the Commission it is making a mistake, while also offering it an alternative. I will not threaten to vote against the CAP or argue that the structures of the European Union are undemocratic because one does not get anywhere in the EU by engaging in that type of grandstanding. One must win the argument and that will be my focus. I am fortunate to have an excellent Department with many smart officials who know how the European Union system works. They have done a great job in positioning Ireland as one of the key players in shaping the Common Agricultural Policy and Common Fisheries Policy. I hope that following 18 months or two years of discussions we will, in early 2013, achieve an acceptable outcome which will secure unanimous support and for which Ireland will be the deal-maker.

I thank the Minister for his time and the diligent and efficient manner in which he responded to questions. I will allow Senator Ó Domhnaill to make a brief concluding comment.

As the Fianna Fáil Party spokesperson on agriculture, fisheries and food, I acknowledge the constructive nature of this discussion. I thank the Minister and Leader. We may have political and policy differences but this has been a constructive day. I welcome the Minister's commitment on the key issues we raised about the review of the Common Fisheries Policy, which is crucial to the economic survival of the fisheries sector. I wish him well in the negotiations on the CFP and the CAP. He has the full support of the Fianna Fáil Party whose MEPs will work closely with him.

I referred to trade restrictions which are important for the Irish mackerel sector because Iceland and the Faroe Islands are behaving disgracefully in this matter, as the Minister agreed. He indicated the Commissioner will bring proposals to the European Council in October. I ask him to keep Senators informed of progress in the matter.

I thank the Minister for coming before the House. This is the first experiment the Seanad has had with questions and answers. While we can tweak the procedure for conducting our business, this is a good example of how Senators should do business in future, primarily because of the expertise and assistance provided by the Minister. I thank him for responding to all the questions posed.

I thank the Minister for coming before the House. This has been a worthwhile discussion on agriculture and fisheries.

I heard most of the discussion in my office and was highly impressed by the Minister's responses, the detail with which he answered questions and his command of his brief. In the mid-1990s, his father was only a couple of days in office when he participated in negotiations on the Common Fisheries Policy. I have every confidence the Minister will drive job creation through his Department. Agriculture, fisheries and food is one area in which Ireland can generate significant growth. I wish the Minister well.

Sitting suspended at 2.25 p.m. and resumed at 3 p.m.