Dáil Éireann Debate, Wednesday - 8 June 2016
576. Deputy Bernard J. Durkan asked the Minister for Agriculture, Food and the Marine the extent to which he has identified weaknesses arising from price fluctuations in the various segments of the food sector; if he has identified mechanisms to address these issues; and if he will make a statement on the matter. [14895/16]
View answerFood Wise 2025, the new ten-year strategy for the agri-food sector as published in July of last year, identifies the opportunities and challenges facing the sector and provides an enabling strategy that will allow the sector to grow and prosper. Food Wise includes over 400 specific recommendations, spread across the cross-cutting themes of sustainability, innovation, human capital, market development and competitiveness; as well as specific sectoral recommendations.
If these recommendations are implemented, the expert committee which drew up the Food Wise 2025 Strategy believes the following growth projections are achievable by 2025: increasing the value of agri-food exports by 85% to €19 billion; increasing value added in the sector by 70% to in excess of €13 billion; and increasing the value of primary production by 65% to almost €10 billion. With regard to employment, Food Wise foresees the creation of 23,000 additional jobs in the agri-food sector all along the supply chain from primary production to high value added product development. Realising these growth projections will be challenging, but I am confident that they can be achieved.
The Government is strongly committed to the implementation of the Food Wise strategy. I will chair the fifth meeting of the High Level Implementation Committee, including senior officials from relevant Departments and State agencies, next week.
As a small open economy which exports the vast bulk of its main agricultural commodities, Ireland will always feel the effects of volatility on world markets. However, there are measures in place to help Irish farmers through these periods. I believe that moving up the value chain where possible, in terms of the type of products sold and how they are produced, is an important insulation against volatility. The Food Wise strategy for the sector contains detailed recommendations aimed at improving value added and productivity at farm and food industry level through a focus on sustainability, efficiency, knowledge transfer and innovation.
Direct payments estimated by Teagasc at an average of over €17,000 per farm in 2015, provide a valuable source of farm income support and act as a hedge against price volatility.
With regard to farm borrowings, like my predecessor, I will have regular meetings with the CEOs of the main banks, who are all aware of price volatility issues, and are planning accordingly in terms of managing their farm loan books. My Department has also engaged actively with other financial institutions with regard to the development of innovative new lending products for the sector; and is preparing to procure an ex-ante evaluation for the introduction of Financial Instruments under the Rural Development Programme.
My Department will continue to engage with the Department of Finance on key agri-taxation policy objectives, including responses to income and price volatility.
While there are no specific risk management tools included in the Rural Development Programme, risk management is one of the topics covered by Knowledge Transfer Groups. Animal disease risks are covered by the Targeted Animal Health and Welfare Advisory measure.
Fixed price contracts are increasingly becoming a feature of the producer/processor relationship in the dairy sector, with numerous milk purchasers offering such contracts, which provide producers with the opportunity to lock in prices over the medium term, taking costs of production into account. Such relationships are a welcome development in terms of their potential to mitigate volatility.
