Dáil Éireann díospóireacht -
Wednesday, 4 May 1983

Vol. 342 No. 2

Private Members' Business. - Closure of Agricultural Based Industries: Motion (Resumed).

The following motion was moved by Deputy Noonan(Limerick West) on Tuesday, 3 May 1983:

That Dáil Éireann calls on the Government to review their decision in regard to the proposed closures of the many agricultural based industries as the consequences of such closures would be detrimental to the continuance and growth of the food processing industries in this country.

Debate resumed on amendment No. 1:

To delete all words after "Dáil Éireann" and substitute:

supports the efforts of the Government to increase the production of raw material for the food processing industry and to promote the development of the industry along the most efficient lines.

—(Minister for Agriculture.)

Mr. Kitt

When I moved the adjournment on this motion yesterday evening I was voicing my criticism of statements made by the chairman of the Sugar Company concerning Tuam sugar factory. I was particularly critical of two statements that the chairman made in his annual report. He asked farmers to increase beet acreage by 20 per cent in the western catchment area, but when the acreage sought by the Tuam area was of the order of 10,000 acres this was refused by the Sugar Company. They would not allow a greater acreage than 8,500.

I also want to criticise a statement by the chairman of the Sugar Company in which he justified the closure of Tuam factory by referring to the recommendations of the Joint Oireachtas Committee. I am sure the House and anyone who has studied that report are well aware that the committee also stated that Tuam should not be closed until alternative employment was provided in the town. The employment situation in Tuam is serious and, unfortunately, we have not got the industry we were looking for, let alone replacing the jobs of people who would be made redundant by the closure of the sugar factory.

I should also like to mention the losses which are supposed to have been incurred by the Tuam factory. In the annual report of the Sugar Company a figure of £2½ million was mentioned as the loss for 1982. I met the workers' action committee concerning this matter and they informed me that the losses at Tuam last year were £1.4 million. They are hopeful that the projected loss for 1983 will be just under £1 million. I understand that the Sugar Company have now accepted this figure and it should be seen in the context of their total loss for 1982 which, the annual report states, was £22 million. We must immediately ask where were these losses in the Sugar Company when only £1.4 million was lost in the Tuam operation. I hope the Minister of State will reply to that question.

Another very important point relates to the loss to the Exchequer in the event of the closure of Tuam factory. The figures I have available show that with payments of PAYE, PRSI, VAT and unemployment benefit, the total amount of money would mean a loss to the Exchequer of £2.86 million. It is imperative that we get a commitment from the Government to Tuam factory. Fianna Fáil in Government gave that commitment and when Deputy Lenihan, as Minister for Agriculture, allocated £30 million to the Sugar Company in 1982, he spelled that out very clearly. I should like to quote from the debate on the Sugar Manufacture (Amendment) Bill, 1982, in the Official Report of 29 June 1982, volume 337, column 236:

What is true of the company in general is, of course, true of the Tuam factory in particular. In deciding that this factory should remain open the Government are affording an opportunity to all concerned to ensure that the necessary efforts are made to guarantee its future.

The effort has been made and beet acreage has increased over the last two years. The catchment area could, in fact, produce much more beet than was allocated to them. The workers in the factory have agreed to a voluntary redundancy scheme which means that the work force has been cut from 376 to 318.

The tonnage per acre and the sugar content in the Tuam catchment area was very close to the national average. When I was quoting from the Official Report, I noticed that Deputy Hegarty contributed to that debate and I am sure that he, as a man associated with the sugar industry, knows that the factory was located in Tuam for social as well as commercial reasons. I ask him to consider the great benefit that this factory has been to County Galway and to the west generally.

I note from reading various reports by the Galway County Committee of Agriculture, now known as the ACOT Committee, that the advisers have stated on many occasions that more beet can be grown in the western catchment area. They have stated that this can be done without any adverse effect on livestock productivity. This is the case in many other European countries and I have no doubt it can also be done in the Tuam catchment area.

I have mentioned the benefits to the west with regard to the income from the sugar beet industry. In 1981 it was reported that £6 million was directly derived as income from the sugar beet crop and indirectly many people benefited from it. One can have rationalisation without closures but I am afraid the Sugar Company are adopting a policy of closures to solve our problems. This is not the the correct way to deal with this problem. Tuam set a good example by accepting voluntary redundancies. There is also scope in other agricultural based industries to have redundancies but not to have an immediate decision by the Sugar Company to close down these types of industries. I hope the Government will use their influence to see that these industries will not be closed. They should look at how savings can be made and also at rationalisation but let us not have these precipitate closures before full investigations have been made.

Minister of State at the Department of Agriculture (Mr. Hegarty)

The welfare of our food processing industry is a subject in which I have had for a long time a deep interest, an interest which has been intensified since I became Minister of State at the Department of Agriculture. I fully realise that while the production at farm levels must be the first priority, the failure of our processing sector would create serious difficulties for our farmers. To be successful, however, our processing must be efficiently conducted in terms of costs, packing, presentation, marketing and acceptability by the eventual user or consumer. In the present world of keen international competition our processing industry has to get all these factors right or go under. That is the stark reality of the position, and one to which we must face up if we are to survive. We have many food processing units in which we can have the utmost confidence as to their viability — this applies particularly to the dairying industry — and we have many more which, I feel sure, could with greater effort come into that classification also.

Last evening Opposition spokesmen were somewhat dismissive of the work of the committee which the Minister established recently to monitor imports of foodstuffs, the extent of which in more recent years has quite understandably caused concern to all who are interested in the welfare of our agriculture industry and the agri-business. I would like to say here that the objective of the committee's work is to pinpoint the imports which are supplanting home production and to ascertain the real reasons why such imports are taking place. Until we find out precisely what the problem is that is confronting us we will not know exactly how we should combat it. I would hope that, armed with this detailed information, we will be in a position to see what action might best be taken with a view to ensuring that home produced goods would replace the imports to the maximum extent possible. We can all talk about the possibility of setting up embargoes and making a big row about imports of horticultural products but we must bear in mind that we, as a nation exporting £700 million worth of food, are very vulnerable. Our future must lie in being competitive and there is no good reason why we should not be.

At this point I would like to refer also to the Horticultural Development Group, which was set up in 1980 to identify potential areas of development in the horticultural industry and to make recommendations to the Minister on the measures needed to achieve such development as well as on specific programmes and projects. The group was asked to give special attention to the potential for creating new jobs in the industry with particular reference to enabling trained young people to become established in commercial production. The group was originally appointed for a three year term of office which has recently come to an end. I propose to appoint the group for a further three year term from the nominations of all the different interests represented on the original group. At the request of some Members of this House we will be including ladies from the country markets. However, there are still one or two bodies which have not sent in to me the names of the people they wish to nominate to the group and when these are all in I will consider whether some additional independent people should also be directly involved in the work of the group. We hope to be on the way by mid-May.

So far the group have made valuable recommendations on the tomato, processed vegetable and apple sectors. I understand that the group had been working on a further report on the processed vegetable sector and on the production and marketing of fresh vegetables. I would like to see the new group complete these reports as quickly as possible and look at other aspects of the development of the horticultural sector, in particular policies that would meet the threat of imported fruit and vegetables of a kind we can produce ourselves.

I would here like to express my thanks to the members of the committee, which is now ceasing to function, for their excellent work, which is much appreciated. The committee has been working diligently behind closed doors since 1980 for the horticultural sector.

In contributing to this debate I want to put on record my involvement in and commitment to the food processing industry. Many Deputies are in fact aware that I was in no small way involved in the setting up of East Cork Foods. I travelled through the highways and, mostly, byways of the area to get the local people working together to set up an indigenous industry which provided local employment and gave an income to the farmers in the area through the processing of locally-produced vegetables. I maintained my involvement with the company after it was set up and up to the time I became Minister I continued as director.

This Midleton plant is owned by East Cork Foods Ltd. which is 97 per cent owned by CSET. CSET purchased most of the local shareholding and we have now very few local shareholders. During my period as director of East Cork Foods right up to the time I became Minister I was under the impression that the company was paying its way and even making a small profit. It was not until I became Minister that I learned that the accounts of East Cork Foods do not in fact represent a true picture of the profitability of the Midleton undertaking. All production is sold to CSET at a break-even price. Losses are carried in the overall accounts as divisional losses by Erin Foods. And, as the Minister pointed out last night, these losses are a threat to the very existence of our sugar industry and the highly profitable beet growing enterprises.

Indeed, I might refer at this stage to Deputy Kitt's complaint of last night that Tuam growers looked for 10,000 acres and got only 8,500 acres. He omitted to mention that this 8,500 acres represents a substantial increase over previous years — some 21 per cent increase in fact. Indeed it was something the Mallow growers and I am sure the Thurles and Carlow growers were not that happy about. With the success of the 1982 campaign there was considerable grower pressure for increased acreage but except for Mallow, where an increase of 18 per cent was granted to bring levels back after the grow no beet campaign, no increases were granted. No increased acreage was granted to Carlow or Thurles although warranted on a commercial basis. Nobody got extra beet except Tuam. They believe they were entitled to a fair amount of extra beet and did not get it. That is a good trend now and it is certainly a good thing that farmers are interested in beet growing. The crop has been a success. Let us hope that 1982, with its extraordinary yield, will be repeated this year because for the tillage farmer the sugar beet crop still constitutes a very substantial slice of his annual income. Substantial cheques from his sugar beet acreage can be of vital importance.

To get back to Midleton, the situation is that the losses for the year ended September 1982 were £1.4 million. As a result of a deputation the Minister had these figures checked and, regrettably, they are correct.

The huge deficits of CSET as shown by recent years' accounts are mainly due to Erin Foods which accounted for some £13 million loss in 1981-82. The basic fact that losses of this magnitude cannot be sustained has to be faced and, to be fair to our predecessors in office, it is clear that that grim reality was being realised. Evidence of such realisation is the agreement to the closure of the Skibbereen and Carlow food undertakings in the period November 1980 to May 1981. Unfortunately, as the Oireachtas Joint Committee on State-Sponsored Bodies had indicated and the consultants' report confirmed, this action was not enough to safeguard our sugar industry or the remainder of the Erin Foods operations. It was clear that further action was necessary and the Minister has last night indicated the basis and reason for such action.

I would like to point out to the House here how vegetable growing is now an established feature of our own East Cork farming. We do have farmers there who are willing and able to grow top quality produce. There is terrific potential if the new technology of the 1980s can be adopted satisfactorily, but the viability of any undertaking, the capital investment, lead-in time to profitability, marketing et cetera need careful study. It is an unfortunate fact that multinationals have enormous advantages in these areas. However, I can assure the House that this Government have a positive commitment to the development of a viable food processing industry and I, as Minister of State with specific responsibilities in the food area, will be co-operating fully in this. There have already been discussions with interested parties with a view to the creation of viable profit making enterprises in Midleton and Limerick in replacement of East Cork Foods and Mattersons canning operations. I have been involved in, and have in fact been responsible for, getting some of these discussions under way, and I shall continue with my commitment to do all in my power to ensure a satisfactory end to negotiations with regard to a new food enterprise.

At this stage I should like to tell the House that we are getting the full co-operation of all the State agencies and the full co-operation of the local farming community. In October 1982 we sent a deputation — I was away at the time — to the then Minister. That deputation was received by him. The request was quite simple. We requested a year in which to do something with this industry and we got the year. We have our peas and our beans and we will be working right up to the end of September. We have that time then in which to make a success of a new operation. I am more than optimistic. The House will be the first to learn about the development when it comes right but it would be premature and prejudicial at this stage to develop it any further.

Deputy M. Ahern is fully aware of what has taken place.

With regard to problems in the potato sector, I would like, first of all, to refer to imports, about which there has been much publicity in recent months, and to state that as members of the EEC we are obliged to allow access to our markets in accordance with Community rules. Potato imports largely depend on domestic supply. For instance, last season, when domestic supplies were only about 85 per cent of requirements, large imports — 92,000 tonnes — mainly Dutch, took place. On the other hand, this season domestic supplies are adequate to meet demand and consequently because of the lower prices there has been a dramatic reduction in the volume of imports. For some considerable time there has been pressure from producers' representatives and others to set up some sort of overall body to regulate all sides of the potato industry. The most recent approach has been from the IFA and the chairman of its commodity group, John Ahern. They have done considerable work in consulting all sides and now have proposed the setting up of a self-financing Potato Authority. The IFA have been told that their proposals, including the legal implications, would be examined and this is being done. It will involve legislation and a further meeting with the IFA is envisaged. Unfortunately, our seed potato exports have been decreasing in recent years, mainly due to intense competition from new varieties being marketed by other countries and to our own high costs of production because of inflation. The future for the traditional varieties such as King Edward, Arran Banner and Up-to-Date, even Pinks is bleak. Fortunately Irish Potato Marketing Ltd., which is the sole exporter to third countries, has developed, in collaboration with An Foras Talúntais, a comparatively new variety, Cara, which is selling well on export markets and there are also some promising new varieties such as Claustor and Mizen following on.

One of our problems has been that we have not a suitable processing variety with shallow eyes of tonnage large enough to make it a viable operation from the farming point of view. I believe that Cara measures up to this requirement and if that is so it will open up very substantial new avenues for the growing of potatoes for the processing market. IPM have plant breeders' rights for these varieties. The quantity of Cara seed being produced has increased dramatically in recent years and last year it formed 60 per cent of our exports. The 1983 acreage of the variety is 50 per cent up on last year. With the change over to Cara it is hoped that IPM can in the near future increase our share of export markets and thereby procure an enhanced income for the growers.

The market for processed potatoes — frozen chips, crisps, flake and so on — is growing but much of the market is being supplied by imports. The whole potato processing sector is labouring under considerable difficulties such as arranging successful contracts with growers and with regard to high production costs. A frozen chip factory and a crisp factory established here in recent years are reported to be in financial difficulties. Perhaps the best hope for this side of the industry is the development of potato producer groups and their involvement in the processing sector. This could help to secure a steady supply of raw material, which is an abiding problem. The decrease in our inflation rate should also be a factor in bringing down production costs.

With regard to the general supply in the market place of fresh potatoes, one big problem is that of presentation and quality control. The IFA themselves have come up with their own solution to that in so far as each grower marketing potatoes in future will have his bag clearly identified with a number or a name. That in itself will solve that problem because each individual grower must stand over his own grading, marketing and product.

In conclusion, I want to reaffirm the Government's commitment to a policy which is designed to ensure that adequate supplies of raw material for processing are produced here on our own farms as efficiently as possible and that adequate assistance is available from the IDA and other State agencies to expand viable food processing ventures to deal with that raw material.

As Deputy De Rossa has an amendment, I would like at this stage to forego some of my time to facilitate him.

Mr. De Rossa

I appreciate the time given to me by the Minister of State. In speaking to this debate we are anxious that problems in relation to East Cork Foods should be dealt with in the motion. For that reason I appeal to the parties in the Dáil to accept the amendment put down by The Workers' Party.

The three items before us — the motion, the Government amendment and our amendment — are not contradictory in any way. The Government amendment is probably more realistic than the Fianna Fáil motion in that it refers specifically to a most important element in relation to the food processing sector: the production of raw materials. As has been mentioned a number of times in the course of the debate, this is one of the key areas which will either make or break the food processing industry. The Minister of State indicated that they are working to try to iron out that problem. He also mentioned the number of factories which had in recent years been established. He was probably referring to factories in the Donegal area which were dealing with frozen chips, crisps and so on. Perhaps the difficulty then is that they were attempting simply to replace imports, which is important, but because of their structure and the level of capital which was available to them they had not the ability or capacity to go for export markets. It must be accepted and understood by everybody in relation to all areas of industry that the Irish market is far too small to support any area, be it food processing, engineering or anything else. It must sell abroad. For this reason I oppose any suggestion that imports of food should be banned. We must export or the economy will just shrivel up. Banning imports will simply result in other countries, in turn, banning our exports and that would be of no use to us in the long run.

I appeal particularly to the Fianna Fáil Deputies from Cork to support the amendment which Deputy Mac Giolla and I have put down urging the Government to keep the East Cork Foods factory open. The food processing industry clearly is in trouble and in that I refer as much to the private food processing industry as to the State industry. A quantity of £600 million or thereabouts worth of food imports is being brought into the country. The State food processing industry is probably the more important in the sense that it has the necessary capacity and in the past has aimed as much at exports as at serving the home market.

The problem in relation to the production of raw materials is serious. We have numerous examples of the manner in which the farming sector for short-term gain has not fulfilled contracts it entered into with both State and private industry for the supply of raw materials. No industry which has large capital investment can survive unless it is sure of its raw material. It is well known that the acreage under vegetables is falling and at the same time the import of vegetables of all kinds is increasing.

It would be wrong to discuss this area without also referring to the manner in which the cattle industry is organised and the falling cattle herd. Large fortunes are being made out of the export of live cattle while meat processing factories are closing down.

In relation to the food processing industry a number of constraints are holding back its development. The potential for jobs in that industry is enormous, not merely in direct employment in the processing factories but also in the service industries to that area. Apart from the production of raw materials, and having a stable and constant supply of them, we have the question of energy costs. We must recognise that we have the highest energy costs in the EEC. If the Government are serious about developing the food processing industry and many other areas in industry, they must set about tackling the question of high energy cost.

In reference to that area and as it affects the food processing industry, I draw attention to the Telesis Report which says:

Energy can be a significant cost in processed foods, also. Energy is more expensive in Ireland than in many competing countries. Within the EEC this has been particularly the case versus Holland — because of its natural gas fields — and progressively so versus the UK. Again, the importance of this penalty can be put in perspective by analysing cost structures. Dehydration is a typical example of food processing for which the higher cost of Irish energy is a severe competitive penalty. Energy cost may represent some 20 per cent of the total ex-factory cost of consumer packaged dried vegetables.

This has particular importance to the East Cork Food plant.

Another area which is very important to food processing is not only a steady supply of raw materials but also quality raw materials. If the Government are serious they must set about establishing an effective way of carrying out research and development in this area. The whole area of export marketing does not seem to be organised. There are a number of areas which are doing a very good job but no serious attempt is being made in the vegetable processing sector to increase export marketing.

I urge the Government to consider adopting my amendment and appeal to the Fianna Fáil Deputies from Cork to support it. I ask the Government to pay particular attention to cheap energy, and organising dependable supplies and effective marketing.

Mr. M. Ahern

I support the Fianna Fáil motion and having listened to the Minister for Agriculture last night and his Minister of State this evening, I have no reason to change my mind. The Minister's speech was only padding and did not get down to the nitty gritty of the Government's amendment which reads "That Dáil Éireann supports the efforts of the Government to increase the production of raw material for the food processing industry and to promote the development of the industry along the most efficient lines". He did not spell out how that would be done, but I would love to hear what they intend to do to implement that amendment.

I want to deal primarily with East Cork Foods Limited. Over the life-time of that firm I am led to believe profits were being made, but in the last two or three years that trend reversed to a loss-making position. In 1982 the loss amounted to £1.4 million. I have been informed that the Mallow factory made a loss of £1.4 million or £1.5 million. The number of workers in East Cork Foods Limited was approximately 120 and in Mallow about 60. It was held that the land and the conditions in the East Cork Foods and Midleton areas are much more suitable to vegetable growing than the Mallow area. I find it very difficult to understand the raison d'etre behind the closing down of the Midleton plant under those circumstances. I have no doubt the next stage will be the closing down of the Erin Food plant in Mallow. This will be detrimental to the food processing industry because we will not have any Irish food processing industry. A great deal of food is being imported at present, but what will happen if the Mallow factory is closed? We will be almost 100 per cent dependent on imported vegetables.

Prior to the recent election Fine Gael gave a written commitment to keep East Cork Foods open and to improve the efficiency of that plant and the Erin Foods plant in Mallow. No sooner was there a change in Government than this commitment, as well as the written commitment of the Tánaiste, was committed to the shredder. On 29 June 1982 the Minister of State, Deputy Hegarty, in a speech on the Sugar Company Bill, stated that East Cork Foods were established for social as well as commercial purposes. I do not hold with the idea that factories losing a great deal of money should be kept open just for the sake of keeping them open. I believe there must be trimming down, increased efficiency and so on. Under the circumstances, the closure of East Cork Foods will take approximately £5 million out of circulation in that area. The social aspect of the closure of this factory will be much greater than the loss that would have to be sustained by the Government if the factory were to be kept open. This social aspect is vitally important. The Government's action is further evidence of their lack of social conscience.

The Workers' Party 's concern at the pending closure of East Cork Foods is laudable in itself but it must be viewed with a certain amount of scepticism when one recalls the inactivity of their former colleague, Mr. Joe Sherlock, in the constituency I represent. When it was first mooted that East Cork Foods was to close, Mr. Sherlock kept very quiet and did not come to a number of meetings in Midleton which were dealing with that closure. I believe he considered the keeping open of Erin Foods in Mallow more important. I can assure The Workers' Party that their concern will not fool the people of East Cork and no votes will be garnered by their posturings.

How do the Minister of State and the Government intend to seriously tackle the virtual dumping of vegetables and other products on our markets? How do they intend to put the vegetable producing industry on a sound and valuable footing? These are fair questions and deserve answers. These are the issues on which the election campaign was fought. Now is the time, not during elections, to produce answers. At election time we tell the people what we will do. I call on the Minister and the Minister of State——

Mr. Hegarty

I will have five minutes at the end and I will tell the Deputy.

Mr. M. Ahern

——to tell the people how they will act, and to stop saying what we did or what we did not do when we were in Government. They are now in the driving seat and I ask them to drive. I know the Minister of State is working hard to establish another industry in place of the industry which has been closed down. I wish him the best of luck.

Mr. N. Treacy

I am very pleased to have the opportunity to speak in support of this motion. This is a prime agricultural country, but maximum use is not being made of our tremendous land resources. Last year we imported circa £75 million worth of vegetables at a great loss to the Exchequer, to the disadvantage of our balance of payments and with a loss of revenue from employment contributions to the Exchequer which would have been available if these vegetables were produced at home.

We must take urgent and immediate steps to ensure that the incentives are available to farmer producers to grow vegetables and potatoes, and that the marketing structures exist within which there will be a guarantee that the necessary investment in time, labour and raw materials will be supplemented with a decent profit for our industrious farmers.

I want to refer specifically this evening to the Tuam sugar factory in the west of Ireland which has been part of the Comhlucht Siúicre Éireann Teoranta operations for the past 50 years. There has been much debate about its viability within CSET. The economic implications for the west should be seriously examined before an attempt is even made to consider the closing of this factory, apart from the finances of the Sugar Company. The Government should not seek to hide behind consultants. All the facts are known. The Sugar Company were investigated thoroughly by the Oireachtas Joint Committee some time ago. Apart from the effects on Tuam, the closure of the beet factory would probably also mean the closure of the railways and in particular the Sligo-Limerick line. Farmers would not grow any more beet west of the Shannon if there were no factory in Tuam.

Experts have stated consistently that tillage has a considerable future particularly in the west. Beet is also a relatively profitable crop. Land leasing, which we hear so much about at the moment, for beet growing in the west, through the operations of the Sugar Company has been very successful. This should be continued. The fact remains that 318 people are employed permanently in CSET in Tuam. In 1982 they paid £1.2 million in PAYE and PRSI to the State. A further 300 people are employed annually on a seasonal basis which means a great deal to the economic life of the west.

The commitment of the farmers in the Tuam beet catchment area is total and absolute. Over 10,000 acres were available to the Tuam sugar factory this year. The board of CSET would allow Tuam a quota of only 8,500 acres, while the other factories have circa 30,000 acres allowed to them. Surely it is reasonable to expect that Tuam should be allowed 10,000 acres to ensure its viability. The fact that the factory in Tuam was not allowed this 10,000 acres, in spite of the fact that they were available, brings in question for me and the farmers of the west the sincerity of the board of the Sugar Company in their commitment to Tuam as one of their four factories.

In October 1982 instructions were sent by the Secretary of the Department of Agriculture to CSET to have Tuam included in all feasibility studies within the operations of CSET. In March of this year a letter was sent by a Mr. Dooney in the Department of Agriculture stating that Tuam should be omitted from the feasibility study. This is a clear indication to us that the Department and the Government have not got the commitment to the continuing operations of the sugar factory.

I am pleased to state that on 28 April a letter issued to me from Mr. Maurice Sheehy, the managing director of CSET, saying that the examination of the Tuam turbine had been completed by the experts and they were satisfied the action which they had recommended would ensure that the turbine would be in a satisfactory working condition for the foreseeable future. I hope that future will be permanent and that the Government will ensure that the Tuam factory remains in operation. It is vital to the future of the agricultural industry.

There has been much ado about the location of Tuam and the fact that the maximum amount of beet does not come from the Tuam area. I should like to point out some facts and figures to the House. As one who has been 15 years involved in the agri-business, and coming from the west where we are generoushearted people by nature, I believe we have made a major contribution in the west of Ireland to the development of agriculture. Weekly we send millions of pounds worth of livestock from the west to the midlands, the eastern part of the country, the south eastern part of the country, and to Northern Ireland. We do that on a continuous basis, obviously because it is profitable to do so from an agricultural point of view, and also because we have the commitment to production in the west, agricultural production and the production of livestock. There are no complaints from any sector of the agricultural industry about the location of the west when it comes to producing various agricultural products.

That commitment should be balanced right across the country. The Department, CSET and the Government should acknowledge the fact that the Tuam factory has been in operation for 50 years. When the farmers have that commitment there is no reason why a campaign which lasts not more than two months should not be backed up with support from outside the Tuam catchment area, if necessary, to ensure that this factory remains viable. I appeal to the House to support this motion and I appeal in particular to the Government to ensure the future of the Tuam sugar factory.

Mr. F. Fahey

I support this motion because in my view this is one of the serious problems which has not been tackled by any Government since we became a member of the EEC. When the negotiations were in progress on our entry into the EEC, great play was made with the fact that many benefits would come from EEC membership.

In this country we have one of the best raw materials in the world, but we have failed to make any impact on EEC markets where there are 900 million people, because of our consistent failure to process and market food properly. That failure can be attributed to this House and to successive Governments who failed to take action since we became a member of the EEC. I have already called for the setting up of an agricultural development organisation to promote food processing and marketing along the same lines as the IDA promote industry. Unfortunately that call has fallen on deaf ears.

In supporting this motion, I ask the Minister if he would consider proposing to the Government the establishment of a post of Minister for Food? We have the finest raw materials but we are importing food to the value of millions of pounds. As a food-producing nation we are incapable of making any impression on EEC markets with the exception of Kerrygold butter. It is a pity we are unable to export value-added Irish beef, bacon and other meat products. I have had discussions with people involved in the promotion of Irish meat. We are able to hold great trade shows in German supermarkets and in other countries, yet when it comes to the matter of exporting top-class Irish meat, the food processing and meat processing factories are not capable of fulfilling the orders. We are looking for employment and it seems ridiculous that we are unable to add value to the raw materials we have and gain maximum benefits in terms of jobs and exports.

It is time for the Government to look carefully at this whole area. I am satisfied there is vast potential for the development of our food processing and marketing businesses. I am convinced the reason it has been a failure up to now has been the lack of Government action and lack of co-ordinated policy. We need a high-powered sales team in Europe to sell Irish food and we need a high-powered processing industry to produce that food in Ireland and give it its full added value.

We might be able to do something constructive in this area if the Government gave one Minister full responsibility for the promotion and development of Irish foods. The time has come for the appointment of a Minister for Food: I use that term for want of a better one. I agree with the motion and I ask the Minister to consider specifically the proposal I have made.

Mr. Noonan

(Limerick West): I should like to express my thanks to the Deputies who contributed to this debate, to the Minister for Agriculture who spoke last evening and to the Minister of State, Deputy Hegarty, who spoke this evening.

I am disappointed at the response of the Minister, and that is putting it mildly. In my contribution last evening I said the Minister would have an opportunity of highlighting the Government's commitment, programme and policy with regard to the development of the food processing industry. As Deputy Michael Ahern rightly pointed out, the contributions of the Ministers were just padding and waffle. They have given no hope to this major industry which employs so many people and which has had a considerable impact on the social life of the areas concerned.

The amendment in the name of the Minister for Agriculture reads as follows:

To delete all words after "Dáil Éireann" and substitute:

"supports the efforts of the Government to increase the production of raw material for the food processing industry and to promote the development of the industry along the most efficient lines."

Deputy De Rossa has an amendment in his name and he has asked us to support it. As I said last night, actions speaks louder than words. The Minister for Agriculture has stated he was only 18 days in office in 1982 but he has now been in office for the past five months. However, there is no indication of any action by the Government. There was no indication of a commitment by the Minister in his contribution last night or by the Minister of State, Deputy Hegarty, the person responsible for the promotion of the food industry. They have not given any hope for the future and that is why we cannot support the amendment in the name of the Minister. We consider it is just an excuse for inaction, that it is a delaying tactic so far as our motion is concerned.

Last night the Minister when referring to the EEC price negotiations said:

"It is regrettable that in spite of all my endeavours, the price negotiations in Brussels have not yet been finalised but I am confident that the eventual package will be a worthwhile one and will show a considerable improvement over the level of the increase that had been anticipated earlier this year".

The Minister used the words "all my endeavours" but I am at a loss to know what this meant. The breakdown of the price negotiations, the annual agricultural review on the morning of 28 April last, is responsible for further losses to Irish farmers. These losses are increasing by £500,000 per day because of the failure of the Council of Ministers to come to a decision. The loss is hitting all farmers but it is affecting to a great extent the dairy farmers who are responsible for a major part of our food processing industry.

This and previous Governments have encouraged early calving and most of our progressive farmers have pushed early calving back to January in response to the national demand. They are now being unfairly penalised by the delay in the negotiations and have been badly let down by our Minister for Agriculture. The farmers who are suffering are responsible for a major input into the food processing industry. The most amazing feature of the situation is that the British Minister, Mr Walker, has greatly outwitted our Minister. He can now block even the most reasonable decision in favour of Ireland. Our Minister has let himself become isolated in regard to many aspects of these price negotiations, particularly in regard to the British variable premium. This is a financial advantage enjoyed by British exporters which is not only unfair to our interests but also contrary to the very principles of the Community.

The Minister should now call the British bluff by taking the initiative to bring the talks to an end, even to the extent of using the ultimate weapon. He might take a leaf out of his predecessor Mark Clinton's book, a colleague of his own party, who took the necessary action during the price negotiations in the mid-seventies by walking out of talks. This is the tough approach which the Minister should adopt with regard to these negotiations. Every day of indecision is costing our farmers dearly. I hope that this necessary action will be taken because the negotiating table at Brussels is no place for amateurs. We have an old saying—there is little point in sending a boy in a man's place and that is the situation with regard to the present Minister for Agriculture.

The Minister stated that the Government's second aim for our agricultural sector is to encourage increased efficiency at all levels, not least on the farm itself. An abundant supply of raw materials efficiently produced is essential to the welfare of any processing industry. This is certainly the case with our own food processing sector, which constitutes a major part of the Irish manufacturing industry as a whole. Contrast those laudable words with the absence of action. Action speaks louder than words, but action is lacking. The reverse is happening in so far as agriculture is concerned. It is downgraded by this Government, who have destroyed any prospect of economic recovery.

Government mismanagement of the whole economy, not alone in the agricultural sector, has undermined the farmers' confidence and prolonged the dreaded farm recession. That is the reality of what is happening. There is little point in the Minister expressing laudable sentiments that there should be greater production and greater efficiency but not giving the farmers the backing of the Government. Perhaps the Minister has the goodwill of our farmers at heart and is not getting support from his Government. Time will tell and we shall see what happens in the future.

I agree with the Minister that agriculture is Ireland's most important industry, contributing at least 50 per cent of our total net exports and employing half of the working population, directly or indirectly. The agricultural sector have demonstrated their ability to contribute to the economic growth in the past and I have no doubt, provided the commitment is there, that it can do so in the future. We in Government have created and will again the economic environment conducive to revitalising the farming industry, which will generate increased output and improve income. This, in turn, will hasten our economic recovery. Above all, it will recreate job opportunities, not alone for people employed in agriculture, but in all other sectors.

I give the example of our four-year plan for agricultural development. This was being put into operation when we left office in December of last year. That plan contained the ingredients for the restoration of confidence in farming. It was long-term planning which is so vitally needed in the development of agriculture at present and in the development of the food processing industry based on agriculture. Lack of interest by the Government has been highlighted by the action of the delegates of the farm organisations representing their associations in the previous Government's working party. Their recent resignations are further evidence of this Government's complete abandoning of the farming sector.

The budget recently introduced by the Minister for Finance, who should be aware of the problems affecting agriculture, is costing farmers in the region of £3 million a week because of the level of taxation. It is inhibiting farming enterprises. In addition, lack of decision by the Council of Ministers with regard to the settlement of agricultural prices is costing our farmers in the region of £½ million per day. Then the Minister came into the House last evening and outlined the importance of more efficient and increased production. This can be effected only by incentives, by the Government giving the necessary assistance and wherewithal to achieve that efficiency. What can we expect when the Government have reneged totally on their commitment to the development of agriculture?

The Minister said in the course of his remarks last evening also that he wanted to emphasise that the setting up of a committee was not the solution to the problem. The Minister of State made reference to this matter again this evening when he said that I was somewhat dismissive of the work of the committee. What I said was that there was little point in setting up a committee to examine a problem about which we all know. I said it was necessary to take action now rather than set up committees or commissions to examine the problem, that what is required now is action.

In regard to the production of raw materials at farm level the inflation factor is crucial. In this respect it is interesting to note the Minister's latest estimate of the rate of inflation for 1983 which he put at approximately 12 per cent. Of course this inflation is caused by the budgetary strategy of the Minister for Finance. I hope agriculture will be fully compensated by increased prices from Brussels. However, I doubt that such increased prices will be forthcoming at present.

I must emphasise again greater output and efficiency at farm level, as outlined by the Minister last evening. Government action is not consistent with those laudable words, more particularly their action in the recent budget showing no support at all for agricultural development. There have been also the suspension of the farm modernisation grants, the farm retirement scheme and many of the other aids to agriculture introduced by this party when in Government. Yet the Minister can come into this House and say we must be more efficient and produce more while the Minister for Finance and the Government remove the aids to do that vital work. Surely that is not consistent with good Government policy in regard to agricultural development? I would appeal to the Minister of State — whom I know has a commitment to the development of agriculture — to bring that message to his Minister.

Much has been said in this debate with regard to the Sugar Company. What was said by the Minister last evening and the Minister of State this evening gives no indication of positive action in this regard. Indeed their words were very inept, indicating no positive action for the development of this vital sector of our economy. The Minister's remarks gave no great hope. Something should be done immediately to save and secure present jobs. I was glad to note that the Minister of State this evening accepted the facts I put forward with regard to the whole of the food processing industry. However, the Government have not given the Minister the necessary support. It should be remembered that the whole of our agricultural industry can provide the wherewithal for the recovery of our economy.

The Minister last evening referred to a deputation he had received from Limerick with regard to Mattersons and said I had stated that he was very discourteous to that deputation. Those are not my words alone. In this respect I want to quote from the Limerick Echo of April 2, from an article entitled “Minister Goofs Jobs Appeal”, which said:

A deputation from Limerick was "shocked" to discover that the Minister for Agriculture didn't know enough about Mattersons. And now local union chiefs have asked whether a deal was done to save a factory elsewhere by closing our historic cannery. It was revealed today that Mr. Austin Deasy, Minister for Agriculture, had believed Mattersons to be privately owned. It is, in fact, part of the State-owned Sugar Company.

Even the Minister for Agriculture did not know that Mattersons was State-owned. The article continued:

The union leaders have now stated that they were treated with "scant courtesy" by the Minister when he met the Limerick deputation.

Those are the facts. Indeed I have news for the Minister of State present — when the Minister was contacted by the same paper the following week, speaking at his Waterford home, he is reported as saying that there had never been a question of a deal to keep East Cork Foods open while closing Mattersons. He said both were to close and the idea of a deal was nonsense. That is in sharp contrast with what the Minister of State said this evening when referring to East Cork Foods.

It is sad to note the Government's lack of commitment to the agricultural sector and the food processing industry. I ask the House to support this motion bearing in mind the continuation of the food processing industry in East Cork and, most important of all, the provision of the wherewithal to ensure that the Tuam sugar factory remains open. This party have given that commitment because we feel there is a social aspect involved in these processing industries.

Amendment put.

The Dáil divided: Tá, 74; Níl, 61.

Tá

• Allen, Bernard.
• Barnes, Monica.
• Barrett, Seán.
• Barry, Myra.
• Begley, Michael.
• Bermingham, Joe.
• Birmingham, George Martin.
• Boland, John.
• Bruton, John.
• Bruton, Richard.
• Burke, Liam.
• Carey, Donal.
• Cluskey, Frank.
• Conlon, John F.
• Coogan, Fintan.
• Cooney, Patrick Mark.
• Cosgrave, Liam T.
• Cosgrave, Michael Joe.
• Creed, Donal.
• Crotty, Kieran.
• Crowley, Frank.
• D'Arcy, Michael.
• Deasy, Mark Austin.
• Desmond, Barry.
• Desmond, Eileen.
• Donnellan, John.
• Dowling, Dick.
• Doyle, Avril.
• Doyle, Joe.
• Dukes, Alan.
• Durkan, Bernard J.
• Enright, Thomas W.
• Farrelly, John V.
• Fennell, Nuala.
• FitzGerald, Garret.
• Flanagan, Oliver J.
• Glenn, Alice.
• Griffin, Brendan.
• Harte, Patrick D.
• Hegarty, Paddy.
• Hussey, Gemma.
• Keating, Michael.
• Kenny, Enda.
• L'Estrange, Gerry.
• McCartin, Joe.
• McGahon, Brendan.
• McGinley, Dinny.
• McLoughlin, Frank.
• Manning, Maurice.
• Mitchell, Gay.
• Molony, David.
• Moynihan, Michael.
• Naughten, Liam.
• Nealon, Ted.
• Noonan, Michael. (Limerick East).
• O'Brien, Fergus.
• O'Brien, Willie.
• O'Donnell, Tom.
• O'Keeffe, Jim.
• O'Sullivan, Toddy.
• O'Toole, Paddy.
• Owen, Nora.
• Pattison, Séamus.
• Prendergast, Frank.
• Ryan, John.
• Shatter, Alan.
• Sheehan, Patrick Joseph.
• Skelly, Liam
• Spring, Dick.
• Taylor, Mervyn.
• Taylor-Quinn, Madeline.
• Timmins, Godfrey.
• Treacy, Seán.
• Yates, Ivan.

Níl

• Ahern, Bertie.
• Ahern, Michael.
• Andrews, Niall.
• Barrett, Michael.
• Barrett, Sylvester.
• Brady, Gerard.
• Brady, Vincent.
• Brennan, Mattie.
• Brennan, Paudge.
• Browne, John.
• Byrne, Hugh.
• Byrne, Seán.
• Calleary, Seán.
• Colley, George.
• Collins, Gerard.
• Conaghan, Hugh.
• Cowen, Bernard.
• Daly, Brendan.
• Doherty, Seán.
• Fahey, Francis.
• Fahey, Jackie.
• Faulkner, Pádraig.
• Fitzgerald, Gene.
• Fitzgerald, Liam Joseph.
• Fitzsimons, Jim.
• Flynn, Pádraig.
• Foley, Denis.
• Gallagher, Denis.
• Gallagher, Pat Cope.
• Geoghegan-Quinn, Máire.
• Harney, Mary.
• Haughey, Charles J.
• Hilliard, Colm.
• Hyland, Liam.
• Kirk, Séamus.
• Kitt, Michael.
• Lemass, Eileen.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leyden, Terry.
• Lyons, Denis.
• McCarthy, Seán.
• McCreevy, Charlie.
• McEllistrim, Tom.
• Morley, P.J.
• Moynihan, Donal.
• Nolan, M.J.
• Noonan, Michael J. (Limerick West)
• O'Dea, William.
• O'Hanlon, Rory.
• O'Keeffe, Edmond.
• O'Kennedy, Michael.
• O'Leary, John.
• O'Malley, Desmond J.
• Ormonde, Donal.
• Power, Paddy.
• Reynolds, Albert.
• Treacy, Noel.
• Walsh, Joe.
• Walsh, Seán.
• Woods, Michael.

Tellers: Tá, Deputies Barrett(Dún Laoghaire) and Taylor; Níl, Deputies B. Ahern and V. Brady.

Amendment declared carried.

An Ceann Comhairle

Amendment No. 2 in the name of the The Workers' Party falls.

Motion, as amended, agreed to.