Deputy Bill Cotter gave me notice of his intention to raise on the Adjournment the subject matter of the closure of a mushroom processing plant in County Monaghan with the loss of some 150 jobs. Deputy Cotter has some ten minutes to present his case and the Minister of State has some five minutes to reply.
Adjournment Debate. - Mushroom Industry.
I wish to express my sincere thanks to you, Sir, for giving me this opportunity to discuss this matter this evening. I believe that the Chair has rightly assessed the situation in the mushroom industry to be very serious indeed. I hope this debate will spur the Minister and the Government into action, which I hope will happen now rather than later.
We are having debate on this issue this evening because a mushroom processing plant will close tomorrow evening with a loss of jobs. I hope the closure will be temporary rather than permanent. We had a debate on a similar issue on 14 March 1990 and during the course of that debate I sought to highlight the problems facing the industry at that point in time. In the aftermath, the Minister paid more attention to the industry; but, in my view, his efforts were entirely advisory and motivational and were not what the situation demanded. Indeed, I believe the Minister's assessment of the situation at that time was incorrect and today's stark announcement is proof enough of that.
It is quite revealing to look back on what was said in the course of the debate on 14 March 1990. My analysis of the problem in the industry at that stage indicated there were short-term and long-term problems to be faced, although I have to admit that what I saw as longer term problems have turned out to be problems in the short term.
I referred to the problems we had with the rate of exchange and the relative value of sterling to the Irish punt. That was a very severe problem in March because the value of sterling had dropped and the punt had risen from a value of 84p sterling to 97p sterling, which was an enormous difference especially when you consider that most of our mushrooms went to the English market. I felt, and indeed the Minister also felt, that we were extremely vulnerable because of that difference in the exchange rate.
However, there were other problems and I referred to the difficulties we had in producing both tonnage and quality product and I will quote a few lines here and there from my speech on that night to illustrate the analysis I had made. I suggested: "There is a grave need to overhaul and revamp the industry". I also referred to the lack of technology and that in the circumstances most growers could not afford to instal the required technology themselves. I also said that 93 per cent of growers did not have the basic cooling systems and that many of the older houses needed to be upgraded because many of them were over ten years old. I said that in order to produce better crops with greater efficiency we had to have equipment to monitor environmental changes.
At that stage I asked what we needed to do and I stated that we had to introduce forthwith a system of grants to enable growers to bring old housing stock up to standard with grant aid to cover the introduction of essential new technology. In retrospect I feel the latter part of my suggestion was more important. I also suggested that we needed to control the development of the industry because the pace of growth more or less outstripped itself. The Minister in reply agreed with much of what I had said, but his emphasis was quite different. He spent most of the time dealing with the exchange rate and I agree that this was a very serious problem at that time. However, the Minister did not advert to or mention, except in passing, the longer term problems I had outlined. I will quote from the Minister's reply:
A resolution of the current problems will only come about by the concerted action of all parties and that includes the various State agencies.
I agreed with that at that time and I assumed that the State agencies would make a meaningful input, but I have to report that the input was more motivational and certainly had no real impact on the situation. The Minister also said:
The present difficulties facing the Irish mushroom industry have largely arisen from the very rapid depreciation of sterling over the past number of months and in particular since October 1989.
I agreed with that assessment, but that problem has eased somewhat now. However, the Minister spent very little time discussing the fundamental problems facing the industry. The Minister also said:
Whilst the currency exchange rates are outside their control I impressed on them the need to tackle issues which are under their control, i.e., their own costs and greater efficiency.
He paid no further attention to that. The Minister said:
Finally, I want to assure the House that I will continue to keep the situation under review. We shall examine all areas of the industry to see where savings can be made and improvements in efficiency can be achieved.
I have to say that this has not been carried out to the letter. While the Minister has certainly been close to the industry since then — I have to admit that — improvements in efficiency have not been achieved and no effort has been made to improve matters at the level of growers, where, in my view, all the problems are. The Minister further said:
To this end I can indicate that my Department, Bord Glas, the IDA, Córas Tráchtála and the industry are in the process of undertaking a long-term strategic analysis of the whole industry...
I hope this has been done and I hope the Minister will offer something more than what he offered the last time. His previous speech was rather bland and was a useless input into the whole debate.
I hesitate to interrupt the Deputy but I would be grateful if he would bring his speech to a close.
Finally, a Cheann Comhairle, I would like to quote a question which I tabled a few days ago to the Minister for Agriculture and Food where I asked him if he would grant-aid the industry for obvious reasons, but the Minister replied that at this time the grants to the horticulture sector are under review.
I wish to ask the Minister what plans he has to save this processing plant which is due to close tomorrow evening. I want him to give me a specific reply to this issue, a reply which will give me the confidence that he knows what is happening and convince those in the company that certain moves will be taken which will strengthen the industry in the future. I look forward to hearing the Minister's reply.
I wish to give one minute of my time to Deputy Jimmy Leonard.
I am conscious of the need not to say or do anything at this stage which would have a damaging effect on one of our most successful enterprises. Monaghan Mushrooms has been one of the most striking successes in agriculture over the past decade and I am happy to have been associated with it when it was being set up initially.
I spoke to a principal in the factory today and he told me that 24 workers in the processing plant will be laid off tomorrow night. I have been assured that this is a short term measure and has been caused by the large volume of produce coming onto the market. This company have experienced small hiccups before but they are very resilient and will overcome their problems. I am not critical of the Department because they have been very helpful. I know they are examining many aspects of this industry at present. I suggested that they should carry out an in-depth study of the industry. There has been such a massive growth in this industry that there had to be some hiccups. I hope the Minister and his officials will carry out an in-depth study with the processers and growers in order to ensure the continuance of this very important industry which employs so many people.
I want to put this issue in its proper context by giving some background information to the growth of our mushroom industry, which in many ways has been quite spectacular.
This industry has expanded rapidly over the past decade from a base of 6,800 tonnes, valued at £6.3 million in 1980, to 31,000 tonnes in 1989, valued at £35 million. Of this production approximately 18,000 tonnes were exported to the UK. These exports accounted for over 12 per cent of the UK market. A further 4,000 tonnes were exported in processed form to the Netherlands and Germany. The balance of production was consumed on the domestic market. By any standards this is significant progress.
There are five major compost companies and four major export companies in the country. These companies have undertaken major investments in collection, storage, packaging and distribution systems. This has allowed them to compete at the top end of the UK market and to meet the exacting standards of the supermarkets. There are 540 growers in the country and the vast majority of them market their produce through one or other of these exporting companies. It is this totally integrated system and the professionalism of the exporting companies which has allowed us to expand the industry in highly competitive markets over the past decade.
Since the beginning of this year the Irish mushroom industry has experienced difficulties largely due to the very rapid depreciation of sterling. For the first nine months of 1989 the trade weighted exchange rate was 84p sterling to the Irish pound and then increased to over 97p. Currency fluctuations are a normal feature of international trade. This situation has improved over the past month or so with the strengthening of sterling and the industry has come through the eye of the storm.
Growers also experienced drops in yields during the summer of 1989 due to the exceptionally warm weather. They have responded this year by cutting back on compost in their houses and altering their cropping programme. Therefore, the reality is that while the mushroom sector has achieved spectacular results it is going through a difficult phase.
Now is certainly not the time to undermine confidence in an industry which has proved itself over the past decade. Monaghan Mushrooms have been one of the success stories of the mushroom sector and of the horticulture industry in general. The company directly employs over 300 staff and indirectly provide employment for a similar number in the growing of the crop. The decision of the management to temporarily close the processing plant for a period of six to eight weeks must not be seen as a crisis for the company or the industry in general. The decision has been taken in the light of certain marketing difficulties for processed mushrooms on the Continent and the relative scarcity of mushrooms suitable for processing within the company. This is a commercial decision taken by the company in response to the current prevailing market situation. The decision will affect 30 of the company's staff and will not affect growers at all.
I have absolute confidence in the ability and determination of Monaghan Mushrooms to overcome this temporary problem. The company have proven themselves over the past decade and have provided a major impetus to the prosperity of the Cavan and Monaghan region. The Government have shown their commitment to the growth of the mushroom industry, especially through IDA support. I can assure the House that this support both for Monaghan Mushrooms and the industry in general will continue.