Vol. 464 No. 2
6 Mr. Leonard asked the Minister for Agriculture, Food and Forestry the proposals, if any, he has to have an in-depth study carried out on the agri/food industry in view of the serious problems it is facing with competitiveness and in maintaining its existing workforce. [5861/96]
An in-depth study on the food industry was published in April 1993 by the Expert Group on the Food Industry, established following the recommendations of the Culliton report on industrial policy.
One of the expert group's principal recommendations was the need for competitiveness in terms of cost, innovation, marketing and product quality. It recommended that a single operational programme for the food industry covering all the elements essential to competitiveness should be co-ordinated by my Department. As a result, a sub-programme for the food industry was incorporated in the Operational Programme for Industry 1994-1999. The sub-programme envisages a total investment of £641 million of which £283 million will be contributed from the national Exchequer and the EU Structural Funds. The measures in it were: capital investment grants; assistance for in-company and institutional research and development; training assistance and assistance for marketing and promotion.
Subsequent to the publication of the sub-programme, An Bord Bia, Teagasc and Forbairt drew up and published five year development plans consistent with the sub-programme. These plans incorporate detailed arrangements for the implementation of the measures set out in the sub-programme.
I am fully aware of the very competitive trading environment in which the food industry is operating. I am satisfied, however, that the necessary measures are in place to enable companies not only to meet the competitive challenges but to continue to develop and to expand employment.
The Minister of State will be aware of the many difficulties our exporters face, especially those to the United Kingdom. While acknowledging that the Minister established the poultry industrial forum early in 1995— whose report I understand has been on his desk since the beginning of March — central to it there was to have been a detailed study of the differential in feed costs. On Tuesday last I tabled a parliamentary question to the Taoiseach seeking under two headings the price of broilers and turkeys in European Union member states. His reply contained information in respect of eight countries, but none in respect of the most relevant, the United Kingdom, in respect of which departmental studies had been undertaken over an 18 months period, and on which I have not been able to obtain any from the Department. How can the Minister of State explain that at a time when the industry is experiencing such difficulty?
The question does not relate to the poultry industry.
The agri food industry.
If available, I will certainly endeavour to obtain the figures requested by the Deputy.
The Minister of State is chickening out.
So the Minister of State is a better man than the Taoiseach; he could not give them.
I do not know whether such figures exist but, if so, they will be supplied. No question has been tabled on the poultry industry.
Does the Minister of State regard poultry as food?
With regard to exports to the United Kingdom, I agree that difficulties have been experienced because of the strength of our punt versus sterling, which have created problems for many exporters in the Deputy's constituency, particularly those in the mushroom sector, who enjoyed a very competitive advantage up to 1990 when the punt stood at approximately 88p or 90p against the pound sterling. The reverse is now the case so that, for every 1p differential, we lose something like 6p in price. As I said in my reply, I hope the £641 million available under the sub-programme will make us more competitive vis-à-vis our managerial structures, plant, research and development and training which, while not warranting perhaps the same degree of urgency, are all important. I am convinced that, on the expiry of this programme in 1999, Irish industry will be much more competitive, that, in the interim, problems being encountered by some exporters to the United Kingdom will have been more than compensated for by improvements in their overall operations. If the figures the Deputy has requested in respect of poultry are available, I will endeavour to obtain them for him. He will realise that the Minister established the poultry forum but I can request that its report be published as soon as possible.
Does the Minister of State agree that none of the £641 million is being siphoned off to those in real need to alleviate their problems over the past six months, particularly those in the mushroom industry, many of whom have gone out of business?
Since the Minister based his reply on a report published in April 1993, I must draw his attention to the fact that there is no comparision between the system of trading then and now as currency fluctuations over the past six months, feed prices, transport costs and the like have eroded the competitive edge. I appeal to the Minister to do everything possible to ensure that markets built up assiduously and carefully over a long period and the jobs of primary producers will not be lost.
I accept the Deputy's comments. With regard to the restoration of a concession like the marketing fund established in 1992, the Deputy will be aware that its beneficiaries are now being requested to reimburse such grants on the basis that the fund was anti-competition and not in conformity with EU regulations. Therefore, we must be very careful even in directly assisting some exporters at present experiencing difficulties because of the differential between the Irish punt and sterling.
The Expert Group on the Food Industry was established following a recommendation in the Culliton report, and advocated the implementation of a special programme to help the food industry, leading eventually to the establishment of the £641 million sub-programme. If that programme is not successful and warrants further review, that can be considered but, three years after the production of an excellent report by the expert group, is too early for such review. However, because of the changed circumstances that have arisen since 1993. I take on board what the Deputy said.
In view of the fact that the Minister recognises the potential difficulties — particularly those arising from the differential between the punt and the pound sterling — what initiatives have been taken by the Department of Agriculture, Food and Forestry to support the food sector, particularly mushrooms and poultry producers, throughout the difficulties of the past 12 months? Has the Department made representations to the Minister for Finance? He has the power to take initiatives to make the industry more competitive, particularly in Britain and Northern Ireland.
Our response was through An Bord Bia. We have a marketing fund that is available to companies to improve market penetration in Britain and other countries which is working quite successfully. Our exports of various food commodities are up in Europe and outside it.
As I have explained already, a similar fund to the market support fund of 1992 would not be acceptable because the people who received that money have encountered problems.
In this year's budget, the Minister for Finance reduced the employers' PRSI contributions——
By £20 per £10,000.
The concessions last year and this year have made a significant difference. For example, what it meant to Kerry Ingredients in the Kerry Group, the food industry closest to my constituency, is that they could take on 12 more employees last summer and I hope this year's concession will help further.
I agree with the Deputy that we must put in place, whether through budgetary concessions or other assistance, initiatives to help them, otherwise they will go out of business. Our approach is to provide money for a marketing fund to increase market penetration and provide the resources to sell their product.
