Written Answers. - Food Industry Sub-Programme.

Ceist:

433 Mr. Coveney asked the Minister for Agriculture and Food if he will make a comprehensive statement on Government policies on funding arrangements for Measure 1 of the Food Industry Sub Programme in view of the original allocation of £102 million for the period 1994 to 1999, the diversion of £27 million from Measure 1 earlier in 1997, the very large number of applications currently seeking FEOGA capital investment aid, the likely further demands from food processors for capital aids for investment programmes during 1998 and 1999, the importance of the indigenous food industry to both the farming sector and the rural economy and the implications if a large number of worthwhile projects are left without funding for further modernisation of the food industry in terms both of sharpening its future competitiveness and for its job creation potential. [1519/98]

The decision to transfer funds from Measure 1 of the Food Sub Programme was taken as part of the mid-term review of the Community Support Framework which was carried out last year following independent reviews of both the Framework and its component Operational Programmes. The main factors which influenced the decision were: the substantial underspend on Measure 1 up to that time and, having regard to the prevailing level and flow of aid applications under it, the very real danger that the remaining funds might not be fully utilised; the need to meet commitments and priorities under other measures for which funding had been exhausted.

The transferred funds were reallocated to areas which will benefit the food industry, either directly or indirectly — namely, the industry research, technology and innovation measure and farmyard pollution.

In view of the lengthy time lag between approval and execution of a capital project and the need to comply with the timescale set out in the Community Support Framework for the draw down of funds, the funds remaining under Measure 1 of the Food Sub Programme must be committed within the next few weeks. While the applications for funding exceed the amount available, I should point out that eligibility under the measure does not confer entitlement to grants and that all applications are subject to a strict assessment and selection process. That process takes into account the contribution of projects to the sectoral objectives set out under the measure as well as their potential benefits in terms of the farming sector, the overall economy, employment and competitiveness.
The current Food Sub Programme and the range of support measures provided under it recognise the food industry's multi-faceted contribution to the economy. That contribution will continue to be taken into account in formulating a post-1999 strategy for the industry in the context of a national development plan for the next round of Structural Funds.