Vol. 573 No. 4
222 Mr. Durkan asked the Minister for Agriculture and Food the way in which he views the market for Irish lamb developing in the future, in view of the likelihood of increased competition in the marketplace; and if he will make a statement on the matter. [25883/03]
FAPRI Ireland has produced a detailed study of the effects of the Luxembourg agreement on relevant commodities, including sheepmeat. The study shows that supplies will increase and prices decrease in 2005 as a result of decoupling but as supplies become scarcer prices will recover in 2006 and continue to improve up to 2012, the period of the agreement.
As regards trade, the FAPRI analysis forecasts that there will be marginal changes in the level of imports and exports over the period. The result, therefore, is unlikely to alter the current position where France remains the principal outlet for Irish sheepmeat exports, accounting for some 80% and where better quality product will continue to be targeted. Bord Bia will continue to focus its efforts on consolidating and growing the opportunities for further market penetration in France and in other EU countries.
The decision I made recently to decouple direct payments from production will encourage farmers to produce better quality animals that reflect the demands of the marketplace and enable Irish production to move up the value chain in retail markets.
223 Mr. Durkan asked the Minister for Agriculture and Food the way in which he views the beef industry developing in the future with par ticular reference to increased competition on world markets and the need to sustain the income of producers; and if he will make a statement on the matter. [25884/03]
Arising from the Luxembourg Agreement, I recently decided that all direct payment for cattle would be decoupled from production. Full decoupling represents a fundamental change in the nature of support for Irish farmers under the Common Agricultural Policy. Farmers will now be free to focus more sharply on the market and the demands of the final consumer. While some reduction in production can be expected under full decoupling the resulting increase in cattle prices and reduced input costs will lead to an aggregate increase in farm incomes.
The beef market in the EU at present is broadly in balance. Consumption is of the order of 7.3 million tonnes with production at 7.2 million tonnes. Intervention stores have almost emptied with 250,000 tonnes sold in the last 18 months. The UK and other EU markets are performing well and exports to Russia continue to be strong. I am aware of the importance of third country markets for our Irish beef exports and the recent lifting of restrictions on product specification for Egypt and the agreement by the EU Commission to my request for an export refund increase of 30% will enable trade in commercial volumes to resume shortly. I continue to make every effort at political, diplomatic and technical level to re-open other third country markets that have been restricted due to BSE.
However commercial considerations also arise in respect of all markets and Irish beef faces stiff competition from South America in particular, to retain and expand market opportunities. In this regard the industry needs to intensify its focus on both quality and price in order to improve its international competitiveness and sharpen its appeal to consumers.
224 Mr. Durkan asked the Minister for Agriculture and Food his plans for the future development of the dairy sector, bearing in mind the existence of likely increased competition on international markets; and if he will make a statement on the matter. [25885/03]
A major study of the Irish dairy processing sector, jointly funded by the Department of Agriculture and Food, Enterprise Ireland and the Irish dairy industry itself, was published in March of this year. The report, prepared by Prospectus and Promar International, identified a number of weaknesses associated with the Irish dairy industry and suggested key strategies aimed at ensuring the long-term success of the industry in an increasingly competitive trading environment. Issues such as scale, cost efficiency, greater investment in research and development and new product development are central to the consultant's recommendations.
It is clear that less dependence on commodity type products and intervention, and a move to more value added products is a fundamental requirement for the development of the sector. It has been shown that our international competitors invest more in new product development and this is an area which will have critical importance going forward. Ireland's dairy output must be dictated by the needs of the marketplace and I have no doubt that product innovation will be a critical element of dairy processors' future business plans. The prepared consumer foods sector is the fastest growing sector of Irish industry. My Department has been actively involved in the prepared consumer food strategy 2003-06 which addresses the continuing market-led move away from basic food products, towards prepared food products. This shifting trend has been prevalent in the dairy sector for a number of years, with Enterprise Ireland and Teagasc actively assisting organisations to exploit the opportunities that exist. Their continued work in this area combined with my Department's contribution to the funding of the food research programme will provide valuable support to the industry in the years ahead.
To assist the discussion on the future development of the sector, and to address the strategies required to bring about the changes necessary, I have, over the past few months, had a series of meetings with representatives of most of the main processing undertakings. I also convened a dairy forum at which all of the main producers and processor organisations were present. This forum afforded an opportunity to all sections of the industry to give their views in relation to the present state of the sector, the changes necessary for the future and how these changes might be achieved. Of course, the final decisions relating to investment in change rests with the management and boards of the processing undertakings themselves. These are commercial decisions which must be taken within the constraints inherent in every organisation. I will, however, continue to encourage and support the industry to take the steps necessary to ensure a viable and successful future for the sector in an increasingly competitive environment.
Question No. 225 answered with Question No. 214.
