Support for food sector crucial to economy

AS fears start to mount about the future of the economy and its over- exposure to the construction sector, it is time to remind those in high office that we have options beyond construction.

In particular, the food sector and its role in the Irish economy is hugely significant and more important than it gets credit for, even at Government level.

The slowness of this state to create a senior ministry dealing with food suggests a Government more preoccupied with keeping farmers happy than addressing the challenges and prospects offered by the food sector.

In fact entrepreneurs in Ireland, many of them involved in food production across a wide variety of activities, need to be supported with the same enthusiasm that we put into attracting foreign firms over the last 30 years or more.

That’s the conclusion of Forfás, the state’s strategic think tank on industrial policy.

In a new report, Towards Developing an Enterprise Strategy, it concludes we have to do certain things if the plan is to create a world-class entrepreneurial environment supportive of indigenous industry.

In the final analysis, the Forfás report makes it clear Government action is needed to ensure this economy remains a good host and nurturer of those who want to set up and grow businesses in Ireland.

Though not confined to the food sector, its conclusions are as relevant to food as any other aspect of the domestic economy.

In 2004 the Enterprise Strategy Group gave the food sector just two measly pages on an appendix at the back of its report. How positive an endorsement of the food sector was that?

In the space allocated, it stressed the need for far-reaching changes to deal with more open markets due to continuing World Trade Organisation agreements and the continuing reform of CAP. It did, however, identify prepared consumer foods; functional foods and beverages; food ingredients and speciality foods as key areas.

It also stressed the need for efficiencies across the entire supply chain, from farmer to manufacturer, marketing and distribution.

“Product differentiation and the capability to satisfy evolving consumer requirements will be essential,” it warned.

All so true — but what’s being done to ensure the food sector does not end up stewing in its own overpriced recipes, driven up by state charges and rampant energy costs?

Here are a few facts worth chewing on that help put the importance of the food sector into perspective.

The food and drink sector purchased Irish labour, raw materials and services worth €8 billion two years ago.

The rest of manufacturing accounted for €9.2bn. Food and drink therefore accounted for 47% of the total spent by the manufacturing sector. There’s no reason to believe this has changed since then.

Food and drink also has the largest wealth creation capability of any manufacturing sector when its indigenous base and its near-total reliance on home-produced raw materials is taken into account.

Today Enterprise Ireland will publish another report on no less a topic than Transforming Irish Industry, as if we didn’t already know what is required. If we could get a few basic things right, like cutting the cost of energy and the red tape surrounding business, we would need less reports on what the economy needs.

This country doesn’t lack entrepreneurship or good business ideas. The food sector has demonstrated that clearly in recent years, with exports of over €8bn generated in 2006, up more than €1bn on the previous year.

This sector has shown it can compete and win.

What it needs is for the Government to cut the cost of doing business here to allow it to get on with it.