Food industry leaders say farms need help to compete

LONG term leasing and partnerships have been identified by food industry leaders as the route for farms to play their role in Ireland remaining a leading food producing country.

Ireland's small milk quotas, only about half the size of the Dutch average, are well behind the scale needed to compete in the European food industry, says an advisory group chaired by Kerry Group CEO Hugh Friel.

Government policy must facilitate leasing and partnerships, if farmers are to reach the necessary level of competitiveness needed for a successful food export industry, from farm to fork, said the advisory group.

They said Ireland continues to be one of the most competitive EU countries in terms of the cash costs of farm production.

But we drop significantly down the rankings when economic costs such as family labour and land are taken into account.

The downside to Ireland's seasonal milk production was also highlighted by the group, which included Glanbia MD John Moloney.

They said the e3bn Irish dairy sector has enjoyed a cost advantage in Europe due to grass-based feeding, but this restricts our range of dairy products.

"Ireland needs to take steps to produce a more diverse and high value added product mix," the group advised the Enterprise Strategy Group, commissioned by Minister Mary Harney to plot a course for Irish industry to 2015.

Under the heading of rationalisation, the advisory group said clarity is needed on how Irish competition law will be applied, as our predominately export oriented food industry scales up to a competitive size in the European context.

Only larger companies can gain retail market entry, particularly in the UK, Ireland's main export market, said the advisory group, which also included Dan Browne of Dawn Meats; Brian Duffy of Diageo; and Billy O'Regan of Northern Foods.

They noted in their report that proposals to rationalise the beef industry are currently on hold, as the Competition Authority has initiated High Court proceedings against the Beef Industry Development Society's restructuring plans.

Setting up a single food industry development agency to drive a cohesive strategy was among the advisory group's other recommendations to the Mary Harney appointed group, which recently published its 'Ahead of the Curve: Ireland's Place in the Global Economy' strategy.

The advisory group said the organic share of food sales remains small, at 1.3% in Europe, and there is only limited potential for further sales growth.