Ibec sets out the agri-food stall for new Government

Ibec has set out the policies the new Government needs to implement to support growth and job creation in the agri-food economy.

‘Policy priorities for the food and drink sector 2016’ was published on May 23 by Food and Drink Industry Ireland (FDII), which is part of the Ibec group.

“The key priorities for the food and drink sector run across different parts of Government and need to be addressed in a co-ordinated way,” FDII Director Paul Kelly said.

FDII are calling for:

  • A relentless focus on manufacturing cost competitiveness, particularly government influenced costs like energy and waste
  •    Improved access to lower cost finance to ensure the industry can invest in enabling technology, plant renewal and expansion
  •    Free trade agreements and market access that are aligned with the needs of all the industry
  •    A continued focus on food sector innovation and skills development with increased budgets for enterprise led training
  •    Avoidance of discriminatory measures like sugar taxes on beverages which impact on consumers and business alike with no net public health benefit

Kelly said the €19 billion export target of Food Wise 2025 is grounded in the reality that Ireland’s food and drink industry faces many challenges in domestic and export markets.

These include:

  • commodity volatility
  • market access difficulties;
  • costly and difficult access to finance
  • import competition in the domestic marketplace
  • increased calls to impose taxes and restrict choice

“The National Agri-food strategy Food Wise 2025 doesn’t ignore these challenges,” said Kelly.

“It identifies a number of cross–cutting areas that require strategic action if the industry is to capitalise on, deliver and maximise the growth opportunities in the years to 2025.”

Key Statistics Of Sector

  • 230,000 jobs linked to the agri-food sector, with a €26bn turnover in the sector.
  • Supplies the majority of produce to Ireland’s €14bn domestic grocery and food service sector
  • €10.8bn worth of exports in 2015 to 175 countries
  • Half of exports by indigenous Irish companies
  • Destinations – UK 41%, rest of Europe 31%, third countries 28%
  • Total payroll in the sector is €1.8bn – more than any other manufacturing sector
  • €9.6bn worth of materials purchased – 76% are sourced in Ireland
  • €3bn worth of services purchased – 55% are sourced in Ireland
  • Ireland is the largest net exporter of dairy ingredients, beef and lamb in Europe
  • Ireland is the largest exporter in Europe of powdered infant formula
  • Ireland exports over 80% of its dairy and beef production
  • Ireland is the UK’s largest supplier of food and drink

FDII Policy Recommendations

Market Development

  •  Establishment of a dedicated Market Access Unit to advance international market access for Irish food, investment in trade missions, wider market access resources and market research funding.
  • Increased funding towards Irish food promotion and marketing and secure access to the revised and substantially increase EU agri-food promotion budget.
  • Effective enforcement of domestic grocery sector regulations and the development of a consistent approach to fair trading across the European Union
  • Conclusion of balanced EU trade agreements that secure additional market access in strategic growth markets; keep pace with trade agreements secured by other global food exporters while at the same time defending EU agriculture from unfair competition.
  • A competitive cost base environment and budgetary measures to stimulate consumer demand and to support vibrant domestic grocery and food service sectors.

Competitiveness

  • State aid rules need to be reviewed to recognise the uniqueness of the agri-food sector in order to ensure increased levels of indigenous investment. Increase funding to appropriate state agencies for the further development of insights, skills and capabilities in the sector.
  • Significantly improved access to finance funding to support investments in enabling technology, plant renewal and expansion, refinancing, market development and innovation.
  • Continued budgetary supports and agri-taxation measures to enhance primary production competitiveness and expansion.
  • Ensure that the CAP and direct supports are focussed on the productive sector.
  • Reduce industrial energy costs to the EU average and significantly reduce other utility and local authority charges.
  • Full impact assessment before any further legislative change impacting on labour costs and tackle the spiralling cost of liability insurance and injury claims.
  • Regulatory impact assessments must rigorously address the cost impact of new legislation on the agri-food sector.
  • Tax relief measures for investment in the agri-food sector should be expanded and repositioned to incentivise expansion of existing businesses and investments in start-ups.

Supply chain integrity, sustainability and health

  • Climate change policies must recognise the sustainable grass-based food production system in Ireland.
  • Government to ensure that EU 2030 Climate and Energy Framework results in a fair effort sharing commitment for Ireland.
  • Ensure the review of EU ETS does not exclude Irish agri-food installations from carbon leakage provisions.
  • Continued support for national sustainability and quality assurance schemes.
  • Maintain a world class food safety regime.
  • Support by Government for voluntary industry efforts on health and nutrition.
  • An evidence based approach to public policy-making, including full engagement with industry.
  • Avoid discriminatory taxes on food and beverages.

Innovation and skills

  • Ensure a taxation environment which encourages increased investment in innovation.
  • Continue the strong focus on and investment in industry-led applied and fundamental research in particular in Technology Centre initiatives and increased access to Horizon 2020 funding.
  • Consumer and sensory research are critical to the food industry and should be covered by tax incentive schemes.
  • Continue budgetary support for technology transfer and adoption at primary production level.
  • Streamline and simply the application processes for access to innovation supports, particularly for SME’s.

Human Capital

  • Ensure the skills base of the agri-food industry  reflects not just the current business demands but the challenges of future growth in existing and new markets.
  • Increase funding supports for enterprise-led training initiatives including Skillnets and industrial apprenticeships.
  • Continue to build on the ‘Food Marketing Graduate’ Programme to deliver high quality talent to the industry.
  • Ensure a strong focus on national research, skills development and apprenticeships in the agri-food sector.