Food Harvest 2020 - Report of the Horticulture Ireland Action Group
FOOD HARVEST 2020 - Report of the Horticulture Action Group - June 2011
Contents:
- Executive Summary & Key actions
- Background to Horticultural Industry
- Markets
- Main issues impacting on the development of the Horticultural Industry
- Development Potential
- Food Harvest 2020 Action Plans
- Appendices
1 Executive Summary & Key actions
The Horticulture Action Group was established in December 2010 by the former Minister of State at the Department of Agriculture Mr Ciaran Cuffe TD to review the horticulture recommendations in Food Harvest 2020 and revert to the higher level implementation group chaired by the Minister for Agriculture with an action plan on how the recommendations can be progressed and how the horticulture sector can contribute to the targets set down in Food Harvest 2020. In this context the group were also asked to consider the outcomes of the Bord Bia Cost Competitive Study, Amenity Sector Strategy and the Teagasc Plan for Horticulture 2010-2013.
The Horticulture Action Group consists of representatives of the Horticulture Industry and the key development agencies (see appendices). The group identified seven key areas that have a significant impact on the sector and will play a key role in how the Industry develops and evolves up to 2020. These are summarised below. In addition this document sets out the horticulture recommendations in Food Harvest 2020 and proposes a number of actions on how these can be addressed.
Key Issues/Actions
1.1.1 Cost Competitiveness & Credit
Costs of Production - The cost of producing crops in Ireland is higher than competing countries (eg UK, Holland) particularly for energy and labour. While the commodity price for gas is similar in Ireland and Holland the other linked costs (ie distribution, transport and carbon tax) in total are 160% more expensive in Ireland. In Northern Ireland the minimum agricultural wage is £6.37 per hour for standard worker and £6.99 for lead worker while Ireland’s minimum agricultural rate is €9.33 per hr.
The group recommends that:
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The Joint Labour Committee (JLC) be abolished and minimum labour rates be brought in line with key competitor countries
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The mechanism for setting gas prices be reviewed (ie the distribution & transport cost elements)
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Tax exemptions for Agri diesel be maintained in the context of current discussions at EU level on the Energy Taxation Directive.
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Credit be given against the carbon tax for horticultural businesses who use carbon dioxide generated for crop production.
Availability of Credit – The production of horticultural crops by their nature require front loading of investment. It is important that credit facilities are made available to horticultural businesses to allow them plan and sow crops. A reduction in the cropping area due to a lack of credit facilities will lead to an increase in imports and reduce import substitution opportunities.
The group recommends that:
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A mechanism (and monitoring process) be put in place by Government that will allow horticulture businesses access to working capital to facilitate planting of crops and facilitate import substitution.
1.1.2 Retail Sector
The retail sector is the most important market outlet for fresh produce. As already well documented the major multiples have a very dominant role particularly in relation to small and medium suppliers and can therefore to a large extent dictate the profitability of these suppliers. It is estimated on average across a range of produce that only one third of the final selling price is received by the producer.
The group recommends:
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The introduction of a statutory Code of Practise for the retail sector and the appointment of an ombudsman to oversee its provisions.
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The development of a system whereby the timely & accurate collation of import statistics is recorded which can be utilised in monitoring produce levels within the market and maximising the domestic market share for home grown produce throughout the year.
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The introduction of a mechanism whereby the amount of own brand product on a retail shelf is limited to 50%.
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The promotion and support for businesses pursuing alternative routes to market.
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The re introduction of the ban on below cost selling including fresh produce
1.1.3 Cooperation
The Industry should actively pursue & encourage within and between sectors collaborative and joint activities to deliver savings/efficiencies and the basis for enhanced co operation in a range of areas including marketing etc.
The group recommends:
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The promotion and facilitation of collaborative initiatives within the horticulture sector
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The promotion/development of Producer Organisations
1.1.4 Promotion
To implement significant campaigns to promote the consumption of Fresh Produce and in particular Irish Produce. The measuring and highlighting of the sustainability of produce grown locally should be part of this messaging as well as the health benefits of consuming fresh produce. The use of social media and telephone technology should feature in this activity.
The group recommends:
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That additional resources be allocated to responsible promotional & health agencies to increase the level of promotional activity around local produce.
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The establishment of a committee representing the key promotional agencies to assist in the coordinating and efficacy of promotional activity.
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That co funding from the fresh produce Industry to support Bord Bia Quality Mark promotions focusing on fresh produce be progressed.
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There should be increased promotion of fresh produce at secondary school level.
1.1.5 State Support
NDP Commercial Horticulture Grant Scheme – It is critical that the NDP horticulture grant scheme be maintained for the sector.
The group recommends:
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That the NDP Commercial Horticulture Grant Scheme be implemented on a two year approval cycle rather than on an annual basis to take account of the seasonality of certain crops and the time frame involved in securing planning permissions.
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That the NDP Scheme be extended to include Potatoes.
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That grant aid be made available for valued added/processing activity in the horticulture sector through the NDP Scheme and/or the FEOGA Marketing & Processing Scheme.
Research & Development – Increased resources are required to support the advisory and research needs of the Horticulture Industry. It will be important that market led research is prioritised and programmes are developed in conjunction with the Industry and third level institutions.
The group recommends:
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The following resources be made provided within Teagasc – crop/research specialists in cut foliage, potatoes and the apiculture sectors. An entomologist and knowledge transfer specialist are also required.
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That Teagasc examines and develops collaborative initiatives with the Horticultural Development Company (HDC) in the UK to facilitate sharing of technical information and initiation of research projects.
State Agency Support – It will be important to enhance & extend other State Agency support for the sector.
The group recommends:
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That Enterprise Ireland reviews its current rules and mechanisms to allow all relevant horticulture businesses access key EI programmes to assist their ongoing development.
1.1.6 Amenity Sector
Amenity Sector Development - The Horticulture Action Group having considered the outcome of the Bord Bia Amenity strategy review have endorsed its recommendations as key actions to be carried out to maximise the contribution of this sector to the targets in Food Harvest 2020.
The group recommends:
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The endorsement of the recommendations of the Bord Bia strategic review for the amenity sector (full list of recommendations listed in section 7.3 appendices)
Cut Foliage Sector – A recent review of the cut foliage sector by the relevant State Agencies and the Industry has identified a roadmap for its development.. The Horticulture Action Group endorses the findings and recommendations in the review including:
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That a target of planting 40 Ha of foliage per annum over the next 10 years be pursued with the aim of developing cluster of growers in a number of counties.
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That “leader” growers to demonstrate best practice in production in Kerry, Wexford and an inland site be selected by the National Cut Foliage Steering Committee on the advise of the cut foliage development officer.
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That DAFF provide grant aid for the establishment and maintenance of foliage plantations.
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That the supply of a maintenance contract service similar to that in the Forestry Sector be pursued by Marketing companies along with the cut foliage development officer .
1.1.7 Regulation
Plant Protection Products (PPP’s) - It will be critical that the ongoing work by the Industry, Teagasc, Bord Bia and the Pesticide Control Service is maintained to ensure that an adequate range of plant protection products are available to the Horticulture Industry in the future.
The Sustainable Use of Pesticides Directive will come into effect in the near future. It aims to further reduce the risks and impacts of pesticide use on human health and the environment; promote the use of integrated pest management and of alternative approaches or techniques such as non-chemical alternatives to pesticides. It will establish a framework that is intended to promote best practice in the storage, use and disposal of pesticides, and their packaging. This will put additional requirements on producers and the group recommends that support and assistance be provided to the horticultural industry to meet these requirements.Streamline of audits/inspections – Horticultural businesses now have to undergo a number of inspections annually both on a voluntary and statutory basis. The Group have highlighted the need to examine how the inspections process can be streamlined and simplified.
The group recommends that:
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State agencies support actions that will facilitate Ireland’s access to data to support future PPP use applications.
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Resources be made available to initiate residue testing trials in Ireland to facilitate exchange of information with other EU countries.
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Industry be assisted to meet the requirements of the Sustainable Use of Pesticides Directive 2009/128/EC through training and the provision of support documentation.
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Inspections/audits be streamlined and simplified to reduce costs.
2. Background to Horticultural Industry
2.0 Overview
The Horticultural Industry has an output valued at approximately €350ml at farmgate values. This figure includes both the food and amenity sectors of horticulture which make up 80% and 20% respectively of the value. The key crops in the food sector include Mushrooms, Potatoes, Field Vegetables, Fruit & Protected Crops. The key crops in the Amenity Horticulture area include Nursery Stock Production, Protected Flowers/ornamentals and Christmas Trees.
A Bord Bia review of labour in the horticulture sector in 2007 showed that employment in primary production activity was estimated at 6,000 FTE (Full time equivalents). This did not include employment upstream or downstream of the primary production process which the horticultural sector impacts (eg preparing, packing produce, garden design & landscaping etc) and which is estimated at a further 10,000.
2.1 Mushrooms
The mushroom industry is the largest sector of the Horticulture industry. The 80 growers are principally located in Monaghan, Tipperary, Cavan and Mayo and produce an estimated 45,000 tonnes of mushrooms annually from 183,000 tonnes of compost. Most of the compost is produced in Ireland. Disposal of the spent compost is still a major issue for the industry. The annual output of the mushrooms is valued at approximately €100 million at farm gate level. At least 70% of the production is exported to the UK, where Irish mushrooms account for about half of all retail sales of mushrooms. The value of Sterling against the Euro has a significant impact on the profitability of the industry. The other significant factor is the price of mushrooms coming into the UK market from the Netherlands and Poland principally. Growers have responded to price pressures in the market by investing to reduce unit cost and improve productivity
2.2 Potato Sector
In 2010,it was estimated that there were 11,200 hectares of potatoes grown in the country. 1,475 farmers listed potato production on their SPS applications. Of these 540 grew over 5 hectares and approximately 200 of these growers would account for over 75% of total production. The Irish market is dominated by 3 main varieties. Ireland imports upwards of 50,000 tonnes of fresh potatoes each year. These are mainly earlies, baby potatoes and for the processing market While the potato production area fell in 2010 compared to 2009, this was more than offset by a very good growing season and good harvesting conditions combining to give very high saleable yields. The high yields coupled with relatively poor demand lead to difficult market conditions as traders envisaged a large surplus of potatoes coming onto the market. However the opportunity to export potatoes opened up for the first time in recent decades with a significant quantity of potatoes being shipped to Russia in late 2010 and into 2011 with the effect of firming up the domestic market and stimulating demand for good washing quality potatoes. To date over 60,000 tonnes have been exported both directly and indirectly.
2.3 Field Vegetables
The 2009 National Field Vegetable Census highlighted the ongoing consolidation within the sector. The total production area for field vegetables reported was 4,590 ha which is a 8% increase on 2005 and similar to the area recorded in 1999. The census shows that there are now 212 commercial field vegetable growers which is 11% less than 2005 and an indication of the ongoing consolidation within the sector.
In 2010 while field vegetable growing conditions during the year were favourable and yields were good, the two consecutive severe winters have lead many growers to consider whether it’s viable to continue to take the risk of producing winter vegetables, whilst others are considering investment in frost protection measures.
2.4 Protected Crops
There are 120 protected crop growers mainly located in North Dublin, Louth and Wexford. The main crops grown under protection are tomatoes, peppers, cucumbers and some flower crops. The areas and values of output overall has decreased over the years due to competition and high capital and running costs. Despite this there has been some significant investment by individual businesses in this sector in recent years.
2.5 Fruit
Over 70 growers are involved in soft fruit production where the main crops grown are strawberries, raspberries and blackcurrants. The most important crop is strawberries which are now mainly grown under protection. The soft fruit sector has faired reasonably well with strong yields and good consumer demand helping to minimise price falls despite strong competition between the retail multiples. There is also however strong competition from imports.
There are approximately 40 apple growers producing culinary, dessert and cider apples. Less than 10% of the apples consumed here are actually produced in the country. The apple sector achieved very strong yields in 2010 resulting in an increase in production of approximately 25% compared to 2009. The weakening of Sterling against the Euro also improved the contracted price for Irish cider apples however the prices for culinary and dessert apples suffered to an extent due to strong supply coupled with a very competitive retail market.
2.6 Nursery Stock:
There are over 100 nursery stock producers located mainly in Kildare, Tipperary, Kilkenny and the east of the Country. The nursery sector continues to suffer from the severe slow-down in economic activity and the collapse in construction activity and the knock effect that has had for what was the nursery sector’s main market; landscaping. Many growers in the nursery sector have re-aligned their production systems to supply alternative markets (including the export market) in response to the fact that while people still are willing to buy plants they are no longer willing to spend significant sums on high value plants
3. Markets
The key market for the horticultural Industry is the domestic market. The two main areas of export are Mushrooms to the UK (€100ml pa) and Amenity horticultural products (€10ml pa incl Nursery Stock plants, Cut Foliage & Christmas Trees).
The majority of horticultural production is sold on the home market. The key outlets for fresh produce is the retail market. This market is valued at €1.2bn per annum (total household purchase in shops incl home produced and imported produce). The other important outlet for produce is the food service (ie catering) sector. This includes a range of outlets from hotels, restaurants, pubs to company canteens, hospitals & airlines. In many instances the product for these outlets is washed and prepared (eg peeled, diced, sliced etc) in dedicated vegetable preparation facilities. The domestic retail market for prepared fruit/vegetable products is also an important market and is valued at €85ml annually.
Fresh Produce is both produced, harvested and graded on one site or can be transported from the production site to a central facility for packing. From this point fresh produce will be supplied to CDC (Central Distribution Centres) for supply into the retail market.
The market for Amenity products and services offered by the sector are focused to a large extent on the domestic market. The retail market for plant/flower sales is estimated to be in the region of €235ml per annum. The retail market is serviced by Garden Centres, DIY shops. Lifestyle centres and supermarkets. In addition the commercial gardening & landscape market is an important part of this sector. This includes landscape designers & contractors. However with the downturn in the economy and the negative impact this has had on the building sector and consumer spend these developments have also impacted negatively on the landscape sector.
4. Main issues impacting on the development of the Horticultural Industry
4.1 Cost Competitive & F


