A strategy document published this week by Ibec's Food and Drink Industry group argues for less regulation and more investment to reflect the importance of the sector writes, Marc Coleman Economics Editor

Timely and, with one or two important exceptions, reasonable. Those are words that might be used to describe the strategy document published this week by Ibec's Food and Drink Industry group which calls for a change in policy towards the sector to reflect its importance.

The document is clearly framed with one eye on the coming budget.

On the wish list are less regulation, more investment and a ban on predatory prices. All reasonable requests, but as is often the case, Ibec put obstacles in the way of anyone trying to see their point of view.

Surprisingly, one of the points in favour of protecting the sector is one the submission does not make. What the - somewhat cold and calculating - analysis does not take into account is the sector's vital role in counterbalancing the urban bias of much economic activity in Ireland.

Even if many of its jobs are assisted by artificial means, they are nonetheless jobs in rural areas where - for the moment at least - no alternatives exist for the local communities.

As well as omitting strong arguments in its favour, the submission employs some weak ones, in particular its point about a 'deflationary food market'.

Only a day after the submission the Central Statistics Office (CSO) - along with October inflation figures - produced some interesting data on trends in food prices.

That evidence was not favourable to those who, including Ibec, opposed the order's abolition.

Food prices have generally showed a downward trend in the months following the order's abolition, with food inflation considerably lower than overall inflation and way lower than inflation in services.

The difference between 'non-Groceries Order' and 'Groceries Order' price trends - contained in table 21 of the CSO's detailed price sub-indices is even starker.

Whereas the price of food items not covered by the order - and therefore not affected by its abolition - was 4 per cent, prices of food items covered by the order, which were affected by its abolition, actually fell.

Ibec's submission complains about more intense market pressure, but omits to mention that processed food price inflation in Ireland has in recent decades been markedly higher than in EU countries of similar wealth where no Groceries Order was in operation.

But if it is wrong to complain about the Order's abolition - and even if its call for a ban on predatory pricing is a little bit like calling for elephants to be banned from roaming the Irish countryside - it has justice on its side in much of what it calls for.

Having had their margins squeezed as a result of the order's abolition and greater competition, Irish food producers and retailers face a cost environment that is anything but competitive.

Echoing yesterday's call by Ibec senior economist Fergal O'Brien, the submission points to escalating energy and waste management costs faced by manufacturers and farmers alike.

Top this with the ever rising costs of a growing regulatory burden on every aspect of their business, from food safety to environmental protection, and Ibec's point is clear to understand, and support.

We've taken reform on the chin. Now it's time to reform the sectors we rely on for our inputs, including the state which drives much of its input and compliance costs.

Ibec's call for more impact analysis on the compliance costs of regulation is well made.

Waste collection charges and other local authority charges are other areas where government writ large imposes a huge burden on the sector.

Having abolished the Groceries Order, dealing with those two pariahs should be part of government payback to the sector.

Ibec's point about the wide spatial distribution of the food industry is another welcome argument for the Government to get its act together in terms of infrastructure investment.

Other policy areas where its recommendations need support are those of research and development on the one hand and education on the other.

The food sector is one in which research and development goes beyond traditional notions of scientists in a laboratory.

Innovation in new products - particularly in the area of convenience foods and diet and nutrition products - should be fully supported by resculpting tax reliefs for research and development.

And as a source of comparative economic advantage, investment in education should be strongly weighted in the sector's favour.

In relation to one aspect of the food manufacturing sector's cost base, however, Ibec has a big problem.

Many of its members are manufacturers who would like cheaper food ingredients.

On the other hand it also shares a social partnership table with the farming lobby, with which it needs to maintain a good relationship.

But inserting a long whine about trade liberalisation per se is no help to Ibec's long-term credibility.

A better way to balance this tension would have been to focus on the one very strong argument of Irish farmers against present WTO proposals: their lack of a level playing field imposed on potential competitors like Brazil in such areas as animal protection, environmental standards and food safety.