The Minister for Agriculture, Mr Walsh, is correct when he says that the members of the new committee on the future of farming and the food industry have been given a task of "real national importance". The Agenda 2010 Committee, to be chaired by former Glanbia managing director, Mr Pat O'Neill, has been asked to steer a future course for the entire farming and food sector; it will decide on the measures requires to ensure that the industry remains strong and competitive.
This is no easy task. Although the overall importance of the farm sector to the Republic's economic well-being may have declined appreciably in recent years, it remains the case that agriculture - our largest single industry - is more important to Ireland than to any other EU state. In all, the agri-food sector accounts for 13 per cent of GDP, 12 per cent of total employment and one-third of the Republic's net foreign earnings. At this juncture, prospects for the sector appear uncertain. This State may have emerged reasonably well from the recent CAP reform negotiations but there is still the distinct sense that storm clouds are gathering.
The most critical of these will be the forthcoming world trade talks, where the US will renew its push for dramatic cuts in EU export subsidies. The continuing dispute between Brussels and Washington over the EU's ban on US meat treated with growth-promoting hormones, which has the potential to jeopardise some £10 million in annual Irish exports, underlines the importance of formulating new trading rules. But there is the real risk that the concessions offered by the EU to their US trading partners could damage farm incomes in this State.
The EU is not well-placed to face down US demands in the trade talks; the recent CAP reform agreement, which introduced only modest changes in the beef regime, means that Washington will be demanding much deeper cuts in EU export refunds. It is also the case that the threat of significant cuts in CAP funding, so effectively neutralised by Mr Walsh and his negotiating team earlier this year, is certain to resurface. The current deal will continue until 2006 but world market pressures and EU enlargement means that the pressure for more radical reform will intensify.
There are also internal challenges to meet; the heavy reliance on commodity products must be lessened in favour of added-value products. And the sector faces a more fundamental shift, away from the over-dependence on the EU and towards a more customer-driven, market-led approach. In this regard the appointment to the committee of the Director of Consumer Affairs, Ms Carmel Foley, sends the right signal; for too long the management of the food sector has been dominated by the needs of the producer. The new committee could play a critical role by acting as a catalyst for thorough-going change in Irish agriculture. As Mr Walsh has observed, there are great threats - but there are also great opportunities.