Farm Ireland

Sunday 21 January 2018

Food jobs lost in funding dispute

Declan O'Brien

Declan O'Brien

Hundreds of jobs are continuing to be lost in the speciality food sector because of an ongoing dispute over how such projects are funded.

Declan Rice, CEO of Kilkenny LEADER Partnership (KLP), said a ban on funding food projects had prevented Ireland's 36 LEADER companies from funding small-food enterprises to the tune of millions of euro, leaving many food producers in limbo.

"Kilkenny LEADER Partnership alone has had to turn away at least 17 micro-enterprises in the food sector this year," Mr Rice said.

"Between them they were seeking a total of €800,000 in investment. Very few of these companies have any other realistic prospect of funding support other than LEADER and we estimate 35 jobs have been lost," he said.

Mr Rice claimed that the number of jobs lost nationally could run into hundreds.

The suspension of funding was imposed after it emerged in January that Ireland and other EU countries were unwittingly breaking EU rules by funding food projects out of the wrong axis of CAP.


The Commission found that small-food enterprises should not be supported under Axis 2 of CAP, as was traditionally the case, and had to be funded through Axis 1 instead.

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"The only solution to funding food projects now is for an estimated €25m over the 2009-15 period to be added to Axis 1 to allow LEADER to fund food," Mr Rice said.

He said the Government needed to urgently solve the debacle over funding in order to safeguard the future for existing Irish food businesses and Irish jobs.

"This funding crisis is disastrous for business development and job creation in Kilkenny and across Ireland."

The majority of LEADER's funding of €425m over the five-year period of this programme comes from the EU, but must be backed by 45pc Irish exchequer funding.

KLP has directly supported the establishment or growth of up to 40 food producers over the past decade. The combined revenues are approximately €15m.

The matter is to be highlighted at a food industry seminar which will be held this Friday in The Parade Tower, Kilkenny Castle, to coincide with the opening of the Savour Kilkenny Food Festival.

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