Food prices in Ireland are 23 per cent higher than the European average and Irish households spend a lower proportion of their household income on food, new figures published yesterday reveal.
The above-average food price is strongly influenced by Mediterranean countries and new EU member states where prices and incomes are generally lower.
Minister for Agriculture and Food Mary Coughlan said yesterday that the Irish food price index had decreased marginally in 2005, while general inflation increased by 2.5 per cent.
She said the influence of the abolition of the Groceries Order on food prices has yet to be determined.
"The fact is that we are now a much more affluent society and it is the type of food we are spending our money on, not the food itself which is causing this," she said.
The Minister, who was announcing her department's annual review and outlook for 2005/2006, said Irish consumers were now looking for more convenience foods.
"You see people heading up to their Spar and buying fruit which has been cut up and sold with a spoon. If they purchased the fruit themselves and cut it up, it would be a lot cheaper," she said. "That is what is making food dearer. The price of a bag of spuds and indeed other basic foods have not increased in the past 10 years. In fact some of them have gone down," she said.
The Minister said the future of agriculture lay in this kind of new alignment between farmers and the food industry.
She said there are huge opportunities out there for the provision of convenience, health and other foods and the farmers provide all the raw ingredients.
"There is a great future for both the farmers and the food industry if they work together and that is in the plan we put forward to develop these centres of excellence and on R&D," she said.
In her review of 2005, the Minister said farmers had made a very successful transition to the single farm payment and total direct payments to them reached €2.28 Billion, the highest ever in the history of farming.
"The agri-food sector is a hugely important constituent of the national economy. Farming provides direct and indirect employment, it still forms the mainstay of rural development, it protects and enhances the environment, and it is central to the country's EU and international policy," she said.
"Anyone who believes that farming is on its way out had better think again because it is as vibrant as ever and I have great belief in the ability of farmers to adapt to new conditions," she said. This had been demonstrated by the low level of farm sales and the fact that the numbers leaving the land were lower than the European average.
There was, she said, a growing number of part-time farmers who were using off-farm income to keep their farms going.
"People in the machinery trade say these are the farmers they like to see coming in the door. They spend money on the new technologies to help them farm more efficiently and that is what it is all about," she said.