A €300 million investment package for the dairy processing sector was announced yesterday.
The investment will include €100 million Government grant assistance and will provide capital investment for the industry.
The grants will be topped up by the industry, with ventures in the BMW region receiving 50 per cent of the costs of capital projects from the Government and projects in the rest of the country receiving 40 per cent.
The grant aid will provide an incentive for dairy businesses to rationalise, possibly merge and to develop plant specialisations. It will be available toward the cost of construction and acquisition of buildings, new machinery and equipment.
There are around 30 dairy processing plants in the country and the industry had lobbied for aid for some time.
Enterprise Ireland will manage the scheme and evaluate the investment projects. Full details of the scheme will be announced following state aid clearance from the European Commission. Applications are expected to close at the end of the year.
Speaking at the launch of the scheme in Carrick-on-Shannon, Co Leitrim, yesterday, Minister for Agriculture Mary Coughlan said the investment package is capable of taking the Irish dairy sector forward in a cohesive and strategic manner and would lead to the sustained development of the sector.
"This much-needed injection of capital, with direct support from the Government, will reinvigorate the sector and will go a long way toward realising my commitment to the development of a modern, competitive, innovative, market-focused and highly efficient food sector in Ireland."
She added that the department had been in negotiation with the EU in regard to state aid clearance and she was confident that the EU would deal with the issue quickly.
The Irish Farmers Association welcomed the scheme and called on co-ops to grasp the opportunity to rationalise the dairy industry.
It said rationalisation must strip out processing costs.
Richard Kennedy, IFA national dairy committee chairman, said that any project part-funded by the scheme would need to match up to tight criteria of sustainability and improved efficiency.
"I believe this scheme will help our industry shape up for greater competitiveness," he said. "Our co-ops must now set down to work in earnest and waste no time in putting forward sustainable common proposals for funding."
ICOS, the umbrella body for the co-operative movement, also welcomed the investment.
Padraig Gibbons, ICOS president, said that the dairy sector at farm, processing and marketing levels all face major challenges from policy changes, economic factors, competition and market developments.