The full report is available on the Department of Agriculture and Food website www.agriculture.gov.ie or from Crop Production and Safety Division, Department of Agriculture and Food, Maynooth Business Campus, Maynooth, Co Kildare, or from the Government Stationary Office.
Republic of Ireland Minister of State, Mr Noel Treacy TD, established the Mushroom Task Force, in December 2003, to 'devise a timebound action Plan' to help ensure the future viability of the mushroom industry in Ireland. The task force was asked to find a consensus among the major players in the industry on the issues which the industry faced, such as the threat posed to the Irish mushroom industry by the encroachment on Ireland's major export market, Great Britain, by the Dutch and Polish industries, and to develop a plan to meet the challenges.
Scope
The task force examined issues including: the role of producer organisations; cost reduction; research; training; and the environmental impact of the industry. One of the recommendations of the report calls for the creation of a supply contract between Producer Organisations and Marketers.
Supply and Marketing
Under such contracts the Producer Organisation will be responsible for all the mushrooms supplied by its members, ensure production is flexible enough to be tailored to market demand, and create a reliable concentration of supply and price stability for growers. The Marketer must provide details of the retail outlets it is currently supplying and the total sales volume and the names of outlets proposed under the contract. The task force sees price transparency as crucial and recommends that in the case where a marketer's own growers are part of the Producer Organisation there must be full transparency in all transactions and prices.
On Composting
The task force sees increased use of Phase III compost as one way to boost the competitiveness of the Irish mushroom industry. The report recommends a feasibility study be undertaken in conjunction with Enterprise Ireland on the possibility of lifting Phase III production to 4000 tonnes per week, double the current level of 2000 tonnes per week. The group says the industry should set itself the goals of reducing the cost of providing Phase II compost to growers by eight per cent and cut the cost of Phase III by 20 per cent. The cost reductions are to be achieved by compost companies over an 18 to 36 month period. The task force proposes the creation of a cross border Phase III composting plant and suggests using InterTrade Ireland to help facilitate the project.
Promotion
The report also outlines opportunities for cross border cooperation in the marketing and promotion of mushrooms and in the creation of quality standards. An Bord Bia, An Bord Glas and the Department of Agriculture and Food are charged with exploring the cross border possibilities in this regard. The report calls on An Bord Bia to look into the possibility of a pan-pean promotional campaign to increase mushroom consumption generally.
Research
The task force sees a need for ongoing research on mushroom growing environments and compost quality as a means of boosting mushroom productivity and profits for producers. Product development in the mushroom sector has fallen behind other areas of the food industry, according to the report. The group suggests new outlets be found for mushrooms which fail to meet the quality requirements for the fresh retail market, it considers such outlet as underexploited by the industry in Ireland. Diversification into the food service and convenience sectors would increase consumption and therefore profits along the production and supply chain, according to the report.
The Environment
One of the main environmental problems facing the mushroom industry is odour emissions from compost plants. UK expert, Professor Ralph Noble of Horticultural Research International, was commissioned by composters to examine odour emissions from compost yards. Bord Glas liaised with the Environmental Protection Agency and composters on the issue and all three groups see compliance with the measures set out in Professor Noble's report as the basis for progress on the issue. The mushroom task force support the decision to use Professor Noble's recommendations as the way forward.
Recommendations of the Noble Report
Poultry manure should be stored undercover, preferably off-site and pre-mixed with gypsum. The manure should be brought to the site as required. Handling overly liquid manure, defined as 45 per cent for poultry manure, results in unacceptably significant odour emissions and should be rejected. Liquid entering the storage pit should be monitored and sifted to reduce the level of solid matter entering the system.The amount of water introduced to the storage pit should be kept to the minimum consistent with maintaining the through put of compost. Fresh water should be applied separately and not used to increase the volume of goody water in the storage pit. The goody water should be regularly tested for dissolved oxygen concentration, once a month is considered sufficient. To keep the level of solid matter in the pit down it should be cleaned out frequently, at least once every nine months. The goody water pit and storage tanks should have some type of aeration/oxygenation system installed. The straw bales should be dunked in recycled water, with fresh water being added to the dunking bit as needed, but not to the storage tanks. The application of recycled goody water in a fine spray over the bales and pre-wet should be avoided. Within three days of dunking the bales should broken open and placed in an aerated area. Poultry manure, with an appropriate 15 per cent urea substitution, should not be applied all at once in the pre-wet stage and applications within a three-day period should not exceed 75 per cent of the total. Aerated floors, using either high or low pressure systems able to maintain a minimum of 5.5 per cent v/v in the air of the entire compost, should be used in the pre-wet and Phase I stages.
During the pre-wetting stage, compost in the lower half of the stack should be frequently checked to measure oxygen concentrations. The oxygen level should be gauged either electronic hand-held detectors, gas detector tubes or a computer control system. Aeration should be increased if the oxygen concentration in the air of the compost falls below 5.5 per cent v/v. At the end of pre-wetting the moisture levels of the compost material should be checked and the amount of water used in Phase I should be reduced if moisture content exceeds 75 per cent. Water applications to further batches should be adjusted in light of the results of this testing. If poultry manure is being washed into the run-off liquid during the pre-wetting stage corrective measures should be employed, such as decrease in the amount of manure or water being applied at the same time.
Urea should be added to the pre-wet stacks at the initial stage to substitute the amount of poultry manure. It is suggested that the first substitution of urea for poultry manure should be at a level of five per cent. The effect of the substitution on the composting process and compost quality is to be frequently assessed with a view to increasing the level of urea to 15 per cent if no adverse effects are detected. The amount of urea will required will probably be less than the amount of poultry manure, as the nitrogen in urea form is more readily available to the ammonia producing bacteria compared to the nitrogen from the poultry manure, though uptake can vary.
During the Phase I stage oxygen concentration in the compost must be checked, as in the pre-wet stage, and aeration or turning of the mix increased if oxygen concentrations fall below 5.5 per cent v/v. The moisture level and the end of Phase I should be at or under 75 per cent.
Sites where compost is being prepared should be maintained at optimum cleaniness levels to prevent smelly residues and organic matter accumulating which might otherwise become anaerobic. Run-off liquid should be effectively drained into storage facilities to avoid the formation of static pools.
Significant odour nuisance from a composting plant arises when the combined hydrogen sulphide and dimethyl sulphide concentration in the air reaches two parts per million. If sulphide levels in excess of two ppm are detected near the composting stacks or the goody pit, remedial action is required. Actions which might be undertaken include: better aeration through increased air flow and/or more regular turning of the compost; substitution of urea for poultry manure; and the reduction of compost moisture to prevent the anaerobic compost conditions. To detect and measure combined sulphide emissions the use of gas detector tubes is advised such as Gastec/Anachem Model GV-100 or the Draeger type accurro 2000 or Mod 21/31. The measurements of combined sulphide levels are required during the turning of the pre-wet stacks and Phase I windrows, and near the goody water pit. The testing for air contamination should be carried out at various times of the day above static compost piles and measurements are also to be taken in the plume near the compost. Records should be kept of the measurements of both the combined sulphide levels, including the sites tested, and the oxygen concentration levels in the goody pit and the pre-wet and Phase I compost.
The Mushroom Task Force also looked at another key environmental issue of concern to the mushroom industry, the disposal of spent mushroom compost in a manner compatible with the Nitrate Directive. The group has endorsed the Bord Glas draft proposal, 'Code of Practice for the Field Storage and Land-Spreading of Spent Mushroom Compost', which Bord Glas has submitted to the Department of Environment, Heritage and Local Government. Bord Glas is awaiting a response on the draft proposal.
Code of Practice for Field Storage and Land-Spreading of Spent Mushroom Compost
Under the code spent mushroom compost can be stored on a field for up to 180 days prior to land-spreading for a subsequent crop. The field cannot be used for continuous storage of the SMC. The spent compost has to be kept in a compact pile at least 300m from any public water supply source and 50m from any public road, water-body, domestic well or watercourse. No more spent material can be stored on the field than will be used before the next cropping cycle. Storage will not be allowed on fissured limestone formations, fields with a thin overlay on gravel or situation where there is a high risk of polluting a public water source.
The spreading of SMC will be restricted between November 1 and January 15 to areas which have a land mangement plan which ensures spreading can take place during that time without the risk of water pollution.
The application of SMC must comply with the practices set out in Teagasc's 2004 document 'Nutrient and Trace Element Advice for Grassland, Tillage, Vegetable and Fruit Crops', along with any updates to that document. The amount of nitrogen and phosphorus in the SMC is not allowed to exceed what is required for a specific crop. Higher levels of these elements will allowed for the purpose of soil amelioration provided a land management plan exists showing this can be done without risk of water pollution.
The spent compost is not to be applied within ten metres of any watercourse, 50m of any domestic well or drinking water source, or within 20 metres of a lake or main river channel.
To reduce the risk of water contamination SMC is not be used on steeply sloping land or land on which rainfall patterns, ground cover, soil conditions or proximity to watercourses might lead to pollution. The spreading of the spent compost will not be allowed on waterlogged, snow-covered or frozen land. The SMC is to be spread as uniformly as possible to prevent nutrient loss to water. SMC sourced from a diseased crop is not to be used within 2km of a mushroom growing facility.
The Mushroom Industry in Ireland
The Mushroom Industry Task Force estimates that the industry is currently worth 124 million at the farmgate, generating 95 million in export income. The mushroom industry directly employs around 4,000 people in the production and supply chain. The value of the export income from the industry is particularly useful as it uses local materials which would not otherwise generate economic activity.
The industry grew from small beginnings in the 1980s to reach a peak of 566 growers in 1995, buoyed by the use of family labour and the low investment levels required. Consolidation and rationalisation of the sector has seen the number of growers cut to 242, while production levels have been maintained.
Mushroom production in Ireland stands at about 69,000 tonnes eight per cent of the total EU market which comprises 800,000 tonnes. Around 55 per cent of the 170,000 tonnes UK fresh mushroom retail market is supplied by Irish businesses in the UK along with production in Ireland, north and south. Mushroom production is expanding in The Netherlands and Belgium, which currently produce a collective 330,000 tonnes and export to Britain, France, Germany and Scandanavia. Entrepreneurial drive, high investment and low labour costs have lifted Polish mushroom production to 150,000 tonnes and its target markets are Germany and importantly Britain. Export driven mushroom production in Hungary has seen its output increase to 38,000 tonnes, 28,000 tonnes of which were for foreign markets. Hungary has invested heavily in composting recently.
Rationalisation in the Irish industry has seen production plateau at 69,000 tonnes, with downward pressure on prices and underinvestment. Northern Ireland has seen production decline, currently at 17,000 tonnes.
Grower numbers have declined rapidly in Ireland since 2000. The reasons for the decline have been the higher labour costs as family labour has become less abundant and the need for capital investment has risen. The rising costs of the sector combined with the squeeze on profits provided by a static market, have taken the gloss off the industry for smaller players and led to consolidation.
Indicative figures from Teagasc suggest high investment, mechanical shelving operations make up about 15 per cent of all the units, small investment units make up 35 per cent of units and the remaining half of operations are medium sized units using staging and hand labour to increase fill. Five-tunnel operations are the most common type.
If the 171 growers operating 940 mushroom houses in Northern Ireland are included, there are 413 growers with 2845 houses in Ireland as a whole, 301 of which have less than eight houses. A quarter of all the growers in Ireland have a turnover of under 150,000, one fifth of growers earn between 300,000 and 500,000. The top bracket of those earning over 1 million comprises 0.6 per cent of growers. It is thought the smaller scale operations could be casualties of consolidation in the industry in future.
Production and Exports
Mushroom production in Ireland rose from 41,000 tonnes to 67,000 tonnes from 1992 to 2002, an increase of 65 per cent. The majority of this production, which has remained steady despite the decline in grower numbers, goes to the British market, 80 per cent in total. The remainder goes to the domestic retail market. Of the 68,927 tonnes of mushrooms produced in Ireland in 2003, an estimated 55,938 tonnes were exported. The fresh retail market for mushrooms grew by an annual six per cent during the 1990s and the success of the local mushroom industry has depended on the British market which which amounts to nearly 170,000 tonnes. Britain itself produces around 54,000 tonnes of mushrooms, almost half of which are supplied by Irish companies in Britain. Republic of Ireland mushrooms account for 50 per cent of the British market. Whole of island exports to Britain comprise 54 per cent of the market, with Dutch exports accounting for 37 per cent. Currently Polish penetration of Britain's market stands at around four per cent. The stable price of mushrooms and increased UK incomes saw mushroom consumption in Britain rise throughout the 1980s and 1990s in Britain.
The situation has changed in recent years with the market reaching saturation and penetration of the market by Irish mushrooms having come to a standstill. The market price of the product has similarly stalled while production costs have escalated, putting pressure on margins. The increasing dominance of the multiples, like Tesco, has afforded them the power to push for tougher deals with their concentrated buying power, further eroding the margins for Irish producers. Other factors combining to bear down on the Irish industry are the adverse impact of the exchange rate changes since 2000, competition from continental producers and the rising prominence of internet auctions.
The competition
Dutch mushroom producers have higher labour costs than those in Ireland but the Dutch industry has various advantages over local producers. The Dutch industry has mirrored the growth of the Irish industry over the last two decades and has gained a telling penetration in the key British market. The Dutch industry has a 30 per cent advantage in the costs of producing compost, it uses more Phase III compost and Dutch growers are better mechanised than their Irish counterparts. The group reckons the Dutch growers have 40 per cent better productivity through higher yields. These factors allied to logistical ease in reaching the British market and economies of scale, have and will continue to make the Dutch key players in the market. The overall mushroom production costs of the Dutch industry are estimated to be 10-15 per lower than those of Irish producers.
A rising threat to the Irish mushroom industry comes from Poland. Current estimates suggest Polish growers have cost advantages of between 40 per cent and 45 per cent, over Irish growers.
The local mushroom industry employs around 3000 at grower level and the labour intensive nature of the business means worker costs comprise one third of the price of production. The inability of growers to source labour locally due to recent levels of economic prosperity in Ireland has resulted in the use of significant levels of non-nationals.
Growers have had ongoing concerns over access to non-national workers and the price of worker permits. The situation has changed since May 1, 2004, as the members of the 25 EU Acession states now no longer need work permits and the difficulty of getting permits for non-EU nationals has increased. The new reality means accessing low-cost non-nationals is not sustainable into the future for the industry.
The Compost Sector
As can be seen from the table below compost production in Ireland is a highly consolidated area. The sector is dominated north and south of the border by a handful of manufacturers and this production is well integrated with supply and marketing.
Type of Compost Ireland No. of manufacturers Estimated tonnes per week Phase II 4 3150 Phase III 2 1770 Total 6 4920
Type of Compost Northern Ireland No. of manufacturers Estimated tonnes per week Phase II 5 2370 Phase III 1 130 Total 6 2500
About 36 per cent of the compost available in Ireland is Phase III, while in Northern Ireland Phase III comprises just six per cent of the compost produced. There are various issues in the sector including: the environment, as mentioned above; finding the optimum number of producers to service the mushroom industry; inconsistent quality of the product; the perception by growers that they are tied to compost manufacturers; and the high cost of conversion to Phase III.
The Goodbody Report identified the need to move to production of Phase III compost as crucial to the Irish mushroom industry. The cost of conversion is seen as an inhibiting factor. It is estimated creation of a Phase III facility on a green field site in Ireland would be 1 million per hundred tonnes of weekly output.
An Bord Glas and Bord Bia jointly commission Goodbody Economic Consultants to examine the competitiveness of the Irish industry in early 2003. The resulting report found there were several ways to increase the competiveness including a need to move to Phase III compost use. The report also suggested the need for the development of a long-term marketing strategy, getting greater scale in growing units, improved growing sector productivity, management of environmental controls without incurring excessive costs and targeted government assistance.
Role of Producer Organisations in the Mushroom Industry
The Mushroom Industry Task Force sees the role of Producer Organisations in the mushroom industry as important in the future development of the industry. The Producer Organisations are a basic element of the Common Organisaton of the Market and are capable of accessing EU aid. The Department of Agriculture and Food recognises the bodies on particular criteria. The organisatons must establish an operational fund from which an approved operational programme is financed. These funds must are created by levies of members. The EU aid is equivalent to the amount contributed to the fund. The aid is capped at 4.1 per cent of the value of marketed production of the Producer Organisaton. The aid can be retrieved from the Producer Organisations under the legislative framework if the organisations fail to meet regulatory requirements.
Table of the Number of Producer Organisations Paid Aid
Year Number of Producer Org.s in receipt of Aid Number of Members Aid Paid 2001 9 401 1.94m 2002 9 412 2.77m 2003 11 286 3.49m
Mushroom growers have received 1.4 million in funds from National Development Plan since 2000, in addition to EU aid.
In talks with mushroom growers the task force found a significant level of distrust among them regarding marketing companies. Among the grievances aired by growers to the task force were: a perceived lack of fair treatment; lack of transparency in relation to pricing structures; the perception that mushrooms were not graded on their merits; undercutting by marketers in the UK market; insufficient promotion of mushrooms; and the need for the benchmarking of marketing costs.
Marketers complained that mushroom supply from growers was inconsistent and there have been failures in meeting demand. Marketers want to see Producer Organisations impose more discipline on member growers in relation to the supply of all production via the Producer Organisation. Marketers see a need to cut costs of mushroom production and see more promotion as a necessity to grow the market.
The task force believes trust needs to be established and sees supply contracts and price transparency as the means to create a better relationship between Producer Organisations and Marketers.
As part of the supply contracts recommended by the task force growers who have consistently met grading requirements should be allowed to carry out their own grading. This grading is to be subject to a proposed Grading Protocol.
The Grading Protocol
The self assessment process will see growers grade and pallet their production before delivery to the packhouse. The assessment is to take place on the basis of clearly defined specification on which Marketers and Producer Organisers are agreed. Spot checks will take place to ensure compliance with specifications. Failure to meet the specifications will result in rejection or downgrade of product with the producer to incur the cost.
The specifications will include: mushroom size; size grading; mushroom colour; firmness; level of bruising; peatiness; stem length; punnet weight; presentation; punnet identification; pallet configuration; and packaging type. Tolerance levels for each specification will be established.
Pallets are to be prominently marked with the grower name, grower number, harvest date, delivery date, number of units and product code. Pallets are to labelled twice, on alternate sides, and consist of one product line which is firmly secured. One mixed pallet will be acceptable in each consignment
Up to ten per cent of each product code will be examined at the packhouse and failure to meet specifications will result in rejection or downgrade of the consignment. At which point the grower will be informed of the reason for the rejection or downgrade
Repeated failure to meet pallet specifications will result see the Marketing Company inform the Producer Organisation, which will then mete out appropriate penalties, as set out in the supply contract, to its member. A review process will be established to ensure the grading protocols are operating fairly. ________________
The task force feels the best way to improve the competitiveness of the industry is through the move to Phase III compost and development of growing units requiring less labour. The group wants to see progressive growers targeted for funding, those investing in additional and high tunnels allowing more shelving, Dutch shelving, mechanisation to exploit the Dutch shelving, cold storage and high humidity cooling equipment and labour saving equipment.
Average mushroom consumption stands at around 2.28kg/head and growth at retail level has remained static between 2000 and 2002. The last advertising campaign in the UK for mushrooms was in 1996. Mushroom consumers tend to be over thirty and the task force considers any future campaign should be based on consumer research which should aim at examining possibilities in the under-35 market and the feasibility of product branding.
The Report is available on the Department of Agriculture and Food website www.agriculture.gov.ie or from Crop Production and Safety Division, Department of Agriculture and Food, Maynooth Business Campus, Maynooth, Co Kildare, or from the Government Stationary Office.
Mushroom Task Force Report
Annex
Members of the Mushroom Task Force:
Denis Lucey (Chairman)
Jarlath Coleman Department of Agriculture and Food
Michael Hickey Department of Agriculture and Food
Joe Fox Enterprise Ireland
Jim Gollogley Commercial Mushroom Producers
Noel Heavey Producer
Tara McCarthy An Bord Bia
Michael Neary An Bord Glas
Padraic O'Leary Walsh Mushrooms
Mel O'Rourke Sylvan Ireland
Vincent P. O'Sullivan Consultant
Michael Slattery Irish Farmers Association
Liam Staunton Teagasc
R. C. Wilson Monaghan Mushrooms
Secretariat : Patricia Cannon, Niamh O'Reilly and Clodagh Byrne, Department of Agriculture and Food.
Terms of Reference 'To arrive at a consensus on the major issues facing the mushroom sector and to devise a time-bound action plan to address those issues in order to secure the future viability of the sector'.
