I move: "That the Bill be now read a Second Time."
The purpose of this Bill is to contribute towards the better organisation and development of the potato sector primarily by improving the quality of domestic supplies of potatoes reaching the market place.
The potato industry in this country is not well organised. The distribution system from the producer to the retailer is not very orderly. Marketing tends to consist of individual efforts by producers, packers, merchants, etc. Adequate facilities for storing, grading, packing and processing of potatoes do not exist. A survey carried out by the Department of Agriculture last year showed that less than 50 per cent of the potato crop had adequate facilities. This inevitably results in losses and wastage which can be avoided. The potato industry is also characterised by considerable fluctuations in supplies from one year to another. A year of short supply and high prices is often followed by a year of excess supply and poor prices. Even within a season where there is a reasonable equilibrium between supply and demand there is often oversupply early in the season and a shortfall towards the end of the season. Some of the more extreme fluctuations can be reduced considerably if the sector becomes more rationalised and orderly.
The consequences of these weaknesses in the potato industry are obvious. High quality, well-presented potatoes and potato products from other member states gain inroads into the domestic market. In fact £25 million worth of potatoes and potato products were imported in 1982. We can replace these imports with obvious benefits to the country but some developments in the sector are required if this is to be achieved. It should not be forgotten that we have many advantages which can help to organise and develop the industry. Many areas in the country have excellent soils and climatic conditions for potato production. High quality home grown certified seed is readily available and the control, research and advisory services of the Department of Agriculture, An Foras Talúntais and ACOT are readily available to producers. The proximity of domestic markets is a major advantage. ACOT have put a man specifically in charge of the horticultural scene.
The absence of international competition was a major factor for the relative under-development of the potato sector. Inter-Community free trade followed implementation of the EC plant health directive in 1980. Before that, our producers enjoyed the protection of our own domestic market. They now face the full rigours of EC competition and the industry must adapt to this at production, distribution, marketing and processing levels. Failure to make the sector more efficient and competitive will inevitably lead to further growth in the supplies of foreign potatoes and potato products.
The reorganisation and development of the industry is primarily a matter for the commercial forces which operate in the sector. But the Government can help by providing conditions and promoting a climate wherein the sector can ultimately compete more efficiently and effectively. In this connection, the State is providing financial aid towards the development of a national potato co-operative. The task of establishing the national co-operative was undertaken by the Irish Co-operative Organisation Society (ICOS) in conjunction with the Irish Farmers' Association. I understand that 12 regional potato producer co-operatives have been set up and these form the constituent bodies of the national co-operative. Much remains to be done by the co-operative. It will be endeavouring to get the fullest support from the regional co-operatives by way of channelling their entire output through the co-operative. I understand the co-operative will be looking into the local and regional needs in terms of grading, handling, packing and storing facilities.
I wish to refer briefly to grant-aid available under an EC regulation on the marketing and processing of agricultural products. Under this scheme, grant-aid may be obtained from the European Agricultural Guidance and Guarantee Fund (FEOGA) towards the cost of certain approved projects which are aimed at improving structural efficiency in the processing and marketing of agricultural products in the Community.
Successful applicants must have the approval of the member state, which must contribute a minimum national grant of 8 per cent of the cost of the project and 16 per cent for projects located in the disadvantaged areas of the west of Ireland in order to attract the maximum level of EC grant which amounts to 25 per cent and 50 per cent in disadvantaged areas. On-farm production projects involving modernisation, rationalisation or development of individual farms are not eligible for consideration under the FEOGA Projects Scheme.
Nowadays in the market place, product presentation is becoming increasingly important. In this connection, I would urge producers to pay particular attention to the selection of potato varieties which have good storage quality and which look attractive to shoppers.
From experiences which I have had recently this point of view is confirmed. For far too long we have been starting out in the fields growing something in the hope that the customer will purchase the product. What we should have been doing is starting in the supermarkets, finding out why the housewife buys one product and rejects another and then taking the process from there. It was quite clear to me that the price is not the factor in the determination of the purchases. It is the presentation of the product, how they look. The Heinz company proved that the housewife's decision making is 75 per cent on visual presentation. The product must be 100 per cent edible. There must be no waste or rotting. The shops which have started offering to housewives the facility of choosing their own potatoes from the tray have proved this point. It has been a tremendous success even though from those trays the potatoes were one and half times as expensive as the packaged potatoes.
The registration requirements as proposed in the Bill together with the co-operative structure I have referred to can provide an overall framework to promote the achievement of greater development, efficiency and competitiveness which the sector requires.
The Bill before the House provides for a system of registration of all who grow ware potatoes for sale and of all who pack potatoes. It will be illegal to sell potatoes other than those grown by a registered grower, or to sell packaged potatoes other than those packed by a registered packer. A packer or a grower who packs will be required to show his or her registered number on the pack. About 80 per cent of the trade in 25 kg packs is met by growers who are also packers. The proposed registration system will facilitate trace back of substandard potatoes through the sales chain, as middlemen will be required to put their names and addresses, or other approved identification on the packs. This will make it easier to take appropriate action with those who pack poor quality potatoes. It will also encourage the collection and dissemination of information regarding acreage planted, varieties etc. The enactment of this legislation will not solve all the problems associated with the industry. It will be no substitute for the action that is required by the commercial sector. But it will help to provide a better framework and promote greater discipline in the chain from producer to retailer.
I want to refer to a few points, for the information of the House. We do not regard prosecution as the ultimate. We hope, through our ACOT advice, the setting up of the co-operatives and assimilation of literature from all Departments, to be able to advise people as to the right course of action, the standards which are needed and how to get people to do their business in a business like way. As Members are probably aware, we have had regular meetings both with packers' and growers' representatives.
The significant thing about this legislation is that it is not something emanating from this Department. It is legislation which was asked for by the growers and the packers. That would indicate that they would like to travel down this road of discipline. They fully realise that they are in a tough scene. In a year in which there will be surplus potatoes in the Netherlands or elsewhere, these countries will try to put their surplus on the Irish market. That happened in the winter of 1982-83, leading to this legislation. Farmers here were dumping potatoes into the sea at that time.
We are having discussions with our colleagues in the IFA and in our own Department. It would appear, as I said, that the presentation of the potatoes is very important. As a matter of fact, housewives bought a very inferior Dutch potato because it was very well presented and well prepared. We are very fortunate that we have a very thorough seed breeding programme, resulting in some very excellent varieties, that of Cara in particular. One which is being very much promoted at the moment, especially with the processor in mind and which also looks very well on the shelves is the Pentland Dell.
In a nutshell, it is important that the product should look well, taste well and keep well. This latter is probably the greatest hurdle to be faced by the growers — the question of storage. That is the key to success. At this time of year it is easy enough to have good potatoes but in February and March you get problems with the imports. It is at that stage that storage is necessary. That is why the co-operative is very important. Groups of people will get together to do a proper job of storage. Without proper storage, we cannot compete on an all year round basis.
If there are any points which any Member would like to raise, I shall do my best to respond. I commend the Bill to the House.
