Skip to main content
Normal View

Dáil Éireann debate -
Tuesday, 27 Jun 1995

Vol. 455 No. 1

An Bord Bia (Amendment) Bill, 1995: Second and Subsequent Stages.

I move: "That the Bill be now read a Second Time."

The primary purpose of this Bill is to increase the membership of the board of An Bord Bia by two and to provide that one member of the board shall be appointed on the nomination of the Minister for the Marine.

This Bill addresses a long running grievance by farming organisations that they were not represented on the board of An Bord Bia. This was an error and on the enactment of this Bill, I will put the matter right by appointing two new members to the board, one from the IFA and one from the ICMSA. This approach is justified because of the substantial levy contribution farmers make to An Bord Bia which in 1995 will be in the region of £4.3 million.

Quite apart from their direct financial contribution to the work of An Bord Bia, it is high time to include farmers as key players in the food industry as it is they who must provide the raw material for the industry. That raw material must satisfy processors' requirements in relation to quality, cost and timing of delivery. The commercial partnership between farmers and processors must be fostered. The processors are already well represented on the board of An Bord Bia.

The direct representation of the IFA and the ICMSA on the board of An Bord Bia will be a further step in developing the partnership needed if we are to exploit fully the potential of the food industry to create additional wealth and employment.

As a result of discussions which I had with the Minister for the Marine it has been agreed that BIM and An Bord Bia should cooperate closely in marketing fish exports with a view to the ultimate transfer of those functions to An Bord Bia. We have both concluded that such a move would not only strengthen the export marketing of fish products by making available for that task the resources of a larger organisation like An Bord Bia but would also assist An Bord Bia in promoting the distinctiveness of all Irish food products and ultimately to develop some form of "Brand Ireland" for Irish food. To facilitate that process, this Bill provides for the appointment of one board member of An Bord Bia on the nomination of the Minister for the Marine. It is worth noting that during the debate on the An Bord Bia Act, 1994, a number of Deputies highlighted the fact that the marketing of fish should be included in An Bord Bia's remit. Provision was made in section 9 of the An Bord Bia Act, 1994 to enable transfers of that kind to take place. On the enactment of the Bill, I propose to appoint a nominee of the Minister for the Marine to one of the existing places on the board.

I recently appointed the managing director of the Irish Dairy Board to another of the existing places on the board of An Bord Bia. This appointment will strengthen the links between An Bord Bia and the Irish dairy processing sector. The Irish Dairy Board is by far the largest Irish food exporter and is highly representative of the dairy sector. The need for such an appointment was also raised by many Deputies during the debate on the An Bord Bia Act, 1994 and I am glad their concerns will be met by the appointment of Dr. Noel Cawley.

The food industry is Ireland's single biggest industry. It provides employment for almost 200,000 people on farms, in processing and related activities. We must explore, examine and exploit every possible means of strengthening our food industry. I said on a number of occasions that the realisation of the full potential of the Irish food industry would be capable of transforming our economy through additional employment and wealth creation and through the stabilisation and re-invigoration of rural communities.

If that potential is to be realised, the industry needs to be more competitive to accommodate the effects of CAP reform, the GATT and any changes generated by the need to facilitate Central and Eastern European countries through enlargement. It is important to realise that being competitive is not just about price or about the most up-to-date plant and equipment. It is about quality, delivery at the right time and back-up service if something goes wrong. Competitiveness is also about developing the human resources of an industry to ensure that the best advantage is extracted from all the other resources in it. Competitiveness is also about innovation. If we think we can develop our food industry by always producing the same products in the same way, then we will fail. Food companies must continually look ahead and take a view of how the market is developing, how consumer tastes and eating habits are changing and devote a substantial part of their resources to innovation — to new product and new process development — to meet those future changes. Finally, competitiveness is also about marketing. There is little point in having first-class products if one does not sell them in accordance with a well thought-out marketing strategy.

This thinking underlies the programme for development of the food industry which I launched on 14 February last. Under the programme, which runs from 1995 to 1999, a total of £640 million will be invested in the food industry. Of that amount, £283 million will come from public funds, mainly the EU Structural Funds, and £357 million from the industry itself. What is different about this programme is that, for the first time, all the factors involved in the development of the industry are brought together in a co-ordinated way. In addition to assistance for plant and equipment, the needs of the industry for additional investment in research and development, marketing and training are provided for, in line with the thinking outlined.

Of particular relevance to the Bill before the House is the marketing function. A total of £66 million has been set aside in the programme for marketing in the widest sense. An Bord Bia will have a central role in the implementation of the marketing measures under the programme.

An Bord Bia will publish a plan tomorrow detailing how precisely it will discharge the funds allocated to it under the programme in the years to 1999 and all the other State agencies involved in the food industry will do likewise. To ensure consistency and synergy in their plans. I established a management unit in my Department under the chairmanship of the Secretary which will examine and approve them as they fall due.

I see an exciting time ahead for the food industry. The massive assistance being underwritten by the State, EU Structural Funds and the commitment and skill of the State agencies provide a framework within which opportunities can be grasped and challenges met.

The constitution of the board of An Bord Bia will be pivotal to the success of the programme. Strengthening the board of An Bord Bia as I described will put it in a better position to deliver what is needed.

Section 1 of the Bill provides that the minimum number of ordinary members of the board shall be increased from nine to 11 and the maximum from 11 to 13. It also provides that one ordinary member shall be appointed on the nomination of the Minister for the Marine as well as for certain consequential changes in the provisions governing the terms of office of board members.

Section 2 provides for the short title and collective citation of the Bill. Since publication of the Bill, I received a letter from the chairman of the board, Mr. Ned O'Sullivan stating that he has been given a major promotion with ITV and is to take up residence in London. He will be unable to remain on the board or as chairman. I take this opportunity to pay tribute to him. His expertise as a marketer of drinks at international level has been invaluable to the board and he will be greatly missed. I thank him for his dedicated work as chairman in recent months and particularly acknowledge his input into the five-year development plan.

It is vital that farmers are directly represented on the board. When I travel abroad to food fairs and exhibitions and quality is mentioned, invariably it is in the context of meat, better genetics, confirmation of carcase and less fat. When we talk about dairying we talk about somatic cell counts, less butter fat and more protein. It all relates to primary production, and farming practices, I am trying to ensure that all elements of the food chain are represented on the board. For the first time there will be joint marketing of Irish red and white meat, drink, seafood and horticultural products. I hope this will culminate in the biggest promotion of Irish food in Ireland under the aegis of An Bord Bia. The board is in its infancy and expanded membership will ensure the controversy caused by the exclusion of the agricultural sector will be rectified. I commend the Bill to the House.

I join the Minister in thanking the outgoing chairman of the board. We hope the Minister will be in a position to appoint someone who will continue the good work.

This Bill seeks to amend the composition of the board of An Bord Bia. The policy decisions on streamlining the food industry were taken by the previous Administration and implemented by the then Minister, Deputy Walsh, in response to the expert group set up as a result of the Culliton and Moriarty task force reports.

The Bill is simple in its concept. The Minister has yet to appoint a female appointment to the board. The gender equity provision of the directive applies to this Government as much as it did to the previous one. The Minister in error claimed credit for appointing a female to a board the warrant of appointment having been made during his predecessor's time. Will the Minister state who will be the appointees to the board as it has been heralded that one will be from the IFA and one from the ICMSA? Many people in the industry would like to know who will be appointed.

It is wrong to suggest that farmers or primary producers are not represented on the board. When a person is appointed to the board his occupation or status is irrelevant. As a member of the board one's primary duty is to serve it without reference to outside agendas, particularly sectional ones.

One of the great mistakes of successive Ministers in many Departments has been to believe that every vested interest must be represented on a board for it to be effective. That is not logical. Mr. Michael Hanrahan and Mr. John Duggan are eminent farmers involved in the co-op business, in the ICMSA and the IFA but this is not why they are members of the board. They are quite capable of representing the view of farmers in so far as it would apply to any matters under discussion by the board. They are members because of their expertise as farmers. Such experience should be the raison d'être for any person's membership of the board. Competence, not membership of an organisation should be the determining factor.

While I know prospective appointees from farm organisations the Minister has in mind will be more than able to contribute positively, I do not accept in principle that all organisations must be represented on the board. The Minister said he will make the appointments on the basis that primary producers pay levies to the tune of £4.3 million. This is not a reason ipso facto people should be members of a board. The food industry is a multi-billion pound industry. Levies should not be a determining factor in whether people should or should not be represented on the board. This is not to say that people from those bodies should not be on the board but the argument on the basis of levies paid is weak.

The Minister has been pressured by controversy which arose because the representative organisations were not explicitly given the right to nominate persons to the board. Representatives of the IFA in executive capacities are not excluded from membership of the board of An Bord Bia but representative organisations have not had until now a nominating role for boards. There is good reason for this. If we follow the Minister's contention to its logic every constituent area of the food industry in terms of its positive contribution to a multi-billion pound industry, would be entitled to a member on the board. Clearly this is not feasible.

However, the Minister sees political kudos for him in appointing these people to the board and this is his primary motivation. He made this announcement when he met them on the IFA's 25th anniversary on 6 January. To say that the payment of £4.3 million in levies is the reason for the appointments is insulting everybody's intelligence. It does not make sense. If this was the case, every co-op and export marketing organisation which makes a contribution to the food industry would be entitled to have members on the board. I am not objecting in principle to the appointment of people from the IFA or the ICMSA to the board. However, the Minister is seeking to assuage a vested interest, as he sees it. Two eminent members of the farming community are already on the board and are well able to ensure primary producers' interests are articulated and defended.

I made this point at the outset because of the importance of the food industry. The key issue in terms of how we develop a progressive industry was outlined in the Culliton report, which stated that a key requirement is a vision shared by producers and processors in different sectors and this must be supported by Government development agencies. Probably one of the great weaknesses of the Irish food industry until now was that there was not a share vision. Very little is being done by either side to establish common ground between producers and processors so that the long term interests of the Irish food industry are served.

We know from farmers' perception of the interests being served that they have great distrust of the processing industry. Examples can be given to show why farmers have good reason to be suspicious of the intentions of processors in terms of price and why they feel there is a cartel in the ring when they go to sell their livestock. The processing industry has developed a great deal of sophistication. We have a more market led agriculture now than we had when we had a price support mechanism under which, regardless of production levels, there was a guaranteed price. In the absence of a significant live trade, it is always felt by the primary producer that the processing industry takes advantage of this situation.

This is further exacerbated by the key weakness in the food industry probably since the foundation of the State — the seasonality of our production systems and the failure to avoid a glut at various times in the season, particularly with regard to beef. The continuing divergence of opinion between farmers and processors as to where the real interests of the Irish food industry lie must be overcome. The Minister and Members of the House can seek to persuade but until producers and processors find common ground on these issues, so that they can be resolved in the long term strategic growth in the niche markets we have identified as a result of the Culliton and Moriarty reports and the report of the expert group on the food industry.

We agree with everything in these reports but we know the practice is different. People go back to their vested interest groups and short term entrenched positions. More enlightened practitioners in the food industry have indicated that this must be challenged. The Minister must be mindful that there will be short term political difficulties in facing up to this problem but if we have the long term interests of the food industry at heart we will have to address this issue.

I have enormous admiration for the many excellent people in these organisations who represent farmers exceptionally well, both here and abroad.

It is absolutely vital that the membership of the board does not seek to protect vested interests. Rather it must seek to bring about the shared vision to which Culliton referred. This key weakness can only be overcome if the board considers the overall picture. All the boards set up by the Department must have this shared vision. The Department is the regulatory body but only the industry can ensure that it achieves its full potential. The work has already been completed on the strategies and policies, the direction in which the industry should go, the winners and where the investment both in terms of capital and marketing initiatives should be placed. There is a general agreement on these issues both politically and otherwise as they make sense and a great deal of work has been put into them in recent years. Unless there is a change of culture among those in the industry and we are willing to educate each other on the importance of taking the long term rather than the short term view, we will not have the type of industry our natural resources and grasslands would give in terms of competitive advantage both in the European Union and elsewhere. I emphasise this point because, if we were to achieve this competitive advantage, the potential of the industry could be realised rather than merely talked about.

Agriculture is our most important indigenous industry. Foreign computer, pharmaceutical and electronic industries are attracted here because of our well educated workforce and good macroeconomic competitive advantages, but then can move or stay depending on how well we manage our economy in the meantime. While we will always have the competitive advantage our grasslands give us in terms of environmentally friendly farming etc., the industry will not achieve its full potential without a shared vision. If this key requirement is not met what we are trying to do in terms of structures will not work to the extent that it should. In the past there was a lack of co-ordination in the part of the various marketing organisations in their attempts to build structures which would meet the needs of a modern food industry. However, the co-ordination of these attempts may result in our taking our eye off the ball, that is the need to find a common ground between producers and processors so that everyone knows it is in their interests to produce the food required by consumers in an effort to increase our market share in the most sophisticated consumer market in the world, the European Union.

This £8 billion indigenous industry employs 200,000 people. The import content of Irish food is only 14 per cent whereas the import content of foreign non-food companies is 80 per cent. A competitive food industry creates jobs not only in the food sector but in the wider sub-supply sectors. The contribution of food to net exports — 40 per cent — is also an indication of the central importance of the industry to the economy.

The Minister is seeking to make two further appointments to the board. This is the first opportunity many of us have had to outline the problems and the need to be aware of the growing complacency in the industry. Recently people to the fore in driving the food industry such as Denis Brosnan referred to the need to be aware of this complacency. Previously we had a commodity-based agricultural sector where production levels were irrelevant and price supports were in place. As a result of CAP reform we now have a more market-led agricultural sector which needs to gain access to the market in order to survive. While the food sector has adapted well to these changes much more needs to be done, and the expert group is pointing the way. Unfortunately, this Bill is being debated the day before An Bord Bia sets out its marketing strategy. If the debate had been left to another day we would have had an opportunity to discuss these matters in a more informed way.

We need to start picking winners in the sectors and to take discerning decisions. All too often the Department has played the field and adopted the short term attitude of getting the money and looking later at what can be done with it. The Department had to grapple with a series of crises because it did not know what the final direction of CAP reform would be and it wanted to get as much of the cake as possible. Hopefully we now have in place a marketing organisation which will take a strategic view of what needs to be done. Given its objectives. I wonder whether £66 million is sufficient to ensure that we have a real, solid marketing agency. We will have to await its detailed marketing strategy to make a more critical assessment.

The most successful food conglomerates in the world spend enormous amounts of money on research, development and marketing. Given that it will take some time to gain the resources necessary to do this, it is critical that the marketing agency is adequately funded. The expert group in the food industry and Culliton have referred to the need to build more Irish companies. We are talking about building twenty to forty £100 million pound turnover companies during the term of the plan. It is sad to note that one of the companies at the cutting edge of the food industry, Green Isle, has to be taken over by a company from another country in order to develop. There is a certain logic to this as there was insufficient capital within the country to help it develop. However, it is sad to think that in order to develop, control of some companies will pass to companies outside the State. That need not necessarily be a bad thing. I understand the scales and the need for marketing and distribution systems into those markets. Greater penetration into those markets is an understandable objective. It is sad that as we develop the food industry with indigenous raw materials there will be fewer Irish food companies in terms of ownership. That is something which the Department, the Minister and others in this economy should take cognisance of to see if it is the right or the only way to go or whether we should have a greater degree of partnership as distinct from take-over in terms of the development of the food industry. It appears that take-overs will become the norm rather than the exception and partnership will be the option taken by those who are not in the first division.

As regards marketing, a couple of issues have arisen in the Department in recent months which jar and which will not be helpful to the job of An Bord Bia in the future. Again, it is a case of crisis management. The Minister and the Department are calling for a strategic marketing view when they do not seem to have one themselves in terms of delivering basic schemes which help to build the image of an Irish food industry. The fiasco of the control of farmyard pollution scheme contradicts everything in the Minister's speech about the development of the food industry. The fact that we are not able to manage our resources to ensure that such a scheme is properly funded is a reflection on our policy direction and our failure to allocate sufficiently where the need is most.

If we are to pick winners in the food industry and in food companies, we must pick them departmentally. We must choose schemes where there is obvious demand and where a critical element must be addressed. The expert group on the food industry and the Culliton report always refer to the growing importance of the environment and the need for environmentally friendly practices as being the norm in agriculture. It is not simply for the purpose of a good image, these are now becoming critical viability issues for many farmers. The ability to deal with waste and farmyard pollution is an important factor in terms of the viability of many farmers, particularly in the small to middle income groups, and it must be addressed. When we consider that small level of capital investment in relative terms, probably an investment of £14,000 to £20,000 on average, it is obvious we have failed as a Department and from our resources of thousands of millions to deal with that issue for 18,000 farmers.

Yet at the other end of the chain, we will say that if we develop a food business and competitive companies, we will grant aid capital investment, provide repayable loans and increase the percentage of marketing initiatives. We are again putting the cart before the horse. As the Minister said, there is failure to integrate the farmyard with the supermarket in terms of maintaining not only the food link chain, but the quality assurance on which the modern sophisticated consumer not only in Europe, but in Ireland, insists if we are to have a market share for our food industry in the European Union.

The disease fee status of our herd is an important issue as people look at Irish food. This is another issue where there is a stand-off which should be resolved by the Minister. It is his job to ensure that we do not harm the image of the food industry. It is important to resolve these issues quickly because that is the name of the game, doing the job one is entrusted to do. We do not want hassle over this because it will create a huge problem for us internationally if we allow it to continue. It will be used by competitors in the same way as the live export issue was used. This has become a cut-throat business and if people put a black mark against us, we should do everything possible to remove it.

I understand that every Minister faces vested interest pressures and problems in Departments. We must find a solution to this problem. We do not need stand-offs because there are enough in our supermarket chains at present where people are being hurt. We can solve this problem if the Minister has the goodwill and political ability to do so. I encourage him to do so as quickly as possible. The appointment by the Minister for the Marine of a person from the fishing industry was included in the definition of food in the original Bill but discussions had not been completed with an Bord Iascaigh Mhara at the time. I am glad the Minister now has the opportunity to complete that process by making the appointment.

I have no objection in principle to the fact that he is making these appointments and I hope board members realise that their job is to address the board's agenda and not to bring others to it. A shared vision for the producer and processor will determine not only how effective this board will be, but how effective the food industry will be in meeting the targets it has set itself and which have been set for it by the Department and the Minister in the Structural Fund allocations. I wish whoever is appointed to the board well, they will have our full co-operation and assistance.

I am mystified by the necessity for this Bill. Perhaps Deputy Cowen was right when he suggested that it is a sop to some organisations so that life will be made easier for the Minister in other respects. If that is the case, it is unworthy and it is not appropriate to bring in a Bill. Regardless of whether it is appropriate, it is unnecessary. If the Minister wants to appoint two further people to this board — I question the wisdom of a board of 14 running anything — he already has power to do so under the 1994 Act.

The Minister did not mention the Order on today's Order Paper which he made in the past couple of days called An Bord Bia Act, 1994, Order, 1995, where he increased the existing board, as far as I can ascertain, from nine to 11. That creates two more vacancies. In addition, we are told that the chairman has resigned, which is unfortunate, but it is because of advancement in the company and I congratulate him and wish him well. There are now three vacancies which can be filled by the Minister without this legislation. Why not do that?

It is unnecessary to bring in this Bill. If it is enacted, there will be a total of 14 board members, 13 ordinary board members and a chairman. What organisation can be run by a board of 14? I have plenty of experience dealing with semi-State bodies and boards of a promotional, developmental and regulatory nature and various others. The ideal is that there should be six or seven intelligent people with a broad view of the task to be undertaken and who are not there in a representative capacity. The curse of semi-State bodies has been the people who inhabit their boards on a representative basis. If they are perceived to be the representatives of particular organisations their only contribution to the board usually is to fight the cause of the members of that organisation, not the cause of the board. It is retrograde in principle, no matter who is involved, to increase a board unnecessarily for the ostensible purpose of allowing wide representation rather than a presence for the purpose of furthering the objectives of the board. In any event the Bill is not necessary. Under the Order about which the Minister did not tell the House — but which is in today's Order Paper — he has power to appoint more people. He gave himself that power at the end of last week and he does not need this legislation. The House should only pass legislation when it is needed.

I knew only some of the people on the board but I have got a list of the members from the Minister. It is a good board, better than average in many respects. I do not see anything wrong with it as it stands. As there are two vacancies I do not see the need to increase its membership. To increase it to 14 members is utterly foolish and is done for the wrong reasons, as the Minister knows. This House should not facilitate him in doing it for the wrong reasons.

The Bill gives me an opportunity to say a few words about the food industry and about marketing because this board is primarily about marketing and promotion and, presumably, about the increase of employment in the industry and so on. Certain fundamental dilemmas face the food industry, one of which is the fact that it is now ultimately supervised from within the Department of Agriculture, Food and Forestry. That Department has dealt with some aspects of food since 1987 but it has not worked. I spent much time on the other side of Kildare Street looking out the window of my office at the Department of Agriculture across the way. It was usually covered in scaffolding as it appeared to be falling down from an early stage in its existence, but it is now visible again. That building about 30 yards away could have been 3,000 miles distant from the Department of Industry and Commerce in terms of its culture and approach. I said that ten or 15 years ago and unfortunately I know of no reason I should revise that view.

In the Department of Agriculture, Food and Forestry the whole culture is about the primary producer. They are not interested in the food industry or processing. All these issues are secondary. If some benefit accrues to the economy incidentally, after the primary producer is looked after, well and good, but if not, it does not matter. The primary producer is the only one who matters. That culture and outlook has caused this country huge loss. That is the official policy borne out by this Bill and by what the Minister has said. It is not necessary for him to appoint two primary producers since there are already two on the board. He claims he is introducing the Bill to strengthen further the already extremely strong hand of the primary producers. That is wrong. That is not where the need is. This is the traditional solution of the Department of Agriculture, Food and Forestry and of those who are not that concerned about industry as such and it runs totally in the face of what Culliton recommended. Unfortunately the Culliton commission's recommendations not only on the food side but on various other sides have long since been jettisoned or consigned to the waste paper basket with great loss to this country.

The whole question of adding value where food is concerned is secondary in official thinking. As a result employment will continue to suffer. Employment is secondary because of two fundamental policy approaches by the Government: first, the traditional primacy of the producer over the processor and, second, the policy of taxing work and workers up to the hilt but of giving. on the other hand, large scale support to capital intensive, low employment creating and non-productive activity. An example of non-productive activity is the support given to building at great cost to the taxpayer. Once a building is erected it makes no contribution whatever to the economy whereas the production of goods and the adding of value to primary agricultural produce is of enormous benefit.

If people think there is a great effort nowadays to add value or to reinvest it is worth examining some recent figures.

The State pays out large sums in grants and thinks it thereby fulfils its obligations to the industry and to the economy while the major Irish companies in the food sector prefer to invest their money outside Ireland. Total acquisition expenditure by the Irish dairy companies over the past seven years is estimated at £1.2 billion, the vast bulk of which went on corporate purchases outside the State. Recently a food industry analyst estimated that less than half of this money had been well spent, with the rest either unproven or poorly spent. This capital flight into high risk foreign acquisitions tells us much about the state of the Irish food industry. With no possibility of increasing output and with labour costs driven up by high personal taxation there is no commercial incentive to invest in either additional primary processing capacity or in downstream processing facilities. That is the dilemma the Government should face. Almost every penny of that vast expenditure by Irish co-operatives in the past seven years went outside Ireland.

All that is being done here is the primary processing of the primary product: the value is not added here but in England, the US and so on. They are continuously investing so that their most valuable activities are taking place outside the State. That is the real dilemma. What the Minister said in his contribution is of no consequence and is only the same as has been churned out each time a Bill of this kind has been introduced. That is not tackling the difficulty.

As was confirmed by the Minister, the time-honoured solution to all industrial development problems in Ireland is a massive dose of Government grants. The most important statement the Minister made today was that An Bord Bia would make a big announcement tomorrow. This shows the primacy of this House — it certainly takes a lowly place.

A big PR stunt.

It is a great pity that so much of the agricultural processing industry is bound up in PR stunts. I can think of many examples and it is sad that there will be another tomorrow.

This House cannot be told what is happening, other than that large sums of money will be spent. We know that under the sub-programme for the development of the food industry, the Government is committed to paying £283 million in grants over the period 1994-99, 70 per cent of which will come from the EU. The Government thinks that is the solution but it is not. As proof of that, between 1991 and 1993 the State expended £100 million in grant-aid to the food industry, yet the CSO data now available suggests employment levels in that sector remained static over that period. Investment by way of grant-aid of large sums of money in the food industry is doing nothing for employment.

There are a number of anomalies in the food industry, one of which is that by and large the big indigenously owned companies, which are mainly co-ops, perform basic processing of the primary product here, but do relatively little else. Their value-added activities tend to take place abroad, through companies which they acquire. As a result, much value which could be added to Irish agricultural produce here is done abroad for the benefit of other economies. This is partly due to our high costs in telecommunications, energy, transport, etc. and, above all, our high personal tax, which is beginning to drive companies into Northern Ireland.

The other anomaly is that much of the value-added here is added by multinationals. Relatively few large scale downstream processors in Ireland are Irish owned. The drinks industry is perhaps the best example and it is a national tragedy. Apart from one tiny Irish owned producer of spirits, which has less than 1 per cent of the market, every other producer of drink here is foreign owned.

The Irish owned distiller is not enthusiastic. It tried to sell out to a monopoly competitior, which is foreign owned, and was aggrieved when he was not allowed to do so. He does not have much faith in the distilling industry and is primarily there as a tax arrangement under a BES scheme. He has no interest in distilling as a long term commercial activity.

Our main distillers, all our brewers, all our cider producers and most of our mineral water and soft drink manufacturers are foreign owned. This is a disgrace and it is one of the anomalies of our food industry and An Bord Bia will not do anything to redress that. These drinks producers are owned by foreign multinationals and their marketing strategies are devised abroad. They are not interested in what An Bord Bia is doing because that body has nothing to contribute to them and it will not be asked, except for a grant if one is available. We should give some thought to the position we find ourselves in, where the production of drink, one of our largest and most important indigenous industries, for which there is export demand, if we sought it, and high domestic demand — is entirely foreign owned. If someone asked 30 or 40 years ago if that was possible, he would have been thought mad.

It appears that everything which is reasonably profitable is likely to pass into foreign ownership and the companies in the food industry able to invest are making those investments in the form of acquisitions abroad. This is the dilemma facing us all. We should face up to these realities rather than debating them within the terms of the Bill. An Bord Bia will not achieve any worthwhile increase in exports which would not have happened in any case. The multinationals carry out their own marketing and are controlled from outside the country.

An Bord Bia is just another layer of somewhat dubious bureaucracy. In effect, CBF will continue as a subsidiary of An Bord Bia. BIM remains as a separate body — I cannot see the rationale for that — and ABT remains as the primary marketing body. However, although it has more experience, knowledge and resources than any other body it is not allowed to contribute to the promotion and development of food. This is crazy and is the direct opposite to what Culliton recommended. Even An Bord Glas remains. I was never very conscious of what it does but this House passed a Bill some years ago to set it up and, no doubt, it is still in existence.

This incredible proliferation of organisations for every conceivable task suggests that job creation is a growth industry in itself. Those employed to create jobs seem to be able to increase their bureaucratic type jobs more quickly and readily than those they are supposed to be creating. It is more important to create genuine productive, value-adding jobs by the production of processed food products, processed to the product as finally prepared with the maximum added value for the convenience of the consumer. We have little of that here and what we have is foreign owned for the most part.

A recent sad example was that referred to by Deputy Cowen. An Irish company called Poldy's was one of the few successes in the preparation of oven-ready and consumer-ready products in fish, meat and vegetables. It was successful and had plants in Naas, Portumna, Sligo or Mayo and Dublin. It is now owned by Northern Foods of England; it was taken over because it was successful. How often has that been repeated, and, more important, how often will it be repeated?

The net effect of such takeovers is that Ireland is simply a producer of primary agricultural produce, usually of a good standard, which is made available to other processors to add value for the benefit of other economies. I have a vision of the food industry here which is different and we should get on with developing it.

The drinks industry, both distilling and brewing, is a substantial user of agricultural products. It is a large and successful industry here — although it could be a great deal more successful — and every single part of it, bar one minute distillery which wants to get out of the business anyway, is foreign owned. That is a great tragedy.

Unless we as a House, a Government and a country face up to these fundamental problems, difficulties and anomalies, we are only codding ourselves. Trying to pass this Bill today simply to add two people to a board of 14 people, which the Minister has the power to do anyway even if the Bill was never passed, seems quite ridiculous. A Bill such as this will not help. We need to come to grips with the fundamentals and the sooner we get on with that the better.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

I call the Minister of State, Deputy Deenihan, who is making a contribution and not replying to the debate at this stage.

I am sure that is quite satisfactory.

I am delighted to have the opportunity to speak on this Bill. During the Second Stage debate on the An Bord Bia Act, 1994, I was one of the Deputies who highlighted the fact that functions in relation to the marketing of fish exports should be transferred from BIM to An Bord Bia. I am glad to say that the concerns I had then are now being met following discussions with the Minister for the Marine.

I am also glad to see that this Bill addresses the long running debate that the farming organisations, the IFA and the ICSMA, should be represented on the board of An Bord Bia. However, let me say at this stage that the two farmers on the board are there on merit in their own right — Michael Hanrahan, chairman of the Kerry Group, and John Duggan, the chairman of Avonmore.

However, if farmers, who contribute by levy about £4.3 million to An Bord Bia, are to be key players in the food industry the two farming organisations should be directly represented on the board. I agree with Deputy Cowen that it is very important we have co-ordination from the producer to the processor. That is exactly what we are doing in this Bill. We are making provision for farming presentations to ensure that what the Deputy has said here will be fulfilled.

Indeed, the appointment of representatives of the IFA and the ICMSA to the board will cement the link between the different stages of the food chain from production to consumption. The recent appointment of Dr. Noel Cawley to the board will also strengthen the board and the links between An Bord Bia and the dairy processing sector.

Turning to An Bord Bia and its overall role in the development of the Irish food industry, I have been impressed by the progress it has made in such a short time. I disagree with the sentiments expressed here by Deputy O'Malley as regards the effectiveness of An Bord Bia. It has achieved a great deal in the short time in which it has been in existence. An Bord Bia is vital to the industry and it will submit a strategic plan tomorrow which will guide its activities, promote leadership for the industry over the next five years and provide a very important focus.

The main goals of An Bord Bia are: to build a reputation for Irish food based on consistent quality, consumer sensitivity and innovation; to ensure a market-led approach to the development of the industry through strategic market research and enhancement of marketing capabilities within Irish food companies; to inform the industry of marketplace developments through the provision of market intelligence and to enable individual companies develop and implement specific marketing initiatives by providing financial assistance.

It is important that An Bord Bia's strategy is firmly based. We must recognise the needs of processors and rely on information on consumer requirements. Above any other agency, it must operate at the cutting edge of the market. It must be the market eyes and ears of the industry. In a general way it must operate in partnership with industry. I have been impressed, as I said earlier, with An Bord Bia's performance to date.

The development of the food industry is of major importance to me as Minister of State and to the economy as a whole. I believe that agriculture and food are synonymous. The production of food from farm to retail outlet must be regarded as a single economic activity to which a single policy must apply. It is only then that we will get the policy right.

There may be some justification for a separate approach so long as price supports in the form of purchases into intervention or export subsidies are available to dispose of surplus production. CAP reform has already commenced a major scaling down of intervention availability and a reduction in institutional price levels, while the recent GATT Agreement will reduce the amount of export subsidies available. The GATT Agreement will also intensify competition on the EU market by reducing restrictions on imports from outside the EU.

Because of these developments, if we, as producers of significant volumes of farm products that are surplus to our needs, are to sell those products at a reasonable return to all involved, then we must sell them as processed products. If not, then we are likely to end up selling a substantial proportion of them as commodities on the world market at rock-bottom prices. In this respect, I agree with Deputy O'Malley. By adding value through processing we increase national income by selling them at a higher price. Farmers may believe that they will not see much of the added-value in their returns. That may or may not be so, but there can be little doubt that if left to the mercy of the world commodity markets, they will get even less.

The processor has much to do as well. In addition to all the obvious requirements imposed by the marketplace, the processor must be committed to innovation and marketing. The processed food market is a fiercely competitive one and one in which Irish companies are small players. It gives a sense of proportion to recall that the top food company in the world — Nestle — has a turnover equal to about three quarters of Ireland's GNP or that Heinz, which we rightly regard as a giant, only just makes it to the top ten of the world's food companies.

I am determined that our biggest industry will realise its full potential and in the process make a major contribution to national wealth and employment. The task is a formidable one. It is difficult to break into new markets which are highly competitive. However, we have a good image as a food processing country and that image is well founded on a pollution-free environment and extensive production at farm level.

Our State agencies are specially dedicated to the task of exploiting fully our advantages. Our farmers are capable of producing the right raw materials. We also have the entrepreneurs willing to invest in the plant and the human resources necessary to process those raw materials and market them. Generous assistance is now available for such investment. I therefore foresee a great future for the Irish food industry.

The measures in the Bill before the House are simple but important. They will strengthen considerably An Bord Bia and the marketing of Irish food. They will help to realise the potential of the food industry to the benefit of farmers, processors and all others who now depend on food production for their livelihood as well as those who will come to depend on it as employment expands. This is a welcome addition to the 1994 Act. I am delighted that primary producers will now be represented on the board.

I thank the Minister of State for giving me this opportunity to speak to the Bill. During the debate on the 1994 Act I spoke for 20 minutes on the issue in question, that is, the right of the primary producer organisations to be represented on the board. I welcome the Minister's decision to allow the IFA and the ICMSA to be represented. Two farmers are already members of the board. It is extremely important that the organisations which sold the idea to farmers that they should provide funds to market their products should have the right not just at committee but at board level to decide how those funds should be disbursed.

When I was a member of the board we had to be careful, in making hard decisions on whether we should cater for the needs of one industry over another, that there was no bias. I and other producer representatives ensured in no small way that the element of trust was preserved. The appointment of Dr. Noel Cawley is an extremely important one because of the close links between the dairy and meat industries. One need only consider the success of some products in the dairy industry, such as Dairy-gold and Baileys cream liqueur to realise that Dr. Cawley can play an important role in providing advice to the board.

One cannot but smile at some of the comments made during this short debate about the failure of the Minister and Minister of State to provide funding for pollution control and disease eradication measures.

The Deputy must be the only farmer who is smiling.

The main Opposition party was in power for eight years. A sum of £30 million had to be handed back to the Commission in Brussels because it failed to reach agreement with veterinarians. It also failed to provide adequate funding for farmyard pollution control measures. The year after CBF was established the then Minister, Ray MacSharry, cut its budget by half at a time when expenditure should have been increased to meet the needs of the industry and to market Irish meat abroad. It was only when Deputy Austin Deasy increased its allocation to over £1 million that there was movement in this area. If the board had been given the support it deserved, farmers, producers and processors would not have been as dependent on placing meat in intervention.

Ray MacSharry's effigy was burned at one time. The Deputy has reason to be thankful to him now.

The Minister has increased its allocation dramatically. Both he and the Minister of State will meet the needs of the industry, both producers and processors, for the benefit of the nation. The agriculture industry is the biggest creator of external wealth. The board, with the additions to be made to it, will secure major improvements and work extremely well for the benefit of all.

This is a minor Bill and the criticisms levelled at it, in as much as it has been suggested it will not solve the remaining problems of the food industry, are unfair. Some minor adjustments are to be made to the board of An Bord Bia. It is unrealistic to expect huge changes in the industry.

Other speakers outlined the difficulties confronting the food industry. Deputy O'Malley mentioned in particular that successful small Irish food companies tend to be gobbled up by international players. They are made offers they are unable to refuse.

The size of Irish food companies presents the greatest problem. If this problem is not resolved the food industry will not realise its full potential. We should be realistic and accept that there is a need to group the existing co-operatives into one or two major co-operatives with a turnover of £2 billion to £3 billion. That is the challenge confronting us. A large number of those at the top of the indigenous food and dairy industries realise that this needs to be done. Those with a vested interest tend to resist this concept as it would result in a diminution of their own importance.

I have listened with interest to the debate but have yet to hear any suggestions as to how progress can be made on this front. It is a pity that in the debates which have taken place on the development of the food industry little has been said about the ways and means by which amalgamation can be secured. In the past initial private tentative discussions took place. I hope someone will take the initiative to rekindle interest in such discussions as it is essential that we have large indigenous companies with the capacity to penetrate international markets.

The Minister of State, Deputy Deenihan, mentioned Nestle, whose turnover is equal to three-quarters of Ireland's GNP. If the industry is to make progress it needs to develop new processes and products and spend enormous sums on marketing. Deputy Cowen mentioned the sum of £66 million, but this will have little impact on international markets.

That was my point.

If anyone doubts that Irish food companies have failed to penetrate international markets all he need do is visit a supermarket on the continent. Irish food companies need to increase in size. This would enable the industry to fund research and development, which is badly needed. The extent to which companies invest in research and development is grossly inadequate. One of the characteristics of investment in research and development and product development is the enormous level of failure that must be sustained. Most attempts at developing new products fail and these products never reach the shelves. It is only a very small proportion of new products that make it into the marketplace. When products are successful the benefits and payoffs are enormous, but one must have a broad base of investment and be able to endure considerable losses in order to succeed.

I agree with some of the remarks made. I acknowledge I do not represent a farming constituency. On the last count I could find only one farmer in my constituency and that gentleman has now retired. I am in a luxurious position in terms of talk about the enormous strength of the farming lobby. I realise it would be very foolish for people who represent constituencies with a large number of farmers to ignore this matter.

I share in the criticisms of the Department of Agriculture, Food and Forestry in terms of the tremendous emphasis on farming matters in the Department. The Minister has been in office for only a short time and his approach to date has been enlightening. However, greater emphasis should be placed on the food aspects of agriculture. I am aware that changes have been made in that area in recent years but there is scope for considerable further change.

It is essential that much more attention by paid to the concerns of consumers, not only here but internationally, because we depend on those markets. If we do not understand what the people want we will be doomed to flounder and the food industry will not realise its full potential. That industry, together with tourism, are the two major indigenous industries which have huge potential to develop. It is absolutely essential that initiatives are taken to consolidate the agriculture industry, particularly the dairy industry. The beef industry has lunged from one crisis to another over the years, and I will not refer to them. That industry has not made the first steps in terms of achievements. There are huge problems, particularly in the meat industry, in terms of inadequacies of technology. Technological investment in that industry is too low.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

I welcome the opportunity to speak to this Bill. The difficulties encounted by the food industry as a result of the weakness in sterling have caused problems for some of our food producing companies. The Government has granted no assistance to this sector. In an industry where Irish manufacturing costs are 5 per cent above those of our UK competitors it is very difficult for Irish companies to compete on the export markets when the Irish punt is trading at or above parity with sterling. The exchange rate between the punt and sterling is a crucial factor in maintaining competitiveness in the Irish agri-food business. It affects exporters trading in the UK market as well as those competing in other European and world markets. Their competitive edge is compromised since their UK competitors are at an advantage.

The present weak position of sterling makes it difficult for Irish food exporters to maintain market share. Today's news that sterling has weakened further makes it even more difficult for Irish food manufacturers to compete. The effect is serious, threatening employment in this important labour intensive sector. The Government must acknowledge the contribution of the food industry to the economy in terms of its output value and low import content. which is of the order of 14 per cent. The only thing saving many companies at present is the fact that interest rates remain low. Food companies currently exporting to Britain, one of the most volatile and competitive markets in Europe, have found that their margins have been eroded in the past three years as the punt has been trading at or above parity with sterling.

The obvious solution to the problems associated with the fluctuation in the currency exchange rate is the creation of a single currency involving all European Union countries. However, recent evidence suggests this goal is a long way off and it is further complicated by the fact that Britain does not favour the idea of a single currency — it negotiated an opt-out provision on this proposal. This is the only viable long term solution. It would give some stability to Irish food manufacturers involved in the export market so they can plan medium and long term policies.

More than 40 per cent of our exports go to the UK. Any change in the exchange rate between the punt and sterling has an effect on trade with our near neighbours, a problem exacerbated by the fact that 75 per cent of food exported from Ireland goes to the UK. The value of food exported to Britain last year was of the order of £1.4 billion. Ireland currently supplies almost 11 per cent of Britain's annual food imports. Apart from the UK, and to a lesser degree Germany, the European consumer associates Ireland more with the production of first class alcoholic drinks such as Guinness stout and Jameson whiskey than as a main producer in the food sector. We are told repeatedly about our green image, but let us not fool ourselves; most of the time we are trying to convince ourselves of this image.

Irish food companies are relatively small compared to some of their international competitors. If our products are to be found on the shelves of more world markets, our food producers must seriously consider options such as alliances, partnerships and producing branded products for major multinational food companies. We heard criticism earlier about Irish companies becoming involved in foreign partnerships or buying foreign companies. I do not see anything wrong in that and I commend the companies involved. In recent years some of our major co-ops have bought into foreign companies on the basis that the easiest way to secure market share is to buy existing companies trading in the market. It is a relatively inexpensive way of securing market share and some of those companies have been badly stung as a result of some of their investments in recent years. A number of Irish companies have gone down the road of acquisition, spending almost £1,200 million in the past seven years. This is the road we must follow if we are to become the main players in world food business. If Irish companies are serious about competing in world markets, they have no option but to join forces in some form with multinational food giants.

We need to improve our international and branded marketing as a matter of urgency. If the Irish food industry is to prosper and grow, it must diversify away from low margin commodity products, such as beef and dairy products, which are in surplus and move into value added downstream processing. Some companies have been imaginative and gone down that road in what is becoming an increasingly competitive market but, unfortunately, others have not done so. If we are to succeed, we must go down that road.

As I said before, the Government stands indicted for not appointing a Minister with responsibility for food. While I accept and compliment the former Minister, Deputy Walsh, for setting up An Bord Bia, we must acknowledge there are two aspects to it, primary producers and sales and marketing. They are and should remain separate indentities. Primary producers are more than adequately represented by the Minister for Agriculture, Food and Forestry and former Ministers have done a good job in promoting and protecting the interests of primary producers, farmers. We must seriously consider the food processing sector and ensure its interests are protected. I question whether the Department of Agriculture, Food and Forestry should have responsibility for that area. That is another debate and perhaps An Bord Bia should be answerable to the Department of Tourism and Trade, a proposal we might consider in the future.

Since 1987 we have had a Minister of State with responsibility for the important food sector. While it is universally accepted that the primary responsibility of the Minister for Agriculture, Food and Forestry is to the farming sector, there is a growing acknowledgement that the food industry needs political representation in the form of a Minister or Minister of State.

Over the years our food industry has developed the capacity to produce and sell high quality, but relatively unsophisticated products, on domestic and world markets. Only a few Irish producers have succeeded in developing any substantial presence in the export market with value added produce. In a number of agri-related food industries the Irish sector has failed to keep pace with its competitors in terms of product sophistication and the price of basic products. The elimination of those weaknesses is essential if the food industry is to hold and build its market share, especially with supermarket groups in the European Union.

Much lip service has been paid to the horticultural sector and yet the only success in that sector has been achieved in the production and marketing of mushrooms. We have failed to market properly our field vegetables, apples and soft fruit. Tomatoes and lettuce can be produced in abundance with a market on our doorstep and yet we have failed to take advantage of those opportunities. There are major structural problems regarding the processing and marketing of horticultural produce. While the most important market for those products is the fresh market, there are great opportunities for onward processing.

I welcome this legislation in so far as anything that will strengthen the make up of An Bord Bia is to be commended. However, like our spokesperson on agriculture, Deputy Cowen, I consider that perhaps it is being introduced as a result of commitments given by the Minister earlier this year. Farmers will contribute £4.3 million to the board by the way of a levy in 1995 and they have a role to play in the functioning of this marketing board. I have always held the view that a greater degree of unity is needed in the promotional activity of our major industry, agriculture. A number of our fellow member states of the European Union have single agencies which deal exclusively in the food promotion business and they have had considerable success to date. I anticipate that An Bord Bia will make important progress in improving buyer and consumer demand for Irish food and drink products abroad. I welcome that An Bord Bia will have responsibility for the export marketing of Irish fish products. I look forward to the publication of the board's five year marketing plan.

Given the challenges facing our food industry following CAP reform, the GATT and the need for our food producers to compete successfully on the world market, it is timely that we have a single agency to deal with the marketing of our food and drink products abroad. I welcome the thrust of the An Bord Bia Bill introduced by the former Minister, Deputy Walsh. We have a serious job to do and we must address the competitive nature of the food market, not only in Europe but worldwide. We have the ability to produce many agricultural products and we must seriously consider how we can secure added value in that regard.

I welcome the opportunity to speak briefly to this Bill, which is of importance to the agriculture industry. I concur with the remarks of Deputy Nolan and I record my appreciation of the many successes for our agriculture industry achieved by the former Minister for Agriculture, Food and Forestry, Deputy Walsh, in his work as a member of the Council of Agriculture Ministers of the European Union. Those benefits accrue to primary producers, processors and the Irish economy. I wish to refer specifically to the urgent need to stimulate and encourage the emergence of innovative food enterprises and agri-business projects.

My home county of Cavan is predominantly rural, with only 16 per cent of its population living in towns or their environs with a population of 1,500 or more. The county is highly dependent on agriculture, which accounts for 32.7 per cent of persons in employment compared with a national figure of 14.3 per cent. The proportion employed in that sector is on a par with the national level, whereas the 36.4 per cent employed in the service sector is well below the national level. The food industry is the main subsector within manufacturing in that county and directly employs approximately 1,300 people. Direct support should be targeted at new small scale and speciality food projects. Training and support is needed also to develop product diversification. New and existing food companies need to develop suitable scale added value food processing enterprises. Quality innovative projects are needed.

In the Cavan-Monaghan area there is a particular emphasis on the dairy, mushroom, poultry and pigmeat industries and there is practically no emphasis on added value. The necessary research and development is not being carried out in those sectors. Research, whether in individual agri-businesses or in the higher institutions of education, must provide better uses for the primary product through formulations to suit customer requirements. Too much of our agricultural product is in commodity and not enough in added value. Research, adding value, customer requirement and the creation of customer needs must be interlinked if we are to derive maximum value from our agriculture industry.

There is an obvious need for the establishment of satellite units or small food research centres in areas in which there is special emphasis on a particular agricultural commodity. The Cavan area would be a prime location for such a unit, with possible co-operation from our neighbours in the North. The desire of the US administration to help job creation in Border regions provides us with a link to strengthen our national food industry.

We must aim at exploiting to our best advantage the huge markets of the European Union and the United States. Satellite food research centres could provide advice on product development, marketing, labelling, testing and facilities which meet stringent European Union regulations. I ask the Minister to pursue the idea of establishing small research centres and in association with Forfás to consider establishing an advance factory in Cavan geared specifically towards the food industry with an emphasis on development in a cross-Border context. Such developments should be based on indigenous industry as private companies and co-operatives could, with proper direction and assistance, provide much needed jobs in the Border economy.

I welcome the Bill and compliment the Minister on giving recognition to farming organisations because without their co-operation it would not have been possible to establish An Bord Bia. An organisation that encourages the farming community to respond by investing in excess of £4 million is entitled to recognition. The farming community has always responded well to demands.

Much nonsense has been spoken about a gender balance on the board and while I believe in equality, the best people for the job should be appointed to the board of An Bord Bia. People should not be appointed for the sake of giving them jobs as was the case in the past. As the organisation is in its infancy I appeal to the Minister to ensure that those appointed to the board are the best qualified for the job.

Since 1987 Ministers for Agriculture have responded favourably to the promotion and marketing of agricultural produce. Our farmers are possibly the most adventurous in the world. Failure usually takes place outside the farmyard gate. Farmers will endeavour to expand, but many manufacturers and agencies fail to market or promote their produce adequately. This is the case at present in regard to lamb. I appeal to the Minister to assist sheep farmers who are experiencing serious financial difficulties. We produce probably the best lamb and pork in the world but we are not compensated for quality and image. If the Minister does not address this problem immediately, we will lose that advantage.

I appeal to the Minister to assist the food industry, particularly the cheese, confectionery and mushroom industries which depend to a large extent on the British market. Approximately 35 per cent of Irish exports go to the UK market and the firms that export all their produce to the UK are experiencing serious difficulties. Many small cheese manufacturers are in difficulty and have asked me to appeal to the Minister on their behalf. We cannot afford to lose those manufacturers who require approximately 20 million gallons of milk per annum. There may be very few of them, but they produce good quality cheese mainly for the UK market. Because of the uncertainty in the United Kingdom, which is likely to continue while there is uncertainty in the British Government, the Minister should set up a fund to compensate for currency fluctuations.

Central marketing is not the answer. The primary producer and the manufacturer should be able to go to the marketplace to ascertain what is required for consumers. For many years we have been bedevilled by people trying to sell the concept of centralised marketing in the dairy industry. Will the Minister clarify the role of An Bord Bainne in An Bord Bia? An Bord Bainne is not referred to in this or previous Bills. If the food industry does not participate in its promotion we will not achieve anything.

Before being elected to the House I frequently attended international food fairs where three or four Irish organisations would compete to promote Irish produce. That is unacceptable. There should be one organisation selected under An Bord Bia to promote our food industry abroad. I am disappointed with the work of An Bord Bainne. Even though the UK market is on our doorstep, we produce very few fresh dairy products. The Danes and the Dutch have tapped that market and are concentrating in particular on high population areas. We produce mainly bulk dairy products such as whole milk, skimmed milk, buttermilk and whey powders. We do not produce enough consumer products or adequately promote the Irish name across the world. Irrespective of how patriotic or Irish-oriented a supermarket is, it must sell foreign dairy products because similar products are not manufactured here. Because of the prevailing trend there is no incentive to manufacture them. Commodities in bulk do not constitute the answer.

If we as a nation are to be successful in the food business everybody in that sector will have to pool their talents and resources. While An Bord Iascaigh Mhara and An Bord Glas should be represented, so also should the dairy sector. I heard other Members pay tribute to the many co-operatives that have spent money on acquisitions abroad to expand and diversify their businesses. However, if there are to be separate promotional units, without overall integration we shall fail. I must emphasise that point. I am always disappointed when I examine the list of consumer goods to realise that we do not have the variety or diversity of other European countries with whom we compete, such as Holland and Denmark, the two with whom we are always compared.

Our food industry can be the envy of the whole of Europe, producing good quality food in a perfect environment, with good grass and animal foodstuffs, but more is required. This Bill is not sufficiently comprehensive and a future Minister will have to pick up the bits and pieces and introduce a further Bill. Historically, that has been the failure of our food industry — the failure never has been on the part of farmers — in the manufacturing, marketing and promotional area, which has been so fragmented as to fail our people.

There are many quality commodities produced within the agriculture industry, the finest of which is probably beef. This sector has experienced difficulties in the past, all of which are now behind us. There is an urgent need for greater marketing and promotion in that area. Prior to the establishment of An Bord Bia much good work was done in that respect which no doubt will continue so that we can retain our many markets for fresh red meat. Today's modern transport facilities, air freight and frequent ferries render its distribution easier. I am informed that it is possible to bring fresh bottled milk from a bottling plant in the United Kingdom to shop shelves here by 7 o'clock in the morning and vice versa. Somebody here should take up that challenge and engage in milk exports, giving our food industry the boost it deserves while recognising the efforts of our farming community.

I have no doubt that the contribution of the farming organisations will be of great importance to the board of An Bord Bia. Many farming executives are innovative, far seeing people who will advance some excellent ideas, as will executives of many of our co-operatives.

I represent an area with what is probably our largest food manufacturing industry, trading under the name "Dairygold". I have already expressed my disappointment that that totally Irish-owned company, with little involvement other than within Ireland is not represented on the board of An Bord Bia. Representation of that region, which comprises practically all of Munster, must be examined sympathetically, especially within the pitmeat and dairy sectors.

I appeal to the Minister to give sympathetic consideration to the suggestions I have made and to get away from the former method of appointment of semi-State boards by appointing the right calibre of people. While equality is important, it is equally important to appoint people with the requisite expertise, whether male or female, people who understand the business and will give of their best.

(Wexford): Having spent some time as a Minister of State in the Department of Agriculture, Food and Forestry — at a time when the food export group was established, from which An Bord Bia has evolved through a number of the recommendations of that group — the best that can be said about this Bill is that it affords us an opportunity to discuss the present condition of the food industry and its future.

The appointment of two representatives of the ICMSA and IFA will not yield any dramatic change in the future development of An Bord Bia. I read in the press last week of a rift between the Minister for Agriculture, Food and Forestry and the farming organisations on whether their respective Presidents should be appointed directors of An Bord Bia, which point I hope will be clarified by the Minister.

During my term of office in the Department it was my experience that people in the food industry had a genuine interest in its development for the betterment of the country as a whole. We have first-class raw materials and, in marketing terms, a green island image, on which we should capitalise. Our farming community is producing high quality raw materials but the marketing strategies of food companies are in urgent need of examination. While that green image opens doors to us on the Continent, commodity quality is the determining factor in attaining sustainable markets. We must also be competitive, ensuring that we produce commodities which will be purchased by European Union customers.

Our food companies must adapt to the changing scenario. In the past much of our produce was put into intervention but the reform of the CAP has changed all that. I should prefer greater emphasis on adaptation to the new European scene within which market supports are lessened, with more dependence on quality produce with greater added-value. Underlying the potential for increased value-added in the food chain is improved technology, generated by research, applied by an increasingly educated, trained workforce. Facing into a highly competitive future one of our greatest strengths is the exceptional calibre of our young business graduates who demonstrate an incredible appetite for greater knowledge. These young men and women are selling our produce worldwide within many differing cultures and languages. Exporters must realise the importance of foreign languages and improve the skills of their personnel, particularly in German. I participated in many promotions with CBF when I observed that German was more widely spoken than English, on a par with French or Italian within the European Union.

Our food industry has tremendous potential. We must also carefully examine convenience foods, the fastest growing sector within the European Union. While there have been some success stories of companies engaging in the production of convenience foods, we need to attract more of them. This would lead to the creation of substantial numbers of jobs within an ever expanding market, in which endeavour I should like to see An Bord Bia participate. An Bord Bia needs to examine its marketing policies.

As it is now 7 o'clock, I am required to put the following question in accordance with an order of the Dáil of this day: "That the Bill is hereby read a Second Time, that sections 1 and 2 and the Title are hereby agreed to in Committee and the Bill is, accordingly, reported to the House without amendment, that Fourth Stage is hereby completed and that the Bill is hereby passed".

Will the Members claiming a division please rise?

Deputies Clohessy, Harney, Keogh, M. McDowell, Molloy, O'Donnell, O'Malley and Quill rose.

As fewer than ten Deputies have risen, I declare the question carried. The names of the Deputies who have claimed a division will be recorded in the Journal of the Proceedings of the Dáil.

Question declared carried.