I move: "That the Bill be now read a Second Time."
This Bill is simple and straighforward. Its sole purpose is to increase the membership of An Bord Bia and each of its two subsidiary boards by one and to provide for the filling of these additional places by consumer representatives. Deputies from both sides of the House have, at various times, sought consumer representation on An Bord Bia. This reflects not only the overall importance of the food industry to the Irish economy but also the particular importance of the consumer dimension in relation to food production, food safety and marketing.
The problems currently being experienced in the beef sector have brought home to us, as never before, just how consumer perceptions and concerns can impact on our food industry. Bord Bia, more than any organisation, is fully aware of the need to take account of the consumer dimension. It meets customers as part of its day to day work and knows at first hand that the consumer is king — it is they who exercise the choice between purchasing food products or leaving them on the shelf. With such huge influence on markets worldwide their views and concerns must be heard.
As a promotional and market development agency An Bord Bia does not have any statutory functions in relation to food safety, nor is it intended that it should. Food safety is a regulatory function which should be exercised by the regulatory authorities. However, in order for the board to discharge its duties effectively, it must be very conscious of and concerned about consumer requirements and fears.
The legislation under which it was established — An Bord Bia Act, 1994 — requires that the members of the board and its two subsidiary boards must be persons with knowledge and experience of consumer requirements. This is as it should be and I am happy that these requirements have been complied with fully. Anyone who doubts this has only to look at the membership lists for the board and its subsidiaries. These include the chairmen and top executives of some of our most prominent food companies whose success is due in no small measure to the attention which they give to the needs and requirements of their consumer customers.
They realise, like the other members of the three boards, including a senior executive of one of our leading retail chains, that food companies who want to be successful must concentrate less on marketing food from a production or sectoral viewpoint and think much more in the way consumers do. In this respect they must have regard to innovation, convenience, diet, health, nutrition and, above all, to producing products which are safe to eat and drink.
This influence can be seen clearly in the board's five year development strategy published last year, which emphasises the need to build stronger and better links between the industry and the marketplace. It will achieve this through developing a deep understanding of its clients, competitors and customers and applying that knowledge to the benefit of the food industry; providing information, contacts, market support and financial assistance to companies to assist in finding profitable, reliable and sustainable routes to market; promoting and marketing Irish products at trade level with an uncompromising commitment to product, process and service quality; and providing a continuous flow of high quality market information and intelligence.
This focus on the marketing and promotion of Irish food and drink products is guided by the objective of developing an industry which is innovative, consumer oriented and responsive to the rapidly changing consumer market environment; an industry expanding its market outlook, broadening its product range and adding value. The board recognises that such an industry can be successful only by focusing on satisfying consumer needs and by ensuring that Irish food, wherever it is sold, is synonymous with quality.
The reaction of the board to the BSE scare is a clear example of that strategy in operation. In conjunction with my Department the board has worked tirelessly, at home and abroad, to allay the fears and concerns of consumers, with some considerable success. That work will continue relentlessly until this problem has been satisfactorily resolved.
The aim of this Bill is not, therefore, to rectify any deficiencies in the board's structures and operating procedures but to reinforce the strong consumer dimension it already has and which is evident from its day to day activities.
An Bord Bia has been in existence for just over 18 months and during that time it has delivered an impressive list of achievements. Following a period of intensive research and a comprehensive consultation process, involving all sectors of the industry including consumers, the board published its five year market development strategy last May to which I already referred. This strategy sets out in detail how the board will carry out its statutory remit to promote, develop and assist the marketing of Irish food. In particular it set out in detail the specific measures it will take to fulfil the task assigned to it under the National Development Strategy for the Food Industry of implementing the marketing and promotion measure of the Structural Fund sub-programme for the industry. The implementation of that strategy is now well under way.
Last December the board completed its first full year of operations. During that period the board co-ordinated industry participation at 15 international trade fairs; held discussions with over 100 retailers across the EU; made 112 presentations to potential customers in Ireland and throughout Europe; co-ordinated some 30 inward buyer visits of potential international customers; conducted 300 in-store promotions in Europe; and provided assistance to 66 Irish companies in overseas markets.
The board also developed an electronic database of Irish suppliers by which overseas buyers can access information on Irish food and drink manufacturers in any of its overseas offices. It also undertook 30 research projects ranging from basic market profiles to the identification of opportunities for Irish food and drink in specific markets.
During the year two programmes of targeted financial support at company level were developed to enhance the marketing capability of individual firms. The marketing improvement assistance programme provides assistance at the rate of 50 per cent of the approved cost of marketing improvement activities up to a maximum of £200,000 in any one year. A total of 202 projects amounting to £4.3 million were approved. The strategic market development programme provides assistance of up to £750,000 per project based on the submission of a three year market development strategy. The implementation of this programme has just commenced.
The report records the overall export performance of the sector in 1995 as monitored by the board, in association with the ESRI, against the targets set in the market development strategy. The overall growth in exports achieved by the industry in 1995 over the 1994 level was 11 per cent. Growth was particularly marked in the prepared consumer foods sector although the dairy and fish sectors also performed well above average.
In terms of fulfilling its primary objective of promoting Irish food and drink products, An Bord Bia's most notable achievement must be its organisation of the Horizons food and drink exhibition and conference at the RDS three weeks ago. The exhibition was the largest ever single display of Irish food and drink and attracted 600 buyers from 30 different countries. In a nutshell, Horizons was about showing the world the ability of Irish food producers to manufacture and market food and drink products of the highest quality.
In organising a major-conference alongside the exhibition, the board hit on a winning formula. The conference was addressed by some of the most respected business leaders in the world and was attended by senior food company executives from all our principal overseas and home markets. The centrepiece of the international food fair was the high quality Irish food hall which was very impressive. I am convinced that Horizons will provide many spinoff opportunities for the Irish food industry.
An Bord Bia predicts that overall global demand for food products will show strong growth for some time to come with the strongest growth in Asia and certain Latin American countries. We must — and will — improve our penetration of these developing markets. The highly competitive EU will, however, remain the major outlet for Ireland's food exports and to succeed there our industry must remain competitive while at the same time meeting the highest standards for the products supplied.
Food markets world-wide are becoming extremely competitive. To compete effectively we must do better than our competitors in every area — on the farm, in the processing plant and in the market place. In particular, we must ensure that our customers get the quality and standard of food they demand and that the image of Ireland as a producer of clean green food is matched by reality.
The indigenous food sector has grown in three decades from a modest level to a stage where Irish companies are challenging for a place among the big European and world players. Food is Ireland's single most important industry. It is based almost entirely on indigenous raw materials and currently has a gross output of approximately £9 billion, over half of which is exported.
In the period to 1999 the food industry sub-programme will see investment of £640 million by the industry, supported by the EU and the Government. This will result in an increase in output of 25 per cent to £12 billion and an increase in exports from £4.3 billion to £7 billion. The creation of 6,600 additional jobs will be a significant feature of the programme and will maintain the leading position of the food sector in employment terms accounting as it does for 200,000 people on farms and in processing and related activities. This is the tangible proof of our confidence in and commitment to this most important of sectors of economic activity and our conviction that it has a bright future.
We are determined that our biggest industry will realise its full potential and in so doing make a major contribution to national wealth and employment.
We are confident that our production systems will satisfy the most stringent standards of production set anywhere in the world. The main challenge is to produce products which the customer is prepared to purchase and to market and promote them intensively. An Bord Bia has a major role in this but in the first instance Irish food manufacturers must be prepared to provide an unrivalled customer service. In particular, they must be prepared to respond to the reasonable expectations of consumers who want to know more about every stage of the food chain, from farm gate to kitchen table. Full traceability of the raw materials used to manufacture food is being sought and will be provided. I am convinced that developing quality assurance programmes, as An Bord Bia is doing, which are both transparent and comprehensive is the single most effective way of satisfying consumer worries about food. Clearly food safety has significant marketing implications because if our industry can successfully reassure consumers about the quality and safety of the food it produces it will have overcome the first marketing hurdle.
We are now well on the way towards a co-ordinated approach to marketing in Ireland, an approach which embraces the industry at a national level. We need to focus more clearly on those markets which, taking a long-term strategic view, offer the best prospects of sustainable gains. Our co-ordinated approach must be capable of offering tailored marketing services to individual companies to assist them in selecting the most appropriate routes to market. An Bord Bia's presence in all priority markets is a major help to food companies and their customers, as these companies seek to eatablish long-term defensible market positions. The presence of consumer representatives on the board and subsidiary boards through the passing of this Bill will serve to enhance these prospects.
The Bill is short and uncomplicated. Section 1 is a short definition section. Sections 2, 3 and 4 provide that the membership of the board and each of its subsidiary boards shall be increased by one; that one member of each board shall be appointed on the nomination of organisations whom the Minister considers to be representative of consumers and for certain minor consequential changes resulting from these amendments.
Section 5 is a saver provision inserted on the advice of the Attorney General's Office to safeguard the position of persons who have already been appointed to the board and subsidiary boards. Section 6 provides for the short title and collective citation and construction of the Bill.
I commend the Bill to the House.