Statement of Strategy 2003-2005: Presentation.

I welcome the Secretary General of the Department of Agriculture and Food, Mr. John Malone and his colleagues. Before making the presentation, Mr. Malone, I draw your attention to the fact that while members of this committee have absolute privilege, the same privilege does not apply to you. Members are reminded of long standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or mention an official by name or in such a way that makes him or her identifiable. Mr. Malone, you may now proceed with the presentation.

Mr. John Malone

On behalf of the Department of Agriculture and Food, I thank you, Chairman, and the joint committee for the opportunity to discuss the statement of strategy prepared by the Department as required under section 5(2) of the Public Service Management Act 1997.

This is the fourth strategy statement prepared by the Department since 1996. It identifies the mission, goals and strategies which will guide the Department over the next three years. It is intended to be a reflection of the challenges and changes which will confront the sector in the period ahead. The strategy statement is a key element of the Strategic Management Initiative, SMI, which has now become embedded within all levels of the Department and is an integral element of our ongoing work.

There have been many significant developments in SMI throughout the Department over the past number of years. We are cognisant of the fact that we must constantly re-examine the way in which we do business if we are to ensure excellent standards of service delivery, customer satisfaction, staff motivation and resource effectiveness.

One of the main challenges arising in the short to medium term is the need, as envisaged in Delivering Better Government, to integrate the various elements of the reform programme and to develop a shared understanding of the inter-relationships between business planning, resource allocation, human resource modernisation, e-Government, quality customer service, financial management, accountability for resources in terms of outputs and outcomes, and managing individual performance and development. These challenges have been met in this statement of strategy.

The current statement of strategy for the period 2003 to 2005 has 75 strategies and in excess of 200 performance indicators, which is a reflection of the level and complexity of the Department's work. These indicators are both qualitative and quantitative in nature. Monitoring of progress by the Department in implementing these strategies and the targets set by the performance indicators is carried out through the ongoing business planning process and in the Department's annual report. In addition, the Department is taking part in a pilot scheme dealing with the integration of business planning and resources allocation under the direction of the Department of Finance. While this project will place additional demands on us, the advanced stage of development of both risk management and the SAP accounting system within our Department should facilitate undertaking this study. A coherent approach to the modernisation process within the Department is ensured through an SMI co-ordination group, which I chair.

The Statement of Strategy was prepared in accordance with: the guidelines for Ministers on implementation of the Public Service Management Act 1997 and the guidelines for Secretaries General and the heads of Offices on the preparation of the Strategy Statements approved by the Government in 2002. In preparation for the drafting of the document an extensive consultation process was initiated in June 2002. Under the process the following were consulted: staff, trade union representatives, the partnership committee and the Department's clients and customers. The Statement of Strategy 2003-2005 has been posted on the Department's electronic messaging board, referred to as the eZone, and is available to all staff.

While the management of and adaptation to change are essential parts of our work I believe that this Statement of Strategy has been framed in the context of great change. We fully subscribe to the European vision of multi-functional agriculture. While the primary role of agriculture remains the production of food and the provision of a living for farm families, and this will continue into the future, agriculture is now seen by society in the broader framework of the countryside. In this context it has an important role in protecting the environment, promoting biodiversity and a varied landscape and providing rural dwellers with a desirable living and working environment.

The agriculture and food sectors remain the main drivers of rural development and the means by which farmers earn their livelihood. This statement of strategy was developed against the background of the CAP mid-term review and the WTO talks. While the recent Council agreement on the mid-term review secured the future of the Common Agricultural Policy, it will nevertheless reshape it and make it more relevant to society's expectations. The opportunity to exploit our advantages remains in the hands of farmers, the food industry and the economy in general. The agreement also poses a number of challenges for the Department and its staff in terms of service delivery to farmers and resource issues into the future.

In addition to the mid-term review, our future operating environment will be significantly influenced by European Union enlargement and the outcome of the World Trade Organisation talks. While one always wishes for a stable operating environment, it is fair to say that farmers have been confronted with major change in recent times. It is to their credit that they have shown such adaptability, and this is still required. In addition to being innovative and adaptable, the agriculture and food sectors must match the expectations of consumers in food safety and animal health and welfare. This must be done in a competitive environment where, especially for a major food exporting country with considerable natural advantages, price and new product development remain critical success factors.

Since the publication of the previous statement of strategy, the mandate of the Department has changed with the establishment of the new Department of Community, Rural and Gaeltacht Affairs. However, the core work of the Department remains and reflects the multi-functional role of modern agriculture. The Department continues to carry out an extensive range of functions. These include the development of an agri-food sector and rural economy which will support the maximum number of farm families and rural households, compete successfully in international markets, be consumer focused, value and respect our rural environment, offer rural dwellers attractive livelihoods and promote efficient and sustainable farming practices - this development activity being underpinned by annual expenditure of approximately €2.9 billion; the maintenance of high standards of food safety, animal health and welfare and plant health; the discharge of our responsibilities as required by national and EU law and the payment of funds under national and EU support schemes in an effective manner while maintaining the highest standards of customer service and financial management, control and accountability.

Our six goals are formulated around our key functional areas and I will refer to each of these goals briefly. Goal one is agri-food development and trade. We want to develop an internationally competitive agri-food sector and support and facilitate trade in agriculture and food products. Goal two is food safety, animal health and welfare and plant health. We want to ensure the highest standards of food safety and consumer protection, animal health and welfare and plant health. Goal three is the international framework. We want to achieve the optimum framework for the agri-food sector, rural economy and natural environment at EU and wider international level and enhance North-South co-operation. Goal four is the rural economy and environment. We want to promote the development of the rural economy and environmentally friendly and sustainable systems of agriculture and food production. Goal five is system delivery and financial management. We want to operate all our schemes and programmes in an efficient and effective manner and ensure the highest standards of corporate and financial management and accountability in all our activities. Goal six is operational capabilities. We want to develop our human and physical resources and operational capabilities and ensure the delivery of quality service to our customers, both internal and external.

The Statement of Strategy 2003 to 2005 has, from initial preparation to final publication, provided the Department with an opportunity to focus on its strategic goals, consult its customers, both internal and external, and obtain their views. It outlines the way forward for the Department over the coming three years in the context of its ever changing operating environment. The final document embodies the proactive steps the Department is taking to achieve the shared objective of the Department, the goals of the programme for Government and the use of the strategic management initiative process in a way that will improve the quality, standards and relevance of our service to our client base.

I thank the Secretary General and his staff for attending. I wish to take up a few points with him.

I thank Mr. Malone for his contribution on the strategic management initiative. How does the Department measure the success or otherwise of its output? What measurement does it take to adjudicate on whether it is providing a better service?

The number of farmers has decreased in recent years. Between 1997 and 2003, the Department of Agriculture and Food recruited an additional 500 to 600 staff. What was the reason for this and where are these people located?

Many staff deal with direct payments which amount to €1.6 billion. It is clear that our scheme will be amended following CAP reform. How does Mr. Malone see this impacting on staff? If the scheme is to be more user friendly and have less red tape attached, will staff be relocated or will numbers in the Department be reduced?

In the context of policy objectives, the Secretary General referred to assisting rural dwelling. Did his Department have an input into the national spatial strategy in terms of assisting people to obtain one-off housing? The Minister for Community, Rural and Gaeltacht Affairs and other Ministers have referred to encouraging rural development, yet it is my understanding that they have no power in this area and that any directive from the Department of the Environment, Heritage and Local Government gives strict guidelines to local authorities to move people into villages and towns and stop the proliferation of one-off houses. Accordingly, every county council is in conflict with its members. My belief is that conflicting messages are being given by the Government. What message, if any, has the Department of Agriculture and Food given in this regard?

Agriculture and rural development have gone hand in glove in recent years. What is Mr. Malone's view of the loss of the rural development section from the Department of Agriculture and Food? It was a grave error on the part of the Taoiseach to split the Department in this way. Does Mr. Malone see a need for this section to be relocated to the Department?

Where will the money go that will be received under modulation when the new CAP reform is in place, which I understand will be in the region of €34 million per year? I have asked this question of the Minister. Will it go to the Department of Agriculture and Food or the Department of Community, Rural and Gaeltacht Affairs? I have grave concerns about this.

Mr. Malone referred in his contribution to it being one of the missions of the Department to support the maximum number of farm families and rural households. How does he see the Department's policy assisting this? By aiming to fulfil this mission, which is admirable, how will this impact on the Department's other stated aim, namely, economic efficiency? Has Mr. Malone any comment to make on finding the balance between the two? This is the problem in agriculture - trying to maximise both the number of farm families and efficiency. I have asked a number of organisations the number of full-time and part-time farmers. I was ridiculed in one submission and told that the numbers were available in the back of some booklet. However, when I looked, it was difficult to ascertain the numbers. I receive different figures from different people. Mr. Malone may not be able to give me the figures but if he could, I would appreciate it.

The first stated goal of the Department is to develop an internationally competitive agri-food sector. The Minister lectured the dairy industry on the game being up and how it could no longer produce butter and skimmed milk powder for intervention. However, this happened for a long period during his watch and that of the former Minister of State at the Department, Deputy Ó Cuív, in the previous Government. What plans does the Department have to assist the dairy industry? The Minister undermined his position by lecturing the dairy industry before he departed for Luxembourg.

This ties in with goal three - the international framework - in that we have ceded territory. In 1984 during discussions on the milk quota, while other countries operated off their 1981 production levels, we were permitted to operate off our 1983 levels plus I do not know whether it was 3.6% or 5% in addition to the milk production for 1983. In this way our unique position regarding milk, its importance to the agricultural sector and by extension to the economy at large, was recognised. Have we now lost that unique position? I believe so. I regret the Minister did not push for continued recognition of that unique position. What are the views of the delegation?

Regarding the delivery of schemes, this goes back to measuring actual output. We often get complaints about the delivery of schemes, and often the fault lies with customers but sometimes it does not. It has not been mentioned yet and may be outside the delegation's remit but I would like some clarification of modulation. I know the Minister and his officials are coming back to the committee in a few weeks so if Mr. Malone is not in a position to answer this, that is fine. However, if possible he might clarify the options for decoupling. Can he confirm that the small anomalies in the CAP reform are still under negotiation? The Minister mentioned decoupling being tied to slaughter premium and a value payment, but I read recent reports that if there are any conditions attached to decoupling, the production levels involved have to be as per the average of the reference years and that one cannot simply come along and attach conditions to decoupling. Maybe I am wrong and, if so, I seek clarification. Has that been decided for definite or is it still being negotiated?

I thank Mr. Malone and his officials for bringing us up to date. Will Mr. Malone elaborate on the performance indicators that will be applied and what that means for staff output in the Department? In his presentation Mr. Malone indicated that the CAP reform review and the WTO talks will impact on challenges to the Department and its staff in terms of service delivery to farmers and resource issues into the future. Will he elaborate on what those challenges are and how they will be addressed?

An issue that concerns farmers is bureaucracy and red tape; anyone who has spoken about farming realises that. Arising from the mid-term review of CAP, is there any danger that bureaucracy could increase rather than decrease? I would have seen the modification as a method of getting rid of a lot of the bureaucracy but looking at the fine print there is every danger that bureaucracy could increase rather than decrease.

In terms of policy and the review of the dairy industry and milk production, overproducing for the sake of production is not good. However, at the same time dairy farmers have to be looked at benignly here. What are the alternatives? While we might recognise that producing food just for intervention is not the way to go, there must be some support mechanism for dairy farmers which will allow them to utilise their product, milk, effectively and economically as well as the products deriving from that. Does the delegation have any ideas on how that can be developed, particularly in relation to value-added for dairy products and new product development. What supports will be put in and what will the back-up be?

A question similar to one of Deputy Timmins's is the issue of rural development. Issues such as tax come up frequently, and while these impact on rural life in Ireland and the farming community, they belong in another Department. I agree with Deputy Timmins that it was a mistake to take rural development away from the Department of Agriculture and Food because it could be confusing. I would have a preference for removing the food element and having a separate Department of Food. That would make more sense.

In relation to EU enlargement and the impact that will have on the Department, can we have more details on how that will impact on the performance and activities on the Department?

I welcome Mr. Malone and his team. Regarding the implementation of the review, particularly for decoupling, whether that is partial or full, which would be most beneficial, primarily for the family farm? I believe full decoupling is the way forward. There certainly is a problem with slaughter premium; perhaps the delegation would elaborate on that. There is a fear that if the slaughter premium is not active it will lead to a reduction in prices and trouble for the family farm.

Regarding dairy farms, the Minister is on record in a reply to a question from me - as are the main farming organisations - as saying that farmers with a milk quota of 40,000 gallons or under are virtually heading for extinction. If that is the case, what are their chances of survival? Is there an option for the Government, perhaps in conjunction with the EU, buying out those quotas? Maybe those farmers could be kept active on the land through the suckler system.

The point was made about a competitive environment. From a production point of view a competitive environment is access to our markets for South American beef. It appears to me and many others that we do not have a level playing field and that is what is needed here. I refer to the individual traceability of animals, which they do not have in those countries. Is the Department satisfied there is a level playing field in terms of a competitive environment?

There were many references to and laudable claims about Teagasc's role, particularly in relation to further research and education in the farming sector. We had a presentation here about cutbacks in Teagasc and how detrimental they would be for the future of research and education. Those cutbacks amount to €17 million or €19 million. Is Mr. Malone satisfied those cutbacks will not impede the implementation of this strategy?

References are made here to cross-Border co-operation but I find it mind-boggling that last week we heard about the Ballinamore centre closing. It is close to the Border and to areas such as Leitrim, Donegal, Fermanagh and parts of Tyrone. Does Mr. Malone accept that closing a centre like this sends the wrong signal in terms of research and development?

Regarding rural development, implementation of this strategy is all embracing. What role does Mr. Malone see for the part-time farmer and his linkage into the wider community in contributing to rural development? How can the active promotion of alternative enterprises in rural Ireland contribute to the survival of those people who are farming part-time and want to continue to do so?

Mr. Malone

I will answer questions in the order in which I received them. Many questions overlap.

The document sets out, in fairly elaborate terms, the various performance indicators. These are intended to be specific and measurable and it is intended that we will measure ourselves against them. We will also use the annual report to show what we are doing. It is quite easy to measure our performance in many of our areas of activity. With regard to payments, for example, we either get them out on time or we do not. Committee members will know that we have a customer charter, particularly in relation to direct payments to farmers. There are very specific targets and deadlines. We meet those deadlines and we are measured very stringently against them. A monitoring committee, chaired by an independent chairman, meets four times per year.

I accept the point being made. It is one thing to prepare a strategy but we must be prepared to be measured against it. The staff of the Department fully accept that. Business plans are an integral part of the Department's varous units. All units prepare annual business plans.

Our staff numbers have increased. However, 2,200 of our staff are engaged in food safety and in monitoring food safety. We have a service contract with the Food Safety Authority and it is recognised that we deliver between 70% and 80% of food safety in Ireland. We believe that service contract works quite well and that is also the view of the Food Safety Authority. The increase in staff numbers has been mainly in that area. We also have additional staff in developing our IT systems. It was widely acknowledged that it would be difficult to deliver the range and complexity of our payments - we deliver 1.3 million individual payments per annum for a variety of schemes - without very good information technology systems. We have invested hugely in that over the past four or five years. We have 200 staff working on policy, 2,200 working on food safety and production, 1,400 working on agricultural payments and approximately 700 on corporate development including financial control, human resources and IT.

Decoupled payments will reduce the level of bureaucracy. The new regime will not totally eliminate controls. We must accept that a huge amount of taxpayers' money will be coming into the country, we are the paying agents for that and we must ensure that it is properly paid and controlled. There will be a number of cross-compliance measures. This is important. I see this as laying to rest the argument, which has existed for some time, that taxpayers' money is going to farmers in the form of direct payments with no clear payback for society. Society wants good and safer food and a clean environment. That is what lies behind cross-compliance. If the payment is decoupled the single payment will remove many of the difficulties that exist for individual farmers in filling out applications and in getting the timing of their applications right. That will have implications for our staff. We will have to change our IT systems. Depending on which options we choose it could, in turn, have implications for staff numbers. I will come to that point later because it relates to one of the questions that have been asked about the range of options.

We sat on a committee that fed into the preparation of the spatial strategy in the Department of the Environment, Heritage and Local Government. It is widely accepted that rural development is not a stand-alone issue. It is what is now referred to as a cross-cutting issue. Our view of rural development is that it covers a range of different issues. It is difficult to have good rural development unless one has active agriculture and the best way to protect the rural environment is to have good and active agriculture taking place in the rural environment. Rural development includes a range of other things - infrastructure, facilities, education, health and so on.

The decision as to which Department is the lead Department was a political one and I cannot be expected to comment on that. I can say that my Department will have a strong input into rural development through the various agricultural policies.

Many people who would previously have been classed as urban dwellers now live in rural areas. There is now an urban rural drift which is working in the opposite direction to the received wisdom. There is a drift from Dublin to areas on the periphery of Dublin, for example.

We did not become involved in the one-off housing issue; that is for the planning authorities. We do not intervene with planning and it would not be appropriate that we should.

With regard to modulation, I can clarify that the money that will come back to the country, which is of the order of €34 million, will be for on-farm measures. It will come back into the Department of Agriculture and Food.

The issue of rural households and economic efficiency has been raised. There has been a huge change in agriculture and it is obvious that the change will continue. Approximately 60% of farmers now work on a full-time basis and 40% on a part-time basis. However, one must examine the question more deeply. There are various ways of working full-time and various ways of working part-time. I believe we will continue to have a core of highly efficient, full-time, commercial farmers. Other farmers will work on less than a full-time basis and some will have off-farm employment. In some instances the off-farm employment will supplement the farm income but in other cases it will be the primary income and farming will be a secondary activity.

Our job is to give people choices. With decoupling we have succeeded in presenting a range of choices. If farm families do not continue to live in the countryside the range of other services - post offices, schools and various facilities - will come under threat. We must have a range of different policies and instruments to support what is no longer a single entity. In the history of the Department agricultural policy has been one dimensional - produce as much as possible. That has changed and now it is about more than production. A whole range of other issues has come in on the agenda.

The internationally competitive sector is a reality. Bearing in mind that we are export dependent - we export more than 90% of beef produce and more than 80% of milk produce - we must compete on international markets. Competition is intense and we must watch what our competitors are doing. This issue has come to the fore in the dairy sector where it is acknowledged and accepted that last year was difficult. Prices were difficult, costs increased and in many ways the sector got caught in the classical price-cost squeeze. Our competition is not standing still and we must look at what has been going on in Denmark, the Netherlands or New Zealand.

There may have been some misunderstanding regarding what happened in the mid-term review. In effect, what happened in the review was that an extra 5% was added to the 15% that was already agreed in agenda 2000. If nothing had happened in the mid-term review, there would still have been a 15% reduction coming down the tracks.

We argued the case for intervention but the difficulty was that we were in a minority of one as no other member state had an interest in it. Commissioner Fischler had a strong view on the issue. He said there are more than 200,000 tonnes of butter in intervention and if it kept accumulating at that rate - bearing in mind that we put in 47,000 tonnes last year - there would suddenly be perhaps 500,000 tonnes of it. We have been round that course before and know that if we accumulate a huge amount of stock, that will actually become the problem. There was a time when we had a million tonnes of butter in intervention but we do not want to return to that situation. We argued and were successful in getting him to move from his original proposed limit of 30,000 tonnes to 70,000 tonnes reducing annually. This gives us time to adjust. A study has been prepared which will be of interest to the dairy industry and there is an appetite for change within the industry which recognises the reality facing it. The difficulty is that we need time to adjust.

There was further difficulty because of the number of member states which want to abolish the quota regime. In essence, we were caught in a trade-off between trying to protect the quota regime and giving a concession on a further price reduction. An added difficulty was that had this been postponed until 2006, 2007 or 2008, the debate would take place in an enlarged Union. That would be more difficult because a number of new member states feel hard done by on milk quotas. A point that is forgotten in regard to the milk quota is that we already got our milk quota increase - 2.8% - and have it in our pocket. It is worth about €40 million to the industry whereas the quota increase that was coming for the others from Agenda 2000 has been deferred.

The delivery of the scheme is something against which we are prepared to be measured. We have made significant strides over the past four or five years and would be regarded as having one of the best payment systems in Europe. There will always be problems or irritants in the system, some difficult. However, compared to any other member state we have at least as good a payment system, if not better.

There are a number of different options for decoupling and it is easier to deal with some sectors than others. The arable cereal sector has two options, total decoupling or a mix of coupled and decoupled, 25% coupled. The sheep sector option is full decoupling, or 50% decoupled. I will clarify an important point. The 50% does not mean that the applicant gets the full payment for 50% of the animals. It means that the applicant gets 50% if he or she has no animals at all decoupled, but in order to get the other 50% he or she must have 100% of the animals decoupled. The reason for that is to do with the WTO. It is a rather complex argument but it is about getting the payment out of the blue box and into the green box. If it was left that they got the full payment for the 50% of the animals, in effect one would be doubling the payment and not doing anything for the blue box.

In the beef area, probably the more complex area, there is an option of having the suckler cow premium either coupled or decoupled 100% and to have the slaughter premium coupled or decoupled. However, if a farmer has the suckler cow premium coupled, he or she can only have 40% of the slaughter premium coupled also. One does not have the option of having 100% coupling of the suckler cow and 100% coupling of the slaughter premium side by side. One also has the option of up to 75% of the special beef premium coupled. There is a mix of different options.

It is intended to have a process of consultation. It is interesting that in the course of the negotiations the attitude to decoupling changed somewhat in this country. In essence, the choice is how far do we go on the decoupling option. Do we go for total decoupling and decouple everything or do we keep certain payments coupled, in particular the slaughter premium? It must be looked at against a number of different criteria. Payments must be protected and this has been achieved to a large degree. We must also look at what is best for the industry overall in terms of its development, the quality of production and the income of farmers. There is also an argument in terms of employment, the processing industry and raw materials. It is not a simple issue.

We intend to begin the consultation process fairly soon and, hopefully, to have an early ministerial decision. The system will not apply until 2005 so we have some time. It is intended to provide clarity and certainty so that people may buy or sell animals with an understanding of the environment in which they are buying or selling.

There are some possible irritants and anomalies in the system. We have tidied up many of them but I am anxious to convey to the committee that we do not have all the final legal texts in this area. What was achieved was a broad political agreement and much of the detail has now to be tidied up. We are anxious to have clarity for everybody.

Deputy Upton referred to the performance indicators and I think I have answered that question. Regarding the mid-term review, the WTO and the challenges to the Department, obviously the new support regime will bring challenges in terms of making payments in a different way and of ensuring cross-compliance. The WTO is likely to create a more competitive environment for Irish agriculture, whatever the outcome. We hope there will be a decrease rather than an increase in bureaucracy.

The point about the dairy industry is important in that we must try to broaden the product portfolio. In fairness to the Irish dairy industry, it has a very good record in developing new products and many products which were developed in Ireland are now being imitated abroad. There is a seasonality problem to contend with in that the bulk of our milk appears at a certain time of the year but we cannot produce products to sell them into intervention because it is gradually becoming a thing of the past. We must take advantage of time and space to make that adjustment.

We are aware of the concerns about the special areas of conservation. This has been a fairly thorny issue with the farming organisations. There were very useful discussions and negotiations in the context of the partnership negotiations. We are not the lead Department in this case but I have the impression that there is now a better framework for dealing with these issues which encourages good dialogue between the sides.

There are a number of aspects regarding enlargement. Dealing in the enlarged Union of 25 will be different to dealing with a Union of 15 member states and the decision making process will be different. It will be a huge challenge to the way we do business. There will be opportunities in terms of consumer products and consumer demands. As these countries become more affluent they will demand more sophisticated products and that will provide us with market opportunities. The obvious threat is their good production potential, and good land and good capabilities. In the initial stages, I predict more opportunity than threat because it will take them some time to gear up their production.

We must analyse the issue of decoupling, listen to the various users as to which option is most beneficial and make a balanced decision. Deputy Ferris spoke about quota sizes. The average quota size has been increasing and it is now over 40,000 gallons. The issue can be examined in a number of different ways. A producer can make a good living on a quota of 40,000 or 50,000 gallons, but it depends on the situation on the farm in question, such as how much money has been borrowed, what the family circumstances are or what other enterprises are carried out on the farm. It might be different for a young person starting off in farming who may have taken on borrowings. There is no simple answer but it is clear that if people are in full-time farming, they should be entitled to earn a decent living and a living comparable to what they would earn if they were in an activity outside the farm.

There are a number of dimensions to third country imports. It is important to understand that virtually all the products coming into the European Union come in with a heavy tariff such as the heavy tariff against beef from Brazil or Argentina or other countries. The second dimension is that their production systems, such as meat plants and facilities, must meet standards. There is a European Union inspectorate charged with ensuring those standards.

The Deputy has touched on an interesting third dimension which will be the subject of debate in the WTO and that is called non-trade concerns. European agriculture pays a lot of attention to issues such as animal welfare, traceability and environmental conditions on farms. The European Union is attempting to have these standards recognised in the WTO negotiations. The difficulty is that the other partners regard this as a cover on the part of the EU for more trade protection. It has proved very difficult to put these issues on the agenda. Now that the mid-term review has taken place and the pressure is no longer on the European Union but has gone back on the other partners, this may create an opportunity to advance that part of the agenda.

There are a number of points to be made about Teagasc. The broad point is that Teagasc's budget for 2003 was slightly increased compared to the 2002 budget. It is a very large organisation and its staff is its principal resource. Effectively to stand still, it requires an increased budget every year and members will understand the budgetary environment within which we operate. The second dimension to Teagasc is that it is spread across the country. Leaving aside whether there was a budgetary problem or not, there is a case that Teagasc should review its operations, in terms of its locations, the kind of services it delivers and the change in its client base with the diminishing number of full-time farmers in the country. To examine Teagasc solely in relation to cutbacks is a rather one dimensional view. I argue that the organisation has been fairly well looked after in the past number of years. It has received extra resources such as an increase in staff numbers and enhanced facilities in the agricultural colleges which have received a lot of money in recent years.

The Department is aware of the depth of feeling about Ballinamore. Speaking honestly, I do not see it in quite the same light on the cross-Border issue. There have been extremely good working relations between the Department and our counterpart in Northern Ireland. There is a wide agenda for us to work on, particularly in common programmes of disease eradication, animal health and plant health and shared scientific research projects. We must work together in the implementation of schemes and some work has been done in that area, such as common dates for retention in the ewe premium scheme. There is a very productive agenda between us and we are both anxious to move ahead.

The Department regards the all embracing rural agenda as its view in that it is not a one dimensional issue. The agenda looks at wider agricultural issues and alternative enterprises and there are supports available through Leader and other measures.

However, I labour the point in particular that the key to rural development is a vibrant agriculture. If the vibrant agriculture is taken away, the void will not be filled through a series of other add on measures. I hope I have picked up on all the points.

I thank Mr. Malone. Deputy Timmins has offered his apologies. He had to leave to go to another meeting and he asked me to request a copy of your mid-term review for the members of the committee if you have it with you.

Mr. Malone

What we have is a compromise document, which was presented. It actually does not make much sense because it must be read with another document. Maybe when we get the clean text we will send it to the clerk. I do not think we would do any favours by releasing it at the moment.

I welcome Mr. Malone and his staff. When I worked with these people I was very impressed with their work rate. There is nothing they would not challenge if they were asked. I pay particular tribute to Mr. Andy McGarrigle who, at the time I was either dismissed or demoted, was innovative in putting in order the headage payment area, which had been the bane of all Deputies. Although I do not want to single out one official more than any other, I congratulate Mr. McGarrigle.

Mr. Malone has answered nearly all the questions I was going to ask - he must have envisaged what I was going to ask. The Chairman need not worry about me going to the plinth and making statements. I feel very strongly about imports. While I compliment the Department on introducing the new booklet, which is well done and very presentable, we are now importing approximately 17,000 tonnes of beef and 45,000 tonnes of pig meat and there is practically no production level poultry left in the country. In spite of what has been said about safety and quality, poultry has been very suspect of adulteration, as has been reported in a recent London publication. This cannot continue and we must give more protection to the consumer. Even when this happens to an imported product, it gives the Irish producer a bad image.

I do not understand why we cannot have the country of origin identified on all foodstuffs. I have raised this issue at my parliamentary party, which endorsed my view that this should be the way forward. To date it has not happened. I do not see why we must be protective of the multinationals that strategically manufacture across the European Union. Why should we have to pay the price here? It is taking from the market share of Irish producers and we can no longer give a full and wholesome food guarantee to tourists, which means the Minister for Arts, Sport and Tourism, Deputy O'Donoghue, has a tough job.

During my time in the Department of Agriculture, Food and Rural Affairs, the assistant secretary in charge of food, Mr. Jim Beecher, used to talk about marbling in beef, the quality of beef and the different colours where we had strong or red for the grass based or grain based. As we no longer have that our beef and steaks are now suspect. This is quite a problem for us as people like wholesome Irish food. We need to address the issue of imports by introducing some regulations. To the gentlemen sitting opposite I say that a great leader of my party, Mr. Charles Haughey, when he was Minister for Finance, said that our civil servants could legislate to tax redheads.

The main food importers are the plcs, whose only interest is in having a good return for their shareholders and not in the community or the farmer. This is not acceptable and needs to be challenged. Those companies probably sponsor a few sporting events to get good PR. If wine is labelled with its country of origin, I cannot understand why the same cannot be done for food so that consumers can choose between Brazilian, Irish or Danish.

I am not enthusiastic about the outcome for the dairy industry of the negotiations in Brussels. There is no point in always running with the crowd, as the wind will blow in our faces at times. We have a mere 5 millions tonnes of milk and we are competing with those operating on a global scale. If we had the population that exists on the continent there would be no problem, as we would always have a market on our doorstep for fresh product. We have a seven month dairy operation as opposed to an 11 month operation on the continent. They have a very diversified operation. We have peaks and valleys. The Irish dairy industry breaks down approximately 40% diversified and 60% commodity. The commodity sector is competing with those on the global market like New Zealand, Argentina, etc.

It is not feasible for a politician or anybody to simply advocate diversification. It is not possible to take such a large amount of milk and put it into a product that will sell. Research has proven me right in this. We have spent millions of euro on research and have not been able to get a diversified product. We have failed to move away from hard cheeses, caseins and the various powders.

I am very concerned and, as a dairy farmer, I see a very bleak future for dairy farmers. How many of the 27,000 dairy farmers have quotas of less than 45,000 gallons? No farmer thought the Agenda 2000 15% would reach their doorstep. The 4.5% on top of that will give an overall loss in four years time and the loss of intervention will be about 10 cent per gallon. In my area, not alone am I concerned about the farming community, but I am also concerned about the massive dairy industry operations that are based in my constituency. What happens in five years will be a problem for me and my community.

While, in principle, decoupling is fine, what will happen if we go down the road of full decoupling? Where will production start and finish? We could have the four green fields without livestock and a small number of privileged people in farming. Production related payments are required in this area. The Secretary General should consider exempting a certain number of part-time farmers on the western seaboard who do not have the expertise or wherewithal to complete the headage forms. We should pay the first €5,000 to everyone and thereafter payments should be production related. We do not have production related farm schemes. We will end up without a dairy, beef or any industry because when we reach a valley period and prices drop, everybody will opt out.

I have a passion for rural Ireland. Mr. Jim Beecher and I come from the same part of the country where there are good production levels. Although a blanket approach to decoupling is great when speaking from a political platform, it does not represent the way forward in this area. I was very impressed with the way the Department proposes to structure this, but finding the right formula will be the issue. As national politicians, we will need to carefully consider this in the national interest.

I have frequently spoken about Teagasc at this committee. Advice is very important and the advisory service represents a neglected area. It appears that we are trying to eliminate the advisory service as it is an unproductive area. While Teagasc's advisory and research areas have been financed on a 50-50 basis, there seems to be more emphasis on staff recruitment than on research. There has been no great payback from the research area at the production or the other level. Advice has been very helpful to farmers, who have placed more emphasis on it than they did in the past. I do not have much more to say on this matter.

I would like to refer to beef issues. Approximately 1.8 million animals are slaughtered in this country each year. This figure is made up of about 450,000 cull cows, some of which are of good quality but more of which are not, and animals slaughtered for beef. It has been argued that we should become involved in high price markets, but I am asking for the formula to enable us to become involved in such markets. There is no point in lecturing farmers by saying that the high price markets are there. One can access such markets if one is prepared to subsidise it heavily and to provide a great deal of money for promotion. One of the best food organisations to have been set up in this country has been Bord Bia, but it has been given a skimpy level of financing. I feel that it should have a more autonomous role in the food promotion area as there seems to have been too much interference in its operations. The UK market is on our doorstep but we have rarely captured the consumer market there and we seem mainly to provide beef to the catering industry there. When I say that I do not want farmers to be lectured about the need to become involved in high price markets, I do not refer to departmental officials but to politicians and those in high office. It is not possible to dominate such markets and to suggest otherwise is to cause beef farmers to become disillusioned. We are talking about a similar commodity to milk, which is 60% commodity, as I mentioned.

I am not a member of this committee but I am glad that the Chairman gave me the opportunity to speak. I do not know whether I have done well, but those present can be assured that I feel passionately about these areas.

There is not much for me to say after Deputy Ned O'Keeffe's contribution. I welcome the publication of the Department's document. If the Secretary General achieves everything that is mentioned in it during the next three years, we will have an easy time thereafter.

I do not recall receiving a copy of the 21 food labelling recommendations which are mentioned in the document, but I would like to see them. Perhaps the committee will be given a copy of the recommendations at some point in the near future as food labelling is an important issue.

I will be somewhat parochial by complimenting the Department's achievement, in recent years, of making most payments by a certain time each year. I would like measures to be put in place, however, to ensure that the recent strike will not be repeated. The strike, which lasted for 11 weeks in four or five counties, will have repercussions for payments at the end of the year. It did not save the Department any great deal of money as those involved are now working overtime but it caused untold harm to a number of farmers in each county. Their herds were restricted and they were unable to sell cattle because they could not get the necessary paperwork. A suitable provision should be put in place so that a similar strike can be dealt with quickly. I cannot see why it was not dealt with in two weeks rather than being allowed to continue for 11 weeks.

I do not know if anything can be done about the special beef premium, which I have mentioned in a few places but about which I have never received a satisfactory answer. When a farmer with a small number of acres, for example, applies for a special beef premium for too many animals, his cards come back stamped. He is not told that the animals are not eligible, however, until the payments are due; at that time he will find he has not been paid for the number for which he applied. Modern technology should be used to put in place suitable CMMS and extensification measures which ensure that a farmer is informed about the cut-off point and told, for example, that two animals are ineligible. If it happens that two or three animals are ineligible, the farmer can sell the cattle in question and the EU moneys will not be lost to the economy. I understand that such moneys are being lost at present.

I am glad to have had this opportunity to make these points. All other matters have been adequately covered today. I thank the officials for attending this meeting.

I thank Mr. Malone and his team for coming here and giving the committee details of the talks that have been taking place. It is obvious that a great deal of talking remains to be done. I was amazed by the number of farmers who approached me before the talks to state that they favour decoupling. The leading farming organisation, the IFA, did not support decoupling at that time but it changed its stance midway. Other organisations, such as the ICSA, favoured decoupling all the time, but the ICMSA did not. There were very mixed views. The leading farming organisation did not support decoupling but it came around to it. Views are divided within the farming industry and a great deal of discussion has yet to take place.

Many issues have been mentioned in this meeting, but I would like to refer to the problems faced by farmers when mistakes are made in applications for many premiums and grants. I consider the kind of correspondence that comes from the Department to farmers to be rather harsh. I agree that guidelines and rules need to be in place and need to be observed, but mistakes that are made by the Department are seen as mistakes and nothing else. This attitude is not present when farmers make mistakes. I know of people who have been seriously wronged for making genuine mistakes. I know there are problems as it is not too easy to prove that mistakes are genuine, but I want to make this point.

The premium, quota and over-production system that is in place in present is not working. We have to face the fact that people are leaving the land. We should accept that new methods must be tried, even if change is always greeted with concern. Many matters need to be discussed and two things need to be done. A commission should be established to examine the farming industry as a whole. While I do not wish to dictate to farmers about their business, I feel that there should be a single farming organisation. Farmers need to be led better in the present circumstances.

I would like to ask Mr. Malone a couple of questions in light of the completion of the mid-term review, the fact that the WTO talks will take place later in the year and the forthcoming enlargement of the EU. What effect does Mr. Malone envisage these developments will have on farming? Does the Department believe that the enlargement of the EU will make increased production more attractive for farmers or will it be a disadvantage?

The development of the agri-food sector has been mentioned, as has the development of a rural economy that will support the maximum number of farm families and rural households. Deputy Timmins raised the question of one-off housing in that context. I remind members of the committee that nobody other than ourselves and members of local authorities can rectify this problem, which was addressed in County Meath's most recent development plan. Members of the Oireachtas will not be members of local authorities for much longer, but it is our duty to encourage councillors to ensure that the problems I have mentioned are addressed in counties where no steps have been taken to encourage more one-off housing in rural areas. This is very important. We now have a serious problem caused by An Taisce and others objecting to young farmers building homes in rural areas. This is a sad development and while not the direct responsibility of the Department of Agriculture and Food, the Department of the Environment, Heritage and Local Government should rectify it. I advise members that the relevant bodies will come before the committee on this day fortnight.

Mr. Malone referred to the Department's function of offering rural dwellers attractive livelihoods and promoting efficient and sustainable farming practices. This probably relates to more attractive off-farm employment and similar matters.

Deputy Carty referred to over-runs. What is the up-to-date position on the over-run in beef premiums? We are aware that the views of the farming organisations will be taken into consideration during the mid-term review. Will the views of farming organisations other than those currently participating in the partnership talks also be sought?

With regard to the Chairman's last question on the farming organisations' participation in partnership talks, will ICSA, the smaller farming organization, which supported decoupling, be part of the talks?

Mr. Malone

I will respond to the questions as they arose. On the issue of imports, Deputy Ned O'Keeffe is correct that this is not a new issue but has been ongoing for a considerable period. It is important to examine the reasons these imports are taking place. It is due to the highly sophisticated consumer market in the European Union and its relatively high prices compared with the rest of the world. In addition, the countries of origin of these imports, for example Brazil and Argentina, have considerable production potential, their production costs are lower than those in the European Union and, in general, their standards and facilities are as good as one would find in the European Union.

In the instances to which Deputy O'Keeffe referred, the issue arose not so much before the products in question arrived in Europe but afterwards. To put it at its mildest, a certain transformation occurred in the products, particularly chicken. We were aware of the problem before the publicity in the United Kingdom.

A committee was established to examine food labelling because there is a raft of regulations on labelling. It would be helpful if copies of its report were forwarded to members of this committee. The report made two core points. First, a more centralised enforcement system is required. It has been decided in this regard that the Department of Health and Children will become the one-stop shop for enforcement, a responsibility previously shared by a number of Departments. The second core issue addressed in the report was the definition of origin. People should be entitled to choice. If they want to eat Brazilian or Argentinian beef, that is fine. The critical issue is that they should be aware of the origin of the beef. The Department has asked its consumer liaison panel to carry out research in this area and allocated funding for this purpose. We need to find out exactly how one can inform consumers about the origin of products and the kind of information one needs to provide.

We are conscious of the labelling issue. It forms the nub of much of our discussion and debate. While it is possible to introduce order in the relevant regulations, the question is how far one should go on the labelling of country of origin. Are we prepared to have our products labelled on European markets? While views on this question are mixed, mine are clear. If one is not prepared to have one's products labelled and identified as Irish, it raises questions.

It is accepted that we have a seasonality problem in our dairy industry. We will always have a dependence on butter and skimmed milk powder, which are known as commodity products. It will be necessary to reduce what has become an over-dependence on such products; although this will take time, it is necessary. We must also address how we achieve greater cost efficiencies in our use of butter and skimmed milk powder. As we probably have too many plants producing these products, there may be a case for rationalisation or sharing facilities.

The major difficulty we encountered with Commissioner Fischler was whether we can expect to sell butter into intervention on an ongoing basis. He informed us that a considerable amount of butter - more than 200,000 tonnes - has already been purchased and if matters were allowed to continue, the amount of butter in intervention would reach 500,000 tonnes in a fairly short period. For this reason, he argued that limits would have to be imposed on taking butter into intervention. An additional difficulty was that no other member state was interested in this issue.

As I have outlined, a range of issues will need to be addressed in the dairy industry. Nobody is arguing that we can transform the industry overnight or overcome our seasonality problem. For as long as we have grass, we should use it. There should, however, be opportunities to reduce our current dependence on commodity products and also to sell them on the open market.

The issue of decoupling is complicated in the sense that there is no way back irrespective of whether one chooses complete decoupling or a variation of it. The decision should not be taken lightly. A certain amount of impact analysis has been carried out on full decoupling, including studies we commissioned on the issue from FAPRI, which show that its introduction would result in a fall of around 6% in beef production relative to the current baseline by 2012 and a decline in sheep meat production of 5% over the same period. This would help farm incomes because a slightly lower volume of production would help the market.

The farm organisations argue that keeping an element of the suckler cow sector coupled will present a difficulty. This arises from the fact that suckler cow production is inherently unprofitable in many areas. A producer locked into an unprofitable position can, therefore, argue that he or she is carrying the can while all other producers will have the freedom to farm down the line. This is a logical argument and we must be conscious and careful in this regard.

One of the arguments in favour of retaining coupling for slaughter premiums is that it provides maximum impact in the sense that the producer at the end of the chain must have a product or animal and this helps demand in the other direction. We are not yet close to taking final decisions on these issues. Consultations, an issue raised by the Chairman and Deputy Ferris, will have to take place. They will be wide ranging and extend beyond the social partners. Given that the food processing industry and, I suspect, the trade unions have views on these issues, the consultations will cover a wide canvas.

We have to look at this issue in its broadest sense. There is certainly no intention on our part to reduce the number of advisers. The difficulty is that there are new ways of transmitting information and of communicating with people, which we have to examine. I do not think that one can take from it that we want to run down the advisory service; we do not. The contrary is true, but we have to have an advisory service that uses modern technology and modern systems of communication. We are doing the same in the Department. We are using information technology to communicate with many farmers in regard to premium payments. We find, ironically, that the response rate is better than when letters are sent out because the communication is more instant.

In relation to the strike, we did not want it to happen, as the people involved were our colleagues. There was a reason for the dispute, however, and the work to rule which was implemented caused problems for the way we did our business. We wish it had not go on for as long as it did, but that is the nature of these things. When they start it can be difficult to resolve them. We are conscious of the difficulty that it caused for individual farmers and others. Unfortunately, sometimes when disputes start that is a consequence. We have a good record in the area of industrial relations if you look at the history of the Department. We have not had many disputes even though we have a large number of staff. We have quite a number of trade unions involved as we have different streams. I hope this was a once-off event.

In relation to such issues as penalties and mistakes, I must emphasise our role as a paying agency. We have certain responsibilities in that regard and if we do not discharge them the Irish taxpayer is subject to disallowances. We have tidied up the penalty regime in recent years. We have clarified matters in regard to what draws a penalty or what would result in somebody being barred from a particular scheme. We set up an appeals office which is working well. The herd owner now has an opportunity to have an oral hearing. We also provide an opportunity for applicants to rectify genuine errors. The most obvious example is that every year we get several thousand unsigned applications. I think on average it is 3,000. If we took those at face value we would deem them ineligible but we always send them back as a matter of course to get them signed. We try and take a common sense approach. Many people feel that decoupled payments are the solution to all the current difficulties.

Deputy Carty's point in regard to special beef is an interesting one. This is an area we have tried to develop. At one stage we used to return the cards which sometimes caused confusion for the herd owner in regard to the retention date. We then used to bring it to their notice that they were not to release the cards until the day after the retention date. Part of the problem with the proposed solution is that much of the time we are also in the dark. We cannot establish the eligibility of the animal until after the two months are up. If there is a way around it we will certainly look at it. I take the Deputy's point. In some cases the herd owner tries to second guess when he does not know for sure. We can have the same problem. One does not know until a check has been made. You could have the reverse where the herd owner got rid of two animals that he might actually have needed. We have to watch out for that.

In regard to the overshoot on the special beef premium, we got some interpretations from the Commission so we have made some payments; potentially there was 20%, which we have mitigated down to between 12% and 13%. We are still in discussion with the Commission to resolve that particular problem. We are aware of how difficult it is and how important it is for people.

A point was made in regard to food labelling and the country of origin. I was involved in discussions with a certain organisation in 1976 or 1979 which tried to import Edam and Gouda cheese from Holland. It was a new development in this country at the time. We were forced by the Department to put the country of origin on the label. Mr. Malone was probably a junior civil servant at that time and I was outside of politics. A man from another party sat on the board with me who referred to the fact that the building across the road was known as Lemass's white elephant. That remark insulted me deeply. We were nearly forced out of the market because we were not putting the country of origin on the label. It had to be specified that the product was imported from Holland. That is still on the label today and we are still importing it.

I fail to understand why we have to set up a consumer panel to taste beef. I will taste it any day and say where it comes from. I would not be the best judge but I like a good steak and I like an Irish steak, as I think does Mr. Malone with whom I have travelled on previous occasions. If there is a hidden agenda in regard to not identifying food of Irish origin then let us hear about it. Do we want to protect the importers? Irish people have nothing to gain from these people. I feel very strongly about the country of origin label. I can go to any branch of O'Brien's wine shops tonight in this town and get wine from any number of different countries. It is possible to get Portuguese, Italian, French, Chilean and so on. Why can I not go into a supermarket and distinguish Irish beef from Brazilian, Dutch, British or whatever? What is the problem?

Perhaps the Deputy can take that up with the Minister.

I took it up with him and got nowhere.

In regard to the issue of decoupling, a 5% drop in sheep numbers and a 6% drop in beef will not have any influence on the price. We are in a different scene now. The home market was always the stabiliser for farming problems. The numbers went up and down whether it was in regard to beef, pigs or whatever. With the numbers dropping by 5% or 6% people might think that will be the case but I do not envisage it having any effect in future. We have seen numbers going up and down in recent years yet this did not affect the price to the farmer, nor did it influence the price to the consumer. I am somewhat worried about the proposals in regard to decoupling. As a national politician I cannot be parochial on this matter. The theory of coupling is grand; it is simple and it works well but there is an obligation on us towards new people in this area. We have to ensure that it is done in a proper way to protect the national interest in regard to production levels. If we do not have production related systems at farm level, farmers will opt out for the reason that has been stated - the economics of farming. That will happen and we will finish up with four green fields.

I agree with some of the views expressed by Deputy O'Keeffe, particularly in relation to country of origin and so forth. I take a different view, however, in regard to decoupling. It may create an environment in which we can produce a quality product rather than quantity. Some of the animals that are currently produced are doing a lot of damage to the Irish market.

Did Mr. Malone state that suckling might not be a profitable business in future? The big danger, if suckling is not a viable enterprise, is that we will lose a lot of good quality product from the market. We will have more Holsteins going into the local, European and British markets, which may not want them. Therefore, it is important that there is some attraction to continue the practice of suckling in this country.

Mr. Malone

In regard to the last point which is related to Deputy O'Keeffe's comments, we have built up a suckler herd of about a million in Ireland and it is an important production base. However, the difficulty is that if one just keeps the suckler cow premium coupled on its own, suckler cow production without the premium is unprofitable for many people. I am not saying which option we should go for because it is much too early to do so but one must examine the economics of the production.

I would argue about a 5% or 6% reduction in production in milk, cereals or beef. It can be critical. If one looks at any of the years in which we have had a problem, it can be 30,000 or 40,000 tonnes of beef which does not have a home which causes the problem. In the kind of business we are in, it can actually make the difference. I accept this cannot be looked at in isolation. One must look at what is happening in other countries and the balance in the European Union. The beef market in the EU is now relatively in balance. There is a huge consumer population. I accept what Deputy O'Keeffe says about it not being an easy market to penetrate. Just because it is on one's doorstep does not mean one can just walk in there. However, we must be present there since it is a better market than third countries which can be volatile from time to time. Equally, one must be sure it is the right 5% or 6%. One must not lose the quality end but rather the poorer quality.

In regard to the argument about labelling, if it was as simple as just looking at an Irish steak or a Brazilian steak, there would be no problem since it would be like comparing two different bottles of wine. However, that is not the case. Food has become much more sophisticated and the food chain is much longer. There are products which have been packaged and reworked and there is a sophisticated food service industry. That is the difficulty. The steak in the butcher's shop is not really the problem. The problem is a lot of the packaged products which have been processed and are consumer ready as well as the area of the food service industry. There is no single magic wand to solve this because, if there was, we would have applied it a long time ago. We accept that it is a huge issue in regard to the volume of imports. However, beef is not the worst in that regard; there is a huge problem with regard to pigmeat and poultry.

It is not a single simple homogenous market, which is why we must get behind this and see that the information which is being given to the consumer is genuine information which will help them.

The Scots and French are now branding their beef and the Americans are doing so on a voluntary basis. The Americans are also branding their fish. Why can we not start with two commodities and just brand beef and pigmeat and pioneer those areas? We need to look at the packaging and all that goes with it because they are the critical commodities.

Mr. Malone

The Deputy is correct. Scottish beef is a product which has a recognition and brand. It is recognised particularly in Smithfield. Our difficulty is with where our product is sold in Smithfield. It is sold into a different end of the market. One can brand it all one wants but I am not sure one would solve the problem.

I thank Mr. Malone and his colleagues for attending this interesting discussion on the statement of strategy and we look forward to hearing from them in 18 months' time. It was a pleasure having them.

The joint committee adjourned at 4.50 p.m. until 11 a.m. on Wednesday, 9 July 2003.