I am pleased that we have here before us this Second Reading.
This Bill, if enacted, will provide an important complement to other measures already taken to rationalise the organisation of the potato sector. The prime objective of the overall effort is to improve the quality of domestic supplies of potatoes reaching the market place. We are all well aware of the poor organisation of the sector. The distribution system from producer to retailer is not organised in an orderly way. Marketing tends to be haphazard, consisting really of individual efforts by producers, packers, merchants and others. We are seriously lacking in adequate facilities for the storing, grading, packing and processing of potatoes.
A survey carried out by the Department of Agriculture last year showed that less than 50 per cent of the potato crop had adequate storage facilities, particularly long-term storage. This situation gives rise to losses and wastage which we can ill afford. A characteristic of our potato industry is the fluctuation in supplies which can occur from one year to the next. So we frequently have a year of short supply and high prices followed by a year of excess supply and poor prices. Even within a season in which there is a reasonable equilibrium between supply and demand there is often over-supply early in the season and a shortfall towards the end of the season indicating our storage problems.
The consequences of these organisational weaknesses are readily apparent. High quality, well-presented potatoes and potato products are gaining inroads into our domestic market. In fact £25 million worth of potatoes and potato products were imported in 1982. The corresponding figure for 1983 was £17 million and for this year it is estimated at £27 million. The bulk of this figure comprises of processed potatoes, primarily potato chips.
This situation is a matter for serious concern. However, it has to be understood that, under EC rules, there is intra-Community free trade in potatoes as there is in other commodities. This means that we have the same freedom to sell our potatoes in other member states as they have to sell in this country. The reality, however, is that due to our poor standards generally, not only are we unable to export ware potatoes to other member states, but some of those states, notably the Netherlands, are able to compete successfully with our produce on our own home market. Until 1980 we were shielded from this international competition by our plant health regulations. Following the implementation of the EC plant health directive in 1980 our producers face the full rigours of EC competition.
The industry must adapt to this situation at production, distribution marketing and processing levels. Failure to do so will inevitably lead to even greater volumes of imported potatoes and potato products. After all, we have many advantages. Many areas in the country have excellent soils and climatic conditions for potato growing. High quality home grown certified seed is available and the control, research and advisory services of the Department of Agriculture, An Foras Talúntais and ACOT are readily available to producers.
The reorganisation and development of the industry is primarily a matter for the commercial forces which operate the sector. The Government can help by providing conditions and promoting a climate wherein the sector can ultimately compete more efficiently and effectively. I referred at the beginning to other measures already taken. The Food Standards (Potatoes) Regulations were introduced in 1977. These regulations lay down that potatoes for sale should be graded and in good condition. The enforcement of these regulations which apply also to imports, has brought about some improvement in the quality of Irish potatoes offered for sale. Nowadays, in the market place product presentation is becoming increasingly important. In this connection I would urge producers to pay particular attention to the selection of potato varieties which have good storage quality and which look attractive to shoppers. A recent survey indicated that 70 per cent of the housewife's decision-making is based on the visual impact of food.
The State is providing financial aid towards the development of a national potato co-operative. The task of establishing this co-operative was undertaken by the Irish Co-operative Organisation Society in conjunction with the Irish Farmers' Association. I understand that 12 local potato producer co-operatives have been set up and these form the constituent bodies of the national co-operative. Much remains to be done by the co-operative. It will be endeavouring to get the fullest support from the local co-operatives by way of channelling their entire output through the co-operative. It will also be looking to the local and regional needs in terms of grading, handling, packing and storing facilities.
I wish to refer briefly to grant aid which is available. Under an EC regulation on the marketing and processing of agricultural products, grant-aid may be obtained from the European Agricultural Guidance and Guarantee Fund, FEOGA towards the cost of certain approved projects which are aimed at improving structural efficiency in the marketing and processing of agricultural products in the Community. Successful applicants must have the approval of the member state, which must contribute a minimum national grant of 8 per cent of the cost of the project, 16 per cent for projects in the disadvantaged areas of the west of Ireland, in order to attract the maximum level of EC grant which amounts to 25 per cent, 50 per cent in disadvantaged areas.
On-farm production projects involving modernisation, rationalisation or development of individual farms are not eligible for consideration under this FEOGA projects scheme. Under the farm modernisation scheme however, aid is available for the construction of potato stores on the applicant's farm. Farmers in the "development" category are eligible for grant-aid of 25 per cent, 35 per cent in the disadvantaged areas. Those in the "commercial" category are eligible for an interest subsidy equivalent to a capital grant of 15 per cent payable over seven years. The "other" category is eligible for grant aid of 25 per cent.
The Bill before the House provides for a system of registration of all who grow ware potatoes as distinct from seed and other potatoes for sale and of all who pack such potatoes. It will be illegal to sell potatoes other than those grown by a registered grower or to sell packaged potatoes other than those packed by a registered packer. A packer or a grower who packs will be required to show his or her registered number on the pack. About 80 per cent of the trade in 25kg packs is met by growers who are also packers. The proposed registration system will facilitate trace-back of substandard potatoes through the sales chain, as middlemen who trade in potatoes but do not pack them, will be required to put their names and addresses or other approved identification on the packs. This will make it easier to take the appropriate action against those who pack poor quality potatoes. This is the biggest problem facing officers in the Department, that is because of the lack of registration they are unable on many occasions to trace back the potatoes to source. It will encourage the collection and dissemination of information, for example, with regard to acreage planted, varieties, etc.
The enactment of this legislation will not solve all the problems associated with the potato industry. It will be no substitute for the action that is required by the commercial sector. I am confident, however, that the provisions of the Bill, in conjunction with the other measures I have mentioned, will provide an overall framework for improving the efficiency and competitiveness of the potato sector. Before concluding, I should like to add that one of the reasons why the Bill will succeed is that the demand for the Bill did not come from parliamentarians but from the people involved in the industry — the growers, packers and the processors. These people demanded this and discussed it in detail. In some cases it is not going far enough, but, by and large, they are satisfied with it.
One of the points which was raised in the Dáil was the problem of the country of origin. Members on the other side of the House said that putting the country of origin on the packs would be a good idea. I had the same idea but ran into some difficulties with it. However, this problem is still being examined and it appears that there is a way around it; as this is a registration Bill, it cannot come under it. It now appears that it can be brought in under other legislation, for example, the Regulations under the Food Standards Act, 1974.
I commened this Bill to the House.