Seanad Éireann debate -
Thursday, 4 Mar 1993

Vol. 135 No. 5

National Stud (Amendment) Bill, 1993: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Kelleher

A coherent development plan must be drawn up for the National Stud. That would be the first step in the process of making the Stud a viable entity again. As I said previously the horse industry is one of our greater national assets and it is important that we are seen to be enhancing its image internationally. We must buy suitable stallions and advertise them correctly so that the features for which the Irish horse is famous will be reinforced internationally. Increased exports of horses would help, also, to make the Irish equine industry more viable.

The Minister might usefully increase the share capital and borrowing ability of the National Stud. I recommend this Bill to the House.

Mr. Cashin

I welcome the Minister, a fellow Cork man. For a considerable number of years the Irish National Stud in Tully, County Kildare has been the show case for Irish horse breeding. It has acquired a reputation as one of the best studs internationally, attending to many foreign buyers, and a source of much needed revenue. The Stud's success in the breeding of thoroughbreds is a source of national pride. Mindful of its role in the equine industry, the Stud organises a horse breeding training course for 25 to 30 people each spring. The course, which has been in operation for over 20 years, is recognised within the blood stock industry as the best of its type in the world. Graduates of the course manage some of the biggest stud farms in the world and trained winners in three continents last season. In recent times the Stud has also directed its attention to the tourist industry. The Japanese Gardens and horse museum attract 80,000 visitors annually.

To date the National Stud has operated without any State subsidy and now, in times of world depression, has requested assistance. We are obliged to support an enteprise which has been of such value to the State. I support Senator Henry's suggestion that the National Stud should consider the breeding and development of the show horse as a worthwhile project. The Irish show horse performs well, nationally and internationally, and a merger of the show horse and thoroughbred sectors of the industry would resolve the financial difficulties of both sectors to some extent. In my area of Cork northwest the sport horse breeding tradition has supplemented many a small or medium farmer's income and as a result one of the finest international show-jumping arenas in the country has been built in Millstreet. The Millstreet horse show has gained European recognition and within two months will feature a European contest of a different nature.

Miss Ormonde

I welcome the Minister to the House. Coming from Munster and being familiar with Cork, Kerry and Waterford I have a special interest in this matter and, though still cutting my teeth in the Seanad, I would like to contribute to this debate on the development of the National Stud.

I welcome this Bill. We had the choice of injecting more money into the National Stud or closing it down and I am glad the Minister has decided to generate activity there through an injection of shares and money. The Stud has been recognised worldwide for is success in the horse breeding and horse racing and for its development of equine education programmes. Graduates of its training course have trained winners in many parts of the world and it would be a great pity if we did not enhance that reputation. Farming is an ancillary activity of the National Stud and I know that its profitability is questionable at the moment. It is time to look at ways of generating farm related activity at the Stud.

The success of the National Stud depends on having a suitable number of stallions standing at the Stud to facilitate high class horse breeders. Anything that would help the racing world must be encouraged. Racing is a major industry in terms of horse breeding and of horse racing; one need only count the number of race meetings held through the country each year between now and October to realise that it is a great national asset.

I welcome the opportunity to talk about the museum and Japanese Gardens which are run by the National Stud and I hope the Minister will look at ways of promoting them. I am a career guidance teacher yet I know little about the Japanese Gardens or about the generation of employment at the Stud. The Department of Education might organise trips for school leavers who may be interested in apprenticeships or employment in the horse industry. The Minister might also look at ways of co-ordinating the activities of the Departments of Education, Tourism and Agriculture for the good of this important industry.

Mr. Wall

As a resident of Kildare, one of the most important horse racing areas in Ireland, I consider the support the Minister is giving to the National Stud as essential for the survival of the bloodstock industry.

We must invest in the bloodstock industry on a national basis and I support this Bill. When buying bloodstock for the National Stud we must be prudent and responsible aiming for quality rather than quantity of stock. The time form ratings of classic winners indicate that a rating of between 120 and 140 has produced the highest percentage of classic winners. Consideration should be given to that fact and to expert advice which no doubt the Minister and the National Stud executive will seek when purchasing new horses.

The Minister might consider additional development of the Stud's training course. The course, to my knowledge, carries a registration fee of £1,000 which might be prohibitive to persons on low income. A considerable number of the 38,000 or 39,000 people involved in the racing industry in Ireland are on low incomes and the Minister might ensure that persons interested in taking the course are not debarred for financial reasons.

The farm, as already mentioned, is a viable entity and would help to ensure the viability of the National Stud as a unit. We might look at what benefits could be derived from the farm for the racing world. Trials to ascertain the types of wheat, oats or grasses most beneficial to horses could be carried out there. The Stud farm could become a basis for the further development of our bloodstock industry and in that regard we must ensure that the Stud retains a permanent rather than a part-time workforce. Permanent workers are required to ensure that the knowledge gained from constant contact with the racing fraternity will be passed on to the benefit of those involved in the industry and of people visiting the Stud.

I am delighted that the Minister is considering developing the present Stud museum or building a new one. Last year I visited Tralee and saw the benefits which the heritage centre there, a magnificent structure, has brought to the town. Similar benefits could be created at the National Stud and should be done so urgently. An attractive Stud museum would be of enormous benefit to tourism and to the racing fraternity. One can see the potential for tourism at the Stud in the substantial figure the Minister gave — 80,000 visitors to the Stud last year. In view of the proximity of many Kildare racecourses to the National Stud — the Curragh racecourse is about three miles away, the Naas course is about 11 Miles away and the famous Punchestown course is about ten or eleven miles away — it should be possible to market a block ticket which would admit persons to a racecourse on a racing day and also to the National Stud. An offer like this might attract visitors interested in racing and the Stud. It could also increase the gates at the racecourses in Kildare. I ask the Minister to look at the situation with the Bord Fáilte board and to ensure that if such a deal was implemented it would be of benefit to the National Stud and to Kildare racecourses.

As a Kildare follower of racing I support this Bill. It could be said that Kildare is the home of racing.

I ask the Minister to consider the position with regard to bloodstock which is of the highest calibre. Many small breeders, in most cases small farmers, depend on this to supplement their income. We do not want to see the cost to the small breeder increase because of a sudden input of finance. The National Stud must be seen to be involved at all levels of our racing industry. I hope the Minister will look at the points I have raised.

An Cathaoirleach

Regrettably no winners from Senator Wall.

Mr. Roche

I welcome the Minister to the House. Although this Bill contains a modest set of proposals, I welcome its introduction to the House. The National Stud, since its inception, has served this country well. Last year the Oireachtas Joint Committee on State-Sponsored Bodies produced a report on the National Stud and some of the issues raised in that report are addressed in this Bill. A number of important issues were raised at the time and perhaps the Minister could deal with some of the outstanding issues on Second Stage.

For example, one of the concerns of the Oireachtas joint committee was the need to review the corporate objectives of the National Stud. It might be an ideal opportunity for the Department to consider doing this in the context of this Bill. A considerable amount of time has passed since the National Stud was established and times have changed dramatically within the industry. Now that the National Stud is being refinanced this is an ideal opportunity for the Department to look at this issue, especially when there was agreement to do so in the Dáil last year.

The second issue which concerned the committee was the apparent lack of planning within the National Stud and, in particular, the lack of a long term corporate strategy. The Oireachtas joint committee recommended two specific things. First, that a five year plan be produced and, second, that a detailed forecast on a current year basis be provided by the National Stud to the Department. As I understand it, the five year plan has been produced. The Minister referred to it in his speech and it is currently under examination in the Department.

Given the way the National Stud has operated over the years, it would be a good idea if there were regular corporate reviews of its operations. If the five year plan, which is currently available, was operating on a rolling basis we could examine its operations at departmental level and at the appropriate level in both Houses.

Another issue which the Oireachtas joint committee was concerned about was training. We suggested that there should be a joint financial arrangement between FÁS and the National Stud with a view to the Stud becoming a training centre, expanding its training activities while being funded partly by FÁS. This recommendation was made in the Oireachtas joint committee report and I would like to hear the Department's view on it. It is an important area where there is employment potential and where the Stud has proven its excellence in the past. A joint operation between FÁS and the National Stud would be beneficial.

The National Stud owns important heritage assets. The Minister referred to the museum, which is a little gem but its potential is not fully realised. The Japanese Gardens is a long established tourist asset. The Oireachtas joint committee felt there was scope for greater cooperation between Bord Fáilte and the stud with a view to marketing these minor, but nonetheless significant tourist assets abroad.

The committee was also concerned about the complement of stallions at the National Stud and the necessity to maximise their earning potential. The committee believed that the company should reconsider its policy of standing national hunt stallions at the Stud if they were taking up capacity which could be allocated to more remunerative flat stallions. I am not well versed in the esoteric activities in question so I do not wish to expand on this, but when it comes to using the resources at the National Stud it would be prudent if, from time to time, we looked at more cost effective ways of using them.

Another matter of concern to the committee and particularly members who were more familiar with the racing aspects, was the question of a quality stallion, how it should be managed, how the financial burden which would be associated with it could be overcome and the possibilities of joint ventures. We were also concerned about the statutory limit of borrowing. We suggested that it should be replaced by a requirement that the company get ministerial approval for its borrowings. This has been dealt with in the Bill which is following the recommendations in the report of the Oireachtas joint committee. This is a welcome development and one I wish to endorse.

There were two other issues of concern to the Oireachtas joint committee. One was the discussion that the National Stud could be considered for privatisation. I would like to put on record that it was the unanimous view of all members of the committee that this would be an inappropriate state body for privatisation; I am sure that view is shared by the Minister and his Department. The second issue of concern to the management of the National Stud centred on decisions being made by Kildare County Council about a road. I am not sure if that matter has been resolved, but last year there seemed to have been a deficit of information about the proposals of the local authority in this matter. Although it is not directly related to the Bill, the environmental impact of that proposal could have had a significant effect, not just on the location of the stud but on its primary activities. Could the Minister clarify if this matter has been resolved?

I welcome the Bill and compliment the Minister on its introduction. While it touched on a number of important points raised by the Oireachtas joint committee, there are one or two issues on which neither House has heard from the Department. Perhaps the Minister could enlighten us.

Minister for Agriculture, Food and Forestry (Mr. Walsh)

I take this opportunity to thank the Senators who contributed to the debate on this Bill last week and this week. Each Senator made a very helpful and constructive contribution and suggestions which will be extremely helpful. I can guarantee they will be taken into account by myself, and by the board of the National Stud.

This Bill proposes to increase the borrowing powers of the Stud from £0.5 million to £5 million and its share capital from £5 million to £10 million. The power to borrow will continue to be subject to the consent of the Minister for Finance and of the Minister for Agriculture, Food and Forestry. There is also a technical provision concerning the control of staff pay included in the Bill.

A number of Members suggested last week that in addition to thoroughbred breeding the National Stud should get involved in the sport horse sector. While I have no objection in principle to this suggestion, I would have some concerns about its feasibility given the very different cost structures which obtain in the two sectors. At the lower end of the scale in the thoroughbred sector, there are so many no sale appendages one would have to question that divergence, because sport horses are making very considerable sums in many cases. However, if the National Stud were to get involved in sport horses it would have to look for a minimum stud fee of at least £3,000 to cover its costs, which is far in excess of the going rate in the general sport horse industry.

Members will be aware that a range of schemes have been introduced under the operational programme for rural development to assist the sport horse sector. One of these schemes offers generous grants to stallion owners to encourage them to purchase top quality stallions for use in the sport horse sector. These stallions are located throughout the country thereby reducing the time and transport costs involved in having mares taken to them. As I have already stated, I have no objection in principle to the National Stud becoming involved in this area.

I like Senator Henry's suggestion that specimens of native Irish breeds should be maintained by the Stud in its visitors' section and I will be recommending to the board that consideration be given to this idea. It would be an additional attraction for visitors to the Japanese Gardens, the museum and the core activity itself. They have a large herd of cattle which I hope they will make optimal use of from now on. If they had some Connemara ponies, Irish draught and other native breeds it would be another tourist attraction. There is a considerable amount of land in the National Stud — approximately 800 acres. It has not been very remunerative up to now and I believe it could be used for that purpose.

The question of the proposed Kildare by-pass was also raised by a number of Senators. I have been assured by the Department of the Environment and Kildare County Council that every effort has been made to minimise the effect of the by-pass on the National Stud. I have been assured that there is no realistic alternative to the proposed route and while it will cause some disruption to the Stud, I believe that the Stud is capable of coping with these difficulties. I understand that about 80 acres of the 800 acres are affected. Senator Dardis and Senator Roche raised this matter. Senator Dardis was also concerned that the by-pass might direct visitors to the Stud and away from Kildare town. I will draw the attention of the Minister for the Environment to this concern.

Senator Fahey expressed disappointment at the delay in the provision to increase the Stud's power to borrow. While it is true that this proposal has been under consideration for some time, it must be realised that the purchase of stallions is high risk business and to do so on borrowed money in a period of high interest rates would compound the risk. I see the borrowing facility of benefit principally to enable the Stud to move quickly when a suitable stallion becomes available. Unless a source of permanent capital is available to be tapped, the purchase of a stallion with borrowed money would not, in my view, be advisable.

The point has been made repeatedly that in regard to the quality of the stallions a well known name would be required. The Stud should wait for the most worthwhile name before endeavouring to purchase. The delay might have been gratuitous in that the price of bloodstock generally has come down very substantially since the Arabs were more heavily involved. While I am not making excuses for the delay, it might have worked to our advantage in this case.

I will also pass on to board members a number of recommendations in regard to sponsorship, syndication or partnerships in the ownership of stallions. At present, a number of stallions are owned by outside interests. If you want to get a top quality stallion, you have to pay a considerable sum of money and it would make sense to have some form of syndication.

I was very interested in the suggestions on training. It is seldom, if ever, you find a student, on completion of the course, not being able to find a job. A number of students have been successful in getting very high profile jobs at a number of prestigious international studs, including the British National Stud. I will be discussing this with the board. I know that the board and management are already in contact with educational institutions and the Department of Education to enlist their support to broaden the base of this course and make it more exciting. In most courses in agricultural colleges, for example, and in a number of vocational schemes, FÁS is directly involved and there is a degree of subsidisation. I will also look at that matter.

Improving the tourist amenity of the Stud as well as the core activity was also referred to. There is no doubt that the Japanese gardens are outstanding. The Stud's capacity to cultivate and look after rare plants is as good if not better than its capacity to breed thoroughbred horses. I have always enjoyed visiting the Japanese Gardens and the visitors section of the Stud, especially when there were race meetings in the area. That suggests the possibility of linking tourism with race meetings.

Mr. Dardis

I hope the Minister was not suffering from withdrawal symptoms after the races.

Mr. Walsh

I was going to make the point that I always ensured my visit to the Stud was before the race meetings rather than afterwards. I am glad to say that the Stud has invested a considerable amount of money in the Japanese Gardens and Bord Fáilte has made a grant of £300,000 available. There is a total investment of £600,000 in the Gardens and I look forward to that improved facility being available to tourists this summer. I know that the board and management have looked at better ways of advertising this unique facility because many people are not aware of its existence. You do not see signposts for it and there is no reference in literature to the Japanese Gardens.

The horse museum is fascinating. There are many artifacts and memorabilia relating to the horse industry. Arkle's skeleton has been mentioned and we are still searching for Shergar's skeleton; maybe some day we will put that there too. We could do more, particularly in the area of videos. I enjoy watching videos of the great Irish bred, owned and trained Gold Cup and Grand National winners.

A number of other matters were raised during the debate, including the accounts. Generally accounts are a bit behind the times. Only recently we laid in the Library in the House of the Oireachtas, the 1991 and 1990 accounts. The 1992 accounts will not be available for a while but the board is planning to produce draft audit accounts on a current year basis so that financial details will be completely up to date in the future. I welcome that because we hear of many organisations and companies getting into financial trouble, deep trouble, before you know it. It is important particularly in the case of State bodies, that the Oireachtas is kept up to date on how matters stand financially.

This Bill should be seen in the context of a five year plan for the Stud. The five year plan has been mentioned by a number of people. Senator Kelleher talked about the desirability of having a plan and a programme. One of the things I asked the new board to do was to update this five year plan because it was good but it became dated. Apart from the core business and the impact of the plan, there is the question of the farm and the type of farming to be done there. Senator Dardis referred specifically to that matter. He is a farmer in the locality and he said it was possible to make money from farming in County Kildare. With 800 acres, in County Kildare, it is difficult to see, under certain farming enterprises how you could not break even but to lose money there raises questions because even if the land is leased you should at least come out on the credit side.

I have asked the board to update the five year plan and I should have it shortly. The plan will consist of a number of elements. The first priority will be the overall financial viability of the core business in the Stud. I am very concerned about the financial activities of State bodies under my aegis. I see no reason why State bodies should allow their finances to get into such a serious situation that the only recourse is for the good old taxpayer to bail them out. If the finances are going in a certain direction, corrective action should be taken at an early stage. The second priority will be the rationalisation of the farm activities. I feel very strongly that it should be possible to make an income from that asset. The third priority is updating the tourist attractions. The fourth priority will be having resources available for the purchase of stallions, in order to ensure that the Stud continues its valuable contribution to improving the thoroughbred sector. There are about 25,000 people directly and indirectly employed in this section and there is potential for a substantial increase in those numbers. There is also a capacity to increase exports and the number of jobs in the industry.

I want to thank Senators for their constructive contributions which will take into account, and I will ask the board to take them into account.

Question put and agreed to.

Agreed to take remaining Stages today.