An Bord Bia Bill, 1994: Second Stage.

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

When I addressed the House on 11 May 1994 on the subject of the Report of the Expert Group on the Food Industry I indicated that the Bill to establish An Bord Bia had just been introduced to the Dáil and that I hoped to bring it before the Seanad very quickly. I now have great pleasure in doing that.

The Bill stems from one of the two central recommendations made by the Expert Group. This was that a new single food promotion and market development agency should be formed by amalgamating CBF and the corresponding units of similar agencies dealing with other sectors of the food industry. The Expert Group's other main recommendation was that an integrated development programme for the food industry should be established under the new round of EU Structural Funds. As I have already advised the House, this is being done.

Before dealing with the provisions of the Bill I should like to remind the House that the Expert Group on the Food Industry dealt in some detail with the institutional framework within which the industry operates and made several recommendations for improvements in that area. However, it took the view that, by and large, those improvements could be implemented administratively.

Consequently the Bill focuses on one element only of the institutional framework, that of promotion and market development. This is, however, as the House will agree, an element of vital importance. Our food industry has been making rapid progress but in the context of CAP reform and of the GATT agreement it faces major competition and challenges. The Government is determined to provide properly focused State agency back-up for the industry in its efforts to develop and expand markets, particularly in Europe. An Bord Bia is the instrument designed to achieve this.

In summary, the Bill proposes in the first instance to combine CBF and the food unit of ABT, and to include certain export promotion functions of An Bord Glas. Provision is also made for the possible inclusion of other relevant agencies' food functions as and when appropriate.

In the drafting of this legislation, particular care has been taken to maintain the structures, mechanisms and market information systems that have worked well in CBF. In this connection it will be noted that a subsidiary board for meat and livestock is specifically provided for. I do not envisage additional Exchequer expenditure arising from the legislation.

With regard to the text itself, part 1 contains, in sections 1 to 5, fairly standard provisions relating to the short title, interpretation of the main terms used, the making of ministerial orders and provision for expenses incurred in administering the Act, to be met from voted moneys.

Part II of the Bill deals with a range of matters relating to the establishment, organisation, procedures and functions of the new agency. Section 6 provides for the establishment of the agency and for the dissolution of CBF on the establishment day to be fixed. Of course, this does not mean that any of CBF's current functions will be abandoned or lost sight of. On the contrary, it is intended that these functions will be strengthened and extended to other sectors of the food industry.

Section 7 sets out the general functions of the board while more specific functions are contained in section 8. The specific functions which are without prejudice to the generality of section 7, and, therefore, non-exhaustive, cover the whole range of activities appropriate to the type of agency envisaged. These include promotion, market intelligence, market development, symposia, publications and quality assurance.

Section 9 provides for the transfer of certain functions of An Bord Glas to the new agency. An Bord Glas itself will remain in place; only those of its functions that relate to the export marketing of edible horticultural products are being transferred. The remit which An Bord Glas has in relation to the home market is much wider than that proposed for An Bord Bia. It also has substantial functions in regard to non-edible horticultural products such as nursery stock. Those activities will not be transferred.

In the same section, there is provision for the assignment to An Bord Bia, at a later stage, of other functions related to food marketing. This would cover, for instance, the case where, following the review of BIM's functions, currently in progress, it might be decided to transfer to An Bord Bia responsibility for fish as a food. This power could be exercised only with the consent of other Ministers responsible for bodies from which the transfer of functions might be proposed, and with the specific consent of the Oireachtas.

Section 10 allows for assignment of additional functions to the new agency where these are incidental to or consequential on the functions assigned by the Bill.

Section 11 requires An Bord Bia to act in co-operation with other bodies that have functions relevant to its own. What is intended here is that close and effective co-operation will be maintained between An Bord Bia and An Bord Tráchtála, especially with regard to the use of facilities abroad and, indeed, with An Bord Glas and BIM.

Section 12 empowers the new agency to charge for its services. The intention is that fees under this section will be charged for services provided to those sectors which do not contribute to the new agency by way of levy. It is not intended that the section should operate as a means of applying a double levy system. The level of fees to be charged would be drawn up by the board but subject always to ministerial approval. While, obviously, the level of fees should not be exorbitant or act as a deterrent, at the same time I would expect them to make a substantial contribution to An Bord Bia's budget. I should mention here also that I expect the board to benefit substantially from EU funding to be provided under the Structural Fund Food Sub-Programme.

Section 13 imposes on the board the obligation to set up a subsidiary board for meat and livestock which would maintain and continue the current functions and focus of CBF. It also empowers the board to set up, with ministerial consent or on ministerial direction, subsidiary boards for other sectors. As my colleague the Minister for Agriculture, Food and Forestry, already indicated in the Dáil, in view of the emphasis which the expert group on the food industry placed on the prepared consumer foods sector and the very specific recommendations which it made in the context of the establishment of the new agency, it is expected that the board will move very quickly to set up a subsidiary board for that sector. It is also intended that levies collected from particular sectors, for instance those of meat and livestock, should be used for the benefit of those sectors. Subsections (1) and (5), together with the right of the Minister to specify conditions under subsection (3), will allow that procedure to be observed.

Sections 14, 15 and 16 deal with the appointment and terms of office of the chairman and members of the board and subsidiary boards. The essential qualification for membership is that the persons to be appointed should, in the case of the main board, have knowledge or experience of the food industry and, in the case of a subsidiary board, of the particular sector for which it is being established, but with all appointees being required to have knowledge of the consumer requirements. The appointments to the main board will be made by the Minister and those to the subsidiary boards by the board. The provisions in relation to the meat and livestock subsidiary board mirror those currently applying in CBF. In that way the aim of preserving in the meat sector the focus and producer links that have worked well in CBF will be achieved. Those provisions also take account of the important CBF levy arrangements that will be carried into An Bord Bia, and of the representational pattern which that implies. To ensure effective links between the main board and the subsidiaries, the chairmen of the subsidiary boards will be appointed from the membership of the main board.

Sections 17 to 20, inclusive, deal with a number of matters common to the board and the subsidiary boards such as eligibility of outgoing members for reappointment, conditions of office, casual vacancies and remuneration. Remuneration and allowances for expenses will require the consent of the Minister for Finance.

Sections 21 and 22 cover accounts, audits and annual reports as well as the supply of any information about performance of the functions of the board and of the subsidiary boards that the Minister may require. Section 23 allows the board to borrow money but only with the consent of the Minister and of the Minister for Finance. Section 24 lays down some framework provisions as regards meetings and procedure within which the board, or a subsidiary board, will be free to determine its more detailed procedures. Section 25 contains stringent provisions to guard against conflicts of interest on the part of members of the board or of a subsidiary board or of the staff of the agency. Section 26 will prevent incorrect disclosure of information by any of those persons. Section 27 allows investment of funds by the board in the manner of a trustee.

Section 28 provides for setting up committees to assist and advise the board or a subsidiary board. This is similar to the existing committee system employed by CBF and which has proved useful and effective in practice.

Under section 29, the board and the subsidiary boards are required to comply with any ministerial policy directives. This is a standard provision for bodies of this kind but one which I would not envisage being used to any significant extent. This Bill sets a clear framework for the board and it should be allowed to operate freely within that framework. Thus the power under this section would be used only for necessary policy directives.

Section 30 empowers the board to accept gifts but only if any trusts or conditions attached would not be inconsistent with the board's functions.

Passports, for instance.

Section 31 applies to the board, the subsidiary boards and the staff of the new agency, the standard provisions to cover the situation where a member becomes a Member of either House of the Oireachtas or of the European Parliament.

Sections 32 and 33 enable the board to appoint a full-time chief executive and other staff members, with remuneration, allowances, terms and conditions subject to national or governmental guidelines and ministerial directives. Section 34 enables the board, or a subsidiary board, to perform its functions through authorised staff members.

Under section 35, the board is required to draw up for its staff a superannuation scheme or schemes which will be submitted to the Minister and, after approval, laid before each House of the Oireachtas. It will be noted that the preexisting superannuation entitlements of staff transferred to An Bord Bia are safeguarded under section 35 (7).

Section 36 provides for grants-in-aid to An Bord Bia from Exchequer funds, as is already the practice for CBF and ABT. While it is expected that the greater part of the new agency's resources would come from levies, fees for services and EU Structural Funds, there will also be an annual grant-in-aid.

Part III of the Bill, dealing with levies on livestock and agricultural products, is largely based on existing legislation relating to CBF, legislation that will become inoperative once An Bord Bia is established and CBF dissolved. The specific amounts of levy per animal shown in section 37 (2) are the present statutory amounts operated by CBF, and the present practice whereby those amounts are charged to the vendor of livestock for slaughter is taken up under section 38 (7). It is also present CBF practice, however, to collect a voluntary, i.e. non-statutory, levy from slaughterers and that latter charge is not intended to be passed back to the vendor. Sections 38 (7) and 38 (8) taken together enable the Minister to put the latter non-statutory levy on a statutory basis. It is the intention that this would be done in the event of the voluntary arrangement being discontinued or not working satisfactorily; however, any order varying the current statutory levy amounts would, in accordance with section 37 (4) be subject to a resolution of each House of the Oireachtas as also would any order on recoverability under section 38 (8).

The other provisions of sections 37 to 44, inclusive, relate to the mechanics of the levy on livestock, such as records, offences and penalties, powers of authorised officers, estimation of levy where necessary and evidence in proceedings. These are similar to existing provisions governing current CBF levy collection, except that under section 38 (10) (c) cancellation of the stamps by means of which levies on exported animals are paid will be effected by staff of my Department instead of Customs and Excise staff as is the case under the existing CBF legislation.

Section 45 provides for a levy on agricultural products. This is to cover the situation where it might prove more convenient or desirable in sectors other than the livestock/meat sector to introduce levy arrangements for promotional purposes rather than to charge fees. An order under this section would require prior consultation with the producer, processor or trade interests concerned, as well as a resolution of each House of the Oireachtas.

In Part IV of the Bill, which deals with transitional provisions, section 46 means that the initial staff of An Bord Bia would be the existing staff of CBF together with An Bord Tráchtála staff members designated by ABT itself. As regards the latter, the intention would be that the current food unit of ABT would be transferred to An Bord Bia on the establishment day. As I indicated earlier when speaking about section 35, transferred staff will run no risk of losing out on superannuation rights. Neither will they be at risk as regards their remuneration and conditions of service. Section 47 provides that they will be no less favourably treated than before in those respects. I do not anticipate that the transfer of functions from An Bord Glás would necessitate any transfer of staff from that organisation.

In section 48, the central provision is that in subsection (1), which transfers CBF property to An Bord Bia. The effect of the reference in section 48 (3) to the Finance Act, 1985 is to exempt An Bord Bia from liability for stamp duty in respect of any transferred property.

Section 49 transfers the rights and liabilities of CBF, as well as any pending legal proceedings it might have, to An Bord Bia. Since ABT is not being dissolved, the transfer of any rights and liabilities from that agency will be dealt with administratively. Section 50 provides for the final audited accounts of CBF, after its dissolution on the establishment day, to be laid before each House of the Oireachtas.

The Schedule attached to the Bill, relating to levy on livestock exported live, deals with the forms of adhesive stamp to show that levy has been paid, as well as the document to which they would be affixed.

As I indicated at the beginning, the establishment of An Bord Bia is but one element in the programme which the Expert Group on the Food Industry set out for the development of the industry over the next five years or so. It is a key element, however, in that without it the other measures recommended by the group, almost all of which are now at various stages of implementation, would not have their full or optimum effect. I therefore commend the Bill to the House.

This area is very important and fundamental to our economy. There is great potential for job creation if we can capture the markets available to us in Europe and further afield. The Bill is disappointing. It derives from the recommendations made last year by the Expert Group on the Food Industry. As a means of making these recommendations concrete, the Bill has a number of defects. Like other Bills presented by the Government, it is excessively bureaucratic. The Government has a fatal tendency to find the most bureaucratic way to introduce what I consider to be easy regulations. The Bill illustrates that Fianna Fáil has given way to the Labour Party, which always seeks the most bureaucratic way possible of doing what it sets out to do.

This was clear from the Minister's speech. I have rarely heard an introductory speech say so little about the inspiration behind the measures taken. It is appalling that there was no suggestion of any notion of enterprise or development. The Minister blandly told us that the Culliton report had made certain recommendations, as had the expert group. He then gave us an expanded version of the explanatory memorandum which accompanies the Bill. He did not give any of the reasons for what is in the Bill. I suspect this was for a good reason. God knows there was enough debate on it. Had the Minister waited longer, he might have found a few more things to throw in.

I can see no plan in the Bill. It is a random collection of what exists. It will not change the world as far as the promotion or marketing of agricultural produce and food is concerned. If the Bill did nothing but change the style of the organisations, it would not be too bad. However, it is important to bear in mind that the recommendations of the expert group, on which the Bill is founded, were made as part of a strategy. There is other material in the group's report but the Bill bears little relation to much of it. There is no indication that the Government is pursuing any particular strategy.

When the Bill was published, while it had some defects, it was a good and well articulated. Those who produced it have every right to feel disappointed and let down by the way it has been brought forward, both in the Dáil and the Seanad. I was expecting to hear more from the Minister, as a result of the debate which took place on the Bill in the Dáil.

The group highlighted the absolute necessity of reducing seasonal imbalances in beef and milk production, if we are to maximise added value from food production. It recommends that we should aim to reduce the percentage of milk used for butter from its present level of between 60 to 65 per cent to between 50 to 55 per cent over a three year period. It also recommends that we should reduce our share of European Union butter production from 8 per cent to 6 per cent and try to increase our share of semi hard cheese production from 3 per cent to 5 per cent.

There is nothing in this Bill, or anywhere else, to indicate that the Government has taken any action, either at European Union or national level, to bring about these most important changes. If we do not do so, then it does not matter what we call the board, how it is appointed or the amount of funding it will receive — it will not make much difference to the value added by our dairy sector to the economy.

The group recommended that we should aim to ensure that 20 per cent of slaughterings would take place in each of the first three quarters of the year. Very little progress, if any, has been made in that direction since the report was published. The excessively rigid retention period, which is still insisted on under the beef premium scheme, is a major obstacle to achieving such a pattern in our beef output. As repeatedly pointed out to the Minister, those excessive retention periods are a very real obstacle to the ordinary marketing of our beef and, therefore, to expanding and increasing added value in food production.

The beef industry is still trying to come to terms with the fall out from the humiliating defeat of the Minister in the carcass weight issue; a defeat which we could all see staring him in the face long before he even recognised that a problem exists. This is another factor which will militate against the kind of strategy set out by the expert group and which makes this Bill irrelevant in terms of any strategy to develop the food industry.

The expert group proposed that development agencies should consider supporting final processing and marketing activities abroad. There is no evidence that anything of that kind has been undertaken or contemplated by our development agencies, we all know that they are only now finding their feet after the erroneous and useless shake-up which the Department imposed on them. We now have the IDA and other organisations; committees spawning in the bowels of the Department of Enterprise and Employment; the county enterprise boards and other boards at county level which, as far as I and most people are concerned — and I am a member of a couple of them — duplicate each other, which is a great mistake. I expected that at this stage the Government and the Minister would have seen that these boards serve a useful purpose but that four or five of them cannot duplicate each other's activities in the same area.

The evidence is that, so far, nothing has been done which even goes in the direction of the group's recommendations. The expert group recommended the creation of a substantial branded product development fund from extra European Structural Funds. The report was published in April last year but nothing like this has happened to date. On the contrary, we now know that the amount of Structural Funds will be considerably less than the amount which the Government dishonestly claimed that we would receive, even at the time that the expert group's report was published.

We also know that the amounts allocated to the various programmes set out in the spurious National Development Plan are in danger of being cut but of course, we do not know from where the cuts will come. Fianna Fáil, Labour, the Minister for Enterprise and Employment, the Minister for Agriculture, Food and Forestry, the Minister for the Environment and the Taoiseach have all refused to give even the slightest idea of which part of the National Development Plan will be cut by 8 to 12 per cent or whatever percentage is forced on the Government as a result of its stupidity in the handling of the Structural Funds episode.

The climate has changed utterly since the day the expert group proposed we should have a substantial product development fund from extra EU Structural Fund resources. We now know that there are no extra resources and, as far as I can see, no consideration has been given to the creation of a branded product development fund. Another important piece of the strategy set out by the expert group on food production has been totally ignored, another reason the Bill has serious defects.

Neither the operational programme for the food industry nor any other operational programme has been published. We do not know the kind of development funds the Government has in mind for the food industry or any other sector of the economy. We have no idea of what the development climate will be for the next new body which the Government intends to cobble together for the various bodies now in existence. We do not know the kind of framework under which this body will work. How, therefore, can the Minister expect this House to give him its views on the body or how can we have an informed view of the kind of role which it should have?

The food industry is not the only sector in which there is uncertainty in the context of this infamous and spurious National Development Plan. The expert group said a number of wise things about the necessity for port development. The Minister for Agriculture, Food and Forestry, should look again at the report as he has a constituency interest in this matter. We do not know what will happen in this regard; what the operational programme in the relevant sector will be or the level of funding which will be available for port facilities. The food industry does not know what kind of improvement it can expect in terms of the facilities at its disposal to expand exports.

Given the uncertainty about the national development plan and the Government's failure to make any significant progress with the other parts of the strategy on which the whole idea of putting this new body in place was built, it is nonsense for the Minister to introduce the Bill at this time. The Minister referred to the Culliton report. I invite him to look again at that report and the Moriarty report — the report to the Government on the Culliton report. There is a yawning chasm between what the Government has been doing for the past year and the recommendations in these reports. It is nonsense for the Minister to come forward with a Bill which pretends to be part of a strategy for the food industry.

There is a great deal more in the Bill which fails to match up to the report of the expert group published in April 1993 referring to food safety, quality and nutrition. Recommendation number 27 refers to minimum safety and hygiene standards for food. What is the Minister doing about that? Is anything planned in that regard which would help the new body to promote and market Irish food abroad? As far as I know, the Minister has not brought anything forward.

In recommendation number 31, the expert group makes wise remarks about topics which should be included in the syllabus for second level schools. It is proposed that the Minister should make nominations for the council for vocational education awards; that FÁS should establish a 16 week foundation course for food and that the Dublin Institute of Technology should provide pre-entry training for meat factory operatives. Has any of that been done? That was not mentioned in the speech which the Minister made to the Dáil or here today. Will this new board have any say in that or is this just another pious platitude?

Recommendation number 33 of the report of the expert group is an interesting one, part of which states that £15 million per annum, in addition to the EU funds, for food research and development should be included in the new EU Structural Funds framework. The food industry has lacked research and development for the last 15 years, as the Department of Agriculture well knows. That was never mentioned. If we are to retain and gain markets in Europe, we must invest in research and development. That is not something new which I brought to this House, it is something which everybody knows. I am greatly disappointed, having read the Minister's speech and listened carefully to the speech of the Minister of State, that that was not even mentioned.

This is a far cry from the initiative which the Minister announced earlier in the year about research and development when, if my memory serves me correctly, he spoke of approximately £7 million. What is the Minister doing about that? He is not even going half way to meet it and appears to have a different type of research and development programme in mind.

It is proposed in section 10 that "The Minister may by order assign to the Board such additional functions as the Minister considers to be incidental or consequential on the functions assigned to it by this Act." This is another dubious provision allowing the Minister to have second, third or fourth thoughts, to come back in a year and decide that something which was left out of the Bill should be inserted. Such a power should not be inserted in this type of Bill.

Section 12 states: "Subject to subsection (2), the Board may make such charges as it considers appropriate in consideration of the performance by it of its functions, the provision by it of services and the carrying on by it of activities." The Minister said he hoped these charges would not be excessive, but there is no provision in the Bill to have them controlled or inspected by anybody. The Bill provides the proposed new board with powers to enforce these charges. I am not talking about levies, but about fees which the board is empowered to charge for its services, if it can find unfortunates in a position to want to avail of them, particularly when it is operating within the type of policy vacuum which I spoke about earlier.

I listened to what the Minister said about this Bill and its provisions. He spoke at length about charges or levies. Given that structures already exist, I do not understand why the Minister is now talking about bringing in part of Bord Iascaigh Mara. I was a Minister of State at the Department of Agriculture for three and a half years. When I took office in 1983, I found there was little or no attempt to sell fish abroad. I set about doing that, but I did not want a lot of legislation of this type. It required looking at markets to find out what the requirements were and then to sell fish. I do not claim to be an expert, but Bord Iscaigh Mara had experts. The Minister spoke about setting up an overall board with responsibility for all exports, including fish. This will be so bureaucratic that by the time it is set up the markets will be gone.

I headed a delegation from Wexford County Council which visited Germany last week where we spoke to industrialists. The markets are there, but we are not ready to take them up. The research and development aspect of the food industry has been neglected by successive Governments and the food industry itself. This is partly explained by intervention. Those involved in processing consistently use intervention instead of using research and development to sell meat on the open market. I will not oppose the Bill because it has already gone through the Dáil and I would like it go through this House. However, I am greatly disappointed by the provisions of this Bill.

I am glad to have this opportunity to speak and I welcome the Minister to the House. I welcome this important legislation which arises from the report of the expert group on the food industry which reported to the Minister for Agriculture, Food and Forestry in 1993.

The purpose of the Bill is to set up a single body which would be responsible for the expert promotion of food. The Bill is most timely; it could be argued that a single food industry promotion body should have been set up before now. Regardless of developments in EU agricultural policy in the past year or two, the need for a single body is clear. The dramatic changes which have taken place in CAP, the successful conclusion of the Uruguay Round and the demands of the Single Market place additional pressures on our food industry. This industry is in the business of increasing the value of output and sales.

This Bill aims to unify and make more effective the services provided to the food sector by the different agencies. In that context, the Bill represents a considerable step forward. Given the challenges which face the food industry following CAP reforms, GATT and the need for our food production to compete successfully in the EU, we must now streamline the backup given by State agencies.

We have something which many other countries seek — the green image, which is the envy of the world. The green image is associated with Ireland and it is an invaluable asset in the promotion of Irish food. We must build on this image in the future and I hope the board will make use of it.

The food industry has undergone enormous changes in recent years. I understand there are 40,000 to 50,000 people employed in the industry, but considering the number of subsidiary industries involved, employment in the food industry would be closer to 100,000. There is great potential for job creation in this industry, which has undergone major changes in the past 20 or 30 years.

Gone are the days of creameries in each parish, especially in the Munster area where I live, when farmers transported milk by horse and cart or by tractor and trailer. At the creamery, farmers might have got a newspaper or engaged in a social conversation about the price of cattle at the fair or a hurling match. Gone are the days when farmers had three or four sows and would sell the progeny to other farmers or else fatten them themselves. In those days it was a sideline industry to boost their main industry, which was dairying, so as to have an income to maintain a good standard of living.

Over the years the dairy, pig and other industries have been rationalised. Instead of creameries in each parish, there are co-operatives and most are based in Munster — Golden Vale, which is adjacent to me, Kerry Co-Op, Dairy Gold and Waterford Foods, which the Minister is familiar with.

There is no such thing as small producers in the pig industry. It is concentrated on big producers producing fatteners for the pig meat factories. Because of these developments, our food industry is in many respects starting from a position of strength. Research on European markets indicates that our food is perceived as wholesome, of high quality and produced in a healthy environment. Because many consumers are preoccupied with health considerations, our food has the type of image which suits them. The reality may be somewhat different, but that is how our food is perceived. It is essential that we maintain that image.

I welcome the recent crackdown on the abuse of angel dust. Having regard to its long term effects, it is regrettable that such abuse should take place. It would be disastrous if European consumers perceived a problem in regard to Irish food produce. I also welcome the action taken by the Department in respect of BSE which is a major concern for consumers. It could be said that it is folly to adopt a policy of depopulating entire herds having regard to the small number of cases. However, that type of radical action is necessary to ensure there is no doubt in regard to our meat products. Such action may be expensive in the short term, but it is wise in the long term because it protects the image of our food products and, more importantly, it protects the consumer from risks associated with this disease. The small number of cases is tailing off because of action taken by the Department and I congratulate the Minister.

A heading in my local newspaper yesterday read: "Pledge By Minister In Fight Against Mad Cow Disease". The Minister for Agriculture, Food and Forestry, Deputy Walsh, reiterated his commitment to finding Euro-wide solutions to mad cow disease at the Munster Agricultural Society summer show in Cork at the weekend. Earlier this year the Minister gave assurances on the safety of Irish beef. CBF launched a major marketing campaign to boost its image among German consumers. I commend the Minister for doing a good job because the export of beef to Germany was under threat. There are also problems in Britain and I heard on the news today that there may be problems in France. The Minister's action ensures the protection of the image of Irish meat.

Senator Quinn always expresses his concern about consumers. Consumers are important and their concerns are paramount. There are two types of consumer in Ireland: the urban consumer and the rural consumer. They are different. The urban consumer is more convenient to towns and large big supermarkets where goods can be bought cheaper than elsewhere. We spoke earlier about door to door delivery in the context of the Milk (Regulation of Supply) Bill. This is essential in rural areas and definitely costs the consumer more. In the final analysis it is the consumer who call the shots because they decide on which product they will spend their money.

Hygiene standards in retail outlets is another area of concern. Everyone working in the food industry should have a knowledge of food hygiene. I am not suggesting that they attend intensive courses but the basic principles should be understood by those who sell food. From my limited experience I believe that hygiene standards in supermarkets and many of our retail outlets are high, although there might be room for improvement in some areas. It would be a good investment if people were required to attend a short course on food hygiene. Further education in this area is needed because some people working with food handle it in a manner that would not be recommended in text books.

There has been a tremendous change in the eating habits of Irish people, particularly the young. Ten to 15 years ago people would not have been aware of pizzas. The number of Chinese, Italian and other type restaurants is growing. While bacon and cabbage is still very popular, people's eating habits have changed and there is a preference for variety. If people eat bacon and cabbage at home, they might change to Chinese or Italian food when they eat out. It is important that the food industry take cognisance of this and meet the changing demands.

Section 9 provides for the transfer of certain functions of An Bord Glas to the new agency. As the Minister said:

An Bord Glas itself will remain in place; only those of its functions that relate to export marketing of edible horticultural products are being transferred. The remit which An Bord Glas has in relation to the home market is much wider than that proposed for An Bord Bia.

An Bord Glas did a good job promoting horticulture and home made products but it should be in a position to do more work especially in the area of potatoes and vegetables. It is impossible to get home grown new potatoes in any shop or supermarket but that may be because of our climate. Ensuring a better supply of home produced horticultural products would also create employment.

There is concern about the environment and the agricultural sector is often criticised for causing pollution. I welcome the £230 million package for an agricultural environment programme which will give farmers an opportunity to consult and co-operate with people who care about the environment. Grants will be provided for conservation and the protection of the landscape, wild life habitats and endangered species of fauna and flora. It is important to protect the environment while trying to improve our industry.

Section 14 deals with membership of the board. Ordinary members shall be appointed to the board, one of whom shall be an officer. People will be anxious that specific interests, such as the consumer, be represented but I believe producers should have representation on the board.

As the Minister said, the Bill stems from recommendations made by the expert group who recommended that a new single food promotion and market development agency should be formed by amalgamating CBF and the corresponding units of similar agencies dealing with other sectors of the food industry. I would like to put on record our appreciation to CBF for the excellent work.

Their recent annual report states:

Irish livestock and meat industry achieved an outstanding export performance in 1993. Exports of cattle, beef, lamb, pig meat all grew and gained increased market shares in key overseas markets. Overall livestock and meat exports grew by over 20 per cent in 1992 and reached £1.6 billion.

That is to be commended. We must recognise the great work CBF have done for the meat industry. I welcome section 13 which provides for a subsidiary board for meat and livestock. This board will carry out work previously done by CBF. Section 46 recognises the work done by the staff of CBF. It provides that the initial staff of An Bord Bia will be comprised of the existing staff of CBF.

This Bill is most welcome and very important. The Minister recommended it to the House and I am happy to support it.

I welcome this Bill and I welcome the Minister of State, Deputy O'Shea, to the House. I enthusiastically support the activities of An Bord Bia. I want to go straight to the heart of the matter and make a plea that this new organisation will be market driven and not producer driven. That is the crucial factor that will decide its success or failure.

We can fall into a number of traps when considering the food industry and one of those is to look at what is there and ignore what might be there. If we look at the food industry as it is we see that it is overwhelmingly concentrated at the commodity end of the spectrum. The other end of that spectrum — value added — is at present only a small fraction of the overall food industry. If we were happy about that state of affairs we would not need An Bord Bia. We need such a board primarily because we have signally failed over the last 25 years to make any significant inroads to the value added end of the food business. We have made some progress but it is as nothing compared to what it could be or should be.

The value added end of the food business is crucial and critical to success in the future because it is the only part of the food industry that offers us the possibility of creating a significant number of jobs. Many were surprised when the Expert Group on the Food Industry, of which I was a member, concluded in effect — against many expectations — that there was little or no job creation potential in the food sector and that the challenge was likely to be to hold onto jobs in the face of the inevitable rationalisations that were taking place and continue to take place in that sector. That may be true, but the value added element of that sector is the exception. In that sector we can create many new jobs if we take an aggressive and imaginative approach — the approach I hope An Bord Bia will take.

An Bord Bia must be concerned with the entire food industry and I hope the slightly ridiculous situation where An Bord Iascaigh Mhara is left out of this reorganisation will be swiftly corrected; I note Senator Dardis has tabled an amendment in that regard. I know it is the intention to correct it but I would like to see it done sooner rather than later. While An Bord Bia's remit is with all the food industry, its priority should be to develop the value added sector; that should be reflected in this Bill but it is not. There is nothing in the Bill about that.

The comprehensive list of aims and objectives of An Bord Bia does not even mention the critical issue of new product development which is the core of the effective approach to solving the value added problem. For this reason I have tabled an amendment to those aims on which I hope the Minister will look kindly on Committee Stage.

In making value added food products its priority, I hope that one of the first things An Bord Bia will do is to ask why we have failed in this area in the past. Why has Ireland done so poorly in the value added food markets of the world? The answer will come as a surprise to nobody. We have failed to penetrate the value added food sector and markets around the world because we have not approached the challenge from the perspective of the consumer. In that regard I support Senator Rory Kiely when he spoke about the value of the consumer.

Time and again we have continued to approach this problem from the perspective of the producer; not even that of the food producer but that of the agricultural producer. We have looked on the food marketplace as somewhere to sell our products and not as somewhere we can make profits and create jobs by meeting customers' needs. Food marketing must start with the consumer.

About six or seven years ago I visited what was then called Leningrad — now St. Petersburg — and asked to see a supermarket. Arrangements were made in the then communist system to take a group of us to see a supermarket. We went into a very unimpressive supermarket and were introduced to the manager and spoke to him through an interpreter. I asked him how many customers he had each week and he replied immediately 10,400. I was impressed that he knew this and I wondered if he used the same technology as we did, although I realised that since he had old fashioned cash registers that it was unlikely. I asked him how he knew the figure. He replied that it was easy to know — it was the number of people in the town.

As he said it I thought "Surely they do not all shop here", but I realised that of course they did. That was precisely what went wrong with that system — it was being governed centrally and not being driven by the consumer. Eventually, that broke the system. If we are not driven by the customer and what the consumer wants, we may find something that is right in the short term but not in the long term. We have to make sure that we do not end up in the wrong situation with An Bord Bia.

The basis on which we must start is to find out what the customer needs and what are the customers' emergent or latent needs. We must then seek to compete successfully in meeting some, if not all, of those needs. That requires new product development. It was interesting to hear Senator D'Arcy concentrate on the need for research and development. That requires innovation and a constant, non-wavering concentration on customer focus.

The marketing of value added food products has little to do with agriculture. Agriculture will provide many of the raw materials for those products, but if agriculture ends up calling the shots in An Bord Bia we will continue to fail as we have in the past. The purpose of the food industry is not to act as an outlet for agricultural products; its purpose, from a national point of view, is to create jobs and wealth by meeting customers' needs. That is why I wrote a minority report on the work of the expert group. To put An Bord Bia under the tutelage of the Department of Agriculture, Food and Forestry is to condemn it to being producer rather than customer driven. It is the Department's job to be producer driven — it is not expected to be any other way.

I hope that the worst does not happen and that in our oversight of this new organisation we will be vigilant against the dangers of An Bord Bia ending up as a plaything of the farming interests. With the structure this Bill gives it, An Bord Bia will have to work hard to become and to remain customer driven. Its most critical first challenge is to succeed in doing that. If it is not customer driven it will just have been an expensive waste of time. Having said that, I am pleased that the Bill has already been amended to include references to knowledge of consumer requirements as a criterion for the selection of some board members. That shows an awareness of the issue and I welcome it as a start.

In watching the football in the last few days it reminded me of my teacher in Newbridge College who trained us in football. On one occasion when giving us a training lesson he referred to the attacking team and the defending team. I asked him which was the attacking team and if it depended on where the ball was on the pitch. He thought for a moment and replied that it was not; he said that the attacking team is the team in possession of the ball, even on its own back line. The Department and the Irish food industry will have possession of the ball when this Bill, if correctly amended, becomes law. With the legislation and An Bord Bia we will be in a much stronger position to create the jobs, the wealth and the success in the food industry of which we are capable. I wish the Bill well.

I am glad to have the opportunity to welcome An Bord Bia Bill. As other Senators and the Minister have pointed out, the agri-food sector is one of the linchpins of the economy. It is opportune that we discuss this Bill on a day when there are further indications that the Irish economy is in a strong state in the form of a £137 million budget surplus in the first six months of the year. We have one of the strongest economies in Europe, with a growth rate averaging 5 per cent and a large annual trade surplus.

Tell that to the people in TEAM Aer Lingus and Irish Steel.

That is correct.

Senator Kelleher without interruption.

At least we have performed as we set out to do in the programme agreed by the two parties in Government. Nobody can deny that fact.

We could.

The trend is falling, unemployment and employment have been stimulated by a net growth of 56,000 jobs over the last six years. They are mere statistics but they are clear indications of the Government's productive stewardship of the Irish economy and of its determination to produce jobs and growth. Part and parcel of this process is the fostering of our vital natural resources. As outlined, one of our greatest natural resources is agriculture.

Fianna Fáil and this Government have always recognised the significance of the agri-food sector, both to rural Ireland and the Irish economy as a whole. This commitment is evident in the fact that between 1987 and 1993, £323 million was invested in this sector alone. In addition, the forthcoming programme for competitiveness and rural development will maximise the contribution of farming, food and forestry. However, marketing promotion is a key element of any concerted drive to boost the agri-food sector and that is why An Bord Bia is so significant.

The legislation is welcome because for too long boards of various forms have marketed different commodities. We must realise that food and its overall context is very valuable to this country. Agriculture is our greatest natural asset and it should be marketed by a single board. I congratulate the Ministers involved and the Department for bringing this about, a move which was recommended in several reports.

The establishment of An Bord Bia marks a major step forward in the development of the agri-food sector. In particular, I welcome that this new body will be allocated substantial funding. This is an acknowledgement that agriculture and the agri-food sector are areas in which employment can be created and where growth is perceived. This is borne out by the establishment of the board.

An Bord Bia represents a major streamlining and restructuring of the State's input to the agri-food sector. It involves the amalgamation of CBF, the food marketing and promotion functions of ABT and the export market development functions of An Bord Glas in so far as they relate to edible horticultural products. As a result of the review of the activities of An Bord Iascaigh Mhara, it is not yet possible to conclude whether its market development and promotion functions will be transferred to the new board. The Bill contains a provision which would allow this to happen. This is an acknowledgement that An Bord Iascaigh Mhara plays a major part in marketing a substantial natural resource. I welcome that provision.

The amalgamation of these bodies is most important. Synergy is a fashionable word in business and management circles these days. An Bord Bia will create synergy in growth and jobs by binding together and capitalising on previously disparate and diverse strands of agriculture and the food sector to create a real dynamic for growth and enterprise.

Irish agriculture is operating in an increasingly competitive market. This is evident throughout the EU at present where prices are being generated in the main by consumer demand. This matter was discussed earlier. We will not win these markets easily and we must aggressively promote our products. We must focus on marketing, use creative and dynamic promotion and take an innovative approach in seeking out new markets. These traits must be at the heart of the new body. When the board is established, I hope adequate funding will be provided so that measures can be immediately implemented. While surpluses have been created in the EU, there are still food deficits in the global sphere. Marketing and the creation of new export opportunities are vitally important.

I have outlined the importance of the agri-food sector to the rural economy. However, the growth of the sector is intrinsically linked to the ongoing wellbeing of rural Ireland. Schemes and support programmes are important but they only go part of the way. A strong future for rural Ireland will stem from indigenous rural enterprise, creating indigenous rural jobs. The agri-food sector can provide these jobs if it develops accordingly. An Bord Bia has a responsibility to create a market which is sustained by profitable and enterprising jobs.

I hope the work of An Bord Bia will develop along the lines of a new Leader programme. The present Leader programme is expected to create over 2,200 jobs when completed and the forthcoming programme will offer greater job potential to rural Ireland. In essence, both An Bord Bia and the Leader programme have job creation at their cores. I am confident they will be successful if, as the Minister outlined, everything is taken into account, funding is made available and the board is speedily established.

On an Adjournment debate some months ago I asked the Minister of State to convey my views to the senior Minister and the Cabinet for seeking An Bord Bia to be located in Cork. I did not suggest this for political purposes but rather from a deep belief that An Bord Bia, as a marketing body for food, should be located in an area where food is produced. Unfortunately, there are not many food production units in Kildare Street.

Or in Cork city.

I did not suggest Cork city.

I suggested Cork which has a large hinterland. The Senator comes from a smaller county, which has a poor football team. I presume the Senator realises that.

The Senator should deal with the Bill before the House.

An Bord Bia should be established in Cork, which has the Moorepark research facility and a food section in University College Cork. I hope the Minister of State will convey these points to the Department, the Minister and the Cabinet. Everybody requires food but if it is not properly marketed, it can be difficult to sell. I ask the Minister of State to seriously consider Cork as the location for An Bord Bia, not for its job potential but because it can market and sell food naturally produced. The fact that consumers want food produced by the Irish is an issue which has been discussed many times in this Chamber.

I ask the Minister of State to take cognisance of my plea to locate An Bord Bia in Cork. Kinsale is the gourmet capital of Ireland, if not the world. The recognised chef, Keith Floyd is based in Cork, which also has the Moorepark research facility, UCC and a large agricultural hinterland. These are of prime importance in the marketing of products abroad. The Minister of State should take note of all I have said in relation to An Bord Bia.

I wish the Bill a speedy passage through this House. It is imperative that all the measures outlined by the Minister of State are implemented without delay.

I agree with Senator Kelleher on one matter — the value of the Leader programme and what it has done and has the potential to do for rural Ireland. Unfortunately, I see no relationship between the success of the Leader programme and what is proposed in this Bill.

It has been suggested that the board's headquarters should be in Cork and that Moorepark is of value in that respect. Under this Bill agricultural research is specifically excluded from having any input into the composition of the board and its operations. The most favourable location one could choose for the board is one which is most adjacent to an airport because the board's work is about getting out of this country and selling.

The Senator has made Cork's case again. Cork has an international airport.

Senator Kelleher was not listening to me. I did not exclude Cork.

I favour a single agency for all food products. However, that is not being established in this Bill. This Bill gives us a single marketing and promotional body. The Minister said that An Bord Bia Bill, 1994, focuses on one element only of the institutional framework — promotion and market development. It does, but it does not do so for the entire food industry. We have excluded several commodities. This is a commodity board for the export of some food. It is a comnationa modity board and not a food board. It focuses on commodities and on nothing else.

We have created another bureaucratic colossus. Will it achieve its objective? I doubt it. We must focus on our objective. We are talking about a market of 350 million people in Europe. We are talking about an island whose main economic activity is the production of food. If this island were to regard itself as Ireland plc and were to set out to achieve an extra 1 per cent penetration in this market of 350 million people, it would believe it possible to achieve that target. If we could do that there would be incalculable national benefits, far more than will result from the economic growth to which Senator Kelleher referred. That is the prize before us. Do we have the political will and the legislative armoury to achieve that? In this legislation we do not. We are merely shifting the furniture, no more than that. We are not taking the fundamental radical decisions we have been asked to take to promote this industry.

To his credit the Minister of State, Deputy O'Shea, did not chant the mantra of Culliton, a mantra which has been chanted during every debate in this House on agriculture, economic activity and even on the postal service. The Minister for Transport, Energy and Communications told us, when we discussed the increase in telephone charges, that all the recommendations of the Culliton report would be adopted. Everybody speaks about the Culliton report and everybody is in favour of implementing it. However, on reading the Culliton report one will discover that it is not being implemented at all. The Minister of State did not mention Culliton although the Minister did when he spoke on this Bill in the Dáil. What does Culliton say? We should look at what he said instead of what he is supposed to have said. He says:

The problem has been that cohesive action programmes have not followed the recommendations. The reasons for these have been two-fold. ... [He cites one relating to the difference of interests between producers, consumers and processors.] ... the fragmentation of the State policy formulation and support system for the food industry which involves: 4 Cabinet Ministers, 5 Ministers of State, 4 Government Departments and 10 State sponsored bodies.

Have we done anything to address that problem in this legislation? We have not. We will leave the fish sector under the control of the Minister for fish and ships. We will leave An Bord Tráchtála under the control of the Minister for Tourism and Trade and we will leave everything else with the Minister for Enterprise and Employment. That does not address the problem.

Culliton also says:

Given the size of the product development challenge facing the Irish food sector the focus of existing State R&D supports is not adequate. ... There is a need as indicated earlier to co-ordinate and integrate State aided agency support for overseas food marketing and to relocate State assistance to the genuine development of marketing skills within companies.

Where is there anything about marketing skills in this legislation? Where is there anything about research and development? The food section of Teagasc should be part of this establishment. People are going in different directions. The core of this issue is product development and it is not even addressed in the Bill.

Section 8 of the Bill talks about journals. We will provide for the publication and distribution of magazines, journals, reports and similar documents for the purpose of encouraging the increased consumption of food. Glory alleluia, we will produce books. That will not sell food. We must have the right product in the first place and without basic research how can we have the right product? We are doing to the food sector what we did to industry when we introduced more bureaucracy with the establishment of Foras, Forbairt and IDA Ireland. This is layer upon layer of bureaucracy and I put the blame where it belongs — with the Labour Party.

Culliton talked about seasonality. Where is that problem addressed in this or in other legislation? Import substitution is discussed in the Culliton report. Where does this Bill address that problem? Culliton discussed the question of the environment and suggested that we should be proactive and not just reactive to European developments. Is there anything in this legislation relevant to those issues?

Let us get rid of the myth that the Culliton report is being implemented. The most basic aspect of the Culliton report is not being implemented. It recommended fundamental tax reform and we all know what happened in that respect in last year's budget. We did not have anything approaching fundamental tax reform.

What do we have in this legislation? We have a commodity based approach. In an era when the industry is moving away from a commodity based approach, when intervention is disappearing and when the consumer decides, we are sticking with a commodity based approach. We do not even have a full commodity based approach. Nobody has mentioned Bord Bainne. It goes its separate way; it is not part of this scene. What about the expertise that has been developed in that organisation over the years and the success it has achieved? We will not even incorporate it in this legislation.

An Bord Glas is fractured into two separate elements. We debated the legislation establishing An Bord Glas at length in this House and what happens? One area of Irish horticulture in which there is likely to be significant success is the export of nursery stock. Now we will separate the food section — and I accept that we must do so if we adopt this particular approach — and leave An Bord Glas with the nursery stock. I can only imagine the funding An Bord Glas will be given when it is left in that state. As an aside, one can question the relevance of our debate about representation on An Bord Glas. Will we leave the food producer representatives on the board in place, although the board will now deal only with nursery stock and non-food items? I do not know where we are going with this Bill.

An Bord Iascaigh Mhara is left afloat somewhere in mid-Atlantic. We must formalise our position with regard to the fish sector. Fish is a food and it should be treated as a food. If we are to have one food board it should be a board for the entire food sector. We also have the food unit in An Bord Tráchtála. Research and development, which is the foundation for growth in this industry, has been completely left out. How will we move from the intervention market to branded products if we do not have the necessary research and development? That research and development must be related to the work of this board.

The main defect in this legislation is that it ignores the consumer. A minimalist gesture was made in the Dáil to give consumer representation on the board. Section 14 (5) reads:

The chairman and the persons appointed to be ordinary members shall be persons having knowledge or experience of the food industry and of consumer requirements.

When the board is established someone from a meat factory or a processing plant will be regarded as having knowledge or experience of consumer requirements. The person will have such knowledge and experience but he will not be a consumer.

I read an interesting article in a magazine to which Senator Quinn contributed to the effect that on a regular basis, consumers are brought to the Superquinn boardroom and asked what they think of the service they are given and the products they buy. We too must allow the consumer to decide. We are deceiving ourselves if we think European consumers will behave on the basis of intervention or of how matters were run in the past. We must compete in the market and sell our quality goods produced in an environmentally friendly fashion. We can stand over our products I agree with Senator Kelleher that we must be aggressive, but this legislation is not aggressive and does not give us the armoury to be aggressive in those markets.

I welcome the minimal improvement in bowing to consumer requirements but the consumer should be represented on the board. If that means another person giving way, so be it, because otherwise we deceive ourselves.

On 10 May in the Dáil, the Minister, Deputy Walsh, spoke about a subsidiary board for prepared consumer food products. He said this would be among the first matters on which he expected An Bord Bia to take action when set up. The Minister of State, Deputy O'Shea said something similar today. Will we be able to do that under EU law? Will the subsidiary board be allowed to work for branded products? Perhaps the Minister can outline whether that can happen and how it will happen. How will we make the jump from our approach in the recent past to producing branded products and getting them into the market? The Culliton report pointed the way in suggesting links with international companies.

What will happen to the representatives from the food interests in the horticulture sector of An Bord Glas? Will they remain in place although An Bord Glas will have no function in the food area?

It is hard to eat a tulip.

Yes, but a large number of daffodils, although not tulips, are exported to markets as far away as America. My objective is that the entire horticulture industry should prosper. What has been done to An Bord Glas will prevent that prosperity. I accept the difficulty about covering the non-food elements of that industry in this legislation.

Fish should be within the scope of the Bill, as should the food research arm of Teagasc. Further, what will we do about ostriches? There is a great deal of interest in ostrich production in farming circles. I do not know whether ostriches constitute poultry or meat but section 2, the definition section, should include ostriches. They are extremely efficient converters of food into meat, far better than pigs or other forms of livestock and should be considered by research workers.

I welcome several provisions of the Bill including section 8 which deals with quality assurance, which is at the foundation of what we are trying to achieve as a food exporting country. We must be able to ensure its quality and these schemes should be of assistance to us.

CBF is to be dissolved and then reestablished almost as before, with extra work in livestock promotion. Why was it not left as it was, since An Bord Bainne was left alone? The Minister said:

This does not mean any of CBF's current functions will be abandoned or lost sight of. On the contrary, it is intended that these functions will be strengthened.

How will CBF's functions be strengthened under this legislation? It is not apparent from the Bill.

Senator D'Arcy dealt with the levy. The other factor is the Structural Funds débâcle. There we had an opportunity to assist the research and development I advocate for the industry. That does not seem to have been done effectively. The Structural Funds saga has seen a succession of missed opportunities, but in that respect we could have done something dramatic and radical.

I have worries about the colour of the stamps — a deep yellow, yellow, a fascinating colour called cyan which is I believe a mid-blue, etc. Are these precise technical definitions?

In the Dáil the Minister made considerable play of the fact that the title of this body was in English as well as Irish; as well as an Bord Bia, it is called the Irish Food Board. Senator Quinn wants to change that and I agree with him. It was said it would be helpful on international markets to have a name in English. It would be even better, and would indicate a positive attitude towards marketing, if we had French, German and Japanese versions and as many others as we need. The French would probably not be too impressed by the Irish Food Board.

The Bill does not achieve its objective. The philosophy behind it is defective. The same defect was evident in FORFÁS, Forbairt and the IDA and now the same bureaucratic syndrome is developing in the food industry. It makes me apprehensive for the future of our food exports.

I thank the Senators who spoke on Second Stage. Certain threads ran through all the contributions and by and large the objectives of An Bord Bia are agreed. There were questions about how the board may or may not implement these desirable objectives.

Senator Dardis asked how we envisaged strengthening the functions of CBF in the context of An Bord Bia. That is to anticipate the synergies which will occur with other food sectors as part of the new board. This is a rationalisation process; it also brings together the various skills in the food unit of ABT, CBF and An Bord Glas.

Senator Dardis was concerned about ostriches. At a recent function in Kilkenny in connection with a Leader project, I had an interesting conversation with a person from Scotland who is involved in breeding them and, from what I was told, there seems to be scope in this area. Although ostriches are not included in the definition of poultry, I am sure it would not be a problem to add them by way of ministerial regulation later.

Perhaps we should do so now by way of amendment.

The Senator also mentioned the legal problems in relation to subsidiary boards for prepared consumer foods in terms of European law. An Bord Bia is a promotion and market development agency; it cannot sell products. Sales are the responsibility of the individual companies. This board is concerned with the development of markets. I announced last week that Forbairt had set up a group on prepared consumer foods. This group is weighted in the direction of industry and it is a valuable touchstone for Forbairt in terms of the development of its internal policies. It now has a group to advise it on where resources should be focused at various times. That high powered group is in place in Forbairt. An Bord Tráchtála is assisting in the marketing of branded products. I do not envisage the difficulty in European law to which the Senator referred.

The functions of An Bord Glas go beyond promotion and market development because it also has a production role. This Bill will transfer its export functions in the edible horticultural produce area to An Bord Bia. The entire home market will still be the area of activity for An Bord Glas. The Senator will be aware that, in terms of structuring the industry, there is a vital role to be played in improving standards in the horticultural sector. An Bord Glas has been successful in this role.

A number of Senators mentioned research and development. In my view, research and development is the engine room of our progress. If, at the end of this tranche of Structural Funds, our scientific research and development community, whether in the research units and universities or in-house units in our companies, has not reached a standard which is acceptable at international level, then we will have failed. There are two areas where research and development is being catered for under the operational sub-programme for the food industry. First, there is research and development for the public good, the type of research and development which will be available to the industry, and its diffusion will be important.

I recently announced the formation of a committee which is weighted in the direction of industry as opposed to academia because criticism has been made that too much emphasis has been placed on the academic area. This year £7 million is available and the committee we have put in place is considering its mandate. Questions, such as where does an agricultural product end and a food product begin must be addressed. The committee will invite submissions from the research units, such as Teagasc, and the universities and it will adjudicate on what projects should be funded. Central to this is that we achieve critical mass. It is not enough to spread the money around on a number of small projects. We need something substantial which will be of real benefit to industry. I would also envisage contracting out in the sense that this could be done through a regional college or the Dublin Institute of Technology.

It is not correct to say that no provision is being made for research and development. Research and development will be available for the public good. Funds will also be available through Forbairt for research and development by private companies, whether in-house or commissioned research. This is an important area of the sub-programme.

I agree with the points made by Senators that our fundamental objective must be to rapidly extend our portfolio of value added products. These must be quality products at a price which the European consumer is prepared to pay.

I take the point Senator Quinn made in relation to where An Bord Bia should be located and the conflict he sees between the interests of the producer and the industry. There is integration in the food industry which does not exist in other areas. Under CAP reform, we operate in a system where production is limited. We must increase the wealth we create from that limited production. Research and development on product portfolio is important. With intervention now receding as a market outlet, we must go this road if we are to dispose of our products. Senator Quinn said we were market-led and that is true. Unless we respond to what is required by a more demanding consumer, in terms of our range of products, we will not be able to sell our produce. Market forces push us in that direction.

Although it is not at the most sophisticated level of research and development or of value added products, last year the Irish meat industry made a significant move away from intervention into the commercial markets. Our exports were worth approximately £400 million. This was achieved in the multiple sector in Europe and our objective was to look for a premium market. CBF did that on behalf of the Irish economy and succeeded in developing it.

Senator Dardis said An Bord Bia was only a commodity board. That is not the case and I dealt with this matter. The issue I dealt with most in relation to An Bord Bia was the location of its headquarters. I reiterate that it is our intention to appoint people to the board who can rapidly market the products we must develop. An Bord Bia should have a say in where its headquarters is located. If we appoint people who know the business and will do the job for us, the location of their headquarters is of strategic importance. This matter will be referred to the new board.

An Bord Bainne was mentioned. Our difficulty here is that An Bord Bainne is a private company. The State can amalgamate State agencies where there is agreement but Bord Bainne is beyond that. It would be wrong to take the view that there has not been co-operation in the past between the food unit in An Bord Tráchtála and An Bord Bainne. I would see that type of linkage developing in the future. The whole range of products comes within the remit of An Bord Bia, which will have a presence in all our major markets. As we envisage the board, it will encompass those private interests which at present we cannot make a statutory part of what we are doing.

It needs to be emphasised that this board is not about selling. That is a matter for the private sector. For instance we made significant headway in the Italian market last year. There is now a full time presence of four Irish meat companies in that market.

The recommendations of the expert group in relation to education were also mentioned. I have already discussed these recommendations with the Minister for Education and we have made a submission to the Department of Education in that regard. We can lose sight of the fact that there are 54 recommendations in the expert group report and that these recommendations are being put in place. An Bord Bia is a very large part of the strategy and the sub programme based on the Structural Funds deals with the other areas. That needs to be emphasised again.

The expert group recommended that the food functions of Bord lascaigh Mhara become part of An Bord Bia. As I mentioned in my opening address, a major review of all the functions of An Bord Iascaigh Mhara is going on. That will not be completed until the end of the year but the legislation provides that with the agreement of the Minister for the Marine those functions can come in by agreement at a later stage. I am disappointed that such functions are not included now but as the situation stands it is not possible to move down that road.

Senator Dardis and Senator D'Arcy made points in relation to seasonality. The slaughter premium has been of assistance in achieving 20 per cent of the kill in the first three quarters of the year. The seasonality of milk becomes of pivotal importance when we talk about the softer cheeses which have a much shorter shelf life than cheddar, our main cheese product. The availability of high quality milk throughout the whole year is of great importance. That issue is best left in the private sector and it is an area that Waterford Foods plc, the major plc in my area, has addressed in the context of its product development.

Senator D'Arcy complained that the Bill does not give effect to the expert group report. I have dealt with that in some detail in my reply. There are two major areas of recommendation. One is the setting up of An Bord Bia. The other is the operational programme and that is very well in hand in terms of the Structural Funds. There are 54 recommendations and it takes time to put them all in place. That is the mandate of the office of the Minister for Food and we are moving in that direction.

Senator D'Arcy also claimed there would be no control of An Bord Bia charges. Section 12 (2) provides that the amounts of charges shall be subject to the approval of the Minister.

I thank Senators for their positive acceptance of the need for a single body for the whole area of market development of Irish food products. We have our disagreements, with Senator Quinn in relation to where it is to be located and with other Senators as to its functions, but we all have the same objective. We are doing our best to achieve very important objectives. I commend the Bill to the House.

Question put and agreed to.
Agreed to take remaining Stages today.