An Bord Bia (Amendment) Bill, 1995: Second Stage.

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

I congratulate the Cathaoirleach on his appointment. It is well merited. He has made a great contribution not only to Dáil Éireann but also to Seanad Éireann and I wish him the best of luck in the future.

This Bill serves a dual purpose: first to increase the membership of the board of An Bord Bia by two and second to provide that one member of the board shall be appointed on the nomination of the Minister for the Marine.

The primary producer must be involved in all aspects of the food industry, including the marketing and promotional aspects. In the past, the farmer focus has been solely on raw material production. In my opinion, this does not fulfil the role all primary producers should play in the food industry. Primary producers have certain fundamental food production obligations that must be met. The raw materials they produce must satisfy their consumer requirements, namely, those of the processors, with regard to quality, cost, consistency and timing of delivery. To make these requirements, the link between the producer and the processor must be strengthened and direct representation of farming organisations on the board of An Bord Bia will help to achieve this.

Farmers already make a substantial levy contribution to An Bord Bia and this is another reason they should be represented on the board. It is estimated that the levy income paid by farmers to An Bord Bia in 1995 will be in the region of £4.3 million, a substantial figure. On enactment of this Bill, it is intended that two representatives of farming organisations, one from the IFA and one from the ICMSA, will be appointed to the board of An Bord Bia.

If An Bord Bia is to be truly successful in marketing Irish food, its remit should include all Irish food, including fish products. It has been agreed with the Minister for the Marine that BIM and An Bord Bia should co-operate closely in the marketing of fish exports with a view to the ultimate transfer of those functions to An Bord Bia. Section 9 of the An Bord Bia Act, 1994, allows transfers of this kind to take place. The appointment of a fisheries representative to one of the existing places on the board will be the first step in ensuring a smooth and efficient transfer of BIM functions to An Bord Bia.

I envisage the main outcome of these changes will be to assist in the development of a new attitude to the food industry, an attitude of unity of approach which involves both farmers and processors. This idea of unity of approach is already evident in the recent appointment of Dr. Noel Cawley, managing director of the National Dairy Board to the board of An Bord Bia. The dairy board is the largest Irish food exporter and is highly representative of the dairy sector. It is only fitting that such a large sector should have a voice on the Irish Food Board. These modifications will provide a wealth of knowledge and expertise covering the entire food industry and will allow the board of An Bord Bia address problems and make informed educated strategic judgments in relation to product marketing and promotion for the entire industry. An Bord Bia will be truly representative of the Irish food industry and can achieve a true unity of approach.

This unity of approach to which I keep referring is absolutely essential for the success of the Irish food industry. National and international markets are increasingly dynamic environments. Market pressures are constantly changing and we must be able to adapt and respond to these changes. Two major market pressures affecting food markets are changing consumer demands and European and global policy issues. Consumer expectations are constantly evolving with factors such as changing lifestyles, environmental issues, economic constraints and food quality and convenience all shaping consumer choice.

With regard to changing policy issues, the main issues affecting food markets will be the effects of CAP and GATT reforms. CAP reform has already resulted in major scaling down of intervention availability and a reduction in institutional price levels. The recent GATT agreement will increase competition for EU producers.

Another factor that must also be considered is the expansion of the EU. The Union has recently welcomed three new members and the possibility of further expansion involving central and eastern Europe is very real. We must be prepared for the effects of these changes, but it is no longer satisfactory to simply defend or even maintain our current position. We must expand, compete and aggressively sell our food industry and food produce. In essence, my vision for the Irish food industry in the future is one of a single, strong, cohesive and competitive industry.

Currently, the Irish food industry provides employment for 200,000 on farms and in processing and related activities. It is Ireland's single biggest industry with an annual output approaching £9 billion. However, when our food industry is viewed as a single industry it only ranks eighth in the world in terms of size behind the food giants such as Nestle, PepsiCo and Unilever.

It is clear that we have a long way to go before the industry achieves its full potential, but we have made a start. Earlier this year the first ever National Development Strategy for the Irish Food Industry was launched. This strategy provides a framework for the growth and development of the industry to the year 2000 and involves a financial investment of £640 million. Of this, £283 million will be provided from EU and national funds and £357 million will be invested by the industry itself. In accordance with the concept of "unity of approach" the National Development Strategy aims to co-ordinate all aspects of the food industry including producers, processors, Departments and all relevant State agencies. It is a unique and innovative approach to the industry. In addition, a special management unit, under the chairmanship of the Secretary of my Department, has been established to monitor and co-ordinate the progress of the plan.

Of particular relevance to the Bill before the House is the marketing function of this plan which will be implemented by An Bord Bia. The board was established in December 1994 with the primary aim of developing and implementing a comprehensive marketing strategy for the Irish food industry. The board's first five year strategy was launched last month, under which its activities will encompass six key areas: market information, promotion, market development, product innovation, quality assurance support and key policy inputs.

An Bord Bia's plan specifically targets markets judged to offer the best long term prospects and food sectors with expansion potential. If targets are realised, we will see exports increase by 5 per cent in the dairy sector, 14 per cent in the meat and livestock sector, 50 per cent in the beverage sector, 55 per cent in the edible horticulture sector and 100 per cent in the prepared consumer food sector. This may sound ambitious but I think it is realistic — but only if we follow through with our "unity of approach". The constitution of An Bord Bia will be pivotal to the success of the Irish Food Board. I believe that strengthening and consolidating the board in the manner proposed will ensure that the board's aims are achieved.

The Bill before the House is a short and uncomplicated one. Section 1 provides that the minimum number of ordinary members of the board shall be increased from nine to 11 and the maximum number from 11 to 13. It also provides that one ordinary member shall be appointed on the nomination of the Minister for the Marine as well as for certain consequential changes in the provisions governing the terms of office of the board members. Section 2 provides for the short title and collective citation of the Bill.

I commend the Bill to the House.

I congratulate you, Sir, on your election as Cathaoirleach and wish you every success. I welcome the Minister of State. We have a great deal in common and I hope that on Sunday week he will have better luck in Kerry than we had last Sunday in Thurles.

I am afraid we are going to have that in common as well.

I welcome the opportunity to speak on the Bill. The Minister of State stated that An Bord Bia's activities will encompass six key areas — market information, promotion, market development, product innovation, quality assurance support and key policy inputs. Agriculture is our key industry and it is important for this board to promote it.

The recent weakness of sterling has caused problems for some of our food producing companies. The Government has granted no assistance to this sector where Irish manufacturing costs are 5 per cent above those of our United Kingdom competitors. It is very difficult for Irish companies to compete on the export markets when the Irish punt is trading at or above parity with sterling. The exchange rate between the punt and sterling is a crucial factor in maintaining competitiveness in the Irish food industry, as it affects those competing in the United Kingdom and other European and world markets. Their competitive edge is compromised as their UK competitors are at an advantage. This should be addressed to ensure that we are competing on a level playing field.

The purpose of the Bill is to increase the minimum membership of the board from nine to 11 members and the maximum from 11 to 13 members. I hope that will benefit agriculture which is our most important indigenous industry. Foreign computer, pharmaceutical and mechanical industries are attracted here because of our well educated work force and good macro-economic competitive advantages. However, they can stay or move depending on how well we manage our economy in the meantime.

While we will always have the competitive advantage of our grasslands in terms of environmentally friendly farming, the industry will not achieve its full potential without a shared vision. If this key requirement is not met then what we are trying to do in terms of structures will not work to the extent it should. In the past, there was a lack of co-ordination by the various marketing organisations in their attempts to build structures to meet the needs of a modern food industry. However, the coordination of these activities may result in our taking our eye off the ball in terms of our need to find a common ground between producers and processors, so that every one knows it is in their interest to produce the food required by consumers in an effort to increase our market share in the European Union, which is the most sophisticated consumer market in the world.

There have been weaknesses in the food industry since the foundation of the State, such as the seasonality of our production systems and the failure to avoid a glut at various times in the season, particularly with regard to beef. The slaughtering premium is an attempt to address this but the seasonality problem will remain, especially in dairying and beef production. The continuing divergence of opinion between farmers and processors on where the real interests of the food industry lie must be overcome. Until producers and processors find common ground on these issues so that they can be resolved in the long term interest of Irish agriculture, we will continue to have this impediment.

We have identified the long term market growth strategy as a result of the Culliton and Moriarty reports and the report of our expert group on the food industry. Previously, we had a commodity based agricultural sector where production levels were irrelevant and price supports were in place. As a result of the CAP reform we have a more market led agriculture sector which needs to gain access to the market in order to survive. While the food sector has adapted well to these changes, much more needs to be done and the expert group is pointing the way.

We know that farmers have great distrust of the processing industry. Examples can be given to show why farmers have good reason to be suspicious of the intentions of processors in terms of price when they go to sell their livestock. Without naming anyone or being critical, I have had experience of this in my dealings with some processors. Some of them are fair in their dealings with farmers but others are unfair and I would like to see An Bord Bia address this problem. The processing industry has developed a great deal of sophistication and we now have a more market led agriculture than when we had a price support mechanism under which, regardless of production levels, there was a guaranteed price. In the absence of a significant live trade, it is always felt by the primary producer that the processing industry takes advantage of this situation and I am sure An Bord Bia will try to address this situation.

The Minister said that on the enactment of this Bill, a representative from each of the two farming organisations, the IFA and the ICMSA, should be appointed to the board of An Bord Bia. These organisations have made recommendations as to who should be appointed and I trust that the Minister or the Minister of State will appoint those who have been nominated by the organisations.

I publicly congratulate you, a Chathaoirligh, on your appointment, having done so privately yesterday. I wish you well in the highest office in the Seanad and I congratulate your family for being so supportive.

Thank you, Senator.

The prime purpose of this Bill is to increase the membership of An Bord Bia by two and to provide for the appointment of one member on the nomination of the Minister for the Marine. This Bill addresses a long running grievance by the farming organisations that they were not represented on the board. I feel this was an error and I welcome the provision to allow the IFA and the ICMSA to appoint one member each to the board. This approach is well justified because the farming organisations will contribute approximately £4.3 million in the form of a levy and this justifies them having representation on the board.

Apart from the direct financial contribution to the work of An Bord Bia, the farmers must be described as key players in the food industry. They provide the raw materials which must meet the requirements of processors on quality, cost and time of delivery. The commercial partnership between farmers and processors must be fostered. Processors are already well represented on the board and the Bill provides a linkage between farmers and processors as far as the board is concerned. The direct representation of the farming organisations will be a further step in developing this partnership.

If we are to explore fully the potential of the food industry to create additional wealth and, in particular, additional employment, following discussions we should clearly map out the value of agriculture for the entire economy. The value of the agricultural industry is between £8 billion and £9 billion and it employs approximately 250,000 people. The Minister gave a figure of 200,000, there is a difference of 50,000 between his figure and mine but I think the service industries should also be taken into consideration because some people employed in them could be described as being directly employed in the food industry.

The import content of Irish food is in the region of 15 per cent whereas the import content of foreign non-food companies is approximately 75 per cent. If we can increase our export food market, this will be of direct benefit not only to the food industry, farmers and processors but to the economy as a whole. Another figure I have never failed to highlight in a debate of this nature is the contribution of food to net exports, which experts argue is between 35 and 40 per cent. My understanding is that it is approximately 40 per cent. This is a clear indication of the importance of the industry to the entire economy.

With regard to the link between the farm gate, processors and the main market, it will be the function of An Bord Bia to establish where markets are and what the requirements will be. Having established these facts, the next important function is to provide the necessary information to farmers to ensure quality requirements are fulfilled by them. I am not satisfied with the present situation. Over the years I have seen a breakdown between farmers, processors and the market which came about because of the elimination of the county committees of agriculture, which were well established bodies representing all interested parties. There are three elements in any industry, particularly the food industry — producers, processors and those who market, and they are equally important.

As a result of the CAP and GATT reforms we now have a more market led agriculture sector which needs to gain access to the market in order to survive. Even from one year to the next changes are needed if we are to gain market share which is fundamental to the whole operation.

The Culliton report states that the key requirement for the development of the processing industry is a vision shared by producers and processors in the different sectors and this must be supported by Government development agencies. Probably one of the greatest weaknesses in the food industry until now was that there was no shared vision and little has been done to improve this situation. Little has been done by producers and processors to establish common ground so that the long term interests of the food industry could be served.

Over the years farmers have had a great distrust of the processing industry, especially in the meat sector. Examples can be given to show why farmers have good reason to be suspicious of the intentions of processors with regard to price and why they feel there is a cartel operating when they sell their produce. The processing industry has developed a great deal of sophistication. We now have a more market led agricultural industry than we had with the price support mechanism under which, regardless of production levels, there was a guaranteed price. In the absence of a significant live trade it was always felt by primary producers that the processing industry takes advantage of this situation.

We now have a continuous argument between those in favour of live exports and those opposed. I have made my position on this clear. If we do not have a live export market, it will cost farmers between 8p and 10p per pound on their cattle; these are clearly established figures. This has been the approach of processors over the years and, unfortunately, for this reason alone the live industry must stay for the foreseeable future.

The seasonality of our production system and the failure to avoid a glut during various parts of the season, particularly with regard to beef, have been weaknesses of the food industry since the foundation of the State.

The continuing divergence of opinion between farmers and processors as to where the real interest of the food industry lies must be overcome. The Minister and Members can seek to persuade but until producers and processors find common ground on this issue, so that it can be resolved in the long term interests of agriculture, we will continue to have this impediment to the long term strategy of growth in the niche markets we have identified as a result of the Culliton and Moriarty reports and the report of the expert group on the food industry.

I read these reports carefully and I agree with everything in them. We know practice is different and that people go back to their vested interest groups and their short term entrenchment positions. More enlightened practitioners in the food industry have indicated that this practice must be changed and I am glad about this. The Minister must be mindful that there will be short term political problems in facing up to this but if we have the long term interests of the food industry at heart we will have to address these issues.

It is absolutely vital that the members of the board do not seek to protect a vested interest, they must seek to bring about the shared vision in the Culliton report. Key weaknesses can only be overcome if the board considers the overall picture. Boards set up by the Department must have the shared vision that all interested parties must participate in this exercise and not on an individual basis. There is a serious educational aspect to the food industry. We must educate each other and take the long term rather than the short term view. We should never be afraid to say that agriculture is our most important industry.

I have also read theMarket Development Strategy 1995 to 1999 drawn up by An Bord Bia. After reading it carefully, I am dissatisfied with certain areas of it. Page 21 of the report says:

Thebuyer-supplier bridge concept is a key tenet of An Bord Bia's strategy. It will involve the provision of a menu of services through which linkages between suppliers and new and existing customers can be built and developed. To this end, the following mechanisms will be provided:

The development of close working relationships between An Bord Bia and key buyers in the marketplace based on an indepth understanding of customer needs.

An on-lineinformation system providing links between buyers and potential Irish suppliers.

A new company contact system linking buyers and sellers and facilitating the development of business relationships.

Direct and indirect promotional assistance to support the strengthening of established supply links over time.

Page 4 ofAn Introduction to An Bord Bia Services from the Irish Food and Drinks Industry refers to an “Expansion of on-farm inspections”. This is what I was searching for in the main document but it was not there. What does An Bord Bia mean by this statement?

The link between all elements of the food industry was the county committees of agriculture. We had intervention schemes at that time which were damaging to our processing industry. The processing firms used intervention when they should have been processing and marketing our food because it was the handy way out. Now there is no intervention, I hope our farmers will never again turn to it or the EU.

I also readAchieving Growth in Horticulture Development Plan for 1994-1999 and there is also a failure there to mention the primary producer, the farmer. The link is not there. I wish An Bord Bia every success. It has good people on its board which was not set up by this Government but it is adding to it under the provisions of this Bill and I agree with it. However, the Minister must create a link between farmers, processors and the market.

Agricultural systems change from year to year. The milk area can update itself rapidly, but this cannot be done with the beef and sheep industries; it is a two to three year process. For that reason, I am worried that the introduction of more milking breeds will damage certain areas of our beef industry. Fortunately, the establishment of the suckler herds will help, but I am not satisfied with the overload of Holstein blood in the national herd. Will the Minister take that point on board?

My last point concerns the overall situation in the processing industry, which has consistently failed to make a deal with the farmer. Senator Kiely and I have spoken about seasonality. For many years we tried to persuade the processors that if they wanted to do away with seasonality, they must draw up contracts with their farmers. A contract means it is binding on both sides. To stop a glut at certain times of the season, it is essential that the farmer has a contract for meat for the slacker times as he will then know exactly where he stands.

I am a beef producer and have tried on numerous occasions to talk to processors. January, February and March are usually slack months for beef production while there is not sufficient beef for the market in April, May and June. They are watching for a glut in the market to reduce the price. That has been their policy through the years. I ask the Minister that as An Bord Bia develops, it tries to draw up contracts between processors and farmers for the slack periods, knowing what is required in the markets. Everybody else can draw up contracts. Supermarkets have contracts with their suppliers. They do not wait for fluctuations and generally know where they stand. If the farmers knew where they stood on this issue, seasonality and gluts in the market would stop.

I fully support the Bill and wish the board every success.

I welcome the Minister but regret that I cannot welcome the Bill. I urge my colleagues to reject it. This seemingly innocuous Bill is a retrograde step which will undermine An Bord Bia's efforts to develop as a truly market driven organisation rather than one that is just beholden to the producer interests. I feel strongly on this matter and will do my best to convince the Minister to rethink this measure as it is a retrograde step.

The Bill increases the number of board members to 14, including the chairman, and also provides one member to be appointed on the nomination of the Minister for Defence and the Marine. I have no objection to the second part, since I was one of those who argued that An Bord Bia's original remit should have included seafood from the beginning. The idea of a food production organisational body that does not include seafood is ridiculous. If having a member appointed by the Minster for Defence and the Marine is a step forward towards bringing seafood within An Bord Bia's remit, well and good, but legislation is not needed to do that. It can be done informally. The real issue is whether — and when — Bord Iascaigh Mhara will be amalgamated with An Bord Bia and this Bill does nothing about that.

My real problem with this Bill is the increase in the number of board members, mainly because of what the Minister for Agriculture, Food and Forestry intends to do with this increase. I read carefully what the Minister said in the Dáil and what the Minister of State said here. The Minister said the purpose of this measure is to make room for people representing the IFA and the ICMSA, the producers' interests. He says he considers their original omission from the board an error. I strongly agree with Senator D'Arcy that members of this board should not be actively pursuing a vested interest. With the greatest respect, the Minister is making the same mistake that has bedevilled the development of our food industry for the past 30 years. His mind-set is one that sees food as nothing more than an outlet for agricultural produce.

There was an outcry when McDonald's opened in Grafton Street and it was announced that the chips it used, an important element of its menu, were being imported from Holland. We asked how could a company import chips to Ireland, a country which should be the best at producing potatoes. McDonald's said it could not get the type of chips it wanted in Ireland and they could only be got in Holland. We thought it was outrageous that Mc Donald's was being driven by what the customer wanted. However, McDonald's has succeeded and thrived throughout the world by pursuing the customers' interests. We have adapted to what McDonald's and its customers want and I understand McDonald's now buys its potatoes in Ireland since we now produce the product it wants. That is what I call the customer being driven by the market.

However, this is a long way from being driven by agriculture. Even today the Minister made an error by saying that 200,000 people are employed in the food industry. Senator D'Arcy added to it by saying the figure was 250,000. They were talking about the agriculture industry, not the food industry. Unless we are single-minded in our approach and say these are two different industries — the agricultural industry which produces products that customers want, and the food industry where jobs will be created in the years ahead — it is unlikely, no matter how successful the agriculture industry is, that we will produce more jobs.

This mind-set sees food as no more than an outlet for agricultural products and that has bedevilled our thinking for years. The reason our food industry is underdeveloped and we need An Bord Bia is that for too long we approached the food industry from the agricultural perspective. I have argued consistently that we will not develop our food industry properly unless we take a customer driven, not a producer driven approach. We need a food industry driven from the marketplace, not from the farmyard. We also need an approach which recognises that marketing is about producing what the customer wants and not about trying to stuff what it suits us to produce down the customer's throat.

There is an old-fashioned ring to the Minister's words on this subject. They reflect a world view which I thought we had begun to move away from with the successful setting up of An Bord Bia last year. They also bear out my misgivings about putting An Bord Bia under the aegis of the Department of Agriculture, Food and Forestry.

I had the honour to serve on the expert group which recommended the setting up of An Bord Bia and I supported most of what it recommended. I compiled a minority report dealing with this issue in which I argued that because of its nature the Department of Agriculture, Food and Forestry could not be fully market driven. It deals with farming interests, but food, if we view it properly, covers a wider range of interests than farming.

The objective of the food industry is not to get rid of agricultural products, but to create wealth and jobs from the production and sale of food products which have been designed to meet customers' needs. Only part of the potential wealth and jobs are in agriculture. The undeveloped nature of our food industry is an illustration of what happens when one lets the tail wag the dog as we have been doing for many years. It is an illustration and an indictment of a failed policy.

I am a strong supporter of An Bord Bia, even if it is under the wrong

Department. I want this Bill defeated in order to protect An Bord Bia and to allow it to do the job it has successfully started. I am impressed by the dynamic, knowledgeable and farseeing board of An Bord Bia. I understand that the Chairman, Mr. Ned Sullivan, will resign from his position because he has been offered a promotion in London with a highly successful multinational company for which he previously worked. He will be a great loss. I hope the Minister, when appointing his successor, will take great care to ensure that this important position is filled by someone from the marketplace we are trying to penetrate and not by a producer.

Within the past month, An Bord Bia has produced a marketing strategy, to which Senator D'Arcy referred, and a programme for action from 1995 to 1999. This was like a breath of fresh air compared to previous efforts in this direction. Its action is firmly based on what the marketplace needs and what our food companies can and cannot do. I am excited about the possibilities which An Bord Bia may open up for us in the years ahead. It has built up an excellent team in the food area and it is moving in the right direction. The last thing it needs is to become a hostage to political infighting.

By rejecting this Bill we will send a message to the Government, the Department of Agriculture, Food and Forestry and to An Bord Bia that we wish this new organisation to remain fully market driven. It is worthwhile to send this message and I hope my colleagues in this House agree with me.

We cannot prevent the Minister from appointing producer representatives to the board because he already has the power to do that without any further legislation. There are vacancies on the board because he has, by order, increased the number of ordinary members from nine to 11. By virtue of that order and this Bill he proposes to increase the number on the board by four to an unwieldy 14, which is too big for any board. One wonders why it is necessary to increase the size of the board by 40 per cent when it is working well.

I fear the reason for this is a change of direction in the Department of Agriculture, Food and Forestry in the past eight months where the emphasis has moved from food. I only noticed yesterday that we no longer have a Minister for Food. We had one for the past eight or ten years which recognised that future jobs would be in the food sector as well as the production sector. This is a sign of the change of direction emphasised in this Bill.

The Bill is unnecessary and undesirable as far as the food industry is concerned and from the point of view of what An Bord Bia will achieve in the years ahead. It is important for this House to send a message to the Government. I call on my colleagues to reject this Bill so that An Bord Bia, which was set up last year, will become a healthier organisation. It is capably and enthusiastically driving the market and thereby creating success, wealth and jobs.

I congratulate you, Sir, on your appointment to this exalted position yesterday morning. The House was united in its decision and I know you will do an excellent job.

I thank the Senator.

I welcome the Minister to the House. I listened with interest to Senator Quinn who gave us food for thought. I agree with much of what he says but I disagree with his downright condemnation of the Bill. My analysis of the food industry in Ireland suggests that the level of sophistication which we have achieved is not equal to that achieved in other parts of Europe. Irish workers are not adding as much value in their day to day work as is happening in other parts of Europe. Those who have carried out research in the area accept that as fact.

We are not good at research and development. Being late into the game, we are still learning and are still trying to place the right emphasis on it. We do not put enough profit back into research and development, which is essential. We are still not achieving the level of investment there which we should be achieving. It involves a slow build up. The amount of money we invest compared to that which other countries invest in this area gives an indication of our position. We are not achieving the same added value and as a result this country is not a market leader among food producing countries. We may be a market leader in some niche markets, such as the fresh mushroom market in England, and in other minor areas, but we are not big players in any food market in the world. We are not recognised as such, except by ourselves, but we delude ourselves sometimes that we are. Name recognition of Irish products abroad is minimal and that is where we must start.

The Government has a lot of work to do. They are putting more money into research and development and there are announcements for time to time about redirecting finances in a better way. That is happening but there is a huge amount of work to be done before we can be satisfied we are achieving our potential. Given our climate and unpolluted country, we are not as yet reaping the benefits.

Even though we are going in the right direction, we should hurry because we could easily be caught by some of the emerging countries in the east. I have not visited those countries in recent years but I understand they are making great strides and are showing huge potential in the food sector. We would be wise to be aware of that.

We must be sensitive to change and be able to change the food industry from top to bottom. We have not been able to do so to date. We have not been sensitive enough to lead with new products in the market places of the world. We have not been listening on the ground and if one is not listening, one is unlikely to hear the correct message.

Since industry must be able to change, the board needs to include some representatives of the primary producers too. I disagree with Senator Quinn on this issue because I do not believe two members of a board — a minority of the board will be appointed from that area — will be able to sway decisions or dilute the intention of the board. What will happen is the leaders of the primary producers will get information, which they otherwise would not get. They will be able to disseminate it throughout the primary producing area and will receive responses more quickly when that is required.

Senator D'Arcy said the county committees of agriculture were useful from the point of view of getting information across at local level. They met regularly, there was good debate and the local newspaper carried the message. Disbanding those committees was a grave error because national newspapers, given their nature, do not print the kind of debates which local ones do. The debate was led by the county committees of agriculture and it was ongoing. It dealt with all the important issues of the day and local people had the opportunity to thrash out major questions and understand them a little better. Messages were received and attitudes were changed but that does not happen now because these committees do not exist.

The Bill is a good one because we need to be sensitive throughout the food industry. We need a board which is not lopsided and the addition of two or three producer representatives will not have the effect of which Senator Quinn is afraid. I appreciate his fears and he is right to voice them. We should all be afraid if there was a danger of a dilution of the purpose of the board but this will not occur. The presence of those people on the board will give them an insight, which they would not have otherwise. It will give us the opportunity to be more sensitive to change and, perhaps, allow us claw our way up the leader board of food production.

I appeal to the Minister on behalf of the food sector in County Monaghan, particularly the mushroom industry. We are market leaders in fresh mushroom production because of Monaghan Mushrooms Limited. We have taken over almost 40 per cent of the fresh mushroom market in England. I dare anybody to point out another product which has done the same in any market in which Irish companies are involved. This is good for mushroom producers but it is also good for national morale. It is like Leitrim winning the Connacht Championship. Monaghan Mushrooms achieving that breakthrough in the English market is like Leitrim and Clare breaking through in football and hurling. We have grabbed a huge slice of that market and to do so we had to be expert. The people who were part of that achievement are turning their minds in other directions and there are signs they may do the same in other areas.

While we are market leaders in that area, because of the instability of the English pound there is a grave danger we will fall from that position. Sterling has been in a mess for a long time. Not many years ago, the Irish pound was valued at 84 pence sterling. It subsequently rose to 92 pence sterling and stayed there for some time; it then rose to 98 pence and remained at that point for a period. Now the Irish pound is valued at £1.02 to £1.03 sterling. One can imagine the difficulties of people who traded at the 84 pence level and had to rethink their production when the level changed to 92 pence and to 98 pence. They are now under great pressure and I know the Minister understands the problem because he has spoken to me about it.

I ask him to pay close attention to the mushroom industry in Monaghan and to our added value industry, which is similar to other such industries around the country. We have a substantial number of jobs in the food industry but they are under strain and need assistance and understanding. I appeal to him to keep in touch with us about it and I know he will ensure that anything which can be done will be. I will be in contact with him about this issue.

Senator Quinn was wrong to say this Bill points the board in the wrong direction. The Minister has taken a step which will make the food industry more responsive and sensitive. Irish people will know more about the details of production and marketing because of the changes to the board and I commend the Minister for them.

I welcome the Minister and I am delighted to be able to discuss this Bill. The importance of our food industry to the future development of our economy is vital. It provides huge opportunity for the job creation we so desperately need, as highlighted by the recent unemployment figures. To further develop the industry all sectors must be united in their approach and aim to produce a quality product, competitively priced, for the consumer. All sectors must work in partnership, with no one interest demanding or dictating to the others, if we are ever to realise our food industry's potential.

An Bord Bia must lead the future development of our food industry and bring together in a co-ordinated way representation from all sectors. With the appointment of representatives of the IFA and ICMSA, the board will work well. My only concern is that membership of An Bord Bia may become too large to work successfully. However, the farmers are the key players, who supply the raw material for this industry.

Quality is essential, as we face a more competitive future because of CAP reform, GATT and competition from central and eastern European countries. To succeed, our products must be of the highest possible quality, delivered at the right time and meet the tastes and eating habits of more demanding consumers. To meet these challenges, careful planning is needed for the future. Research, development and marketing must be of the highest importance to An Bord Bia to achieve success.

Our clean, green environment and disease free status is vital. With regard to the control of farmyard pollution, many farmers had plans at an advanced stage for the building of pollution control facilities when the grants were suddenly suspended. I urge the Minister to allocate funds to these schemes as great work has already been carried out and much more needs to be done. This is an issue of great concern to me and to a large number of farmers in Monaghan and Cavan.

The food industry is a huge employer in my county, Monaghan, particularly the dairy, beef, poultry and mushroom sectors. The mushroom business has proven hugely successful, employing a large number and providing a great financial boost to many areas of the county. This is an example of an industry providing a quality food to the consumer. Poultry has also proved successful and the industry continues to expand.

I urge all involved in the food industry to unite in their approach to the industry. Farmers' suspicion of the processing industry must be laid to rest and the seasonality of our production system must be addressed, particularly in beef. With the IFA and ICMSA now sitting alongside all the other interests in An Bord Bia, they must aim to guide the industry to develop its full potential, giving the best return to all and providing the maximum number of jobs to cut the ever-increasing dole queues. I welcome the Bill and congratulate the Minister.

I welcome the Minister and wish him well in his portfolio. He has the interest of agriculture at heart and is working hard for that industry. Notwithstanding that, I do not see the need for this Bill. Its value is highly questionable in terms of achieving our objective of ensuring our food products are marketed profitably abroad and that the country benefits. I do not have any principled objection to the IFA or the ICMSA being involved on the board of a marketing company, but from my study of the composition of the board, producer representatives are there already. Some of the very best farmers are there including John Duggan the chairman of Avonmore Foods who, I suspect, represents producer interests on the board as well as anybody could. Michael Hanrahan, the chairman of Kerry Group and a director of the ACC Bank is on the board as is Stephen O'Connor, the former chief executive of Waterford Foods plc. They are people who have a deep knowledge of agriculture. Also on the board is Philip Lynch, the chief executive of IAWS, a company that deals on a day to day basis with farmers. He understands farmers' needs and also knows how to build successful marketing operations both here and abroad.

It is a good board on which producer interests are well represented, so why is it necessary to expand it by way of this unnecessary legislation? Is it some sort of political publicity stunt to ingratiate the Minister for Agriculture, Food and Forestry with the IFA and the ICMSA? Is it being done so that the Minister can visit the Farm Centre and claim to be a wonderful person because he has put representatives from the organisations on the board? Is this another example of the type of political management whereby a Minister visits Gort and goes out in a boat to convince everybody, via the Six O'Clock news, that he will solve the flood problems?

What will be the effect and how will this achieve the objective we have established for the food industry? We do not have to go through this rigmarole about how important the food industry is and how many people are involved in it because that is taken as read. Also taken as read is that we have to have high quality products, that we must be aggressive in a highly competitive international market and provide what the customer wants in France, Germany or Japan. There is no need to regurgitate all that.

The question is how, but there is nothing in the Minister's speech or in the Bill that tells me how. I accept that the people in An Bord Bia are working on the question of how to do it. They have the knowledge. Let them get on with the job. Why do we need a 14-member board to regulate An Bord Bia? I do not understand the need for it given that an order was laid before the Dáil to put two extra members on the board. I await the Minister's reply to this with interest because it was not replied to in the Dáil. The chairman, Mr. Ned O'Sullivan, will depart from the board while two others will be appointed by ministerial order, so why do we need the Bill? The Minister is free, if he so wishes, to appoint the president of the IFA and the president of the ICMSA.

Senator D'Arcy made several references to the Culliton report and I subscribe to what he says. It is a pity we do not implement that report given all the things that were said about it in this House and elsewhere when it was published. We are just creating more layers of bureaucracy and administration. We need people to travel to Japan, Bahrain and France. We need people with the highest qualifications, with energy and initiative to sell our food in these competitive markets.

Let us not delude ourselves. We all accept that we have a wonderful green image, but it will not sell our food for us. That image is something in our minds which makes us feel good about the food we produce. It is essential that we produce food of that quality in this competitive market but the green image alone will not sell it. As somebody who sells food every day of the week, Senator Quinn knows that very well. The green image is part of what sells the food but it is not all of it by any means.

Senator D'Arcy made the point about vested interests quite convincingly, but what are we doing? We tell the vested interests that we will concede to them. I do not see the logic of what we are doing.

Let us talk about the food industry that is so important to our national economy. What do we do with it? We institute a tax regime that compels people trying to develop this industry to enable it to compete successfully in international markets, to go aboard. They take their mobile capital out of this country and the value is added abroad, not here.

We have a drinks industry in which one would be hard put to find an Irish interest. Imagine predicting 30 years ago that there would one day be an Irish drinks industry in which there is no Irish control. That is quite extraordinary yet it reflects how we manage our economy. The Government's responsibility is to create the environment that allows this great industry that we keep talking about to develop, flourish, become competitive internationally, and to survive and prosper.

Let us get rid of all this unnecessary optical stuff which is leading us down acul-de-sac. Talking about our wonderful industry is self-satisfying rhetoric that we regurgitate at regular intervals in the Houses of the Oireachtas. Very little happens, however, other than that the few people trying to survive commercially find it increasingly difficult and frustrating to achieve their objective. Let us get our priorities right.

Senator O'Brien is right in saying that the primary producer is important. However, they are all interrelated and interconnected so if we did not have the food processor, the primary producer would be in a pretty sorry state andvice versa. That is a different issue, however, from trying to sell our ham in competition with ham from Parma, Denmark or Britain. The issues should not be confused.

It may be economically advantageous for an Irish food company to invest its capital abroad and to add value abroad rather than at home, but statistics on the matter of added value are questionable. There is an argument which says that what we have added is cost, not value. In other words, if one adds up what it costs to produce processed products it may be, from a national economy point of view, that we have added more cost than value and that there has been a negative equation.

There is an employment aspect, however, so even if there is a slight negative it may be justified in national global terms because of the employment content which was identified by Culliton, as were the possibilities for the industry. It is about time we started to implement the Culliton report in the way that Culliton meant his report to be implemented. On several occasions he had to say — not in respect of this Administration I should add, but a previous one — that what we were told he had said was not, in fact, what he had said.

We are heading towards a global market where products will be able to move under the GATT and, as the Minister outlined, they will be able to move across frontiers without impediment. Californian and Israeli strawberries will compete with Wexford strawberries. We should be clear about how we will compete in that hostile and difficult environment.

We know we should produce quality goods of the highest hygienic standards. How will we do it? How will we penetrate the markets? There is a European market of 350 million people which is expanding. If Ireland plc could get 1 per cent more of that market, it would have many positive consequences for the country. I guarantee if Unilever, Grand Metropolitan or anybody else was thinking of getting that 1 per cent, they would have a good idea how to do it. That is the strategic thinking we will have to apply to our industry but I see no evidence that this Bill will assist us in doing so.

I thank all Senators for their varied contributions. Some were positive while others were negative in some senses. The core message and philosophy behind this Bill is unity of approach. We want interests at all levels and sections of the industry to be represented on An Bord Bia so we can have a focused marketing approach and the core messages will filter back to all sectors of the industry. I am confident that, rather than weakening the position of An Bord Bia as indicated by some speakers, this Bill will strengthen its focus, make it more effective and help us to capture some of the market which Senator Dardis mentioned.

Senator Kiely rightly referred to the currency problem. We are fully aware of the difficulties experienced by a number of exporters. We have constant discussions with the industry and the Department is examining ways to help. However, as the Senator probably knows, we cannot give direct subsidisation to the industry as this is illegal under EU law. We are concerned and will be as supportive as possible. We are monitoring what is happening very carefully on a day to day basis and, hopefully, the English pound will regain some of its strength. It is a major problem and, if this trend continues, it will affect the future of many of our exporters.

Senator Kiely also highlighted the farmers' suspicion of the industry at processing and retail levels. An Bord Bia plans to address this problem and allay these suspicions. That is why it is important that farmers are directly represented on the board. Farmers are also represented on the meat and livestock subsidiary boards and that is important. I will refer to the direct involvement of farmers in my reply to Senator Quinn.

Senator D'Arcy emphasised the need to involve farmers more and to bridge the gap between farmers and retailers and processors. This attitude and policy bedevilled the industry up to now because farmers were taken out of the equation the minute the food left the farm gate. After all, the farmer produces the product and the quality. The retailer may package and market it, and do so very skilfully, but it is the product in the package that counts. If the farmer is not directly involved he cannot do that. I am confident that the farming representatives on the board will tell the organisations and their members about the need for quality at farm gate level. It is vitally important. Farmers will feel they are involved and I hope it will break down that barrier and bridge the gap.

Senator D'Arcy also mentioned the booklet on market development strategy. The booklet is not a breakdown of the marketing strategy and is currently being updated as it relates to the services of An Bord Bia. He also mentioned farm visits. It is part of the philosophy of An Bord Bia to increase farm visits to the primary producer to emphasise their importance in the food chain and in our strategy. He emphasised repeatedly in his contribution the importance of the link between the farmer and the processor and how the industry suffered in the past because of a breakdown in that link. I hope the additional members will ensure that link will be developed in the future.

I appreciate what Senator Quinn said but the matter he mentioned has also bedevilled the industry because farmers do not feel involved. The insinuation was, if I understood him correctly, that farmers should not be directly represented on An Bord Bia. I disagree with him because their representation is important. I know the Senator has direct links with farmers in his business and it is important that they are directly involved and not just made to feel involved.

I recently attended the Royal Show in England. I was speaking to the main purchasers from Tesco, Marks and Spencers and Safeway. I agree that the consumer will determine what they will provide but, having established that, they go back to the farmer to provide it for them. The consumer and marketing are very important but the individual at the start of the chain is the most important because he can produce the product which the consumer needs. If we ignore the producer, as we did to some extent in the past, we do so at our peril.

He who pays the piper should call the tune to some extent. As the farmers contribute £4.3 million in levies to the running costs of An Bord Bia, they are entitled to a say on the board and to make their contribution. If we wish to relate the philosophy of An Bord Bia back to the farmers, there are no better people to do it than the farm organisations. They attend the mass meetings of farmers throughout the winter, give the message and drive the policy.

At the moment two Ministers in the Department have responsibility for food and the Minister for Agriculture takes a very proactive role in the food industry. As well as my responsibility for An Bord Bia and the food monitoring programme I also take a very active role rather than simply leaving responsibility for this area to a Minister of State. The Minister is aware of the great possibilities for job creation in the food industry.

It is very important that the Minister, as was not the case in previous regimes, drives the food industry and that full responsibility for this area is not left to a Minister of State. I have my role to play but the major decisions are made in Brussels and it is important that the Minister at the Council of Ministers promotes our food industry.

I appreciate Senator Quinn's argument but I do not agree with it. Putting two farm representatives on An Bord Bia will strengthen the board, reassure farmers that they are part of the process and that their views and the importance of their contribution is fully understood and taken into consideration.

The Minister already has that freedom without introducing a new Bill.

Farmers' representatives should have been included when the Board was set up but they were not.

The Minister can do it any time.

Under the present Bill he had to go down this road.

Senator Dardis mentioned John Duggan and Michael Hanrahan and they are on the board in their own right. They just happen to be farmers but they do not specifically represent farmers. Senator Cotter made a very good contribution and brought up the problems of mushroom exporters. He outlined how successful the mushroom industry has been in County Monaghan. I agree with him, we are very much aware of the problems faced by mushroom producers, especially exporters, and we are closely monitoring what is happening.

I welcome Senator O'Brien's contribution because his first sentence confirmed what I am trying to do in this Bill, which is to emphasise the key role farmers play in the food chain and the quality of our product. I thank him for confirming what I already said this morning. The Senator mentioned farmyard pollution and I agree that its control is a very important part of the food chain. Several aspects of the food chain are important for the production of a quality product and we have the image of an unspoilt environment. Our great assets are the freshness of our food and the clean environment. Unfortunately we inherited a budget of £90 million for control of farmyard pollution and we all knew it was not adequate as the money had run out by 28 April.

The Minister did the right thing in suspending the programme. However, he is now trying to get money to pay all the people who had applied. As Senators know, 6,000 applications had been approved before the scheme was suspended. He is now seeking approvals for those who applied before December; in September I hope he will be in a position to make an announcement that the other 9,000 applications can be approved and that these people can go ahead with work having received conditional approval knowing that they will be paid, maybe not in 1996 but certainly in 1997. That will solve the problem from the point of view of all those applicants. Some people did not apply and we will have to examine the overall effectiveness of the programme to include them as well but I agree that the whole issue of control of farmyard pollution is a very important part of the overall food industry.

I appeal to the Minister to look at it favourably for 1996 rather than 1997 which is a bit far away. I know there were applications but at the same time they should be dealt with before 1997, 1996 is the acceptable limit.

We are trying to get the money from other programmes; we have almost completed a package so I think we will be able to satisfy the needs of those farmers. Senator Dardis asked why we did not give the two seats that are already there to the farmers. We filled one by appointing Noel Cawley and the other will be filled by an appointee of the Minister for the Marine. It was very important if An Bord Bia is to be totally focused, that the Dairy Board and the Department of the Marine are represented.

Will a second person from the Department of the Marine be nominated?

I have allowed three interruptions and I will not allow any more. Queries can be dealt with on Committee Stage.

No. Two more places were needed to ensure direct representation for farmers, which I welcome. I do not agree with Senator Dardis who said there is no need for this Bill. There is as it will ensure direct farmer representation, send a clear message to the farmers that they are a very important part of the food chain and that they will have some involvement in how their levy will be used. We will be looking more and more to the farming population in future years to pay for the running costs of An Bord Bia. It is important, to retain their confidence in the board, that they should be represented.

The Senator referred to the Minister taking a boat ride in Galway. This Bill is pushing out An Bord Bia boat so that we can take on the world, in particular the New Zealanders, who will be flooding the EU market shortly with a very competitive product. I have had contact with An Bord Bia over the past six months; it is a very professional organisation, well motivated and going in the right direction.

The Senator said that there is nothing in my speech about where the industry is going. I referred to the market development strategy, I did not want to describe it all but it is there. We are clearly focused on where we are going and the additions to the board will make it more dynamic and inclusive. I thank all Senators for their contributions and I look forward to Committee Stage.

I hope An Bord Bia boat has a more successful landfall than the Minister's in Gort.

Question put.


The question is: "That the Bill be now read a Second Time." On that question a division has been challenged. Will those Senators calling for a division please rise in their places?

Senators Dardis, Henry and Quinn rose.

As fewer than five Senators rose in their places I declare that the question is carried.

Question declared carried.

When is proposed to take Committee Stage?

It is proposed to take Committee Stage at 2 p.m.

Committee Stage ordered for 2 p.m. today.
Sitting suspended at 12.30 p.m. and resumed at 2 p.m.