Seanad Éireann debate -
Thursday, 14 Dec 2000

Vol. 164 No. 21

National Stud (Amendment) Bill, 2000: Second Stage.

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

Minister for Agriculture, Food and Rural Development (Mr. J. Walsh)

I am delighted to debate in the Seanad my legislative proposals for the National Stud Company in the National Stud (Amendment) Bill, 2000, and the state of the thoroughbred horse breeding and racing industries generally. There was a useful debate on the Bill in the Dáil. There was strong cross-party support for the improvements we are proposing in the way in which the stud is expected to operate. It is now a strong and vibrant company and I have every confidence that the growth it has sustained over recent years will continue and its excellent performance in all its fields of activity will be maintained.

In the Dáil, Deputies Dukes, Power and Wall from Kildare took a particular interest in the Bill and no doubt that will be the case with Senators from Kildare. That is not surprising given their proximity to the stud. They recounted some of the local history of the place, the top class stallions that have stood at Tully over the years, the pride the local people take in it and the esteem in which it is held. They also commented favourably on the Japanese Gardens and the new St. Fiachra's Garden and their importance from the point of view of tourism.

Three amendments were made to the Bill on Committee Stage. The main amendment related to the removal of any ministerial role in the decisions to be made in the future on how the proceeds from the sale of any part of the stud land would be used. Essentially, there was full agreement that the stud should be allowed to operate on a commercial basis and the board of the stud company should decide how the revenue will be used. We also agreed to increase the share capital and the limits on borrowing powers from the original proposals of £25 million and £20 million respectively to £30 million in respect of each. I will discuss these in more detail later.

I will now discuss the general state of the equine industry and where it is going. The horse industry has over the past few years gone through a momentous period of significant change. This is true of many industries and is probably caused chiefly by the unprecedented growth in the economy, the increase in disposable income and the radical improvements in the availability and use of leisure time in people's lives coupled with the modernisation of lifestyles.

This change created great opportunities for businesses in the service, leisure and tourism sectors. This is where the breeding, training and racing of horses and greyhounds are most active, and progress and prosperity in these areas have significant benefits for the producers of the basic products, that is, good quality horses and greyhounds. Three State bodies play leading and important roles in these sectors – the National Stud, the Irish Horseracing Authority and Bord na gCon. All three have, through the efforts of commercially-minded and business orientated chairmen and boards, not only seized the opportunities that were there but, with vision, pushed these sectors beyond all apparent barriers to place them at the cutting edge for the future.

The Government has shown its strong commitment to these sectors by the provision of an appropriate and much increased level of investment funding for the State bodies concerned. However, that was not all. Critically, and at important stages over the past few years, the Minister for Finance, Deputy McCreevy, and I have encouraged much needed change in the underlying organisational and financial structures underpinning these sectors. As a consequence of relatively recent developments, I intend to introduce in the near future new legislation governing the horseracing industry, probably the most significant ever in this area. This will represent the final phase in the restructuring of the way in which the horseracing industry is organised and funded, giving it a secure and permanent footing for the long-term future.

The first initiative in this direction was the establishment of the IHA in 1994. The work it has done over the past six years represents a major step in the development of our horseracing industry. The results are obvious – increased prize money, better facilities at our racecourses and improved customer services, resulting in strong growth in the key economic indicators of the health of the business. The current level of attendances are 1.3 million for the horseracing industry and 750,000 for the greyhound industry, proof that improved facilities in these leisure industries attract people, especially young people. There is a total of approximately £150 million turnover in on-course bookmaker and tote betting on horseracing and up to £50 million on greyhound racing.

However, continued and sustained development is essential to maintain and accelerate that growth. There is now full industry agreement on the way forward. I will put detailed proposals to Government shortly on the establishment of a new unified structure under a body to be called Horse Racing Ireland or HRI to replace the IHA and take over certain functions from the Turf Club. It is planned that this will facilitate securing for Irish racing the revenue coming from tax on off-course betting which currently goes to the Exchequer. This will in turn provide the level of investment required to stimulate the real growth potential of this important industry. I expect off-course betting in bookmakers' shops on the streets of our towns and cities to be close to £1 billion. For a relatively small country, that is a fair amount of punting.

Mr. T. Hayes

The Minister will have contributed a fair amount of it.

Mr. J. Walsh

I have been an occasional net investor in the industry. I now turn to the National Stud. If there is one thing that has stood to Ireland in the horseracing industry, it is its ability to breed and train excellent world class racehorses. In this respect, the Irish National Stud is to the forefront of the industry so I am particularly glad to bring a Bill before the Seanad which will allow the National Stud to develop even further. It is a tremendous national asset from the viewpoint of the contribution it makes to horse breeding and the efforts of Irish breeders generally. It also contributes significantly to the international reputation of the Irish thoroughbred and to Irish tourism.

Since its inception as a stud, Tully has been the nursery of so many world famous racehorses that its name is almost a household word, synonymous with all that is best in the thoroughbred. Many people will remember Lord Gayle, Crash Course, Sallust, Ahonoora and many more outstanding international thoroughbreds. For 2001, the Irish National Stud will have five stallions standing at Tully, including Indian Ridge, one of the top proven stallions in Europe and sire of Namid, the top rated sprinter in Europe this year. The other stallions are world champion three year old of 1998, Desert Prince, champion French miler, Ashkalani, and Priolo, the sire of champion miler Sendawar. Joining them will be the soon to be retired Indian Danehill, a group 1 winner in France.

Ashkalani is at the stud through the co-operation and collaboration of the Aga Khan. It is the first time this has occurred in Ireland since the 1920s. It says much for the professionalism of the stud that the Aga Khan is co-operating with the stud by standing one of his outstanding stallions there. Ashkalani was the European champion miler.

In addition to the stallions standing at the company's farms in Kildare, there are four national hunt stallions based around the country to facilitate national hunt breeders. Examples are proven sire Broken Hearted and the new addition, Rudimentary, which is owned by the stud in partnership with Anngrove Stud. This makes the stud's stallions more easily accessible to breeders throughout the country.

The stud company, which showed profits of more than £400,000 in 1998 and more than £600,000 in 1999, is currently trading very well. A substantial profit is also predicted for this year. It is interesting to note that the total turnover generated from the company's stallions this year is more than £6 million of which in excess of £3.5 million is generated from foreign owned mares, reflecting the world class attractiveness of these stallions. More than half of the mares coming into the stud come from outside the country. On the stud's yearlings, this year turnover was almost £1 million at the recent yearling sales and included the top price for a filly sold in Ireland which was bred out of the stud's excellent brood mare, Sabaah.

This year was a record year for tourism at the stud. The Japanese Gardens and the millennium project, St. Fiachra's Garden which opened in June 1999, were an outstanding success. It is expected that final numbers of visitors will be in excess of 145,000, 17,000 more than last year and almost 50% higher than two years ago. Another part of the Irish National Stud's function for some years now is its training course in horse breeding, of which it is justifiably proud. This most important course will continue in the future as it is regarded as one of the best training courses in the world and has a track record second to none. Graduates of the National Stud course are to be found throughout Ireland and the world.

The horse museum, which houses the skeleton of Arkle, is another of the stud's attractions. I would like to see the museum being expanded because many people are interested in equine history, the source materials for which should be located in one centre. I cannot think of a location preferable to the National Stud.

The history of the legislation governing the stud is that the National Stud Act, 1945, vested the National Stud Farm which covers more than 800 acres in County Kildare in the Minister for Agriculture, Food and Rural Development. The Act provided for the establishment by the Minister of a limited company under the companies legislation to operate the stud farm and for the Minister to grant a licence to the stud company to use the land accordingly. It also provided for associated matters such as the share capital and borrowing limits of the company.

The National Stud Act, 1976, amended the 1945 Act by, among other things, increasing the share capital to £5 million and the borrowing power of the company to £500,000. The 1993 amending legislation increased the share capital from £5 million to £10 million and the borrowing powers from £500,000 to £5 million.

This Bill proposes to empower the Minister to vest the National Stud Farm in the stud company and to increase again the share capital and borrowing powers of the company. The total amount of share capital which can be issued in respect of the National Stud is currently limited to £10 million and, to date, the State has purchased almost all of the available share capital. The equity investment of recent years has been channelled into the purchase of top quality stallions or shares in such stallions. Together with other initiatives, the acquisition of these stallions has underpinned the stud's success and brought the company back from a loss making position in the early 1990s to a viable and profit making operation today. The stud will have to continue to purchase shares in more quality stallions over the coming years and, for that reason, it is proposed to increase the share capital of the company from £10 million to £30 million. I initially intended to increase the share capital to £25 million but it was agreed, following some debate in the Dáil, to increase it to £30 million instead as it was recognised that the value of bloodstock has increased so much in recent years that the higher provision of £30 million is easily justified. This year's winner of the Kentucky Derby changed hands for $70 million which is some indication of the kind of money at stake. Last year, the stud bought Desert Prince for the relatively modest sum of a couple of million pounds. This year, eight of the stallion's first foals were sold at auction, averaging a price of £100,000 each.

Mr. Dardis

Surely the Minister means guineas?

Mr. J. Walsh

I stand corrected. The National Stud's borrowing powers are currently limited to £5 million and such borrowing is subject to the approval of both the Minister for Agriculture, Food and Rural Development and the Minister for Finance. The price of top quality stallions in which the National Stud would be interested has increased substantially in recent years. When the stud becomes interested in a particular stallion, it is crucial in competing in a tough market place and to achieve purchase at the most reasonable price available, that the stud is able to move quickly in offering a price and completing a purchase. There will be occasions when the stud will want to purchase 100% of the shares of a stallion and subsequently seek investors to take up a proportion of those. Both of these manouevres would generally require substantial short-term borrowings and it is therefore proposed to increase the borrowing limit to £30 million. Again here I had originally intended to go with a somewhat lower limit of £20 million but for the same reasons advanced in relation to the possible need for a higher level of share capital, it was agreed in committee in the Dáil to raise this to £30 million.

The National Stud currently holds the stud lands under licence from the Minister for Agriculture, Food and Rural Development. It is proposed to give the Minister the power to vest all or any part of the lands in the company to make it possible for the company itself, if circumstances require, to sell such vested land, subject to the consent of the Minister and to use the proceeds to buy suitable replacement land or otherwise develop some other aspect of the stud's activities. This is particularly relevant now because the Kildare byass will result in the separation of parts of the stud lands from the main farm, making those parts considerably less suitable for stud farming in the context of an integrated National Stud farm operation. It may then be desirable to sell the 50 or so acres cut-off by the bypass and buy other more suitable land adjacent to the main farm.

I had intended that when such land sales were made the Ministers for Agriculture, Food and Rural Development and Finance would decide in each case how the proceeds would be used and that some or all of such proceeds could go to the Exchequer in certain circumstances. However, following a very useful debate on this subject in the Dáil, I decided that this might represent an unnecessary restriction on the commercial operation of the business of the stud company, especially given that I have such confidence in the board and management of the stud. The relevant provision was removed by amendment on Com mittee Stage in the Dáil and replaced by a new subsection that gives the stud itself the right to decide how the proceeds from the sale of land should be used. The management may decide to buy replacement land or develop the stud and the company's other associated interests.

I would like to clarify one issue regarding section 2 of the Bill which deals with the whole vesting issue. A comment was made at the conclusion of the Report Stage debate in the Dáil which suggested that subsections (4) and (5) of section 2 were defunct as a result of an amendment passed on Committee Stage to subsection (3) of that section. This is not the case. These subsections relate to incidental provisions which may be contained in an order under section 2 vesting land in the stud company and the requirement to lay such orders before the Houses of the Oireachtas. As these subsections relate to the orders referred to in subsection (1), which was not affected by the amendment, and are nowadays fairly standard qualifications to most ministerial orders being provided for in legislation, it is appropriate that they are used here and should remain part of the Bill.

Under current legislation, the National Stud does not have the power to form subsidiary companies. The stud is now involved in what is effectively a separate business relating to its tourism activities and, from time to time, operates its search for and purchase of bloodstock separately from its main stud farm operations. Both of these businesses can be most efficiently operated from a VAT viewpoint, in particular, through subsidiary companies. It is now proposed to allow the stud to establish such companies, purchase shares in other companies and enter into joint ventures, subject to ministerial consent, in line with powers introduced some time ago for the IHA and Bord na gCon. In other words, the stud is to be allowed to operate as a commercial entity in competition with other studs throughout the country and the world.

Under the 1945 Act, each director of the National Stud Company holds one share in the company. Five shares are held by ministerial nominees who are civil servants in the Departments of Agriculture, Food and Rural Development and Finance with some responsibility or expertise in this area. The remaining shares are held by the Minister for Finance. To date, 9,975,374 shares have issued, of which the Minister for Finance holds 9,975,362. Under the present arrangement, new share certificates must issue and other documentation must be amended every time there are changes to the board of directors. As this is a very unwieldy operation, it is proposed to amend the Act to allow us to dispense with these procedures and to provide for the total share allocation to be held by the Minister for Finance and, if required, certain office holders in the Departments of Agriculture, Food and Rural Development and Finance.

The Bill also includes a number of other technical changes of minor consequence dealing with the name of the company and its objectives which clarify the totality of the role and activities of the stud as it has evolved over the years. There is no direct charge on the Exchequer in these proposals. However, if and when the Minister for Finance opts to purchase some of the additional shares in the National Stud provided for in the Bill, there will be financial implications for the Exchequer.

I commend the Bill to the House.

Mr. T. Hayes

I welcome the Minister to the House for this very important Bill. The Minister reacted in a responsible way to some of the Opposition amendments in the other House. He saw the need for what was proposed and we are very pleased these amendments were accepted. Therefore, we will be supporting the Bill and I want to help in every way possible the speedy passage of the Bill.

It is gratifying to read about the success of the National Stud which is no longer dependent on the taxpayer. It is very good that it is now making a profit. We should be very proud of the history of the National Stud. Through tougher times various Governments helped finance it and Kildare people and ourselves are very proud of its record. The horseracing industry has benefited as a result of that investment over a long period.

The racing industry is very important to our country and it involves many people. Everybody has an interest in racing, be they older people who study form at home on a Saturday, young people who go for the social aspect or tourists. A huge amount of finance is generated by the industry and a huge amount of social activity surrounds horseracing, which is very welcome. It is good that so many people can benefit from the racing industry.

I have often commented on the amount of racing coverage provided by RTÉ and have asked it to review its policy in this regard. There are great races, particularly at weekends, and given that older people cannot travel to meetings at Leopardstown, Fairyhouse etc., RTÉ should consider broadcasting much more racing. Many people cannot go to race meetings for various reasons and perhaps the Minister will recommend that RTÉ carry more racing for their benefit.

Racing is now for everybody, something evident from the success of syndicates. Indeed the success of the grand alliance syndicate is an example, the secretary of which has just joined us. Syndicates are another reason many people can become involved in the racing industry.

I come from an area which has had much success in the past. One notable success is Vincent O'Brien who has contributed hugely to the racing industry. He has retired from the business but has left an indelible mark on it. His contribution to the industry is probably the greatest of all time. At some stage we should honour that contribution in some way. I know the Minister raised the issue of a museum, and Vincent O'Brien should be part of it. The story of Vincent O'Brien should be told and it could be a huge tourist attraction as no figure is better known in the world of racing. He was born in Cork, which should help my argument that he be recognised in some way.

Perhaps I am inclined to be parochial and to raise issues concerning my constituency, but I wish to raise the future of Tipperary racecourse, an issue I have raised with the Minister on numerous occasions. The racecourse has been running into difficulty because it has lost certain fixtures, a major blow to a course which could host many more events. The reason for the cancellation of some events is the condition of the ground. The drainage of the racecourse is a major issue which has been ongoing for some time. I understand that in future proposals will be made to the racing authority to provide funding to help the racecourse company drain the track. The Minister, who has often attended race meetings there, knows the track is very good and has attracted a huge number of people over a long period. It would be a pity if the racing authority turned its back on the track. There is a feeling in the community, including the wider business community, that there is not the same commitment to the track as there is to others in the area. When the Minister is discussing racing with the people in authority, I ask him to remind them of the potential of Tipperary racecourse.

I welcome the Bill and assure the Minister that I wish to progress it as speedily as possible.

Mr. Ó Fearghail

As a Kildare man and a near neighbour of the National Stud, I am delighted to have the opportunity to take part in the debate. I welcome the Minister and the provisions of the Bill. It should be viewed in the context of the explosion of interest in the bloodstock industry and the many positive changes achieved in recent times. I strongly agree with Senator Hayes that due to the effects of the booming economy we are seeing people who in the past could aspire at best to being regular racegoers becoming owners or part owners. The sport of kings is now accessible to many citizens. Great credit in that regard is due to the Government, including the Minister for Agriculture, Food and Rural Development and the Minister for Finance, whose passion for the industry is well known. Indeed we can point to record investment by the current Government in the industry and massively improved management at most of our racecourses where the attitude is progressive and forward-looking. The racecourses and their facilities have been enormously improved and prize money has been increased. Generally a new sense of customer awareness has been established. After six years in existence, the IHA can be proud of its achievements in that the growth targets it set itself in its strategic plan have been surpassed. I wish we could say the same about every strategic plan that has been put before us.

Progressing from this, and as a result of the Minister's initiative and that of the Minister for Finance, we are shortly to have, as stated, the new HRI, Horse Racing Ireland, which I am sure will be a strong unifying force for the industry. With the substantial additional revenue from off-course betting, the new HRI will be a major force for securing the future of the industry and all those who are employed in it. Coming as I do from the thoroughbred county, I know how important that achievement is. Both Ministers are to be complimented on the manner in which they successfully concluded what were on many occasions quite difficult negotiations to this end. The industry is indebted to both.

Since 1945 when the National Stud Act vested the 800 acres at Tully in Kildare in the Minister for Agriculture and then licensed the use of the lands to the new Irish National Stud Company, that company has fulfilled its remit in an admirable fashion. Like many companies, it has had its ups and downs, not least in the early 1990s when times were bad. It is today on a sound financial footing, having increased trading profits in the past few years and with expected further improvements in the financial situation for the year 2000. It has also loyally adhered to its purpose of promoting the breeding of top class bloodstock, with due regard to the making available of quality sires to the smaller breeders. That four top quality sires are now standing at different locations throughout the country is clear testimony to that fact.

More than any other factor, the stud can attribute its success to the unrivalled commitment and dedication of the board and the staff. Living within a stone's throw of the stud, I know all the people who work there and have first-hand knowledge of their loyalty to the stud company. Stud managers over the years have demonstrated great skill and expertise in developing the stud and in promoting it on a local, national and international level. In this regard I refer to the tenure of Dr. Michael Osborne as manager of the stud, a man renowned in bloodstock circles. He will be remembered locally and nationally with particular admiration and fondness in relation to the work he did for the Irish National Stud Company. Great credit is due to the selfless commitment of the board members over the years, each of whom has brought their own expertise and wisdom to the process of governance of the stud. The Minister and his predecessors are particularly fortunate to have been able to recruit the services of people of the calibre of the current chairperson, Mrs. Chryss O'Reilly, and the former manager, Dr. David Shubotham. We are very much indebted to them for the commitment they have made to this State enterprise.

In addition to the four stallions standing at locations around the country, we have five top class stallions who will stand at Tully during 2001, among them being Sean Coughlan's Indian Ridge, one of Europe's leading stallions, to which the Minister referred. Operating as it does in what is a hugely competitive market and with the need to acquire through purchase or share arrangements top quality breeding stock, the provisions of this Bill relating to share capital and borrowing powers are timely. The increased limits proposed in the Bill in both share capital and borrowing power, now set at £30 million in each case, will place our National Stud Company in a position to function more effectively in the marketplace. That is something we would all strongly support.

I warmly welcome the proposal to allow the Minister to vest some or all of the lands in the National Stud Company, together with the provisions relating to the sale or acquisition of land. The Minister referred to the now famous, or perhaps infamous, Kildare bypass. The extent to which the development of that particular road and the stud have been interconnected in recent years is a story in itself. Suffice it to say that in attempting to minimise the effect of the new motorway as it crosses the stud lands, the design team and the county council decided to place the road in a deep cut with the ensuing controversy about the Curragh aquifer, the now famous Pollardstown Fen and, of course, the Angistora vertiego, the mollusc or snail, so much beloved by my colleagues on the Fine Gael benches. Upwards of 50 acres of stud land will be severed by the Kildare bypass.

While having due regard to the need to facilitate the expansion of the operations of the Racing Apprentice Centre of Education, it is entirely proper that the remainder of the lands lying close to Kildare town should be rezoned. As these lands would, if zoned, realise a very substantial sum on the open market, I welcome the decision the Minister has made to leave decisions relating to the spending of such income to the board of the Irish National Stud Company, as would be the case in relation to any normal commercial venture. I would simply echo the hope the Minister expressed in his contribution that in acquiring replacement land, if that is what is decided, it will be in very close proximity to the current operation.

It would be remiss of me to conclude without mentioning the tourism aspect of the company's operation, because this a significant part of its overall operation. The package that is now the National Stud, the Japanese Gardens and the most recently established St. Fiachra's Gardens, is one of the most visited tourist attractions, pulling in about 150,000 in the current year and showing a 50% increase in its numbers in a period of two years. The stud, therefore, has been well justified in its investment in its tourist product having, as it does now, one of the country's top ten attractions at its very heart. I salute the work of the tourism manager there, Mr. Pat Mullarkey, who in recent years made the very difficult transition from farm manager to tourism manager, proving the adaptability of those of us who work in the agricultural sector. Working with a small corps of diligent staff he has achieved record levels of success.

I thank the Minister for bringing this Bill before us. So positive and welcome are its provisions that I have noticed in the newspaper columns that others are claiming credit for it and ownership of it. That should not be the case. This is just one more initiative from a Minister who has served the bloodstock industry well. I commend the Bill to the House.

Dr. Henry

I wish to share my time with Senator Cosgrave.

An Cathaoirleach

Is that agreed? Agreed.

Dr. Henry

I thank the Minister for bringing this Bill to the House and welcome him. I am sure he realises that, despite the fact that my entire family has been ruined by horse breeding, I still have an interest in these very interesting and intelligent animals.

The National Stud is a great credit to us. I agree that the tourist attractions which have been brought forward so well there in recent years should be hived off into a separate company, and it is good that this should be allowed. I hope the engineering problems at Pollardstown have now been resolved. This has been a serious difficulty not just for the snails but for the inhabitants of Dublin as well in the context of water.

I am pleased with the success the stud has had in attracting international breeders with their mares to our very important stallions. However, stallion fees here are extraordinarily high, and this is causing a great crisis for smaller breeders who find that there are fewer and fewer stallions in fewer and fewer hands. I wonder whether the National Stud has a policy regarding smaller breeders. I would hate to see them squeezed out of the market because they have been of tremendous interest to people all over Ireland, and a source of income when things go well, which seems to be one time in every five. Does the Minister have a mission statement, which is the fashionable word now?

In the context of the Pollardstown Fen again, and the extraordinary statement reported the other day in The Irish Times to have been made by Commissioner Fischler that BSE could be spread by excrement and could be spread in ground water, if the Commissioner does not have scientific evidence for this, I would have thought it should be refuted at once. I am not suggesting that horses are going to get it, but there are other animals there and it is important that statements like that should be immediately knocked on the head. I would not like to see another problem with the Pollardstown Fen.

Mr. Cosgrave

I welcome the Bill and the opportunity to say a few words on the Bill and on the general racing industry. I welcome the Minister who, from his hands on approach and his appearances on the track, keeps an eye on the racing industry and the various matters related to it. As the Minister said, the National Stud, the Irish Horseracing Authority and Bord na gCon come under his stewardship and are areas in which progress has been made.

I want to take up a point raised in relation to the National Stud which brings to mind the issue of the Kildare bypass and the concern about the extension of the M50 at Leopardstown racecourse. There is a letter in The Irish Field of 9 December from Kevin Smith, president of the Racing Club of Ireland, which is headed “Rally Round the Cause or Say Goodbye to Racing in Dublin”. In that letter he states that with all that has happened in relation to the alignment of the roadway near Leopardstown, it appears definite that sprint racing and racing of two year olds will be a thing of the past, and possibly even the death-knell for racing in general.

It is proposed to move the five or six furlong track in Leopardstown towards the centre where the stables, etc. are currently located. If people believe it is possible to redesign a course in such a way, they are not living in the real world. I am sure the Minister would agree with that because he would be aware of problems already experienced in Punchestown and in Doncaster. Designing a racecourse is not as simple as laying concrete or tarmacadam because land has to settle. What they are attempting to do at Leopardstown is totally reckless.

An article appeared in The Sunday Times on 10 December last by Michael Clower, the headline to which read: “Leopardstown in Disarray over the M50”. I am aware that the acting general manager, Tony Corcoran, is seeking an urgent meeting in relation to the way the design work on the roadway will affect Leopardstown. Not only will it be out of line with no sprint track, etc., but the fences, which some Members will know are just beyond the stands, will be affected also. When they start digging and laying this roadway there is a danger that the track will be flooded, which is a major concern. I ask the Minister to investigate that matter because as Peter McCarthy, chairman of the Association of Irish Racehorse Owners, stated:

If Leopardstown were to close, it would be an absolute disaster. It is the only course left in the Dublin area and it would be hard to rebuild its great atmosphere.

The track in Limerick is coming on stream and perhaps the Minister, when replying, could advise us as to the progress that has been made or when it will be opened. Perhaps there might be a suitable race there for the grand alliance horse, Artic Copper, which, hopefully, will be running over Christmas. I hope he does not have to contend with the roadway, as long as he can get over the jumps. On a more serious note, there is a major problem with Leopardstown and a decision should be made on what will happen because a race track that has been built up over many years cannot be moved. A race track cannot be made out of ordinary land.

I welcome the fact that various problems have been resolved satisfactorily. The Minister, his officials and others are to be thanked for getting these matters sorted out. With the progress that was sought in relation to racing and the various bodies coming together there was a danger that the funding would not be allocated.

There have been major improvements in regard to race tracks and facilities. Racing is a spectator sport and people have to be looked after. The days of throwing up any type of food and drink to them are gone. If people are paying reasonably good money to get into a racecourse, they want to be looked after. Other sports are getting their act together and racing has made a lot of strides in that area. I welcome the fact that some of the facilities have been improved.

I compliment everybody in the National Stud on the work they have done through the years. I know some of them very well; they are related to me. The acquisition by the National Stud of Desert Prince and the fact that his first crop has achieved tremendous prices recently both in Kill, Newmarket, Goffs and Tattersalls is to be welcomed.

I understand that my colleague, Deputy Dukes, proposed a number of amendments in the other House, which the Minister saw the wisdom of, in relation to increasing the borrowing limit, etc. It is important that the stud is able to build on its success. It has made some excellent purchases through the years and perhaps it could acquire a stallion even before his racing career has concluded. I am sure the Minister would support that in so far as it is possible.

I know the Minister is committed to this area and that he has the interests of the industry at heart. The entire industry – the stud farms, the racing game and the people who work in the yards – is an important employer. The success of Giant's Causeway, Istabraq and others has put Ireland on the map. Cheltenham, Kentucky, Vintage Crop in the Melbourne Cup, Sinnbar this year and other major races have all done much to promote the Irish thoroughbred. I know people who are coming here from Japan, Hong Kong and South America to buy some of the less fashionable horses but the more Irish thoroughbreds travel to these countries, the more that will benefit this country. Those of us who have a particular interest in racing like the sport for different reasons but as a spectator sport and a flag bearer for the country, I urge the Minister to take on board some of the points I have raised. I have pleasure in supporting the Bill.

Mr. Dardis

I welcome the Minister, Deputy Walsh, to the House this evening and I welcome the legislation before us. It is part of a series of measures which has improved the industry. As a Member of this House for the past 11 years I can recall speaking on the 1993 Bill, where we did something similar to increase the capacity of the stud to operate commercially and be able to borrow the required moneys to allow it to operate in a competitive international environment. We have dealt with the Irish Horseracing Authority Bill and I know we will deal with Horse Racing Ireland.

We have been fortunate that we have had continuity in terms of the Ministers we have had and their understanding of and support for the business, as well as their involvement in it. I am talking about Deputy Walsh, when he was previously Minister for Agriculture, Deputy Yates, when he was Minister and again back to the Minister, Deputy Walsh. We also have the critical support of the Minister for Finance, Deputy McCreevy, who lives in the area and who understands these issues. It is fortunate that we have had such people there. Very often in the past there was a misunderstanding about the industry and the people involved in it. In certain quarters there was a perception that it was somehow elitist, which, of course, it is not.

Racing is one element of the industry but it is not the only element. It is a large industry both in terms of breeding and entertainment. I made this point in 1993 and it has taken a long time for it to filter through in terms of the promotion of racing and the provision of facilities to encourage people and families to go to race meetings. Last year when I visited Fairyhouse I was very taken with the fact that the tote hall was heated. If people involved in the horseracing business were told 15 years ago that the bar or tote hall on a racecourse would be heated they would have laughed heartily. There was almost a belief among the management of racecourses that there should not really be the facilities and comfort people expect and to which they are entitled. If such facilities are not provided, people will go elsewhere.

The Bill accepts the important reality that the breeding industry is a big money business. The Minister said that the winner of the Kentucky Derby costs $70 million. One could quote many similar examples. If this stud is to be a flagship for the industry it must have the resources to compete in the market and represent Ireland effectively at the highest level within the industry. It is about creating and maintaining an image of excellence. This is a significant image as it is the only one many people have of Ireland. This is the image of Ireland which is projected in Hong Kong, Australia, New Zealand, America, Canada and other countries where there is bloodstock and racing. The survey conducted by the thoroughbred development company established in County Kildare confirmed that the dominant image of County Kildare is of thoroughbreds and horses. This is why the company has created the thoroughbred county.

Given that this is a big money industry, increasing the thresholds for the share capital and borrowings is important. The Fine Gael press office was somewhat disingenuous in its press release which quotes Deputy Dukes as saying he had secured an increase in the company's share capital from £10 million to £30 million. The figure in the Bill is £25 million and the Minister can take credit for at least half of the money. Deputy Dukes cannot take credit for it all. He also said he had secured agreement to increase the company's borrowing limit from £5 million to £30 million. The figure in the Bill is £20 million. It is correct that the limits were increased but it is disingenuous to issue press releases which make claims which are not strictly true. The amount was increased in 1993 from £500,000 to £5 million. This shows how far we have come over the past eight years.

I welcome the ability of the stud to create subsidiary companies. This is important in the context of the Japanese Gardens and St. Fiachra's Garden. I attended the opening of St. Fiachra's Garden which has the capacity to do what the Japanese Gardens did in terms of attracting visitors to the stud. Martin Hallinan who designed the garden and the people associated with it deserve much credit. It is different from the Japanese Gardens and complements the tourism product.

I have noted the comments on the number of tourists. The tourism turn-over is high but the figure of £78,000 for revenue generated is less than one would expect. This is an aspect that should be looked at. The stud and farm generated £645,000 in 1999, which was up on the figure for the previous year. I note that the Exchequer, in its munificence, gave it back £23,000 by way of over paid tax; it must be a compliant taxpayer in addition to all its other attributes.

I strongly support the case made by the Minister for the equine museum. Last year I brought an American visitor to the National Stud. The part which fascinated him most was the Arkle skeleton and the associated displays. There is huge potential in this area as part of the overall tourism package and I agree with the Minister that it should be expanded. The revenue generated from the disposal of the land could be used for this purpose.

The RACE school, which is associated with the stud, does a good job but I would like to see the educational aspect developed. A third level course on equine science is run in Limerick but some young people come into the industry at a lower level. We are all aware of how stable lads were treated. Happily that era is ending, which is as it should be. There is a capacity to improve the ethos and experise within the industry. The question of a farrier course also arises in this con text. This was dealt with during the debate in the other House.

Those of us who live there know that God blessed County Kildare with the limestone soil, grass and climate to create the resource that is the bloodstock industry.

Mr. J. Walsh

Is there any chance he would throw a drop on the footballers to give them that vital bit of edge?

Mr. Dardis

There seems to be another deity at work in the case of the footballers. We are getting there but we have a bit further to go. However, we have achieved more than we did in the past.

To put the importance of the industry to County Kildare into context, KELT, the Leader company, commissioned a study which revealed some surprising facts which might not be readily appreciated. One is that the bloodstock industry is much more important to County Kildare in employment terms than farming. This is not something one would readily think of. In 1975 there were 5,600 farmers in the county and this had decreased to 3,300 by 1991. Obviously this figure has decreased further with the developments which have taken place since. There are approximately 4,000 jobs in agriculture. The study carried out by the Kildare Horse Development Company showed there were 5,500 direct jobs in the equine industry and 10,000 in associated industries and services. There are 162 stud farms in the county, covering 22,000 acres, and a quarter of the national population of brood mares. In 1998 more than 1,000 horses, almost a quarter of the national figure, were trained there. One can see from these figures how hugely significant the industry is to the welfare of the county.

During the debate in the Dáil, Deputies congratulated John Oxx and His Highness the Aga Khan on their marvellous achievement with Sinndar and Ted Walsh for his achievements during the year. People in County Kildare were very proud of these achievements and it is only right that Ted Walsh has been chosen as Kildare Man of the Year.

Senator Hayes made an important point I wish to take up. Following the Olympic Games there was much laudatory comment on the RTE coverage. The Prix de l'Arc de Triomphe is the equine equivalent of the Olympic Games and it was terrible that we had to watch the race on BBC2. This race is the pinnacle of excellence, yet RTE did not cover it.

Naas and Punchestown have done a tremendous job in improving facilities and making it comfortable for people to go to race meetings. During wet days we no longer get bogged down in the carpark at Punchestown. We can move around in comfort. Dermot Cox and the other people involved in Punchestown deserve a great deal of credit because they started the ball rolling. They could not have done this without Government assistance. Naas racecourse also received assistance. The atmosphere at Punchestown has been transformed and it can compete with the best. It is the Cheltenham of Ireland. The comparison is somewhat invidious because huge numbers go to Cheltenham, but it is a genuine comparison. It competes effectively and we can be proud of what has happened there.

The sixth Oireachtas Joint Committee on State-Sponsored Bodies reported in March 1990 and made recommendations. I am glad quite a few of those recommendations have been adopted. Others may still merit examination.

Earlier I talked about the education aspect. The report recommended that the National Stud should expand its role and become an academy that would develop the skills and expertise of those already working in the sector. It also mentioned the development of the equine tourism package, of which St. Fiachra's Gardens is part.

The committee mentioned the museum which the Minister referred to earlier. It also mentioned setting up a body to implement its proposals. I am not sure if that is necessary because the board of the National Stud has done an excellent job. We are fortunate to have Mrs. Chryss O'Reilly as its chairman. She has been instrumental in bringing some of the very good stallions we mentioned earlier to the stud. She has provided huge support to the stud and her work should be recognised. Her predecessor, Dr. David Schubotham, did immense work. It is significant that one of the submissions to the fifth Oireachtas joint committee was made by Mr. John Oxx, then chairman of the stud.

I remember saying on the last occasion we discussed this issue that it was spectacular to lose money on 1,000 acres of prime Kildare farmland. The reasons for this were that the stud had to pay a hefty rental fee and the rest of the money was invested in bloodstock. Running a stud is not as simple as farming. The stud's record over the years in terms of the revenue it has generated is impressive. There have been hiccups along the way, with two years of great losses. We can, however, take great satisfaction from the way successive boards have managed the stud's affairs.

In 1915 Colonel Hall-Walker decided to hand the stud over to the Government of the day. He wanted to augment the skills and expertise that were necessary for the creation of military cavalry horses. It is extraordinary that the British controlled this property until 1945 when the National Stud Bill was enacted. They rented it to the Irish State during the 1920s and the stud company was formed in 1946. I do not know if Colonel Hall-Walker knew what he was getting into when he made his original bequest to the State.

I noted at the time Mr. Oxx made his contribution in 1998 he said that the National Stud could not afford the luxury of a flagship stallion. That was said in the context of the sale of Ahonoora for £7 million. At the time it was stated that the stud could not justify keeping a horse worth that much. Thankfully, our economic circumstances have changed to such a degree that the State would not want to get its grubby paws on £7 million or on the several millions of pounds that will be generated from the sale of the land.

A happy outcome from all this is that Ahonoora begot Indian Ridge in 1985. Thank God the stud kept Ahonoora for two extra years and Indian Ridge stands at the National Stud. The contribution Seán Coughlan has made in that regard was referred to by Senator Ó Fearghail.

I congratulate the people involved in the governance of the stud. I also congratulate its manger, Mr. John Clarke, and the staff. We should not forget that the stud injects about £1 million into the economy of Kildare in terms of wages. Senator Ó Fearghail referred to the Kildare bypass. The Minister has enough confidence in the stud's board and management to ensure that the money is used to develop it without putting caveats on it.

I accept what the Minister said about sections 2(4) and 2(5), that they do not impose the restriction suggested on Report Stage in the Dáil. It will, however, make operating the stud problematic in the future, particularly with regard to the lands between the motorway and Kildare town. Senator Ó Fearghail's suggestion that this land be considered for building purposes is the only realistic course of action. We all know of cases where it has become almost impossible, if not impossible, to operate a working stud which is surrounded by urban development. Looking further down the road, if the motorway is built through that part of Kildare, there must be question marks about the capacity of the stud to continue to operate. The Japanese Gardens, St. Fiachra's Gardens and some of the lands around the stud and its buildings can be retained. The operation of a stud farm has become extremely difficult. I do not know where we will find 900 acres of prime agricultural land within five miles of Kildare. Some consideration will have to be given to this matter.

I welcome the establishment of Horse Racing Ireland. Again, we are back to money and the need for it. We want the industry to thrive and develop. We also want owners, trainers and everyone involved in the industry to be able to make a living. The HRI will provide a unified system of developing, financing and administering the sport and the industry.

I want to draw the Minister's attention to a unique event. Earlier someone spoke about the grand alliance syndicate. On 11 October in a very unique cross-party gesture a press release was issued expressing strong support for the innovative proposals put forward by the Ministers for Agriculture, Food and Rural Development and Finance for the future administration of funding for racing. The Minister for Agriculture, Food and Rural Development had an unprecedented impact on the Houses when he got three Cabinet Ministers, one Minister of State and many Deputies and Senators from various parties to support his initiative.

Mr. Callanan

There were 17 Members involved.

Mr. Dardis

The Minister should be congratulated on securing such unique cross-party support.

It was extraordinary to see people protesting outside the Turf Club at the Curragh. No one expected to see it. However, it demonstrated the feeling within the industry. That does not take away from the contribution made by the Turf Club to racing, and the Minister would not suggest that it does so. In terms of stewarding services, for a long time the Turf Club has tried to ensure proper racing standards, and this has been acknowledged. It is time we moved forward on this issue. The Minister was correct to do what he did and I applaud him for his initiative. I am sure we will have an opportunity to debate this matter in greater detail when the legislation comes back to us.

The national hunt is another aspect of the stud's operations that could be expanded. This is my favourite aspect of the stud. There are four stallions based around the country. Perhaps more could be done in this area. I want to know how the non-thoroughbred industry can be developed. I am aware that the National Stud cannot cope with every aspect, but we should focus more on the national hunt.

The issue of foal levies was raised in the other House. I agree with some of the comments made in that regard. Syndication is a very important aspect of the stud's work. It would allow the stud to stand some of the best stallions.

Privatisation was mentioned in several of the earlier reports of the committee. The stud is not a proper vehicle for privatisation. I am enthusiastic about privatisation in general but the stud can fulfil its objectives best, as defined in the original 1945 Act, by remaining in State ownership. The late Tom Coleman, a farmer from Meath, said the road to ruin was fast women, slow horses and fattening cattle. I have experienced two of these.

Mr. J. Walsh

The Senator will not admit what is the third.

Mr. T. Hayes

The Senator should specify.

Mr. Dardis

The Minister may have heard me say this in the House previously. Fattening cattle is one of the recipes on the road to ruin as are slow horses. Hopefully, with the benefit of the Minister's expertise, his support for the industry and the input of the National Stud the horses will run a little faster and the horse I brought to Tipperary racetrack on one memorable occasion might be able to run around the course a little faster.

It is totally unsatisfactory that if one is a small owner who brings a horse to a racetrack anywhere, one cannot park one's car in comfort, obtain a race card when one passes through the turnstile and grab a bite to eat or have a cup of tea. That is minimal and on the memorable occasion I rushed from my home to see the race in Tipperary, a man in a white coat in the car park told me I could not enter. I had a pass to get through the gate but there was no race card. Perhaps the racecourse owners might give a little credence to the input of the small owner to the industry.

Mr. Callanan

I welcome the Minister to the House. I listened with interest to the debate and my two colleagues from Kildare and you, a Leas-Chathaoirligh, expressed their concerns about the happenings at the National Stud and at racecourses. I want to impress on the Minister that we breed good horses in west Cork and in Cork generally. There are good enthusiasts there. Ms Donegan from my home town of Bandon performed with excellence at the Sydney Olympics on a horse called Don't Step Back. A second horse, Customer Line, bred in Bandon by Mr. and Mrs. Tim Horgan and ridden by David O'Connor, equally excelled.

Horseracing enthusiasts, especially those in Kildare, must be offered assistance. There are problems in Kildare as a result of bypasses, the destruction of property and a dearth of land for car parking and so on. Perhaps Denis McCarthy from Clonakilty who owns a farm near Leopardstown could be consulted, but in the absence of agreement we will facilitate the entire industry in Cork. We have no problem providing the 800 acres of good limestone land required and we will facilitate the Minister in every way to ensure the industry grows.

I compliment the Minister because he has been open and receptive in regard to ideas and amendments. He steered the industry well in 1993 and between 1998 and today and I look forward to more legislation.

Minister for Agriculture, Food and Rural Development (Mr. J. Walsh)

I thank all Senators for their excellent, positive and knowledgeable contributions. I doubt there is a House of Parliament in any democracy that could have such an informed discussion on the equine industry. It is fitting because the industry covers a range of activities which involve approximately 25,000 people, including those working in training and breeding establishments, bookmakers and at racecourses. There is hardly a town or village in Ireland which does not have a connection with a thoroughbred or non-thoroughbred. I am enthused by the support for the National Stud and the Irish horse generally.

The legislation relates to the marketplace and one needs to be at the upper end of the market. Increasing borrowing and share capital are needed. The National Stud has helped to promote and sustain the image of the thoroughbred racehorse as well as Irish racing generally on the world stage.

Mention has been made of Sinndar's unique achievement of winning the Epsom Derby, the Irish Derby and the Prix de l'Arc de Triomphe. Sinndar was bred at Giltown, County Kildare, trained by a Kildare man, John Oxx, and ridden by a Kildare resident, Johnny Murtagh, although he hails from Meath originally. It was a shame that RTÉ did not broadcast all three races because the Irish flag was flown before an international audience. Ireland reached the pinnacle of excellence in horse racing. We have few enough international brand leaders in any industry but the Irish horse is one.

It is unfortunate that the bypass of Kildare town cuts through the Curragh. However, following the positive discussion in the Dáil, the stud will be allowed to acquire additional alternative land to further develop its activities such as its tourism-related activities, including the museum.

Senator Tom Hayes was supportive and I appreciate a number of points he made about the stud, the racing industry and Tipperary racecourse, in particular. Additional money will be allocated to the new body, Horseracing Ireland, and its role will be to ensure it is distributed properly and various racecourses are upgraded. We will ensure not alone that they are good courses but the facilities will be improved. I recall attending a racecourse a number of years ago which had no heating. We tried to light a superser gas heater but after a while we realised there was no cylinder in it. Thankfully that day is gone and nice facilities are available now.

Senator Ó Fearghail referred to the projects in the IHA's strategic plan, which have been surpassed. A number of Senators complimented the board and management of the IHA, including Dr. Michael Osborne, John Clarke, manager, Chryss O'Reilly, chairman and her predecessor, David Shubotham. Chryss O'Reilly, for example, has an encyclopaedic knowledge of pedigrees and blood lines worldwide and she has used her excellent contacts to acquire valuable animals for the stud. She is a unique asset to the horseracing industry and to the stud and we are fortunate that she gives of her time as chairperson of the board of the stud.

Senator Henry referred to the cost of fees. Generally the cost is at an economic level. Fees for national hunt horses are set below commercial rates to help people. Horses from the stud are strategically located at different stud farms around Ireland. Senator Dardis and others stated that national hunt racing should be promoted and not given a lesser role in the industry. Most people prefer national hunt racing to flat racing. It is important that the greater number of people who follow national hunt racing are supported.

A Leas-Chathaoirligh, you expressed concern about Leopardstown racecourse. I will take that up with the board of the racecourse because it has tremendous facilities and it would be a shame if the view of the track was distorted.

As regards Limerick, perhaps it would help if there were good agronomists there because the problem is that clover has grown there at a tremendous rate and the grass growth is not very good. They have not been able to race there as soon as they would like. It is hoped to hold the inaugural meeting there next spring if it does not rain continuously until then.

The grand alliance was mentioned. The Leas-Chathaoirleach is the kingpin of that, and I wish it well. I noted the Leas-Chathaoirleach did not indicate the likely outcome of the race.

Mr. T. Hayes

We all noted that.

Mr. J. Walsh

I might have a private word with him to see if a little modest investment might be worthwhile during the Christmas meeting. I wish the alliance luck because it resulted in the unique cross-party support we received during the debate on the future structures for horseracing.

The Leas-Chathaoirleach also mentioned horses such as Giant's Causeway. It is unique in this commercial world that horses such as Giant's Causeway, Montjeu, Sinndar and the world's premier horse, last year, Daylami, have been stood in a small country such as Ireland. We have the world's best blood lines, and I express appreciation to stud managers for that.

Senator Dardis mentioned the RACE school and a number of the other activities in Kildare. Early next year we will be allowed construct a master farriery adjacent to the RACE school which has produced many outstanding jockeys, including Johnny Murtagh. It is amazing there is a shortage of blacksmiths in a country such as Ireland. Farriery skills are scarce throughout the world and blacksmiths are well remunerated. Were it not for objections to the farriery school last year, it would be in place now. We have eventually obtained planning permission and I will provide the money for it in the next development programme. That will come through next year and the farriery school will be provided.

Senator Dardis made some interesting remarks about the history of the stud and Colonel Hall-Walker. Many people believe that only the ports stayed in British control until 1939 when places such as Castletownbere and others were handed over. The Irish National Stud stayed in British control a little longer, up to the mid-1940s. It was handed over in 1943 and the legislation covering it was introduced and passed in 1946. I made the point in the other House that the National Stud was bequeathed to the State in the same year as I was born. Deputy Dukes, uncharitably and, I hope, facetiously, said that Kildare got a better bargain.

I thank Senators for their support for the legislation and look forward to Committee and Remaining Stages being passed.

Question put and agreed to.

An Leas-Chathaoirleach

When is it proposed to take Committee Stage?

Mr. T. Fitzgerald

There was an agreement this morning that we would review the position. With the agreement of the House, we can take it now.

An Leas-Chathaoirleach

Is that agreed? Agreed.