Dáil Éireann díospóireacht -
Thursday, 16 Jun 1988

Vol. 382 No. 3

Córas Beostoic agus Feola (Amendment) Bill, 1988: Second Stage.

Minister of State at the Department of Agriculture and Food (Mr. Kirk)

I move: "That the Bill be now read a Second Time."

The main purpose of the Bill is to amend and extend the Córas Beostoic agus Feola Act, 1979, in order to confer on CBF responsibility for the promotion of pigmeat in addition to their existing promotional role in relation to cattle and sheep. Provision is made in the Bill for the introduction by CBF of a levy on pigs of 20p per animal and for increasing the existing levies on cattle and sheep from £1 and 10p respectively to £1.50 and 20p. The opportunity is also being taken to introduce certain provisions which will facilitate the collection of levies by CBF.

CBF were established under the 1979 Act and replaced CBF Teoranta, a company limited by guarantee. Heretofore, their purposes, broadly, have been to promote the export of cattle and sheep and their meats and to furnish promotional and marketing support to exporters in addition to the promotion of beef, mutton and lamb on the home market. The role of CBF in relation to cattle and sheep could be defined as follows: To adopt a position of leadership which will be instrumental in guiding the industry towards meeting market requirements; to provide processors and exporters with specialist marketing support services; to build an information bridge between the market and the producer.

In so far as pigmeat is concerned, for some time past there has been no body responsible for the overall promotion of pigmeat. Córas Tráchtála Teo have been doing very valuable work in assisting individual pigmeat firms in their export endeavour. However, CTT have no function in relation to the home market which accounts for some 70 per cent of our pigmeat output. This has been a matter of considerable concern to me, as indeed has the fact that the industry must now also meet the competition at home from imports from some other member states of the Community.

The House will be aware of the major development and rationalisation programme for the pigmeat sector which is already underway. This programme involves a total investment of up to £140 million, including very substantial inputs by the Exchequer and FEOGA. The main elements of the programmes are the establishment of about eight centralised slaughter units, each with a minimum capacity of 6,000 pigs a week, which will cater for their own needs and for those of surrounding processing plants. All of these premises will meet the highest standards prescribed by EC and third country importers particularly the United States and Japan. The successful implementation of the plan will require a substantial increase of pigmeat output from 2.2 million pigs a year at present to nearly 3 million by 1992. All of this extra product will have to be exported and increased exports of £100 million are targeted.

I regard the efficient promotion of pigmeat as an essential element in the success of the programme. Hence this Bill, under which CBF, which has done such fine work in promoting beef and lamb, will take over the promotion of pigmeat on the home and export markets. CBF will provide the necessary assistance to those firms which will be adopting strategies and programmes to market in the most effective way the increased output which will result from the development and modernisation programme. The decision to extend the role of CBF to cover pigmeat has, in general, been well received by the various sectors of the industry.

As regards the funding of the activities of CBF in relation to pigmeat, it is proposed to introduce a levy by CBF of 20p per pig. This will yield about £400,000 in a full year. In addition, a further £400,000 is being transferred from the grant-in-aid of Córas Tráchtála to CBF for the year 1988. This latter will enable CBF to meet commitments already entered into by CTT in the pigmeat area and will fund further activities by CBF later this year.

I am also taking the opportunity to provide for CBF to move into promotion of other meats at a later stage should the occasion warrant it. The growing interest in deer farming and the export prospects for venison as well as the possibility of further developing poultrymeat exports — turkeys and ducks in particular — along with the need to retain the share of the domestic market for chickens are examples of further complementary activities for CBF in the meat area. These are medium—term possibilities for which provision is now being made.

As the House is, of course, aware, the board of CBF are at present representative of the sectors of the meat industry with which it deals. It is accordingly proposed that, since CBF are taking over the promotional functions in relation to pigmeat, the number of ordinary members of the CBF be increased from nine to 11 to allow for an additional producer representative and an additional exporters representative. Provision is also made to further increase the number of board members by order if additional types of livestock and meat are included in CBF's functions at a later date.

As regards CBF's present functions in relation to cattle and sheep, their corporate plan for the years 1986-1990 envisages a significant increase in funding to enable them to expand and develop its promotional work. They will have an important role to play in the years ahead in identifying trends in overseas markets and in seeking out new outlets for the products of the industry.

Section 28 of the Córas Beostoic agus Feola Act, 1979, provides for the payment of levies on cattle and sheep slaughtered in the State or exported live. It also makes provision for the amendment of these rates by ministerial order. The current rates of levy, which have been in force since 1 January 1985 are £1 per head for cattle and 10p per head for sheep. I am taking the opportunity in the Bill to update the amounts of these levies by increasing them to £1.50 for cattle and 20p for sheep. The board of CBF which includes both industry and farming representatives was unanimous that the levies be increased to these amounts to enable them to expand and develop their promotional work. There is broad industry acceptance of these levels of fees. Current CBF levies on cattle and sheep yield approx. £1.9 million. The increased rates proposed should yield some £3 million. Taken with the proposed levy on pigs, estimated total levy income will amount to approximately £3.4 million.

I now come to the Bill, which is divided into 12 sections. Section 1 simply refers to the original CBF Act, 1979. Section 2 amends the definitions of "livestock" and "meat" to cover pigs and pigmeat. It also provides for the inclusion of other species of animals and meat by regulations at a later stage should the remit of CBF be further extended at some future date.

Section 3 increases the number of ordinary members of the board of CBF from nine to 11 to allow for representation of the pigmeat sector on the board. The board will then comprise, in addition to its Chairman, four producer representatives, three exporter reprepresentative, one livestock export trade representative and two members appointed by the Minister. The number of ordinary members may be further increased by regulations. This is to provide for the possibility of the promotion of other meats being assigned to CBF later on.

Section 4 details the amounts of levies payable in relation to bovine animals, sheep and pigs. This section also makes provision for a levy, to be determined by order at the appropriate time, on other animals if considered necessary. It further provides that rates of levy may be varied, subject to the approval of both Houses of the Oireachtas.

Sections 5 to 10 are designed to improve the efficiency of CBF's levy collection system. They provide, in general, for increased penalties for contravention of the Act and firms will be required to retain records for four years. Provision is also made for the appointment by the board of authorised officers who will be empowered to enter premises and inspect records. The board may also estimate the amounts of levy due where firms fail to furnish the appropriate returns. In addition, officers of corporate bodies will, in future, be answerable, in addition to the body, for offences under the Act.

The remaining sections relate to general provisions and there is little need to refer to them further at this stage. These, in summary, are the main provisions of the Bill which I now commend to the House.

Mr. J. O'Keeffe

The integration of pigmeat into the operations of CBF is a rational development and one which I support in principle. The responsibility for promotion and market development of pigmeat products has been in limbo and it is high time the issue was resolved. The Bill was circulated by the Minister only two weeks ago but Fine Gael will facilitate its passage through the Oireachtas to ensure its enactment before the summer recess. While I approve of the decision to extend the role of CBF to cover pigmeat and I am glad that the unseemly wrangling between Government Ministers on the issue has ultimately been resolved, I would stress that the case for the closest co-operation between CBF and CTT, at home and particularly abroad, has been considerably strengthened as a consequence of the debate on this issue.

There is absolutely no case for wastage of scarce national resources and rivalry between semi-State bodies chasing markets abroad for Irish products. The Government have taken the opportunity to establish a levy by CBF of 20p per animal in respect of pigs and also to increase the existing CBF levies on cattle and sheep from £1 and 10p respectively to £1.50 and 20p. This decision raises the issue as to whether the increased sums available to CBF will be available for market development and will, therefore, be additional to their existing resources or whether the additional moneys are merely to substitute for the existing Exchequer subvention. There is a strong case for a continuation of the existing Exchequer support to CBF which, at a sum of less than £1 million, is merely sufficient to cover the fixed costs in administration, salaries and offices both at home and abroad. If this sum is not continued it raises the question as to whether CBF should be structured on the basis of being a semi-State body. It is also relevant to compare the amounts available to CBF with the State contribution to CTT; the comparison is a figure of £915,000 as opposed to £20 million available to CTT. Almost half our exports net of import content and profit repatriation are in the food and drink sectors. A significant proportion of such exports is covered by the CBF mandate including £1 billion for beef alone.

The Government have stated in their Programme for National Recovery that they have high aspirations for the food industry. The £1 million State subvention to CBF is a good investment as part of the developmental function of the State. It is fair comment to say the decision made by the Government in the original 1988 Estimates, where it was proposed to slash the subvention to CBF by half while maintaining a sum of £66.5 million to cover the bureaucratic structure of Department of Agriculture and Food, was almost obscene. I am glad the Government reversed engines on their earlier decision to have that support for CBF. Cutbacks in Government expenditure should not be focused on such a relatively minor sum being made available to a body who have such a major role in export market development in the interests of the entire economy.

Furthermore, in the light of the attitude of the Government, which can best be seen in their protection of the bureaucratic structures of the Department of Agriculture and Food, at the expense of those bodies providing frontline services to farmers and the food industry, the question of whether CBF should be a semi-State body at all in future has to be addressed. The Minister has a whole raft of powers under the Principal Act of 1979, setting up CBF, including the appointment of the board. I know some of the members have to come from different sectors but the appointment is made by the Minister and he has control over reports, accounts and borrowing powers. Perhaps what is more relevant is that the remuneration and allowances paid to the chief executive, officers and servants of CBF must have the approval of the Minister for Agriculture and Food and the Minister for Finance. I raise the issue as to whether these powers are appropriate now where, even with the continuation of the State subvention of £915,000, the State contribution will probably be no more than 20 per cent of the income of CBF. A case is developing, now that the main income for CBF is from the industry itself, to free it from the bureaucratic shackles which are perhaps more appropriate to a body substantially funded by the State.

Now that I have the opportunity of addressing the question of marketing and promotion arrangements for products abroad, let me say there is a strong case for the development of the Ireland House concept abroad. Basic cost effectiveness would suggest the need for the closest linkages abroad between the various bodies working on behalf of the country. This, therefore, raises the issue of having all such agencies under one roof. In Paris alone, I understand that nine separate semi-State bodies are operating, all at different locations. Surely major cost savings would be involved in rationalisation and a sharing of facilities. The lead in this regard must come from the Government if they are serious about cost cutting and cost effectiveness. This is the kind of option that has to be pursued. The CBF offices in Dusseldorf and Milan are shared with CTT, yet their London and Paris offices are operated independently in cities where there is a plethora of other Irish semi-State offices. This issue has now to be tackled seriously by Government not just in relation to CBF but to the whole range of offices directly or indirectly funded by the taxpayer, all chasing markets for Irish products of one kind or another.

Similarly, it is time for serious thinking, constructive research and positive action on the question of Irish branding on the "Kerrygold" idea for meat products. The idea has been floating around for some time. Respected marketers like Tony O'Reilly and David Dand have touched on this issue at various conferences. I do not underestimate the difficulties from the point of view of organisation or cost. I accept the need for proper grading standards followed by the removal of any franchise in the event of the high standard not being met. Intervention will play a much less significant role in future, and this fact provides another reason for urgent, widescale debate on this issue. Again, the lead has to be taken by the Government and it is not just sufficient to continue the flotation of the idea. Much detailed work and organisation will need to be put into the structuring of an approach which would lead to the kind of results I am talking about, but I believe the returns from the market would justify the effort and over time the premium available from the market would provide the central part of the necessary funding to establish such a branding approach.

Since the principal purpose of the amending Bill is to extend the role of CBF to cover pigmeat it provides an opportunity for comment on the problems confronting the pigmeat industry in Ireland. Unless these problems are confronted and a clear policy established, CBF will not have a pigmeat product to market abroad. An integrated approach to production, processing and marketing appears to be the answer. The industry is on the point of putting in place highly modern plants with the aid of the generous aid package negotiated by Deputy Austin Deasy. Accordingly, provided CBF are successful in market development and the present Government make rational decisions, particularly in regard to the location of modern slaughterhouses, the major problem to be resolved will be raw material supply. Here, as in the beef industry, the Minister has been singularly lacking in ideas and effective policies. There is now a real danger that we may end up with a number of modern, half-empty plants without the throughput to justify their construction.

If we are to increase pig output to three million per year as has been suggested, we need to put in place the measures to provide stability and profitability for producers and thereby the incentive to expand numbers. The issues have been identified clearly in various reports. However, producers still face problems of high feed cost, variable feed quality, high energy and transport charges, poor feed conversion rates and question marks as to the genetic merit of existing breeding stock. These are but some of the problems facing producers and action is now urgently required on the part of the Minister to provide a developmental environment for pig producers comparable to that provided by his predecessor for pig processors. Therefore, I call on the Minister immediately to put in place a policy to encourage increased pig production.

Overall, this Bill is one with which I agree in principle. We are prepared to facilitate its early passage through the House. I suppose it is appropriate to take the opportunity, now that we are discussing the role of CBF, to wish them every success in their efforts to establish Irish pigmeat abroad in a major way.

Mr. Gibbons

The debate on the Bill gives us an opportunity to focus attention on what continues to be our primary industry. At the outset I should like to point out that we do not object to the principal aims of the Bill. It is a welcome development to see the role of CBF extended to the pig and poultry sectors. What concerns me is the lack of Government commitment to the agricultural industry. Although we are living in a time of over supply in regard to many products, there is still tremendous opportunity in the meat industry. With the projected shortage of cattle in Europe there is plenty of scope for expansion for the sale of Irish beef and opportunities exist on the French market for our sheepmeat. Members will know whom to thank for opening that market.

Now that the role of CBS is being extended to cover pigmeat I hope they will promote that product as an equal to Danish bacon because up to now there has been a perception that our product was not comparable to Danish bacon. I hope the effect of the Bill will be to restore some badly needed confidence in a sector that has been neglected over the years. Our producers are finding it difficult to make ends meet and it is high time that the Government took this sector seriously.

With regard to the increase in CBS levies, I should like to say that if the primary producer can see that Irish beef, sheepmeat and pigmeat are being marketed in an aggressive way those increases will not present any difficulty. However, it should be remembered that the primary producer will be expected to pay more by way of levies. For example, a farmer sending his cattle to the factory can expect deductions of between £15 and £25 per head. Part of the deductions will be made up in reduced VAT refund. It can account for between £7 and £10 per head.

CBF have a vital role to play in Irish farming. The meat industry is crucial for the country. It is estimated that it is worth in the region of £1.4 billion, a staggering figure. Undoubtedly, however, the potential is greater. It is worth noting that 85 per cent of the 500,000 tonnes of beef produced here annually is exported and that less than 2 per cent of those exports are in the form of processed beef products. That is not good enough. In other member states the figure averages out at 23 per cent of their produce.

The importance of improving our performance in this area is underlined by the fact that the Irish Meat Processors Association have estimated that if that sector of the industry is developed properly an additional 2,800 full-time and permanent jobs will be created. Those jobs are badly needed. Changes are taking place and progress has been made. For example, our export figures from May to June for chilled boneless high valued vacuum packed meat were up on the same period last year. In an economy such as ours which is crippled with unemployment no effort should be spared to encourage the full development of that sector. Much of the responsibility for development lies with the Government and the EC.

The current structure of MCAs, variable premiums and export refunds places processors at an enormous disadvantage. We need to reform this sector if we hope to create employment. A lot of the responsibility for the practical improvements will fall on agencies such as CBF through their ability to find and develop new markets and because of their role in developing market research. I do not find the basic aims of the Bill objectionable but what I find objectionable is the attitude of the Government, and their predecessors, towards this primary industry. That attitude is clearly demonstrated in grant aids to our processors in the beef and pig industries. Our priority should be to increase cattle, sheep and pig numbers because we are good at that. Before we consider diversification into the production of deer, rabbits and so on we should try to capitalise on the areas of production that we are good at. The Government's attitude has been clearly demonstrated by their support for the industry. In contrast to the Government's contribution to CBF of £900,000 they have made £20 million available to CTT for administration and general expenses. Millions are spent on agencies looking after industrial promotion.

It is unfortunate that while agriculture tightens its belt and looks after itself, no similar attempts are being made to make industry more responsible for its own promotion. That is regrettable. We have highlighted on many occasions the need to come to grips with our cattle numbers. I was glad to learn that CBF agree with the sentiments expressed here in regard to that. One of their biggest fears is that there will be a shortage of supply in the years to come. With regard to the makeup of the board I do not see why the Government, who do not appear to have any commitment to the industry or CBF, should have any input into the membership of the board. In my view the board should be entitled to elect a chairperson from its members.

Mr. Durkan

I welcome the general thrust of the Bill which seeks to extend the ambit of CBF to include the pigmeat industry. In fact, I suggest that there should be a further extension into other meat marketing areas. It is important to recognise with the approach of the internal market that heretofore we marketed our products with certain advantages and that we did not experience the full draught of the competition which will be working against us in 1992. In the run-up to the internal market, and after, that will change and our producers and exporters will have to face stiffer competition. Our competitors will be given funds to get the maximum coverage for their products in the country targeted by them.

Dr. Tony O'Reilly, in the course of a recent television interview, dealt with the importance of marketing and promotion and outlined the cost of such work. He highlighted the fact that without concentrated and concerted efforts in the area of promotion, which had to be backed up with adequate funding, Irish food products would not make the impression needed on the European or world markets, with particular reference to the US market. That, coming from a man who has more experience than most in the area of marketing and food processing, should be sufficient warning to all of us that what we will be facing from now on is much sharper and stiffer competition than we have had to face in the past.

I hope our producers and our marketing experts will be able to evolve in a similar fashion to the manner in which our soccer team has faced up to competition. That is what it is all about. The competition is getting stronger and we have two options; either to succumb or to get into the marketplace in the same competitive fashion and beat people at their own game. There is absolutely no doubt but that we have certain natural advantages which we have not even begun to utilise which we should be utilising and which, if our competitors had, they would have utilised long ago. We do not seem to make the most of those obvious advantages we have. If we do not do that we will have a serious problem.

The question of brand marketing relates not only to the pigmeat, beef and sheepmeat industries but right across all food products. Let us remember that in the 12 months ending 31 March approximately £1 billion worth of food products were imported into this country, into our small economy with a small population. Somewhere out there people had the marketing techniques and expertise to be able to launch onto our market food products to that value. I know that some of those products could not be produced at home but quite a number of them could have been. There are obvious implications for employment if we allow that trend to continue. I agree with my colleague — I notice this was also mentioned by Dr. Tony O'Reilly and by the Minister of State at the Department of Food and Agriculture in the last few days — in regard to the advantages of brand marketing, of taking a well-known brand, pushing it further, attaching as many products as possible to it and ensuring that the maximum possible advantage is gained for those products by that brand. That was a simple technique employed by Kerrygold and Baileys. Everybody knows about Ballygowan. A few years ago people would have asked Bally what? Again, it comes back to effective and efficient marketing, identifying, meeting and feeding the consumers' needs on an ongoing basis. If that can be done we can penetrate the market in the same way that our home markets have been penetrated in the past. I keep coming back to that point and I emphasise it. We should not have the degree of market penetration of imported food products that we have at present.

Our population is very small. We are an allegedly affluent society and we have high aspirations. We tend to walk along by the supermarket shelves and if we can afford something we buy it. That is marketing. It is a natural progression and we have to accept it. It is up to our own people who are in that business to be able to put those products before the consumer in the same fashion and give them the obvious advantages that they must have. Obviously it will be cheaper to produce and sell products in our own land than it is to send them abroad and sell them there because the same competition will exist in either location.

I strongly support the concept of brand marketing and its utilisation to a far greater extent than has been the case up to the present. Having got your market, one of the ways to keep it is obviously to supply the consumer with his or her needs. We should make sure that the product is a residue-free, healthy product and that the producer and the country has every possible advantage in every way, whether in packaging, wrapping, the manner in which the sales are projected or whatever. There are many advantages to be gained and all of them need to be taken on board. It is important that we concentrate on animal health. We should be able to convince the consumer that our product is healthy, drug free and residue free and is being delivered to them in the best possible condition. We should be able to ensure that there is no fall down in that chain from the producer to the supermarket itself.

It is not unknown, even in some of the best-known eating establishments, to come across food products, whether it be beef, pigmeat, sheepmeat, poultry or whatever, that are slightly past their best to say the least. In this House it has been known to happen, I am quite sure that virtually every Member has had that experience at some stage. There is no excuse for that at the present time. We have all the modern conveniences in so far as refrigerated transport and power wrapping and packaging is concerned. A simple system can be readily operated whereby shelf life is reduced to what is allowable and no more. No product should be recycled on the shelves in such a way as to damage the market. One of the easiest ways to mess up the system and to damage your own market is to put through the system products that are in some way deficient, have expired their shelf life, that have gone off and are not acceptable to the consumer. It is all very fine to have consumer protection associations. They are very welcome and very important but there should not be a need for them in the food area. We cannot afford and we should not allow any excesses which would bring the industry into disrepute.

I do not propose to delay the debate. A new responsibility has been placed on CBF and, as a result, the pigmeat industry will be taken out of the limbo into which it was thrust after the demise of the Pigs and Bacon Commission. I hope there can be devised some way of making it clear to the consumer that a product is appearing on the market which is of the highest quality, which excels in its own right, that is capable of competing and beating any competition at home or abroad and that is getting to the marketplace in the freshest and best possible condition. That is most important. The consumer should be satisfied and his needs should be met. There is not much sense in having satisfied customers for nine, ten or 11 months of the year if for one month or for one day in one week the customer goes into the marketplace, whether at home or abroad, and finds that the product is substandard. There is no sense in putting products like that onto the market because all they can do is damage it.

I would like to think there will be a new boost in sales in the pigmeat industry at home and abroad. I emphasise the importance of that with the approach of 1992, not only in relation to this Bill before us but in relation to the entire food processing industry. There is a market of 320 million people in Europe. There is considerable market penetration into our economy by food products from outside. If we do not shape up very sharply in the not too distant future the market penetration that will be generated by the expertise and the competition that is being forced upon the producers within that market — I refer in particular to the European market — will be too good for us and we will succumb.

Mr. Leonard

I am glad of the opportunity to speak on this Bill. Like other speakers, I welcome the inclusion of pigmeat as part of the responsibility of CBF. Anybody who has studied the pigmeat industry over the last number of years will know that strong pressure was exerted to have it included in the responsibility of CBF. Everybody knows this meat can be sold across the counter but not everyone realises that as the basic ingredient in other foods it is becoming much more attractive.

It is sad that we have not increased pig production over the last number of years. That was mainly due to the insecurity of the market. For years the emphasis was on production, but now processing and presenting the product attractively to secure sales is very important. Pig production has been very important in small farming areas. For years Cavan-Monaghan and North Cork were the prime pig producing areas, but the emphasis has changed. At one time there were 90,000 producers but that has been reduced to 1,000 or 2,000 at present. These are very efficient producers and have made very big investments in this industry.

There are a few areas which give rise to concern. There are six or eight large plants which are in a position to set up the proper structure to meet the criteria of the American market, which we have been denied for so long. However, we should move fairly slowly and ensure that we do not damage the small traditional areas of pig production and processing. I relate this to my own areas where two pig slaughtering plants closed in 1987 — one closed through rationalisation and the other closed because of trading problems. Efforts have been made to have somebody take over one of these plants but we have not been successful to date. It is very important that traditional pig producers should stay in business.

It is all right for the IDA to sit down and mark certain areas on a map, but if they encourage centralised slaughtering farmers in the peripheral areas like my own will withdraw from pig production. I made this point very clearly to the IDA recently. In our discussions it was brought home to me very forcefully the importance of food processing in my constituency. About 10 per cent to 12 per cent of our workforce are employed in foreign-owned industries, but 88 per cent depend on the production of pigmeat, turkey, rabbit and so on. While nobody wants to vote extra funds to CBF, in the present situation we should be very free with the money because employment is dependent on these areas of production.

The Minister spoke about the growing interest in deer farming and the export prospects for venison as well as the possibility of further development in poultry exports. Poultry exports have been developed to a terrific extent over the last number of years. Grove Farm, a mile from where I live, employ about 300 people. Fifteen years ago this firm started by rearing a few turkeys in a loft and that firm has been acquired by Kerry Co-op for approximately £20 million. That firm was built on grants and grants-in-aid provided by the IDA and FEOGA. This is a success story. This shows how much can be done.

A few years ago we developed a mushroom industry. This industry also had a very small beginning and has an employment potential of 200 permanent employees and 700 temporary workers, including housewives and young children. The importance of this market could not be overemphasised.

Another area which is very important is the production of rabbits for sale at home and abroad. There are approximately 100 farmers who breed rabbits. An entrepreneur has at substantial cost, set up a processing plant in Castleblayney. They are having discussions with the Department at present because they are facing problems as there is no veterinary expert available to help deal with infections. They are sure that when this problem is resolved they will have a very profitable enterprise. Then not only will they be able to sell whole rabbits but they will also be able to sell rabbit portions, as is happening at present with broilers and turkeys. There is a great opportunity here for downstream production.

If the CBF take this industry under their wing they will be providing a great service for the small farmers who are compelled to go into other areas of production. A farmer with 40 or 50 acres will not be able to earn his livelihood and rear his family if he is involved only in the traditional areas such as milk, where the quotas are being reduced.

Last week the Minister introduced the suckler grant for every cow after the first ten. This will help milk producers, because these farmers have to move into other areas and the natural one is broiler, turkey, pig, deer and rabbit production. In my county we cannot increase turkey production. There are advertisements in the papers asking for turkey breeders in Cavan, Fermanagh and Louth but not in County Monaghan because there is the danger of disease if there is an over-intensification of production in the area.

Many aspects of the meat trade covered in CBF's report last year showed signs of great improvement. The meat plants are continuing the export of cattle and supplies increased over the previous year from 82 per cent to 86 per cent of the total cattle available. A high percentage of these exports are in the form of vacuum-packed beef. Despite our European Community contacts, Britain continues to be our main export market, accounting for one-third of our total exports. Sales of Irish vacuum-packed beef to Britain in 1987 rose by 42 per cent in volume to 20,000 tonnes. This satisfactory result reflects the efforts being made by CBF and the on-going arrangements for direct retail sales. The Continent accounted for 20 per cent of Irish beef exports. Vacuum-packed beef sales expanded by 30 per cent to 17,500 tonnes in 1986. In total, chilled boneless beef exports increased by 40 per cent. This trend will have to be followed in regard to pig meat and sheep meat. Slaughterings of sheep for export reached the record figure of 1.3 million.

A cloud hangs over the agricultural industry due to the reduced numbers in the national herd, despite the strenuous efforts by the Department and the Minister. There is no instant solution, especially when cattle are selling at premium prices.

Mr. Gibbons

They would need to exert themselves a little more.

Mr. Leonard

They started from a very low base.

Mr. Gibbons

I agree.

Mr. Leonard

The child must creep before it can walk. They are getting along fairly well and they will be ready for the marathon in a year or two.

Mr. Gibbons

I do not agree.

Mr. Leonard

There was a general reduction in milk supplies throughout Europe and it is very difficult to switch to using maiden heifers for one calf, then going into beef. It is difficult to get people to change to other systems. The natural instinct of most farmers when their milk quota was reduced was to buy an extra calf. The result was that calves became scarce. However, I believe an improvement is being made.

Deputy MacSharry went to Europe in 1981 and negotiated the £300 million Western Package, which included substantial grant aid for a calf to beef system. I welcomed that scheme but criticised the number of restrictions which deterred people from applying and made it difficult to qualify. The number of people who applied in any one county could be counted on the fingers of one hand and in some counties nobody qualified for this assistance. The scheme is now being reintroduced and this is an ideal opportunity to promote the calf to beef system. Deputy O'Keeffe wants the Minister to wave a magic wand and have the Western Package introduced overnight. The Minister says it will be in operation within about a month. I have never witnessed an EC measure being introduced more quickly than that.

Mr. J. O'Keeffe

It went through the Commission last November. What is the delay?

Mr. Leonard

One thing we have noticed, Deputy O'Keeffe, over the past few years——

An Leas-Cheann Comhairle

If you address Deputy O'Keeffe he might think you are inviting him to make comments.

Mr. Leonard

There has been an on-going argument about when the application was made for an extension of the disadvantaged areas and various other schemes.

Mr. J. O'Keeffe

It was 4 February 1987.

Mr. Leonard

We found the dates had been mixed up. We are satisfied that EC approval was secured only two months ago. The Minister will deliver a package which will enable small farmers to get substantial grant aid for the erection of effluent tanks and cattle buildings suitable for the calf to beef system. This will provide an opportunity for the meat plants. These plants should act more responsibly and should not compete against each other when there is buoyancy in beef prices. They shouild behave as others do in the poultry sector and other sectors where customers are paid premium prices. Competition in the beef market has made it very volatile and has not done anything to improve prices or confidence in the trade.

Feed prices here during the past few years have been higher than in most other producing countries. This is especially the case in regard to pig production where feed inputs account for a substantial amount of the overall cost. Whey and skimmed milk were heavily subsidised but that will not be the case in years to come due to the growing demand for skimmed milk powder. Even though the pig producers, who were getting a heavy subsidy which enabled them, most of the time, to have a very profitable enterprise, are faced with having to improve the quality of the feed themselves since the subsidy is no longer there. From discussions with producers I know that many of the cheap imported feeds contain fillers etc. and this is a big problem. The quality of such feeds is not properly monitored and checked. It should be closely and regularly monitored and there should be, on the outside of the bag, a list of the full contents so that people will know that they are getting what they are paying for.

The final point I want to make is that over the last few years the Dutch have had rapid growth while we were static. The Netherlands export about 60 per cent, Denmark export about 80 per cent and our exports are something like 14 per cent. There is room for improvement. We have the know-how and the capability. We need to be able to get these together in conjunction with the CBF as a marketing body so that we will be in a position to compete with the best. By doing that we will be giving additional revenue to the country and additional income to our producers here.

An Leas-Cheann Comhairle

I am calling Deputy Sherlock. Deputy Deasy, it is normal on Second Stage for a spokesperson for other parties to get priority over second or third spokespersons from the main parties. That is the tradition.

Mr. Deasy

We will keep the best wine until last.

Mr. Sherlock

Go raibh mhaith agat, a Leas-Cheann Comhairle. This Bill is clearly designed to strengthen the role of CBF and to increase the resources available to it and as such is to be welcomed by anybody who wants to see the proper development of Irish agriculture and the food industry. The inclusion of pigmeat within CBF's mandate is particularly welcome and this has been an especially neglected and underdeveloped area. Hopefully the power available to the Minister under the Bill to give CBF responsibility also for poultry and other meat products such as venison will be used as soon as possible.

The need for a strong promotional and marketing arm of our meat industry is vital if it is to be developed and provide the jobs for workers and the income for farmers that it should. The failure of successive Governments to ensure the proper development of our agriculture in general and the meat industry in particular is a disgrace and reflects what can only be described as a lazy and indifferent attitude to what should be our most important industry. The result of this has been that tens of thousands of Irish workers have been deprived of jobs in the food industry. Many farmers have been driven unnecessarily from the land despite the fact that hundreds of millions of pounds have been poured into the farming industry from both Government sources and the Common Agricultural Policy. We had an abysmal level of productivity, a declining number of jobs and a smaller return to the community from this sector in terms of taxes and investment. All the signs are that the Common Agricultural Policy as we know it is going and particularly the days of massive sales into intervention are numbered. In this situation the role of CBF takes on an additional importance.

There is also a need to face up to and to deal with the continuing massive export of cattle on the hoof from this country. Exports of live cattle which, in the early eighties, reached half a million per year are still running at a huge level. In 1986 we exported 322,000 live cattle. While this trade makes fabulous profits for a handful of exporters and has found favour with some farmers who appreciate the less rigorous requirements of the live cattle trade it is selling workers' jobs down the river. Exporting cattle on the hoof means exporting them in the least profitable state. It is of negligible value to the country compared to the employment that could be created if the cattle were slaughtered here and the meat exported in a processed state. The Confederation of Irish Industry estimated some years ago that if the cattle now being exported live were to be processed at home it could earn another £45 million each year for the Irish economy. It is also estimated that 3,000 additional jobs could be created even if all these cattle were slaughtered at home in this country. The aim should be to ensure that no cattle are exported live and that all the slaughtering and processing is done in this country.

In this context it is worth referring again to the need for an identifiable brand name for Irish products. This is a point that has been made over and over again and it was made very strongly by CBF in the international meat symposium in Killarney last week. While it is an idea that everybody seems to agree with there seems to be no progress in making it a reality. There is no doubt that the Kerrygold butter brand has been one of the real successes of Irish food. Why can that not be emulated in terms of a similar brand for meat? This is particularly important as it is estimated that within ten years 60 per cent of our fresh meat sold in supermarkets will carry a consumer brand. This is an issue that I hope CBF with its increased budget and strengthening mandate will tackle. If we have a brand name for meat products it is essential that it be recognised as a quality brand.

One of the greatest selling points of Irish food products generally is the fresh, clean, pollution-free image of this country. This is an image that needs to be protected. It is an image that is being endangered abroad every time there is publicity about yet another incident of pollution in our rivers and lakes. It is also important that the hormone-free image of our meat be protected and there are alarming reports of the widespread availability and use of illegal hormones. Late last year there was a discovery of more than 1,000 cattle which had been given illegal doses of hormones in a feed lot at a meat plant in County Kildare. This was not some small fly-by-night operation. It was in a feed lot of one of the biggest meat processors in the country. We were promised an investigation into the circumstances of this discovery; we are still waiting. We are entitled to know who are responsible for this disgraceful behaviour and if they will be brought to court.

The Bill provides for an increase in the levies that farmers will have to pay for slaughtered cattle, sheep and pigs. I hope this will be accepted by farmers because it is in their interests as much as anyone else's that CBF be developed and given the resources necessary to do the job. People can hardly complain about these small charges considering that the incomes of the farmers rose by 20 per cent last year, an increase that nobody will begrudge them, considering that they had a succession of bad years recently.

I note that the Bill also provides for a substantial increase in fines for a failure to make returns or pay levies. It is appropriate that these fines should be increased as, unfortunately, many meat plants have a reputation for wholesale abuses and dishonesty, involving not just failure to make returns on levies to CBF but in many cases wholesale fraud, especially involving EC payments. There is a need for improved supervision in the meat industry to ensure that there is no evasion of the payment of levies and that all fraud is stamped out. I hope these issues will be tackled by the strengthened and developed CBF. We support the Bill and hope that it will pass through both Houses as soon as possible.

Mr. Deasy

I welcome the opportunity to discuss this legislation. We have had quite a few opportunities in recent times to speak on agricultural matters. Quite recently we had Bills brought before this House to set up the new body Teagasc, which relates to the advisory and experimental side of the agricultural industry. That was major legislation. However, I do not think that this legislation before us is in anyway, less important. The marketing of our agricultural products is of paramount importance. I do not wish to use clichés, but I would say that the greatest national scandal in this country over the years has been the inadequate way in which our agricultural products have been marketed, not just at home but primarily abroad. The necessity to fund bodies such as CBF must take priority when we consider the agricultural industry and, for that matter, industry in general.

It seems that only since the eighties have we attempted to get our act together in this most important sector. One wonders what we were doing during the seventies and sixties when we knew that we were going to join the EC and did join it. Deputy Sherlock mentioned the problem of exporting jobs because of exporting so many cattle on the hoof, live cattle. He is a little out of date in that that practice has almost ceased completely.

Mr. Sherlock

I am glad to hear that.

Mr. Deasy

When we joined the EC, about 70 per cent of the beef that we produced here——

Mr. Sherlock

We exported a great deal between 1983 and 1987.

Mr. Deasy

I am making the point that when we joined the EC in 1973 about 70 per cent of the beef that we produced here was exported live. Now that figure is less than 10 per cent and rapidly diminishing, for which we are thankful. We have overcome that particular problem which was a very major blot. It was not just the export of cattle, but the export of jobs. Now we have a highly sophisticated beef industry which is able to match the best in any part of the world. The most sophisticated beef industry that one can find is here in Ireland. While there are begrudgers who might object to monopolies or near monopolies, I can only admire, as can most fair minded people, the work which has been done by people like Mr. Larry Goodman and others in the processing industry. They have brought Ireland to the forefront in this sector. The days of exporting live cattle are now in the past. Our beef is being exported to Europe in the ultimate form of processed beef, that is, vacuum packed. We have had an outstanding degree of success in that area.

There is a disturbing factor in our beef industry which was highlighted at a conference in Killarney this week by the Assistant Director General of the European Commission for Agriculture, Mr Peter Pooley, who pointed out that despite the decrease in cow numbers in the Community and in the beef herd, the amount of beef going into intervention was never greater. At the end of April the amount of beef in intervention in the Community was 755,000 tonnes. He made the point that it looks as if we will have a million tonnes in intervention by the end of the year. That is a particularly dangerous direction in which we are travelling. It could have dire consequences for our beef industry and farmers. If the stocks of beef in intervention keep increasing at that rate, it means that the Commission will act to undermine the intervention system for beef. They threatened that very strongly in recent times and we should take due cognisance of that threat. It will have very serious consequences indeed for the price of cattle here if it comes about. It is not to be under-estimated.

The lunacy of advocating that we should use hormones with regard to the rearing of beef is beyond comprehension. We may not worry, as a race — although I am sure that many do — whether the cattle are treated with hormones or not, but those upon whom we depend to buy our beef, the people in continental Europe, the Germans in particular, are very concerned. West Germany is our major market for continental Europe and it will not entertain beef which has been treated with hormones. If we think that by injecting beef with hormones, thereby increasing the weight and reducing fat content, we are doing ourselves and our farmers a big favour, we are fooling ourselves. Of course we want to eliminate fat, but we will have to do so by conventional methods. We cannot depend on artificial systems such as hormone injections.

The German Minister for Agriculture told me three years ago, when this debate was in full swing in Europe: "You farmers had better realise that the German consumer will not accept beef which has been treated with hormones". Hence, what is the point in producing a massive amount of product if we cannot sell it? That is really what it boils down to. There is no point in our producing massive quantities of a product which is not saleable because it is not acceptable to the consumer. The consumer decides whether your product is acceptable. There is a real problem in regard to the massive amount of beef in intervention in Europe and we must ensure that we can sell all the beef we produce on the open market. The sooner we get away from depending on intervention, the beter. That is why I cannot advocate the increase of the levy from £1 to £1.50 per head of cattle because it is absolutely essential to get the beef moving in the marketplace. CBF are the vehicle by which we do it. They have done an excellent job and it is a pity that they were not in existence 20 years ago. However, better late than never.

I wish to refer to certain individuals but I will do so in a complimentary manner so the Chair should not object. The Department of Agriculture recently suffered a body-blow in the areas covered by the Bill. We lost the Secretary of the Department, who is probably the most respected civil servant in the agricultural scene in Europe, Mr. Jimmy O'Mahoney, who has retired. The person who was effectively in charge of the beef division, Gerry Hoey, who was also a member of the board of CBF, is taking up a new career in the private sector. These are devastating blows to the structures in the Department, although I am confident that there are suitable replacements. In the pig and poultry division, also covered by the Bill, the man who did so much to highlight Ireland's need for further structural aid in this regard, Liam Butler, has also left the Department to set up his own private consultancy. The sectors we are discussing today have been affected because the key people, the "hot shots", in the Department have left recently. They were regarded in Europe as being among the best and will be difficult to replace. However, I hope the problems caused by their departure will be temporary.

I do not see why there should be any objection to raising the levy for each head of cattle from £1 to £1.50. It is a bit childish of the farming organisations, particularly the IFA, to object to these levies. They seem to think it is incumbent on them to object to everything, good, bad or indifferent. They should be more discerning, object to what is bad and applaud what is good. While nobody wants to pay more, the money could not be used in a better cause, because marketing is the Achille's heel not just of the beef industry but of the agricultural industry in general, indeed probably of industry generally here. Anything we can do to improve marketing is to be applauded and welcomed.

Two years ago, in the agreement of December 1986, after a meeting in Brussels which lasted for 60 hours — I see one is threatened in Luxembourg this weekend to last 72 hours — we got the beef premium, which is worth £15 per annum for each head of cattle. Farmers were very blasé about that — they seemed to think they were entitled to it — but, when it comes to paying 50p extra on any animal slaughtered or exported, there is an outcry. It is so childish and immature that it is hardly believable for people looking at us from outside. It is incredible that we could be so narrow minded and short-sighted. It is vital that CBF are properly funded. The chairman, Denis Brosnan, and the chief executive, Paddy Moore, are outstanding and dedicated and there could not be a better pair at the helm.

I have one serious objection to the structure of CBF, which was alluded to at considerable length by the Minister of State. The board of CBF comprise nine members and the Bill proposes to increase that number to 11. I would not recommend this board in their present form to anybody. I made this comment in the discussion on the Bill setting up Teagasc and I will repeat it now. It applies to CBF more than to any other board of which I am aware. There should not be nominated to a board representatives from different sectors of the industry because it guarantees that you will end up with a bad board. Increasing the number from nine to 11 is totally unacceptable. There should be no question of going to a farming organisation or a representative group in the agricultural industry and telling them to nominate a member who will be put on the board. That is how the board of CBF are constructed; it is lunacy.

I do not want to be over-dramatic but much of the good work which this body do is being seriously eroded by the makeup of the board. The Minister should say that he wants a board of three, five or, at the very maximum, seven. I would favour five and he should pick people who know the industry and who can represent it effectively. They should see that the money is spent properly and that the promotion of the beef, sheepmeat and pigmeat industry is carried out effectively. They should be business people with a capacity for selling, people who know the marketplace, who understand what is happening abroad and who can speak at least one or two — preferably three or four — languages. The present system is madness and I am surprised that more Members have not expressed their views on it here today. When sectors of industry are asked to nominate somebody the old pals act comes into force and quite often you end up with a number of people who are over the hill. It is a return for favours done in the past. If someone is president of a farming or a meat industry organisation and if they have been assisted in getting to that high position somewhere along the line, there is a natural tendency to repay the person for the favours. Quite often such a person is totally unsuited to act on a board of this nature.

It is marvellous to see the income of CBF being increased from £1.9 million to £3 million and, with the addition of the pigmeat levy, to £3.4 million. It is great to see that much money being made available but I contend the Minister should have gone the full way, seeing to it that there is a board in place which can spend that money to greatest effect. We should not have to repeat that it is the largest and by far our most important industry. It is the most lucrative, with everything being produced at home. The computer and chemical industries can show massive export figures but it is not the same thing because much of the raw materials and basics in those industries are imported and the bulk of their profits exported. It should be remembered that beef exports alone amount to over £1,000 million per annum and are growing rapidly. It is imperative that the people who manage that industry should be the cream of our business executives. I think I have made that point adequately and I hope it will be listened to.

I contend that the provisions of this Bill will achieve a small amount only. Why not go the whole hog and do the thing properly? Last year for example, we imported over 1,000 tonnes of bacon. That is not good enough. We also import bacon from Sweden and Denmark, although Sweden is not a member of the EC. In view of the new 75 per cent FEOGA grants system I hope the pigmeat industry will really take off. It should be remembered that we have a tremendous advantage in this area in that our pigmeat is absolutely the best produced. The Japanese recognise that fact. It was another scandal that, up to last year, there was not one pigmeat plant here licensed to export to the United States, the largest market of all. I am glad to note that this new 75 per cent grant is being taken up by a number of individuals, co-operatives and business interests because there is a great future in it. Perhaps Jack and the boys will bring home the bacon in large quantities next Saturday.

Mrs. Doyle

There is no doubt that effective international marketing will be the key to Ireland's success not only in the immediate years ahead but certainly post-1992 and the establishment of the single European market. Nearly all contributors have pointed to the fact that perhaps it has been our major difficulty to date. We have the raw materials, the commodities, the capacity to add value but we have fallen down dramatically over the years in relation to our ability to get our produce on to supermarket shelves abroad, to have a strong identity in the minds of the international consumer, particularly the 320 million consumers who now form the European market.

The Bill before us — which I support without equivocation — mainly purports to help in relation to, and I quote the Minister "the efficient promotion of pigmeat". It also allows the CBF to become involved in the future in the area of deer and venison products and in various aspects of the promotion of poultry.

At a recent management conference I was particularly struck by the contribution of one individual who asked us to turn our attention to the difference between generic marketing of Irish products and specific brand marketing of Irish products. I think surveys have been undertaken abroad, particularly in Europe, as to what is the Irish identity in relation to certain aspects in this area. Really it is a tragedy that most people can identify brand names, such as Guinness, Kerrygold, Bailey's Irish Cream and Waterford Glass but that, thereafter, they dry up; they are among our leaders, producing products of which we are extremely proud. When one looks to the agricultural sector — particularly to beef, pigmeat and sheepmeat — one finds a general assumption abroad that there is a ring of good quality about Irish bacon but there is no brand name for the marketing abroad of bacon, or beef. I put it to the Minister that perhaps no other country produces the quality bacon, beef and sheepmeat that we do.

To date the CBF have performed extremely effectively. In relation to our range of semi-State and State companies they must be one of our more successful outfits. For some reason attention has not been turned to date — although we are beginning to hear people talk in those terms now — to the fact that we need to market our beef under a brand name that hits the consumer between the eyes, that is synonymous with a quality product produced in an environmentally-pure and clean country.

Mr. Gibbons

Like hormones.

Mrs. Doyle

That is all part of the story. My greatest plea to the CBF at this point would be that they should turn their attention and efforts to this area. No matter what work is done before or post the farmgate, unless we can concentrate resources, getting the different companies and producers together to market under a brand name, we will lose out post-1992, as effectively we have lost out since 1972. There appears to be an assumption that the agricultural sector, and Ireland generally, did well since our entry into the EC in 1972. However, if one analyses it, one finds that is not the case at all. The high agricultural prices and their general application through the Common Agricultural Policy have actually distorted our food industry in particular by pushing back growth in commodities. We know the story of butter mountains and sides of beef in intervention. They have, if you like, distracted attention from the proper and aggressive marketing that is necessary in the open markets, in the United Kingdom, Europe generally and indeed further afield.

We are also aware of the fact that the higher prices farmers received post-1972 actually fuelled farm debt. Many farmers in my own county of Wexford and elsewhere are still reeling, trying to shoulder the difficulties they brought on themselves through expansion that perhaps was not carried out on the best of advice. With hindsight we can all criticise and point the finger. It is a problem many farmers, particularly the more progressive ones, find themselves saddled with, those very farmers we will be expecting to help in terms of increasing the beef herd, for instance.

Mr. M. Higgins

Under the strong suggestion of the banks.

Mrs. Doyle

Well, I was alluding to that when I said that perhaps the advice was questionable. I accept fully what Deputy Higgins says, that the banks and financial institutions, indeed agricultural advisers generally, encouraged many of our better farmers to expand, to increase their land and engage in capital investment of one type or another. It was badly needed but perhaps those operations were carried out a little in haste, that the debt-equity ratio of those operations was not examined as it should have been. Indeed, there was a time in the seventies when farmers were being told they could finance debts. At one stage they were told they could incur debts of between £1,500 and £2,000 per cow, that they practically get away with that. One wonders where the wisdom for that sort of advice came from. However, that is history. It is part of the mismanagement of the higher prices the agricultural community received from CAP post-1972. Why I am pointing to that now is that we have to be sure that we manage what is before us, post-1992 and the single market, to far greater effect, learn from the mistakes of the post-1972 position and make sure that it does not happen again. The Bill before us is a step in the right direction.

The efficient promotion of pigmeat will now be part of the terms of reference of CBF. The pigmeat industry has had many very difficult years. There is difficulty in terms of cost effectiveness on the production end, there is difficulty in the processing sector and there have been and still are difficulties at the marketing end of the entire equation. Let us hope that CBF will get marketing up and running as quickly as possible. I hope we will have a brand name for Irish bacon through which all Irish bacon will be exported and which can take its rightful place on the supermarket shelves of Ireland. I hope also that is the way we will handle the future marketing of beef products and beef from the cattle industry.

I would draw attention to the fact that one of the aspects of our entry to the EC that attracted me most and in theory still attracts me, even though I see little evidence of it working in practice, is the premise in the Treaty of Rome that we should concentrate production in the areas of greatest natural advantage. If our grasslands are not among our greatest natural advantages or are not one of the greatest natural advantages of Europe, I do not know what is. If we are not in a position to concentrate production on commodities based on our excellent clean grasslands, I do not know what Europe holds for us.

I would like to see our foreign and our farm Ministers when they sit at the Council of Ministers insisting that this premise is held to very strictly. We will never be able to compete with the zero grazing intensive farm management of our European neighbours. They depend on imported soya and on other feedstuffs. They do not compare to Ireland at all. Where we will always have an advantage over nearly all of our European neighbours, in terms of the production of beef and other agricultural products, is in relation to climate, the soil and our environment. We have to get our act together in protecting our environment, not just for the sake of the quality of life of our people and the quality of life offered to tourists, but for our prime industry and its products, the agricultural industry. This week again every newspaper carries further tragic evidence of difficulties in coping with the disposal of farm waste, industrial waste and human waste which puts pressure on the environment. Particularly at this time of the year, when silage making is just beyond its peak, we have to help the farming community to protect the environment, particularly our inland waters, in the interests of society generally and in the interests of farmers and the products we want CBF to market abroad. With the introduction of the super-levy some years ago and the implications that that has had for our national herd, the importance of attention to this area has not been lost; and, to be fair, it has not been lost on the present administration or on the former Minister for Agriculture, Deputy Deasy.

When one looks at export figures here and analyses the impact of agricultural exports on the overall figure, and if one further breaks that down in terms of beef and beef products, the enormous importance of maintaining the national herd cannot be underestimated. With the slaughter of cows on many farms to try to comply with the various quota restrictions that have now been imposed, not sufficient attention has been given to the encouragement of the suckler beef herd. Quite frankly, it has not paid. If we do not get our act together in that area we will not have the products to export and the work of the CBF will be totally wasted. It is part of the overall equation of gearing our agricultural primary produce and exports for 1992 and being in a position to avail of that internal single market, particularly in the area where we have greatest natural advantage in relation to production.

There have been record levels in recent years of EC beef production generally but it is expected to decline post-1988. We are the largest net exporter in the Community of beef and beef products and the opportunity will be ours to increase our market share provided we have the raw material and provided we are producing the cattle and can meet the demand of the export markets. If we do not do it and if the EC does not satisfy its own demands, we can be sure that outside countries, particularly South America and Australia, will be able to pick up the slack and fill a niche in the markets of Europe which rightfully should be ours. That niche is ours if we support the premise that one concentrates production in areas of natural advantage, if we are prepared to organise and be in a position to take it up. Nobody will wait for us to get in. Nobody will come looking for us as a nation to get in. We will have to be vigorous and aggressive in marketing our products. This is what we will be demanding of CBF in the future. Indeed, to date they have done an excellent job and I am confident that they will be able to fill the demands we have to put on this organisation for all our sakes, given the importance of exports to our country.

We give a lot of lip service from time to time to the national debt and to our huge unemployment figures. Since we entered the EC in 1972 we have virtually the same number of people in employment in this sector. Progress has not been made to the extent we expected in this area. There will be no easier or better way of resolving the national debt and our general difficulties with employment than by exporting products we can produce better than anyone else in Europe at the moment. By increasing our exports we will be resolving to a large extent the problems of financing the national debt. Not enough attention has been given to that aspect of the importance of our exports and the export market in resolving our financial problems.

Acting Chairman (Mr. M. Barrett)

The Deputy has five minutes left.

Mrs. Doyle

Another aspect of the beef, pigmeat and sheepmeat industry generally is that it is virtually an indigenous industry and there is no import content worth considering. When considering other manufacturing export industries and the importance we attach to them and the great service the IDA do for those industries, particularly in attracting foreign industrialists into our country, we sometimes forget that more attention to this indigenous industry would reap far greater dividends due to the fact that we have the ideal soil, climate and environment for production and because we do not need imported raw material to prime the industry itself.

In 1987 we witnessed a strong performance in this industry generally with prices having been maintained. We have had growth in the value of our beef exports and further expansion in the sheepmeat sector. I hope we have witnessed the first decline on the dependence of intervention. In the last year or so we have seen pigmeat, kill lines and processing facilities up and running under the FEOGA 75 per cent grant aid. It is appalling that, to date, despite the history of pig production in this country we have had no USDA licensed pigmeat plants. I commend the former Minister for Agriculture, Deputy Deasy, for his attention in this area and, indeed, the present Administration for recognising the importance of rectifying this problem.

Finally, we must remind ourselves of the enormous responsibility that CBF will have to shoulder. I have indicated that I attribute enormous importance, as does everyone in this House, to the value of our agricultural exports, particularly our beef, lamb and pigmeat. We will have to reward quality production in this area. CBF will have to be able to market top quality products. They will have to find our place on the supermarket shelves of Europe and beyond and they will have to gather together the sheep producers, the beef producers and the bacon producers under brand names in their respective categories so that every consumer, and particularly every housewife in Europe, will be able to identify Irish bacon, beef and lamb under a single brand name in the future. If we get our act together we will not see the same mistakes being made in 1992 and post 1992 as were made in relation to post 1972 when we entered the EC.

Mr. McCoy

Generally speaking, I welcome this Bill to amend CBF's funding and to extend their role to cover the promotion of pigmeat, venison and poultry. I know the farming community and the farm bodies are in general agreement with the thrust of this Bill. They realise full well that their future lies in premium prices in the market place and in further processing. In looking at CBF we should not confuse their role with that of the role of actually selling. CBF's role, as I understand it, is to promote and to market rather than to sell. Their role is to make Irish meat, whether it is beef, pork, bacon, mutton or lamb, a premium product in the eye of the consumer in Europe. They must bring before the European consumer the Irishness and the naturalness of the product and the fact that it is grass fed, processed in modern licensed plants and that it is hormone free. In this very intensive competitive market we must make these points known, accepted and appreciated if we are to get the premium for our products which is required.

I should like to point out that within Europe alone, in the poultry trade, the Dutch pay three times more for free range chickens than they do for house reared chickens. The demand for free range chickens is so great that they are sold out within a day of being supplied to the Dutch market from France. It is a point worth considering. It goes to show how the consumer in Europe is thinking in terms of the food which the housewife buys. It is fair to say that the same claim could be made about most of the meat which we are selling in Europe, particularly beef and sheep. It is in this area of market perception of free range production, in properly controlled and fully licensed plants, that the future for us, in terms of return both for the industry and for the primary producer, must lie.

The budget which will develop from the increased levies of about £4 million is still pitifully small for the job that has to be done and the competition which Irish products have to meet from multinationals from South America, Australia and the US which, to a certain extent, are selling into some of the markets and competing with us.

Much has been made of brand naming. Brand naming is a very specific field and is one in which I would advise CBF to go into with great caution. Our brand name should be Irish and what it entails. The brand naming of particular products at present can cost up to £100 million in the food consumer market. The success rate is about 10 per cent so one could be talking about spending £1,000 million in getting one successful product into the market place. The way we are going about it, which requires more money, is the right way in that we have shortened the chain between the consumer and the producer by being able to sell directly to supermarket buyers, particularly within the lucrative European market. The type of product which they require on a day-to-day basis is a chilled fresh product for which the processor will be paid within a specified time and he knows he has a market for the production he is undertaking. It helps his cash flow problem, his quality image and his marketing because he is now in contact with the person who is buying for the housewife. The benefits from this type of arrangement can be enormous for Ireland and as the years go by they are getting better.

It is interesting to note that about 70 per cent of the fresh produce consumed in West Germany is purchased by five groups and we are talking about a market of 76 million inhabitants. We are no longer prepared to put our destiny in the hands of local agents but rather to promote actively abroad what we stand for and that is the kernel to the type of success and the premium price which we need to get. It is interesting to note — and I am not sure of the figure but I know that I am within bounds when I say — that since their inception the cumulative budget of CBF would not have been more than £40 million. Since 1974 Bailey's Irish Cream has had a cumulative budget for promotion of £150 million for one single product. It is that type of money that has given it the pre-eminence it has in European and world markets as a quality product from Ireland.

That level of investment was required for the success which undoubtedly has been attained. We trot out names like Waterford Glass, Guinness and so on who have traditions behind them but the cumulative promotion budgets involved in bringing them to this State were enormous. In the context of the budget we have had for meat marketing and promotion the success has been high. In future if we are to get better returns in the market place for pigmeat, sheepmeat and beef, as with every other product sold in the international market today, a greater percentage of the realised price must be put into promotion and marketing. We have the money in place for the factories. We talk about the 75 per cent grants which certainly have been an incentive to upgrading food processing plants and they were badly needed. Many of them were far below international standards which we need in order to promote our natural products.

With those factors in place, there is to some extent a shortage of raw materials. I will not go into this; it has been referred to by many and I do not want to make political capital out of it, but it must be redressed nationally. One of the key factors after having spent a great deal of money in establishing a name and the supply is the continuity of that supply, not a seasonal job, not when it suits you to sell or when you are going to get a suckler grant. You must be able to supply the product you have contracted to supply so that you gain the confidence of the buyers and the consumers in other countries for your quality and supply.

This year under the budget allocated to CBF about £0.25 million is being allowed for promotion and advertising in our most lucrative growing market which I believe is West Germany. That is not a great deal of money. Individual farmers this year will consider spending £0.25 million on acquiring a farm of land. In the context of trying to make that farm of land pay at the end of the day at the premium price which the output from that land can make, £0.25 million is pitiful in trying to promote the produce of an entire nation where the exports, as has been pointed out by other speakers, have a content sourced within the country of at least 80 per cent and worth about five times more per £1,000, or whatever unit you want to take, than the products of multinational companies, who are located in this country and whom we welcome. It is worth making the distinction that if you are going to get into the business it is not just about "down on the farm", it is about "on the supermarket shelf" where the consumer is buying the product. From that point of view future returns will have to reflect the higher costs that we will have to accept will be required for marketing.

Between now and 1992, there will be harmonisation of taxes, and MCAs will have to be dismantled. — they are a positive disadvantage — and we will have to be very careful about devaluation of the green pound if we do not see a similar devaluation in other countries. If we are to talk about the future of an industry whereby we are accepting that we must in time move into production which will have a processing content, which I accept is the Government's strategy and I concur fully with it, where the MCAs do not relate to these processed products we are at a tremendous disadvantage in exporting. As it stands today with most products within the package of EC products, we are at a 13 per cent disadvantage in ingredients in the processing of food products compared with our nearest neighbour, Britain, and that is not taking account of all the utility costs and transport across the sea because we are an exporting country.

I welcome this Bill. In future we must pay far more attention to the fact that if our future lies in Europe it is not enough to be talking about it. We must promote it actively if we are to put our products where the money is and where the premium price will give the return to the farmer for the raw material in the produce and to the processor who has invested his money.

Mr. Sheehan

In contributing to the debate on this very interesting Bill, I speak on behalf of the small farmer who has been squeezed out of pig production completely by the policies of successive Ministers for Agriculture. This was a very lucrative end of the small farmer's production. When he was trying to eke out a livelihood the bacon industry proved of considerable benefit to him. It is amazing to think that within a span of 20 years pig production has completely vanished from the small farmyard and gone into major units. What was the result? A product not as good nor as tasty has evolved and it was to the detriment of agriculture that the small farmer was squeezed out of this very valuable industry.

We are only skimming the surface as far as pig production is concerned. Denmark, which is not as big as Ireland, produces 17 million pigs a year. We in the Republic of Ireland produce the miserable figure of approximately three quarters of a million pigs. This is the bottom of the barrel. We should at least be able to produce the same number of pigs as the Danes produce. Until such time as the Minister takes off the kid gloves and encourages pig production in an effort to put the industry back on a sound footing there is little hope that it will prosper. Will the Minister explain why farmers have given up the ghost as far as pig production is concerned? It is obvious that they were squeezed out of pig production by major combines and I do not think that was to the benefit of the agricultural industry.

While a member of the Cork County Committee of Agriculture in the last 25 years I have seen a thriving pig industry being strangled by the bureaucracy of the Department. The premium boar scheme, which was essential for the improvement of pig production, was discontinued, and that proved a setback to the farmers. Without foundation stock we will not have a viable agricultural industry.

I understand that the Minister is taking steps to abolish county committees of agriculture, bodies that were responsible in no small measure for the improvements in the bacon and poultry industries. I watched with sadness in the last two decades as those industries declined. We are all aware of the vital role that the turkey cheque played in the household budget of farmers at Christmas time. We can all recall the succulent turkeys that were produced on family farms but today we have mass produced turkeys displayed on supermarket shelves or in deep freezers and the one attractive feature about them is the price. The quality is not the same. The change has taken place because the turkey producing industry was stifled by red tape under successive Ministers.

I was accustomed to purchasing high quality turkeys from farmers' wives at Christmas time and I can vouch for their high quality. There was a great demand for them, but unfortunately we fell down on marketing arrangements. I accuse the Department of Agriculture of not co-operating with the farming community in regard to the production of turkeys. They strangled the industry.

It may be said that the change in the system of turkey production has resulted in a greater demand for turkeys, but we are all aware that the mass produced product cannot match the quality of the free range bird. Until the Minister, who is responsible for the bacon and poultry industries, realises that there is room for expansion and takes appropriate action, we will not make a break-through.

I welcome the provisions of the Bill, but they fall short of what is needed if we are to revitalise an industry that was so important to our economy. We should not cod ourselves into thinking that pig production is improving. It is declining annually, mainly through a lack of finance and guidance from the Department. Small producers have gone out of business due to a lack of guidance. We have lost a saleable tag on the international market, the free range tag. Wives of farmers in Connemara, on the Mizen Head and Bear Island played an important role in the production of free range turkeys 20 years ago. I cannot understand why they were penalised and why the Department have failed to give them assistance. The huge drop in turkey production on farms was caused by a lack of finance and guidance from the Department. Successive Ministers have neglected the poultry and pig industries. They placed more emphasis on milk products and beef production. Assistance was not given to a vital element of the agricultural industry, poultry and pig production, which should be playing an important role in our economy today.

I can recall exiles in Britain requesting Irish produced turkeys at Christmas time, but today Irish housewives have to be content with imported turkeys. It is hard to understand why we must import turkeys from Northern Ireland or Great Britain. The Department are not tackling the problem and we need to put more emphasis on free-range products.

We must make it attractive for the Irish farmer and his wife to get back into pig and poultry production. It is no good to say that there are three or four major units in the country producing the same product. They may be producing it but it lacks flavour and appeal to the housewife. That is why we in Ireland, free to a great extent from pollution and radioactive fall-out, can play a major role in bringing back that product. It deserves more recognition from the Minister for Agriculture and Food and from the Department. Instead of abolishing committees of agriculture which we now seem to be happy about——

Mr. Gibbons

You were abolished yourself.

Mr. Sheehan

Yes, after nearly 30 years as a member. Instead of abolishing committees of agriculture we should try to resurrect, cultivate and reactivate the old schemes for poultry and pigs that were operated by those committees of agriculture. I would like to ask the Minister where an Irish farmer, if he wants to get back into pig production, will get a suitable boar or sow? Are we producing them in this country?

Mr. Kirk

Yes, we are.

Mr. Sheehan

We are holding them in units. There is no such thing as the ordinary farm-produced pig——

Mr. Kirk

Free range pig.

Mr. Sheehan

——free range turkey, free range chicken or free range goose. We have no turkey cock station, gander station or boar station and yet we are bringing fancy Bills before the Dáil such as the Córas Beostoic agus Feola (Amendment) Bill. Perhaps it has a great meaning but I would like to ask the Minister if the incentive is there to make sure that we get the industry back on its feet. It is futile for Members to be discussing today a Bill that has not a broader outline as far as poultry and pig products are concerned.

Imports of bacon products into this country have been steadily increasing. You need only visit one of the supermarkets in Dublin and go to the bacon shelf to see Danish ham, Dutch ham and German ham and imported poultry products. If we are realistic and honest about advancing our agricultural products on the European market we should be exporting them to Germany, Holland and perhaps Denmark. The Irish product, even though it may be far more superior, is not competitive in price with the imported product. Perhaps Irish housewives can give the lead where the Department have fallen down. I would appeal to them to purchase, from this day onwards, the Irish product where it is practicable to do so. Make sure that the ham is not a synthetic product imported from other countries. Make sure it is produced on the farms of Ireland.

There is a vast potential for bacon products in the USA and Japan. Housewives in the great USA cannot get a decent rasher to put on their plates in the morning. They are crying out for the superior Irish product to be put on the supermarket shelves in the USA. The same applies in Japan. The returned Irish emigrant or the Irish-American who comes home on holidays takes back a parcel of smoked rashers and bacon products. I have travelled in many parts of the USA and I have yet to find Irish bacon in the supermarkets there. We are falling down in marketing as far as that product is concerned.

My final words refer to venison. This is a new facet to agricultural life. If the Minister is serious about developing the industry he should start at the points of the industry we know something about, that is, bacon and poultry. We should bring back the free range product to the shelves of the supermarkets and we should export our very valuable product to the great USA and Japan. If we promote exports as far as possible in those two outlets we will be taking the first step in putting a major industry back into prosperity.

Minister of State at the Department of Agriculture and Food (Mr. Kirk)

I would like to take the opportunity to thank all those who have made a very worthwhile contribution to the debate for the past three hours. The positive attitude of Members of the House in their contributions clearly illustrates that they are very much in favour of what is being proposed in the Bill and denotes their satisfaction with the performance of CBF in their area of activity.

The thrust of the remarks of Members is that CBF will do a good job when they assume responsibility for the marketing of pigmeat. Undoubtedly, this has been a problem area. Structural difficulties have existed with pig production. At primary production level the process of rationalisation that has taken place has got the industry onto a firm footing. The proposals that are in the pipeline for the very considerable investment in slaughtering and processing facilities — we envisage an investment package of £140 million in total — will put right that end of the industry. The third most important element in getting the marketing strategy right will be provided for under this legislation.

I will briefly comment on some of the matters which the Deputies have referred to. Deputy O'Keeffe referred to the Exchequer contribution to CBF. It is fair to say, and I am sure the Deputy will accept, that this is a budgetary matter for the Government in the context of the fixing of departmental Estimates. I do not think it is relevant to the proposals contained in the Bill. With regard to the continued State involvement in CBF, I consider that CBF have a very difficult task in reconciling often very different viewpoints. I believe the present arrangements have worked very well. All sectors involved in the industry agree that continued State involvement in CBF is essential.

On the question of co-operation between CBF, CTT and other State organisations, this is already Government policy. Considerable co-operation between them is already taking place and ways and means to achieve further co-operation are being actively pursued.

Deputy Gibbons felt that the Government were not doing enough to get the national herd numbers up. We have to be realistic. The fall in beef cow numbers has been reversed. Cow slaughterings over the last 18 months have shown a significant decline and the market for the foreseeable future is very promising. Recently, the Minister for Agriculture and Food announced steps to increase cattle numbers when he decided to pay grants of £70 and £66 for the first time on beef cows in dairy herds under the 1988 disadvantaged areas scheme.

Mr. Gibbons

What about the non-disadvantaged areas?

Mr. Kirk

He is obviously very anxious to actively encourage further development in the beef cow herd, but we have to be realistic about this.

Mr. Gibbons

I am being realistic.

Mr. Kirk

There is considerable opposition at EC level to the introduction of any incentives in this area. We are member states and we are bound by the edicts that come from Brussels.

Mr. J. O'Keeffe

What about the suckler scheme the Minister announced four times?

Mr. Kirk

Deputy O'Keeffe spoke of the need to ensure adequate supplies of raw material. The Government are very conscious of this and the Minister set up the pig producer group to look at this and all other aspects of the pig industry. I acknowledge that much has to be done at all levels of the pigmeat sector if target output is to be achieved and a profitable and stable industry secured. The pig production group have identified the areas which need to be tackled if the pigmeat industry is to develop to its full potential and to achieve a real and lasting increase in export levels. It is true that expansion will not take place in a vacuum, that the creation of confidence, added to the granting of incentives, will be required to draw forth the necessary response from producers.

The State, through the IDA, is contributing very significant resources to the creation of a modern and efficient manufacturing sector. State and FEOGA grants cover 75 per cent of the investment cost. This is an exceptionally generous figure. The Government will be requiring a return from their investment in terms of increased output, employment and exports. We are therefore expecting those in receipt of grant aid to share the benefits with others involved in the industry.

It will be up to the slaughterers and processors to ensure that adequate pig numbers are available to take up the capacity which is being created. One of the ways of doing this which has been suggested by the pig production group is by paying a bonus for additional pig deliveries. There are, of course, other possible systems and slaughterers and processors have been asked to prepare detailed development programmes which, among other things, address the question of encouraging increased pig numbers.

Continued State support for individual processing plants will be dependent on their playing a full part in developing all aspects of the pigmeat industry. The State has shown, and will continue to show, its commitment to the sector. Slaughterers and processors must be in the centre stage in encouraging the expansion of numbers and the improved practices which are necessary.

I do not think the Government's commitment to the pig sector can be questioned. The development programme for the pigmeat sector unveiled last July envisages increased output of three million pigs per annum by the year 1992. This increased output, amounting to 800,000 pigs, will have to be exported. Marketing will be more important than ever and export promotion will have a key role to play in helping to find secure and profitable outlets for Irish pigmeat.

As CBF have a record of considerable achievement in promoting Irish beef and lamb, it is only logical that the extensive expertise and facilities of CBF should now be made available to the pigmeat sector. I have no doubt CBF will chalk up a record of achievement in pigmeat promotion equal to that already secured in the beef and lamb areas.

If I might, I wish to refer to the USDA licensed plants, also referred to by Deputy Doyle. There are two pigmeat plants, Galtee and Limerick Bacon, which have been USDA licensed since 1987. With the new and modernised plants coming on stream later this year, we should increase the number of factories which can supply produce for the US market. The Government will be doing all they can to have more plants of USDA licensed standard.

A number of Deputies referred to brand marketing, particularly Deputy Durkan and Deputy McCoy. This is a very big question and I am not sure it is appropriate to the present proposal. CBF will have their own expert view on this question and they will be aware of the huge amounts of money involved — Deputy McCoy touched on this point. It is essential that we be aware of the limited resources available and it is for CBF themselves to decide how best to use available resources.

Deputy Durkan referred to the need to ensure residue free products. I fully agree with this point and I would like to take the opportunity to point out that my Department carry out a comprehensive residue testing programme not only for hormones but also for such substances as antibiotics, heavy metals and pesticides. I am pleased to say that the results of this testing give a very high degree of assurance that our meat products are free from harmful residues.

Deputy Leonard touched on the price of pig feed. Undoubtedly, this has been a major inhibiting factor to the development of primary production in the pig sector. The people who have looked at this have identified it as a problem area and hopefully will be recommending and taking the necessary steps to make changes. Irish pig feed costs have been very high and have placed us at a certain disadvantage in the import and export areas. Strangely enough, the process of change has been relatively slow, despite the process or rationalisation which is taking place in the whole area of primary production. When people realise its importance I am sure they will be making the necessary changes.

Deputy Sherlock referred to the high level of live cattle exports. Live exports have been declining in recent years and in 1987 reached their lowest levels in modern times. This is indicative of the increasing efficiency of our beef industry.

The major remaining market for live exports is Northern Ireland. With our land frontier with the North a continuing two-way trade is inevitable. The direction of the trade is influenced by short term considerations such as fluctuations in exchange rates and MCAs.

Deputy Leonard reflected on the importance of the pig industry as well as poultry production in Cavan-Monaghan. As always his contribution was constructive and worth while.

Question put and agreed to.

An Leas-Cheann Comhairle

When is it proposed to take the next Stage?

Mr. J. O'Keeffe

I am prepared to facilitate the Minister any way I can.

Mr. Kirk

I propose Committee Stage be listed for next Tuesday, subject to agreement between the Whips.

Committee Stage ordered for Tuesday, 21 June 1988.