I welcome the Minister for Agriculture, Food and Forestry to the House.
National Stud (Amendment) Bill, 1993: Second Stage.
Question proposed: "That the Bill be now read a Second Time."
First, I congratulate the Seanad on electing Senator Naughten as Leas-Chathaoirleach.
Today's business relates to the Irish National Stud. It is asking the Seanad to allow the borrowing capacity of the National Stud and its share capital to be increased. This matter was debated in the Dáil two weeks ago and the Members there were very constructive and helpful and the Bill was passed unanimously.
The Irish National Stud is located at Tully, County Kildare, at the Curragh on 800 acres of land. It is in State ownership since 1945 and was set up originally to operate schemes for the improvement of the thoroughbred horse industry. The Stud's main method of operation is to improve available blood lines by providing the services of high-class quality stallions to as wide a range of breeders as possible.
The Bill now before the Seanad proposes to amend the National Stud Acts, 1945 and 1976, by increasing the National Stud's borrowing powers from £0.5 million to £5 million and its share capital from £5 million to £10 million. These financial provisions are purely enabling ones. The power to borrow is subject to the consent of the Ministers for Agriculture, Food and Forestry and Finance. The increased share capital will be issued, when considered appropriate, by these two Ministers. To date the State has purchased all but £24,000 of the £5 million in share capital which is authorised under existing legislation. The last purchase of 800,000 shares of £1 each was by the Minister for Finance in December last year. The Bill also provides a technical provision concerning the control of staff pay.
The Stud is now 47 years old and has been central to the development of the thoroughbred industry during that time. While the core activity of the Stud is, of course, the breeding of thoroughbred horses, we should not forget that it is not simply a working stud farm. It provides training for the stud managers of the future in addition to hosting thousands of overseas visitors each year.
One of the major successes of the Stud in the recent years is its horse breeding training course. This course has been in operation for 20 years and caters for 25 to 30 students each year. It is recognised worldwide as the best of its type. Graduates of the stud manager courses manage some of the largest studs in the world including the British National Stud and Wyndham Farms in Canada which was the home of Northern Dancer for a good number of years. Indeed course graduates were responsible for training winners on three continents during 1992.
Given the excellence of the course and the esteem in which the Irish National Stud is held worldwide, it is no surprise that it is virtually unknown for a graduate to fail to find employment. I am sure that Members of the House will agree that this is no small achievement in the present environment of high unemployment. It is even more remarkable when one considers that it is operated without a subsidy of any kind and without assistance from the State.
The Horse Museum and the Japanese Gardens at the Stud are well established tourist attractions with over 80,000 paying visitors annually. This activity has been turned into a profit maker in recent years and is capable of further significant development. The general facilities at the Stud are not adequate, however, to cope with an increased throughput of visitors. A new visitors centre, costing in the region of £600,000, is under construction and is scheduled to open at Easter this year. This centre will be capable of servicing the projected increase in tourists by providing the ambience demanded by discerning visitors. The centre will incorporate a ticket office, restaurant, souvenir shops, toilet and washroom facilities. It will provide an appropriate backup to the unique and celebrated Japanese Gardens.
The Irish Horse Museum within the Stud grounds was established in 1977. The Museum, featuring the skeleton of the great Arkle, traces the evolution of the Irish horse from pre-historic to modern times. I was asked in the Dáil if it would be possible to include the skeleton of Shergar, if he could be found, and we are working on that. Included in the museum are exhibits of folk life, transport, racing, hunting and showjumping. The existing building is rather cramped and plans for a new building are under consideration. There are plans to extend the range of activities in the museum and to have videos and brochures of various kinds featuring famous personalities of the Irish thoroughbred and racing industry over the years and many famous horses too. The visitors centre, Japanese Gardens and museum are complemented by the development of a walking trail through the general Stud grounds where visitors can view horses in paddocks at all times.
The farm activities at the National Stud are an essential part of and provide vital support for the core study activity. Of primary importance here is grassland management, geared to supporting the horses in the Stud. In this regard the primary non-bloodstock farm activity is the production of beef cattle. The system of farming was altered in 1991 to a more intensive one than had been practised previously. This switch in activity led to losses being recorded in 1991. However, I understand that the final accounts for 1992 will show a return to profit on the farm. Current cattle prices should help ensure a profit situation is recorded also in 1993. The board is examining the farm activities carefully and may make further changes this year. Indeed it would be difficult not to make a profit in the current buoyant farming situation.
As I have already stated, the central activity of the Stud is and will remain the breeding of thoroughbred horses. Considerable losses have been incurred in this area in recent years. The industry worldwide is going through a major recession with consequential substantial falls in the prices being paid for thoroughbreds and nomination fees being commanded by stallions at stud.
The net nomination fee income earned by the Stud has fallen from £1.2 million in 1987 to almost £250,000 in 1991. It is clear that when this fall in income is set against a more or less static cost base, substantial losses were inevitable.
We are now faced with the question of what we should do about the situation. Currently the Stud has seven stallions standing, considerably fewer than the maximum number the Stud is capable of accommodating. The realistic alternatives are to provide the Stud with new equity to enable it to purchase additional quality stallions and earn more fee income or to close down the Stud entirely. In all my discussions regarding the future of the Stud no one has suggested that it should be closed. It is widely regarded as a major national asset well worth preserving. It is widely recognised that it has contributed significantly to the improvement of the thoroughbred sector and that under reasonable conditions it has the potential to do so again.
While the breeding of thoroughbreds is a specialised activity it is primarily a farm-based enterprise in this country. I regard this as one of the basic strengths of our thoroughbred breeding sector. Breeding activity is characterised by the relatively large number of breeders with just a few brood mares. Obviously the brood mares are normally used to supplement the farm income achieved from more conventional farm activities. Most of these small breeders are involved in the business of producing foals or yearlings for the annual sales.
The National Stud exists in the first instance to meet the demands of these breeders for high-class stallions at reasonable fees. Given the structure of the thoroughbred breeding sector the rationale for the Stud's continued operation is clear. The logic underpinning the need for the Stud is as valid today as it was when it was originally established.
The Stud must now look to the future and I, as Minister for Agriculture, Food and Forestry, will do my utmost to secure its future. The recession in the industry can hopefully be turned to advantage through the purchase of additional stallions at the lower prices now prevailing.
The current limits of £5 million in share capital and £0.5 million in borrowing powers are clearly inadequate and it is difficult to see how the Stud can resume its former role in thoroughbred breeding within these constraints. The Bill before us today provides a more relevant framework for the Stud. This will allow the State to provide greater share capital for the purchase of the quality stallions required. The borrowing facility will allow the Stud to move quickly once suitable stallions are available.
I received the board's five year programme last year and I have asked them to update it with a view to restructuring the Stud's activities in the most cost effective way.
I am pleased to commend this Bill to the House as it will put the Irish National Stud on a sound footing. It will be a vote of confidence in the Stud, in its activities, in the chairman and in the board of directors. I have the utmost confidence in the chairman and the board to turn the Stud's activities around. They have already started on that programme.
It is also a vote of confidence in the thoroughbred industry. It is not widely appreciated that the Irish horse industry directly employs a substantial number of people, 12,500, in stables and training, in bookies' offices, in ancillary activities; at racecourses and on stud farms. The thoroughbred industry is one in which the Irish can compete at the highest level internationally. It enhances the position of Ireland beyond the bloodstock industry itself. As well as the 12,500 people directly employed, about the same number benefit indirectly from the thoroughbred industry, including the small farmers with one or two brood mares and various other people. It is a major contributor to our tourist industry with regional meetings which many people attend and I would hope many more of them will go racing in the future.
From the employment and the economic points of view, the bloodstock industry is an important and positive industry. I want to express my thanks to the people who have given us this fine industry. The National Stud will continue to contribute in a major way, as it has done in the past. It has stood international class stallions over the years, including Lord Gayle, Salus, Ahonoora, African Sky and Crash Course. In fact, during the Dáil debate on this Bill, Jodami was tipped to win the Hennessey Cognac Gold Cup and, of course, Jodami was out of Crash Course; I wonder if we will get any tips this weekend in the Upper House. I look forward to what you have to say.
As well as its immediate activity, the Stud, from time to time, has had a horse in training to run in the President's colours. It has had some good ones like Seskin Bridge and Giollamar and there is a nice bluewin filly in training with Michael Grassick at the moment which, hopefully, will run this summer in the President's colours. It would be of great importance to the Stud and to the industry if we could come up with a winner or two in the President's colours.
For all those good reasons I commend this Bill to the House.
I welcome the opportunity to say a few words on this Bill which I welcome. Something should have been done three to four years ago as far as the National Stud is concerned. However, we are here now and we should do our best.
I welcome the Minister for Agriculture, Food and Forestry and it is my intention to raise agricultural matters in the Seanad while I am a Member. I have great respect for the Minister, but I cannot share his view of the great wealth in agriculture. There are many difficulties there as the Minister must accept and over the years perhaps they will be sorted out.
I understand that the Second Stage of the Bill is being taken today and that we will have a chance to put down amendments, which I intend to do on either the Committee or Report Stage. I welcome that because, when the debate was mentioned, I was told all Stages would be taken by one o'clock today and that would be a bad start to this session. We are here to debate issues and we cannot debate all Stages of any Bill in two hours.
The Irish National Stud has served Irish bloodstock breeders well over the years, despite the fact that it has been hamstrung by virtue of its semi-State structure. This has meant that inadequate resources have been provided to allow the Stud to compete on an equal footing with the well funded studs such as Coolmore. The reluctance of successive Governments — I am not blaming just this Government — to provide realistic financial backing to the National Stud forced the sale of many a good stallion, and in particular forced the sale of Ahonoora. This sire, thankfully, remained in Ireland but his earning power was lost to the National Stud because of the shortage of cash.
The National Stud should not be in a position where its good judgment in purchasing an ultimately successful stallion results in it having to be sold because of Government reluctance to provide adequate funding. I, therefore, warmly welcome this Bill which is designed to put the National Stud on a more realistic financial base. In terms of competing with the private sector, the National Stud is constrained to a certain extent by the absence of flexibility in the labour costs associated with running what is a seasonal business. As a State owned enterprise this inevitably results in substantial extra labour costs which do not necessarily arise in the private sector where flexibility by staff is an accepted norm.
Flexibility is a vital ingredient in a business where trends in economies in other countries can severely affect the demand for bloodstock. Perhaps in this regard an element of privatisation could be considered at the National Stud. The Minister, in his speeches to the Dáil and Seanad, never mentioned privatisation of any kind and I would like to hear if he has given any consideration to privatisation in respect of the National Stud.
The Stud through its excellent training programme has produced many highly qualified people with capacity to operate stud farms. I would like to see a situation provided at the National Stud where skilled professionals, without their own stud farms, could rent facilities at the Stud and even permit the standing of privately owned stallions when there would not be a full roster of stallions available. This is nothing new in other breeding stations. The Dublin District Milk Board operate the same system with bulls rather than stallions. I ask the Minister to give consideration to these ideas.
The board of the National Stud should be concerned to make the maximum return from the valuable State asset at Tully. In this regard a flexible approach could result in increased earnings and a bottom line performance which needs to be greatly improved. I am not casting aspersions on anybody when I make that statement. The current board is well balanced and its chairman, David Shoebottom, I believe the Government made a good choice. We need financial experts in all State bodies and his combination of financial ability and knowledge of the horse industry, as a breeder and owner, ensures that the National Stud has an admirably qualified person to guide the Stud to new levels of performance.
The National Stud, in common of all elements of the breeding sector, would benefit considerably from any boost in the racing sector. The health of the racing sector very much determines the demand for bloodstock and their value. It is, therefore, of the utmost importance to the National Stud and to the entire bloodstock industry that the proposed national authority for racing be brought into existence without delay.
The racing industry with its considerable potential for providing jobs has been ill served in the past by the absence of a dynamic and co-ordinated development agency. The Minister for Agriculture, Food and Forestry, has a unique opportunity to provide the racing and breeding sector with the structure necessary to maximise opportunities from one of our most important indigenous industries.
A large number of people are employed in the horse industry and, coming from Wexford, I clearly understand that situation. County Wexford is one of Ireland's most important and successful producers of quality horses and horsemen. Indeed, the country's leading horse trainer, Jim Bolger, is Wexford bred and he has most of his horses in Clonroche in County Wexford. He is making a major contribution to Irish racing both as a most successful trainer and as a member of the Racing Board.
Earnings from thoroughbred breeding are important to County Wexford and the National Stud is needed to meet the requirements of smaller breeders for quality stallions at reasonable fees.
I will comment on two areas of the Minister's speech. I welcome the worthwhile improvements due to take place at the museum at the National Stud. I am glad to see that £600,000 is to be spent modernising and updating the museum. As a tourist attraction it could be a valuable asset for the National Stud.
Stud fees stood at £1.2 million in 1987 and £234,000 in 1991. There is something wrong here. At present there are only seven stallions standing at the Stud. There must have been a greater number of stallions standing in 1987 than in 1991 if stud fees have decreased to such on extent. An explanation is required.
I strongly support this Bill and look forward to a significant contribution to the development of the Irish bloodstock sector and the strengthening of the National Stud.
I welcome the Minister and congratulate him on his reappointment as Minister for Agriculture, Food and Forestry. It is appropriate that he is present today because I usually meet him when I attend race meetings. I do not know whether I have ever received a winning tip from him, but he supports horse racing and it is appropriate that he should introduce this Bill.
Horse racing and breeding have for many years formed an important part of Irish life. Racing provides an ideal leisure activity for many people. It can be regarded as a family activity enjoyed in a healthy and natural environment. There is also room for the armchair enthusiast, whether at home in front of the television or in the betting shop. Although I rarely frequent betting shops I enjoy watching racing on television and I compliment television stations on their coverage of horse racing in Ireland.
Despite the difficult economic conditions prevailing last year, attendances at race meetings and betting on the tote held up well. Attendance rose by 3 per cent and stood at 1.053 million people. This was the sixth consecutive year in which attendance topped the one million mark. Tote betting also increased by 3 per cent in 1992, an indication of the popularity of horse racing in Ireland.
The National Stud Company Limited was set up under the National Stud Act, 1945 to lease land from the Minister for Agriculture to continue the business of stud farming and horse breeding. This Act gave the Stud the power to set up and operate schemes for the improvement of thoroughbred breeding. The Stud's main method of operation was to improve available blood lines by providing the services of high class stallions to as wide a range of breeders as possible.
In addition to its core stallion and thoroughbred breeding business, the National Stud is involved in a wide range of activities including farming tourism and the training of personnel for the bloodstock sector. The Stud and the Japanese Gardens at Tully are well established tourist attractions with over 80,000 paying visitors annually. These activities have generated profits in recent years and there is potential for further development.
The Stud organises a horse breeding training course for 25 to 30 people each spring. This course, now in operation for over 20 years, is recognised within the blookstock industry as the best of its type in the world. Graduates of the course manage some of the best stud farms in the world and trained winners in three continents last year.
The purpose of this Bill is to empower the National Stud to increase its borrowing and its share value to ensure that the Stud remains viable. The merging of a small number of highly professional stallion studs over the last 20 years has led to doubts about the continued necessity for a National Stud. It is important that the Stud remain viable and competitive to service breeders in the long term. The Killanin report, 1986 was also of this view.
In recent years major changes have taken place in the equine industry in relation to thoroughbred and sport horses. Thoroughbred breeding has gone through a difficult phase because of worldwide recession. Stallion fees and prices fetched by young racehorses have dropped considerably. While the sport horse business has been affected, the disciplines of showjumping, eventing and dressage have continued to increase in popularity.
Ireland has always been famous for thoroughbred and sport horses but in recent years the sport horse section of the industry has not been as prominent as heretofore because of major advances in pedigree research and horse performance in Germany, Holland, Belgium and France. Ireland has lagged behind in these areas. It is now accepted by all that change is necessary to enable Irish horses and competitors to reach international performance standards. To achieve this the Government has appointed an interim horse board and some innovative thinking has emanated from this.
The University of Limerick has introduced major innovative equine programmes and projects at the college. At present the University is researching the performances of the Limerick Lady and two and three year old filly champions at Limerick shows. Their performances over a number of years will be recorded and made available so that best breeding lines can be recorded, identified and developed.
The university plans to develop a commercial computer sport horse database which will make available to Irish breeders and buyers information on the combined pedigree and performance of all Irish sport horses. All necessary information is available to breeders of cattle, especially on pedigrees. Similar information is necessary in the equine industry.
There are approximately 20,000 owners and breeders of sport horses in Ireland. The sport horse data base which will be developed at the Equine Research Centre at the University of Limerick will supply much needed information to owners and breeders. Money will be required to develop these and other projects and the college is fund raising for part of the cost.
Another research project planned for the university is an exercise in physiology study to record and analyse thoroughbred performances during training. Heart-rates and other physiological fitness indicators will be monitored so that more effective training schedules can be planned. The identification of talent in both horse and rider will take place at some future date. The university hopes that the stallion genetic index programme will be awarded to the college.
The Minister referred to the educational programme at the National Stud. We lack adequate education for those involved in the equine industry. There are wonderful educational opportunities, both vocational and academic available for those in agriculture. Courses are available in vocational schools and others are organised by Teagasc. Prospective farmers should always complete a certificate in agriculture. Until recently no academic qualifications were necessary or available in the equine industry which has served Ireland well at home and abroad.
The University of Limerick must be congratulated on its initiative in introducing a Bachelor of Equine Science degree, the first of its kind in Europe. We live in a competitive world and we need to make a greater input than heretofore into education programmes for the development of the equine industry. Such an education programme is long overdue.
The University of Limerick will help to provide education opportunities currently not available in the equine industry. Horsemanship was learned traditionally through intuition, handed down from generation to generation, with hardly any formal schooling. Specialised degrees or diplomas did not exist. This omission was identified by Lord Killanin in a major investigation in the mid-1980s in which he concluded that there was little formal training in the racing industry: most of those involved learned through their family involvement with racing or because they came from rural areas where racehorses were trained and bred.
A survey conducted in 1985 or 1986 confirmed Lord Killanin's finding that the standard of equine education was low. That survey prompted the University of Limerick to introduce the Bachelor of Equine Science degree. It is a four year course and of the 36 pupils enrolled 15 are from urban areas, 11 from equine backgrounds and ten from farming backgrounds. This degree course enables people from urban areas to train in horse breeding and in equine matters, generally.
It is not my intention in praising the University of Limerick to take from the National Stud, which has served the equine industry well and must be placed on a sound footing.
I welcome the Minister to the House and I support this important Bill.
The Culliton report urged us to pay particular attention to our indigenous industries and today's events in Galway bear out the wisdom of that advice. Perhaps, because horse breeding is located in different areas throughout the country, its national importance is not recognised. I am glad the Minister revealed the number of direct jobs in the industry — there is also an enormous number of indirect jobs. The equine industry is more important to Ireland than to any other European country because the horses to humans ratio is higher here than elsewhere.
The promotion of the Irish horse breeding industry has been ably done by the National Stud and it is essential that the Stud receives the money proposed in this Bill. Things have changed enormously since 1976 when the last financial levels were set. The Stud does incredible work. The availability of good flat racing stallions and national hunt stallions at many commercial studs does not affect the value of the National Stud.
Important services provided by the Stud exclusively include the training programmes and in particular the farrier programme, which is an essential part of the Irish equine industry. Without the training course in the National Stud with a master farrier, the equine industry would be in a difficult position.
The visitors centre is also a big money maker and a great show place for international visitors. I have seen the new centre which is being erected and I am sure it will be well used. I would like to make a suggestion regarding the Irish horses shown at the centre. I have visited the French national stud in Harras-lesPins. There they have Percherons — a French native horse — a well as racehorses. Would it be possible for the Stud to include some Irish draught mares and Connemara ponies to allow visitors to see other native Irish horses?
I wish to comment briefly on — and Senator Rory Kiely also mentioned this — the position of the sport horse. While the success of flat racing and the national hunt has declined the situation of the sport horse has continued to improve. The Killanin report recommended that the Stud become involved in non-thoroughbred breeding. If it did, it might assume a leading position in the sale of sport horses, internationally, where Ireland is doing well. I find it disappointing that so many Irish bred foreign owned horses do much better at international sport horse competitions than Irish owned horses. I am not sure whether that is because owners here do not have the money to buy potentially good horses, fail to recognise potential or lack adequate training facilities. Certainly, Irish sport horses are doing extremely well and I hope the Minister will consider using the National Stud to help Irish owners of sport horses. I know that the report of the joint committee chaired by Senator Roche a few years ago, was not enthusiastic about this idea. However, in view of the decline in flat racing, in particular, and there is no immediate sign of recovery; Arab interests lie elsewhere now — perhaps, it is an area the Stud should concentrate on.
I would like to comment on the situation regarding the Kildare by-pass. I do not think any decision has been made, but if the by-pass goes through the Stud farm, it will entail not only the loss of farming land, but also the break-up of the various stud areas. I hope this will not happen. Perhaps the Kildare by-pass should be considered as part of the overall plan for a south-bound motorway rather than as a by-pass of Kildare town only.
I would like to share my time with Senator Cashin.
I would remind you, Senator, that the debate must cross the floor of the House when you finish. You are not in a position to share time on Second Stage as there is no time limit.
That is a sign of inexperience and I apologise. The Minister said of the National Stud, and I quote: "It is widely regarded as a major national asset well worth preserving". In the final part of his speech to the Dáil he said: "I believe that the Bill before the Members today is necessary if the Irish National Stud is to have the financial flexibility necessary to enable it to continue to deliver access to international quality stallions to small breeders at affordable rates". The two terms I draw attention to there are "small breeders" and "affordable rates". The suggestion by Senator D'Arcy that the National Stud should be privatised flies in the face of the sentiment that international quality stallions should be made available to small breeders.
I would like to stress the importance of horse breeding and of the horse industry generally, particularly in rural Ireland. In County Limerick where I come from many stud farms operate on a small scale. They may not hit the headlines or become well known but they are an important part of the rural landscape. They provide alternative employment for many small farmers and the larger studs are a valuable source of employment for jockeys, grooms and they help the local economy. Many of the stud farms provide over ten times the amount of employment that the same acreage would provide, if used for dairy farming, cattle or tillage.
The Irish horse industry is important to our tourist trade. Many tourists come to Ireland to go racing or hunting and to engage in equestrian sports. This is an important aspect of an economy, particularly in a rural area that is trying to encourage tourism. Continental tourists find Irish horses are more tame and easier to manage and French and German tourists often have an enjoyable holiday here.
Senator Kiely has already emphasised the importance the University of Limerick has given to the equine industry by the foundation of a Bachelor of Equine Science. This should not be seen as being opposed to the activities of the National Stud. It should be seen as an adjunct to it, carrying on the work already done in the National Stud by providing a scientific base for the training of stud farm managers. I am a frequent visitor to the Japenese Gardens and the National Stud and I think they are well worth visiting. They are assets of which we can be proud and which we should promote wherever possible.
I welcome the Minister to the House. His contributions to the Seanad during the last session were helpful and I am glad to see that he has retained his portfolio.
This is a very important matter. At the outset, I must declare a vested interest because I happen to be one of those unfortunate people who has owned one of these animals. It was not a stallion but a mare and I bred from the mare. An interest in horses can become addictive, with some unfortunate results; at this stage, I have overcome my addiction. The other interest I should declare is that I was nominated to contest the election by the Irish Thoroughbred Breeders Association. In the spirit of the new openness in Government, it is important that we put these matters on the record of the House.
The National Stud is an important national asset. I live a short distance from it and I am aware of its work over a number of years. In my view, it has three important functions. First it is a working stud providing good stallions for breeding to the industry. Secondly, it is a tourist amenity. The Japanese Gardens attract 110,000 visitors a year. It is a very important tourist attraction for County Kildare, it is an important amenity for Kildare town and it brings a lot of business to the town.
The third dimension of the National Stud is its farming activity. Some of the figures available from the 1991 report make for sorry reading. The Stud's performance over the past few years has been disappointing. It is engaged in a competitive industry and many stud farms are finding the going extremely tough at the moment. The importance of the industry nationally is spelled out in the report of the Oireachtas Joint Committee on State-sponsored bodies the first report on the National Stud. It is on the record and everybody is aware of the value of the industry to the country. In Kildare there are 136 stud farms covering 27,000 acres and there are over 5,500 people either directly or indirectly involved in the industry. It is of huge importance to the county.
In many ways, it is a flagship for Ireland. If one asks people around the world what they associate with Ireland, many would say good horses produced on good stud farms with good grass but we have reached the point where anybody who goes to Goffs or Tattersalls is aware of how difficult it is to produce foals profitably. The pre-Christmas sale in Goffs was a disaster. I had an animal there and I was fortunate enough to sell it but I saw people leaving Goffs crying because they had invested so much in the business and were getting a meagre return.
The Stud is definitely worthy of our support. In 1987 there was a net profit of £134,500 and in each of the subsequent years there was a loss, beginning in 1988 with £429,000 and increasing to £786,000 in 1991. That must raise questions about the way the business is being managed. I am aware of the dedication of the staff in the National Stud. They work extremely hard and are good people who know their business but the Stud is facing a difficult time. Its assets have decreased from £12 million in 1987 to £5 million in 1991. It is accepted that the State has a responsibility to invest in this business but I wonder about the stallions standing at the Stud. I accept the remit that the Stud should have to provide good quality, reasonably priced stallions to the smaller breeder, but it can also look profitably at the upper end of the market. At the moment that seems to operate through syndication. I wonder whether the National Stud should be involved in syndication with private stud farms and other stallion owners and be totally involved in the industry. Syndication is a standard practice and perhaps the National Stud should go down that road now. I hope the Minister will address this in his reply.
We need the mix of good stallions. We all think of the five or six furlong sprinter or the potential Derby winner but the racing industry is based on the owner with one or two horses who is concentrating on a mile or a mile and a half and will subsequently go onto hurdles and maybe chasing. That is the side of the business that is neglected. It is all right for the Maktoums, the sheikhs and others but for those who want to be involved in the sport, it is an expensive hobby. Nevertheless, without these ordinary owners, who seem to be decreasing in numbers, I wonder how viable the racing industry can remain. The recession has affected stud farms and breeding. The reverse of that coin is that there is value for those who have the money and are prepared to invest. Some stallions are breeding far too many mares. The foals are coming on the market and they cannot be sold. Consequently, there is a degree of oversupply in the industry.
The Japanese Gardens have enormous potential to generate income. If anybody from abroad comes to County Kildare and wants to go somewhere, six out of ten people in Kildare will bring them to National Stud and the Japanese Gardens. The National Stud is well known. It is a huge resource and could be exploited to better effect.
That leads me to the matter raised by Senator Henry, that is, the potential effect of the motorway by-pass. I realise this matter is not within the Minister's remit but I assure him that the motorway by-pass is a matter of controversy within the town of Kildare. It is proposed by Kildare County Council to bring the bypass through the National Stud. There are three different routes but the preferred route goes through the middle of the National Stud. That is regrettable but when you look at the geography of the area it is difficult to see an alternative.
The big worry of the people in the town of Kildare is that the design of the motorway is going to bring all the tourist traffic to the Japanese Gardens and away from the town. They are extremely worried, and they are right to be worried. They have made numerous representations to Kildare County Council, all of which have been rejected. I wonder about the extent to which the rights of local communities are attended in this age of subsidiarity. There does not appear to be any sympathy for their side or any understanding of their cause. It is regrettable that the motorway should bisect a stud of this quality and of such international standing and it definitely will not be to its advantage. However, it is difficult to see an alternative to the route proposed.
I am a farmer in County Kildare and I cannot understand how a farm of this size can show the sort of losses that it has shown. I realise that there are difficulties in the cattle trade and that there are difficulties in farming in general but if anybody were given a farm of this size in this location — given that it operates Barrettstown House as well — they would expect to make money out of it. The whole question of farming needs to be looked at. It strikes me as odd that there is no one with professional agricultural expertise on the board of the National Stud. I realise that people who own stud farms also know a bit about farming but my experience is that they would much prefer that someone else put the cattle on their land, that they pay them a fee and they do not want to be bothered about it. The National Stud should consider appointing to the board somebody with a qualification in agriculture or a practising farmer of known quality and expertise. That would be a step in the right direction. I do not mean to suggest that the present members of the board are in any way deficient. I would not begin to suggest that and the Minister knows it.
I believe the National Stud might consider syndication. I am not in favour of privatisation because I do not think it is the road to go. The Stud has a particular role within the national bloodstock industry. It can fulfil that role if it is given the necessary resources and if it is managed properly but it needs to involve itself more fully in the industry. For instance, if you go to most race meetings you will find races sponsored by Coolmore and Earlie studs among others. I do not know if the National Stud sponsors anything; it probably does not have the money and I can understand that. That is an example of how it should be involved in the totality of the industry. It has the capacity to represent Ireland in a very positive way. It has enormous tourist potential. I hope that given the resources which the Minister intends to make available, it can be restored to profitability and contribute fully to the industry.
This is my first occasion to speak in the Seanad. I am delighted to be a Member of this House. There is a more relaxed and industrious atmosphere in this Chamber than in the Dáil. I never saw as many Members present in the Dáil as I see in the Seanad, and that is a good sign. I look forward to working with the other Members to make this a very successful Seanad.
I welcome the opportunity to speak on this very welcome legislation. I compliment the Minister for being here. The Bill will enable the National Stud to purchase more stallions. That makes sense given that it can become much more profitable through an expansion in its main core business. With that will come the opportunity to immediately expand one of their other important services, the training and education of young people.
There are 22 or 23 young people being trained there at the moment. This number would immediately increase to between 40 and 50 given the extra resources and the extra number of stallions that could come into the Stud. It is interesting to note that there is guaranteed employment for people who train at the stud. I am disappointed that it has taken so long to introduce this legislation given the potential in the industry. The Minister, Deputy Walsh, is in no way responsible for this. He has been more than supportive of the National Stud and of the people in the industry. I welcome the fact that he has taken such a keen interest in the racing industry because of the significant potential it has for job creation. We should focus for a moment on our real problems when we cannot recognise opportunities for growth, investment and job creation and yet this legislation has been sought since 1986 by the National Stud. It has taken until 1993 to introduce it. This legislation is straightforward and deals with the outdated statutory limit of £500,000. Despite the fact that the stud can immediately double the number of young people they train and can significantly increase their profits through the purchase of more stallions, we, the politicians have held back progress until now. I compliment the Minister for introducing this legislation.
There is great potential for job creation in this industry. I hope the Seanad will highlight the possibilities for increasing the present 25,000 jobs in the equine industry to 50,000 jobs within the next four to five years. This is one area where we can immediately increase the number of jobs and profit.
While the National Stud is primarily there to be of assistance to the Irish commercial breeder, there is great potential to increase foreign investment as a result of the decision taken here today. The National Stud will now be in a position to do much more international business. That makes sense because the increase in its activities will give it a greater international profile and will bring greater attention to the Irish horse industry. Such a profile and such attention will clearly attract people worldwide who want to invest in the Irish horse industry both on the stud side and on the racing side. That is of the greatest significance overall in this decision to increase the borrowing powers of the National Stud to £5 million and the share capital to £10 million.
I have read with interest the Oireachtas joint committee's report on the National Stud. I believe there is potential to allow the non-thoroughbred industry become involved in the National Stud. As I understand it there is a desire among people in the National Stud, and in the industry to become involved in the non-thoroughbred side. The expertise, knowledge and contacts of the National Stud could be put at the disposal of the non-thoroughbred industry, for instance, in the purchase of stallions. Galway would not be noted as a significant part of the country in terms of training, etc., for the thoroughbred industry. Its strengths lie in the non-thoroughbred area. There is significant potential for the National Stud to be of assistance to people in the non-thoroughbred and the thoroughbred industries. We have two relatively young horse trainers, Val O'Brien and Pat Kelly doing extremely well. If they got help and support they could expand their businesses and employ more people. I fail to understand why the Oireachtas joint committee recommended that the company should not become involved in the non-thoroughbred area. Clearly the National Stud's first priority is the development of the thoroughbred side but it should provide support and assistance for the non-thoroughbred side also.
With regard to the education and training of young people, there is a significant potential for pre-training courses for those who are thinking of getting involved in the industry, and for courses in the equine business in addition to the core course which can be expanded significantly into stud management etc.
I hope this legislation will draw to the attention of Members the fact that the racing industry has significant potential. This is a black day for Galway on the manufacturing side and I am convinced that job creation can best be brought about through investment in and development of areas, such as the racing industry.
I am confident that as a result of the Minister's leadership, we will see a major move forward. The Department should become far more involved in this area and the relevant section should become a bigger, stronger and more important part of the Department. People in other areas of the State should also become involved in this drive to develop the industry.
The current developments are encouraging. It is great to see Tattersalls moving their yearling sales from Newmarket to Fairyhouse and to see some of the leading trainers seeking new business so that they can provide more jobs. I spoke recently with some of those trainers — Dermot Weld, Jim Bolger and John Oxx, and it was interesting to hear them talk about their potential to create more jobs, given a climate conducive to expansion.
I wish to comment on the syndication question which Senator Dardis raised. While the Stud should not get involved in the upper end of the market, there may be good commercial opportunities to get involved in syndication. The conservative approach of the past should now be replaced with a more aggressive approach to money. If this means syndication, we should get involved in it.
I was listening on my monitor to the Minister's reference to some of the progeny which had gone through the Stud I heard him mention a bluewin filly which hopefully will run in the President's colours in the coming months and anybody who participates in today's debate should be privy to that tip. I heard him mention Jodami. My tip for Cheltenham is Jodami and Senator Cosgrave can bet all he wants on it. I did not know Jodami came through the National Stud. I am pleased to hear it, because this will be one of the top horses in the next year or two. I look forward to good results in Cheltenham.
Finally, it is unknown for a graduate of the National Stud to be unable to find employment, yet the National Stud has tried for seven years to get this legislation through the Houses of the Oireachtas. They say they can double the number of people they can train immediately as a result of this legislation. As politicians, we must look carefully at our role to ensure that we are not stopping development in areas like the racing industry.
I welcome the Minister to the House and congratulate him on his recent reappointment. While this is an enabling Bill, this debate gives us an opportunity to express our thoughts on the breeding and racing industry, and related matters. This industry is undergoing a very thorough examination and is facing severe difficulties in the management of its affairs. The Arabs, who took over part of the industry in the 1980s and 1990s, are re-examining the situation and cutting back. There are lessons to be learned from this.
I compliment those involved in the running of the National Stud over many years, especially during the very successful years. Obviously, that did not happen without planning, development and foresight by the managers.
It is important to look ahead. The Minister mentioned two alternatives — an injection of money into the development of the stud or, the unthinkable, closing the Stud. Nobody is advocating the latter. As the Minister said, that would be a national act of sabotage. If the present trend continues, something like that could be on the cards.
It is clear there has to be a rethink in this area. One has to look at all aspects of the stud and how it is being managed and developed. I was interested to hear what Senator Dardis had to say. He would know from experience that if we cannot make money on an 800 acre farm despite the difficulties, questions have to be asked.
The Stud should have the funding necessary to stand stallions of high calibre and some of these stallions should be household names. Many people are now involved in horse racing purely for investment purposes. Numbers of syndicates are increasing while the number of wealthy individual owners is declining in times of recession. Indeed, many associates of mine are now involved in syndicates.
Before considering the National Stud, we need to look at the management of the racing industry of which the Stud is an integral part. Levels of employment direct and indirect within the Irish blook-stock, racing and breeeding industries, are high. Today has been a bad day for jobs in Galway and the situation there highlights the need to guard existing jobs everywhere. Senator Dardis referred to the number of people in Kildare who are dependent on the equine industry. There is tremendous potential in the equine industry but we must examine it in its totality.
A new racing authority has been set up but many older practices still need to be changed. Racing is now competing with pop concerts and big matches for attendance and marketing in the industry will have to improve and that depends on the willingness of people of authority in the industry to effect change.
Government commitment to the industry is necessary. I hope the Minister will press this case and also any application from the National Stud to purchase a high calibre stallion. Stock has to be replenished. More stallions at the National Stud are not household names. It is only by winning races that horses become famous. I hope the Minister will fight his corner at the Cabinet table to ensure that, despite the difficult times, additional money is made available for the purchase of stallions and that a thorough review of the racing industry is carried out. I am sure that the Minister will have the willing ear of the Taoiseach who is interested in many aspects of the racing industry.
I welcome the granting of more money to the racing museum. Greater effort should be made to promote the Japanese Gardens and the museum as tourist attractions. Tully is located on one of the main southern routes and could attract more tourists, if marketing were improved. This could be one way of redressing the National Stud's deteriorating balance sheet.
The racing industry is experiencing difficult times in comparison with heady days when Irish horses won many prizes at Cheltenham and Ascot. This is a vicious circle; if prize money is not pumped back into the industry it becomes increasingly difficult to keep the better horses at home. As the Minister said, the public responds to quality horses, as in the case of Jodami which ran at Leopardstown recently. Sunday race meetings have been successful but many meetings on Saturdays and weekdays are poorly attended. Race going is expensive but its marketing must be improved and meetings made more family-orientated. Facilities require improving at some tracks. Greater investment is required if results are to be achieved.
We are considering the National Stud in this Bill but its problems are mirrored throughout the racing industry which currently employs 25,000 people directly and indirectly with potential for more employment. The Minister should under no circumstances consider closing the stud. Instead, it should be developed and a broader range of attractively priced stallions made available to breeders. Famous stallions need to be purchased whether by syndication, or otherwise. Irish horses must be seen to compete and win at home, in England and throughout the world for the development of the Irish racing industry.
I thank the Minister for coming to the House. We will support the Bill although we might propose amendments on Committee Stage.
I welcome the Minister to the House. It is nice to see a Minister hold a portfolio in which he has a deep interest and I have no doubt of the Minister's commitment to the equine industry. Like Senator Dardis I have a vested interest in the industry. I was often lucky to have my vest left after a day at the races.
The horse industry is synonymous with Ireland for many people and is one of the most vital national assets. The National Stud in Tully, County Kildare, is the cornerstone of what we have achieved in equine matters. The Stud has declined over the past few years, mainly due to lack of funding which has been rectified today. We need to appreciate the significance of every facet of the horse racing industry. The importance of racing in Ireland is evident by the numbers who attend race meetings. The greatest potential for exploitation in this industry lies in the export market. It is vital that the Stud have the funding necessary to stand stallions of high calibre so that when we sell and export them, they will be successful on foreign race courses. A good product is vital to any industry.
Over the years I have been amazed by the growth of syndication in the horse industry. It is under these circumstances that the Stud must compete. Will it be able to increase its present number of standing stallions? Stallion purchase costs are high. There is no point however in filling stables with stallions not of the quality necessary to rejuvenate this industry.
In a recent advertisement, Team Aer Lingus used the image of the Irish thoroughbred as a marketing ploy, successully. Other countries regard Ireland as the home of horse racing.
The Bill provides adequate funding for the National Stud and I am pleased that the Minister has moved on it quickly. Many recommendations were made on the Joint Committee Stage and it is disappointing that the Bill did not appear sooner.
I know of people who have gone to Kentucky having graduated from the Tully stud farm and who have been very successful abroad. As mentioned already, Winfield is the home of Northern Dancer, an Irish horse. I think the English Stud is also managed by an Irish graduate. Throughout the world Irish people have been excellent at their jobs. It is vital that this funding be made available.
What has happened in the past is that the National Stud was not able to move quickly enough to buy stallions. Good stallions do not stay on the market long and it is vital that the £5 million be used to buy suitable animals.
Debate adjourned.
Sitting suspended at 1 p.m. and resumed at 2 p.m.