Seanad Éireann díospóireacht -
Thursday, 13 Jul 1995

Vol. 144 No. 10

An Bord Bia (Amendment) Bill 1995: Committee and Final Stages.

SECTION 1.

Mr. Dardis

I move amendment No. 1:

In page 2, between lines 15 and 16, to insert the following:

"(4B) One ordinary member shall be appointed to represent the views and interests of consumers.".

This amendment was tabled when the original 1994 Bill was debated. It was not pressed because it would indicate other sectoral interests which might be represented. The amendment seeks direct representation for the views and interests of consumers. As regards the point made by Senator D'Arcy on Second Stage about sectoral interests, it would seem logical that if the producer interests are represented, as they should be, consumer interests should also be. That is why I tabled this amendment. There would be no difficulty finding the numbers, which could be done quite readily.

I know from Senator Quinn's experience, which he will tell us about, that he has panels of consumers who give their views on how things should be done in his shops and on the products on the shelves. That is part of ongoing market research. The consumer is the most important person in all of this in that he or she pays money to consume the products. There are consumer organisations with plenty of experience in this area.

If, as the Minister of State at the Department of Agriculture, Food and Forestry, Deputy Deenihan said on Second Stage, farmers are being levied and are contributing to the marketing exercise, then they have a legitimate expectation to have some input to the policy of the board. What I am saying is not inconsistent with that. If those interests are represented, then this interest should also be.

I would like the Minister to clarify a point he made in his reply on Second Stage about representation from the marine sector. I understood that a second person would be appointed.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. Deenihan)

No.

Mr. Dardis

It will be only the person provided for in the Bill. That clarifies the point.

The original Bill said the chairman and persons appointed to be ordinary members shall be persons having knowledge or experience of the food industry and of consumer requirements. That is not the same as what is proposed here. The fact that a person should have knowledge does not give consumer organisations or the consumer, as such, direct representation the board. There is an important distinction which was debated when we discussed the original Bill.

Mr. Quinn

I rise with a certain reluctance to speak on this. As a general policy I am not usually in favour of places on boards being given to representatives of organisations rather than to those who reflect various interests. The Minister said that the purpose of increasing the number on this board is to ensure that he will give those places to representatives of producer organisations rather than to primary producers. If that is the Minister's intention, then he is already, to certain extent, tying the hands of the board by saying it will be representative rather than reflecting the views.

It will be impossible to create a market driven food organisation if we exclude representatives of consumers. The freedom is already in the Bill which would enable the Minister to ensure that consumer interests are represented on a wide ranging catholic board. The Minister has declared that it is his intention to fill gaps with representatives of organisations. Senator D'Arcy spoke of his concern that they would represent an interest rather than act in the wider interest. I also share this concern.

There is a need to recognise that we will not succeed unless this is consumer driven and driven by the market place. A healthy An Bord Bia was set up last year with that objective. A strong board of nine members was established, but its hands were not tied by saying it must represent different interests. I am disappointed by what has happened. We are increasing this board by changing its tenor and structure. We are saying that this board should attempt to sell the products which we, as a nation, produce on our farms. That is the wrong thing to do. We should ensure that this board finds ways to create the food which the market will buy. If that means that we must force producers to change what they produce to suit the market, then so be it.

We have failed miserably to create jobs in the food industry given the opportunities available. I was delighted to hear the Minister speak about the strength of Irish farm produce, about its freshness and the great image we have in Europe. Yet we have failed to create jobs in the food industry. If, for example, somebody went to An Bord Bia with an idea to set up a factory to produce frozen chicken pies to sell in Europe, it would help and encourage that person because it would want to satisfy the European market. However, if the producer said he planned to buy chickens from Denmark and France because they would be most suitable for his market, An Bord Bia would tell that person to consider Irish chicken producers. In other words, it would not fully encourage him because it would be producer driven. The market place is so competitive that if we try to please two masters it is unlikely that this organisation will succeed.

There was a balance with nine members on the board, but we are now increasing it to 14 to ensure fixed places for farming organisation members. I fear that An Bord Bia will no longer have the strength portrayed in Market Development Strategy 1995-1999, which should be actively supported and encouraged, and, therefore, I reluctantly support the amendment. The Minister should also accept it in order to get a better balance onto the board.

Mr. D'Arcy

I cannot see the logic in the amendment. It is not possible to draw a comparison between a consumer group on the one hand and a producer group on the other because one is not comparing like with like; they represent two different sets of interests.

Mr. Dardis

That is why they should both be represented on the board separately.

Mr. D'Arcy

Consumers are well represented on the board. They make their case by going into a supermarket and buying a product. Their message will be heard quickly if one product is inferior to another because the supermarkets are well represented on the board.

Given the rate of import substitution we must ensure that Irish products are sold on the home market to prevent the rate increasing. However, I am more interested in the European market and I will speak later at greater length on this and on other aspects of section 1.

Mr. Dardis

Given the composition of the board, the only person who could represent consumer needs and requirements is the managing director of Quinnsworth. However, he is not a consumer, other than that he buys goods in the same way as other citizens. I, therefore, disagree with Senator D'Arcy's contention that the consumer's interest is represented.

Section 15 of An Bord Bia Act, 1994, refers to the CBF portion of the meat and livestock subsidiary. Section 15(3) states that the ordinary members of the meat and livestock subsidiary board shall consist of:

(a) five persons who shall represent the producers of livestock...

(b) four persons who shall represent the meat export trade....

(c) one person who shall represent meat traders...

(d) one person who shall represent the livestock export trade...

Sectoral interests are, therefore, already embraced in part of the substructure to the board. We could engage in a lengthy argument over the different layers of structures, but I will not pursue this now.

I read with interest the remarks by the Minister of State at the Department of the Taoiseach, Deputy Doyle, on Second Stage of the An Bord Bia Bill, 1994, in the Dáil as set out in the Official Report, 11 May 1994, Volume 442, at column 1288 where she said:

The Bill falls so short of what is required and what Culliton and the reports of expert groups detailed as necessary that it is merely a window dressing exercise and does not deserve support.

One's perspective changes in Government. However, this was a fundamental statement by the Minister.

Mr. Quinn

Representatives of the consumer could be taken from groups such as the ICA, the former Irish Housewives Association, and the Consumers Association of Ireland Limited. Everybody is a consumer and there are far more consumers than there are members of any other sector of the economy. It is outrageous that not one of the present members of the board represents an association representing any of the consumers' interests. It would be worthy, worthwhile and efficient if the Minister accepted the amendment because it would strengthen the organisation.

Mr. R. Kiely

What is the definition of a consumer? We are all consumers. For example, members of the IFA and the ICMSA are consumers. As consumers, all members are, therefore, represented.

Mr. Deenihan

Senator Kiely makes a good point. I am sure the Minister of State at the Department of the Taoiseach, Deputy Doyle, is happy with the Bill as it is now constituted.

Mr. Dardis

I do not believe the Minister would have agreed with that were she to be in Opposition.

Mr. Deenihan

I reject the amendment because there is no need for it. Under section 14 (5) of An Bord Bia Act, 1994, there is a specific requirement that all ordinary members "... shall be persons having knowledge and experience of the food industry and of consumer requirements". For example, to suggest that Michael Hanrahan, chairman of one of the most progressive food companies, not only in Ireland but in Europe, and chairman of the biggest food speciality ingredient group in the world, is unaware of what the consumer needs is a contradiction in terms. There is no need for specific representation in that area. All of the ordinary members, including Mr. Barry and Mr. Hanrahan are themselves consumers. We are all consumers.

An Bord Bia must be consumer and market driven. If its members are not conscious of the needs of consumers it will fail. The provision regarding consumer requirements was taken in the Dáil on Committee Stage of the 1994 Act in response to a similar amendment put forward then. The consumer is also well represented on the consumer food and food ingredients subsidiary board of An Bord Bia.

With regard to Senator Quinn's remarks, there is no statutory provision for the representation of farmers organisations by right on the board. It is at the discretion of the Minister. There is statutory provision for the marine and for tourism, but not for the farmers. There are no fixed places on the board for farmers.

Mr. Quinn

The Minister has decided that the reason for this is to have the two farming organisations represented on the board.

Mr. Deenihan

However, they are not on the board by right. It is for the Minister to appoint them. I agree with the Senator that An Bord Bia must be consumer and market driven. We must provide the food that the market must buy. On the Senator's point regarding chickens, it is in the interests of the economy to ensure that indigenous raw materials are used as much as possible in the food industry.

There is no need for the amendment. The consumer is already well provided for. I am happy that the needs of the consumer will be well and adequately looked after within the present framework of the Bill.

Mr. Dardis

The Minister has suggested the way out of this situation. If the Minister for Agriculture, Food and Forestry publicly said that representation would be granted on the board to the farming organisations, as he did, the Minister can now publicly say that the remaining place on the board will be filled by a representative of the consumer associations. There is then no need for the amendment. This is the consequence of the Minister's remarks. The Minister, Deputy Yates, could make a public announcement that he will appoint somebody to represent consumers. I presume there is an availability because of the places subject to the ministerial order.

Mr. Deenihan

The place for the Department of the Marine is already filled. There is only one place for the Department of the Marine. There is no room for what the Senator proposes.

Mr. Dardis

That means there is one fewer place.

Mr. Deenihan

There is not one fewer place; that is for the Department of the Marine. If the Senator reads the Bill it is quite clear.

Mr. Dardis

I may have to press the amendment.

I did not say any of the eminently qualified people on the board were unaware of consumer interests and I would not suggest that. The Act says they should have experience of the food industry and of consumer requirements but that is not the same as what is now proposed. A person who runs Quinnsworth must have a detailed knowledge of consumer requirements. The same applies to anyone who runs a large food company. However, they are not representative, by definition, of consumer organisations. If, for example, Mr. Hanrahan can adequately represent the needs of consumers he is eminently qualified to represent the needs of farmers.

Mr. Deenihan

I have stated my case. The Senator has said nothing to convince me I should accept his amendment.

Amendment, by leave, withdrawn.

Question proposed: "That section 1 stand part of the Bill."

Mr. D'Arcy

I listened to the concerns expressed by Senator Quinn and Senator Dardis and I would like to convince them of the need for two members from the farming organisations. Senator Quinn made a strong case that An Bord Bia would not be market driven and that the representatives from the two farming organisations would unbalance the board. However, I disagree.

In An Bord Bia's market development strategy there is a section dealing with mushrooms. On page 57 it states:

The mushroom sector continues to perform well, growing consistently in volume despite pressures on margins and prices in the UK market. Mushrooms are the most export-orientated of the sub-sectors with over 75 per cent of production being exported to the UK.

The mushroom sector is noted for its considerable success, having secured almost 20 per cent of the UK market, with an estimated 45 per cent of the retail multiple trade.

The scenario outlined is so good because there is a link between the producers, consumers and processors. Monaghan Mushrooms and Walsh Mushrooms in Wexford, who are the processors, are very successful because the producers are in constant contact with them, and with the market in England which is the main market.

The contact between the producer, the processor and the markets is important. The agents from England come to Ireland three or four times a year and visit the farms. There is ongoing consultation and if there is any reduction in quality the producers are notified immediately. I know the management of these mushroom firms and they tell me it is fundamental to keep the producer on their side by keeping him informed about production and market requirements. That is why we are winning market share.

Another example is milk production where one of the great success stories is Bailey's Irish Cream. Bailey's is supplied with milk by Premier Dairies in Dublin, which is a liquid milk producer and can guarantee a high quality raw material all year. There are continuous meetings between Premier Dairies and the producer groups representing each county, including Kildare — Senator Dardis' county — Dublin and Wexford — where I am a member — which have active liquid milk producer groups. They insist at all times that quality milk is supplied for Bailey's, which is winning market share because it is getting an excellent raw material. The issues of somatic cell counts, bacteria and antibiotics are all dealt with. Every producer has four tests a month to ensure there is no reduction in the quality of the product supplied.

These two examples are not huge areas of production but they are success stories. The producers are in constant contact with the processors. I would like to allay any fears Senator Quinn and Senator Dardis have with regard to the two members from the farming organisations on the board of An Bord Bia. The farming organisations have become sophisticated in their outlook. The narrowness whereby co-operatives support only their own products must be ended as An Bord Bia cannot tolerate such an approach. There must be a broad approach for the general good of the industry.

Deputy Doyle argued a different point in the Dáil but I am arguing on behalf of the producers. When information is needed the people who have it should be on the board so that it can be disseminated to the farmers. I am ardently in favour of these representatives on the board.

Mr. Dardis

I do not disagree with Senator D'Arcy. However, it is a different issue from the board. We can produce the highest quality goods in the world but to no avail if we do not sell them. The milk going into Bailey's Irish Cream must be of the highest quality. I have heard it said at farmers' meetings over the past 30 years that we produce the best potatoes in the world, yet our potato production has declined. It is of little use having the best potatoes in the world if we do not sell them.

I learned a valuable lesson about 20 years ago at a conference in Harrogate from the founder of Rochford's Flowers in England, who had built an internationally successful business. He said, "I know how to grow flowers but I do not know how to sell them. I get somebody else to sell them for me." That was a telling point that stuck with me.

I hope we will not create another case like CIE. I do think we will as the people on the board and those who will be appointed are eminently qualified. The Minister talked about the agreement of the Minister for the Marine and BIM and that An Bord Bia should cooperate closely in marketing fish exports. On Committee Stage of the 1994 Act, I tabled an amendment which stated: "On the establishment day, those functions of An Bord Iascaigh Mhara which relate to the export marketing of fish and fish products shall stand transferred to the Board." It was supported by Senator Quinn but it was not accepted.

That course is now being taken. Why have a representative of the Department of the Marine on the board before BIM is brought in? When will BIM come into An Bord Bia and how will that be done? Is more legislation envisaged? I would be grateful for clarification from the Minister.

Mr. Quinn

The point regarding representation on the board was dealt with in the amendment. We are speaking on section 1 so we are limited to speaking about the size of the board and the length of its term of office.

The board set up 12 months ago by the Oireachtas comprised nine members. That number could be increased to 11. It was a capable, competent size. It is good management practice to follow the old cliché that "small is beautiful". It was prudent to provide that 9 members could be increased to 11. The Minister, by order, has already increased the number to 11 and now we are increasing it to 13. Apart from the fact that it is an unlucky number, it appears to be unwieldly. It is not in the interest of good management practice. It would be far better to leave the number as it was. The new board is already performing competently and efficiently and we should leave well enough alone, particularly as it is only 12 months since it was established.

I agree with Senator D'Arcy about the success stories of Baileys and the mushroom industry. We need hundreds of similar success stories. The only way we can achieve them is to ensure that we respond to the needs of the market. We will do that with the board that is already established. If we make the board unwieldly by increasing its size for political considerations, it is unlikely that it will be as efficient as it was.

I urge the Minister to reconsider this decision and to retain the original size of the board. That will ensure efficiency and will be more likely to achieve success.

Mr. Deenihan

I wish to respond to Senator Dardis's comments regarding the nomination by the Minister for the Marine of one member of the board. As a result of discussions which the Minister, Deputy Yates, had with the Minister for the Marine, it has been agreed that BIM and An Bord Bia should cooperate closely in the marketing of fish exports with a view to the ultimate transfer of those functions to An Bord Bia. It has been agreed that such a move would strengthen the export marketing of fish products by making the resources of An Bord Bia available for that task. It would also assist An Bord Bia in promoting the distinctiveness of all Irish food products and ultimately to develop some form of Ireland brand for Irish food.

During the debate on the An Bord Bia Act, 1994, many Deputies were concerned that the marketing of fish products was outside the remit of An Bord Bia. The discussions the Minister for Agriculture, Food and Forestry had with the Minister for the Marine and the appointment of the latter's nominee to the board of An Bord Bia will ensure that the concerns outlined then will be met as a result of the Minister's action in this case.

The total inclusion of Bord Iascaigh Mhara within An Bord Bia is not realistic. Bord Iascaigh Mhara has several other functions besides the sale of fish.

Mr. Dardis

I wished to emphasise the marketing aspect.

Mr. Deenihan

That provision was made in section 9 of the 1994 Act which provides for the transfer of fish functions to An Bord Bia by the Minister by way of order. The Department of the Marine's representative on the board will facilitate early and smooth transfer of those functions. This is a welcome departure and I am glad that the Minister for Agriculture, Food and Forestry and the Minister for the Marine agreed to it. It reflects the good spirit in which we are approaching the issue of An Bord Bia and its effectiveness.

Having worked with An Bord Bia to date, I can guarantee to Senator Dardis that it will not be another CIE.

Question put and agreed to.

Section 2 agreed to.

Title agreed to.

Bill reported without amendment and received for final consideration.

Question proposed: "That the Bill do now pass."

Mr. Dardis

I thank the Minister for the manner in which he has dealt with this legislation. Our points were raised in a spirit of trying to improve the operation of the board and the export of our food. We thank the Minister for his attendance and we wish the legislation well.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. Deenihan)

I thank the contributors to this debate. I invite Senator Dardis and Senator Quinn to discuss the food industry with me at any time in the future. I also thank Senator Quinn for his co-operation in other areas.

Question put and agreed to.