Select Committee on Enterprise and Economic Strategy díospóireacht -
Wednesday, 22 Jun 1994

SECTION 7.

Ms McManus

I move amendment No. 9:

In page 6, subsection (1), line 15, before "to promote" to insert "to initiate an integrated national food industry development policy and".

This amendment follows on the debate just completed. I question the Minister's statement regarding the make up of the expert group. Many of the recommendations of the group are valuable but the make up of the group was not broad, for example, there was nobody to represent the consumer, which puts a question mark over the approach of the group.

The amendment also addressed the question of the inherent contradiction of the Bill, If the purpose of the Bill is to create a promotional body which gets into the markets to sell our products, it should be organised under the aegis of the Department of Tourism and Trade. That is what the Department is set up to do and that is where this body should be located.

However, if the body comes under the aegis of the Department of Agriculture, Food and Forestry, then it must be something more than that provided for in its remit. In this respect the purpose of the amendment is to ensure that the remit of the board should include the development of policy regarding the food industry.

It is clear to all that the message conveyed by various reports, including the report of the expert group, is that things are not as they should be, that there is an over-reliance on the State, an over-reliance on intervention and that the emphasis is on the production of basic products rather than the development of basic resources to produce a wider range of products and jobs.

It is not the case, therefore, that an additional dimension is being created for a food industry where everything is in good condition, rather that the opportunity should be taken to use the facilities provided by a food board, which is the description attaching to An Bord Bia, to improve matters. The Minister should be more careful in the way he defines the board if he is going to limit its potential.

The board has potential, even if it remains under the aegis of the Department of Agriculture, Food and Forestry. However, the Minister is closing the options in respect of this potential by restricting the board so much. Therefore, the essential issue of policy development should be included under section 7 of the Bill. If this were to be part of the brief of the board it would lead to a more integrated approach rather than an end of pipe solution. It would also ensure that the work of the board will be maximised and made more effective. This is the kind of work that needs to be undertaken, and there is no better organisation to do so than the Food Board, An Bord Bia.

Mrs. Doyle

I agree with the thrust of the case made by Deputy McManus. The functions of An Bord Bia are centred purely on market development, not even marketing, because marketing and market development are quite different.

The pursuit of marketing and market development is entirely a trade matter, and in this respect, the general function of An Bord Bia is described as the marketing of Irish food and livestock, nothing else. If that is the only function designated to this board, it should be under the control of the Minister for Tourism and Trade. However, the Minister probably has in mind that the board will undertake other activities, but it is one of the best kept secrets as to what activities the board will undertake, other than marketing because this is its only designated function as set out in section 7 of the Bill.

If An Bord Bia is to be the Food Board and if there is not to be a lie in the very title of the board, a major misnomer, it must act as the Food Bord and have the functions and remit to act as the main board which looks after the quality food industry in this country. However, this is not the case as the Minister has limited its functions to the marketing of Irish food and livestock.

A board should be established and given a remit which is worthy of a flag ship industry in this country, the food industry, or the Committee should not be engaged in this exercise. It is a figleaf of an exercise, the purpose of which is to pretend that the section in the Department of Agriculture, Food and Forestry which deals with food is engaged in specific activities. In this respect, the Minister is not reflecting the views of the expert group or the Culliton report, rather he has adopted a section of these views and has produced a remit which is too narrow to represent the view of the excellent report the expert group produced. In this respect I am disappointed.

Mr. O'Shea

The report of the expert group is a blueprint for the development of the Irish food industry to move the industry away from what it has been, a commodity driven industry with intervention as its main outlet, into a value added industry. In this respect, an operational programme has been submitted to Brussels as part of the National Development Plan which deals with the various aspects of the industry as part of the general policy laid out in the report, and which has been endorsed by the Government.

Regarding the amendment proposed by Deputy McManus, it is an inappropriate function for An Bord Bia to initiate an integrated national food development plan as part of its remit as such a plan has been developed, endorsed by the Government and put in place. Elements of the plan do not relate specifically to the Department of Agriculture, Food and Forestry, for example, there are parts of the plan which must be developed in conjunction and co-operation with other Departments, as it is a wide area covering 54 recommendations.

Regarding Deputy Doyle's points on the board's remit being confined to a narrow marketing function, marketing is involved with the identification of markets and engaging in promotional activities in markets where products will sell. The entire market is assessed and niches are identified for Irish products. In this respect, An Bord Bia can co-operate with other agencies in the food industry, as An Bord Tráchtála has done, and with the industry at large in respect of all kinds of overseas promotions. For example, there could be an Irish stand where various Irish companies decide to come on board. There are many aspects there including the whole business of a company going into an area that is foreign to it yet having contacts and an Irish market presence there already.

The base of this board is far from being narrow. Its general function is laid out in a lot more detail in section 7 than in section 8. However, if the attitude of the spokesperson for the main Opposition party is to say that this is a missed opportunity, to rubbish it and talk it down, then she is talking down an important aspect of the thrust of developing our Irish food industry in the interests of producers, processors or those unemployed people for whom we are all anxious to create employment as part of our food industry.

There are some issues to which I am reluctant to refer because they come up later by way of amendments. To make a distinction between marketing and marketing development, to say that there is a narrow marketing focus and that it is just a trade matter, is misleading because while marketing is about trade it is also about identifying where you can trade successfully.

Mrs. Doyle

It is about more than that though.

Mr. O'Shea

Indeed it is.

Mrs. Doyle

And the board cannot do it.

Mr. O'Shea

We will hear the Deputy expand on that later. My specific role here is to respond to amendment No. 9 and to say that first, it is inappropriate to An Bord Bia because of its marketing role and second, an integrated plan for the food industry has already been developed and endorsed by the Government.

Chairman

Is the amendment being pressed?

Ms McManus

I would love to ask more about how that particular development programme is doing, but I will not go into that now. I will press the amendment.

Amendment put and declared lost.

Ms McManus

I move amendment No. 10:

In page 6, subsection (1), line 17, after "livestock" to insert "including the establishment of standards, quality conditions, including symbols where appropriate, together with the necessary infrastructure to develop and monitor these".

I am putting forward this amendment because it is central to the functions of the board. In the National Development Plan the first objective under the strategy for agriculture talks is about promoting efficient quality and market-led output at all levels of the food chain. On Second Stage I argued strongly for the provision of quality standards as a key element in the work of An Bord Bia. I know that is referred to later but I wanted to heighten its importance and spell out, particularly in relation to symbols, the importance of this kind of work which An Bord Bia could take on to improve the quality and excellence of our products, as the Minister said and to recognise the increasing importance, from the consumer's point of view, of good quality products, high standards and environmental questions like safety, hygiene and the green image.

Much has been said about consumer trends but we need to develop our products in a practical way to match the desires of consumers. That is a key element of the work of An Bord Bia, albeit only within the marketing sphere.

Mr. O'Shea

Section 8 (g) and (h) of the Bill cover the areas that are the subject of this amendment. I would suggest that the amendment would be superfluous at this stage.

Amendment, by leave, withdrawn.

Question proposed: "That section 7 stand part of the Bill."

Mrs. Doyle

Am I in order in referring to official advice given to us during the briefing section prior to the commencement of this meeting.

Chairman

I would imagine that when the official gave you the advice he was acting in an official capacity so I would not see any conflict.

Mrs. Doyle

Thank you. During the advisory or briefing section prior to this meeting, I specifically raised the point about the functions of the board as being merely a promotion and marketing agency. I am concerned that the board will not legally be able to operate as a marketing agency as the definition is understood in the trade section because it is precluded from doing so by EU regulations. In other words, the board cannot market Irish food as such. They can identify and extend markets and promote Irish food generically, but they cannot get into marketing specific Irish foods as that is precluded by EU regulation. Having made that point, I was very well advised by the official concerned that in fact where the board would be involved was in market development rather than marketing. A definition of "market development" and "marketing" was given to me: "market development" is the identification of new markets and the expansion of existing markets; "marketing", is selling, and this board will not be selling. I want to make that quite clear. Consequently, I cannot accept section 7 which states that:

The functions of the board shall be to promote, assist and develop in any manner which the board considers necessary or desirable the marketing of Irish food and livestock.

The main function of the board is the marketing of Irish food and livestock. Marketing in that context means selling from which the board is precluded. To me there is a conflict here and, since, the section is incorrect I will not be able to accept it. This has added the confusion to what will be the role of this board. If it is selling then it is a trade function and should not be in the Department at all. With respect, I do not think that the Minister means "marketing" in section 7, although he may mean market development. Therefore, we are really talking about a super promotion team in the board, as Deputies have called it. That is their sole role, a sort of super promotion team. As I said on Second Stage, apart from organising trade fairs and getting the leprechaun, the shamrock and the harp on the one stand, it is far from clear what this board will do. I cannot accept the general functions as outlined.

Chairman

Is there any further comment on this section before I invite the Minister to respond?

Mr. O'Shea

The section states that "the functions of the board shall be to promote, assist and develop in any manner which the board considers necessary or desirable in the marketing of Irish food and livestock". So, in the first instance, the role is to promote the marketing.

Mrs. Doyle

To support the selling, yes.

Mr. O'Shea

In the second instance, it is to assist in any way and to develop——

Mrs. Doyle

To assist the selling and develop the selling; I accept that.

Mr. O'Shea

No. If you look at the role of, for instance, CBF and the excellent job they have done — in what is a similar role in terms of beef in the main and to a lesser degree livestock — that successful concept has been developed and efficiently and effectively put in place by CBF. In my view, they have made great strides in creating this generic image of Ireland; the clean, green, unpolluted environment in which the product is created.

Mrs. Doyle

Quality, yes.

Mr. O'Shea

There is great potential for moving way beyond beef and the meat products that are dealt with by CBF in this very same context. To minimise the potential of An Bord Bia in this context is to minimise the enormous achievements of CBF. I do not accept that this is a narrow mandate. Obviously, as with other national food promotion agencies within the European Union, we cannot involve ourselves in selling. It would be illegal for the State to do so.

Mrs. Doyle

But marketing means selling.

Mr. O'Shea

Marketing means selling but section 7 states that " the functions of the Board shall be to promote, assist and develop..."——

Mrs. Doyle

The marketing.

Mr. O'Shea

——"the marketing of Irish food and livestock." With respect, the Deputy should read the section in context. As I said earlier, selling by the meat and other sectors is done by the companies themselves.

Mrs. Doyle

I agree but the section does not say that.

Mr. O'Shea

It does.

Mrs. Doyle

Then I got misinformation from officials. The Minister cannot have it both ways.

Mr. O'Shea

The Deputy did not get misinformation from officials.

Mrs. Doyle

I do not think I did, I am inclined to agree with the Minister.

Mr. O'Shea

The section states that the board shall "promote, assist and develop ..... the marketing of Irish food and live-stock". The function is not to sell. There is no implication in the section in regard to selling by the State. This is the simple truth of the matter.

Mrs. Doyle

The Minister's response has done little to clarify my concern. Having asked the question at our briefing session, I was told precisely that the role of An Bord Bia would be market development, not marketing. There was a distinction made between both and I accepted what I was told. There is a difference between market development, which is finding and extending markets rather than selling the produce to them, and marketing, which equates to selling. I am using the words of the official who said that the board is being given the role of market development and not marketing. This is not what the section says and this is my difficulty.

We cannot sell Irish food and livestock because we are precluded from doing so by EU regulations. CBF did an excellent job but did not pretend to be more than it was, which this board is doing. CBF was a meat and livestock marketing exercise; it even marketed branded meats at trade fairs. It was always a mystery to me how it chose between the different factories. One year it would market one factory's meat output and the next year it would market another. A board is a marketing one or it is not. This board is precluded from being one under EU regulations. This section makes no sense.

Mr. O'Shea

It should be stressed that there is no difference between market development and developing markets.

Mrs. Doyle

I agree with the Minister, there is no difference there.

Mr. O'Shea

I suggest that the Deputy read the section. It states clearly that "the function of the Board shall be to promote, assist and develop in any manner which the Board considers necessary or desirable the marketing of Irish food or livestock".

Mrs. Doyle

Not the development of the markets for Irish food and livestock.

Mr. O'Shea

The Deputy and I will have to differ on this. I believe it is clear in the section what are the functions of the board. It does not have a marketing function in the sense of selling directly to consumers.

Mrs. Doyle

It is far from clear what are the functions of the board. This is the biggest problem with it. If its functions were clear, the industry may have greater respect for it and it may be awaited with slightly more interest that it is at the moment. The confusion and gobbledygook in relation to its functions has resulted in it being held in low esteem. Section 7 provides that the board shall deal with the marketing of Irish food and livestock and to assist, promote and develop this. In other words, it is to deal with the promotion, assistance and development of the selling of Irish food and livestock. The term "marketing" includes selling and is used incorrectly in this context. Maybe the board will deal with selling and will do more than the Minister would like to admit. Maybe he does not want the EU to know exactly what it will do. I would not disagree with this because I think there could be a role for it but we should be honest and say what it will do.

Mr. O'Shea

If we read objectively the functions laid out in section 7, we would see that the board is to provide support to companies in the business of selling and developing markets, or market development, depending on what way we want to describe this role. The Deputy is wrong to insinuate that there is a hidden agenda and that we intend that the board should sell directly.

Mr. Molloy

We are spending a great deal of time on this. The difficulty Deputy Doyle has raised seems to arise from the definition given to her at the briefing session by an official, which equated marketing with selling. Maybe the Minister could deal specifically with the point raised by Deputy Doyle rather than continue to refer to the developing of markets and market development. Could he deal with the issue of selling and whether he equates marketing with an ability to sell?

Mr. O'Shea

Marketing in this context would include selling but only by the private sector into markets.

Mr. Molloy

The Minister is adding more confusion rather than providing clarification. We are talking about the establishment of An Bord Bia and the powers and functions being given to it. I take it that we are not giving it a function to sell.

Mr. O'Shea

I have said this at least a half a dozen times.

Mr. Molloy

I know the Minister has but this is the point which Deputy Doyle has made and is holding us up. I have no problem with this.

Mrs. Doyle

It is an insult to the board to limit its functions to whatever we are defining them. The section is far too limited.

Question put and agreed to.