An Bord Bia (Amendment) Bill 2003: Second Stage.

Wednesday, 28 January 2004

Seanad Eireann Debate
Vol. 175 No. 4

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

Minister for Agriculture and Food (Mr. Joe Walsh): Information on Joe Walsh  Zoom on Joe Walsh  I have great pleasure in introducing this Bill to amend the An Bord Bia Acts 1994 to 1996. The primary purpose of the Bill is to provide for the amalgamation of An Bord Glas with Bord Bia. It is almost a decade since I introduced the Bill to set up Bord Bia, the Irish Food Board, and at that time greater focus was needed as regards promotion and market development of food and food products. We have undergone many changes in the past decade. Ireland has moved into a world league and expectations of success are higher, competition is tougher and capital and markets are more global and mobile. We must pool our resources effectively to promote Ireland as the food island of the world and exploit our strong environmental image for the benefit of our amenity sector at home and overseas.

The agri-food industry continues to play a pivotal role in our economy. We have a food industry which has undergone considerable modernisation and reorientation to meet the demands of consumers at home and abroad. Ireland is now the fourth largest food exporting nation in the EU and our reputation as the food island is well deserved given the range and diversity of foodstuffs produced here. The agri-food and drink sector accounts for more than 8% of Ireland's GDP, 7.1% of Irish exports and almost 10% of total employment. When one takes the net value of exports or earnings, because of the low import content, the sector accounts for almost 25% of our net export earnings. Our markets are balanced between the United Kingdom, once our only significant market, the euro zone and third country markets beyond the EU. That breaks down as 40% for the UK, 30% for the rest of the EU and 30% for markets outside the EU. I am confident that the outlook for the entire food industry is positive as well as challenging.

The horticulture industry is an important indigenous industry which contributes [185]significantly to employment, exports and output. The farm gate value of the industry was valued at €400 million in 2003. In terms of gross agricultural output, horticulture is third after beef and milk. This diverse and well-developed sector comprises two main areas, the production of amenity products, such as trees, shrubs and flowers, and the edible or food sector, which produces a range of edible fruit and vegetable products. The industry has a good geographical spread with over 18,500 people employed across the food and non-food areas countrywide.

Overall, the horticultural market was valued at €2.3 billion in 2002, with the edible food sector accounting for almost €2 billion and the amenity sector valued at €431 million. Industry performance in 2003 was strong, with exports of edible horticulture, primarily mushrooms, valued at €180 million. My Department recognises the importance of the horticulture industry and has supported its development by providing grant-in-aid funding for capital projects and through the provision of plant health services. On the amenity side, grant-in-aid funding has been made available under the scheme of investment aid for the development of the commercial horticulture sector. State agencies have also provided a range of support services through market research, quality programmes, research and development and the provision of expert advice. These initiatives have led to improvements in the quality and presentation of Irish produce over the past decade.

The horticulture industry operates in a dynamic environment characterised by rapid evolution in both demand and supply. Changing consumer trends provide challenges and opportunities. Supply chains are at the same time being reorganised and restructured to shorten the route from field to shelf. The top three supermarket groups in Ireland have half the Irish retail market and the situation is similar throughout Europe. As markets become more open, demanding and competitive, continued and innovative investment at producer and pre-packer level is required to upgrade production, packing and storage facilities to ensure product is sold in prime condition. The accession of ten new member states, all of which have considerable horticulture production, will present further challenges and opportunities. There will also be an additional 100 million consumers, bringing the total home and domestic market of 500 million consumers in the new EU.

This challenging environment blurs distinctions between local and global and highlights the need to focus on efficiencies, competitiveness and market orientation. My aim is to assist the industry in addressing these challenges. Against this background, I recognise the need to adopt a more cohesive approach to the delivery of services by State agencies in the horticulture sector rather than having separate bodies responsible for promoting home and export markets.

[186]It is worth recalling the rationale behind the establishment of Bord Bia in 1994. It was established following the recommendation of the expert group on the food industry for a single food promotion agency. That group took account of an earlier finding and recommendation by the Culliton group that existing arrangements for food promotion and market development were fragmented and that there should be greater integration and co-ordination in the marketing of Irish food abroad. Food and amenity horticulture are readily identifiable with their place of origin, a factor which enables a country or region with a good environmental image to exploit such a reputation.

The report of the independent estimates review committee to the Minister for Finance in 2002 also considered there was a need for closer co-operation between the agencies responsible for promotion and marketing of Irish exports. The advantage of a single food promotion agency was reinforced by the expenditure review of Bord Bia carried out in 1998, which recommended the retention of Bord Bia as a separate entity in view of the unique nature and economic importance of the food industry. A review of An Bord Glas carried out at the same time considered that a proposal to amalgamate An Bord Glas with Bord Bia should be reviewed within five years. Those five years have now elapsed and given the economic importance of the food and horticulture industries to the economy and having regard to increased trade liberalisation and the prevailing situation relating to public expenditure in general, the time has come to amalgamate An Bord Glas with Bord Bia.

The combined expertise of the amalgamated body will bring together the synergies necessary to promote and market the entire food and horticultural industries at home and abroad. In addition, the horticultural industry will have access to the broader profile of Bord Bia's existing international network, with the possibility of establishing a complementary international branding for the amenity sector. In other words, Bord Bia already has existing offices in most EU countries, which will be of considerable assistance to An Bord Glas and future exports of horticultural products.

The Bill consists of three parts. Part 1 deals with preliminary and general matters, Part 2 deals with the dissolution of An Bord Glas and Part 3 deals with the amendment of the principal Acts, the An Bord Bia Acts 1994 to 1996. Parts 1 and 2 contain the usual provisions regarding legal interpretation, transfer of staff, property, liabilities and preparation of final accounts. Part 2 also provides that An Bord Glas will be dissolved as and from a transfer day, to be made by order, from which day the staff and functions will be transferred to Bord Bia. The main features of Part 3 include the transfer of the current functions of An Bord Glas in their entirety to Bord Bia. This in essence means that the current function in relation to assisting [187]production of horticulture remains. A comprehensive definition of “horticulture” to include amenity horticulture is provided. Bord Bia already has the marketing function for edible horticulture on overseas markets.

I propose that not less than two persons with knowledge or experience of horticulture will be appointed as ordinary members of the new board. No increase in numbers is proposed. I also propose to update the nominating function of the Minister for Enterprise, Trade and Employment and to suppress for the time being the nominating function of the Minister for Communications, Marine and Natural Resources, as seafood marketing has not to date transferred to Bord Bia. However, the facility to effect such a transfer under section 9(2) of the Act remains in place.

In drafting the Bill my Department consulted with the chief executives of the two organisations and with the board of An Bord Glas. In addition, a total of 34 organisations representative of the horticulture sector were asked to submit their views.

The main areas of concern that were expressed related to representation on the new board, the establishment of a dedicated horticulture subsidiary board and the inclusion of the amenity sector. All these points have been covered in the Bill. Having regard to the outcome of the consultation process, I provided in the Bill for a horticulture sub-board, comprising 12 ordinary members and a chair who will be a member of the main board. The horticulture sub-board will have a legal identity under the Act in the same way as the meat and livestock sub-board has at present.

Provision is made for powers by way of regulation to modernise the system of levy payment on live exports from the current pre-paid stamps system, which has become outdated. Any regulation proposed under this provision would be laid before the Houses in the normal way under the existing provisions. Provision is also made for the establishment of subsidiary companies by Bord Bia for the purposes of complying with legal requirements for internationally recognised quality assurance schemes.

The legislation is relatively simple. The interests of concerned stakeholders, staff and the horticulture sector, including amenity horticulture, are adequately safeguarded and strengthened in the proposed new organisation. Aside from the positive aspects of transferring to a somewhat larger organisation, the transferring staff will not lose out on conditions of service, including superannuation, as this is safeguarded in the Act. The Bill will ensure that promotion actions at home and abroad are synchronised to achieve the best possible service for the producer and taxpayer alike. I commend the Bill to the House.

[188]Mr. Coonan: Information on Noel Coonan  Zoom on Noel Coonan  I welcome the Minister to the House. I am pleased to have an opportunity to debate the Bill, although I do not support its broad tenet, the amalgamation of An Bord Glas with Bord Bia. An Bord Glas is involved in a distinctive niche area of food development and I am concerned that this important work will lose its effectiveness if it is subsumed within the broader remit of the larger Bord Bia. The Government has approved the amalgamation of Bord Bia and An Bord Glas. It is intended that An Bord Glas will be dissolved and its functions will be transferred to Bord Bia.

It is fitting to begin this debate on the legislation by setting out the ever-increasing importance of the horticulture sector to the economy. The Minister stated that in 2002 the value of the horticultural market to the economy was €2.3 billion, of which the fresh produce market accounted for €1.9 billion. This is recognised as a dynamic and growing market and its success is to be commended.

Since its establishment almost ten years ago, the work of An Bord Glas in developing and promoting the horticulture industry has been successful. It has played an important role in predicting future trends facing the horticulture sector in an era of rapid industrial and consumer changes. This is a critical aspect of the work of An Bord Glas. In its recent annual report, An Bord Glas pinpointed the tremendous changes which face horticulture in the coming decade. Such trends include the tendency of Irish people to eat out more and also to order more take-away food. Increasing competition faces traditional elements of the staple Irish diet, particularly potatoes and vegetables as non-traditional foodstuffs such as rice and pasta become more popular. The demand for pre-prepared organic produce has increased due to growing concerns and awareness among people of food-related health issues and food safety. The avian flu epidemic in Thailand is a current cause of concern.

These changes present a monumental challenge to the horticulture sector. Producers and wholesalers alike need advice and assistance to meet these challenges. To date, the sector has risen to the challenge of new market demands. In 2002 growth in the sales of prepared, chilled horticulture produce increased by 20%. An Bord Glas has done Trojan work to assist and develop this new growth sector. An Bord Glas has done an excellent job in providing the necessary back-up and support services to the horticulture sector and I am concerned that this support system continues and develops in the years ahead.

The founding principle of An Bord Glas was to maximise the contribution of horticulture to the economy, the environment and to the health and well-being of our citizens by ensuring quality produce and services from the horticulture sector. The work of An Bord Glas includes developing, promoting, encouraging, co-ordinating and assisting the production, marketing and [189]consumption of domestic fruit and vegetables. An Bord Glas has already played an important role in gathering and distributing crucial market information for the benefit of horticulture producers. This has taken the form of a variety of duties, from carrying out surveys, doing market research and undertaking publicity and promotional campaigns to advance the horticulture sector.

An Bord Glas has closely co-ordinated its work programme to co-operate with other State organisations, in particular with Teagasc. This has resulted in the establishment and enforcement of highly successful, grading and quality standards for horticultural produce and the formulation and enactment of policy to inform and direct State investment in horticulture. A further key aspect of the work carried out by An Bord Glas has been in the area of the educational curriculum and programmes of higher education. In 2002 significant links were established with many third level institutions, particularly UCD.

The Minister informed us that no significant financial implications arise from the Bill. However, in order to understand the rationale for this amalgamation, will he indicate what financial savings will result from the amalgamation? The amalgamation is part of a wider trend of cutbacks and reductions in funding for State bodies which provide crucial support services to the agriculture and horticulture sectors. In this context I refer, in particular, to the State advisory body, Teagasc. In budget 2003, funding for Teagasc was cut by €15 million; in budget 2004, its funding was again cut by €5 million and several advisory offices throughout the State face closure. All aspects of the agriculture sector face tremendous changes. Well-founded fears exist among the farming community that their livelihoods are in danger and that many will have to get out of farming and horticulture. The Government is responding to the concerns of farmers by making cuts and reducing services.

An Bord Glas is in danger of losing its distinctive role and focus once it is merged with the wider entity of Bord Bia. An Bord Glas can currently stand alone, gain greater attention for its niche area of concern and push for necessary funding, which it views as essential to support, develop and promote the horticulture sector in Ireland. This Bill does not give the necessary guarantees that An Bord Glas will not lose its relevance and the impact it makes on behalf of the horticulture sector once it is amalgamated into Bord Bia. It is a pity to see An Bord Glas being subsumed and merged into the superbody.

I note the Bill contains guarantees for the staff currently employed by An Bord Glas, which is to be welcomed. The Bill contains a proposal to appoint a subsidiary board and I hope it will contain a balanced membership who shall represent the industry in its entirety, and that they are knowledgeable of the industry and not merely political fodder.

[190]A strong identity for Irish horticulture is required to percolate into the marketplace and the continuation of the excellent endeavours of An Bord Glas in terms of quality and standard enhancement is of vital importance. The section that refers to the constitution of the board calls for “persons having knowledge or experience of (a) the food industry or horticulture; (b) consumer requirements”. I am worried about the term “food industry” in case members would be drawn from non-horticulture disciplines and not give the horticulture industry its rightful voice. Could a member of a food giant, with no knowledge or sensitivity to the industry, be appointed to the board?

I am totally opposed to the dismantling of An Bord Glas and integrating it into Bord Bia; it is a retrograde step and the loss of a dedicated body for a growing industry must be both condemned and regretted. The track record of An Bord Glas and its staff has been excellent and their dedication and professionalism must be commended. If and when the amalgamation proceeds, I hope a strong and clearly identified voice shall exist on the board to speak strongly for the future of the horticulture industry and that it is not subsumed into non-horticulture duties within a larger and more diverse board.

I am far from convinced of the necessity of this amalgamation. If the funding and staffing levels are to remain the same, I do not see the logic for this decision. I am convinced of the good work An Bord Glas has carried out on behalf of the horticulture sector, a view shared by those I have spoken to in the horticulture sector. To continue these good efforts, An Bord Glas must continue to operate as a stand-alone entity. I do not support this amalgamation. Why fix it if it is not broken?

Mr. Callanan: Information on Peter Callanan  Zoom on Peter Callanan  I welcome the Minister, Deputy Walsh, to the House. I wish him well in chairing the Agriculture Council of the EU, and various subsidiary bodies, in the coming months. The Minister has an important national and international role to fulfil and it is appropriate that Members wish him well in this.

The amalgamation is not a criticism of the operations or staff of An Bord Glas. It compliments them as it gives them an expanded role through Bord Bia, a body that has a substantial budget and access throughout Europe. We should welcome the amalgamation of An Bord Glas and Bord Bia. The food and drinks industry has been the cornerstone of the economy for many years. The industry has successfully developed and reorganised itself with the guidance and support of the Minister, Deputy Walsh, for many years. The great success stories of Irish manufacturing and exports are to be found in the food and drinks sector. Its success abroad is testament to its capacity to produce the right product at the right time and to successfully read consumers' needs. Of course, it is also testament to the high quality raw material that [191]farmers have provided to the food industry over the years. Employing 47,000 people and with an output worth €15 billion, of which almost €7 billion is exported, the importance of this industry to our economic well-being is clear. Of course, the industry must continue to rationalise and reorganise to meet ever-increasing competition.

The difficulty we face is that not enough of the industry, particularly its food element, has emulated the leaders. We need more market penetration, especially within the EU. The dairy industry has been disappointingly slow to re-orient itself in the direction of the marketplace and away from intervention. It is clear that the days of market intervention at EU level are numbered. Only for the negotiating success of the Minister in the mid-term review, intervention would already be a thing of the past.

The decision by the Minister to amalgamate Bord Bia with An Bord Glas is a natural and logical step in the direction of having a single body responsible for the promotion and development of the entire food industry. I urge the Government to take the final step of amalgamating Bord Iascaigh Mhara with the new Bord Bia at an early date. Bord Bia has contacts throughout Europe and has built up a sophisticated marketing system which any Irish product would benefit from being associated with.

By establishing the new Bord Bia, the Minister is giving the horticulture and food industry a lead and provides the new body with the opportunity to promote and develop these industries in a united organisation that has clear goals. The timing of the unification could not be better as we prepare at farm level to transfer to the single EU support payment for farmers.

The outcome of the negotiations on the mid-term review of the Common Agricultural Policy has enabled the Minister to introduce the simplified single payment system that will reshape the CAP fundamentally. We cannot overstate the Minister's success at the negotiations. His decision to immediately adopt the single payment shows how well he has organised his Department, and contrasts with the difficulties most of his EU counterparts are facing with phased transfers. The decoupling of direct payments from production is a fundamental change to the CAP that will have major beneficial effects on farmers. Irish farmers will now be free to produce product for the market. They will get their single EU income support payment irrespective of the farm enterprise they pursue. I have no doubt that the Minister has chosen the model best suited to Irish requirements from the perspective of maximising efficiency, competitiveness and protecting the rural economy. Neither do I doubt that the new arrangements he will put in place from 2005 onwards will minimise the bureaucracy that has plagued farmers in recent years.

[192]The change the Minister is proposing is a desirable and welcome complementary measure to his CAP reform arrangement for a single payment, enabling farmers to improve quality production. Everyone's priority must be to manage the transition from the old to the new regime so as to ensure a smooth transfer and enable Irish farmers and our high quality food industry to exploit the new opportunities to the full in the years ahead.

An Bord Glas has made a considerable and fruitful contribution to the development and promotion of the horticultural sector since its creation in 1990. It is a small but effective operation, consisting of 11 board members and 12 staff members. An Bord Glas has been instrumental in the promotion and development of horticulture in Ireland. For example, its quality assurance schemes have improved production standards and consumer confidence in our produce. It has played a major role in the development of the amenity sector where promising export potential exists. According to the Irish Exporters' Association, the value of Ireland's edible horticultural output for 2002 was €223 million and rose to €400 million last year. The independent estimates review committee recommended the merger of Bord Bia and An Bord Glas as some of their efforts are being duplicated. Bord Bia has responsibility for exports, including horticultural products, whereas An Bord Glas has responsibility for the development of the horticultural industry.

The avian flu was mentioned in the Seanad yesterday and it may be raised again today. I will ask the Minister to clear it up because there is some confusion about it.

Mr. Joe Walsh: Information on Joe Walsh  Zoom on Joe Walsh  The avian flu has not arrived.

Mr. Callanan: Information on Peter Callanan  Zoom on Peter Callanan  The EU organic farming sector has been developing during the past 20 years but in particular during the 1990s. In the 15 states of the EU, farmers in 150,000 holdings are farming organically. The figures for 2000 show that 3.8 million hectares are in organic production, which represents approximately 3% of the total utilised agricultural land. Austria and Italy lead with 8% of agricultural land in organic production. In Ireland fewer than 1,000 are farming approximately 20,00 hectares organically, that is 0.5% of usable agricultural land. A key issue to be addressed in the new action plan being prepared by the Minister, Deputy Joe Walsh, as chairman of the EU Agriculture Ministers, is how organic farming can co-exist with genetically engineered crops. I know the Minister agrees with thresholds and the adventitious presence of GMOs in organic products needs careful consideration. Ireland is ideally suited to organic farming and the time is right to be proactive in developing it. The western commission identified it as an alternative resource and since we are now in the post-Fischler era, creating the maximum [193]benefit for farmers from the utilisation of land, we should examine organic farming.

I wish An Bord Glas, the staff, the Minister and the Department the best of luck.

Mr. McCarthy: Information on Michael McCarthy  Zoom on Michael McCarthy  I welcome the Minister, Deputy Joe Walsh, and I join with Senator Callanan in wishing him the best as he chairs the European Council of Ministers for the next six months. The end of that term will tally with a Cabinet reshuffle and I wish him the best of luck with that.

The food sector has grown greatly in recent years. Generally, people are more aware of healthy eating as part of a healthy lifestyle and this has driven the growth in the economy. The agri-food industry has become such a major sector that there is a case to be made for a separate Department with responsibility solely for food. That is a debate for another day, but it highlights the growth in the food sector.

The role of Bord Bia is to promote Irish food and drinks and to develop world-wide export markets for our produce. Bord Bia has extensive knowledge and expertise in the area of exports, production controls, health regulations and new developments in the industry generally. The Minister, Deputy Joe Walsh, initiated legislation to bring together CBF, the Irish Meat and Livestock Board and the food promotion activities of the Irish Trade Board, which is now part of Enterprise Ireland and also the export promotion of edible horticulture from An Bord Glas which resulted in the Bord Bia Act 1994.

The other part of the equation, An Bord Glas, the horticultural development board, has responsibility for the development of the horticultural industry. It is divided into two main sectors, amenity horticulture which covers trees, shrubs, flowers and bulbs and the fruit and vegetable sector, including mushrooms, potatoes and glasshouse crops. An Bord Glas promotes the increased consumption of quality horticultural produce, which in turn leads to healthy eating. We need to be cognisant of the role of each, namely, promotion and production.

As I mentioned in my introductory remarks, the agri-food sector is a major force in the economy. It accounts for 9.2% of GDP, 8.5% of total exports and employs 10% of the labour force, which gives a good idea of the importance of the sector. In 2001, the Irish food and drink industry was valued at €16 billion, of which almost €7 billion was exported to more than 130 countries. The Irish agri-food sector involves 144,000 family run farms and 700 companies, employing approximately 47,000 people. Approximately 4.5 million hectares is in agricultural use, of which 80% is devoted to the production of lush grass pastures, pastures being the ideal environment for rearing dairy and beef cattle. Approximately 70% of Irish food and drink exports go to markets in the European Union. Approximately two thirds of Irish lamb produced is exported and meat accounts for 26% of all Irish food and drink exports. More than half [194]of the Irish pigmeat produced is exported to countries such as the US, Japan and Europe.

Long-standing quality assurance schemes have been instrumental in building the image of Irish meat products at home and internationally. We were the first country in Europe to establish a food safety authority. We were ahead of the market, which speaks volumes about the reputation of the industry. It is good to put in requirements at local level instead of waiting for a directive from Brussels. Such initiative builds our image abroad and is a credit to the industry in general.

We are the leading supplier of Feta cheese in Europe. The Minister will know that is due to the success of Carbery Milk Products in west Cork, a company with innovative ideas in terms of production, management and business planning. This is just one example of the manner in which companies have conformed with the regulations and have been ahead of them. About seven or eight years ago I stayed in Willesden, London and I remember noticing that Dubliner Irish cheese occupied a good deal of shelf space, so there was an obvious demand for it. That was huge kudos for a company that started small and grew large.

Three of the world's leading infant formula companies have chosen Ireland as a European manufacturing base, which is an indicator of our ability to attract such industry. Ireland is home to some of the world's favourite drink brands, supplying more than 90% of the world's cream liqueur market. Drinks account for 13% of all Irish food and drink exports. The country boasts the world's oldest licensed distillery and the most successful new drinks product launched world-wide in the past 30 years. Last March, there was quite a reaction to the fact that both boards were to be amalgamated. One of the more positive reactions came from the Irish Exporters' Association, which was very much in support of this particular endeavour. The association stated that the merger of An Bord Glas and Bord Bia was overdue. There were endless possibilities for relationship building in the market between the normal Irish food range promoted to the retail multiples by Bord Bia, and the mushroom, potato and glass-house crops in the portfolio of An Bord Glas.

Some 70% of fresh produce sales now take place through retail multiples, so Bord Bia should be able to show an early impact for Irish companies supplying that sector. The IEA pointed out that there is still much potential for such exports. The association selected one example, the sale of cut flowers in the United Kingdom, which last year had a retail value of €2.1 billion. The Irish output in that sector, however, amounted to only €3.9 million, with just 270 acres in production. The opportunities in the horticultural sector alone for promoting the export of cut flowers are huge.

The Irish Exporters' Association also mentioned the threat to mushroom production, which is one of our largest export products, from [195]Dutch producers who source their produce in Poland. In 2002, Irish mushroom exports amounted to €117 million — down from €128 million in 2001. There is a case to be made for being more cognisant of that situation.

In recent days I consulted Deputy Upton, who is the Labour Party's spokesperson on agriculture and a food scientist by profession, with much expertise in this regard. There are issues that need to be addressed in the Bill, although it will obviously have a safe passage through this House and the Lower House. It will be enacted irrespective of my party's stance, but I have some difficulties as regards the terms of the separation of the promotional and production roles of both boards. I look forward to discussing these matters on Committee Stage next Tuesday and I am sure the Minister will be favourably disposed to taking on board any amendments that might improve the Bill.

Mr. Scanlon: Information on Eamon Scanlon  Zoom on Eamon Scanlon  I congratulate the Minister and his officials on the hard work that has clearly gone into the preparation of this legislation. The Bill provides for the amalgamation of Bord Bia and An Bord Glas. This should help to provide a much more improved service and allow those who are currently working under the aegis of either body to benefit from the new body's more rounded focus.

The role of Bord Bia is to act as a link between Irish food and drink suppliers and existing and potential customers. The board is currently charged with developing markets for Irish food and drink companies. Basically, its job is to help put Irish food and drink on tables throughout the world, thus bringing a taste of Ireland to as many markets as possible. Bord Bia has performed this role well and should be congratulated on the success it has achieved for food and drink companies. Irish food and drink have a reputation throughout the world for quality and while the companies producing those food products should obviously be congratulated for ensuring those high standards, Bord Bia deserves credit for promoting this positive image.

An Bord Glas on the other hand is concerned with the development of the horticultural industry. Horticulture deals with two main areas: first, amenities, such as trees, shrubs, flowers and bulbs; and, second, the food sector, which deals with the cultivation of fruit and vegetables. The board is also charged with promoting increased consumption of quality horticultural produce, which will help to contribute to healthier lifestyles and improve our environment.

When all these factors are taken into consideration, the need for such an amalgamation is obvious. We need to examine the production of Irish produce in a coherent manner. The best possible overall framework is required in order to promote the growth of Irish fruit and vegetables.

The manner in which the world food market is developing makes this amalgamation all the more [196]essential. If all aspects of the Irish food sector are to continue to enjoy success then there is no question but that we must have such an overall strategy. We must ensure that all aspects of the food and drink industry are working towards the same goal. We cannot allow a situation to develop where one company is promoting the growth of certain fruit and vegetables to the detriment of the best interests both of the economy and society generally. If we were to do that, a situation could conceivably develop whereby both bodies would be operating at cross purposes. That would be a nightmare scenario, which could have wide-ranging effects on all aspects of the Irish food and drink industries.

The amalgamation provided for in the Bill will prevent such a scenario from coming about. It is a natural step that will allow us to make the best use of our resources. Senator Callanan referred to the benefits this move will bring and he also called for the further amalgamation of the new body with Bord Iascaigh Mhara. I agree with that proposal. Further benefits would accrue to the industry if the Minister were to introduce such a measure. As Senator Callanan pointed out, it is the obvious next step but that is a debate for another occasion.

Once the Bill has been enacted, the food and drink industries will go from strength to strength. We will encourage the production of crops that will be best suited to the food and drinks we are producing. In addition, we will be producing food and drink products that make best use of the crops we can grow. Like most of the best arguments, it is a simple one and surely everyone can see its merit. It will help us to make the best use of the limited land available. As a small country it is important to concentrate on the areas that will provide the best return but that will not necessarily happen unless we are all reading from the same script. The various sectors of the food and drink industry — from the growing of raw materials to the manufacturing and marketing sectors — must work from one blueprint towards the same goal of economic success. Such a strategy will ensure that we get the most from what we have and should help the food and drink sectors to make an even bigger impact on the world market. That, in itself, will be a fantastic development.

The Bill is good news for everyone involved, including farmers, food processors and breweries. It is good, also, for those involved in the marketing and sale of Irish food and drink products. The amalgamation of Bord Bia and An Bord Glas, under the terms of the Bill, will bring about a significant synergy of all aspects of the industries involved.

Mr. Quinn: Information on Fergal Quinn  Zoom on Fergal Quinn  While normally I have no problem in welcoming most Government legislation that comes before the House, I have some doubts about this Bill. On most occasions, I can support the Minister's ideas but that does not prevent me from questioning some aspects. I am not [197]convinced that the proposed amalgamation of Bord Bia and An Bord Glas is necessarily a good thing. Part of my reluctance about the proposal stems from my own background in business. Despite the fact that such mergers occur often, they sometimes have a bad reputation among business people for good reason. Most mergers fail to produce the promises made when they occur. In particular, they fail to produce such promises for smaller companies. That happens and it can give rise to problems that continue for a long time afterwards. I can see a great deal of logic in mergers particularly, given my business experience, in the case of purchasing. For example, if a small company tags on to a larger one and manages to maintain its own culture and independence, it will gain the benefits of joint purchasing. Some mergers have worked well but often those mergers are recommended not necessarily by people in the business but by merchant bankers and speculators who talk about the synergies of bringing bodies together in order to maximise benefits. In this respect, merchant bankers and speculators in the business world can gain, while the losers are very often the businesses themselves — the people who work in them, the customers and the culture of the organisations concerned. Rarely is there a genuine business case for making mergers succeed and the usual push to a merger comes from factors external to the business. We are debating the merging of two State bodies and therefore the dark forces of the financial world are not in play. A parallel appears when we consider from where the idea of a merger came. The Minister says quite openly that the idea did not arise from within either of the two bodies involved but from an outside force. The idea came from the three wise men, those three men drafted in by the Government in 2002 to dream up spending cuts for the budget. They produced some sensible ideas along with some short-sighted ones. One of their more ridiculous suggestions was the recommendation to abolish the Irish Film Board, a suggestion which I am glad to say the Government had the good sense to throw into the waste paper basket.

  12 o'clock

The idea of a merger of these two boards survived and we have this Bill before us as a result. It is driven by short-term cost considerations rather than by the synergies about which we sometimes hear. Looking at the two boards from the outside with the eyes of an accountant, there appears to be some duplication and an overlap of functions. Therefore, it seemed a sensible course to remove the duplication by merging the two bodies. There are other considerations we should bear in mind along with the rush to save the few euro we think we shall save.

People who argue for mergers often forget that business entities, whether private companies or State agencies, have a culture inescapably tied up with their individual identity. A successful identity develops into a team with a driving [198]motivation and collective loyalty of its own. I know that An Bord Glas has an energy and enthusiasm centred and focused on what it is trying to do. I know too that the Minister has agreed that it will have seats on the board. However, I express a word of caution. I fear that An Bord Glas will not be able to maintain that focus. The main reason some mergers are not successful is that they destroy the essential energy in an organisation. The promised benefits and the expected financial savings do not always result either. We must tread carefully in order to retain the energy, enthusiasm and culture we have seen previously in small organisations.

I ask for a convincing business argument in favour of this merger to justify the change. In the absence of a compelling argument, my instinct is to leave matters as they are even if that means putting up with a situation which from the outside appears untidy. I am reminded of the old joke people used to tell about McKinsey consultancy reports. The story was that if a group called in McKinsey consultants to examine an organisation, they would make one of two recommendations. If it was a single organisation, McKinsey would recommend it should be broken into several component and separate units but if that had already been done, McKinsey would recommend that all the separate units should be amalgamated to gain all the benefits. I would not say the same about the three wise men. However, no matter how a company was organised, McKinsey could always dream up plausible ways for organising it the other way.

I do not suggest that is what is happening here. However, arguments are sometimes turned on their head in order to justify whatever change is sought. Whether it is a merger or a shake-up, the resulting shake-up of an organisation rarely produces the results envisaged. The costs of making the change always come up to expectations, and often exceed them, and the companies involved in making the recommendation usually get paid.

There is sometimes a fashion in seeking to change how a company is organised. For example, if we look at the public service as a whole, it is somehow ironic that we are debating the merger of two State bodies, as proposed by the Minister for Agriculture and Food, Deputy Walsh, at a time when another Minister is hell bent on breaking up two other State bodies, CIE and Aer Rianta. The situation resembles the McKinsey course; it almost seems as if we must be seen to do something.

I have not heard much by way of a convincing business argument in any of these cases for making any of the changes proposed. Rather than going through what may turn out to be an artificial exercise in merging Bord Bia and An Bord Glas, we would be better examining the marketplace and putting our energy into ensuring that both bodies are fully responsive to it. It will not surprise anybody to hear that I believe Bord Bia has done an excellent job and has had many [199]successes over the past decade. Nevertheless, in terms of organisation, it is seriously flawed. That is not Bord Bia's fault. The fault is demonstrated by the fact that the board's sponsoring Department is the Department of Agriculture and Food.

The Minister may throw his eyes to heaven and think he has heard this before. He has spoken about the expert group, in which I had the honour to participate, which was involved ten years ago in setting up Bord Bia. I had the dubious responsibility of producing a minority report in which I agreed with everything proposed with one exception — that Bord Bia should not fall under the remit of the Department of Agriculture and Food. My reasoning was that the Department represents the interests of producers and that if Bord Bia were included in an organisation representing producers it would always be affected by that balance. I argued that rather than being a food board it would more likely become an agricultural produce board. I did not win the argument.

This is not just a question of semantics. We invariably think in agricultural terms and fail to see the potential of a fully developed food industry. I spoke about this ten years ago. It is interesting in looking at some of the figures now that I spoke about a potential chicken business at that stage. It is interesting too that Thailand and Brazil now export a huge amount of chickens.

Let us suppose somebody came to Bord Bia in 1994 and said he or she wanted to set up a chicken business and make Ireland its centre. If that person explained his or her concept of bringing in chickens from Denmark or France because they had the required flavour and texture and were at the right price, and explained that he or she required the board's help and support in setting up a factory, the Department would have asked him or her to think about producing the chickens in Ireland. The Department would have insisted the business be producer led. It is understandable that the people concerned with agriculture would say that but food people would have said they wanted to create a food business — a chicken eating business rather than a chicken producing business. The potential factory owner would have decided to go elsewhere because the Department or board was unenthusiastic for the project and spent their time trying to get him or her to produce the product here.

An Bord Glas and Bord Bia would be better located almost anywhere other than the Department of Agriculture and Food. Over the past 30 years we have had remarkable success in importing industrial ideas from elsewhere and building a solid position in the global marketplace. We have new high-tech industries in which we had no particular skills or traditions. We succeeded in that area but at the same time largely ignored the potential opportunity waiting on our doorstep — the opportunity to become a world player in the modern food business.

[200]That initiative has been taken by Thailand and Brazil in one sector alone. In that project, our agricultural heritage could have served as a springboard but because our vision was lacking, it became a millstone around our necks. It is certainly true that there have been some fine successes in the Irish food business and in the agricultural industry. I wish all power to the companies which have grasped opportunities and to Bord Bia for accomplishing what it has with one hand tied behind its back. However, what has been achieved is nothing compared to what we could do if we stopped regarding food simply as an outlet for our farmers' produce. We should start instead to look at food as a massive new industrial opportunity this country is adequately positioned to exploit.

While I wish the new body well in its endeavours, I cannot help feeling this energy is in danger of being misdirected. I have a couple of queries. The Minister touched on a point mentioned already today and I am not quite sure I understand the matter. In the supermarket we have been surprised by the recent development of non-food products. I am thinking here of cut flowers, shrubs and garden centre products, which represent a significant business in Ireland worth €500 million a year. I am not sure where that business fits in the context of the proposal before us. Clearly, it is not part of the food industry. In our business we did not always regard cut flowers as part of the food industry, but one finds them in a modern supermarket. I was in a supermarket yesterday where I saw one in four customers buying cut flowers as they walked through the checkout. That is a significant business given that it was fairly minimal ten years ago. It has been helped to a great extent by the energy, enthusiasm and efforts of An Bord Glas. I hope garden centres and businesses which do not involve food and do not quite fit into Bord Bia's remit are not given second class status.

The amalgamation will go ahead and I wish it well. I hope it achieves what is set out in the thinking behind it. However, I caution that where one merges a large and a small body, sometimes the benefits and the culture of each organisation can be lost. I wish the Minister well.

Dr. Mansergh: Information on Dr Martin Mansergh  Zoom on Dr Martin Mansergh  I welcome the Minister and wish him extremely well during the Presidency of the EU. At this stage, he is a Minister with vast experience. Apart from a two year interval, he has been at Agriculture House for the past 17 years. While there have been little ups and downs with farm organisations now and again, I am glad there is harmony once again. I compliment the Minister on the establishment of the group to examine where agriculture will be in ten years. I was sitting opposite Mr. Alan Dukes, the excellent chairman the Minister has appointed, at dinner recently. It is to be encouraged that where the best person comes from a background in an Opposition party a Government should not hesitate to appoint him or her. I congratulate the [201]Minister for doing so in this case. Mr. Dukes was telling me that he was training himself to say “this Government” rather than “this bloody awful Government”.

The amalgamation of Bord Bia and An Bord Glas is probably the right thing to do. I have a slight sentimental attachment to An Bord Glas. I remember well being involved in the research office of Fianna Fáil circa 1986 when we produced a well received policy document on the development of horticulture, which led to the establishment of An Bord Glas. Certainly at that time there was a need to place a particular focus on the development of horticulture. Despite all the development which has occurred, there is still a great deal of unexploited potential which I will discuss later. I did not realise until I listened to the Minister's speech that horticulture was the third most important sector in agriculture. That is an astonishing achievement as it was not the case back in 1986 and 1987.

I remember when I was a diplomat in Germany that there were many different offices. There was a separate office for CBF and another for dairy products. There is a case for rationalising and bringing bodies together. By the way, I must declare a small interest in that a relative of mine by marriage works for Bord Bia in an office abroad. In any case, the board is already responsible for the marketing of produce. Senator Quinn is correct to say that not all mergers lead to added value. One can think in the political field of the amalgamation of Labour and Democratic Left.

Mr. Coonan: Information on Noel Coonan  Zoom on Noel Coonan  Or Fianna Fáil and the Progressive Democrats.

Dr. Mansergh: Information on Dr Martin Mansergh  Zoom on Dr Martin Mansergh  It is far from clear what the added value is for Labour. Obviously, I can see the added value from the point of view of the people from Democratic Left who carried out the reverse take-over, but not for the organisation as a whole. The separate interests of agriculture are adequately taken care of by the provision of two members of the board and the maintenance of a separate identity in the terms of a subsidiary board.

The industry is important from many points of view. Tipperary Mushrooms which operates in the leading export sector in horticulture is based in my home town. I understand that our particular climate with relatively mild winters and minimal disparity between summer and winter temperatures gives us a certain advantage in terms of costs. It is probably as well for exports that the euro is not rising against sterling, whatever about the dollar. Ongoing flexibility is needed in the employment and work permit area as many of those who work in this industry come from places like Romania and Belarus. While there have not been grave problems so far, a little flexibility may be needed. I am sure the Minister for Agriculture and Food and the industry will [202]co-operate with the Tánaiste and Minister for Enterprise, Trade and Employment on that issue.

The way in which the amenities sector has developed over the past 15 years has been wonderful. People have put a great deal of effort into their gardens and local authorities have done much to beautify public places. The type of town or village which wins the Tidy Towns competition has hanging baskets at every window. It is an alternative area of enterprise although I am not sure we have fully exploited it. Many products grow extremely well here including potatoes, beans and various types of soft fruit. I have a particular interest in soft fruit and once took a short soft fruit growing course for family rather than commercial reasons. One regret I have is that in days gone by, most farmers or people with a small plot would have grown potatoes, cabbages and carrots but the practice has gone out to a certain extent. If one is in Brittany or northern France and travels by train from somewhere like Roscoff, one will see people growing vegetables right up to the tracks. Every little corner is filled. Climate is, of course, changing and one wonders about the sort of summer France had last year. Many crops have difficulty surviving the heat. We have a very favourable climate. I remember Mr. Charlie Haughey once saying that this was a slightly de Valeraesque idea but I believe people should be encouraged to grow their own produce. To my mind, and this is a very personal view, people spend a lot of money cycling furiously in gyms and such like. I have found all my life that something like gardening gives one good exercise but in a way that is productive and fulfilling at the same time.

Senator Quinn expressed the view that this is financially driven. Over the years there has been a tendency to create State bodies and agencies to promote various objectives and they need to be rationalised from time to time to avoid a proliferation of the overheads. If this measure works properly, the horticultural sector, which is proceeding reasonably well, will have the clout of a larger body behind it. I do not see any reason its identity as a sector in its own right need somehow be suppressed or submerged. On balance, despite my sentimental attachment to An Bord Glas but having been involved a little in its foundation, this is probably the correct measure. I wish everyone involved in this important sector well.

Mr. J. Phelan: Information on John Paul Phelan  Zoom on John Paul Phelan  I am very interested in Senator Mansergh's comments. The Minister for Health and Children spoke about the introduction of taxes on fatty foods as a means of reducing obesity among young and old and Senator Mansergh is recommending the introduction of mandatory gardening——

Dr. Mansergh: Information on Dr Martin Mansergh  Zoom on Dr Martin Mansergh  Not mandatory.

Mr. J. Phelan: Information on John Paul Phelan  Zoom on John Paul Phelan  Perhaps not mandatory gardening but gardening as a means of——

[203]Mr. U. Burke: Information on Ulick Burke  Zoom on Ulick Burke  ——compulsory tillage.

Mr. J. Phelan: Information on John Paul Phelan  Zoom on John Paul Phelan  Yes, compulsory tillage as a means of making people fitter. I welcome the Minister and I am pleased he has stayed in the House for the debate. Senator Quinn has outlined what I wished to say about the Bill and I echo his sentiments. I have listened to the contributions of the Minister and the Government Senators and I am not convinced of any genuine, strong argument contained therein which would suggest there would be a benefit in the merging of Bord Bia and An Bord Glas. The current situation is more desirable than anything that has been proposed today in the House.

Farming is at a difficult juncture at present. There is also a crisis of confidence among consumers about the products on sale. Agriculture is experiencing difficulties. I fail to see how this proposed merger will tackle any of those issues. My colleague, Senator Coonan, spoke about the funding of Teagasc. I raised this issue on a number of occasions in the House. The funding for Teagasc was cut in last year's budget by €17 million and it was cut again this year by a smaller amount. This will cause the closure of Teagasc offices and there is an effective death sentence hanging over Teagasc advisory centres throughout the country. The Government would be well advised to invest more money in helping farmers to make the right decisions at this vital time for agriculture as we face into the new CAP reform and the Fischler proposals, which will soon be a reality. It is very wrong that funding in this vital area has been cut over the past couple of budgets.

Other speakers have spoken about consumer confidence in products. We are all aware of the bird flu currently in the Far East. A large volume of poultry meat from the Far East ends up being processed in Ireland. I am aware the EU has taken action to ensure that will cease while the infection continues in the Far East but this situation has highlighted the problems which exist here in the labelling of products. An animal or meat product of any sort can be produced anywhere in the world, be brought to Ireland, processed in some form and then sold as an Irish product. I have a particular interest in the potato sector. Potatoes can be produced in Cyprus, washed in this country and then sold as “Irish washed potatoes”. It is true they have been washed in Ireland but it is a very misleading label. The issue of labelling and the display of the country of origin of produce is very important and is a matter on which the Department of Agriculture and Food and the new board need to focus attention.

From the arguments put forward by the Minister and the Government Senators I do not see any coherent reason this Bill should be supported. Other areas in agriculture and the food industry need to be examined and supported. The proposed merger of Bord Bia and [204]An Bord Glas is not an issue which deserves the priority it has been given.

Mr. U. Burke: Information on Ulick Burke  Zoom on Ulick Burke  I welcome the Minister. Apart from the reservations expressed in the House there are many other organisations involved in food production that have reservations about this Bill. Any time there is talk of a review or rationalisation, this effectively means cutbacks. I would prefer to call this an abolition of An Bord Glas rather than an amalgamation and that is a very regrettable situation. The autonomy of An Bord Glas will be lost in this new set-up.

No research, innovation, trials or development are operative in the agricultural sector. The closure of the Teagasc research centre at Clonroche was the first indication that all was not well and that the Minister and his Department were overseeing rationalisation and cuts. It is regrettable that one of the best centres for trials and development under the auspices of Teagasc has been closed and sold. The rapidity and speed with which that was done was unbelievable. Teagasc was established to take over from the old advisory services of the Department of Agriculture and Food. These services were progressive forces in agriculture and gave a new impetus from the early 1970s. They advised on investment in agriculture but now they are all gone and the Minister has presided over their effective abolition. The Minister has spent a decade in his ministry and has made very important and worthwhile changes. The sad thing about it is that the only function of Teagasc that we see on the ground is to prepare for the exit of many farmers from the industry. I ask the Minister, who is presiding over it, if that is good enough and if he is happy with it. I certainly do not feel happy with it. It is regrettable that Teagasc is taking on board the role of catering for part-time farmers and the eventual exit of many people from agriculture.

I wish to highlight a matter of shame which I would like the Minister for Agriculture and Food to address as a matter of urgency. Representatives of Bord Bia and the Department can enter a high class restaurant and ask its proprietor if he or she wants Bord Bia certification to be displayed on the premises. If the restaurateur agrees to display the certification, which is a major advantage, he or she is asked to sign a contract for the purchase of beef from a particular wholesaler in this country. In a case with which I am familiar, however, the proprietor was not willing to sign such a contract. The man in question produces top quality Galway beef, which is free from hormones and drugs, from his fields which adjoin his restaurant. He was astounded to be told that he could not receive certification for his beef and that the beef on sale in his restaurant had to be channelled through a specific wholesaler. He decided not to participate in the certification scheme.

It is regrettable that a producer of beef could not receive certification for his own quality [205]product from the body which certifies Irish beef and other quality products which are available in his restaurant and many others throughout the country. When he inquired into the status of the wholesale company with which he was asked to sign an agreement, he found that much of the beef it was distributing for the catering industry was sourced in South America. It is important that the Minister should investigate this matter immediately so that this rot can be stopped. Ireland contributed to EU beef mountains on various occasions over the years. The prices received by the farmers of Ireland decreased as a consequence. If we are to promote a quality Irish product, which is a suitable description of all Irish beef, we should ensure that we do not lose out on the domestic market.

I call into question the provisions of this Bill on the basis of the matters I have outlined. The Minister proposes to give Bord Bia the power to promote Irish goods and products as quality products, despite the fact that we are aware that it is engaging in practices such as I have described. I am aware that some Irish exporters of beef fiddled the books in the past. They introduced an inferior quality of product to the global export market. It was regrettable that it took a long time to revive the quality image of Irish products. I hope the damage done then has long since passed and that we can promote such products again.

Can the Minister guarantee that this amalgamation, or the subsuming of An Bord Glas into Bord Bia, will maintain support for the vegetables and other horticultural products that he mentioned in his address? Will he guarantee that such products will be supported? I do not want them to lose their identity when they are part of a bigger area of responsibility within Bord Bia. If there is a loss of identity, it will not be a surprise if one finds imported products of a lesser quality when one goes to the vegetable shop. Many Senators on both sides have mentioned that imported products do not have the same quality as the Irish product. It is regrettable that the major retail chains have to search outside this country, in Europe or elsewhere, for a continuity of supply. If a level playing pitch is put in place and the large monopoly chains try to find the cheapest possible product, we will have the potential and the capacity to produce such a supply in this country.

It is regrettable that a free 10 kg. bag of potatoes is being offered with every €30 of purchases. While such practices are allowed to thrive, we cannot say that we are in any way determined to support vegetable producers, horticultural production and many other aspects of Bord Bia's remit. Can the Minister state whether Bord Bia has sourced any new market for Irish products? I refer to a new breakthrough market in any part of the world. The Minister's global statement that we are breaking into new markets for various products every day, every week and every year is too all-embracing. I appreciate that it is difficult to provide details off [206]the cuff, but I would like him to name the specific new markets of a worthwhile nature that have been accessed and will continue to be accessed with a degree of continuity as a result of the initiatives of Bord Bia.

If we are to restore confidence to agriculture, it is important that the Minister can give some hope to this intensive area. Agriculture is becoming an exit industry. Industries such as vegetable production, horticulture and dairying are directly related to great agricultural intensity. The changes being proposed by the Minister in this Bill will be worthwhile if he can offer a ray of hope. Is there a possibility of guaranteeing top class prices to farmers for top class products that are presented well? If there is no such guarantee, everybody will become suspicious and demoralised by the demise of agriculture.

Minister for Agriculture and Food (Mr. Joe Walsh): Information on Joe Walsh  Zoom on Joe Walsh  I thank Senators for their constructive contributions. This well-balanced Bill will ensure the continued development of the Irish food and horticulture sectors, in terms of both development and promotion. The Bill provides for a subsidiary board with separate legal status and representation on the new main board. We are ensuring that horticulture will not be swamped or set aside in any way. It will be strengthened considerably in the new organisation.

The current budget for An Bord Glas, which has done superb work, is less than €3 million. This is a relatively small budget, by any standards, for a national organisation with potential for further exports. Bord Bia has a budget of €25 million, meaning that the new organisation will have a total budget of €28 million. An Bord Glas and Bord Bia are involved in the promotion of Irish food. An Bord Glas, which has a total staff of 12, will be in a much stronger position in a unified organisation with access to a budget of €28 million compared to its existing budget of less than €3 million. It will also have access to Bord Bia's network of offices in many EU countries. Bord Bia's promotions involve individual logos, but An Bord Glas has separate logos. Rather than confusing consumers, we should have a rational identity for Irish food. That will become possible with the merged body.

Currently there is a plethora of quality control schemes and agencies to implement them. There is no need for separate quality control schemes for Irish food, whether it is mushrooms or mozzarella cheese for pizzas. It is all food and it must all be of the highest possible standard and produced under the most hygienic conditions. It must be natural, wholesome food. The new body will provide a better chance to implement important measures such as these.

The Bill ensures for the future that promotion actions both at home and abroad are synchronised to achieve the best possible service for the producer, the consumer and the taxpayer. Senators who have visited food promotion [207]activities, whether in the RDS or down the country, will know that at the Bord Bia stand one sees a well laid out stand, with Irish food looking its best, while the An Bord Glas stand, which is also well done and exceptionally professional, is set up in another area. It is all Irish food and it would make much more sense if it was promoted in a more unified way. The combined expertise of both bodies will be important in the new organisation. Both bodies, with relatively small budgets, have done an excellent job. This performance is due in no small measure to the calibre of the staff involved. They have a particular culture and there is an effervescence to their work. They like their job and are good at promotion, doing much good for Irish food.

The interests of concerned stakeholders will be well served by the amalgamation. These include the staff of the entire horticulture sector, including amenity horticulture. I was glad to hear Senator Quinn and others mention cut flowers. The Dutch are great traders and promoters. When it comes to tulips from Amsterdam, among other things, they really put us in the shade. Senator Mansergh spoke about the fine Irish soil and the good weather we have for producing these items. We should be doing better. At weddings one can see the number of cut flowers being imported into Ireland. The slogan of Fianna Fáil in the last election was “A lot done, more to do.” There is a bit more to do.

Mr. U. Burke: Information on Ulick Burke  Zoom on Ulick Burke  No wonder the flowers are dying.

Mr. Coonan: Information on Noel Coonan  Zoom on Noel Coonan  Many done, more to do.

Mr. Joe Walsh: Information on Joe Walsh  Zoom on Joe Walsh  As I said in my opening remarks, Ireland has established an international reputation as a food island. We have some world brand leaders in this area, most notably Bailey's cream liqueurs. We can build on that work. The new organisation will be sufficiently imaginative to exploit this, especially in the amenity horticulture sector, where there are great opportunities.

Senator Coonan acknowledged the success of both organisations. Bord Bia has a strong track record, particularly in Europe. From 1 May this year Europe will have 500 million consumers. This is a great opportunity. There will be emerging sectors, such as consumer foods. Senator McCarthy talked about a relatively small industry in west Cork, Carbery Milk Products, which did not manufacture cheese of any description until a few years ago, when it commenced the manufacture of mozzarella cheese for pizza toppings, and is now doing a superb job. These are speciality and artisan foods. Bord Bia is giving special attention to artisan foods, which links into Senator Ulick Burke's concern about the supply of Irish-based food to local restaurants. I am not aware of the specific matter he raised, but I will follow it up.

[208]One of the unique things about Ireland is that not alone would a person know his local butcher and abattoir, whose family have probably been in the business for generations, but he would probably know the cattle as well. This is something we should seek to preserve not only for Irish consumers, but also for visitors. They do not want to eat plastic, international food while they are here; they want a unique culinary experience. If they go to Galway or west Cork they want the uniqueness of the area to be transmitted through the food. We have a soil and climate in parts of Ireland conducive to producing excellent food, whether it is Connemara lamb, Bantry salmon or our famous black pudding. We must enhance our efforts in this area.

A number of Senators said this development was about saving money and reducing costs. It is not so much about the price of something but the value we obtain from it. The savings will be modest. There will be some administrative savings because there will be a single structure instead of fragmented structures, but the greater value for money will be the important thing. If Bord Bia is doing market research in an area, why not include mushrooms or another horticulture or amenity product? This is a sensible thing to do and it will work well. During our consultations with Bord Bia and An Bord Glas the organisations expressed concerns, especially about the amenity horticulture area. I hope I allayed those concerns. Bord Bia has 80 staff and An Bord Glas has 12. They are not large organisations by any means. It makes a great deal of sense to merge them. There was concern about the developmental role of An Bord Glas, which has done great work in the potato sector in packing and storage and distributing decent grant aid under the national development plan. This will continue.

Senator Mansergh made an interesting suggestion that people should get out of the gym and into the garden, and I agree. One can get great exercise in the garden and it is wonderful, after a long week in the Seanad, to do some work there. It is good for the mind and the body. Senator Quinn is a renowned retailer and initiated many useful developments long before people raised concerns in those areas. Senator Phelan mentioned labelling and traceability. I remember years ago seeing that the beef in Senator Quinn's retail establishment was from a producer in County Donegal. I thought this was great because not only did people know it was Irish beef, but they also knew the supplier, the breed of cattle and so on. We have developed constructively along that route, but we need to do better. That is what Bord Bia is doing through the Féile Bia programme. Traceability is not as good, unfortunately, in the catering industry as in the retail industry. People are entitled to know what they are eating and from where it has come. The origin of what one eats is important. Good work has been done in this area.

[209]Senator Quinn spoke of business management criteria. We should consider the size of both organisations and the value for money we can obtain by merging market research, logos, quality assurance schemes and promotional operations at various exhibitions throughout the country and Europe. The Senator was very hard on the Department of Agriculture and Food. Its remit does cover food. However, if one is setting up a poultry or other industry in the natural resource area, it is not to the Department of Agriculture and Food one goes, but to Enterprise Ireland which has responsibility for that area of activity. In fairness to Enterprise Ireland, it has done well and there are good industries in food production, such as the infant formula and consumer foods sectors.

Senator John Phelan raised the matter of labelling which is an area where an exceptional job has been done. However, there is a weakness in the catering sector that needs to be addressed. This is a role for the Commission. However, it is not Commissioner Byrne's area but Commissioner Fischler's. I have raised the issue with him a number of times, particularly at times of food health scares. I have also established a food liaison group which does worthwhile research and recently produced a report on its findings. I sent a copy of the report to Commissioner Fischler's office because I want full traceability right through the food chain, including the catering sector. I take the Senator's point on this issue.

Senator Ulick Burke asked if Bord Bia had any success in opening up new export markets. The greatest success of all not alone for Bord Bia, but for the industry, was to get back on European retail shelves following one of the greatest food scares in recent history, BSE or mad cow disease. That scare was followed by the outbreak of foot and mouth disease. Irish food exports, beef in particular, were excluded from European markets and even the live exports trade was stopped. In 2003, the Irish beef industry returned to the UK market with exports of up to 265,000 tonnes — 50% of our entire exports — mostly to retail outlets. Up to 150,000 tonnes were exported to mainland Europe. Irish food exports had been excluded from Germany, France, Netherlands, Italy and Spain. There have been many instances where certain foods and beverages have been hit with a minor health scare and the market has never recovered. However, in the relatively short time of two years, Irish food exports have returned to the market. We owe a debt of gratitude to Bord Bia for this development. The reputation of Irish beef is at an all-time high, so much so that we only need one more third country for beef exports, Russia. Russia took 85,000 tonnes of beef exports in 2003 and it is a valuable market which creates competition.

Members will be aware of the long saga of the Egyptian market where it was open politically, but commercially no Irish beef could be exported there.

[210]Mr. U. Burke: Information on Ulick Burke  Zoom on Ulick Burke  A lot done, more to do.

Mr. Coonan: Information on Noel Coonan  Zoom on Noel Coonan  They were not able to do the Egyptians.

Mr. Joe Walsh: Information on Joe Walsh  Zoom on Joe Walsh  Bord Bia used its good offices in Cairo to get the commercial end in place. Last year, it held a successful symposium in Cairo which was attended by the Egyptian veterinary inspectorate and traders. Bord Bia succeeded in opening the market properly. Thankfully, there is no great need for the Egyptian market because we are doing so well in the commercial markets in the UK and Europe, which have high returns. Much work was done by Ambassador Richard O'Brien in Cairo and the Department of Agriculture and Food to resolve the issue, but it was mainly driven by Bord Bia.

I commend the Bill to the House and I look forward to meeting Members again on Committee Stage.

Question put and agreed to.

Committee Stage ordered for Tuesday, 3 February 2004.

Sitting suspended at 12.55 p.m. and resumed at 2 p.m.


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