Seán Ó Fearghaíl (Kildare South, Fianna Fail)

I thank Deputy Moynihan for sharing time. I am pleased to have the opportunity to contribute to the debate on the Bill, the principal provision of which is the amalgamation of Bord Glas with Bord Bia. I acknowledge the valuable work that has been done by Bord Glas since its establishment in nurturing the horticultural sector and recognise the special contribution of a Member of this House, Deputy Kirk, in his role as the first Minister responsible for horticulture. The industry has come a long way since 1989 and 1990, and in recent years we have witnessed the growing importance of the amenity horticulture sector. Edible horticulture exports were worth €180 million to the economy last year.

However, we must accept that the industry faces constant challenges in the areas of cost and competitiveness, so it is opportune to subsume Bord Glas into the larger body that is Bord Bia. Changes of this nature will always give rise to concerns, but I am satisfied that, given the level of consultation that has taken place and, specifically, the fact that the Bill provides for a sub-board for horticulture as exists for other sectors, that the dynamic of Bord Glas will not be lost in the new arrangement. It is also essential, however, that in the aftermath of the amalgamation, the level of support to the industry is at least maintained at its current level.

As other Deputies have said, important work is being done by Bord Bia. While primary responsibility for marketing Irish produce rests with the food industry itself, Bord Bia plays a leading role in developing and securing export markets. When we consider that the accumulated value of Irish food and drink exports amounted to €6.665 billion last year, as referred to by Deputy Michael Moynihan, we must accept the importance of that truly indigenous industry. Unfortunately, it has become popular in certain quarters to talk down the importance of the agri-food sector to the economy in recent times, but the public demonstrated its understanding of its significance with its magnificent and patriotic response to the 2001 foot and mouth crisis.

Statistics for the agri-food and drink sector are impressive. A total of 680 companies employ more than 50,000 in the sector, representing 20% of the country's manufacturing employment and twice that of the chemical and pharmaceutical sector which is often referred to very favourably. If one adds that figure to the 114,000 people in the primary agricultural sector, there are 165,000, or 9.5% of the total, employed in the country. Food and drink products make up 55% of exports. The agri-food sector accounted for nearly 8.5% of gross domestic product last year, and 22% of Irish consumer spending, or €13.3 billion, was on food and drink products.

Bord Bia states that its central mission is to deliver effective and innovative market development for the food and drink sector, so it is sensible that horticulture should be fully integrated into its remit. The food and drink export market has suffered in recent years as a result of reduced international demand and adverse exchange rates. In 2002, for example, the loss of exchange rate competitiveness was frightening, with the euro appreciating 41% against the dollar and more than 15% against sterling. The situation improved significantly in 2003, and the prospects for global trade in 2004 are good.

However, the marketplace is continually changing, and perhaps the greatest change revolves around consumer habits, with a greater emphasis than ever on convenience foods and the types of speciality foods to which Deputy Moynihan referred. The continued success of the food and drink sector in home and foreign markets depends on its capacity to innovate, adapt and change to meet the vagaries of consumer demand. Simply responding to changing demand is not likely to be sufficient in future. Instead, the sector must anticipate potential market developments.

Executives of Bord Bia recently attended a meeting of the Joint Oireachtas Committee on Agriculture and Food to set out their stall regarding their future marketing strategies for beef, and in an impressive presentation they stated that the board would concentrate its resources on three conditions which they considered key to the success of the industry. First, the board intends to support the industry in extending its market reach through the re-establishment of international market access and building new business within the newly enlarged European Union. Interestingly, the second stated objective is to improve the industry's position in established markets by targeting the highest-returning consumer segments. Third, the board proposes to establish a sustainable brand image for Irish beef to secure its long-term position with consumers and achieve a premium for producers.

It must be acknowledged that the board, working with the industry, has succeeded in maintaining a stable market share for lamb. Some 35% of our sheepmeat output is consumed at home, while nearly 75% of export sales are to France. There is clearly an ongoing need to target the important French market with promotional campaigns, and I am sure that that will be done successfully. There is also a need to support and promote the pigmeat sector which has experienced difficulties in recent years. There was a decline of 6% in pigmeat prices across Europe last year, yet this country achieved €250 million of export sales.

It would be wrong to refer to the meat trade without referring, as Deputy Michael Moynihan did, to the growing impact of imported beef, chicken and pigmeat on the home market. That is of major concern to producers who regularly bring it to our attention. The development might also be of some concern to consumers. Are they fully aware of the fact that the filet of beef put before them in a hotel or restaurant may not originate from a Mullingar heifer but have winged its way from the southern hemisphere? Producers of Irish meat and beef products may well have good reason to be concerned at the extent to which the home market has been penetrated by imports, and not least at the extent to which imported meats are used by the catering industry.

That is why the Féile Bia initiative of Bord Bia must be welcomed and encouraged. Féile Bia aims to enrol hotels and restaurants in a programme that guarantees traceability and quality assurance to the consumer. The programme is working well and I encourage all restaurants and hotels to participate in the programme. I commend Bord Bia on developing the scheme further to provide for the identification of the origin of all food products being sold in participating outlets. Moreover, the plan to put a comprehensive auditing system in place is also to be welcomed. Bord Bia reports strong growth in sales in the speciality food sector in the home and British markets. Most of the companies operating in the area are small, but their potential is considerable, and they deserve to be supported and encouraged.

The establishment of the TASTE Council has helped enormously. There is a complementarity between our successful tourism industry and our capacity to establish new markets for speciality foods. Most visitors to this country are highly impressed by the quality of the fare available in pubs, restaurants and hotels. We have reason to be proud of the high standards that prevail. The indications for the dairy export sector are good for the current year, with an increase of 5% to €1.6 billion having been achieved in 2003.

I wish to refer briefly to the mushroom industry, which is facing a particular challenge in the expanding European Union. Mushrooms are our main horticultural export product. A total of 75% of production is sold into the British market. Competition in that market is fierce and continued pressure is likely to face our producers from low cost Polish producers. This sector requires the ongoing support and attention of Bord Bia.

I compliment all those involved in bringing forward this straightforward legislation. It takes on board the interests of all stakeholders and follows a long period of consultation. It will help ensure that we have a more co-ordinated and integrated marketing approach for our important food products both at home and abroad. I commend the Bill to the House.

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