Joe Walsh (Cork South West, Fianna Fail)

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 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.

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 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.