Peter Callanan (Fianna Fail)

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 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.

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.