Michael McCarthy (Labour)

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 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 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.