Between 70 and 80 per cent of Irish food production is exported, much of it in commodity form. But the changes coming in the EU's Common Agricultural Policy and World Trade Organisation agreements dictate that the food processing industry has to take immediate stock and change.

It has to get into more sophisticated, value-added food products which it can test-market on an increasingly valuable and demanding home market. Changing lifestyles require even more choices in consumer-ready foods and increased convenience in delivery. After gaining and building on consumer confidence in food safety, the Irish industry then can move up the chain on international markets, according to IBEC.

The industry has been getting this message for years, but not always acting on it due largely to the fact that the domestic market was so small and, until the 1990s boom, it was unable to afford the kind of products it should have been developing.

Mr Ciaran Fitzgerald, director of the Food and Drink Federation of IBEC, at the launch of its food industry review yesterday, said every food company was now looking at the issue in some way. He said that, while we exported huge quantities of butter, cheese and beef in commodity form, we should be looking at how other countries, notably the US, now were using these products in the high-value fast food industry.

Food and drink remain Ireland's most important domestic industries employing 47,000 people and accounting for more than 10 per cent of exports. The outlook for beef - 90 per cent of which is exported - in the medium term is "less than inspiring". Pigmeat, which has no EU supports, could expand its current production base if the processing sector remained cost-effective and maintained the necessary scale of production. Dairy production - again almost 80 per cent is exported and 60 per cent is in butter and skim milk powder which are EU supported - remains vulnerable to medium-term reductions in EU price supports.