EACH year more than £4 billion worth of food and drink leaves Irish ports for world markets. In all, Irish goods find their way to 100 countries worldwide. But those figures hide one major reality.

Despite the undoubted success of the food and drinks sector, the UK remains by far the largest single market. In 1993, the most recent year for which official trade statistics are available, Irish food exports to the UK were worth close to £1.5 billion or 35 per cent of total exports.

Meat and dairy products account for about half of the trade but the UK is also particularly important for cereal, fruit, vegetables and confectionery exports. In fact, in the food area, only France exports more produce to Britain than Ireland.

The beef trade, which has tied, itself to long term contracts to the British multiple stores where one steak in four is Irish, has been taking a terrible hammering.

Many of the country's largest beef export plants are on short time, laying off staff in an effort to cut costs to service markets which were profitable when the pound was only worth 95p sterling.

Mr John Smith, of the Irish Meat Processors Association, says that Irish export plants could still do business at a rate of 97p to sterling but they find great difficulty operating at current levels.

"Our plants have had a very bad year. In fact, not one of them had a full week's work in 1995 and there has been on a lot of short time working," he said.

Mr Smith said the sterling crisis, with falling consumption in Britain, is creating a very serious problem for the industry in relation to the UK market.

There has, he says, been no investment in beef processing facilities in the past year but some Irish companies have purchased" plants and are now operating in the UK.

British farmers, for the first time in decades, are now discovering the benefits of having a weak currency for export purposes. Over 1995, British sheep exporters managed to win a large part of the French lamb market from the Irish, a trade worth £80 million.

Nowhere is the impact of the sterling weakness more visible than in Co Monaghan, home of, the Irish mushroom industry. For the last five years, Monaghan mushroom farmers had over 20 per cent of the British mushroom market. Of greater importance, the Irish industry controlled nearly 45 per cent of the UK multiple market.

Now, drive along any of the roads in the north of the county and you can see the empty Plastic tunnels, sometimes flapping in the wind, a pathetic symbol of a what is happening and perhaps a demonstration of what is to come.

According to Mr Michael Neary of Bord Gias, the Irish Horticulture Board, the industry is facing grave problems because each lp sterling decrease against the pound puts an additional 0.6p, cost per pound weight on Irish mushrooms in the UK.

"Just over 70 per cent of the total mushroom production in Ireland, which is now worth £59 million, is going straight into the British market and it has been a major success story," he said.

"But, with the weakness in sterling, there is a grave problem with the market. There is only so much we can do to prune production costs and still retain quality. The growers are suffering," he added.

He said that the sterling weakness could not have come at a worse time for the 550 growers and 5,000 workers involved in, the industry which for the first time saw production units in every county in the Republic.

In its report entitled Competitiveness with the UK published by the food sector of the Irish Business and Employers Confederation last October, the stark realities of the problem were clearly outlined.

"Despite a lower Irish inflation performance, currency changes meant that Irish goods are now 4 per cent dearer in sterling terms than they were three years ago.

"In today's competitive environment, such a movement in relative costs will inevitably affect investment location decisions and employment," said the report.

Recently, Mr John Tyrell, director general of the Irish Cooperative Organisation Society, which looks after the interests of over 100 co operatives, some of them the largest companies in the country, said he was already aware of decisions having been made not to invest in the Republic.

While he does not specify which companies are involved, it is understood that one large Munster based co operative has decided to expand its Northern Ireland processing facility rather than expand at its home base.

His solution to the current crisis is similar to the demand from IBEC and in a Budget submission, ICOS sought a lowering of manufacturing costs in the Republic.

These included a reduction of employers PRSI to the UK level of 7.2 per cent and a reduction of both corporation and income tax to make the Irish companies more competitive.

IBEC also sought reduced transport costs on the southern Irish, Sea routs, a speeding up of investment in transport infrastructure, and reductions in uncompetitive Irish energy and telecommunications charges via an independent regulator.