Private Members' Business. - EC Proposals on Agriculture: Motion (Resumed).

Wednesday, 5 February 1992

Dáil Éireann Debate
Vol. 415 No. 4

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The following motion was moved by Deputy Deasy on Tuesday, 4 February 1991:

That Dáil Éireann, mindful of the importance of agriculture to the Irish economy in terms of farm incomes, employment in associated industries and exports, totally rejects the proposals of the EC Commission on Agriculture which, if implemented, would seriously erode our benefits from the Common Agricultural Policy, and which, taken in conjunction with the trend of the GATT negotiations, would seriously damage the nation's economy.

Debate resumed on amendment No. 1:

[1282] To delete all words after “That” and substitute the following:

“Dáil Éireann supports the efforts of the Minister for Agriculture and Food to secure an outcome from the current negotiations on reform of the Common Agricultural Policy and in the GATT which responds to the needs of Irish farmers and the longer-term development of our agriculture industry and to the overall needs of the economy”.

Mr. Kavanagh: Information on Liam Kavanagh  Zoom on Liam Kavanagh  With the permission of the House I would like to give most of the balance of my time to my colleague, Deputy Moynihan.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Is that satisfactory? Agreed.

Mr. Kavanagh: Information on Liam Kavanagh  Zoom on Liam Kavanagh  Last night we got the impression from the Minister that he is doing his best to persuade the Commission and the Council of Ministers that the present Common Agricultural Policy proposals would be detrimental to Irish agriculture and to the Irish family farm. In his speech the Minister said:

I have left nobody in any doubt that I cannot accept the Commission's proposals as they stand. As far as I am concerned major changes will have to be introduced in several areas before the proposals begin to approach acceptability.

That is in line with the views of all Members. Later the Minister said: “Our approach to Common Agricultural Policy reform is a reasonable one and I am certain from numerous bilateral contacts with my colleagues in the Council that we can rely on their understanding based on the principle of Community solidarity.” That indicated clearly to this House that the new Minister for Agriculture and Food is emphasising to the Council of Ministers and the Commission the serious plight for Ireland should the Commission's proposals be passed without reform.

[1283] Today I received through the post, as did every other Deputy the Commission's press release, The Week in Europe, dated 31 January. In referring to Common Agricultural Policy reform the document states:

EC Agricultural Ministers met only briefly in the Council on Monday and spent the rest of their time in bilateral talks on the prospects for Common Agricultural Policy reform and its significance for the GATT talks. The outcome of these bilateral meetings was that a substantial majority of Ministers agreed with the Presidency and the Commission viewpoint that Common Agricultural Policy reform is imperative and urgent and that the discussions should neither be delayed nor influenced by external factors i.e. GATT.

Will the Minister of State in his contribution tonight clear up the ambiguity? The Minister clearly stated that he is changing minds to the Irish position on Common Agricultural Policy reform while the Commission document states that the majority of Ministers wish to see a conclusion of this matter on the basis of the Commission proposals. It is necessary that we have clarity on the position of the Government and the Community on this matter. I hope the Minister will clear up the ambiguity created by the contradiction between the press release from the European Community and his statement to the House last night.

The Labour Party will be supporting the Fine Gael motion because we do not believe that the talks in progress are any different from those that have been going on for the last year. We are very unsure as to how the Government are handling this matter and therefore this House should support the proposals as set out in the Fine Gael motion.

Mr. Moynihan: Information on Michael Moynihan  Zoom on Michael Moynihan  I am pleased to have the opportunity of speaking on this Private Members' motion. I would like to refer to the serious plight of those engaged in agriculture, especially the small family farmers in disadvantaged [1284] and severely handicapped areas who have been greatly affected by the virtual collapse of the milk quota system and the reduction in milk and cattle prices. The three reports issued in 1991 by the ESRI, the NESC and the Conference of Major Religious Superiors, were unanimous that the second highest section of Irish people living below the poverty line were the small farmers, especially those in the dairy sector. These are people with a proud and independent tradition, and to be considered, in three important reports, as people living in poverty does no justice to them.

Reductions in farm incomes throughout the Community are set on a global basis at 22 per cent, but they can be as high as 40 to 45 per cent over a two year period in the case of small farmers. It is accepted by farming organisations and others that our peripheral location adds substantially to the reduction in incomes.

The Taoiseach, and the Government must take a firm stand to ensure that the living standards of the farming community are not further eroded. Will the Government invoke the veto in such a serious matter of national interest? Why do the Government not seek protection for Irish agriculture under section 39 of the Treaty of Rome which clearly states that any changes in the Common Agricultural Policy should impact equally on all regions? It is accepted that the Common Agricultural Policy proposals as announced will impact more severely on the less favoured regions, and this is in contravention with what was agreed in the Treaty of Rome.

The disadvantaged areas are being sacrificed for the benefit of the large commercialised farmers. Unless this policy changes rapidly vast areas of rural Ireland will be covered with forests, with a dwindling population, closed schools and churches and a decline in voluntary and sporting organisations. While we welcome forestry development — parts of Ireland have been recognised as suitable for forestry — the decision to provide higher grants for forestry is an adverse one. Most of the land which is suitable for forestry was once mountainous land [1285] and bogland but substantial amounts of taxpayers money were used to reclaim it, making it excellent agricultural land. Dairy farming contributed to the wealth of many of the farmers on this land, particularly in the west. However, the cow is now to be replaced by the tree, and many farmers will have to leave the land. If the small farming community with its proud traditions is to be preserved in the west, firm action is needed. Many people, including bishops, community leaders and others, say that unless action is taken the end is in sight. I urge the Minister, the Taoiseach and the Government to ensure that the decline resulting from the MacSharry proposals is arrested so that hope may be restored to the community, because they are without hope at present.

Minister of State at the Department of Agriculture and Food (Mr. Kirk): Information on Seamus Kirk  Zoom on Seamus Kirk  Sir, I propose with the permission of the House to share my time with Deputy Clohessy.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Is that agreed? Agreed.

Mr. Kirk: Information on Seamus Kirk  Zoom on Seamus Kirk  The Common Agricultural Policy reform and GATT negotiations have been debated here on a number of occasions — most recently in November last. I do not propose, therefore, to go into the detail of the background to those negotiations. I would like to pick up on a few points made by Deputies in this debate but before doing so I propose to address the motion directly and to say a few words on my area of responsibility — horticulture. Although the negotiations will have less direct impact on horticulture, no area of the agriculture industry will be totally unaffected by the Common Agricultural Policy and GATT negotiations. In relation to the motion, the importance of agriculture and its associated industries to the Irish economy goes without question. We all know and appreciate the vital contribution from the sector in terms of output, employment and exports.

Reform of the Common Agricultural Policy has been signalled for quite some [1286] time. Continued increases in Community expenditure and growing structural surpluses cannot be allowed continue indefinitely, particularly in a situation where the benefits in terms of the development of farm incomes are minimal. A more effective way to support farm incomes has to be found. The only realistic alternative to some shift from the current market price supports is a continuation of those supports but at increasingly reducing levels, that is continued reductions in prices and quotas but with no compensation. Everybody loses in that scenario.

Acceptance of the need for reform is not the same as accepting any methodology and in particular the methodology proposed by the Commission. Let me say at the outset that the Commission proposals give rise to serious difficulties and they are not acceptable in their present format. For a start, there is too great a movement in the proposals from market price supports to direct income payments and that movement is to take place at too rapid a pace. Effective price supports must be maintained even at somewhat lower levels than at present. Compensation must be made available to counteract the lower price levels and such compensation must have the same permanency as the existing price support mechanisms. It is an essential point for us that adequate financial resources must be made available to underpin whatever new arrangements are agreed.

However, it is important that at this critical time we in Ireland do not adopt an unnecessarily pessimistic attitude towards the process of Common Agricultural Policy reform. What we have to decide is what we want to achieve in these negotiations. In general terms we want a reformed Common Agricultural Policy which will deliver a higher percentage of EC expenditure into the pockets of farmers. At the same time we must ensure that all types of family farms are protected and given a reasonable opportunity of a secure future in farming. Of prime importance must be the preservation of the maximum possible [1287] number of farmers in the rural community. Otherwise, meaningful rural development will be impossible. The smaller farmer must be given the opportunity to improve his income position and the larger farmer must be allowed to remain competitive on the European and world markets. In addition, our agriculture based industries must be allowed to develop and to maintain their very important contribution to our economy. These, then, are our general aims but obviously the achievement of these has to be through the reforms in the various sectors.

The dairying, beef, sheepmeat and cereals sectors are all directly affected by the proposals. The accompanying measures involving an improved early retirement scheme, increased aid for afforestation and the encouragement of environmentally friendly farming practices are also of considerable importance. I would like to deal briefly with each of these sectors.

The beef sector is of central economic importance to agriculture in Ireland. Beef production accounts for almost 40 per cent of our agricultural output, with cattle and beef exports accounting for almost 10 per cent of Irish export earnings. Practically every Irish farmer is involved in one way or another in beef production and the employment provided in rural communities by the sector is vital to their well-being. No other agricultural sector in any other member state of the Community is of equivalent importance.

The Irish beef sector is distinctly different from that in the remainder of the EC in two particular ways. Because of our small domestic market 85 per cent of production has to be exported. Secondly, most of our production is extensive and grass based. Of prime importance for us, therefore, is an ability to continue to export beef and to ensure that the competitiveness of our grass based product is maintained. The premia arrangements must fully compensate grass based producers for price reductions and intervention must be retained in a format [1288] which continues to support agreed price levels. The House can be assured that the Minister has made and will continue to make these demands to his colleagues both in the Council and at bilateral meetings.

Under the EC Commission proposals, extensive beef producers would be compensated for price reductions by increased direct income payments, that is the beef and suckler premia. Obviously action will have to be taken to maintain the competitiveness of beef with other meats if cereals prices are reduced. Nevertheless it is important that the market continues to provide the main source of farm income. The premium system will obviously become more important after reform and it must be operated in such a way that producers generally benefit in full and more realistic stocking rates and farm limits must be provided for.

Another matter of concern to us in relation to beef in particular, but also to other products, is the effect imports have on Community markets. Such imports can undermine any attempts to achieve a better balance in the beef market. We have seen this in the recent past, particularly the effects which illegal imports can have. At the very least legal imports of cattle and beef must be held at existing levels and illegal imports must be stamped out.

In the dairying sector we have had milk quotas since 1984 in an effort to bring balance to markets. Markets are now improving following the 2 per cent quota cut in last year's price fixing and intervention stocks of skim milk powder and butter have been reduced considerably in the past six months. In our view there is no need at this time for the further quota cut of 4 per cent proposed by the Commission. This is particularly so when all the other major dairy producing countries have failed to match the supply restraint which the Community has been undertaking for several years. What we are seeking in the negotiations in relation to milk quotas is that existing quotas be operated in a more flexible manner to cater for the needs of new entrants and to [1289] facilitate structural development. There are stocking rate problems with the compensatory premia for milk producers, similar to those in the beef sector.

As regards sheepmeat, the regime was reformed as recently as 1989 and, in fact, the last elements of that reform, the termination of the variable premium and the clawback payments in the UK, only took place in the past month. It is entirely premature, therefore, to institute a further reform until the effects of the last one can be properly assessed.

The cereals sector is central to the overall reform package since reductions in price in the livestock sector are, in part, related to the effect which the reductions in cereal prices would have on feed costs. Besides the knock-on effects for the livestock sector we are also concerned at the level of price reductions for our cereal growers. We would prefer that the problems in this sector be dealt with by means of supply control measures of a voluntary nature and with a lesser and more gradual price cut. There is also the question of rebalancing but that is a matter to be achieved in the context of the Uruguay Round.

Agriculture is also a central element in the international negotiations in the GATT which have now entered a critical phase. The Director-General of the GATT, Mr. Dunkel, recently presented draft framework agreements in all areas of the negotiations, including agriculture, in an effort to break the logjam and to conclude the negotiations at an early date.

These proposals which were outlined by the Minister, Deputy Woods, already would be extremely damaging to the Community. The result would be a considerable drop in the level of Community exports and an increase in imports into Community markets. This would have the most serious consequences for internal prices, far in excess of the 20 per cent proposed by Mr. Dunkel, and would create major difficulties not alone for the farming Community but also for the economy, the well-being of which is directly related to the well-being of the [1290] agricultural sector. Meanwhile our trading partners would be well placed to take over existing Community markets and producers would not even benefit from the anticipated increase in world prices which would normally follow such large support reductions.

The Council has unambiguously rejected the Dunkel approach and said it must be modified. It has also called for a genuine effort from major trading partners, especially Japan and the US, who would escape relatively unscathed, to ensure mutual advantages and benefits to all participants. Mr. Dunkel has set a new deadline of mid-April for the conclusion of the talks. The prospects for meeting this deadline will depend on how far other parties are willing to go to meet the Community's fundamental requirements. The omens are not good in the US, where all parties are gearing up for the Presidential and other elections. Events over the next few weeks will tell whether the talks can be concluded or whether a later date will be set when participants are freer to negotiate a reasonable agreement.

Ireland's priorities in the negotiations are to avoid excessive commitments and to ensure that any commitments are realistic, coherent and balanced and will safeguard the basic mechanisms of the Common Agricultural Policy. It is essential that whatever compensatory measures are agreed under Common Agricultural Policy reform existing structural and disadvantaged areas payments can be accommodated in the “green box”. We will also be seeking credit for reform measures undertaken since the beginning of the negotiations.

In both of these important negotiations the Government have been conscious of the need to maintain the fullest backing of all of the interest groups in the agriculture area. Even before the Commission launched its Common Agricultural Policy reform discussion paper in February 1991 the Government had committed themselves in the Programme for Economic and Social Progress to entering into discussions with the various organisations on the approach to [1291] be adopted to the Commission's proposals and to maintaining close contact with them as the negotiations on Common Agricultural Policy reform and the GATT developed. This has been done through the consultative mechanisms established under the Programme for Economic and Social Progress and the various Programme for Economic and Social Progress partners have regular opportunity to express their views on the major issues involved in both sets of negotiations.

In addition, the Minister for Agriculture and Food set up a forum in October 1988 to ensure that Irish agricultural and food interests were kept fully informed of GATT developments and were provided with a platform on which to put forward their views on the ongoing negotiations. The group consists of representatives of the Department, the main farming organisation, the agriculture and food industry and the faculty of agricultural economics, UCD. This group meet on a regular basis.

In relation to my own area of responsibility, I am happy to say that the horticultural sector continued to show significant progress in 1991.

The mushroom sector in particular continued its excellent performance. In collaboration with the other State agencies involved, an in-depth study of the industry was commissioned by An Bord Glas with a view to the preparation of a further development plan. The industry has expanded rapidly over the past three years but nevertheless can be expected to face continuing stiff competition in the UK market. Based on the study, a strategy has to be put in place to chart its further development. With a view to maintaining and improving the high standards in the industry, An Bord Glas sponsored the Mushroom Grower of the Year competition in 1991 and continued their policy of co-ordinating the efforts of the State agencies and commercial interests regarding investment in the industry.

One of the highlights of 1991 was the successful hosting of the thirteenth International Mushroom Congress in Dublin. [1292] This is a prestigious international event, with delegates attending from all over the world. It was an opportunity to demonstrate that Ireland has a highly developed and efficient mushroom industry and, in general, should lead to increased opportunities for Irish mushrooms in the marketplace.

In the potato sector further progress can be reported. Producers are showing continuing interest in forming producer groups and are continuing their efforts to ensure a more co-ordinated approach to production and marketing. The number of applications for grants under FEOGA and the Operational Programme for Rural Development is encouraging, particularly as regards the provision of storage facilities.

Returns to tomato growers improved in 1991 as compared to the previous year. An Bord Glas have continued their efforts to improve marketing. The tomato quality monitoring programme introduced in 1990 was continued in 1991. In the first year of the programme the results showed that in general the quality of Irish tomatoes was as good as the competing product. This high standard was maintained in 1991.

The nursery stock sector continues to perform well. The volume of exports has increased from £1.7 million in 1987 to an estimated £2 million last year. An Bord Glas has continued to provide assistance to develop group marketing as well as to individual projects. In 1991 An Bord ran the garden centre awards scheme, which was highly successful.

I would like particularly to refer to an important development in collaboration between producers and An Bord Glas. I recently announced that following discussion between An Bord Glas and the IFA a national horticulture organiser would be appointed by the IFA. The work of this organiser will be to encourage horticulture growers to join producer groups or other groupings of producers. The objective of these groups is to encourage producers to organise their marketing through large and professionally managed structures. An Bord Glas will be contributing to the cost of [1293] the new appointment for the first two years.

Much progress has been made in horticulture in recent years. The various grant schemes under the Operational Programme for Rural Development and FEOGA have been particularly successful in stimulating investment in much-needed potato storage as well as in general horticulture projects. There is already in place a marketing co-ordinator for potatoes, who is making a valuable contribution to the development of the industry.

I should now like to respond to some points which were raised in last evening's debate. The first matter I should like to address relates to access for our cattle and beef to Middle East and North African markets. This country has long experience of trading in these markets through difficult times. I am pleased to see that exports to countries such as Egypt, Saudi Arabia and the Gulf states increased in 1991. This year prospects are even better. There are many hopeful signs. On Iran, commercial negotiations for the sale of beef are under way between Irish sellers and Iranian buyers. I wish them well. This trade will build on the better understanding achieved between Ireland and the Islamic Republic of Iran after a year's negotiations. Libya has been an important market in the past. I am pleased that the way is now clear for exports of beef and milk products. There are good prospects of the cattle trade resuming later this year. In relation to other North Africa countries prospects are also good. Exports to Morocco have resumed and following an Algerian visit to Ireland this January a veterinary protocol between the two countries is planned, which will facilitate trade.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  I thought that they were to start immediately.

Mr. Kirk: Information on Seamus Kirk  Zoom on Seamus Kirk  In relation to disadvantaged area payments, 80 per cent of participants were paid their full entitlements in 1991. This is in line with previous years. While it had been hoped that an even higher number of applicants would have [1294] received their payments in 1991, I consider that the number of payments made was quite a good performance, particularly in view of the extra work that arose from the extension of the disadvantaged areas and the reclassification of some existing areas.

Mr. Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  That is not what the farmers think.

Mr. Kirk: Information on Seamus Kirk  Zoom on Seamus Kirk  I am happy to say that the amount provided in the 1992 Estimates, £95 million, is an increase of £12.5 million on the figure for 1991. In addition, the Minister for Finance announced in the budget that a further £2 million would be provided for 1992.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  But he did not mention the £12 million that was promised but has not been given.

Mr. Kirk: Information on Seamus Kirk  Zoom on Seamus Kirk  These increases will allow higher rates of headage payments to farmers in 1992.

The need for Common Agricultural Policy reform is accepted by all. The GATT negotiations are on a world scale and we cannot dissociate ourselves from them. We have to get in there and fight. There is a lot we can achieve in the negotiations which will benefit our agricultural industry. We can gain nothing by standing back and saying that we do not want to know. The position we have taken in both sets of negotiations is the correct one. It is backed by the farming organisations, and the Minister's position would be strengthened even more if this House were to give unanimous approval to that position. I would therefore ask the House to be positive and support the amendment to that motion expressing support for the Minister's stance in the negotiations.

Mr. Clohessy: Information on Peadar Clohessy  Zoom on Peadar Clohessy  The Progressive Democrats welcome the opportunity for the House to again underline our concerns about the proposals being put forward for reform of the Common Agricultural Policy. The repeated attention that has been given to this matter by both Houses [1295] of the Oireachtas underlines the seriousness of the issue to this country.

It is worth repeating some of the relevant figures to remind ourselves to the exact nature of the problems we are facing. For every single £ of net exports from this country, 40 pence is accounted for by agricultural exports. In terms of gross national product, agriculture is three to four times more important to Ireland than is the case in other EC countries. A higher proportion of our population work in agriculture than is the case in the rest of the Community. These are just some of the figures which must inform any debate on changes in agricultural policy affecting this country.

There has been a tendency here to view agriculture distinctly from the rest of the economy. That is a mistaken approach. Agriculture is not only a key factor in our economic performance, it is one of the key factors. If our agricultural base suffers, the entire country will suffer. This point was clearly evident before Christmas when SIPTU organised a special conference on Common Agricultural Policy reform attended by the IFA and Teagasc, amongst others, which demonstrated serious concern among the social partners at the possible consequences of damaging changes in Common Agricultural Policy practice and the threat, in particular, to thousands of jobs involed in the food processing sector.

These are some of the figures which should inform our response to changes in the Common Agricultural Policy but they should not blind us to the case for reform. Everyone accepts that there is a pressing need for reform in Europe's agricultural policy. Even in this country, we can see the failures and shortcomings of existing policy — butter, milk and grain mountains growing by the hour, side by side with falling incomes, increased numbers fleeing the land growing disincentives to young farmers entering the industry. The question, therefore, is not whether or not we should proceed with reform but what should be the nature of the reform which [1296] we pursue and what vital interests should we seek to protect.

Our focus in this debate must be twofold. On the one hand, we must seek to ensure adequate compensation for any impact which changes may entail for the poorest sector of the agriculture community. This is more than just a matter of simple compensation. Anyone familiar with Irish agriculture will be aware of the appalling poverty in which many farm families are forced to live. Recent years with falling incomes and rising costs have been particularly difficult. Merely compensating these people with one form of poverty for another is insufficient. Equally we must ensure that any proposals to redress these difficulties do not undermine the vital commercial sector.

It has been a national priority for the last number of years to promote a market-orientated focus in Irish agriculture. Already this policy has had a substantial beneficial effect on the food processing industry in particular. This industry accounts for almost one-third of the gross output of all manufacturing industry in Ireland, almost 30 per cent of the employment of Irish-owned manufacturing firms and over 20 per cent of total manufacturing employment. Over the last 15 years Irish farmers have invested over £4 billion towards the creation of a profitable commercial sector. This must not now be jeopardised.

The greater danger, perhaps, in these reform discussions is that they will throw out the baby with the bathwater and confuse damaging our commercial sector with an unsatisfactory response to a serious social problem.

I am glad to see that in the recently published, excellent, report on Irish industrial policy by Jim Culliton and his expert colleagues, the need to focus efforts on building and strengthening this commercial sector has been fully recognised and encouraged.

Obviously this whole debate is taking place against the background of the ongoing GATT discussions and it is impossible to discuss one without referring to the other. Many strong words have been voiced on the whole question [1297] of supports and price aids since discussions began on this latest GATT round. I take issue particularly with the assertion that the Community in some way gives a unique degree of assistance to its farmers compared to other countries. The average figure for producer subsidies in the OECD is 44 per cent of the value of output. In the Community that figure is approximately 48 per cent. In other countries, such as Finland and Japan, the relevant figure is 72 per cent and 68 per cent respectively.

Irish agriculture is at a crossroads. The result of the current negotiations on Common Agricultural Policy reform and the re-negotiation of GATT will have a crucial bearing on the future development of the industry in Ireland and, inevitably, on the wider Irish economy. All sides must unite and show their support for Ireland's constructive approach to this debate and help ensure the best results possible for the country.

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  I would like to share my time with Deputy Connaughton.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Is that satisfactory? Agreed.

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  This is the third or fourth occasion on which the House has debated the proposed changes in the Common Agricultural Policy but there is little evidence of any advancement in thinking on the matter. There seems to be total refusal to face the reality that the Common Agricultural Policy, as we know it, is dead. This is reflected in the motion from Fine Gael which simply criticises the proposed changes, offers no alternatives and, by implication, calls for more of the same.

There is no doubt that the consequences of the package of reforms now under consideration will be very serious for Irish agriculture. On the other hand, the consequences of not facing up to the need for fundamental reform of the Common Agricultural Policy will be even more serious — not just for agriculture, but for the Irish economy and the entire European Community.

[1298] Everyone recognises the importance of agriculture to the Irish economy, but we are also a trading nation, with rapidly expanding exports, of which agricultural products are just one part. For instance, between January and November 1991, our total exports were valued at £13,818 million, but food and live animals accounted for just £2,808 million or just over 20 per cent. We need to defend and develop our agriculture and food industry, but we must make sure that nothing is done which will jeopardise our ability to trade in other products. Therefore, we have a particular interest in ensuring that the GATT talks which are dragging on and on are concluded and an acceptable agreement reached.

The Workers' Party have been pointing out for several years now that the writing was on the wall for the Common Agricultural Policy and it was time to look for alternative structures for agriculture, yet successive Governments and the main farming organisations have failed to face up to reality and have tried to fight a losing battle to preserve Common Agricultural Policy spending at its current level. Commissioner MacSharry has shown that he is prepared to bite the bullet. We have to face up to that. Vague aspirational motions passed by this House are not going to deflect the European Community from reforming the policy.

As I have said on many occasions, a farming policy which produces goods for which there is no market, which adds up to £15 per week to consumers' food bills, which consumes up to 60 per cent of the entire EC budget and which allows 80 per cent of all price supports to go to the top 20 per cent income bracket, has no future and is not worth fighting for.

Whatever about the theory, the intervention system in practice is simply unacceptable. If there was a long established industry in this country, employing thousands of workers producing, for instance, cars and there was no longer a market for that type of car, and in order to protect the jobs of the workers the Government or the EC decided to buy up the surplus cars, and so many cars had to be [1299] bought that the country ran out of storage space for the cars and had to hire ships to store them offshore, just imagine the outcry there would be over the waste of public money. I have no doubt that Fine Gael would be leading the demands to halt this wasteful practice.

Yet this is the story of Irish agriculture after almost 20 years of EC membership. There were no more enthusiastic advocates of Irish membership of the EC than the farming organisations, who promised that the whole country would benefit from the access of Irish agriculture to Common Agricultural Policy funds. Almost two decades later, despite the very substantial transfer of funds, the agriculture sector's net contribution to GNP remains unchanged; the numbers obtaining a living from farming have declined by 40 per cent and the number at work in the food industry has declined by nearly one-third — from 46,000 to 33,000.

Ireland accounts for only a very small proportion of total Community agricultural production, but is one of the biggest users of the intervention system. At the middle of last year, this country accounted for almost 40 per cent of total skim milk powder held in intervention by the Community. We produce only about 5 per cent of the Community's butter but account for around 30 per cent of intervention stocks. Almost 25 per cent of total beef held in intervention is Irish. We have the totally immoral spectacle of families — farming families among them — being unable to put adequate food on the table for their children, while two South American ships had to be chartered and anchored in Cork harbour with tens of thousands of tonnes of butter deteriorating in their holds.

On 17 December last the Minister for Agriculture gave my colleague, Deputy McCartan, some details of the incredible quantities of food being held in intervention. There was, he said, 137,583 tonnes of butter at value of £127.5 million, 185,756 tonnes of skim milk powder at a value of £139.2 million and 196,924 [1300] tonnes of beef at a value of £268.5 million, giving a total of £535 million. According to the Summary of Public Expenditure Programme for 1991, a total of £85 million had to be allocated in 1991 for storage, freezing and transport of intervention products, representing a 34 per cent increase over the previous year. This was almost three times the total amount allocated for the Teagasc budget.

This is, of course, a Community-wide problem. There are other products in intervention in the other EC countries, in respect of which Ireland accounts for very little, such as cereals, and others such as wine, pigmeat, tobacco and olive oil, in respect of which we do not feature at all.

Any agricultural policy whether at national or Community level, should be assessed on how it measures up to the following objectives: to provide a good quality, varied and adequate supply of food as cheaply as possible; to enable the land to provide the maximum number of families possible with decent incomes and to increase its overall contribution to the economy, in terms of income generated and employment created; to do so in a manner that preserves, so far as is practicable, the environment and ensures that the countryside is preserved as a leisure resource available to the entire community; to take account of the need to support the development of the Third World economies, for whom agricultural production and exports is of such importance; and to provide raw material of sufficient quality, quantity and regular availability as is necessary to maximise the efficiency and potential for development of downstream industries in processing, marketing etc.

The reality of the Common Agricultural Policy is very different. It costs a fortune to run up to 60 per cent of the entire Community's budget, almost £25 billion in 1991. Its complicated structure invites waste, inefficiency and fraud. In 1989 it cost something approaching £2.5 billion simply to store intervention stocks and the value of those stocks depreciated by £1.8 billion over the year. It takes an army of civil servants, inspectors and [1301] other unnecessary bureaucrats to operate, manage and police it.

It is estimated that increased food prices and additional taxes cost the average family around £700 per year. Much of the Common Agricultural Policy spending is absorbed by various commodity traders and other `middlemen'. Of what goes to farmers, 80 per cent goes to the top 20 per cent.

The obvious waste and huge cost of the Common Agricultural Policy has been successfully used, particularly by the UK, to block the development of other common policies by the Community in areas where they are clearly necessary. In any event, it leaves little of the Community budget for anything else.

It is estimated that the EC support prices are 20 per cent higher than they need to be in order to keep efficient farmers in business. In theory they are subsidised by this additional amount in order “to protect the incomes of the smaller farmers.” However, since it is a subsidy to production, the most efficient benefit disproportionately and, year by year, farmers get fewer and farms get bigger. Thus, while average farm income and the real gross income of the industry falls, that of the most efficient usually increases and consequently what was supposed to have been an exercise in “social solidarity” has actually seen a further widening of the income gap between large farmers and small landholders. Several studies have actually shown that the Common Agricultural Policy is a much less efficient mechanism for getting subsidies to their targets than either the Regional or Social Funds.

Finally, the drive for increased intensive production provoked by the Common Agricultural Policy has been doubly damaging to the environment, because of the consumption of resources and the pollution caused by waste.

While there are many details which still need to be clarified, the main drift of the MacSharry proposals seems to be a step in the right direction providing as it does a step away from incentives to overproduction, chiefly by the big producers, [1302] and towards targeting spending on smaller and poorer producers. What seems to have been overlooked is that the MacSharry plan actually provides for a substantial increase in Common Agricultural Policy spending, bringing it up from around £26 billion to around £30 billion. What reasonable person can object to more money being spent and more efficiently targeted, especially when it is likely to lead to cheaper prices for consumers and less wasteful production?

The proposals for direct income support, rather than subsidies on production, are particularly welcome and should be of real value to the smaller farmers who need them most. We must ensure that the overall level of EC support for Irish agriculture is maintained to at least existing levels, so that the overall Irish economy will be cushioned against the immediate effects of the proposals.

The MacSharry proposals are only part of what must be an ongoing process of reassessment of agricultural policy at both EC and national level. In many respects the problems of agriculture are similar to the overall problems of the peripheral regions. The problems must be approached in a similar way. Direct payments to smaller farmers can only be a temporary arrangement, and neither is there any long term value in protecting low paying, inefficient industries.

The existing Structural Funds must be retained, although to do their job properly the funds available need to be substantially increased. Any decrease in Common Agricultural Policy spending in Ireland in the longer term must be compensated for by an increase in Structural Funds. There must be a shift away from intensive production in favour of organic methods of production. The demand for organic food products is likely to continue to grow, and such a shift could be particularly beneficial to Irish agriculture and other less developed regions of the Community.

At home the priority for national agricultural policy must be to put the country's agricultural resources to their most productive possible use. There is a need for a comprehensive plan to work [1303] toward this objective. This plan should identify smaller farmers with development potential and provide these with the means to reach this potential. Small farmers who do not wish to expand, but wish to remain in agriculture, should be encouraged to diversify into new areas such as forestry and agri-tourism. Farmers who do not see a future in farming should be allowed to retire in dignity or move into new careers, with their land being reallocated to developing farmers, through sale or lease.

As I pointed out earlier, there is a strong case for diverting much of the Common Agricultural Policy funding which currently goes to bigger farms into the EC's Structural Funds, with the specific aim of creating new job opportunities in rural areas for those wishing to diversify or move out of farming.

The ultimate aim of agricultural policy should be the creation of a corps of commercial farms which can compete successfully in an open market resulting from reduced Common Agricultural Policy funding. Such farms should be capable of affording their owners a reasonable living standard while supplying food to consumers at reasonable prices.

We need a farm population more committed to the long term development of Irish food products. We can no longer afford an industry happy to feed animals on summer grass, selling into intervention in the autumn. Agricultural policy needs to be aimed at developing a farmer-controlled meat processing sector.

Irish farming has been badly served by successive Goverments since the foundation of the State. We must remember that the Department advised farmers to continue their practice of traditional milk production, with a high level of output in summer and a very much reduced level of output in the winter months, which pattern of milk production prevented a genuine development of markets for more valuable, saleable short-life milk products. The conversion of milk into long-life products, much in over-supply [1304] in all markets, meant that Irish milk products were not alone sold at the lowest market price but, to a considerable extent also, below at intervention price.

I contend our agricultural community can have a prosperous future within the context of a more European-wide market. We have a basic advantage in relation to our size, climate and, above all, our reputation of having a clean environment. Many additional off-farm jobs can be created, founded on an efficient farming sector. However, these goals will not be achieved if the various elements are left to their devices. There is need for dynamic political and developmental leadership on the part of the State to get things moving, eliminate the chaff, create a sense of unity and purpose under a programme of reorganisation and reform, resulting in a better future for all of us.

An Leas-Cheann Comhairle: Information on James C. Tunney  Zoom on James C. Tunney  Deputy Connaughton must tailor his comments to finish at 8.05 p.m.

Mr. Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  I thank Deputy Sherlock for affording me an opportunity to contribute to this debate.

There must be a consistent, sustained campaign to resist the American ploy to omit from the GATT any binding arrangements for the payment of adequate compensation to European farmers. It would be totally repugnant to every farmer in Europe, particularly those in Ireland, to have a reformed Common Agricultural Policy in place, with compensation rates agreed, only to discover the United States scuttling the GATT talks on account of those same compensatory payments.

Our Government must initiate discussions within the EC to build up a strong lobby against current stocking rate proposals. I have not sufficient time to comment on the overall European scene except to say that I regard the stocking restrictions as absolutely penal. Indeed Commissioner MacSharry's recent strong defence of these proposals sent shivers down the backs of our agricultural community because, if implemented, those [1305] proposals would pressure good small farmers, indeed all farmers, with average to good stocking rates into actually selling stock before they become eligible for EC compensatory payments, which cannot be good for Irish agriculture.

Commissioner MacSharry's intentions may have been honourable since the new proposals would disqualify factory-type farming activities, that have become part and parcel of the European scene, from receiving compensation. However, within the Irish context, this cure could kill the patient. It is the problem with which we are confronted.

I want to make some comments about a few crazy domestic features within agriculture. The Department should cop-on to themselves with regard to the recent decision that all farmers must supply a tax number in order to render themselves eligible for headage grants. I want to make it absolutely clear that I am not against farmers paying income tax; that is the law and they should do so. However, there is no sense whatsoever in asking small farmers to bear the cost of paying an accountant to convince the Revenue Commissioners they had no taxable income in the first place. That cannot make sense. The proposed system is so crazy 13,000 of our farmers currently in receipt of small farmers' dole, having already convinced the Department of Social Welfare they were below the poverty line, henceforth will have to convince the Revenue Commissioners of the same income and, into the bargain, pay an accountant to do so. There is something crazy about the proposal. There are at least another 20,000 farmers just above the social welfare ceiling for dole who are not within a shout of a taxable income. We all know that many of them have been assessed by the Department of Social Welfare. Would it not be reasonable that such assessment be acceptable to the Department of Agriculture, demonstrating that such farmers have no taxable income? There is also the current exemption of £500. There is a precedent there to the effect that if a farmer receives less than £500 worth of grants he will be [1306] exempt from liability without having to supply a tax number.

The Department of Agriculture and Food have several options open on this issue. For example, the proposal in its entirety could be scrapped — which I believe it should — as farmers within the tax net must declare their headage grants anyway. The Department could exempt all farmers in receipt of dole. Farmers, recently assessed for eligibility for unemployment assistance, found to be above the ceiling but under the level which would render their incomes taxable, might be exempted also. Probably the handiest way out of all this mess would be to increase the £500 exemption limit to almost £2,000 which would shake out thousands of small farmers, with small herds nationwide, from the tax system. I believe the people who would be most pleased would be Revenue Commissioners officials around the country who would breathe a sigh of relief that they would not have to engage in all this investigation only to discover that, at the end of the day, no tax was payable.

I understand that the application forms for sheep premia will be ready for circulation to farmers next week, continuing a space for the insertion of the RSI number and address of the local tax office. The sheep premium payment is exempt but a sheep headage grant in excess of £500 will not be paid without a farmer furnishing a tax number. This regulation will penalise hill sheep farmers in poorer areas such as Donegal, Wicklow, Connemara and so on whereas a farmer with, say, 1,000 lowland ewes would have no problem whatever in furnishing a tax number. I find that proposal very difficult to understand regardless of whoever thought it up. The bullock and beef cow premia are excluded but headage payments in severely handicapped areas will not be excluded. I call on the Department of Agriculture to review their proposals and ensure that small farmers are not driven unnecessarily into the arms of accountants.

I want to speak now about the nonpayment of headage grants to farmers, all grants — beef cow, the ewe premium [1307] subsidy, the whole range. In this House last November I was given a commitment by the former Minister for Agriculture that over 80 per cent of the relevant headage payment cheques would be paid before Christmas. I listened to the Minister of State, Deputy Kirk, a few minutes ago more or less congratulate himself that that has been the case. I must stress that that was not the case, that a handful of cheques only reached their destinations by Christmas. I have no doubt but that the Minister of State, Deputy Joe Walsh, and every other Member of this House is being buttonholed, door stepped in every rural parish by people in uproar because they have not yet received their entitlements. I am led to believe that 25 per cent of our farmers have not yet received a single penny, that is six weeks after they were supposed to have received these payments or cheques. Do the Minister and his Department realise the extent of the hardship they are causing? Is the Minister aware that the biggest topic right across the country at present is the nonpayment of those headage grants? Does he realise that financially, the months of December, January and February are the most crucial ones of the year for farmers? Indeed does anybody in the Department's offices in Kildare Street understand that many purchases such as feedstuffs and fertilisers are literally bought on the strength of the headage grants being paid on time? Is the Minister aware that these grants constitute, in effect, part payment for value unrealised in the market place and are not some form of hand-out or prerequisite, as some people would lead us to believe? Rather it comprises money not collected in its true value on the open market.

The Minister must be aware that many farming families depend on these grants to pay school fees, tax and insurance on cars and tractors, not to mention settlement of bank loans, etc. When summing up, perhaps the Minister would tell me what went wrong? How can the Department of Social Welfare on a two-day period prior to Christmas every year pay [1308] in excess of 200,000 social welfare recipients when the Department of Agriculture spend six months making 100,000 payments? There is something very wrong here. Many farmers want to know who has the benefit of their money when they did not get it. If the Exchequer has the use of that money while farmers are waiting for it, it is nothing short of disgraceful. All I am doing is re-echoing what thousands of farmers are saying and that is what they want to hear on the floor of this House tonight.

How long after the last day of this month, or any other month, would civil servants, the Members of this House, including myself, wait for the few pounds at the end of the month? I have no doubt we would not wait three days. Why, then, do we ask farmers to wait six weeks, ten weeks and even six months? There is something wrong in Kildare Street when somebody genuinely believes that those people can continue to wait. I am aware that my time is running out. This is a domestic issue and somebody might say it is far from the European scene——

A Deputy:  It is European money.

Mr. Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  ——but if farmers are expected to have any confidence in the system there is no way a Minister in any Government can stand up and say: “You will have your money by a certain date” when he knows there was no way it can be paid in two or three months. I do not want to labour the point but I am informed there are six civil servants who are responsible for sending out the cheques. I do not have to be told how the system operates: I was in charge of it while I was Minister of State at the Department of Agriculture. I can assure the House that in 1985 and 1986 headage payments were paid before Christmas in those years, admittedly there are more cheques to be issued now. Why is this task confined to six people? Not alone would I like to hear those questions answered but there are thousands of farmers at this very moment who cannot understand why their cheque has not come through.

[1309]Mr. D'Arcy: Information on Michael D'Arcy  Zoom on Michael D'Arcy  They are watching for the postman every day.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  They are on the breadline

Mr. Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  I wish to turn for a moment to the latest saga in the milk quota and the buy-up scheme. I am informed that because of the European scheme for buy-up that of the expected 30 million gallons, only 10.3 million gallons were offered. It turned out as I thought it would, that very few people — unfortunately it is all the smallest producers — who are getting out of milk could actually face the expense of waiting for five years to receive all their money. If the EC and our negotiators were doing their job adequately they would be aware that a £2 per gallon offer, cash down, would have meant a huge difference to many people who had trouble with their banks, their merchants and so on.

I said a few weeks ago there would be a drain from the small producer areas to the bigger areas. That is actually happening even though the scheme has not been a success. I am now informed that the suppliers of the Kiltogher group of creameries in Leitrim — one of the smallest creameries in the poorest area — have lost over 6.5 per cent of their milk. That is a shattering blow and many jobs will be lost in that area.

I understand that because the scheme has not been taken up a permanent levy, a reduction of 1.6 per cent, will be imposed on the milk quota for everybody. I implore the Minister to ensure that small producers throughout Ireland who have less than 12,800 gallons will not be penalised.

In relation to the availability of the milk quota, when will Commissioner MacSharry, and everybody concerned, be made aware that if a man has a milk quota of approximately 10,000 gallons, and even if there was a fairy godmother to give him another 10,000 gallons for which he would have to pay, it is not financially feasible to actually pay for it. [1310] There must be another system for a certain category of farmers. I see that the Leas-Cheann Comhairle is nodding at me.

An Leas-Cheann Comhairle: Information on James C. Tunney  Zoom on James C. Tunney  The Deputy was grazing in the field of the Minister of State.

Mr. Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  I would have liked to do that. I think you opened the gate a little wider for me tonight. I thank you and I thank Deputy Sherlock.

Minister of State at the Department of Agriculture and Food (Mr. Walsh): Information on Joe Walsh  Zoom on Joe Walsh  First, I thank Deputy Deasy for putting down this motion. It is a timely motion and it is well worth having this debate. I compliment the speakers who have contributed so far. There have been many worthwhile and sober contributions. It is very important to have sober contributions in an area relating to agriculture and farming because much of the time it is a misunderstood profession. The reason is that the representatives of agricultural interests, to use a modern cliche, “go over the top” to say there is disaster all over the place or that things are much worse or different from what they are.

The reality is that farming is going through a very difficult phase at present. It is no harm to say that and to remind Governments, Departments and Commissioners that the farmers we have left in the country work extremely hard in a difficult area of activity. They expect to get a decent income for what they produce. They expect Governments to fight a case for them in national and international fora, but particularly in Europe. They expect their organisations to represent them accurately and their processing organisations to do a good job of work with the produce that comes off the land.

In recent times we have seen that excellent produce is not made any better; in fact, it is made considerably worse on its way to the consumer by various processing organisations. Farmers expect the marketing people to do an adequate job [1311] of marketing with the excellence of the products they have on hand. At the end of the day they expect to get a return for their produce which would reflect the amount of hard work and the time they have put into it. Regrettably, over the last couple of decades the whole agricultural scene has been intervention and European Community driven. Many of the people with responsibility beyond the farm gate have leaned on the supports of intervention and taxpayers to the detriment of the industry. Our marketing people had a very laid-back approach. We now have a situation where we are converting more of our dairy products into in-products for which there is no market, or for which there is a declining market. Eight out of ten of the best steaks produced in the country go into intervention and all sorts of carousals before they eventually end up God knows where. The marketing organisations, who have done a good job for the farming community should start with the consumer, be they here in Ireland, the United Kingdom or in any part of Europe.

It is a tragedy that this has happened since we joined the European Community because, as we are all aware, there are 340 million consumers in Europe, many of whom are sufficiently well off to be able to pay well for good produce. Even though we boast about our environment and our location we then go off and do nothing about that advantage, other than dump our products into the nearest intervention outlet. If that intervention outlet here in Ireland happens to be full to the brim we will take it to some other country in Europe, so long as the taxpayers of Europe are paying.

The scene is not a pleasant one and we do not have much time to ensure that Irish farmers will be there in sufficient numbers to produce the food required in Europe. We sell 60 per cent of our agricultural output, for example, to third countries and only 40 per cent to the European Community where there is a consumer market. The third countries are grand so long as that market is open [1312] to us; it is when it is not available to us, when some international political matter arises, that we find ourselves in serious trouble.

I would like to see our processing and marketing industry become far more serious about the situation we are in. We are all aware, without having to take a stroll through the supermarket, not alone in Dublin but in Ballydehob, that up to half the food products on the shelves are not produced here in Ireland. They are not produced here because, more and more, the Irish consumer is looking for the quality product which is produced elsewhere. We find it much more convenient to produce a truckload of some particular product rather than produce the quality product required in small packs.

It is a scandal that so much food is imported. This reflects our poor marketing and processing. In all fairness to the farming community, everyone knows that our farmers are as good, if not better, than those in any part of Europe. I believe that our shortcomings, and the bottleneck, lie in the processing and marketing area. Last year, for example, international food marketeers and experts from all continents congregated in a very pleasant and beautiful place called Kinsale in west Cork which is known to Deputy Paddy Sheehan at least.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  The Minister of State kept them all to himself.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  That is Deputy O'Keeffe's territory.

Mr. Walsh: Information on Joe Walsh  Zoom on Joe Walsh  I did not even get the chance to go down. On one particular night I had two pairs, one with Deputy Sheehan and the other with Deputy O'Keeffe but still was unable to get there. At any rate there was consensus; it was pointed out at the conference that there was an unlimited market for quality food produced in Ireland if we would only get up and wear out some shoe leather in selling it instead of just paying lip service to this matter.

[1313] We have spent a great deal of money, both Irish taxpayers' and European taxpayers' money, in modernising our industry during the past decade, and we are all aware of what happened in some famous cases with much of that money. Grants of up to 75 per cent have been available and were paid to various plants around the country. Approximately £500 million has been spent, £113 million of which has been spent during the past three years in providing state-of-the-art plant and equipment to do the very best job with Irish food. Much of this has been invested for the sake of drawing grants because full use is not being made of the plant and the old unwanted products are still being produced.

If we were not aware of all of this we were certainly aware of it following the publication of the Culliton report which highlighted, accurately and fairly, both the problems and the shortcomings of the agriculture and food industry. We do not have much time to take corrective action. I certainly hope action will be taken and that the report will not end up by accompanying the many reports which have been produced on the agriculture and food industry during the past few decades.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  We have had too many reports and no action.

An Leas-Cheann Comhairle: Information on James C. Tunney  Zoom on James C. Tunney  We have only time for one speaker, Deputy Sheehan.

Mr. D'Arcy: Information on Michael D'Arcy  Zoom on Michael D'Arcy  With your permission, I wish to share my time with our spokesperson on agriculture, Deputy Deasy. We will have seven minutes each.

An Leas-Cheann Comhairle: Information on James C. Tunney  Zoom on James C. Tunney  Is that agreed? Agreed.

Mr. D'Arcy: Information on Michael D'Arcy  Zoom on Michael D'Arcy  I wish to support my colleague, Deputy Connaughton, who complained about the failure of the Department of Agriculture and Food to send out cheques in relation to the beef subsidy, sheep subsidy and the suckler [1314] cow premium. It is a disgrace that this should have been allowed to happen. As the Minister of State realises, we have now entered the sowing season and farmers are waiting patiently for the postman to bring their cheque which is rightfully theirs. As I said, it is a disgrace that this should have been allowed to happen. I support what my colleague, Deputy Connaughton, had to say in that regard.

The MacSharry proposals for the reform of the Common Agricultural Policy pose the single greatest threat to our farming community and our economy in general. If these proposals are implemented 40,000 farmers will become redundant across the country during a five year period. It is the duty of the Government to ensure that the MacSharry recommendations, as presented, are adjusted as their effects would be devastating not only for rural areas but for every village and town.

The importance of the agriculture industry in each of the member states must be taken into account when any changes are being made to the Common Agricultural Policy. I agree that we must promote economic and social cohesion between the regions of the Community and I am therefore asking the Government to ensure, should the MacSharry proposals be accepted, that Ireland gets a derogation, given the paramount importance of agriculture to the economy.

Irish agriculture is unique in the Community in the following respects: the nation is highly dependent on agricultural exports; livestock is dominant in particular sheep, beef and milk products which account for approximately 80 per cent of total agricultural output. Clearly, the products of our grassland dominate our agriculture. Furthermore, these products have very little import content and hence make a bigger contribution to net exports than the export figures suggest.

The single greatest asset the agriculture industry has is our national herd of approximately two million cows supplying the dairy and beef industry. During the past nine years milk quotas [1315] have been reduced by approximately 10.7 million gallons or 10 per cent, whereas deliveries in other OECD countries increased by 8.5 million tonnes or 7.8 per cent and Eastern European production increased by 14.5 million tonnes or 10.5 per cent. This is a clear indication of where the problem lies in respect of the surplus milk in the European Community. We should provide reciprocal supply management and proper import controls before anything can be agreed upon in respect of the GATT negotiations.

The European Community should continue with its quota policy in order to achieve an acceptable balance in the marketplace and maintain prices. A continuation of supply management is viewed as a more effective and equitable mechanism to achieve balance in the market in contrast with the excessive price cuts included in the Common Agricultural Policy reform proposals, Regions such as Ireland should be excluded from further cuts in quotas to reduce the income disparities between Ireland and the more industrialised nations of the European Community as provided for in the Treaty of Rome and the Single European Act. We have already suffered a 10 per cent cut in our quota during the past nine years. Surely this should be adequate to control our situation in respect of the European market.

I should also add that a European Communiry-funded restructuring scheme should seek to increase the milk quotas of those farmers who are committed to milk production. Quotas which have been bought up should be reallocated to smaller producers and provide access to quotas for young farmers. We should seek a derogation from any further reductions in milk quotas.

In relation to the beef industry, it is only right that we should look at what happened in 1991. Surplus beef is something in the region of 800,000 tonnes and at the same time, as far as Eastern Europe is concerned, EC imports were approximately 800,000 tonnes. This does [1316] not make sense as we are importing beef to create a surplus and damaging the markets for our farmers.

When we look further down the field we find that some of these Eastern European countries require the moneys or — as it has been described — the hard currencies to pay for the loans and on top of that the EC is now giving the Russians money to buy back the same beef. That is a merry-go-round and is neither logical or makes economic sense. These must be looked at in view of the fact that the surpluses in the EC are being created by imports from countries outside the EC, We keep complaining and yet from September 1991 to December 1991 the main reason for the collapse of the store trade was the fact that there was an over-supply in Europe.

An effective price support mechanism is essential to underpin the market and to protect farm incomes from uneconomic low prices arising from disruption in internal and external markets. The safety net of intervention must be preserved; the EC suckler cow premium scheme should be preserved for small scale milk producers and be extended so that small and medium scale dairy farmers can obtain premium payments on up to 30 cows to maintain the farms as viable units. This is essential as nobody can underestimate the importance of the beef industry to this country. We have a very high quality product but, as the Minister of State said, our processing and marketing are a disgrace.

The Treaty of Rome, Article 39.2, places an obligation on the Community to ensure that specific account is taken of the close link between agriculture and the economy of member states. The Single European Act requires that all policies lead to greater economic and social cohesion. Agriculture is over three times more important to Ireland than the EC on average and over seven times more important compared with Germany. The agri-food sector as a proportion of total manufacturing employment is over three times more in Irerand than in the other EC countries. Employment in agriculture and the food sector is twice as important [1317] to Ireland as the EC on average, further reinforcing the need for reform to take full account of the contribution of milk and beef to the Irish economy.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  I regret that this debate has not engendered more passion. It is a very serious subject and the sequel to these negotiations will decide the future of not just the agricultural industry but the that people, even Members in this House, take it seriously, I know that many people outside the House think it is just another little game being played within the EC but it is not. I regret that more interest was not shown. The speeches of the Minister for Agriculture and Food, Deputy Woods, and the Minister of State, Deputy Kirk, were anaemic. The speech by the Minister of State, Deputy Walsh, was shorter but it was to the point. They are all nice people and I do not want to be offensive but I must tell the truth as I see it. The Minister for Agriculture and Food is following a very poor tradition. His predecessor, Deputy O'Kennedy, was just not up to he job. Again, I do not want to be offensive but I must be factual.

The agricultural industry is facing dire consequences because of a lacklustre approach, not just by the Ministers but by the Taoiseach. It is incredible that this matter has not been highlighted by the Taoiseach at any of the last three summit meetings in Europe. I remember that in 1983 the former Taoiseach, Deputy Garret FitzGerald, stormed out of a meeting of the Heads of State in Europe but, in doing so, he put the spotlight on Ireland within the European Community. At the end of the day, by his intransigence, we got the result we needed.

Much of what has gone on in this debate is really parish pump politics when we should be talking about power politics which take place at summit meetings. If one makes the play at a summit meeting then one follows it up in the Council of Agriculture Ministers in Brussels. That is the way the game is played, I probably should not use the word ``game'' because [1318] the matter is too serious but that is the factual situation. This item has not been on the agenda at the summit meetings. How can we expect to score at the Council of Ministers? We hear the same type of speech time and again. Deputy Sherlock said that this is the third or fourth time we have had this kind of debate. I have heard the same speeches from the Government benches on all those handouts. They are not the thoughts of the Minister, I do not know whether he is knowldgeable enough to write his own speech but Civil Service handouts will not win us the concessions we need in discussions in Europe.

If Commissioner MacSharry comes back to domestic politics I recommend that he joins The Workers' Party because they are the only ones who agree with proposals in this House. Are The Workers' Party aware that two major analyses have been carried out on these proposals, one by the ICOS and the other by an independent team of researchers who are paid by the Government?

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  I did not take my brief from the IFA, I took it from the UFA, the small farmers.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  Both analyses indicate that Commissioner MacSharry's proposals would cost this country 40,000 jobs.

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  The jobs have been lost already.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  They are being lost at the same rate at which they have been lost over the past 70 years. There is a decline in the number of people employed on the land. I am talking about over and above the natural rate of job losses in the agricultural sector.

I agree with much of what the Minister of State, Deputy Walsh, said in regard to the food industry. It is a pity the Culliton report has not been debated in this House, not just as a Private Members' motion but over a number of days or weeks because it is relevant to the major problem — unemployment — which this [1319] country faces today. A large section of the report is devoted to what we should be talking about, the food industry, instead of agriculture alone. We have really fallen down in regard to the food industry. The Culliton report has some very pointed things to say and it raised pertinent issues. However, we ignore the report because its comments hit home.

The Minister of State, Deputy Walsh, is right in saying there are a number of areas in which we have been particularly weak in regard to agriculture. I list them as education, research and development and, above all, marketing. Our record on agricultural education since we joined the EC has been moderately good. However, our performance in relation to research and development and marketing has been dismal. The Minister of State, Deputy Walsh, talked about new products. What are we doing to manufacture new products? Our problem is that we manufacture products which cannot be sold on the open market, a market of 340 million people.

They are the issues we should address [1320] when we talk about agriculture and our food industry. We need to stop making butter and skim milk powder and start making saleable cheeses and selling our beef, which is the best in the world; otherwise we will be evading the issue and we will not be doing our farmers any service. We are actually selling them down the river. Those hard-working people are not getting a fair crack of the whip because our policy makers have failed dismally. We have abused the systems in Europe, particularly the intervention system, to an alarming degree. That abuse cannot continue. We must see to it that that abuse is brought to an end and that we have a viable food industry which produces goods which people need and will buy. We need to stop dumping foodstuffs into intervention.

I do not agree with the Minister's amendment. This side of the House will keep pressing our concern that the negotiations in Europe be conducted at the highest level because that is the only way we will get a successful return at the end of the day.

Amendment put.

Ahern, Berite.
Ahern, Dermot.
Ahern, Michael.
Andrews, David.
Barrett, Michael.
Brady Gerard.
Brady, Vincent.
Brennan, Mattie.
Brennan, Sémus.
Briscoe, Ben.
Browne, John (Wexford).
Calleary, Sén.
Callely, Ivor.
Clohessy, Peadar.
Coughlan, Mary Theresa.
Cullimore, Séamus.
Daly, Brendan.
Davern, Noel.
Dempsey, Noel.
Dennehy, John.
de Valera, Síle.
Ellis, John.
Fahey, Frank.
Fahey, Jackie.
Fitzgerald, Liam Joseph.
Fitzpatrick, Dermot.
Flood, Chris. [1321]O'Donoghue, John.
O'Hanlon, Rory.
O'Keeffe, Ned.
O'Kennedy, John.
O'Leary, John.
O'Malley, Desmond J.
O'Toole, Martin Joe.
Quill, Máirín.
Reynolds, Albert.
Flynn, Pádraig.
Gallagher, Pat the Cope.
Geoghegan-Quinn, Máire.
Hillery, Brian.
Hilliard, Colm.
Hyland, Liam.
Jacob, Joe.
Kelly, Laurence.
Kenneally, Brendan.
Kirk, Séamus.
Kit, Michael P.
Kitt, Tom.
Lawlor, Liam.
Lenihan, Brian.
Leonard, Jimmy.
Leyden, Terry.
Lyons, Denis.
Martin, Micheál.
McCreevy, Charlie.
McDaid, Jim.
McEllistrim, Tom.
Molloy, Robert.
Morley, P.J.
Noonan, Michael J.
(Limerick West).
O'Connell, John.
O' Dea, Willie. [1322]Roche, Dick.
Smith, Michael.
Stafford, John.
Treacy, Noel.
Tunney, Jim.
Wallace, Dan.
Walsh, Joe.
Wilson, John P.
Woods, Michael.

Ahearn Therease.
Allen, Bernard.
Barrett, Seán.
Barry, Peter.
Belton, Louis J.
Boylan, Andrew.
Browne, John (Carlow-Kilkenny).
Bruton, John.
Bruton, Richard.
Carey, Donal.
Connaughton, Paul.
Connor, John.
Cotter, Bill.
Creed, Michael.
Currie, Austin.
D'Arcy, Michael.
Deasy, Austin.
Deenihan, Jimmy.
Durkan, Bernard.
Enright, Thomas W.
Farrelly, John V.
Fennell, Nuala.
Finucane, Michael.
FitzGerald, Garret.
Flaherty, Mary.
Flanagan, Charles.
Foxe, Tom.
Gregory, Tony.
Higgins, Jim.
Higgins, Michael D.
Howlin, Brendan.
Kavanagh, Liam.
Kemmy, Jim.
Kenny, Enda.
Lee, Pat.
Lowry, Michael.
McCormack, Pádraic.
McGahon, Brendan.
McGrath, Paul.
Mitchell, Jim.
Moynihan, Michael.
Nealon, Ted.
O'Shea, Brian.
O'Sullivan, Gerry.
O'Sullivan, Toddy.
Owen, Nora.
Pattison, Séamus.
Quinn, Ruairí.
Reynolds, Gerry.
Ryan, Seán.
Sheehan, Patrick J.
Spring, Dick.
Stagg, Emmet.
Taylor-Quinn, Madeleine.
Timmins, Godfrey.
Yates, Ivan.

Amendment declared carried.

Question put: “That the motion, as amended, be agreed to.”

Ahern, Bertie.
Ahern, Dermot.
Ahern, Michael.
Andrews, David.
Barrett, Michael.
Brady, Gerard.
Brady, Vincent.
Brennan, Mattie.
Brennan, Séamus.
Briscoe, Ben.
Browne, John (Wexford).
Calleary, Séan.
Callely, Ivor.
Clohessy, Peadar.
Coughlan, Mary Theresa.
Cullimore, Séamus.
Daly, Brendan.
Davern, Noel.
Dempsey, Noel.
Dennehy, John.
de Valera, Síle.
Ellis, John.
Fahey, Frank.
Fahey, Jackie.
Fitzgerald, Liam Joseph.
Fitzpatrick, Dermot.

[1323]Flood, Chris.
Flynn, Pádraig.
Gallagher, Pat the Cope.
Geoghegan-Quinn, Maire.
Hillery, Brian.
Hilliard, Colm.
Hyland, Liam.
Jacob, Joe.
Kelly, Laurence.
Kenneally, Brendan.
Kirk, Séamus.
Kitt, Michael P.
Kitt, Tom.
Lawlor, Liam.
Lenihan, Brian
Leonard, Jimmy.
Leyden, Terry.
Lyons, Denis.
Martin, Micheál.
McCreevy, Charlie.
McDaid, Jim.
McEllistrim, Tom.
Molloy, Robert.
[1324]Morley, P. J.
Noonan, Michael J. (Limerick West).
O'Connell, John.
O'Dea, Willie.
O'Donoghue, John.
O'Hanlon, Rory.
O'Keeffe, Ned.
O'Kennedy, Michael.
O'Leary, John.
O'Malley, Desmond J.
O'Toole, Martin Joe.
Quill, Máirin.
Reynolds, Albert.
Roche, Dick.
Smith, Michael.
Stafford, John.
Treacy, Noel.
Tunney, Jim.
Wallace, Dan.
Walsh, Joe.
Wilson, John P.
Woods, Michael.

Ahearn, Therese.
Allen, Bernard.
Barrett, Séan.
Barry, Peter.
Belton, Louis J.
Boylan, Andrew.
Browne, John (Carlow-Kilkenny).
Bruton, Richard.
Carey, Donal.
Connanghton, Paul.
Connor, John.
Cotter, Bill.
Creed, Michael.
Currie, Austin.
D'Arcy, Michael.
Deasy, Austin.
Deenihan, Jimmy.
Durkan, Bernard.
Enright, Thomas W.
Farrelly. John V.
Fennell, Nuala.
Finucane, Michael.
FitzGerald, Garret.
Flaherty, Mary.
Flanagan, Charles.
Foxe, Tom.
Gregory, Tony.
Higgins, Jim.
Higgins, Michael D.
Howlin, Brendan.
Kavanagh, Liam.
Kemmy, Jim.
Kenny, Enda.
Lee, Pat.
Lowry, Michael.
McCormack, Pádraic.
McGahon, Brendan.
McGrath, Paul.
Mitchell, Gay.
Mitchell, Jim.
Moynihan, Michael.
Nealon, Ted.
O'Shea, Brían.
O'Sullivan, Gerry.
O'Sullivan, Toddy.
Owen, Nora.
Pattison, Séamus.
Quinn, Ruairí.
Reynolds, Gerry.
Ryan, Sén.
Sheehan, Patrick J.
Spring, Dick.
Stagg, Emmet.
Taylor-Quinn, Madeleine.
Timmins, Godfrey.
Yates, Ivan.


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