The EU Commission's proposal to replace the existing variable ewe premium with a fixed premium of 21 per head was rejected by the Council at the meeting of EU Agriculture Ministers last week. The final Presidency compromise provided for the basic premium of 21 to be supplemented by the equivalent of 1 per head in the form of a national envelope. This compromise was rejected by some member states, including Ireland, as being insufficient and by other member states because it was too generous and too costly. A number of other member states also indicated that they would vote against any further increase in the sheepmeat budget, which would have been fixed at approximately 1.9 billion per annum if the Presidency compromise had been adopted.
The six member states which voted against the Commission's proposal constitute 27 votes. A blocking minority is 26 votes. Therefore, it takes only one member state to change its vote for the present proposal to go through. This demonstrates the difficulties facing us in securing any improvement at the meeting of the Council of Ministers in December.
The amendments proposed by the European Parliament included a premium of 30 for all eligible animals, an increase in the supplementary premium, additional payments through a national envelope system and the exclusion of the first 15 livestock units of ewes for the purposes of the calculation of the extensification premium. These proposals, if adopted, would result in a substantial increase in expenditure on the sheepmeat regime and are unacceptable to the majority of member states, many of which are extremely concerned about the budgetary situation. They are also unacceptable to Commissioner Fischler.
The negotiations on the reform are taking place in a context of serious budgetary concerns and a market situation in which sheep prices this year in Ireland are currently on average 40% higher than last year. The ewe premium this year is now likely to be below 10 per head. While I fully appreciate that the present price levels are the product of a particular situation, namely, the outbreak of foot and mouth disease and the inability of British sheep to access the French market, they are, nevertheless, a factor in the current negotiations.
During the year I used every possible argument to convince Commissioner Fischler and in bilateral meetings with my colleagues in the Council of the validity of Ireland's case for a higher premium. I will continue to press this case strongly but the outcome will be determined by a vote in the Council. However, the voting position in the Council is precarious and any improvement on the current proposal will be extremely difficult to achieve.