asked the Minister for Agriculture if he will make a statement on the meeting of EEC Agriculture Ministers to fix prices for 1979.
Ceisteanna—Questions. Oral Answers. - EEC Agriculture Ministers' Meeting.
34.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 33 and 34 together. The Council of Ministers, at their session of 18 to 22 June, decided on Community agricultural prices for the 1979-80 season and on certain related measures. The general level of Community agricultural prices other than for milk was raised by 1.5 per cent. The co-responsibility levy on milk, which the Commission had proposed to increase substantially will continue at its present level. The MCAs of Germany and the Benelux countries are to be reduced by 1 percentage point in the case of Germany and half a percentage point in the case of the Benelux countries, except for the dairy sector. The UK and French representative rates are being devalued by 5 per cent and 1.5 per cent respectively. This will reduce the MCAs for the UK and France by 5.7 and 1.6 percentage points.
The Council agreed to continue the derogation which I secured last year whereby intervention for beef in Ireland will not be suspended while our prices are below 85 per cent of the guide price. The Council also noted a formal commitment by the Commission to provide supplies of beef from intervention stocks specially for use in manufacture of canned and cooked products. This should eliminate the difficulties which our beef canning industry has been experiencing. With a view to improving the relationship between the export refunds for live cattle and beef, which currently favours live exports, it was agreed at my request that the Commission would examine these urgently.
The intervention buying-in prices for Irish beef are also being increased by approximately 3 per cent, which with the increase of 1.5 per cent already mentioned would mean an overall increase in the buying-in prices of about 5 per cent.
The Council agreed to increase the Community contribution on consumption subsidies for better which in Ireland's case will mean an increased FEOGA contribution of about 6½p per pound. Subject to adjustment for recent cost increases this is being passed on to the consumer. The Community support for UK butter consumption will of course also help to strengthen the market there for Irish butter. National aids for processing of butter and milk powders are being suspended.
Finally, the Council agreed to make decisions on the new common organisation of the market for sheepmeat by 31 October next and on the Commission's current structural proposals (including proposed new measures for the west of Ireland) by the end of this year.
I am glad to say that the overall "price-package" was, in all the circumstances, quite a satisfactory one for Ireland. The package as a whole can be expected to increase farm income in this country by about £23 million in a full year. The package contains substantial benefits for both farmers and consumers. It will also help considerably the further development of our beef processing industry.
Would the Minister agree that the price package could hardly be described as satisfactory from the point of view of farmers? Would he not agree that, while farmers have received an increase in prices of 1½ per cent, the costs they have to incur in the course of production have increased by approximately 10 per cent, or ten times that amount?
I do say that the price package, as it stands, has been a satisfactory arrangement for Irish farmers in general. The House must be well aware that there is a serious structural over-supply in the dairy sector especially, and also in the sugar sector. There is a condition of some difficulty too in the beef sector. In all these circumstances, in my opinion, it would be extreme folly to have increases greater than those obtained. Indeed, it is worth saying that the increases which have been obtained by this country over the past five years or so—the actual increases in units of account—were very, very small.
The bigger increases that have come to Irish farmers during that period derived to a very large extent from successive devaluations of our green currency which cannot now be devalued since our MCA level is at zero at present. The range available for further improvements in prices, such as we have become accustomed to—let us acknowledge that—derived almost totally from devaluations in the green currency, such as the devaluation of 6 per cent that came last year, and 1½ per cent in the intervening period between sometime early this year and the price fixing which has just been obtained. I cannot go along with Deputy Bruton's assertion that it was an unsatisfactory package. The most unsatisfactory situation Irish agriculture could possibly contemplate would be the imposition on the common agricultural policy of intolerable strains. The strains on that policy at present are very difficult to sustain.
Would the Minister agree it is entirely incorrect for him to refer to structural surpluses in the case of beef, because the Community are in deficit in the case of beef, and the justification of a 1½ per cent price increase for beef on the grounds of surplus does not exist?
I have no recollection of saying there was an actual structural surplus of beef. As I recall it, the words I used were that there is a difficult situation.
There is a deficit.
The remaining questions will appear on tomorrow's Order Paper.
With your permission, a Ceann Comhairle, I propose to raise on the Adjournment this evening the administration of the grants for conversion from oil to solid fuel heating recently announced and implemented by the Department of the Environment.
I will communicate with Deputy Quinn on the matter.
I should like to raise on the Adjournment this evening, or at the earliest possible opportunity, the questions raised by the building societies with the Government about the banks increasing their rates to record levels and the likely trends in the future.
I will communicate with Deputy Enright on the matter.