Dáil Éireann debate -
Thursday, 17 Nov 1983

Vol. 345 No. 13

European Communities Negotiations: Statements (Resumed).

Mr. Farrelly

This debate gives us an opportunity of bringing home to the people the realisation of what would be the situation if the super-levy were to be imposed on us. Any such move would put a stop to the expansion of our dairy industry. We rely on our dairy industry to a far greater extent than the other member states. Our milk production accounts for 4.5 per cent of our GNP. That is four times greater than the figure in any of the other countries of the Community. Milk and beef which cannot be separated account for 10 per cent of our GNP. That is six times greater than the situation in any of the other member states. Milk and beef account also for almost 70 per cent of our output which is double the corresponding figure for any of our European partners. Therefore, in so far as this sector is concerned, we are far more vulnerable than any of our partners. In addition, we produce this milk and beef while using a much smaller input of concentrates or of imported cereals than these other countries. On average, we use 11 cwt. of concentrates per cow whereas in Holland the figure is 43 cwt. and in Denmark it is 45 cwt.

It can be seen therefore that our contribution to net exports is far greater than if we were using the factory system that is used in other European countries. It is not in the interest of this country that our dairy industry be curtailed. It is an industry that is 95 per cent self-sufficient in terms of inputs. If and when we achieve the derogation, our work will only have begun in reaching an acceptable level of production per cow. This achievement will not come about by way of across-the-board cuts of 6 to 8 per cent in Government Departments nor will it come about by way of employees in the agricultural business sector seeking wage increases that are above the norm. Neither will it come about by way of the Department of Finance pursuing the attitude that they have been pursuing for the past 10 to 15 years, that is, the attitude that support for agriculture is a waste of time.

Given the right climate and the sort of leadership and guidance that our Minister for Agriculture has shown himself to be capable of giving, agriculture will make a major contribution towards eliminating the massive public debt that has been incurred by Governments in the past five to six years. We should be asked only to make a contribution in line with the amount of the problem we have caused. The EEC have asked us to pay for 10 per cent of the total problem whereas we have caused less than 1 per cent of that problem. What the EEC require of us would close us down in terms of development and all because of the problem caused in the main by our EEC partners.

Over the past 12 years we in this country have done more to sell our products on the market place than any of our European counterparts. As a percentage of production we have put less into intervention than any of our European partners. If this proposal is implemented not alone will there be lost 10,000 jobs in the processing industry but 10,000 farmers will be put out of business, which means — with an average of four people per farm, which would entail 40,000 people in family farms — all of these people will be affected by the Commission proposals. None of us can allow that to happen. It is time our financial institutions, unions and every person with a job in this country came out, supported and was seen to support whatever measures are taken by the Government to ensure that the proposed super-levy will not be imposed on us.

Not alone will milk producers be affected but our cereal producers will be equally adversely affected. If we are not allowed increase production our inputs will be less, which will mean that the farmers at that end of the industry will be in as bad a position as those to whom the super-levy will apply directly. Neither will our beef producers have animals for the production units, which will also have an enormous effect on our balance of payments.

Our objective in joining the EEC was to ensure that the common agricultural policy would help us increase our output and develop our main industry, that being agriculture. It is now practically 11 years since we became members of the EEC and, despite the moneys we have received through the implementation of the Common Agricultural Policy, we have lost jobs in industry. I believe the initial thinking behind the Treaty of Rome was that this country, being an agricultural one, should be afforded an opportunity to develop in the way our European partners had developed. At the time of our accession I do not believe any of us thought the Commission ever intended to put proposals before us which would mean the total downfall of our economy, but that is what these proposals now before us will mean. If they are interested in the preservation of the terms of the Treaty of Rome, as drawn up, the larger countries such as England, Germany and The Netherlands should realise — although I believe they do but are not prepared to do anything about it — that we cannot stand idly by, as our Ministers and Government have been telling them for the last eight or nine months throughout the length and breadth of Europe. Proposals such as these would mean that 10,000 of our farmers would be out of business within 12 months, 10,000 people in the processing industry would be out of a job, with an enormous amount of other job losses in the ensuing two to three years in the beef and other ancillary industries.

I would say to our partners in Europe that we are so serious about this proposal that we cannot and should not accept such a proposal, which would bring about our total economic ruin. The biggest problem facing the EEC, from reports we have read, is that the larger countries are not prepared to endeavour to alleviate or eliminate the problem they are causing through their importation of cereal substitutes. In the Netherlands they comprise 46 per cent of total inputs, with Great Britain and Germany almost as bad. Then there is the importation of 87,000 tonnes of New Zealand butter. There is at present a Commission proposal before us to reduce that by 2,000 tonnes a year over the next four years. There is no concrete proposal to tackle that problem. We are entitled to retain the jobs existing in our agricultural industry and, above all, be allowed to add to their numbers through increased production. Nobody in this House or indeed anybody involved in any union in the country should be seen as not objecting to the proposals before us. Our unions and their leaders should be condemning these proposals now rather than when such a levy is imposed on us. If they do not then we will find ourselves in a situation in which we are opposing the loss of 10,000 jobs in the processing industry over the next two or three years. I must stress that now is the time for united action against these proposals. Our Ministers for Agriculture, Foreign Affairs, Finance and the Taoiseach have been doing an excellent job in highlighting the situation over the past six months even though we have not as yet had agreement to our submissions. They must be complimented on their unwavering attack on the super-levy. The most important thing is that they do not allow themselves be side-tracked into alternatives, which would be a disastrous tactic. They have said at all times, in all places, to everybody they have met: we cannot have any super-levy; we require a derogation for four years, or as long as such super-levy lasts. We must be allowed increase our production to a level commensurate with that of our European partners, indeed to the level obtaining in Northern Ireland where the average milk production is over 1,000 gallons per cow. Each time we receive any concession in the course of negotiations in Brussels, particularly in recent years, Britain has always contended that such applies to Northern Ireland as well. We are seeking to increase our production to the same level.

Coming from a farming background and having developed a dairy herd, I would not like to see eight years after we had been told to develop our farms and to increase our production, a proposal introduced which would mean that farmers with incomes of less than £5,000 would have to carry this heavy financial burden. We cannot lay sufficient emphasis on this point often enough because every Irish citizen will be affected by this proposal if it is accepted by this Government. Perhaps after this debate the people will be more aware of the real problems facing us.

A great deal of money has been collected over the years to finance the Common Agricultural Policy. The bigger states in the Community will object to increasing this 1 per cent until something positive is done about the surpluses, surpluses which were not of our doing. When we get to the level of our European partners none of us will object to paying our contribution to that surplus, but to be asked to bear the brunt of a 10 per cent levy across the board when we are contributing to less than 1 per cent of the surplus is not realistic and every Member of this House strongly objects to this measure.

It is very important to have this debate. I was one of the first to ask the Taoiseach and the Government to make time available for this debate and to outline the seriousness of the problem to the people. In doing this we would also be outlining the seriousness of the problem to our European partners. There is no way our European partners, powerful as they may be at negotiating level, could be allowed to implement proposals which would have a detrimental effect on our economy. None of us could stand for that.

At the summit meeting in Athens I hope we will emphasise the fact that we cannot accept this proposal at this time. We must be entitled to extra years to develop our family holdings because at present many of our farmers have incomes of less than £5,000 a year. A Commission proposal which would have a detrimental effect on such people is very short-sighted. In the final days of negotiating for an exemption for Ireland the Taoiseach and his Ministers must insist that Ireland be given extra years to draw level with our European partners who are involved in this most important industry. The reason we are so far behind our partners is that in the sixties and seventies we concentrated on industrial development. It is a pity we did not spend pound for pound in agriculture as we did in industry. Knowing the farming industry inside out I can assure the House that if we had got an injection of money at the time we joined the EEC in 1973 we would have had no problem meeting the same levels our EEC partners have reached today. We have the capacity for increased production; we have the best soil in Europe and, most important of all, we have the people to do the job and at lower costs.

We say no to the introduction of a super-levy and to the unions we say that we need their support to ensure that this proposal does not come into effect.

Mr. Barrett

(Dún Laoghaire): Before Deputy Collins speaks may I say a few words? There is a long list of speakers on this debate from both sides. I have been speaking with our friends in the Opposition and appeal to Members if at all possible, to make their contributions in 15 minutes because that might make it possible for everyone to speak. I know the order states that Deputies have 30 minutes but if we could agree to each Member taking 15 minutes, I am sure everybody who wishes, could make his or her contribution.

An Ceann Comhairle

That is a matter for the Whips, and in particular for the Members. The Chair must abide by the rules——

Mr. G. Collins

I understand the predicament in which the Government Whip finds himself and I regret that that is so, because he deserves better; but it is a pity he was not able to convince his Government to have this debate last week or the week before when we would have had plenty of time for it. This is regrettable because, in my view, this is one of the most important debates we have had in this Parliament in a number of years. However, I will cut my comments, try to keep my remarks to a minimum and will try not to take the full 30 minutes, although I would need much longer to say all I want to say on this issue. I regret the Government Whip is embarrassed because of the failure of the Government——

Mr. Barrett

(Dún Laoghaire): I am not embarrassed.

Mr. G. Collins

——to make available adequate time to allow Members of all parties an opportunity to contribute to this debate.

Mr. Barrett

(Dún Laoghaire): I came in at the request of the Fianna Fáil Party.

Mr. G. Collins

I will do my best to oblige the Chief Whip.

We are convinced that the handling by the Government of the super-levy is an object lesson in how not to conduct diplomacy. It is surprising that a Government headed by a former Minister for Foreign Affairs should handle a matter of vital interest to Ireland so lamentably badly. If Ireland has a vital national interest in the European Economic Community, then surely it is our agriculture, and particularly our dairy industry. It is by now obvious that this Government are completely lacking in backbone and a real will to resist outside proposals destructive to our vital interest.

The Fine Gael school of diplomacy advocate treading softly in case some nebulous goodwill might be upset somewhere. Let us not forget the contrast between this Government's approach and the resolute no-nonsense handling of the super-levy by us in Government in 1980 and 1981. The Taoiseach had an opportunity at the Stuttgart Summit to make it clear that we could not accept the super-levy proposal. Deputies need only read the records of this House to see how the Taoiseach, who likes to present himself as an experienced international statesman who regularly rubs shoulders with the Gaston Thorns, the Leo Tindemans, the Henry Kissingers, the Rockefellers and the like, completely misread and misjudged the result of the Stuttgart Summit. He said on that occasion, and I quote as recorded in the Official Report of 22 June 1983, Volume 343, column 2687:

The Minister and I,

—In this instance the Minister for Foreign Affairs—

with gratifying support from colleagues, were successful in preventing damage to Irish interests in the Common Agricultural Policy.

They were successful in preventing damage to Irish interests in the common agricultural policy. He goes on:

In fact, a comparison between the proposals circulating recently on that subject and the conclusions of the Stuttgart Council will show a really remarkable degree of understanding and support for the basic principles of that policy ...

How naive and foolish that seems on reading it today, 17 November 1983. I find it past belief that the Minister for Foreign Affairs could still speak yesterday of a successful outcome to the Stuttgart Council. If he thinks it was a success he must be inhabiting a world different from that which I inhabit.

My party leader, though he did not have the advantage of being at the meeting, gauged the situation far more accurately. What he said stands up to an accurate appraisal now. He said, and I quote from column 2703 of the same volume:

Again, looking at the Conclusions of the Summary I do not think that the Taoiseach and his Minister for Foreign Affairs in Stuttgart have done a great day's work for Irish farmers, because it is only necessary to read the list of questions which are going to be examined under the heading "Common Agricultural Policy" to realise that they constitute a major onslaught on the Common Agricultural Policy and I regret very much that such a list was adopted as a conclusion of this particular European Council.

In effect, it could be said that the Taoiseach helped to open the door to new revised super-levy proposals backdated to 1981.

It is obvious that when the EEC's proposals were published at the end of July this Government were taken completely by surprise. The Minister for Agriculture, Deputy Deasy, was quoted in the Irish Independent of 29 July 1983 as saying that the Government would have their backs against the wall in the fight to gain exemption for Irish farmers. It is curious that one month after the Stuttgart Summit, which was supposed to be so satisfactory from Ireland's point of view, we found ourselves with our backs to the wall. When the Taoiseach's friend, Commissioner Gaston Thorn, came to Dublin on 29 July 1983 the Taoiseach criticised the proposals. He said they would be severly damaging to this country and would also operate in a manner that would be inconsistent with the principles of Community policy. The Minister for Agriculture said, and I quote from The Irish Times of 30 July 1983:

I would be much more impressed if we had got a derogation from the proposals... I hope he is going to consider us in a special light. I hope we will get major changes. These proposals are not acceptable in any form.

I would like to make one or two observations about these remarks which illustrate why Ireland has made such little impact in Brussels to date. The Minister's two statements, "I hope we will get major changes" and "These proposals are not acceptable in any form" are contradictory. Secondly, and more importantly, at no point in the public comments of either the Taoiseach or the Minister for Agriculture was our clear and unequivocal opposition to the super-levy articulated. From the start the Government seemed to have made it clear that we would accept super-levy as long as it did not apply to us. This is a far weaker position than saying that we are opposed to the very principle of the super-levy because it is of vital national interest and we will prevent it being enacted, if necessary by using the veto.

If the super-levy is inconsistent with Community principles, then surely that is true in regard to whatever country it applies to. From the start the Government, instead of opposing the super-levy in principle, unfortunately have clearly signalled our acceptance of it provided, in the Minister's own words "that there is a special derogation for Ireland". I believe sincerely that this was a mistake in our negotiation tactics. Opposition to a proposal in principle is always easier to argue than trying to seek special treatment or exemptions. By limiting our case to seeking a derogation or an exemption we have ensured that any such derogation or exemption is likely to be of only limited duration.

At the end of August this year the Minister for Foreign Affairs announced a ministerial tour of the capitals of members states of the EEC. The French Minister for Agriculture came here in September. There is no indication anywhere on record that any particular understanding was reached with the French Minister for Agriculture. Then the Taoiseach went to the Greek capital, Athens, and he seems to have convinced himself—but nobody else—that he procured a valuable ally there. The Greek Prime Minister, Mr. Papandreou, assured him that his Government understood fully our problems, the problems faced by Ireland in the present situation and fully supported, in his words "their just demands". Unfortunately, a few days later the Greek Presidency put forward divisive compromise proposals to use the 1983 milk production rather than the 1981 milk production as the base. This was rejected by us as totally unacceptable. When this contradiction between the statements of support of the Greek Government and their actions were put to the Taoiseach by me earlier this week he sought to distinguish between their Presidency role and their national role.

It is no secret that the Greek Government have little interest one way or another in the super-levy. It is difficult to see how they could be a staunch ally when they have no interest of their own at stake. Ireland's support for special treatment for Greece in other areas, while useful, will hardly improve significantly the bargaining position of Greece in the Community. If the Taoiseach was addressing himself primarily to the Presidency, the proposed two-year exemption means very little. The Taoiseach sought to claim that it amounts to a valuable recognition of the principle of an exemption.

The question of a two-year exemption was raised long before the Taoiseach went to Athens on 31 October. As reported in The Irish Press of 12 October 1983, the Minister for Agriculture angrily denied a suggestion that the Government would be prepared to abandon their opposition to the EEC super-levy in return for a two-year exemption for Irish farmers. He blamed the report on red herrings and leaks from the EEC Commission. Those were the Minister's words. An informal proposal which was angrily dismissed by the Minister in October was welcomed last week by the Taoiseach in the Dáil when questioned by me. He welcomed it as a recognition of the existence of a special Irish problem.

Perhaps the emotional reaction of the Minister for Agriculture should be discounted. I am sure he realises that the television interview in which he said he was nervous and anxious before flying out to an EEC meeting did not impress anybody about our resolution and determination on this matter. An unfortunate sequel to the Taoiseach's visit to Athens was the cancellation of the visit of the German Chancellor, Helmut Kohl, to Ireland, a friend and political ally of his, or so the Taoiseach claims. It was a great pity that that visit was cancelled because the Germans have always been most helpful to Ireland. They helped us in the EMS negotiations. That was a notable example. The Federal Republic of West Germany are as concerned as other countries about wasteful expenditure in the Community, but they have never pushed their views or interests unreasonably on us when they would have had detrimental effects upon us. It would have been of value had Chancellor Kohl come to Ireland as Chancellor Schmidt did during our time in office.

Then the Taoiseach went to see the British Prime Minister, Mrs. Thatcher. We all know how fond the Taoiseach is of telling us that he has known her since 1975. At his press conference he said he fully explained our position to her. He almost convinced members of his own party that we could expect help from Mrs. Thatcher but, within the same week, the British displayed a special hostility in the EEC to any special exemption for Irish interests. This time last year the Taoiseach, who was not Taoiseach then, was fond of telling us how high our standing in the Community was when he represented Ireland abroad. Where are all his so-called influential friends now? Will Mrs. Thatcher support our case? Will President Thorn support our case? Will Chancellor Kohl support our case?

The Taoiseach has not yet sought the support of the Danes, or the French, or the Dutch, or the Italians, or the people of Luxembourg. Last week I put down a question to the Taoiseach asking him what arrangements he had made to meet the remaining Heads of Government within the Community to make sure that they fully understood our problems and the implications of the levy for us. Unfortunately that question was not allowed. I understand why it was not allowed. I appreciate the Ceann Comhairle's decision on it and I accept that decision.

On 26 October the Taoiseach said that between then and the settlement of those critical Community issues he would have whatever other discussion with Community leaders were necessary to ensure that our vital national interests were protected. I regret that there were very few Fine Gael party members present, but somebody should tell the Taoiseach that there are more important matters in Ireland today than the by-election in Dublin Central. As Prime Minister he should meet with the leaders of the other nations he has not yet met to ensure that everything possible is done to enlist their aid for us on this very critical issue.

I submitted a number of questions to the Taoiseach for next Tuesday's Order Paper. I hope they will be allowed. That is a matter for the Ceann Comhairle and I know he will deal with them fairly and properly. I want to ask him if he is aware of the opposition of the Danish Government to any concessions for Ireland on the super-levy, and if he is prepared to meet the Danish Prime Minister before the Athens meeting to present our case to him and seek his help in protecting our vital national interests. I also want to ask him if he will meet President Mitterand and discuss our situation with him. We do not know whether we made any progress with the French Agriculture Minister when he was here. The Taoiseach has an obligation to forget about the by-election and do something worthwhile for the nation. Why has not the Taoiseach met Prime Minister Craxi in Rome? If our position were properly explained to him, I would have thought we might get some help from the Italians. Why has the Taoiseach not met the Dutch Prime Minister? Why has he not met the Prime Minister of Luxembourg who might have some little influence on a former Prime Minister of Luxembourg who is now President of the Commission, Gaston Thorn.

I am not alone in holding this view. I feel the Minister for Agriculture shares my view. He is reported in The Irish Times of last Tuesday as saying it is now a matter for political decision and that he has gone as far as he can go as Minister for Agriculture. He is now putting it up to his boss, the Taoiseach to do something about it. Yesterday the Minister for Foreign Affairs said the Government had made a fantastic diplomatic offensive on behalf of the Irish people and not just for the farming and dairying sector of our community. Somebody should tell the Minister for Foreign Affairs immediately that this diplomatic offensive which he seems to think has been effective has of today resulted in nothing whatsoever for the Irish people.

Many of us are convinced, as I hope are many of the farming community and of the community's leaders, that this Government, despite all the help and support which we are giving them and the fact that we will not make party political issues out of this problem, have failed to do what any Government should do. They have failed to communicate firm opposition to the super-levy. One can scan the colums of L'Agence de l'Europe and look at reports of meeting after meeting without finding any reference to Irish opposition to the super-levy. I am very much afraid that nobody in Europe believes that the present Irish Government are prepared to hold up an EEC package agreement, however detrimental to Irish interests.

I liked very much the comments of the Minister for Agriculture at the recent Fine Gael Ard Fheis that if there has to be confrontation there will be confrontation. I implore the Minister to have a word with his colleagues but, above all, with his Taoiseach and let him know what is expected of him in this very difficult situation.

The Government have made it clear that they will not use the veto. They have cast doubt in this House on whether it exists. Everybody appears to believe that Ireland can be bought off with minimal concessions or perhaps no concessions at all on the super-levy. Ireland finds itself diplomatically isolated on an issue of vital national importance. Does anybody seriously believe that the Greek Presidency will hold up agreement on account of Ireland or that Mrs. Thatcher, perhaps, will come to our rescue? This is what is being told to us. This is all that we know about — perhaps they know more and are not telling us. However, I doubt that very much.

I warn the Taoiseach that if the super-levy is imposed here he can have all the influential friends that he likes in Europe, but his reputation here will be shattered. He is the man who has been presented to us as uniquely and supremely qualified to represent Ireland in Europe. I say to the Government Parties that the Taoiseach had better deliver. We have always said that we will support the Government to the hilt if they adopt a firm approach. That we will do. Equally, we will not support weakness on the Government's part. We demand their best efforts and that the Taoiseach, who is now totally involved in trying to win a by-election seat in the Dublin Central constituency, get his priorities right.

How much time have I left a Leas-Cheann Comhairle?

An Leas-Cheann Comhairle

Five minutes.

Mr. G. Collins

When the Heads of Government met in Stuttgart they did agree that certain negotiations should be carried out. They agreed that there should be negotiations about changes in the Common Agricultural Policy. They did say that the basic principles of that policy should not be interfered with. This they had to say because they had to have due regard to the appropriate Articles in the Treaty of Rome. It is our duty now to insist that, having examined the proposals put forward by the Commission, these proposals do not in any way interfere with or endanger the basic principles of the Treaty of Rome. We must be extremely watchful and careful of what is emerging. The statement issued after Stuttgart said:

Certain regions such as the Mediterranean region, mountain regions and other regions are at a disadvantage because of natural economic features.

It is equally extremely important for us now to make sure that due regard is given to this part of the statement. We recognise very much that the Community are in an extremely grave financial position at present and these difficulties will be added to if Spain and Portugal are admitted to the Community. On every occasion in this House since the Dáil reconvened after the summer Recess, I have pointed out strongly that political considerations on their own should not be enough to sway the present membership of the Community to bring in Spain and Portugal. I am talking about NATO political considerations.

There is no room for ourselves in Europe at present because of the state of finances and we should make sure that those with other interests, such as NATO interests, will not put those interests before the interests of the members of the Community. We must recognise that there are deep financial problems in Europe and that it is in our own interest that these be tackled straight away. It is accepted that we are prepared to contribute our part to the re-direction of Europe which is at present at the crossroads. We are prepared to take our share of the additional burden, but must insist that we are only prepared to take our share and no more than that.

There are many benefits to a small country like ours, with its very open economy, in the Community and it is vital for us that the Community should thrive and prosper. We must not forget that not only was Stuttgart concerned with the question of the adaptation of the Common Agricultural Policy but all of us in a search for a method of relaunching the Community and rediscovering the sense of European progress which has tended to become dim, indeed I might add lost at times under the effects of the world recession.

Of course, we are extremely interested in agriculture which is so important to us, representing almost 15 per cent of our GNP — twice or three times that of the vast majority of our colleagues in Europe. We must insist that anything that would tend to adversely affect agriculture would hurt us to a far greater degree than it would many of our European partners. The Government have a very great responsibility to defend our situation throughout the negotiations. I hope this Government, and in particular their leader, will play their part in helping the Minister for Agriculture who seems to be becoming more and more isolated within the Government in dealing with this issue.

Whatever decision is finally arrived at, I want to see that it will be a decision which has come about as a result of total Government involvement in the presentation of our case and that if anybody has to carry the can at the end of the day, that it will not be just the Minister for Agriculture. It is far too serious a matter for us. There have been too many hits and misses.

An Leas-Cheann Comhairle

The Deputy has one minute.

Mr. G. Collins

I am sorry that I could not oblige the Government Whip by making my remarks shorter. I have much more to say. I regret deeply that this issue, one of the most important facing our whole community, was not given time in Dáil Éireann until it had to be forced from the Government like a dentist pulling a tooth from an unwilling patient in the dental chair. It is a disgrace. If this Parliament are to keep in touch with the people and reflect their views and opinions, why should we have to have a limited debate of less than a day — approximately three hours yesterday and the same again today? If this is all that this issue deserves from the Government, and if that is an indication of their interest in this problem——

An Leas-Cheann Comhairle

The Deputy has extracted his very last minute.

Mr. G. Collins

——I do not envy the Minister his job. I wish him well and want to guarantee him the support of this party in highlighting the weaknesses of his colleague and in particular of his Taoiseach, in helping him as he should and in not putting our country before his own personal interests within his own party.

Mr. O.J. Flanagan

It is correct to say that we could not be discussing a more urgent or pressing matter than the one under debate at the moment. I want to express my displeasure at the shortness of this debate. This debate could go on all today, all through Friday and if necessary, all through Friday night because so much of the future of the country depends on the issue we are now discussing. This is the most important issue we could debate.

In relation to the Athens Special Council, which sat last week in connection with the future policy of the EEC, the whole question of the financing of the Community was debated and, as we were told yesterday, the Community had under consideration three things. The first was to help to make up the ground where development is backwards. Development is more backward in Ireland than in nearly every one of our European partners. We must benefit if the Community are to spend their money in that regard. The second matter was to speed up convergence in both industrial and agricultural regions in decline. There is no country in the Community in which agriculture is in greater decline than Ireland. The third matter was to combat unemployment, especially youth unemployment. Youth unemployment and unemployment in general is now reaching a desperate proportion in this country, where it is a cancer eating into our whole social, economic and political life.

We will not improve this situation by attacking the Taoiseach. I want to express my admiration for the manner in which the Taoiseach spoke in Athens in relation to the super-levy. I also want to express my admiration for his speech in Brussels, which was regarded as one of the best speeches he delivered, in relation to agriculture when he condemned the whole matter of the super-levy. I also want to congratulate him on the manner in which he presented this serious problem in London. All members of the EEC have a bounden duty to cut out completely New Zealand imports into the UK. The EEC are not doing their job if they allow New Zealand to continue exporting butter to the UK. I saw a New Zealand delegation in Strasbourg last year, one of the most high-powered delegation of parliamentarians, who came to Europe for the purpose of exploring every avenue to get more agricultural produce from New Zealand dumped into Britain. The production of butter and milk products has already gone up in Britain but there is still importation of New Zealand products. This is having a serious effect on our situation.

The Government and our Minister for Agriculture have an obligation to see that when we are in the Community we get what the Community has for us. We should remember that Europe does not owe us anything. We have to fight every inch of the way. Every speech the Taoiseach has made about the super-levy was a fighting speech. I am convinced that he meant every word. I want to pay a tribute to Mr. Cashman of the IFA and the Creamery Milk Suppliers for the manner in which they have united their members because of the vital importance of this issue to Irish agriculture. I urge every political party in the country to stand firmly behind the Government and the Minister for Agriculture and, if necessary, to use the veto to reject this unsound procedure which will be the death knell of Irish agriculture and will drive our farmers into the already over-packed and practically closed workhouses. This is a most serious matter for agriculture.

Reference was made yesterday to the fact that the Joint Committee on Secondary Legislation of the European Communities have not met. I deplore the fact that this Joint Committee have never met to deal with this matter. On 1 September 1983 I wrote to the clerk of the committee and stated:

Please have the following notice of motion on Agenda for Meeting of the Joint Committee. This is a very important matter on which the views of the Committee should be expressed. There is no matter so vital for the future of our economy than this matter.

That the Joint Committee on Secondary Legislation of the European Communities emphatically reject the proposals of EEC to implement spending cuts which can cost Irish farmers £150 million. That the suggested super-levy 70p per gallon be not implemented and that united opposition be organised in every part of Ireland against it as such would be the end of the dairying industry in this country. That the calf premium scheme and the EEC butter subsidy should not in anyway be interfered with and we call on the Government to implement the veto in regard to these penal and unjust proposals which could ruin for all time the Irish economy and we further call on our EEC partners to reject these proposals because of their serious effect on our farmers livelihood.

EEC farm cuts can cost our farmers £150 million at a time when they cannot afford the loss of a single penny and when farmland prices have plunged down 20 per cent since the boom years of the late seventies. The CAP was the only reason why Ireland joined the EEC. It was because of the CAP that our farmers solidly voted in favour of Ireland's entry. I was never impressed by our entry into Europe. I felt that the big powers of Europe would not give any serious thought to the economic problems which are characteristic of a small country on the western seaboard of Europe.

The Taoiseach's speeches in London and Athens expressed thorough objection to these proposals. Every speech of the Minister for Agriculture which I have read was an emphatic rejection of these proposals. If the other members of the Community do not agree, the veto can be used. The farmers' organisations and the trade unions want the veto used in relation to these proposals, because as well as the farmers being put out of house and home if these proposals go through the meat industry, the creameries, the people in Mitchelstown and Avonmore, those engaged in every branch of agriculture in which labour is employed, even those in garages where farm machinery has to be repaired, will be affected. There will be fewer mechanics needed and there will be less goods needed for the shop assistants to sell. There will be less on the shelves. If the Common Agricultural Policy is tampered with it will ruin our farmers because it is the strength of the Community. We were asked to join the EEC because there were 250 million people waiting to buy our agricultural produce. Are they now going to renege on us? I hope not.

I believe that the Government have their minds firmly made up to put this to the test and the people are behind them in this regard. Political parties, farmers' organisations and social and regional organisations should not let the European bureaucrats get away with this because they are going to sell the Irish farmers down the drain. We must cut down our imports of vegetables and horticultural products and we must not be afraid to tell the European Community that we are going to have a big campaign to buy Irish, because there is no point in buying expensive imported products to the detriment of Irish workers. It is wrong for Irish people to buy imported agricultural products. It is wrong for Irish bakers to use British flour and to import so much wheat when our farmers are not engaged in wheat production. When will sanity be restored to our economy? There was a time when we grew wheat, oats, barley, beet, potatoes and vegetables. What has gone wrong? It is time to ask why the bread we are eating is made from British flour. I hope and trust that steps will be taken in this regard.

I also want to advise the Minister for Agriculture not to let the Common Agricultural Policy be dismantled because we depend too much on it. Do not allow New Zealand and Australia to poach and take our share of what should be going into Europe. Cut them out of it — that can and must be done. We will have to adopt a fighting attitude and we must not show a white flag. We must be determined to win on this issue. I hope that steps will be taken to ensure that we all stand behind the farmers' organisations and the Minister for Agriculture, who is sincere in fighting this issue. It is not enough to get an exemption for Ireland because that means in a few years we must face the same problem again. We cannot have this cloud hanging over our farmers who must be able to plan and develop for the future, because with sane and sound planning there is a future for Irish agriculture. It is contrary to the original intentions of the Community to have Canada, Australia, New Zealand and others dumping their produce into the Community when we should be getting our share of it. No wonder our farmers are depressed and that there is such unemployment in agriculture. No wonder so many farmers have left the land and are still leaving it. There is a depressing prospect facing young farmers who are taking over land and they are slow also to lease land because there are little prospects for the future. The Irish farmer must be the best in the world because, if not, he would have gone down during the early years of the Economic War; and when he survived that and the policies of Fianna Fáil he will survive anything.

There have been hard and lean times since then but the Irish farmer stood up to them well. No section of the community has suffered greater losses than our farmers. They are being penalised with bank interest payments. I know that because I live in a good farming area and I have farmers coming to me every weekend. They appear to be some of the biggest farmers in the midlands, but the real test of their standing is to examine their bank accounts. The Minister must reject this proposal and adopt the suggestion made by the Minister of State at the Department of Agriculture, Deputy Hegarty, who delivered an outstanding address in my constituency lately in relation to the purchase of Irish agricultural produce by our people. The farmers' organisations must exhort the people to do this.

I ask the Taoiseach to convene a meeting of the Joint Committee on Secondary Legislation of the European Communities so that we can deal with matters of this kind. It is all very well for Deputies to be highly critical but the lives of tens of thousands of our people depend on the courage, determination and political will of the Government. The trade unions must also stand behind Irish farmers to ensure that their livelihoods are not snatched away from them as a result of this insane proposal from the Community.

I cannot subscribe to the suggestions made by Deputy Collins that the Government have not thoroughly canvassed the Heads of State of every member of the Community. Perhaps Deputy Collins is not sufficiently satisfied, so I hope a guarantee will be given to him that in relation to Denmark, Italy, Holland and Luxembourg, Ireland's position has been made very clear. We want the support of all our colleagues in the Community in relation to this matter. Many people think this only affects the farmers but it affects the livelihood of everybody. Our whole economy depends on the future of agriculture and our economy is sinking fast at present. I hope the united effort of all our people of every shade, creed and class will be in support of the Government if they decide to implement the veto in order to ensure that no steps are taken to wreck the CAP or to destroy the prospects for Irish agriculture, for those who have built up dairy herds and who have invested in milk production, moneys which are not likely to be paid back during the lifetimes of the grandchildren of those people. Are we to stand by while their livelihoods are taken from them? We are talking about an issue that affects every constituency. We must stand solidly behind the farmers' organisations and let them know that we mean what we say. If we do not build up a prosperous Irish agricultural sector, other sectors will not succeed either because agriculture is our key industry.

The Government mean business. We must speak with one voice in telling Mr. Thorn and our respected Greek parliamentarian who is President of the Community that it is ‘no' from Ireland in relation to the proposed super-levy. We must let these people know that we oppose the super-levy because we are satisfied that it is not in our interest to have such a levy imposed on us and also because it may not be in the interest of other agricultural countries either despite the fact that none of those countries depends on agriculture to the same extent as we depend on it. In these circumstances we have an obligation to our farmers, to our nation generally and to our Parliament to ensure that the people in Europe are not allowed impose a levy that would be disastrous for us. If the super-levy were to be imposed the rich lands of Ireland would become a vast desert within a number of years. By all of us speaking with one voice on this issue we are giving some encouragement to our farmers and in particular to our young farmers in terms of their future.

I am making my appeal today as one who has long experience as a parliamentarian. Let us reject the proposal in the interest of our economy, a matter that must be first in our considerations. While we share problems in relation to our economy that are experienced also in other countries, we must look after our own people. That is why I am glad that this Parliament has had the opportunity of telling the governments of the Community that we regard the proposal as distasteful and bitter and that we will not swallow it.

If future generations of Irish farmers are as good as those who have gone before them we will never have a bad farmer on the land. But we must give them a chance. We must ensure that there is available to them the markets they were promised. We must ensure that they have the facilities that were promised them in terms of our EEC membership.

An Leas-Cheann Comhairle

The Chair would remind those Deputies who are yet to speak that, in view of so many Deputies wishing to speak on this very important matter, the Whips have expressed the wish that speakers limit their contributions to 15 minutes.

Mr. Hyland

I will endeavour to comply with the agreement that has been reached between the Whips in this matter but I regret very much the time limit which has been imposed for this debate. We all regret the difficulty we have had in having this very important matter accepted by the Government for debate in the House. I regret also that there is no agricultural spokesman present on the Government side. The Minister for Agriculture is missing as also are his two Ministers of State. I hope that that situation is not to be taken as an indication of the approach the Government are adopting to this extremely urgent and important matter.

Minister of State at the Department of the Taoiseach (Mr. Barrett,

Dún Laoghaire): On a point of order, comments are being made consistently about the Government imposing a time limit on this debate. The debate was agreed by the Government having regard to the seriousness with which we regard the matter. It was agreed with the Fianna Fáil Whip that one-and-a-half days would be given to the debate. Fianna Fáil had put down a Private Members' Motion which they did not even move this week. In these circumstances I am asking the speakers to refrain from putting the blame on the Government for the shortage of time. We would have allowed two-and-a-half days for the debate if that had been requested but the request from the Opposition was for a one-and-a-half day debate. I hope that Opposition Deputies will refrain from making these smart political remarks by which they are destroying the co-operation that we have built up here in regard to having such important matters debated.

An Leas-Cheann Comhairle

Deputy Hyland to continue, please.

Mr. Hyland

It is recognised clearly both in this House and by the farmers that Fianna Fáil have been pressing for a debate on this urgent matter. Within the limited time available the House has been debating for the past two days, in what is almost an emergency session, the threat to our entire economy in the form of the proposed milk super-levy.

If this proposal were to be implemented even in part it would undermine and damage permanently the only viable base on which future progress can take place. It is recognised by politicians, by trade unionists and by many other groups that the only credible and sustainable way forward is, in the first instance, through the development of our national resources of land, forestry and of the sea. Following the development of those resources all other development would follow, too late, perhaps, for a philosophy of this nature, but not too late if we are now seriously tackling the problem.

It is nothing short of a national tragedy, when we are seriously contemplating and planning going down this particular road of development, to find the carpet being pulled from under our feet by our EEC partners, if one can call them at this stage of the negotiations "partners" of any kind. This threat must be resisted, fought and won. I emphasise in particular the word "won" because there are no acceptable alternative proposals which would not restrict our overall national development in a very serious way. I would, in fact, maintain that the very credibility of the EEC itself and its alleged commitment to implementing the underlying philosophy of the Rome Treaty to safeguarding, protecting and assisting in the development of developing nations, such as Ireland, must now seriously be called into question.

Where, I ask, is the evidence in recent weeks of this commitment? To take the example of our closest neighbour, Britain, the British Prime Minister has clearly indicated her opposition to any concession as far as Ireland is concerned. So much for the friendship our Taoiseach has claimed to have generated with Britain and the British Prime Minister as a result of his recent meeting with her. It is now painfully obvious that the Taoiseach and the Government have failed to make any impact on the heads of Government in the other EEC countries. Our farmers have been lulled into a false sense of relief that the threat of the levy will not eventuate and, in the closing stages now of this very serious national debate, we find ourselves in an almost panic situation. We, on this side of the House, as has already been said by previous speakers, have no desire to capitalise politically on this failure. In fact we place ourselves fully at the disposal of the Government, collectively and individually, to fight and win our rights within the European Community, our rights as a developing economy. We are entitled to know where we stand because, if the Government fail, we all fail and this Parliament will have failed in a matter of great national importance and in what is certainly the greatest challenge we have faced since we became members of the European Community.

I call on the Taoiseach and his Ministers to come in here today and tell the House and the nation that there will be no weakening of our position, no compromise and, if necessary, we will use our right of veto to bring, as Margaret Thatcher did, these negotiations to a halt, and renegotiate our entry, because at the end of the day, unless we sustain and maintain and support our main basic industry, which is agriculture, there is no point in being within the confines of that particular Community. Let us at this stage as a small but independent nation display that strength and independence. Let us really test the credibility of the concept of a united Europe politically and economically. We all remember, and we campaigned strongly for it, our joining the European Community.

An Leas-Cheann Comhairle

I would remind the Deputy that he must conclude in 15 minutes.

Mr. Hyland

It is almost impossible for me because I had hoped to give some practical examples. I did a certain amount of research into the consequences of this proposal and it is a pity that my time is so short. We should as I say, display our strength and bargaining power within Europe. If necessary, we should use the veto, a veto we are entitled to use as a member state with the same voting powers as all the other nations in the Community.

I want now to give some examples. They may be regarded as being somewhat regionalised. The Avonmore milk area covers the greater part of the midlands. It is an area in which farmers have a capital investment of £106 million. This investment has been built up by the farmers, managed by top management and the share capital out of the farmers' pockets has been considerable. The co-op gives employment to 1,400 and has a wage bill of £15.5 million of which £5 million goes back to the State in PRSI contributions. The proposal if implemented, would lead to a loss of 400 jobs, representing a loss to the State in PRSI contributions, while creating an additional demand on State resources through unemployment benefit payments. There are 6,000 suppliers, 2,000 of them less than 20,000 gallons, indicating the large number of small family farms dependent on the co-op for a living. These are anxiously watching the outcome of this debate in regard to the viability of their future. Avonmore is a developing area. The processing plants have been designed to cater for an expanding dairying industry and so any cutback in relation to development would have disastrous consequences for that particular region.

I would like to give some more examples. If we take 1981 as a base, the Avonmore intake was 100,000,000 gallons and the projected increase for 1984 is 135,000,000 gallons. This represents a difference of 35 million gallons at an average price of 70p. It represents £25 million or over £4,000 for the farmer supplier in the region. Alternatively, it could also mean a reduction of approximately 18p for every gallon of milk produced in that region. Is there really any need to say any more in relation to the catastrophic effect any restriction would have on the Avonmore milk complex serving the entire midland region?

There is one last point I should like to make. It relates to the farmer rescue package. I will give just one example to show how seriously this proposal, if implemented, would affect farmers in the rescue package area. In County Laois there are 220 farmers in the rescue package having their cases accepted and examined for benefit under that particular scheme. Up to 80 per cent of these 220 have been planned towards a developing dairy enterprise. In other words, unless they reach a target of 950 gallons within the duration of the rescue plan they will go by the board. That is one small, isolated, practical example of what would happen to 220 farmers in one single county.

I urge the Minister for Agriculture and the Taoiseach to ensure that, under no circumstances, will any restriction be accepted so far as this super-levy is concerned. At the conclusion of this debate I hope the Minister will reassure farmers and farming organisations that we will resist any restriction, any introduction of the levy and, if necessary, that we shall invoke the veto because that is what our farmers are expecting to hear.

Mr. Sheehan

I welcome this opportunity of debating this serious matter concerning our agricultural sector. At the outset I should point out that, directly or indirectly, our agricultural industry employs approximately 40 per cent of our total labour force, provides approximately 35 per cent of our gross exports and practically 50 per cent of our net exports. It should be remembered that all of this is achieved by an industry which is under-capitalised and the least developed amongst EEC countries, excluding Greece where there is an entirely different type of agriculture prevailing. Over 90 per cent of our farmland is under pasture, its two main products being beef cattle and milk. Together they provide 70 per cent of our gross agricultural output. It is estimated that 80 per cent of our grassland is badly farmed and that a doubling of the output from our grassland is an achievable target. Full exploitation of our grassland would take a considerable period of time, longer than the EEC appear to think. In the meantime, however, between £500 million and £600 million extra could be produced from our existing cattle population primarily through better management, increased milk production and reduced calf mortality.

Our present farming population is ill-equipped to adopt such a course because of age, lack of training, marital status and so on. It is well-known that 25 per cent of our farmers are over 65 years of age compared with 7.5 per cent of Dutch farmers. In itself this has an impeding effect on getting our milk production on a level commensurate with the European yield. In addition our under-utilised land must be made more readily available to our younger, energetic, trained farmers. The utilisation of our two most valuable resources, our land and people, is the best if not the only hope of solving our serious economic situation.

Our present population of dairy cows could give 50 per cent more milk by raising output per cow from the present average of 630 gallons to the European average of almost 1,000 gallons. The average Friesian cow here is capable of producing between 900 and 1,000 gallons, at a stocking rate of one cow per acre, with a concentrated output of ten hundredweights per cow. With no increase in capital investment and only a marginal increase in input costs this would have an outstanding effect on our economy. To any farmer who could achieve that milk production increase from 600 to 900 gallons per cow it would mean an increase of 34p per gallon on his present production level. Additionally it would mean that each extra 100 gallons per cow, on a national basis, would entail an additional £150 million in exports. The present calf mortality rate of 15 per cent, if reduced to 5 per cent, would mean an extra 200,000 calves per year. That would represent a saving of over £20 million in calf losses per annum, at no extra cost, merely through better management or, looked at in another way, an extra 200,000 cattle per year for export, giving the nation over £100 million additional exports.

We have the fifth largest area of farmland in the EEC, with Luxembourg the only member of the Ten having a smaller population than ours. Consequently we have a vital interest in ensuring that our dairying industry, within the common agricultural policy, is not damaged by excessive imports from countries such as New Zealand, or excessive increases in milk production by our EEC competitors, who at present utilise cheap imported cereal substitutes, particularly Holland, Great Britain and France. The fact remains that we have a greater dependence on agriculture than any other country in the world, with the exception of New Zealand. Nevertheless, we have the most under-capitalised, least developed and lowest agricultural output of any EEC country prior to the accession of Greece whose agricultural pattern is much different from ours.

Our milk production is four times more important to our economy than is Danish milk to theirs. It is three-and-a-half times more important than Greek milk is to their economy and six-and-a-half times more important to our farmers than is overall milk production to our EEC partners. Eighty-five per cent of our dairy herds are comprised of less than 30 cows. Forty-six per cent of the cow population in Holland is comprised of herds of less than 30 cows, with 35 per cent of the cow population in the United Kingdom being comprised of herds of less than 30 cows. The Irish cow gives a yield of 650 gallons per lactation, compared with 1,081 gallons per cow in Holland and 1,040 gallons in Germany. When one bears those facts in mind and also that cows in certain parts of the world can produce as much as 2,500 gallons per lactation as in California, one immediately sees how backward we are in milk production. At least we should be on a par with our European partners.

It should be accepted that Ireland receive special recognition and treatment to enable our farmers reach the European standard of milk production, in other words give our farmers an opportunity to reach 1,000 gallons per cow, per lactation period, putting them on a par with their European counterparts. Our farmers, if given the chance, would rise to the occasion. It is well-known, however, that progress in that respect has been inhibited over the past five or six years, indeed one might say for the past ten years here, due to the bovine TB eradication scheme which wiped out hundreds of thousands of our cattle, putting farmers back years in their efforts to achieve the yield of their European counterparts. It is well-known that, because of our geographical position, our economy depends mainly on agricultural inputs. It is also well-known that there is no way in which we will ever benefit from the huge tobacco, wine or soft fruit subsidies in the EEC. If we were situated ten or 20 degrees further south of the Equator we might have some hope of cashing in on those valuable incentives under the Common Agricultural Policy programme. But we are doomed to remain mainly an agriculture-based economy. Even when the last litre of oil and gas is drained from the Celtic Sea agriculture will still pay its part in our economy.

I was amused earlier this morning to listen to statements emanating from across the House. Deputy Collins reminded me of the hurler on the ditch. I appeal to him and to his colleagues to support the work which Deputy Garret FitzGerald, the Taoiseach, Deputy Deasy, Minister for Agriculture, Deputy P. Barry, Minister for Foreign Affairs, started six months ago. It is well-known that the Minister for Agriculture has been working night and day for the past six months in co-operation with other members of the Cabinet and the farming organisations — the IFA and the ICMSA, who are playing no small role in the fight towards staving off this very serious threat to our agricultural production.

I have the greatest faith in Deputy Deasy. He comes from a farming background and knows the ins and outs of agriculture. I believe there is no better man to represent this country as a negotiator at the European table. We are proud to have him as Minister for Agriculture. He will not shirk his responsibilities. I appeal to Fianna Fáil to stop trying to score political points. Come out and let it be seen in Europe that we speak with one voice and that we are behind our farmers who are the backbone of our economy. I was amazed to hear Deputy Collins criticising the Taoiseach.

An Ceann Comhairle

In accordance with an informal arrangement the Deputy has less than five minutes.

Mr. Sheehan

I would love to speak for two hours, but I will respect your ruling.

An Ceann Comhairle

Many of us would love to listen to the Deputy.

Mr. Sheehan

Deputy Collins need have no concern about the future of agriculture. Remember, Fine Gael were associated with the progress of agriculture since the foundation of this State. Paddy Hogan, the first Minister for Agriculture had the slogan one more cow, one more sow, one more acre under the plough. He set the headline for agriculture in Ireland. Was it not James Dillon as Minister for Agriculture in an Inter-Party Government who put the lime lorries into the fields and who increased the fertility of our soil to its present level? Was it not Mark Clinton as Minister for Agriculture who spearheaded our greatest agricultural achievements? Was it not Alan Dukes, as Minister for Agriculture, who a few years ago again spearheaded prosperity for the Irish farmers by the introduction of the calf subsidy and in-calf heifer subsidy? Now the mantle is falling on the shoulders of the present Minister for Agriculture, Deputy Deasy. He will rise to the occasion and see that Irish farmers get their chance to reach the same income levels as their counterparts in Europe.

Mr. E. O'Keeffe

What happened the grants?

Mr. Sheehan

The Deputy knows what happened, but the truth is bitter, and it is there. The truth will sustain us. I guarantee that if we get co-operation from Fianna Fáil — and I hope to see such co-operation in this House before the day is out because there are men and women with commonsense on the Fianna Fáil benches—we could make this a valuable debate for our agricultural enterprises.

Agriculture is the cornerstone of our economy and we must insist that this situation is not changed. Our benefits from the EEC accrue under the Common Agricultural Policy. I know the Minister will be able to conclude a very good deal for our farmers which we will be proud to stand over. The road ahead is very difficult and the discussions which are entering a very important stage will be even more difficult, but it is a consolation to know that we have as Taoiseach Deputy Garret FitzGerald, the most respected Minister for Foreign Affairs this country ever had, Deputy Deasy as Minister for Agriculture, and fellow Corkman Deputy P. Barry as Minister for Foreign Affairs. That team will fight our case in Europe and will leave their imprint on agriculture. They will give our farmers an opportunity to raise their incomes to the same level as our European counterparts.

Remember, Ireland contributes only 5 per cent to the butter and milk mountain but the outcome of these negotiations could be a matter of life or death for our agricultural industry. I wish the Taoiseach, the Minister for Agriculture and the Minister for Foreign Affairs the best of luck in their endeavours to maintain the status quo for our farming industry.

Mr. Kitt

I welcome the opportunity to contribute to this debate which has very serious implications for our agricultural industry and for all those involved in that industry. In case Deputy Sheehan misunderstands the position, we will support any Government efforts to have this super-levy rejected but we would like to know what efforts the Government are making. We are not happy that a sufficient effort is being made by them or that they are speaking with one voice. We would like the Minister to tell us clearly that he is confident the super-levy will be rejected. There is no point going back and mentioning various Coalition Ministers who contributed to agriculture; I could give a list of Fianna Fáil Ministers but we must look to the future and urge the Government to have this super-levy rejected.

In his contribution yesterday the Minister for Foreign Affairs spoke about the success of the European Council in Stuttgart. He said "Stuttgart spoke of relaunching the Community and of providing a solid basis for its further dynamic development during the rest of the decade. This must not be done at the expense of any one member state". That is very encouraging — I presume he is saying that that development will not be done at the expense of Ireland. I am a bit confused because that statement is at variance with the conclusions of the Stuttgart Summit which gave the EEC Commission the authority to put forward proposals for the super-levy.

The basic unfairness of these proposals on the super-levy has infuriated Irish farmers and people involved in the agricultural industry. In this country we produce no more than 4.5 per cent or 5 per cent of Community dairy milk supplies and our dairy farmers get a price for their milk which is low by European standards. We are only developing our dairy industry and if this super-levy is to be introduced it will be a complete departure from the terms under which we joined the EEC. A former President of the IFA, Mr. Paddy Lane, recently queried the legality of the super-levy. He stated that it would seriously contravene Ireland's rights under the EEC Treaty and it must be contested in court if necessary. He went on to say that Article 39 of the Treaty of Rome clearly establishes Ireland's right to exemption from the super-levy and all sections must unite in a positive battle to gain that exemption which is our right under the Treaty. I am sure the Government are continuing to query these matters and we would like to know from the Minister what is their response.

I would like to know also what allies we have in the EEC to support our case. First, have we sought allies and, if so, what response have we got apart from encouragement from the Greek Government? The Irish Press of yesterday, Wednesday, 16 November, published an article which stated that Denmark had become the latest EEC country to oppose any attempt to spare Irish farmers from the pain of the new milk super-levy. The article stated that Britain, the Netherlands, Italy and France have already objected to even the limited special deal for Ireland suggested by the Greek Government. I hope the Minister will give us information on these reports printed in the media. It is very discouraging to hear that we are losing allies day by day. One must ask what the Taoiseach has done in an effort to get our partners in the EEC to understand our position. The Minister for Agriculture is a sincere, genuine man, but the Taoiseach as Head of this Government should have explained our case to our partners in the EEC.

On the adjournment of the House recently I spoke about the super-levy and I mentioned farmers in the west of Ireland who were advised to go into dairying and who had increased production particularly in the last few years. The province of Connacht is an area which has a great deal of land classified as severely handicapped and great difficulties have been experienced there, as the Minister of State, Deputy Connaughton is aware, in trying to increase dairy production, and the figures for that in that area are very encouraging. The Minister in reply to me on that occasion said that he appreciated the problems but he could not make any special case for the west. I was not asking him to do that. I was giving a localised, regionalised example and explaining that he should have an understanding of the situation there. Farmers in County Galway, my county, have increased milk production there by 16 or 17 per cent over the last two years. It would be disastrous for them having been advised to go into dairying and having invested money in it, to have a 70 per cent levy imposed on them. I give an example that would be common to many parts of Ireland. If a farmer who had 15 cows in 1981, which we are told is the base year, were to increase his herd by ten cows in two years he would have to pay a levy of 70p per gallon on 6,500 gallons of milk, taking the average yield per cow in County Galway as 650 gallons. Such production would be small enough compared to some parts of Ireland and small certainly compared to countries in Europe. The imposition of the proposed super-levy on such a farmer would mean a sum of £4,550. If such a levy is to be imposed on a County Galway farmer the consequences for farmers in this country can be imagined. I hope that the Government will continue to communicate these facts and figures to our partners in the EEC. We cannot allow our vital national interests to be damaged. We must state clearly that we will have no hesitation in employing the veto should it come to such a pass.

My colleague, Deputy Noonan, mentioned the alternative attack that should be made on imports of New Zealand butter the contract for which I understand comes up for renewal at the end of this year, and the question of the import of cheap feeding stuffs and also, something of great interest to all farmers, the levy on milk factories.

An Ceann Comhairle

Deputy Kitt has five minutes.

Mr. Kitt

The Irish Press of yesterday contained an article by Mr. John Lichfield in Brussels which stated that plans to impose a further tax penalty on the so-called factory milk farmers had been revived. Maybe the Minister when he is replying will tell us why this tax was not on the list of proposals and why it is now being revived.

This type of production in countries such as Germany, the Netherlands and Denmark is causing a glut in milk supplies. I hope he will explain why it is only now we are looking at the question of a tax on these milk factories. Countries such as Denmark, the Netherlands and Germany base their production on heavy feeding of cows with concentrate feeding stuffs. Their type of farming is different from what we are accustomed to.

The Government should seek the elimination of all MCAs as they give an unfair advantage to several member states at the expense of the Community.

As regards the super-levy on milk the question of the farm rescue package arises. Part of the farm rescue package for many dairy farmers is that they would benefit from increased milk production. The implementation of the milk super-levy would put the whole rescue package at naught and would make nonsense of all the hard work that went into that rescue package. Deputy Hyland has given examples of the targets that farmers were to achieve to make the rescue package viable.

The Government are cutting down on expenditure on agriculture. I sympathise with the Minister. It must be difficult to negotiate on farm prices or on trying to extend the area of land considered to be severely handicapped areas, or fighting against the proposed super-levy. We have no farm modernisation scheme and we are losing money from the EEC. We cannot recoup in 1984 the grants we lost this year. The Minister told me that we will be losing approximately £3 million because of the suspension of the farm modernisation scheme. Last week we were told we will lose £50 million of EEC funds because farmers were not able to finish the work on their development programmes under the farm modernisation scheme and the western drainage scheme. The Government erred in not allowing farmers who were short of cash to have their deadlines extended.

Mr. Deasy

I am sorry?

Mr. Kitt

The Government did not extend the deadlines to allow farmers to complete some of those works.

Mr. Deasy

Which works?

Mr. Kitt

Works under the farm modernisation scheme and the western drainage scheme.

Mr. Deasy

We did, of course.

Mr. Kitt

I understand that farmers who had not finished all the work will not get the total amount of the grants under those headings. There is some confusion about the rescue package. Many farmers who are awaiting the restoration of the farm modernisation scheme are confused about what proposals will be in the restored scheme. They are being told the western package will deal with some of their investment problems. The Government should make this very clear. Will they lift restrictions on the western package to allow investment in buildings? Can the Minister tell us that the farm modernisation scheme is definitely being restored? Early autumn, late autumn and 1 November were given as dates by the Government for the restoration of that scheme which is so important for our farmers.

I hope this debate will impress upon the Minister and the Government the importance of allowing Irish farmers to develop. This is an emergency debate to try to make the Government realise that they must fight for the complete rejection of the milk super-levy. I was disappointed to hear many speakers talking about a derogation for a year or two, that there will be a compromise and we will get a special deal. We want the complete rejection of the levy and I hope the Minister will be able to confirm that.

Minister for Finance (Mr. Dukes)

Members of this House should have no doubt about the seriousness with which the Government are approaching the discussions now going on to prepare for the European Council Meeting in Athens on 5 and 6 December. I should like to make it quite clear that, in approaching those discussions, the Government have been at considerable pains to make it abundantly clear to our partners in the Community that there are some things we cannot accept.

During the course of this debate Deputy Kitt seems to have heard some suggestion that there was talk about a derogation for a year or so. I do not know where he could have heard that suggestion. He certainly did not hear it from the Government. As recently as last week, we made it very clear to our Community partners that, for all of the reasons which have been developed by speakers and by the Government, and which will be set out in even more detail by the Minister for Agriculture, we cannot accept the application of a super-levy in the form now proposed. We have told our partners in the European Community that that will be our position during the next special council meeting on 28 November which I will attend with the Minister for Foreign Affairs, and that that will be the position of the Taoiseach at the European Council Meeting in Athens on 5 and 6 December.

In the framework of those negotiations that is an absolutely crystal clear statement of our position on that issue. We will not change our position on that issue. It is obvious and understandable that agriculture and the question of the super-levy in particular should tend to dominate this debate. A soundly based agricultural sector is of crucial importance to our economy. It is the life blood of our economy. It is so much a part of our economy that it is impossible to conceive of our going along with any action which would frustrate the further development of that sector. Within that sector milk and its associated activities are extremely important.

At this point in the debate I should like to draw attention to some of the other matters involved in the negotiations which, in themselves, also have a central importance for the future development of the Community, and the ability of the Community in the future to carry out the type of role which the Treaty gave it, and which very largely influenced the perception of the electorate here when we decided to join the Community in 1972.

There is a central part of these negotiations which is concerned with the Community's own resources. It might be useful if I were to illustrate briefly what the own resources system of the Community is, and how the Community finances itself. The existing revenues required to finance the Community's activities consist of customs duties, agricultural levies on imports from outside the Community, levies on sugar production within the Community, and the proceeds of a flat rate of value-added tax calculated on a harmonised basis right across the Community. That rate currently is 1 per cent.

The institution of this revenue system, the own resources system, in 1970 was a major achievement for the Community and gave it a financial base which had to be ratified by all the member states. This gives the Community a legal right to the resources which are produced from the various elements I have just outlined. In 1970 a limit of 1 per cent was set on the VAT part of the own resources which is by far the greater part of the own resources.

In 1983 the total of the resources available to the Community under the own resources system, that is, the customs duties, the agricultural and sugar levies and the proceeds from the VAT will come to a maximum of 25 billion European currency units, roughly £18 billion. This total sounds large in our terms. It would be the equivalent of 1¼ times our gross domestic product. Of course it is quite small in overall Community terms. The total of the financial resources available for financing the Community's activities in any given year represents less than 1 per cent of the Community's gross domestic product. The growth in own resources available has maintained a fairly stable trend over the years, over the last four years having been in the region of 10 per cent per annum.

Customs duties and agricultural levies cannot be relied upon to produce any real increases in revenue in the next few years. The trend is for a slight decline in revenue from these. Given the development of trading relations in the world and the various agreements which cover that aspect, the prospects are of a further decline in the amount of revenue being made available from those sources. The VAT element now constitutes about 60 per cent of total own resources in the Community and can be expected to show some buoyancy in line with the gathering momentum of economic recovery in the Community. The difficulty is, of course, that Community expenditure in the foreseeable future is likely to outdistance the growth in own resources. This is where the central financing problem, which is the kernel of this negotiation, arises. In recent years, expenditure from the Community budget has increased fairly substantially. It was 14 billion European currency units in 1979 and reached 25 billion in 1983. Of the 1983 total, the provision for agricultural guarantee expenditure is about 15 billion ECUs, or about 61 per cent of the total budget. That proportion in itself has fallen fairly substantially in recent years. Agricultural spending accounted for about 75 per cent of total Community expenditure through most of the seventies. The fall in the proportion accounted for by agriculture is attributable party to developments in agricultural spending reflecting market developments, a fairly restrictive price policy in operation for a number of years, the co-responsibility levies and other levies implemented since the later part of the seventies. It is partly due, on the other side, to a real increase in budgetary allocation in areas other than the FEOGA guarantee — which, in part, finances the agricultural spending—and notably to increases in the amount of funding made available for the structural funds, particularly the regional funds and for development aid.

Mr. O'Kennedy

What did the Minister say was the current percentage?

Mr. Dukes

Sixty-one per cent. Another element which has brought about a shift in the balance of expenditure in the Community and which again is a key element in these negotiations has been that ad hoc refunds to the United Kingdom since 1980 have added a significant new expenditure onto the budget.

Looking ahead, the trend of expenditure on agriculture will obviously be influenced to a very considerable extent by the measures at present being discussed to achieve greater control of agricultural spending. As the Minister for Agriculture will be commenting on these at a later stage in the day, I do not intend to dwell on them now. It is fairly clear that, even on the most extreme assumptions about the amount of saving achievable in agriculture, the normal growth of existing own resources will not be sufficient to meet expenditure requirements of the Community in the years ahead.

An Ceann Comhairle

The Minister has hardly five minutes left. This is in accordance with the informal arrangement of the Whips.

Mr. Dukes

The central point which I want to come to is that the European Council are now faced with the issue of providing sufficient finance for the Community in the years ahead. There are a number of reasons why this should be so. The cost of enlarging the Community, for example to include Spain and Portugal, has been estimated to be the equivalent of about 7 per cent of the budget, or about 1.7 billion ECUs annually in 1983 terms—that is about £1.15 billion. It is clear that they will need additional own resources just to deal with that problem.

We have made it very clear during the negotiations that it is our view that the Community budget as it stands, at less than 1 per cent of the Community GDP, is not of a size that can bring about a substantial redistribution of income or of economic activity in the Community. Its absolute volume is too small to allow that to be done. That is a reason, and a most compelling reason in my view, for increasing the size of the Community budget. It is also very clear that there are a number of new policy areas with which the Community should be involved which will require additional expenditure. This, again, is a case which was made very strongly. We have made the point that we would consider an increase of the VAT limit to 2 per cent to be justifiable. The latest proposal put forward by the Greek Presidency is for an increase of 1.8 per cent. We have supported that, while saying that we still believe there is a case for going even further. We are not the only member state in support of that.

The difficulty is that a number of member states, while agreeing on the need for increased own resources, are unready to specify a figure before they consider that enough progres has been made in bringing about savings in the current pattern of expenditure. One member state has refused to contemplate the possibility at this stage of any increase in own resources. There is a clear issue to which we have addressed ourselves and which we will continue to raise during the course of these negotiations.

Mr. O'Kennedy

Can we guess which member state?

Mr. Dukes

I do not think that the Deputy would have too much trouble in guessing who that might be. The other key issue involving the same member state covers the so-called problem of budgetary imbalances. As I have said, a number of ad hoc solutions have been found in recent years to deal with what is essentially a problem for the United Kingdom, although it is perceived as being a problem for Germany also. Over that period from a purely political point of view, on a pragmatic basic and in order to ensure the continuation of Community activities, we have accepted that the Community should make refunds of this kind, although Members of this House will not be surprised to hear that I believe that the basic justification for making refunds of this kind is very suspect, both in terms of Community financing and because it is based on a very narrow budgetary view of the Community's activities.

Essentially, there are a great many Community activities that confer economic advantages on member states that are not and cannot be reflected in the budget. Therefore, our position is that to base this discussion solely on budgetary growth means that we are taking a very incomplete view of the situation. However, because it is particularly important for this country that the Community should continue to develop and that we should avoid having, year after year, these extremely bitter wrangles about this question——

An Ceann Comhairle

According to the arrangements which I mentioned, the Minister's time is over. I have no control over the matter, but am merely telling the Minister.

Mr. Dukes

I am about to conclude. Because we take that view we have gone along with the need to make arrangements like that but will, of course—and we have made this clear to our partners —be very jealous about the size of any arrangements because of the damage that these could potentially do to the Community's ability to finance policies in other areas which are of direct importance to us, or which we believe are of a wider importance to the Community.

Mr. O'Kennedy

I am going to concentrate my attack on a government, but for a change it is not this Government, it is the British Government, and particularly the Leader of that Government who, over the last number of years, has succeeded almost single-handed in bringing about a change in direction, a deviation from the principles of the European Economic Community and, quite frankly, a crisis within that Community. In doing that, I am not just engaging in what might be seen as the vindictive role of Brit-bashing from this side. I find myself in the distinguished company of the President of the Commission and very many members of the Council of the European Community.

The Minister for Finance was dealing with the forthcoming European Council. I remember the 1978 European Council. I want to indicate what we can, hopefully, do to get the Community back on course. At that European Council we were then talking in terms of developing policies for Europe and about the funds necessary for those policies in a way consistent with the principles of the EEC. The record will show that that Council came to the conclusion that distortions in the CAP should be eliminated, particularly those represented by positive MCAs. They were first introduced in 1969 because of the then French devaluation by 11.1 per cent and German revaluation by 9.2 per cent. They were meant to be temporary, but like many things in the European Community what was introduced as temporary became quite a characteristic of the Community policy in the intervening years.

The European Council of 1978 unanimously decided that the EEC would move towards gradual but immediate, over a foreseeable period of five to ten years — five years was the time scale in mind—elimination of the positive MCAs because it was seen as being a distortion to maintain what was introduced as a temporary mechanism to deal with the French devaluation at the time. That was the intention until the British budget surfaced. It surfaced in a way that everybody at European Council level and at Commission level were forced thereafter to react to the demands of one member state and one head of Government: "I want my money back".

The imposition of the MCAs has three effects as it continues to be applied notably in the UK, the Federal Republic of Germany and The Netherlands. It means that because you have a higher level of prices than the common price structure, which is an essential characteristic of the CAP, you get a higher level of milk production in each of these countries than otherwise you would have under a common price structure. This has given rise to what has been called during my own time in the Council and the Commission as agriculture without soil or sun. One of the basis of the CAP was to maintain as many involved in agricultural employment on the land as possible. I cannot go into this in any great detail, but everybody is familiar with the principles of the Treaty.

The second consequence of those distortions is that you get higher consumer prices in the same countries. As these countries are the main consumers it means that the level of consumption in those countries is lower than it would otherwise be. You then get higher production encouraged by artificially high prices and lower consumption discouraged by the level of these prices. You also get distortion where you have imported products which are not covered by the CAP. These imported food products are tapioca, oil seed and many others. The prices of those relative to the milk prices are reduced and thereby the importation of these substitute food inputs is encouraged. The consequence of all of this is that we now have a surplus in the EEC costing the budget approximately 4,500 million ECUs this year. It is not the sole cause of the problem but it is one of the major causes, because it is a departure from the principles of the CAP, meant to be temporary, but now is nearly enshrined as permanent.

I suggest to the Minister and the Government that they concentrate on coming back to that at the next European Council. I am sure they have been arguing this because it is a resolution of the European Council. I would also like to suggest that they concentrate on the principles of the European Community, which we have been obliged to ignore because of the attitude of the British Government and its Prime Minister in particular. The reality is that before that budget demand emerged "I want my money back"— I heard those very words used at a European Council — the principle of juste retour was utterly contrary to the principles of the European Community. It is now apparently accepted as a norm. Obviously differences arise even to accept and qualify how much money one is entitled to get back. The very fact of the importation from third countries into Britain particularly from New Zealand, gives rise to tariffs at the border, which is part of the structure of the budget of the Community. This is claimed as being a contribution by the United Kingdom to the EEC from the UK. It is not any such thing. It is simply a collection agency, like any other government would have to put up at the border on behalf of the Community under the rules of the Community and it is not part of a British budget contribution. It is time the heads of government clearly stated that.

I noticed recently that unfortunately this position of a government has actually given rise to internal dissension within the Commission. It is not the first time that the head of a government, the British Government particularly, directly intervened to try to influence allocations of responsibility within the Commission. That is utterly contrary to the basis on which the Commission must operate as an independent body. It now emerges that apparently the tensions between the budget commissioner, who is from the UK, and the other members is such that people within the Commission are being accused of cooking the books when the Commission come up with proposals which demonstrate from their new appraisal that the British contribution is not of the order it is suggested to be. Unfortunately, the budget commissioner apparently felt constrained to suggest that this seemed to suggest that either he was being accused of cooking the books to show the British contribution higher than it actually is or that his colleagues were doing so.

Every member state will be reacting to these problems until it is clearly stated that if the European Council is to have a role it will be a role, as it was originally suggested it would be, to create initiatives for the Community, which was protected by the institutional framework of the Commission, of Parliament and of the Council of Ministers before the European Council was dreamed up. If it is to continue to simply be an occasion where the power of one member state or the stubborness of one member state demanding what I am glad to say was not conceded at the European Council in Dublin which I attended with the former Taoiseach, Jack Lynch, then it will eventually fail. This Council was described in the British press, and some of our own press afterwards picked up that line, as a failure if not a disaster. That Council was the great success of that period because the Council were not prepared to come to conclusions on terms which would undermine the whole basis of the European Community.

It is important that these facts are stated. The consequence is that the budget has been central to the whole argument with a view to accommodating the British case. Agriculture has been attacked and the Minister has pointed out that the level of spending on agriculture, as a proportion of the total budget has dropped from something in the order of 75 per cent to 61 per cent. If there was to be an attack, it should have taken place seven or eight years ago, but the British budget was not an issue at that time, hence the attack did not take place. It is now taking place as a consequence of that budget.

Over the last 15 years or so, we have watched agricultural employment drop from approximately 20 million to around eight million in the European Community. The numbers who have been displaced are now about the same as the numbers of unemployed in Europe. If we are to continue on this pattern, especially in Ireland, what is the alternative option for farmers here or elsewhere who are going to be displaced as a consequence of this reaction to a budget preoccupation which was no part of the Community we joined, enshrined in the great names that we now just call upon like Gaspari, Schuman and Spaak? I often wonder whether this generation will leave the memory of even one name in Europe that can be honoured as previous men were.

The principles of the Common Agricultural Policy are what all governments should be relying on. Of course one must point out that this proposal is not consistent with what those principles enshrined. However, it is not the first time that this proposal was suggested. When I was a member of the Commission, this proposal was being suggested, and even before that. I do not know what line of communication the Government have to the Commission, but they have left it very late to make their views known. During my period in the Commission we used every opportunity to get support from like minded people within the Commission and like minded governments, and what was emerging as a proposal never saw the light of day. The Government, for some reason, were not aware of what was likely to happen and, when it did happen, they had left it too late. Maybe it is not too late yet but the strong demand is not always the most effective way of doing things. We must insist on the principles of the Treaty, recruit the aid of our colleagues in the Community on that basis, and point out that any other way is not just disastrous for Ireland but also for Europe which, God knows, at this stage is very short on idealism. Everybody recognises that. The Government have been a little less than effective in bringing this matter to our attention.

I hope that this debate will be seen as support for the Government in the broadest possible sense, some might say to stiffen their resolve or to criticise them but, above all else, to demonstrate through our Government, to our partners, especially to any one Government which can set back the whole pace of Europe, which has happened, that we will not tolerate this. That should help the Government.

On the question of veto, everyone knows there is no formal declaration of that term in the Community. Certain decisions are to be taken unanimously and, that being so, the consequence is that if someone does not agree it is, effectively a veto. I assume that the Government will not agree to this proposal, which is contrary to the principes of the Community, particularly as it applies to Ireland. They will not be the first Government to impose the veto. I heard it imposed, where it was never even intended to be considered at the European Council, not once or twice but four times by the Prime Minister of Britain. I heard it imposed by her various Ministers at many other councils, and if that can be done in the national interest of one country, surely we can do it, not just in the narrow interest of Ireland, but in a way that is much more consistent with the principles of the Community we joined and the principles of the Common Agricultural Policy that are a central area. If there are surpluses, we too must recognise that the way to tackle the problem is in the manner in which I suggested earlier on.

We also need to recognise that we have done very well from this and many other policies and that sometimes we have not always applied them to the best effect. We owe it to our Community partners to ensure that every penny which is debated here is not dissipated either because of lack of efficient production or wasteful administrative expenditure. I hope this debate will not only stiffen the resolve of the Government but will enable them to demonstrate to their partners that the unanimous position here is one of adhering to the principles of the Community we joined. If the decision of the European Council, which is really an institution of the Community, will put more people off the land here or elsewhere, then I am afraid Europe is going to move into an even sorrier state of decline.

Mr. Crowley

I am glad to have an opportunity of speaking here on this issue because there are times when I wonder whether our people fully appreciate what exactly is at stake. I come from an area in North Cork which produces an enormous amount of milk, and all the population there, under one guise or another, are dependent on a strong and determined agricultural economy. I do not know if they realise the loss of jobs that can and will occur if the super-levy comes in, whether in the dairy industry, co-operatives or the suppliers of dairy products, etc. I do not know whether people in trade unions fully appreciate either what is at stake, and I do not think we are treating the issue as seriously as it deserves. We have almost a crisis of confidence in the dairy industry, but I am glad to say that there is an appreciation that all the political parties are united in supporting the stand taken by the Government on this issue. There are so many problems which should be taken into account and the consequences are so grave, that every section of the community must clearly indicate their total support for the Government in their fight in Europe.

Confidence was being restored to the agricultural industry, especially dairying, this year. There was a considerable rise in production of milk over the last year or two and now that confidence is being eroded. This is regrettable. The agricultural industry has suffered terribly over the past three or four years. It is regrettable that at a time when confidence was being restored, this levy should be proposed. I suggest that the proposal is at the behest of some of the more powerful countries such as Germany, France and Britain. We should not be slow in informing these people that it was not this country that created the surplus, that it was created by the very countries who are now pushing for the super-levy. The figures indicate that our contribution to the surplus is of the order of 4 per cent. If it transpires that we must pay in full so far as the super-levy is concerned, we will not be talking of the kind of EEC that we joined ten years ago.

On average, our milk production yield is 700 gallons per cow whereas the northern European average is 1,200 gallons per cow. Our farmers must be given the opportunity of reaching that higher level of production. But when we compare northern European farmers with ourselves we are not comparing like with like having regard to the imports of cheap cereals that contribute substantially to the production of milk, close to the Port of Rotterdam in particular. If we were to be given the opportunity of increasing our milk production to the north European average, we would be in a position to negotiate as equals but that is not the position at this time. There is a great deal of resistance to what we are seeking. Neither the British nor the Germans are anxious that there be a derogation in our case. In addition, it has come to my notice that COPA, the umbrella for organisations for the farming groups in Europe, are not supporting us either in this matter. We must not forget that. There is a duty on our farming organisations to fight with determination to win the support of COPA in relation to a four-year derogation at least because that body could play an important part in this matter.

There is a major duty on members of the European parliament to work with determination and with diplomacy to indicate clearly our dependence on the agricultural industry. There may not be any country in the Community prepared to support us fully in this instance. That is why I am so pleased that the Taoiseach has met the Heads of State of Britain, Germany, Greece and other countries and has made clear to them the importance of this super-levy in so far as we are concerned. I must compliment also the Ministers for Agriculture, Finance and Foreign Affairs for the efforts they have been making to bring about a derogation.

We joined the EEC in the confidence that our membership would mean a long and bright future for our agricultural industry. We realised then that some of our more traditional industries would suffer. To that extent we have paid the price but the one industry above any other that membership was intended to help must not now be subjected to this severe blow of the imposition of the super-levy.

If we are successful in our efforts to secure a derogation, the Italians may say that the same concession should apply to the South of Italy or the French may say that the poorer areas of that country should also qualify. The British might say that Scotland or perhaps Northern Ireland should be treated in the same way. I am not sure that we have the power to persuade these other countries of the absolute necessity for our not being subjected to the super-levy but in order to have the maximum power possible, the Government must have the support of all sections of the community.

The Minister for Agriculture must be complimented on the stand he has taken in relation to the imports of New Zealand butter, particularly into Britain. Those imports are playing a significant part in the British market, a market that is declining annually. If the sort of determination that has been shown in this regard by our Minister is brought to bear in relation to the super-levy our position will be very much strengthened.

Our level of dependency on agriculture is five times greater than is the case of any other member state. In those circumstances I do not think that any increase in social funds or in any other fund will contribute to the alleviation of the hardship that will follow from the imposition of the super-levy. We must be strong and united in fighting this issue. We must continue to seek a full derogation from the super-levy.

I am not sure that the smaller and poorer nations are getting the type of break they need and that is a reason for giving a good deal of consideration to the use of the veto. I do not have the knowledge of the technicalities of the EEC that the Ministers for Finance and Agriculture or Deputy O'Kennedy may have, but regardless of how much talk there may be about MCAs and so on, the fact remains that the whole issue relates to the question of whether farmers in the west or in the south or in any other part of Ireland will have to cut back on their production of milk. They are wondering whether they should invest more money in the dairying industry, buy more cattle, erect more buildings, or begin to withdraw, whether they should begin to consider getting out of cattle altogether. The consequences of such a decision for our industry, our co-operatives, for those people working in firms supplying agricultural machinery, hay sheds and so on will be dire. Very quickly we will find ourselves in a situation in which there will be fewer people working with more and more people seeking unemployment benefit. When that begins to happen we will realise there is less money available to those in need and there will be no jobs available to those seeking work.

This has been a useful debate. This House should give the Minister and the Government absolute support in what they are doing and I sincerely hope their efforts will be crowned with success because, as a nation, we are in dire need of that success.

Mr. Calleary

I am very glad to be given an opportunity of contributing to this debate. Since I came into this House over ten years ago there have been very few debates of such importance to our people and the country as a whole. My only criticism is that it has been limited. It is sufficiently important, indeed of such vital importance to our whole economy, that it should have been allowed continue until everybody in the House had had an opportunity of contributing. I shall revert to that point later.

As Deputy Crowley has just said, there were many reasons for our joining the EEC. Those of us representing rural areas realise that our principal reason for joining was that we be given an opportunity to develop our greatest natural resource, that being land and, in particular, our grasslands. Our farmers accepted the challenges of that time, borowed money to carry out various developments and purchased extra land and machinery. Many of them, after their day's work in the fields, underwent educational courses in order to improve their theoretical knowledge of agriculture. While southern and eastern farmers had a headstart, western farmers responded to those challenges and opportunities and set about availing of new markets and better prices. As one representing western areas, like the Minister of State, I should say that not alone is this proposed levy of immense importance to the east and south but is of considerable importance to the smaller farmers of the west.

It is generally recognised that dairying presents our small farmers with the best possible opportunity for economic expansion and development. Western farmers took full advantage of the new situation, despite their poor land structure and the fact that a large number of their holdings were in the hands of older men and women. Indeed, there has been a dramatic expansion of dairy produce in western areas. But we must still travel a long way in the west before reaching the national average output. However, our farmers were confident that development already undertaken, investment already made and the hard work put in would pay off in the near future so that the west would no longer be the poor relation. Then we had the bombshell of this super-levy, when the hopes and aspirations of thousands of families were dimmed. While some people might be inclined to feel that this proposed levy might affect the larger producers only, we in the west know that it will freeze the further development of the dairying industry, in particular in counties like Mayo and Donegal. In Mayo there are approximately 3,500 suppliers. The total output in 1981 was 19 million gallons of milk. The output in 1983 is estimated at 23 million gallons and it was confidently expected that there would be an increase of 20 per cent in 1984 over the 1981 level. A cursory examination of the levy shows how dramatic its effects would be on western areas. I shall revert to that later if I have time.

If we examine the concept of the super-levy — and we have been told that it will be imposed in order to penalise those who have contributed to the present overproduction and overcapacity in Europe — then we will see that its objectives should bear equally on everybody. It is our contention that that is not the case, that the criteria being applied to each country are not fair. The reality is that the levy will not meet the criteria and will affect us to a much greater extent than any other country.

This figure probably has been mentioned many times but it is no harm to repeat that our total consumption amounts to approximately 4 per cent only of total EEC production. It is also important to realise that agriculture, of which the dairying sector is the mainstay, amounts to 43 per cent of our total economic output. The current November-December 1983 edition of the magazine Europe contains an extensive article entitled “Agenda for Reform” which all Members of this House should read. It contains the following under the heading “Common Policies”:

On this basis the Commission, in its review proposals to the EEC Council of Ministers, stressed two fundamental principles: The structural funds of the Community must be agencies of structural development and adaptation, rather than channels of financial redistribution. They must support actual Community objectives, not just contribute to projects decided at national level.

That article continues to say: under the heading "Agricultural Reform":

It is therefore, the very success of the CAP, the achievement of its principal initial objective, which makes the review necessary. The policy cannot remain the same when the goal is to achieve self-sufficiency in food, if this goal has been overtaken.

The whole tenor of that article is sympathetic to and supportive of the present proposals of the Commission. It would be fair to say, since its author is a freelance journalist, that the main information contained in that article probably was contributed by the Commission, either from among its members or staff. However, this article appears to me to contradict the terms of the Treaty of Rome. Among the objectives of the Treaty of Rome are included those of promoting throughout the Community by harmonious development of economic activities continued and balanced expansion, increased stability and an accelerated raising of standards of living. Therefore, I do not think those two statements can be reconciled. The rules of the Treaty of Rome, as were referred to by Deputy O'Kennedy, are being changed by stealth.

Recently the Taoiseach received a document from North Connacht farmers seeking the approval and aid of the Government for having certain areas in Ireland redesignated or reclassified. In the course of that letter they said:

In any negotiations which should take place in future we would be most disappointed if the Irish negotiators would allow any benefits to Mountain Areas (i.e. areas coloured brown on the map of Europe), without getting similar benefits for the Severely Handicapped Areas in Ireland which have been shown to be even more disadvantaged than some of the Mountain Areas.

An Leas-Cheann Comhairle

The Deputy has five minutes left.

Mr. Calleary

That is one of the problems when we are limited to 15 minutes. That document contained the following:

Again, one of the main objectives of the Common Agricultural Policy is "to ensure the rational development of agricultural production and the optimum utilisation of the factors of production".

If this levy goes through the document from the North Connaught Farmers Co-operative Society will have been a waste of time.

One of the problems of a short debate is that people who would have liked to speak could not. Deputy Coughlan asked me to say that Donegal farmers will suffer a loss of approximately £3.5 million if this levy goes through and their future development will be severely curtailed. In Donegal, as in Mayo, the smaller herd owner — in the 12 to 15 cow bracket — will be badly hit. In those counties milk production is expanding and this levy will kill that expansion. Contrary to all the commitments, promises, help and assistance to the disadvantaged areas of the Community, it would in reality forestall and stifle the initiative of people in some of the worst disadvantaged areas of the Community, who only want a fair opportunity to develop to the utmost one of the best options they have for development, that is, dairying.

In Mayo 30 per cent of suppliers will go to the wall. These are the people who borrowed money and who need to expand to pay their interest and other charges. Most of those who are getting assistance from the Government under the rescue package will be affected because further expansion of their enterprises is needed. The dairy industry forms a far greater percentage of our GNP than it does for any of our EEC partners and bears unduly heavily on this country.

The Minister for Agriculture is quoted in the CBF news, winter 1983 edition, as follows:

Up to now, most of the attention on the proposals has been focused on the milk super-levy and the other suggestions to curb surpluses in the dairy sector. This is quite natural, because the imposition of such a levy would penalise our dairying industry in a grossly unjust and inequitable way. However, apart from the implications for the dairying sector, the super-levy would also have serious implications for the beef sector on in that 80% of our beef production comes from the dairy herd; quite obviously, any restrictions on dairying would also damage the beef industry.

We must also take into consideration one of our fastest growing industries which is referred to in the IDA News, No. 2, 1983, headed "Agricultural Processing: Ireland's Most Important Industry".

An Leas-Cheann Comhairle

The Deputy has one minute left.

Mr. Calleary

Obviously I cannot complete all I want to say in one minute, but I would like to read part of a letter from the Irish Co-operative Organisation Society Limited:

It must be understood that this issue is not necessarily an agricultural one. The dairy sector is a labour intensive industry employing approximately 20,000 workers, not to speak of the service sector which is so dependent on co-operative agribusiness in Ireland. These proposals further threaten a major number of these urban and rural jobs, at a time when we can do without such threats.

It is up to the Government to go forward now knowing they have the full backing of every Member of this House. I say to the Minister and to the negotiators: go forward and do not be afraid of the word "veto". As Deputy O'Kennedy said, it has been used on many occasions before but never will it be used to greater effect and never will it have a greater influence on our national interest than it will now. I say to the Minister go forward, use the veto if you have to, and you will have the unanimous support of this House and the backing of most of the Irish people.

Mr. Dowling

I too welcome this opportunity to put on record my total rejection of the current EEC proposal, particularly the super-levy on milk. Having listened to contributions of other Deputies, the theme enunciated by all is solidarity for the action taken by the Government in opposing this levy. It is difficult to confine oneself to 15 minutes on such a wide-ranging debate which has very serious implications for every sector of the economy, not only for the farmers whose livelihood derive, from milk, beef and other farming enterprises, but for all associated enterprises. The number of jobs directly related to agriculture will be seriously curtailed if this levy were to go through in the form originally proposed.

I do not believe the people in Europe who thought up this levy believed it could be imposed in the spirit in which the European Community was set up. It was part of the original plan that the weaker sections of the Community would get specialist treatment. That is completely inconceivable in the proposal in its present form and would effect Ireland in the final analysis.

In 1972 I and many others committed ourselves to bringing Ireland into the EEC because of the advantages we felt would accrue from participation in a wider market. For far too long we had been incarcarated by the policies of the United Kingdom in relation to farm produce. It was our market, and their cheap food policy kept the development of Irish farming at such a low level that even in the 11 years of our membership of the EEC it was impossible to achieve a level of growth that other countries had enjoyed for a far longer period. Because of our low level of productivity in milk compared with that of other member states we must fight tooth and nail in resisting this imposition with all the resources at our disposal.

The problem which has brought about this proposal appears to be the funding of the Common Agricultural Policy and Community expenditure on agriculture which is regarded as excessive. When we examine the facts do we find it excessive? FEOGA, the farm fund, represents no more than .5 per cent of the Community GDP, compared with expenditure on the provision of arms and nuclear warheads which would rise as high as 20 per cent. Yet the attempt is being made to undercut further the investment in agriculture and the development and growth of food that is so essential to the survival of not only the people of western Europe but of the world at large. The resources in western Europe are far in excess of resources of many other parts of the world, the Third World for example, where millions of people die each year of starvation. What kind of Christian philosophy have we if we are attempting now to use measures that will curtail, cut back, prevent the growth of essential food products? Surely it is not too difficult for the administrators in and outside the EEC and other trading units and regions throughout the world to devise some policy that would re-distribute that food rather than build up mountains of it. We need a newer form of technology. A speaker in the House yesterday evening referred to the fact that about 60 per cent of milk production here was converted into butter in 1972. Since we joined the EEC we have doubled our milk production and now 80 per cent of our total milk production is being converted into butter. In that context we are not examining the new technologies available to us. We are not investing, and Europe has failed us in this respect. An insufficient amount is put aside in the budgets for food development, the presentation of foods for consumer purposes, new products and the use of milk not only for butter, and there is a cutback in the use of butter.

In expenditure in agriculture even since 1978 there has been a decline in the percentage of the money being spent on the preservation of the very institution that really enabled Ireland to join the Community. It is probable that that institution caused our nearest neighbour to have scond thoughts about joining the Community. I refer to the CAP and its impact on that country's budgets in terms of industry and so on. The costing of agriculture with the imports into the EEC of agricultural produce from certain third countries does not take into account levies raised on agriculture in the Community which if were taken into account would reduce it even further. Any dismantling of the CAP will have disastrous consequences for the Irish economy. If we are serious about developing our economy then milk and related agricultural products represent the only way forward. How often in debate in this House have Members referred to that? Farming organisations and trade unionists recognise that there is a great potential for industrial growth in agriculture, and if we are to accept what is being proposed in even a milder form the consequences for us would be significant.

I would like to put on record the value of agriculture to our economy. It contributes 12 per cent of our GDP and 35 per cent of our exports. That is a significant creation of wealth in our economy, and any attempts to interfere with that would have the most awful consequences for each and every one of us.

I sympathise to some extent with any negotiator who has to deal with the more powerful institutions of the EEC.

An Leas-Cheann Comhairle

Deputy, you have five minutes.

Mr. Dowling

However, we must face up to our responsibilities in this respect. Mention has been made of the veto. I believe that at the end of the day it will not come to that. I feel that Britain would love to see us using the veto because they want a way out of the EEC, or at least they try to make that case. The veto should be mentioned only as a last resort. They have mentioned the veto before now and I think they did so because they believe that the disintegration of the CAP would be in the best interests of the UK. Agriculture is vital to our economy and we must bear that in mind and not allow ourselves to be caught up in a situation where we may have no escape or redress.

I am mindful of the pressure brought to bear on the Community budget in relation to the measures brought by Denmark when they were fighting for certain concessions in regard to their fisheries. They fought a hard battle. They came back time and time again and did not concede until they felt that they had secured something worth while. A similar attack on the present composition of all the institutions within the EEC is demanded at this stage.

It is easy to make a defence for the retention of what we have in relation to growth and milk productivity. Mention has been made here of our 750 gallons per animal compared with 1,200 or 1,300 gallons elsewhere, and a Member here this morning said that in America they are now producing animals and feeding them with highly concentrated compounds so that almost every time they raise their heads they are fed and they produce milk. We are talking about 2,500 gallons per animal. Where will it all stop? There must be a ceiling, but the ceiling cannot be aligned to the 1981 levels of milk production. We have increased milk production significantly since 1981, perhaps by 16 or 20 per cent, and I can envisage a much greater increase. Farmers here advocate and advisers recognise that there is real wealth to be generated in the production of milk and industries related to it. They have been mentioned here. One speaker referred to disease eradication. I did not agree with the point he made. Without disease eradication and involvement and investment in it, we would not be at our present state of development.

Within the wider European farming organisation, COPA, there is not support for us. All farming organisations have to protect the interest of their individual farmers. As a result of the efforts of the Taoiseach in going to Athens to meet the Greek Prime Minister, and the efforts of the Minister for Agriculture and his advisers, there is a recognition that Ireland has a special case. Within that special position we must ensure that the best possible benefits are achieved for us. We hear talk about derogation. Farming organisations are requesting a derogation. I would support derogation for the period of the three proposals up to 1989. The situation could be reviewed at that stage.

I could say a great deal more but I cannot do so because of the agreement. I support the Minister and the Government. I am glad to see unity and solidarity on both sides of the House. That will demonstrate to the bigger members of the EEC the determined mood of the Irish people to defend our basic livelihood and our dignity as a nation.

Mr. S. Byrne

I am delighted to have an opportunity to speak on this very important issue. I was unable to be in the House yesterday because I was expelled on Wednesday week when I demanded that this issue be discussed. Many local authority members, county councillors and others have discussed this issue. As a relatively new Member of the House I was annoyed and shocked that the Government were treating the matter in such a careless way. We had to have an unseemly half hour of wrangling to alert the Taoiseach and the Minister to the fact that the issue was serious enough to have it debated here. Even though the time is short I am pleased that the Government gave time for the debate.

Last week the Taoiseach said that if we in Fianna Fáil were serious we would put down a motion. Our spokesman tabled a motion almost three weeks ago. It was unfair of the Taoiseach to suggest that we were not responsible. It is stated in today's papers that the IFA and the ICMSA were disappointed with the attendance at the debate here yesterday. I could not be here, but last week I played my part in no uncertain manner, not by being unruly but by supporting our spokesman in his efforts to have the matter raised. Within 12 hours agreement was reached and time was given.

I agree with what the IFA and the ICMSA said about the Government's lack of interest in this issue up to this moment. I do not know why they waited until the eleventh hour to debate it. It is a national issue. It concerns workers and farmers. Weeks ago we in Fianna Fáil gave a commitment to support the Government in any action to reject the super-levy out of hand. As the days passed by, statements were made here and in Brussels. We were led to believe that our cause was getting weaker and weaker.

We must stop being nice guys in Brussels. We have been good Europeans in every sense of the word over the past ten years. We should take a leaf out of Mrs. Thatcher's book. I do not suggest we should try to wreck the system as she has tried to wreck it. She must be admired for one thing. She fought for her own people and she gained what she was trying to gain. We must not shilly shally. This is our basic industry. We want to strengthen the Government's hand. Why was the Taoiseach weak-kneed? I do not know. It is his responsibility to support his Minister. We must fight this issue.

In a few weeks' time we will know what type of new farm modernisation grants are to be introduced. These grants were discontinued on budget day and almost 5,000 farmers were chopped off and deprived of their grants. I appeal to the Minister to show a little courage and show people in Brussels that we believe there is a future in farming. Those farmers should be paid their grants when the scheme is reintroduced. On the advice available to them they tried to improve their holdings and to create employment in milk, bacon or beef. They were sold down the drain on budget day.

What kind of treatment can we expect in Brussels if our Government show a lack of faith in agriculture and especially in our small farmers? I do not want the Minister to say in two or three weeks' time: "We have a new modernisation scheme and to hell with the 4,600 farmers who complied with every regulation and were then cut off." They should be paid their grants. In my own constituency 93 applicants were deprived of those grants. Let us show the people in Brussels that we have faith in our farmers.

Ireland's average milk yield is 680 gallons compared with over 1,000 gallons in the Netherlands and other countries where they have cheap imported raw materials to support their milk farms. Over 85 per cent of Irish dairy farmers have fewer than 30 cows. Over 53 per cent of Irish farmers depend on milk production. In other words, the average small family holding will be crucified by this super-levy. If we play the nice gentlemen in Brussels we will regret it in the years ahead. Of course the British want cheap food. We were long enough under the thumb of the British, but we will not be under the thumb of Mrs. Thatcher any longer. We are an independent State and we should go out there and fight.

Eighty per cent of our beef comes from the dairy herd and 11,000 people are employed in the processing industry generally and 6,000 in beef processing. If anything detrimental happens in this area, our co-operative movement will collapse and our beef production come to a standstill. We will have dole queues from here to Donegal, and neither the Government nor we want that to happen. We are now at a crossroads. We may talk about the hard work done by the IDA down through the years in bringing industry into this country, but all that effort and public money will be gone down the drain if this super-levy is imposed. We are in danger of losing a chance of stabilising our basic industry if we do not fight hard. When county councils and ACOT can have taken the matter so seriously for weeks past it is a reflection on the Government that they did not debate the issue. If we had been given a three day debate it would not be a waste of time, it would be time well spent. This is the most serious issue to be debated here since the thirties — the time of the economic war, which was brought about again by the tyranny of the British trying to keep us down.

An Leas-Cheann Comhairle

The Deputy has five minutes remaining.

Mr. S. Byrne

If this super-levy is introduced, in the first year alone it will cost our farmers £146 million. That is a lot of money and its loss will cause a lot of hardship. The bulk of these small farmers who would be affected have borrowed heavily over the last number of years to finance buildings and livestock. A lot, through no fault of their own but through TB or brucellosis, have suffered losses in their herds. These farmers went through many difficult years, especially the last four years, when the cost of their input was so great that they were only barely surviving and trying to keep at bay their bank managers or other lending agencies, which are quietly behind the scene threatening and frightening the life out of these honest people. These farmers very seldom look for handouts or cry out for help. They do their work and work long hours. If they are going to be let down on this issue, we will regret it for years to come.

I repeat that we in the Fianna Fáil Party support the Government, but from today onwards there should be no contradictory statements by a member of or on behalf of the Government, or by sources close to the Government. We want clear-cut statements on this issue, to let the people across the pond know that we are not going to take this lying down.

John F. Kennedy said "Ask not what your country can do for you, but what you can do for your country". We ask the Government to act on behalf of the people and do something for them. This issue is more serious than many realise. A man told me the other day "Farmers are always moaning". I told him that there will be a lot more people moaning if this problem is not solved to the satisfaction of the Government and our people. There will be unemployment across the board, in our meat factories, our building industry, and our machinery industry. Our whole economy will grind to a halt and the dole queues, which are already too long, will be longer.

No other member state of the EEC has a stronger case than we have. Perhaps there is enough time left for the Taoiseach to go on a tour to drum up support for our case from other Heads of State, as Fianna Fáil requested a few weeks ago. He did not think it was serious enough to do that, but I hope he will not regret it. I wish the Taoiseach and his Ministers every success in these negotiations and entreat them to remain firm on behalf of this little nation of ours.

Mr. Durkan

I am glad to have an opportunity to add my sentiments to those of many of my colleagues on this issue. It is very important from the point of view of our entire population, not alone the farming sector. At the outset, we must recognise the magnitude of the task facing us and the reasons for this crisis in relation to the funding of the Common Agricultural Policy. At a time like this we need the best possible team of negotiators to represent our farmers and our nation. In the team of Ministers who are going to Europe, we have those very people. It is at times of crisis like this that we must recognise their value and call on their wealth of experience, negotiating powers and determination to bring off for us the best possible deal.

We should address ourselves briefly to the problems from the point of view of simplistic solutions. I listened to a number of speakers and am somewhat worried that our EEC compatriots listening in — and I am sure they are — might think that we are a little parochial and are not assessing the whole situation, or not fully aware of the problems existing in Europe. We are only too well aware and are also aware of the consequences of the failure to resolve this problem from the point of view also of the Europeans. There is no sense in anybody saying that Ireland will have to accept the super-levy or any kind of circumstances which are less beneficial than those prevailing at present. We cannot do that. If we do, it would be the first step in a total and absolute disintegration of what has become to be known as the European Economic Community. It may be something which today militates against Ireland, but tomorrow it will be somebody else's turn. I warn our EEC partners to take this into account at this stage.

It has been said, and rightly so, that is is unacceptable that the surpluses of agricultural produce should be allowed to continue, with butter mountains and milk ponds and so forth year after year, at great cost to the EEC. It must also be pointed out that Ireland's contribution to the creation of those surpluses is minimal in comparison with that of their colleagues. I ask that our negotiators forcefully point out during the forthcoming negotiations that our contribution to those surpluses is by comparison minimal and that our dairy industry should not be asked to remain at a full stop when we have not yet reached our full potential in that area and have not nearly reached the degree of production or efficiency of our EEC partners.

Why should we be asked to pay the penalty at a time of financial stringency, economic uncertainty and recession? Why should we be asked to curtail our major industry? We have many unemployed at present. Why should we be asked to make further sacrifices and accept proposals from the EEC which would have no result other than further unemployment or rendering impossible the creation of employment in the future? We would be in serious dereliction of our duty if we do not put forward the strongest possible case and point out that if such a package were forced on us it might well be good sport now from the point of view of our EEC partners but might not be such good sport in two or three years' time when they themselves might be in a similar position.

Debate adjourned.