Many interesting points have been raised and some constructive things have been said in the speech we have just heard in relation to the developments in the European Community. It is a pity that the Fianna Fáil spokesman and many others find it necessary during this debate to dwell on the whole question of the super-levy and all that it involves. I would like to say to the Fianna Fáil spokesman and anybody else listening that I find it very sad that all of us who speak on behalf of the farmers at this time and who speak in defence of our dairy industry have to make the point that our farmers, in relation to their average production, are so far behind our counterparts throughout the EEC.
I would like to remind everybody that when you go to Europe and you raise this point you must always be prepared to hear the answer that we had the development of our dairy industry in our hands for the last 50 years and that ten years ago when we became members of the EEC we negotiated a Common Agricultural Policy. I do not think the principles of that policy extended to the question of a super-levy, although I believe they did not exclude the possibility of it. They are fairly well defined, fairly simple principles of financial solidarity between the members of the Community concerning Community preference and a free market. The Fianna Fáil spokesman seems to forget that within the framework of that Common Agricultural Policy our agricultural industry has not made great progress. He seems to forget that his party were in Government when that Common Agricultural Policy was negotiated. They could not see at the time, like most people who spoke and who have spoken since, that Ireland, so far back, would have to make a special effort if we were to find a permanent place for ourselves in the market place with agricultural produce and compete with our counterparts in other European countries when the Community had fulfilled its obligation of providing the people of Europe with sufficient food at a reasonable price.
We forgot that a time would come when European farmers would achieve the level of production that the European consumer wanted or could pay for. We did not foresee a situation in which there would not be a market at the sort of prices the European farmers were paid for our production and we did not foresee the present crisis in the agricultural budget of the Community. We did not check out inflation rates. The Fianna Fáil spokesman did not refer to the fact that we put our farmers at a disadvantage which they could not overcome. When German farmers could borrow money at 5 per cent Irish farmers had to pay 20 per cent. When German farmers had to contend with increasing costs at the rate of 5 per cent Irish farmers had to contend with costs increasing at the rate of 20 per cent. When German farmers were protected by monetary compensation payments, which in effect are a tariff, no protest was raised by the Fianna Fáil Government. They went in under that system, they failed to see its weaknesses and, having gone in, they berated others for seeking to renegotiate. They did not renegotiate, as they should have done, some aspects of the Common Agricultural Policy for the protection of our farmers. After ten years we find ourselves in the situation where we are at 600 gallons and the European farmers are at 1,000 gallons per cow.
That is not the worst of the situation. The worst thing is their stocking rates against ours. They are sometimes producing 2,000 gallons per acre while our farmers produce less than 400 gallons per acre. The difference is not reflected in the difference of yield per cow. The difference in the opportunities of European farmers to compete in the markets does not seem to be understood by the people who speak on behalf of our farmers. I would like to remind the Minister that, if our farmers are so far behind, a good deal of the blame can be attributed to the Fianna Fáil spokesman and to the various Ministers for Agriculture in Fianna Fáil Governments over the years who failed to take account of the disadvantages under which our farmers were operating, who failed to see the gap widen between the income of our farmers and who failed to see the difference in the opportunities afforded to our farmers and the opportunities available to European farmers.
I want to remind the Minister that just before we joined the EEC, when we should have recognised the merit for Ireland which existed in increasing production rapidly, we had a Fianna Fáil Government who actually introduced the very same mechanism in a different form which is now being introduced by the Commission to control the production of milk in the Community. The Fianna Fáil Government introduced the two-tier price system, which is the very same thing, a financial disincentive to people to expand.
Recently I heard a Fianna Fáil spokesman make a suggestion — and I am not saying that Fianna Fáil have said what we should or should not accept in Athens or whenever the negotiations are concluded — that 37,000 gallons of milk would be a fair starting point for the super-levy. That person forgets that only a few years ago Fianna Fáil imposed a 7,000 gallon starting point. That sort of thinking created the present situation with the result that we find ourselves having to go to Europe to plead with other member states to allow us achieve their standards. We have to do so because we failed in the management of our economy and to produce a plan for the agricultural industry to put our farmers into a position in which they can compete.
In recent years the idea has grown up here that the CAP is a set of sacred principles that during our lifetime must not be reviewed. That is a mistaken approach to the whole question. That policy was brought into existence 25 years ago when Europe was 60 per cent self-sufficient in food. At that time 20 million more people were working on the land than today and many people in Community countries were starving. The idea of Europe being an exporter of food was not dreamt of. Surely an agricultural policy designed to fulfil the needs of the farmers and consumers of Europe 25 years ago is in need of revision. Such a policy does not suit the agricultural industry in Europe today and, certainly, it does not suit the requirements of our agricultural industry, if it ever did.
The British over the years have attacked the CAP policy and they are regarded here as the great enemies of it. Last year when Irish farmers were finding it difficult to break even the British Minister of Agriculture announced that British farmers had an increase in income of 34 per cent. The truth is that the CAP afforded to the strong and well-established farmers of the Community an opportunity to stay ahead. It should be recognised that as far as the need of the Community for food is concerned the capacity of Europe to produce food is almost without limit. We are self-sufficient in milk, cereals and livestock products but we are not near the point of not being able to produce any more. In my view we can continue to increase production at a rate of 5 or 6 per cent per annum for the foreseeable future but we do not seem to have markets in the world to sell our produce for the price we produce it. That is a sad situation particularly when one considers the number of people in need of food in the world. The question is often asked why we store up food and cannot sell it, but the truth is that it cannot be bought at the price we offer it. Taxpayers or farmers of the Community do not appear to be willing to subsidise the sale of our surplus produce to those who need it at a price they can afford. To talk about the number of people in the world who are hungry is not a solution to the problem.
The CAP afforded an opportunity to those who were in front to stay there. A combination of the way the policy was organised and the way we ran our affairs created a situation which will mean that Irish farmers will never be able to catch up or become competitive with the farmers of Britain or Holland. Britain has moved from a 60 per cent self-sufficiency in the last ten years to a stage where they are almost self-sufficient in everything. At one time Britain was the biggest importer of food products in Europe. In the last ten years net agricultural output here has hardly changed as a result of the failures I have mentioned. Fianna Fáil policy in regard to the dairy industry was clearly manifest in the imposition of a two-tier price and was designed to prevent efficient farmers making progress and to keep the most inefficient and smaller farmers in that situation. It is hard to understand Fianna Fáil Members who participated in that policy decrying the Taoiseach and the Minister for Agriculture, who were always committed to progressive policies in regard to the agricultural industry. I find it hard to imagine what the Taoiseach can do in addition to what he has done. Some months ago he went to Belgium and his approach was aggressive. He threw down the gauntlet and declared this to be an issue of vital national importance. That is as far as any Head of State can go in Europe, to assert that a country has a vital interest in an issue and be prepared to stand behind that to the end even if it means the disruption of progress in the Community.
The Taoiseach went to Athens to consult with the President of the Council and convince him of the importance of Ireland's case. He did so, so that the President could lead off the special Council meeting in the knowledge that Ireland could not make major concessions on this issue. Although the Taoiseach achieved something on that visit he was jeered in the House and accused of wasting public money on a wild goose chase. I do not know what the Opposition expect the Taoiseach to do. The question is bigger than the imposition of the milk levy or the CAP. Many issues are scheduled for discussion in Athens. We will not have any reform of the CAP if there is not also an extension of the budget and we will not have either of those if we do not clear up the question of the British refund.
The economies of the Community have not returned to growth and, according to recent figures, the growth rate in recent months was negative. We will not return to growth unless we begin to develop policies on industry and energy. We must have the means and the will developed in the Community to deal with the rising problem of unemployment and the failure of the competitiveness of industry and the economies in the Community. The United States and Japan, in spite of their technological advances, do not have the level of unemployment we have in the Community. Until the Commission are in a position to present a plan to deal with this I do not think there is much point in continuing. So far the Community have succeeded in developing only one common policy but that policy, because of the decision-making process of the Community, has not been reviewed or made more appropriate to the needs of agriculture and consumers. When the Opposition spokesman, Deputy Collins, was contributing I waited to hear what would be his proposals, what he thought the Taoiseach and Minister for Agriculture should achieve, what he thought they ought to be able to bring back from Athens; whether he felt they would need to stand up and say, "We cannot give any more", or whether he felt they should not give anything; what he saw as the solutions to the problems obtaining. But he advanced no constructive proposals whatever. Indeed he spent half of his time talking about the failure of the Taoiseach to win the battle before it had begun.
At present whether one talks with local authority representatives who are speaking about roads having fallen into disrepair and who are told that the Government have not the resources to finance their improvement programmes, or whether it be the vocational education committees, voluntary organisations or whoever, all are saying that if the Government have run out of money why cannot something be done for us in Europe by way of grants? What about the Social Fund or the Regional Fund? Can solutions not be found to our economic problems through the EEC? The truth is that there have been many solutions to many problems through our involvement in the Community. But when one talks about the development of the EEC it must be remembered that it is in an embryonic stage even now. Unfortunately, the earlier development seems to have slowed down somewhat and we have not witnessed the same progress recently.
Since we have reached the limit of our resources we have no money with which to develop other policies. It seems that agreement cannot be reached to raise the extra funds through the national governments by extending the mechanisms for collecting VAT of 1.4 per cent, as has been suggested, or more. We cannot reach agreement because at the Council of Ministers each Minister represents his national interest. Rather than a European Council, the Council of Ministers is composed of representatives of individual states expressing their individual views and opinions from day to day in the light of the individual problems in their countries. I do not think we shall be able to make progress in Europe until there are changes effected in the decision-making process. While the EEC are run by the Council, while the strongest weapon in the hand of any Minister is the veto, there will not be progress. Ironically, that veto has not been used except by Britain last year, when it did not work. That would appear to be the strongest weapon in the hand of any Minister. Within the Council of Ministers individual Ministers have the ability to stymie progress, prevent things being done. Nobody seems to have the ability to start things in motion, get things done.
If we are to find an answer to the problems about which we speak in the EEC we must change the whole decision-making process at European level. The Council of Ministers is comprised of people who are enmeshed in their own problems, reflecting their localised political interests. They will be unable to resolve it. We shall not solve the problems of Europe until we develop the institutions of the Community to take decisions and play a larger role than they have been doing to date. The European Parliament has considerable budgetary powers which have been reduced because we are at the stage now where 65 per cent to 70 per cent of the money collected by the Community is composed of compulsory spending; it is spent on agriculture. The ability of the Parliament to change the direction of Europe by manipulating the remainder of the funds is very limited. Until there is a larger budget devoted to the development of other policies we shall not make much progress.
We often forget that there are probably four instruments: first, one for the redistribution of wealth throughout the Community; second the Common Agricultural Policy; third, the social policy and the fourth, regional policy. Very often forgotten in the course of all this debate is that, of all the money spent in 1982 under the Social Fund, Ireland gained approximately 10 per cent, a considerable proportion for a population of over 3 million people. Similarly with regard to the Regional Fund Ireland's share is estimated at 6 per cent. But when one includes cross-Border schemes and the non-quota section Ireland receives something like 10 per cent. Ireland receives from the guarantee section of the Common Agricultural Policy something like 3½ to 4 per cent only. That is the great advantage seen by our people to be received by us from the EEC. It is true to maintain that, if the Regional Fund were as large as the guarantee side of FEOGA, Ireland would receive much more money. Similarly with regard to the Social Fund, with regard to the amount of money spent on the subsidisation of loans to agriculture throughout the Community, Ireland received 30 per cent in 1982.
What we should ascertain is what Ireland would gain from an extension of the European budget, through an expanded regional or social policy, something very often forgotten by our negotiators. While we may go to Athens to prevent a lid being placed on the expansion of the Irish dairy industry, we should not forget that we have an obligation also on behalf of our people to ensure that agreements are reached, that there is an extension of the Community budget so that there can be a development of the policies people advocate — which do not exist at present — with regard to energy and industry but also entailing an extension of the regional and social policies.
When we talk about a new Treaty, new European institutions, a more efficient decision-making process at European level, the question that arises always is, what about the small countries? How can a nation of 3,500,000 people expect to sit around the table with the major powers of Europe, by any standards major powers in the world, and hope to achieve equality around that table? It is difficult to give our people an absolute assurance in that regard. One thing is certain, if we want and hope for the development of European policies then there must be devised a new decision-making process. We should remember that the EEC is the subject of a lot of negative criticism from time to time. I like to point out to our people that whether it be in the Parliament, or in the Council of Ministers, our population of 3,500,000 has five times the representation of a similar number of people in the Federal Republic of Germany. The Irish vote in the European Parliament on behalf of its 3,500,000 people is equal to that of other representatives on behalf of 15 million Germans. That is a major concession we should recognise.
If one were to analyse the decisions of the European Parliament or the Council over a period of years one would find that the input by our representatives was considerably larger than that of our counterparts in other countries because of this weighted advantage. We should be conscious of the fact also that it is not possible in the Council of Ministers, under the present voting system, for the large powers to impose their interests on everybody else. The smaller countries, Denmark, Holland, Belgium and Luxembourg, have the power, through the straight vote system, to veto the decisions of the larger powers who have much greater economic power and larger numbers of people. The position of the small countries is fairly well protected. It is a bit too much to expect, in the development of a Community that plays an increasing role in the everyday life of the people of Europe, that 3½ million should have the right to veto every possible decision that we regard as being against out interests. It is sufficient that the small countries can out-vote the bigger nations. It is a very advantageous position for us and, over the years, without the necessity to apply the veto at any time we have generally got the things for which we worked very hard.
There are many other arguments that can be made in favour of improving the decision-making process at European level. National parliaments, local authorities and people with nationalistic views, will argue that giving power to European institutions is taking away the national powers and undermining the rights of national parliaments. It is true that when you give power to any group, person or organisation you reduce, to some extent, the freedoms of somebody else. For that reason, we must be very careful of whatever powers we agree to give to European institutions in the years ahead. However, we have come to the end of the road as things are organised at present. In working out the organisation of this new decision-making process, we must remember that it is important for the European institutions not to take power from Dublin any more than Dublin should take power from local authorities where they can fulfil their obligations at local level. Brussels must not take power from Dublin which Dublin can discharge efficiently, but Brussels can acquire the sort of powers that national parliaments can never have. We must ask ourselves what these powers are and we must organise the role of the European institutions so that these are the powers they will acquire and discharge.
It is not from the voter in Ireland, the local authority in Carrick-on-Shannon, Castlebar or the Irish Parliament that Europe will take power eventually. I think that Europe will take the power, for instance, from the Japanese to flood our markets with cheap products. Europe will take the power from the United States of America to dictate terms of trade to us. It will be a united Europe pursuing converging policies and harmonising, where appropriate, their laws and regulations to make them more effective. It is the power of stronger regions and states that is threatening the power and decisions of Europe at present. That is why I should like to see Ireland playing a full role within the European Economic Community. From an economic and political point of view, the price that Europe will pay for remaining divided will be that they will continue to be pawns in the power game between the United States and the Soviet Union. They will also be pawns in the game of economic power between Japan, the United States and other developing economies. European industrialists are finding out, to their cost, that the threat is not only coming from countries like Japan and the United States. In relation to steel, it is increasingly coming from less developed countries where energy and labour costs are lower. Modernised plants, with investment sometimes from the West, are threatening the position of producers in the European Economic Community and also frightening the Japanese and the steel producers of the United States.
There is no alternative to a coming together of the European states for the protection of the freedom that we enjoy and for the maintenance and improvement in the standards of living that we have. It would help also to assert our independence of the great powers who are more concerned about their own positions than they are about our freedom. We control 40 per cent of world trade. Relatively speaking, we are not a large power bloc and to remain as individual nations pursuing individual economic policies will certainly lead to a situation in which this part of the world will lose the power and significance which it enjoyed in the past. Ireland will lose the opportunity, through her participation in that Community, of enjoying the standards of living which are at present enjoyed by more developed industrial nations such as Britain, Germany, France and Italy.
I do not want to dwell too much on the Common Agricultural Policy and the super-levy. However, if this debate goes on past this evening, we should apply ourselves to the root of the problem and why it came about. It is not sufficient for our Minister to go to Athens and to demand from the Governments of Europe a solution to our problems without sufficient preparedness and knowledge of the problem to propose solutions to what has gone wrong. In so far as milk production is concerned, there might not be a need for the imposition of the super-levy if the Governments of Europe could agree on the whole question of monetary compensation. These payments have the effect of creating what is a tariff barrier between countries like Ireland and countries like the Federal Republic of Germany, Holland and Britain and giving milk producers in those countries something between 6 per cent and 10 per cent of an advantage over Irish farmers. In addition, we must recognise that in those other countries, milk suppliers, without taking into consideration the monetary compensatory payments which give them a higher price, get from 7 per cent to 10 per cent more than Irish farmers. This means that they have a combination of factors which gives them an advantage of more than 20 per cent. Many of those countries are not regarded as agricultural and are not subject to tariffs but we import eight million tonnes of manioc, better known as tapioca, into the Community annually, mainly into Germany and Holland and some into England. It is imported because they have the shipping facilities on the Continent which we do not have and because they have strong milling industries. Internationally well-known companies have built storage and processing facilities in Thailand to make this into pellet form and easier to handle and transport. It is then shipped to Rotterdam where it is transported mostly inland by canal and supplied to dairy farms. If we tried to do the same thing in Ireland, because of our distance from those ports, our poor facilities and infrastructure, it would cost us 25 per cent more. Yet the Commission have said that if they did not impose a super-levy they could resolve the problem of surplus milk by reducing the price by something like 15 per cent.
There has not been much debate on that in Ireland. It means that 15 per cent would succeed in taking a sufficient number of people out of milk production in those countries to bring us back to a situation where we would not have a surplus. The New Zealand situation is often referred to but she exports in the region of 80,000 tons of butter whereas there are almost 1 million tonnes in cold storage in the European Community. Even if the 80,000 tonnes of New Zealand butter were taken out of that, the amount is relatively small but in such event, the New Zealanders would almost certainly have sold their butter on the world market. They do not keep butter in cold storage. In that case we would have sold that much less so we would have a similar amount. Nevertheless, we concede a considerable advantage to the people of New Zealand.
That is bad economic policy but for one reason or another it should not be seen as the nub of the problem. If we take into account the other differences, the difference in price arising out of the sort of products we produce from our milk and the way in which we market them, together with the MCAs, the Irish farmer is at a disadvantage of about 20 per cent. The Commission says that a 15 per cent reduction in price would reduce our surpluses to manageable proportions. MCAs are a complete contradiction of the idea of a free market in agriculture but if these other farmers did not have the advantage to which I referred, we would revert to a situation in which dairy produce would not be in great surplus within the Community. We are not at the 600-gallon level of production because of our land being inferior or because of our farmers not being prepared to work as hard as their counterparts in Europe. We are at that level of production because of the disadvantages we have been at in recent years. With some improvement in the management of our food-processing industry and with an improvement in the rate of inflation which in turn would result in a reduction in the costs the Irish farmers must bear, I am confident that, with the help of the Community, we could come to terms with the present problem without the need to disrupt the whole process of decision-making in Athens.
Whatever reason the Community can have for maintaining the situation with New Zealand — whether it be in the context of international security, of solidarity or of an old friendship — let them levy the charge not against the CAP but against this other policy. In this way, it would be seen for what it is, a charge incurred not by the farmers of Europe but by European politicians for entirely different reasons.
We should not adopt the attitude of never being able to reach the 1,000-gallon yield. We have the capacity to catch up provided we are working in equal conditions but for many reasons it is time to have another look at the policy which has widened the difference in income between the strong farmers in these richer areas and the poorer farmers. I represent the constituency of ConnachtUlster and I cannot help but notice that while that constituency includes 42 per cent of the farmers of Ireland, we receive about 17 per cent in terms of the guarantee side of the benefits to Irish agriculture. Therefore, farmers of ConnachtUlster cannot regard the CAP as the policy which enables them, the smaller and the weaker, the ones with the poorer infrastructure, to gain a foothold in European markets or to achieve a level of income comparable with that available in industry or in any other part of the Community.
The spokesman on agriculture for Fianna Fáil mentioned the whole question of economic convergence. One of the strongest arguments we can make in favour of a derogation for Ireland in so far as any mechanism for the prevention of further expansion of dairy produce is concerned, is this whole idea of economic convergence, an ideal to which lip service has been paid down through the years by the bigger economies of Europe. They are getting quite an amount of what they want from the Community. They have at their disposal a market that is relatively close to being a free market. They are achieving the opportunity to develop their industries in a market of almost 300 million people. On the other hand it is being said in relation to the proposals concerning the CAP that we should leave the weak where they are and should allow the strong to remain strong although they have become strong as a result of the policies they wish now to discontinue.
There has been a good deal of debate in the European Parliament, and I am sure also at Council of Ministers Meetings, about the harmonisation of laws and regulations. We have gone far enough in that direction, at least until such time as we succeed in making more progress towards economic convergence. I am sure that the people of Europe would like to see the economy of Ireland grow until our standard of living and our industrial and agricultural outputs are as great as theirs but they must understand that there will have to be certain concessions on their part if we are to achieve that position. They must realise that economic convergence will not come about merely as a result of the creation of a free market. If we are to throw open our economy to competition from the more advanced economies, at some stage the areas in which we can achieve progress must be identified.
It has been said repeatedly in the Community that the workings of the free market will give to the various regions of the Community the opportunity to produce and sell within that market those products that they are good at producing, provided they are marketed properly. It is obvious that we have the conditions and the personnel and that we have begun to put together the structures that will create a situation in which the Irish dairy industry will be on an equal basis with that of the rest of Europe. Then, in a free and firm market, we will be able to compete. If there is an argument for giving the go-ahead to any industry in any region of the Community, that industry must be our dairy industry. In this way the Community will be taking one positive step in the direction of bringing about real economic convergence. There are people in Europe who believe that 60 per cent of the budget should not be spent for the benefit of one sector. Consequently, they talk of changing the CAP. I do not think that proportion goes to the benefit of one section only.
