The conditions under which the statements will be made have been made an order of the House this morning. The Minister for Agriculture has 25 minutes.
Common Agricultural Policy: Statements.
This debate comes at a difficult time for agriculture following the climatic conditions in 1985. Those problems very from time to time. The difficulties we are discussing this evening are of a more long term nature and are relevant for the future. Community and world markets for most of the products of main interest to this country are heavily over-supplied — some for cyclical reasons; others for structural reasons. At the same time, the Community's budgetary position is right at the limit. The fall in the value of the dollar means that the record provision of over 21 billion ECU is not sufficient to cover likely agricultural expenditure, even before the need to fund a major stock disposal programme is taken into account.
This is the sobering background against which the recent commission review of the CAP has taken place and which has already coloured their price proposals for 1986-87. It is a scenario that all of us must take into account. There is no place for an ostrich-like approach based on a forlorn hope that all the problems will simply go away. We are, perhaps, the member state with the single biggest interest in having an effective CAP, but the policy cannot be effective if it is beset by problems which are continually threatening it with destruction. The problems must be confronted and overcome, but they must be overcome in a gradual way that takes reasonable account of the income needs of family farms and which does not discriminate against member states such as Ireland that are heavily dependent on agricultural production and trade.
This requires a balanced approach which the present proposals have not achieved. That is the main reason why I am seeking substantial improvements. We accept the need for change and evolution in agricultural policy — otherwise no policy could survive — but the change must be proportionate to the problems before us and it must respect the fundamental principles of the CAP. It must remain a policy which is common in operation and financing over the whole Community.
In dealing with the details of the price proposals and our problems with them I will concentrate mainly on three areas — beef, cereals and milk. This is not because other areas are not important, but because of the over-riding importance of the three areas to us and of the far reaching consequences in at least two of them of the Commission approach.
The Commission proposals on beef are particularly worrying. They envisage in reality the dismantling of the present intervention system by November 1987 and giving much freer rein to market forces as the main determinant of beef prices. Producers would be partly compensated by a system of premia. In the background there would be a vaguely defined provision for intervention in crisis situations at the discretion of the Commission. Export refunds and private storage aids would continue in operation hopefully at effective levels, but the basic position would be that there would be no firm floor support level in the market.
We export as beef or on the hoof five cattle for every one we ourselves eat. We produce a high proportion of our beef in a short period in late summer and autumn. We have the lowest average market prices in the Community. We are furthest from, and marginal suppliers to, the markets of most other member states. In this situation intervention is not a luxury to us. It is an essential element in ensuring some stability in the beef market, and I shall be concentrating in the current negotiations on having that point recognised by the Commission and the Council of Ministers.
I recognise that the Community has a serious problem with beef at the moment. Market prices are low. Public stocks are high. Consumption is static. World market prices are depressed and the beef sector is currently a large drain on the budget. It is important to identify the cause before imposing the solution. The milk super-levy caused shockwaves in the beef sector. Large numbers of cows were slaughtered and this extra cow beef forced an equivalent quantity of prime beef into intervention. The high level of intervention stocks depressed all markets. So intervention became the best outlet and intervention stocks grew further. The super-levy was not the only problem but it was by far the main one.
Is it reasonable to suppose that by eliminating one of the main symptoms — large intervention stocks — one can cure the ills of the beef market? I do not see it that way. The Community is little more than self-sufficient in beef. The production trend is downward, since the lower cow numbers mean fewer calves and thus less beef in a couple of years time. Consumption should increase gradually, provided price relativities with other meats are not distorted. Over the medium term the problem is self-correcting and, therefore, there is no need for a fundamental change in policy now. I am not opposed to measures which would make intervention most cost effective but there must continue to be the possibility of access to intervention, at least at a regional level, on the basis of clearly defined market criteria.
There is a major problem at the moment in the beef sector. We have far too much beef in intervention and there is a problem in the marketplace. The problem is only temporary. If correct and sensible measures are taken that problem can be overcome. There is no need to take far-reaching measures such as are proposed by the Commission which could have dramatic and drastic effects on the beef industry in countries such as ours, ours most of all because we export approximately 80 per cent to 85 per cent of all the beef we produce. Proportionately and in real terms we are by far the largest beef exporters in the Community. That fact escapes many economists and people who study the agricultural scene. In real terms we export more beef than the Germans or the French.
One aspect of the beef market with which the Community will have to come to grips soon is the question of imports. Each year the EC import 400,000 tonnes or more of beef, under various agreements, at zero or reduced levies. This amounts to about 8 per cent of total consumption and is a severe burden on an already over-supplied market. Irish processors and traders are of immense benefit to the Community in that we export such a large amount of what we produce. We alleviate what would be a much more serious situation through the competence of our exporters who supply third countries with such very large quantities. The beef problem has knock-on effects on prices, on intervention, on export refunds and on the competitiveness of Community beef processors.
I recognise that no simple solution is available since a root-and-branch attack on these imports would in most cases be a breach of contractual obligations and would involve retaliation against the Community in other sectors, or indeed in the beef sector itself. Also the Community sees itself as having an exporting orientation in beef and other products. We cannot expect to have the right to export while refusing to accept imports ourselves. However, it is time to take a critical look at all these régimes and see how they could be adjusted to take greater account of changed market circumstances and of the burden which is being imposed on Community producers. The imports of 400,000 tonnes to 500,000 tonnes of beef is creating enormous difficulties for us and this matter will have to be studied. It would be better if those imports were eliminated — although that is probably not a realistic outlook — but if they were reduced considerably we would not be facing this dreadful proposal which is being put before us by the Commission.
What are the total exports from the Community?
I could not give the total.
Would it not be at least twice the amount imported?
Yes, about 800,000 tonnes. As regards cereals, everybody recognises the difficulties facing the Commission this year in trying to frame acceptable price proposals. World production of cereals continues to reach new heights while consumption remains relatively stagnant. Prices are weak and there is intense competition for such markets as do exist. It is sobering to realise that countries like India and China, where famine was commonplace up to a few years ago, are now net exporters of grain. That further complicates an already difficult situation.
The Minister has ten minutes left.
For the Community, disposal of surpluses is becoming more and more difficult in the face of steadily mounting production. Carry-over stocks are at record levels and, unless some solution is found, the Commission estimate that by the early nineties unsold stocks within the Community will amount to half of annual production, with storage alone costing over £2 billion.
The Commission have put forward a package of measures aimed at achieving a greater balance in the market. These measures comprise a restrictive prices policy, the introduction of a co-responsibility levy, the tightening of quality standards and changes in intervention arrangements. I will give the House a brief outline of what that actually means. The co-responsibility levy proposed is 3 per cent. The intervention proposal is that no grain be taken into intervention until December whereas we would normally be putting it in in August or September. That would create severe difficulties not just for our producers but also for our millers and grain merchants. But the greatest danger in all the proposals is that concerning quality standards. This would mean a vastly reduced price for poorer quality grain, that is, grain with a high moisture content, and the price reductions in an average year because of the quality standard could be as great as 9 per cent to 12 per cent, and it would be much greater in a year like last year. Between the co-responsibility levy and the quality standards the reduction would be of the order of something like 12 per cent to 15 per cent. Deputies will realise that in such a situation cereal growing in this country would not be a profitable pursuit and if the proposal went through commercial grain growing would not be an option for many farmers here.
The support prices fixed each year by the Council of Ministers in effect determine market prices and, the measures proposed, if accepted in full, could lead to price reductions of 10 per cent to 15 per cent. Reductions of this order are unrealistic.
Everybody accepts that in difficult market conditions quality products offer the best sale prospects. The Commission proposals, however, would impose severe price cuts not just on poor quality grain but also on grain traded as a quality product and meeting high international standards. Although I am in no way in favour of price cuts for cereals, nevertheless I think it would be far more honest for the Commission to come out with proposals for price cuts than to try to achieve the same result by pretending that the aim is to secure higher quality. All of us are prepared to look at how quality might be improved in a gradual way in line with the requirements of the market. This requires much more thought and discussion and should not be attempted by way of a rushed blunt instrument.
I am not against the principle of the co-responsibility levy if it helps to get rid of surplus stocks but when it is used as a device to depress the price, then I am against it. Last year the Community had a surplus of around 22 million tonnes of cereals and most of this had to be exported at a high cost to Community taxpayers. At the same time, vast quantities of cereal substitutes and alternative products were being imported into the Community, mainly for animal feed. It makes little sense that high quality grain is sold out of the Community at sacrifice prices while at the same time such a high proportion of our livestock are fed with rations made from ingredients imported from the ends of the earth. I know that mainly because of existing agreements — and I am referring in particular to GATT — it is not easy for the Community to terminate or diminish this trade, but steps must be taken to redress this situation. We are constantly advocating in Brussels that if a discipline is being introduced, as is happening with this proposal, then the importation of cereal substitutes must be curtailed and reduced. We do not see why we should suffer as a result of the importation of cereal substitutes from third countries.
The milk proposal is that production throughout the Community be reduced by 3 per cent — this is called the Community cessation scheme. We are contesting this proposal on the basis that in the 1984 super-levy agreement we were told that the level of milk production would not be reduced during the lifetime of this régime. Therefore, we are looking for a derogation from the proposal by the Commission but a number of other countries are also looking for derogations and this is not helpful to us. Most of them are seeking a derogation on the basis that they are deficit producers of milk and therefore should not be penalised.
If there is no derogation will the Minister consider renegotiation?
Deputy Collins may make those points when he is making his contribution. The major problem in the milk sector at the moment is the high level of butter stocks in intervention. At present we have 1.1 million tonnes of butter in intervention and stocks are growing rather than being reduced despite the imposition of the milk super-levy. Added to this is the overall problem of inadequate financial resources to sustain the Community's policy on milk. The fall in value of the US dollar has compounded this problem.
While I am opposed to the Commission's proposal to leave the milk price unchanged, there is clear merit in their approach once again to change the balance between the skim and butter prices. This should assist towards greater balance. But we must get back to a situation in which, with production limited, producers can look to some increase in price to protect their incomes. This could be achieved by eliminating the co-responsibility levy on milk. Despite a decrease in EC butter production over the past two years, intervention stocks have increased by 25 per cent in that period which seems rather extraordinary. It illustrates the difficulty the Community have in getting rid of stocks.
The Commission have also introduced a mechanism recently which has the practical effect of reducing the price being paid for butter going into intervention. This is a temporary measure only to stop profiteering by people trying to get rid of stocks before the price fixing is concluded. Despite all these difficulties, dairying is still an important and attractive enterprise in this country. The demand for quotas is ample proof of that. My objective is to protect the interests of producers and processors.
There are other areas in which there have been developments in the fairly recent past, some of which are rather helpful. In particular, our sheep producers have benefited from the improved market in the Community. Of course, we do have a quality problem but we are improving slowly but surely. In addition, the council recently agreed to a measure to extend the use of sugar in the chemical industry which opens up some prospects of increased sales by the Sugar Company and is to be welcomed.
Overall the position is very worrying. I would be the last to deny that. The real discusions will commence on Monday next. I envisage that those discussions will continue for at least two, perhaps three, months. They are extremely complicated, the main complication being that the proposals cover such a wide range of issues and their extent is so serious and so potentially damaging. For example, I would regard the proposal on grain to be of such magnitude that it could well destroy the cereals industry here were it allowed to go through in its present form.
Overall the proposal on beef is the most damaging because it would shatter our beef and cattle trade. In terms of its effect on our economy the loss would be quite enormous. The overall effect of the three proposals, were they pushed through in their present form, would mean at least a loss to our economy of something in the region of £150 million. That is how serious the situation is. The roll-on effect of that damage would be catastrophic. Ultimately it would mean the loss of a considerable number of jobs, particularly in the beef processing industry. If intervention were done away with, we would be left with something like 80,000 or 90,000 tonnes of beef on our hands each year. One can well imagine what would be the resultant effect on our cattle trade.
It behoves us to oppose these proposals, to ensure that they are modified. There will be some hurt at the end of the day. Let nobody evade that issue; there has to be. The budget is in such a desperate position that these will be terribly difficult negotiations. I hope that we can come out of them in reasonably good shape. The priority of the Community should be to curtail imports of products from other countries which we produce and which distort the market.
I welcome the views of Members of the House. I hope they appreciate the difficulties facing us. At the end of the day, we would all like to see a satisfactory outcome of these negotiations.
(Limerick West): I listened with great interest to the Minister. There is one point he made with which I can fully agree, that is, in regard to the benefits undoubtedly reaped by this country in past years from the Common Agricultural Policy, the best and most developed Community policy which has been of great benefit to us. Unfortunately, in recent years we have been at the poor end of returns therefrom.
When I read the Commission's proposals I cannot but think how some member states, in which agriculture has already been fuly developed, might well be prepared to accept these proposals. The position here is very different as everybody in this House is well aware. Ireland, more than any other member state, is dependent on agriculture for a great part of its economic life; it is our greatest industry. The number of people employed in agriculture here, who derive their living directly or indirectly from agriculture, is larger than in any other member state with the exclusion of the most recent additions to the Community.
It is in that perspective that the Minister must oppose these proposals with all the power at his disposal. In doing so he will have our full support provided he is positive, bearing in mind the importance of agriculture to our economy and more particularly the real concept of the agricultural policy as outlined in Article 39 of the Treaty of Rome. Unfortunately I have doubts, because agriculture appears to be the forgotten Department within this Administration. Indeed, with all the puffing and blowing that surrounded the recent Cabinet reshuffle, one Department only remained untouched, that was Agriculture. I suppose one could content that, if promotions and demotions were effected on merit and performance, there would surely have been a different Minister across the floor today.
What about the Deputy, Charlie McCarthy's dummy as he is known?
The Taoiseach and his Cabinet, obsessed with their much publicised, patently unsuccessful bid to balance the books, have a blind spot when it comes to agriculture. In opposing the proposals on the Common Agricultural Policy one must also examine the mentality of this Government in so far as its damaging effect on agriculture is concerned. Certainly the Minister has been most unsuccessful in putting forward the point of view of the industry he represents. He has presided over a series of measures in the past three and a quarter years which have taken more than £200 million out of the State support for the industry.
You never let down ——
There have been cutbacks all along the line. The farm modernisation scheme was decimated by the Minister when he came to office in February 1983.
You were only put in there——
The lime subsidy was dropped, the AI subsidy halved and the small farmers' assistance reduced. Simultaneously there have been increases in levies and new charges for farm advice, not to mention the super-levy. A major failure of this Government from the outset is that they have refused to accept that agriculture forms the basis of this country's wealth and represents the basis for its economic recovery. Given the strong urban bias in the Cabinet and the hapless performance of the Minister for Agriculture, that is not surprising. It is, however, totally unforgiveable.
It has been clear for some time that the development of our agricultural industry will assume even greater importance in the context of our overall development. This is because the amount of mobile international investment is dwindling.
Do you know how you fared——
(Interruptions.)
The Chair wishes to get a fair hearing for everybody and if he does not get one for everybody he can get one for nobody.
If the Deputy is going to fire personal abuse he will get it back twice over.
The Minister will have another opportunity. He may not interrupt.
(Limerick West): The Minister would be far better involved in opposing these proposals rather than tossing muck across the floor here this evening. He should take his medicine because he deserves every bit of it.
(Interruptions.)
Order, please. This is a confined debate and it is quite unreasonable to have interruptions. There should be no interruptions and the Minister should speak in the third person and address the Chair.
What Minister?
Of necessity we will be forced to rely on indigenous resources for the creation of new wealth and subsequently the provision of new jobs. As a nation, our greatest economic challenge lies in the creation of an integrated farm industry linking the produce to the processor, to the marketer and finally to the consumer. It is imperative, therefore, that a marketled approach be devised to create a range of value-added goods which will successfully penetrate the Community market of 320 million people and beyond that market. We have the land, we have the climate and we are fast acquiring the technology despite the cutbacks by the Minister on the resources to the Agricultural Institute and to ACOT. It is tragic, therefore, to reflect that, rather than grasping the opportunities afforded by our rich grassland and benign climate for real productive growth which would benefit all our people, this Government unfortunately have adopted a negative attitude to farming which if allowed to continue will further erode the productive base of our single most important industry.
It is clear that this Government lack vision and even commonsense. Rather than boost our single most important source of output and exports, this Government in reducing farm spending have chosen to ignore the fundamental first rule of economics that spending in a productive sector, far from being extravagant or spendthrift, would act as a stimulus to farm output ——
On a point of order, could I have a copy of the Deputy's speech?
As far as the Chair knows, the Deputy is reading from notes. The Chair has no control over that.
—— increasing the return to the Exchequer via increased exports and job creation. With all due respect, this is a limited debate and I have a great deal to say. I want to give advice to the Minister and I hope he will listen.
I thought I could have a copy of his speech.
(Limerick West): This party on returning to Government will reverse this depressing negative trend by adopting a positive role in developing the whole area of agriculture which has placed a special emphasis on the integration of the various links in the food chain by co-ordinating Government policy in this vital area.
(Interruptions.)
Deputy Farrelly should restrain himself. If he continues to interrupt he must leave the house.
(Limerick West): This party agree with Farm Commissioner Andriessen's recent statement that Europe's farm surpluses are a time bomb threatening the European farmer. We agree with that statement, but the savage farm proposals put forward by the Commission and the failure of the Minister for Agriculture to negotiate exemptions, however, indicate yet again the failure of the Brussels policy makers to come up with a flexible policy mechanism to deal with farm surpluses. They seem unable or unwilling to take into consideration the varied agricultural conditions in the different regions of the Community and the industry's relative economic importance in the different member states.
The latest proposals in this present price package, if it is allowed to go through, could cost Irish beef £60 million in 1986 and the loss to cereal farmers could be as high as £25 million. In the long term as well as in the short term this proposed phasing out of beef intervention and the proposed further cutbacks in milk production have critical, serious implications for the Irish agricultural economy. It would be well for the Minister to reflect very positively on those at the negotiations next week.
The proposals on beef intervention have alarming implications for our beef industry which has been the focus of farm expansion since the possibilities of expansion in milk have been curtailed. The Commission's proposals to phase out Community beef intervention for all but emergency purposes, such as price collapse, are positively frightening. Not only do they threaten an essential export industry, they jeopardise the development of the Irish food industry which depends on a constant supply of good quality raw material. Forcing farmers out of business and battering farming confidence is not going to help the Irish agrifood industry which at present employs in the region of 40,000 people.
Therefore, if food processing is to develop to its vast potential in terms of jobs, quality products and quality export markets must be explored. If we are to exploit our richest natural resource, our grassland, in the national interest, then we must fight tooth and nail against these proposals which cut across the fundamental principles of the CAP.
This party in a document recently published have accepted fully the need for a reform of the CAP in order to eliminate the distortions which have been allowed to develop in the community's farm policy and to bring it into line with its basic founding principle, that is preservation in Europe of the traditional family farm. The people of Ireland, the farmers of Ireland, have a vital national interest at stake in this process of reform. From an Irish perspective and from a European perspective our attitude in seeking a return to the basic founding principles of the Community enshrined in the Treaty of Rome is both positive and constructive.
By way of encouraging the Minister it is only right that I should bring to his attention that the Fianna Fáil administration and Fianna Fáil Ministers for Agriculture in the past achieved a number of very notable advantages for Ireland through the CAP. The list of these advantages is already well known.
Terms we did not want——
(Limerick West): For Deputy Farrelly's benefit I would like to mention what we have achieved in Europe in regard to these. I will name the following examples: the western drainage scheme, the calf subsidy scheme, the calved heifer scheme, the ground lime subsidy scheme, the farm improvement scheme, the farm modernisation scheme, and the AI subsidy scheme. All those schemes were negotiated by a Fianna Fáil administration but were dropped or withdrawn by the Coalition. They withdrew £200 million from Irish agriculture.
God help us. The Deputy should talk sense and tell the truth.
Deputy Farrelly is being disorderly.
(Limerick West): I should like to refer to an editorial in today's issue of The Irish Press which states:
The assistant director of An Foras Taluntais, and its chief economist, Mr. Brendan Kearney, pointed out yesterday that the removal of one factory farm on the Continent from the reckoning of EEC agricultural out put, would leave enough room for more than 100 farm families in the West of Ireland under the Common Agricultural Policy. Yet, it will again be the small producer, whose relative pittance of output has not created beef mountains, or milk lakes, who is to face the full brunt of the CAP reform measures now being pursued by the EEC Commission.
Mr. Deasy and his Government must make the EC face up to this bizarre and unfair anomaly.
That is the Minister's duty and when Fianna Fáil were in Government our Ministers carried out that duty. The editorial continued:
They must insist that the Treaty of Rome guarantee on `Community preference' for EEC production is rigidly applied. If CAP cutbacks must be enforced then the contributors to the surplus must bear them, not the thousands of small farming families in this country who now face the brunt of fiscal rectitude.
That is the point Fianna Fáil have been making for a long time. We must face that.
In its rigorous drive to rationalise the CAP the European Commission, unfortunately, is failing to abide by the statutes of the Treaty of Rome. The latest policy and price proposals signal once again their failure to devise suitable and flexible instruments to achieve CAP reform within the context of the Treaties.
The Commission's weapon of a price freeze will hit beef farmers big and small, just as in 1984 when the milk super-levy was applied to milk producers with scant regard for their varying levels of progress and efficiency. The Commission have, of course, again trained their sights on the milk producer. The milk cessation scheme, with its aim of a 3 per cent across-the-board cut in milk production, again reflects the failure of the Commission to approach farm policy reform, guided by the principles of the Treaty of Rome.
In effect, the blunt, indiscriminate approach of the Commission has made a mockery of Article 39 of the Treaty of Rome, which states that in the implementation of the CAP account should be taken of "the particular nature of agricultural activity which results from the social structure of agriculture and from the structural and natural disparities between the various agricultural regions".
Over the past two years, we have witnessed a lack of flexibility and discrimination in the application of the farm policy which undermines the Treaty and the basis of the CAP and is in danger of undermining the very foundation of the European Community. Let us not forget that the farm policy is the only fullyintegrated Community policy.
Irish farming has seen very encouraging progress since our accession to the European Community in 1973. In the following decade, the value of farm output increased five-fold, while the value of agricultural exports increased to seven times the value of that in 1973.
However, farm production did not increase to the level projected. The volume of farm output increased only by one-third in the 1973-83 period. Nor has Irish agriculture developed the food processing industry, in pursuit of value added products for the quality export markets, to the level that one might have expected. Under-capitalisation, high interest rates, the rampant inflation of the past ten years, and the age structure of Irish farming, not to mention high transport costs, and other factors have combined to hinder development.
Who caused inflation to rise? It all happened over a period of three years.
What about the real interest rates?
At the same time, the importance of agriculture to the Irish economy is widely acknowledged. Farming accounts for 14.2 per cent of GNP in Ireland. This compares with 1.9 per cent in Germany, 2.1 per cent in the U.K. and 3.7 per cent in Holland. That is an indication of the importance of agriculture to Ireland. Milk alone accounts for 33 per cent of gross agricultural output and 4.5 per cent of GNP. Dairy cows are vital to the beef industry, making up 8 per cent of the total cattle breeding herd.
The future of Irish agriculture is of crucial concern to all sectors of the economy. The general economic situation with regard to unemployment — who created that — and the crisis in the public finances dictate that our strategy must be one of exploiting our natural resources to increase output and generate economic growth.
Therefore, we must fight EC decisions which fail to reflect accurately the needs of Irish agriculture and its vital position in the national economy.
In this process, we are simply reminding the Brussels, policy-makers of the underlying principles of the CAP. I hope the Minister will do that. The founders of the Community's farm policy intended that a balanced expansion of agriculture should take place within the Community, taking into account the relative importance of the industry in the different member states, and its different stages of development.
It is high time that the Minister, Deputy Deasy, stood up to his European counterparts and insisted on Ireland's rights under the Treaty of Rome and under the terms of our accession as Fianna Fáil did. He must reassert our position in Europe as previous Ministers, like Deputies MacSharry and Lenihan, did successfully. He must reassert the Community's commitment to the farm family as Fianna Fáil Ministers have always done.
He must not apologise for his existence at the Brussels bargaining table. Whether he realises it or not, he has a very strong case, and he must not tire of restating it.
Why is it that countries like Holland and Britain, whose imports from third countries of artificial feed stuffs are the real reason behind the food surpluses, always get their way while Ireland, who plays according to the rules, pays the penalty of quotas and restrictions? Could it be true that our Minister really does doze off at the meetings in Brussels?
That was uncalled for.
The people opposite have been asleep for the past 20 years.
Deputy McCartin.
On a point of order, I have been advised by the Whip's office that I am to be called at 6.20.
According to my list, Deputy McCartin is to be called on now.
I have been advised by the Whip that I would be speaking between 6.20 and 6.30
The Whip has no responsibility for what happens in the House.
I wish to protest about this. It is the second time today that this has happened. Deputies conform with the regulation of notifying the Whip's office of their intention to speak and then come in here and find that there is an unofficial list and that we are prevented from speaking. May I suggest that this matter should be sorted out? It is a disgrace and is unfair to those of us who have done the research and who are anxious to speak.
I suggest that the Deputy resume his seat and allow Deputy McCartin to speak.
There is confusion in the Government parties.
The Deputy's use of the word, "disgrace" is a reflection on the Chair who has the responsibility of indicating who is to speak.
I was not referring to the Chair. I am saying that the break-down arrangement is disgraceful and shows utter incompetence.
Just as can be said of the Government.
I am sorry if there has been a misunderstanding. I understood that another Minister was to speak at this time but as he was not here I offered. Perhaps that other Minister has withdrawn from participating in the Debate.
(Limerick West): Just as the Government have withdrawn from agriculture.
Perhaps his scriptwriter was not as efficient as the person who wrote the script for Deputy Noonan. We have been in the EC for a considerable period of time during which there has been a Common Agricultural Policy that was designed almost completely to our taste. We enjoyed high guaranteed prices for unlimited quantities of agricultural produce and we were free to proceed within our capacity to produce as much as we wished, to sell into intervention and to export with the help of Community aid. Deputy Noonan quoted a figure of 30 per cent in respect of increased volume during our 13 years of membership but my information is that the figure is 20 per cent and I do not have a script writer to rely on. My information is also that net agricultural output has decreased in that period by 4 or 5 per cent. This means that the net efforts of all those engaged in Irish agriculture have been reduced in that time. Despite those terms of the Treaty of Rome which we would like to interpret as guaranteeing that everyone on the land earns an income comparable to incomes in other areas and be able to remain on the land for as long as they wish, regardless of whether they are efficient producers, 80,000 people have left the land since we joined the EC. This is despite the fact, too, as Deputy Noonan has said, that we enjoy very favourable conditions in terms of soil and climate for the production of beef, cereals, and dairy products.
Today we seem to wish to blame everyone except ourselves for our plight. Even now we cannot stand up here at a time when the agricultural industry is in a state of grave crisis and address ourselves to the problem in a reasonable way. Apart from saying what policies we will not accept in Europe let us say what we stand for. In the past we have stood for higher prices, unlimited production and the right to run our economy in our own way. At times that meant 20 per cent interest rates for farmers and inflation rates of 22 per cent. Sometimes it created the economic climate in which it was totally impossible during the terms of office of several Governments for farmers to apply themselves to the business of producing more, to borrow money or to take risks. Today, we are faced with the grave situation and there is no point in us trying to blame everyone in the world except ourselves.
The Minister pointed out that we import beef to the value of £400,000 but later in reply to someone on the far side of the House he said that we export 800,000 tonnes of beef. We must acknowledge that we are producing more beef than we are consuming, that we are selling the surplus and are contributing to artifically high prices. Whether we continue to import to this extent we will continue to have to fix our own prices. Therefore, the 400,000 tonnes is not an important factor. It is the result of agreements entered into so we we should not lead Irish farmers to believe that if we can railroad the Community into preventing these exports to our country, we will solve the problem. Such a move would not leave us any nearer to a solution than is the case now.
The same applies to cereals. Deputy Noonan suggests that some of the big continental farms be closed down. That is not a very sensible proposal because one might find a small farmer in Sligo, Leitrim, Donegal or west Mayo who would consider that he ought to be allowed produce more and that a 200 or 300 cow farm in the Golden Vale should be closed. In other words, a solution is not all that simple.
I understand that the 15 million tonne figure in respect of cereal substitutes is a four year old figure and that the up-to-date figure is much lower, but even accepting that, the fact remains that this Community is more than self-sufficient in terms of cereals.
The same applies to beef. While the dairy farmers of Holland use a lot of these cereal substitutes for feed they are paying almost as much for their daily rations as we are paying, so the benefits are not going to the farmers of the Community.
In the context of fair play in regard to the CAP, let us consider the average farmer in Cork, for instance, whose income is £7,000 per year but who, by way of the Community, receives about £2,700 annually while a small farmer in Donegal with an annual income of £2,000 benefits to the extent of £150 out of total European spending. Therefore, even within this country the benefits of membership are not being applied. We do not want increased spending on agriculture but we must ask ourselves whether we wish the money that is available to be spent more evenly and equitably. Are we concerned for social justice within the agricultural industry? If so, let us reflect on a situation in which half the farmers of the country are in Connacht and Ulster and receive in the region of 25 per cent of the total aid from the CAP. I urge the Minister to concentrate on a move back to income aids and structure.
Cereal farmers are demanding quotas so that the status quo can remain. The man with 100 acres can remain in cereals but the Irish farmers will pay for this since we do not have a big cereal surplus. We are not even self-sufficient in this respect so from a national economic point of view we have nothing to gain by increases in cereal prices.
We claim to have favourable soil and climatic conditions which enable us to compete. If that is so, it is not wise for us to adhere to the principle of comhaltas for the foreseeable future. We would be better off by putting our economic act together in order to put ourselves in the position of taking advantage of our favourable conditions to enable us to compete and increase our production. The truth is that we are not working very hard in that direction.
I would prefer our Minister for Agriculture to go to Brussels with a package designed for the long term development of Irish agriculture rather than, as has been happening on every price fixing occasion, have Irish Ministers go to Brussels with, in their heads only, the latest demands from the farmers' organisations and from the political scene as it happens to be on the day the Minister leaves the country. This is not the right approach. In Europe we are resolving the crisis from day to day. That has been the case for the past four or five years. Community preference will have to be observed. We cannot allow products into this country that are in excess of what is being produced here. If we allow in such products as cereals, beef and milk we should insist that the taxpayers of Europe pay for the export of surpluses. On the other hand, if we want to close the borders of Europe and not allow anything in, we need not expect to export anything and must just produce enough for consumption within the Community. Obviously, at the price that farmers within the Community expect, we will not be able to sell abroad.
Recently great play was made of the amount of beef exported to third countries. I warn the Minister and everybody concerned that this is not normal selling. This is selling to markets that pay a very bad price. The Deputy or ordinary farmer who sells his cattle is not aware of the high level of subsidies paid on these exports by the European Economic Community. We should seek to direct our food sales to the lucrative markets of Central Europe and the highly industrialised countries. Other who are less efficient at producing or have less advantages than we have are the people who should be forced to sell outside the Community in markets where they dump their produce.
I am very disappointed at the two and a half hours' debate this evening on a very important national issue. It shows a lack of concern on the part of the Government, considering the crisis facing agriculture. Three weeks ago I requested a day's debate at least to be given to this major issue concerning our beef, milk, grain and the whole agricultural scene. It appears that the Government were not worried enough about the major problems facing the nation—farmers and workers.
Taking this debate at 5.30 p.m. on a Thursday evening means that most rural Deputies have gone home. However, they might as well go home because time has not been allowed for speakers on either side of the House and I must register my protest. It was requested by the Leader and the deputy leader of my party and myself over the past three weeks that ample time be given. We would have been serving the nation very well had we allocated at least another three hours to the debate. I hope Brussels will not see it as a lack of concern on our part that we should treat this matter in such fashion. Because of the seriousness of the problems facing agriculture, I hope that the Taoiseach and the Minister for Agriculture will get a fair deal for everybody, whether in the production of milk, grain, beef, sugar beet or other commodities. We have so many unemployed and so many farmers on the verge of bankruptcy that this matter must be taken seriously.
If the Common Agricultural Policy cut-backs must be enforced, then the people who contribute to the surpluses must be made to carry the can and not our thousands of small farmers. There is a litany of problems facing farmers now—the milk quota and a threatened reduction in the price of milk of 1.2p per gallon on 1 April. I hope that will not happen, but it looks as if it will. I hope that the Minister will do his best in this regard. So many thousands of jobs are involved in the industry and on the land.
There is also the threat of a levy on cereal production. I was surprised to hear the previous speaker talk about 100 acres of grain. He must know very little about grain production. The margins of profit on grain, in the past three years at least, have been very narrow. Input costs have gone up and prices have gone down. Some of the finest tillage farmers have gone out of business because they could see no profit there. I am sure that the Minister does not want to see us using imported grain of lower quality, with many losing their jobs and the nation as a whole being worse off. There are also suger beet quotas.
Where will the farmers go? Where will the young farmers go? I was also surprised at the MEP from the Fine Gael Party, who should be well versed regarding agricultural prices, particularly during the past four or five years, with a drop in our incomes, saying that we should not object to all the imports from outside the EC. This is our major national industry and we have a right to demand special concessions and a fair deal. We need not make an apology to anybody. I hope that the Minister will not, because he is entitled to make as strong a case as possible, bearing in mind the high level of unemployment and the number of farmers in very severe financial straits through no fault of their own. The Taoiseach and the Minister should take this crisis very seriously. There are 180,000 farmers and 300,000 workers employed in the agribusiness. There are many families involved there. As many foreign industries as they like may be brought in at the expense of the taxpayer, stay around for a while until their period of tax relief is over, and then they fly off in the night, but when the farmers are down, the nation is down.
Hear, hear.
If the beef intervention which was worth £173 million to the economy last year is stopped, it will be a calamity. Cuts in the cereal price supports amounted last year to £30 million and there was a milk quota cutback of more than 30 million gallons, amounting to at least £30 million.
I tried to raise on the Adjournment the matter of the absence of a stand to display Irish beef, mutton and lamb at the major world fair at Barcelona last week. A number of meat factories employing many people had to travel to that fair under their own steam and put their goods on a British stand. A representative from the CBF came along on the day after the fair finished, and said he would make sure that Ireland would be represented in two years' time. If this carry-on lasts much longer, how many farmers will be around in two years' time? Are the Government really serious? If the Minister has not control over CTT and CBF, he should have. The boot should be put in. They should not be just globe-trotting. Why was nobody in Barcelona three or four weeks previously, giving the Irish an opportunity to display their goods in a market at which 70 countries were represented? What could befall our beef if anything happened to the intervention?
Are we serious about marketing our produce, with all the semi-State bodies in existence? I tried to raise this subject in the House last week and was told by the Ceann Comhairle that it was not the responsibility of the Minister. Who is responsible? The buck must stop some place. The taxpayer is paying all those fat cats in those State bodies. We have become the laughing stock of Europe, with jobs at stake and all this pussyfooting and shoving away of responsibility.
Hear, hear.
If any of those representatives are not doing their jobs, they should be put out of office. The legislation should be changed. It is outdated if some of those bodies cannot be touched by the Minister of the day. I wish it could be changed before tomorrow and that power was given to the Taoiseach or the Minister to tell those people what they should and should not do. It is a disgrace. I could go on for half an hour.
You have two minutes.
It is not good for our unemployed highly educated young people and our over-taxed people to see these officials globe-trotting. What value are we getting for this? Very little. Nobody is responsible for anybody in this country, as far as I can see. We are at the cross roads in agriculture. We have committees, debates, conferences and when we want to market our products nobody is around to do anything about it. That is one glaring example.
I appeal to the Taoiseach and the Minister to see to it that this never happens again. It was an insult to the people. We have lost many markets in that area which could have been valuable to us in the months and years ahead. I am very disappointed, indeed. I hope we do not end up unable to grow beet and to sell our beef. I hope our young people who inherit farms will still have an opportunity to farm the land as it should be farmed, so that as many people as possible can rear their families on the land, make a decent living and create jobs for others down along the line.
I appeal to the Taoiseach, the Minister for Agriculture and the Minister for Foreign Affairs to do everything possible, as was done about two years ago, to meet the Heads of State of the EC countries and tell them that our backs are to the wall. If we do not, it will be too late, as it was for the fair of Barcelona.
This is the most important agricultural issue which the House could debate and it is probably the most important subject to be debated for several months. The background to what is happening in Europe at present is very well known. When we sift through the rhetoric of many commentators it is obvious that there is an over-production and supply of certain products which the consumer either does not want or is unable to pay for.
As a small agricultural exporting country in a very large club our backs are to the wall. The first major serious onslaught on us as an agricultural community and on the economy generally was launched by the EC two years ago with the super-levy system. Whether one is a supporter or opponent of the Minister for Agriculture, it is generally recognised that in the very difficult circumstances at the time, he put up an admirable show to ensure that our special circumstances were recognised and that we were allowed some flexibility within the system. Obviously most farmers would have preferred to get much more if that had been possible, but everybody understood the tremendous pressures on us as a small community on the periphery of Europe to fight this huge machine. We fought it and did relatively well.
The guns are now pointed in almost the same direction but at a different target, the beef intervention scheme. Obviously some of the people who pay the piper in the Commission, principally the Germans and other who, unlike us, are net losers in so far as the CAP is concerned, say that the available finances should be channelled to the small producers who have to make a living from the land and to try to divert the many millions of pounds which heretofore were made available through the system to the industrial farmers in parts of the Continent. I assume that this makes sense to the German taxpayer. However, we are primary producers and we depend largely on exports but the mix of big farmers to small farmers in this country is very much in favour of small farmers. It is all very well for commentators and European politicians to tell us that it is important to divert the funds and the various subsidies away from huge farming combines — there is nothing wrong with that and the EC will have to address itself to that matter — but we do not have that system and we operate on the basis of a small farming family pattern with very few exceptions. Because we are so dependent on the small farming society for various farming products such as the store cattle industry, the minute anything happens in that industry it reacts on the small primary producers. They always feel the draught more than anybody else and that is why I have consistently argued in Brussels and elsewhere that it should be a matter of deciding to channel available finances to the people most in need of them.
One must question the capability of the EC for getting rid of some of the socalled beef mountains. Their world sales policy is not aggressive enough to get rid of as much of this beef as possible. We all know that beef intervention can be a very costly system but we also know that, in so far as the system is concerned for a nation like ours, it is exceedingly important that there is a facility like intervention or something similar which will have the same effect. I have no doubt that Minister Deasy and the Government will argue extremely strongly on that point. Of course, as has been said on both sides of the House, no discussion in Brussels at price fixing time would be in order unless they talked about cheap food imports. The problem is that that is all that has been done about it over the years. It has come up time and time again but the problem is still there. If the EC and its various governments are interested in what is happening, this is a major factor which will have to be taken into consideration sooner rather than later.
One thing which has not been mentioned this evening is the amount of money coming through the disadvantaged areas scheme. That stood at about £40 million last year and because of the Government decision to increase the beef cow grant to £70 and to extend the disadvantaged areas to the category of severely handicapped, that £40 million will be £60 million in 1986, a 50 per cent increase. That is extremely important as a 50 per cent increase must be welcome even against falling incomes in agriculture. They have now stabilised but The Agricultural Institute say that the incomes on those farms are very small. It is against that background that we must be treated in a special way in Europe for many years to come. Our development was extremely slow for a variety of reasons and that is why present negotiations are extremely important to every farmer, big and small.
Under the structures side we have now implemented a new farm grant scheme for this country which has been widely acclaimed. There will be great investment in Irish farms over the next few years, to a much greater degree than has been the case over the last three or four years. Most of this has emanated from Brussels and it is against that background that that type of investment programme is extremely important and it must continue. The consumers of Europe are very vocal in their criticism of this policy but it is fundamental to every farmer that we adopt this attitude to ensure that our best interests are served irrespective of consumer demand in Europe.
We are discussing not only the CAP but the future of the agricultural economy and the national economy generally. Over the past 13 years since we entered the EC we have not devoted adequate time to discussing agriculture. There have been practically no policy changes and we have been trundling along the same old road. Many people would be termed alarmist if they talked about the seriousness of the problem now facing us, but the reality is that 78 per cent of our produce is accounted for in areas of surplus — grain, beef and milk. In the area I represent grain is not a big consideration but it is nevertheless important. Poultry production plays a very strong role and the importation of grain has caused problems for grain producers in the competitive areas in the south.
The most serious aspect is the problem of the family farm. During the fifties the country was being denuded of population after the war. When we began to talk about entering the EC people saw an opportunity to develop farms in order to produce a reasonable livelihood to maintain their families. From the late forties until the early seventies I was associated with the co-operative societies and I am aware of the work they did to ensure that the family farm would be retained. They gave every possible assistance by supplying fertilisers on a non-profit basis and providing long term credit for the purchase of stock. We believed our entry to the EC would be a levelling-up process, that Jack would be as good as his master and that the position of the small farmer would be recognised. It has not been recognised.
There has been reference to concessionary imports to the EC and this problem must be tackled. The strong economies in Europe which use concessionary imports should suffer for their sins and this country, which is not involved in concessionary imports of grain, should not have to bear the brunt.
In my area people live or die by milk production and the levy placed them in a serious position. The Connaught-Ulster region was very badly done by in the allocations following the imposition of the super-levy. The large, fully developed farms which I visited during by-election campaigns in the south and east were given the same percentage as the smaller farms. Those producing 200 gallons of milk were treated in the same way as those producing only 20 gallons. I have always objected to this and will continue to do so. The cessation milk scheme militated against the small regions. One very small co-operative in my area lost 58,000 gallons of milk, a massive amount to such a small co-operative.
There has been much talk about diversification and it is time this was tackled. I am not satisfied with the way it has been approached by the co-operatives and the State agencies. The IDA report a few years ago pointed to product areas into which we could diversify, but all we hear about nowadays is easy spread butter. Those who should be trail blazers in the area of diversification from milk must move into some other product.
I am sorry that the Minister for Agriculture has left because I should like to raise the question of the milk monopoly which is enjoyed by the Dublin and Cork milk boards. I was unsuccessful in trying to raise this issue during Private Members' Time but I raised it in my contribution during the budget debate. This monopoly is operated under the 1936 Act but prior to Christmas the Commission gave the opinion that the monopoly should be discontinued. Now four or five months later nothing has been done. I put down a question to the Minister asking him to bring in amending legislation to discontinue the monopoly. He replied that the system under which the milk boards operate is currently being examined by the EC Commission and that he would be considering the position in the light of that examination. I understand that the EC will be taking the Government to court on this matter.
At the same time the EC Commission have a case against the British Government regarding milk pricing practices. There is a parallel case which is not likely to come to court for some time involving Bord Bainne and the British Milk Marketing Board. It is time to examine the position and to discontinue the monopoly. The Minister should not bow to pressure from very strong elements around Dublin who have the power to ensure that fair play is not given in regard to a product produced in the provinces. At the same time, these same dairies can go to the provinces and dump their produce there.
We must be very concerned about the western package. In 1981 Deputy Mac-Sharry negotiated one of the best packages ever negotiated by a Minister. The sum of £300 million was to be spent over a ten-year period, to be matched £ for £ by the national Government and the EC yet after the first five years only £103 million had been spent. This was not the way we had envisaged the scheme being operated. We believed there would be a big uptake under the calf to beef scheme but, due to restrictions imposed by way of income limits, only a few dozen people qualified. Income references also play a part in the farm improvement scheme. Part time farmers and others who could not qualify as development farmers applied. Many of them will not be included among those 90,000 who are qualified under this scheme. Those small farmers were disregarded from the point of view of silage making funds.
The background to this year's EC price proposals stems from the Green paper entitled Perspectives for the Common Agricultural Policy. this was debated in various forums, including the Council of Ministers, and resulted in the drawing up of Commission guidelines which were produced in December 1985 in a paper entitled A Future for Community Agriculture together with related policy documents on beef and cereals.
At the same time, the EC Commission had in mind further proposals for curbing the structural surplus in milk which still persists despite various measures taken in the past including a co-responsibility levy and, of course, the quota restrictions combined with the super-levy. The Commission has argued that the budgetary situation and market conditions in many sectors and most notably in the beef, milk and cereals sectors have made it necessary to review the support arrangements so that they become much more market price orientated.
While we may not like the trend the debate in relation to the CAP is taking, nevertheless the problems which face the policy are formidable ones and must be tackled if we wish to preserve that policy in similar terms to the way we know it now. We have a major interest in the CAP and would not therefore wish to see radical changes made overnight. In the forthcoming negotiations our aim will be to minimise the potential damage. It will be essential to bear in mind the fundamental importance of the CAP, the need to maintain employment in agriculture as a major element in the economy and, of course, the importance of the family farm and farm income.
The Commission laid much emphasis on the question of surpluses and overproduction but these are not the only problems which face the CAP. We are very conscious of the need to highlight the fact that there is free access to the Community of cheap animal feeds which supports the development of highly intensive production divorced from the land. If curbs are to placed on the production of Community based feedingstuffs, it is equally necessary to try to check the imports which displace them.
The situation with regard to prices for the coming year is that the Commission has proposed a virtual standstill. Nevertheless, we think, it unfair that prices should be pegged at their present level particularly in the sectors which are at present subject to production controls, for example, sugar and milk and equally some price improvement could justifiably be sought for a product in deficit such as sheepmeat.
However, our main preoccupation this year will be in the beef, cereals and milk sectors where the price related measures proposed could, if passed in their present form, result in a serious financial loss for the country and the farming community. The Commission is proposing on the beef side that the permanent availability of intervention buying be abolished with effect from 1 December 1987 and that intervention be retained solely as a "safety net" for use only in exceptional circumstances to avoid severe market disruption. In the interim, intervention purchases would be severely restricted and producers would be partly compensated by a system of premia. Export refunds and private storage aids would continue but in the background the spectre of budgetary constraints could severely curb the availability of funds for these supports.
Since we export five cattle for every one consumed on the domestic market, price support is of paramount importance to us. We have at present the lowest average market prices in the Community. We are furthest from, and marginal suppliers to, the markets of most member states. Intervention is an absolutely essential element in ensuring some stability in the beef market. We are opposed to the premia which are offered in compensation. These are too small, restrictive and have provision for payment of supplementary national amounts. Intervention is Community financed and it should be replaced by a community financial measure. Restrictions apply as to both the numbers of animals which would qualify and also the measures would be confined to specialised beef producers — mixed dairy-beef enterprises would be excluded. The latter restriction in particular takes away from its usefulness in the Irish situation. The Commission is also proposing to abolish the special element of the suckler cow premium amounting to £15 per head which was payable in Ireland and Northern Ireland and additionally the calf premium of £6.75 per head payable at present would not be renewed. Another factor which will dilute the support available to Irish farmers is the proposal not to renew the UK variable premium under which Irish beef exports benefited.
While the Community has a problem with beef at the moment as far as build up of stocks is concerned and standstill in consumption, we do not agree that this scenario will persist. Much of the problem has been caused by the fall-out from the introduction of quotas in the dairy sector which resulted in a peak of cow slaughterings. The Community is little more than self sufficient in beef and production trends are downward so, in the medium term, we envisage that the market will come back into balance. We will, therefore, given the importance of beef to our economy be urging that the Commission review its proposals particularly in so far as the support mechanisms are concerned.
We have another very unusual peculiarly Irish problem, the seasonality of our beef production, winter fattening and so on. This new approach to the CAP would be catastrophic from the point of view of prices. There is very little we can do about that. Big numbers of our cattle appear on the market at one time of the year and I am afraid that position will continue.
On the milk front the most serious issue facing us is the proposal to introduce a milk cessation scheme. The Commission aim is to buy up 3 per cent of quotas on a Community wide basis and abolish them. We would, of course, be very much opposed to any scheme that would involve a reduction in our national quota. The special situation of dairying in the Irish economy was recognised at the time of the introduction of the super-levy quota measures when specific guarantees were given about the level of the Irish quota including an assurance that it would not be reduced in future years. We will be vigorously contesting any measures which would impinge on one of the greatest natural advantages we have, i.e., milk production. It may be opportune during the course of the negotiations to endeavour to seek come changes in the super-levy system particularly in so far as the linking of quotas to the land is concerned.
We have been giving attention to other possibilities, and I look particularly in the coming year to further production of foodstuffs such as soft cheese and green peas and related crops for processing. We will have to look at new areas of production, and these include flax. This will not be of any great acreage but it will have good possibilities. We are inclined to relate new produce to land use but we must continue to develop new uses which will be of benefit to farmers.
The third element of the price proposals of major interest to us is that concerning cereals. The proposals embracing a co-responsibility levy, changes in intervention procedures and quality standards could, if adopted, reduce producer prices here by up by 10 per cent to 15 per cent. Quality standards are dependent on climatic factors which vary greatly throughout the Community and, as a consequence, it may be impossible for us to comply with all the standards being proposed. We must see to it that the proposals do not have the effect of making cereal growing uneconomic for many of our better specialised tillage farmers for whom there is now no comparable alternative.
While we will be opposing the adverse factors I have mentioned, it is plain to see that difficult challenges lie before farmers. It will be necessary for them to adapt their enterprises to the changing conditions such as the various production curbs visibly in prospect. New lines of production must be sought out. Production must be geared towards meeting the needs of the market place rather than relying on intervention. Now that the demand is there the farmers are willing to have a go. The time is ripe for such a development.
The few minutes available for this debate does not do justice to the importance of the subject. Instead of recriminations between who did what and who did not do what, what we should be doing here is telling the Minister for Agriculture that a hell of a job needs to be done here. The Minister should use the veto if necessary and finally he may be required to renegotiate our conditions within the Community because we are not getting a fair crack of the whip, regardless of what some speakers have said. When we joined the EC in 1973 we relied on Article 39 of the Treaty. That has not been lived up to. The special care of the farming community and the family farm has gone out the window. This was foreshadowed four or five years ago. In my time in Europe on every Common Agricultural Policy debate and in the framing of the budget I have said this. I am one of the few who totally opposed the milk quotas as a sell-out so far as we are concerned. It is a sell-out because it was given to us to understand then that even though we objected to it is was something that was there as an experiment for five years. If one builds something in with sufficient cement, as this has been done, the five years becomes eternity. We were given to understand that the expansion of our quota related to the datum year in arriving at the quota. That increase that we got at the time implied and could have been construed to imply by those who would willingly listen that this would continue for the remainder of the five year period and would then be reviewed. It has not turned out that way. The quota has not been regarded as sacrosanct to our country and we now have the cessation scheme, the buying of quotas and the unfair situation that so far as the country as a whole is concerned those who were in milk and had very good quotas have their land values increased by at least 100 per cent while the land values of others in other walks of life who have no opportunity of going into milk in the future see their land values reduced by about 50 per cent.
It is true that we have a surplus of cereals and butter and that we have a surplus of beef but from where did we derive them? Where were those who should have been talking in the high places during the last five or six years when this scene was developed, when it was clearly evident that the import of cereals from North America, not to speak of Third World countries, would be disastrous for this country? North America has been sending to the Community as much as 25 million tonnes of grain per year at zero or small duty. Who has been taking it up? Large combines who do not own an acre of land on the Continent or within the EC, who have huge buildings on tens of thousands of acres and have put there herds the like of which we never contemplated, herds of milk cows producing milk to such a degree that Germany has gone from a net importer of milk and dairy products to a net exporter of milk and dairy products. It came about as a result of this situation. Let us deal at source with this phoney surplus we are allegedly producing. We should contrive by every means at our disposal to reduce those imports from North America and where necessary from Third World countries.
We should look at the beef industry also and take into account this cheaper feed which the mainland Europeans have been able to get as a result of these agreements, which are not for our benefit but for the benefit of large manufacturing exporting countries and for the benefit of the multinationals who pluck the strings which play the tune that suits them. We will be told that these things are arranged under GATT and other international agreements and that if we try to upset those, worse would be visited upon us.
We went into the Community and have paid the price. In the first 12 years of our existence there we have lost 50 per cent of industrial employment in this entire island. That is because we conformed to the conventions that we signed in 1973. In return for that, during those free years we got expanding agricultural production in all directions. For that time we were doing very well — too well as it turns out. Now that the chickens have come home to roost, now that those industries which we lost as a result of the Common Market are gone beyond recovery, we are being squeezed where it matters, in our agricultural activity. The proposals which the Minister today is rightly afraid of are only the beginning. We will be squeezed to the degree that we will not really be a truly agricultural country in the future unless one can call ranch lands such as there are in North America, an agricultural country, that is the scene I see. It is a sad situation and we through our Government and Ministers have to a large degree been responsible for it, even if we have been conned into that situation by believing we are good Europeans abiding by the rules while at the same time we are strangled from behind. That is what has been happening. We have been too soft.
Hear, hear.
We have been too easily put upon on too many occasions until we have reached the stage where if we do not put the boot in, agriculture will not be just the pale shadow it now is but the substance will disappear altogether. That is the sad situation which faces us today because we were honest and conformed to what was required of us by way of payment in dissipating many of our industries to the point that 50 per cent of our employed numbers in industry in 1973 had disappeared by 1983. That is a stiff price to have paid only to get this in return.
We should be given special consideration because of our geographical location, the cost of transport and so on. In relation to grain, they talk about cereals and the moisture content. Surely the moisture that helps the grass does not help the grain, particularly if one gets it when one is trying to harvest it as we have done in the recent past. These things are not taken into consideration. Neither has an effort been made to get a common market, for instance, in potatoes which mainly concerns the people in my county and of the north-west generally. That industry is practically goen and it was the mainstay of the small tillage farmers of my county and of Mayo, parts of Sligo and as far south as Athlone. The seed trade is gone. Soon we will have nothing but imported potatoes both for the table and for seed as nobody will be growing them because it just does not pay any more. These are the facts. These are the things in relation to which we want the Minister's help. The Minister should be strengthened knowing that the Members of this House are totally behind him in any steps he proposes to take——
The Deputy's time is up.
——to obviate the difficulties that are now being presented to our farming community and to the very life-blood of our country. We will back the Minister all the way right to the point of veto and the call for renegotiation, because we have been conned. We are facing bad times in the farming community and, as somebody said, when farming is doing badly, who is doing well?
I would not necessarily agree with all the sentiments expressed by previous speakers because I believe Ireland has been very lucky to be a member of the European Community.
The Deputy is joking.
We have achieved great benefits' from being a member of the Community, whether the Opposition want to accept that or not. I suggest that they look at the record over the past ten years and they will ascertain just what we have gained from being a member of the EC. Likewise, our European partners have been very lucky to have us in the Community because we were in the business of producing goods which were essential in making Europe self-sufficient. The EC should try to become self-sufficient and that is the area in which we have played a role.
Obviously there have been difficulties down the years in relation to surpluses in a number of areas and this difficulty continues.
Agriculture is our main economic plank, the industry on which the greatest number of people depend. It is not reasonable to expect that we should be asked to make sacrifices now when the going is getting rough. Notwithstanding all the benefits we got from our membership and all the benefits Europe enjoyed as a result of our membership, there is still room for a greater and continued contribution from Ireland. The efforts of our producers, our farmers and all involved in the agri-industry should be recognised by our European partners, and we in turn must continue to be allowed to expand in the areas where this is possible.
Deputy Blaney mentioned a number of areas where possible expansion is being hindered by imports from non-EC countries. While we have benefited from our exports of beef in particular to non-EC countries through export refunds and so on, by the same token our potential market in the EC has been eroded by imports from non-EC countries. That seems to go against the spirit of the original agreement. One must take the rough with the smooth not only in this country but in the Community itself. In many places people are talking about more than co-operation; they are talking about total European union. I think it is unreasonable that people in Europe should contemplate that we might consider accepting any curtailment of the produce we hope to sell on the greater European market.
As regards the proposed limitation on milk production, there are two sides to that story. Depending on which side of the garden gate one is looking at, even in this country one regularly hears that there is milk over-production and that money should not be wasted on continuing to exacerbate that problem, but it must be remembered that a great number of Irish farmers and a very proportion of our agriculture are dependent on milk production. Because we are so dependent on that one area of production, many industries have suffered as a result of our membership of the EC. They must be prepared to accept that we claim the right to be allowed to expand and to explore further those areas where we hoped to capitalise when we became a member of the EC. If we do not do that, then people might say the benefits are not what we expected and that we should think again about this. I do not accept that opinion. I fully accept that we have benefited greatly from membership of the EC and we should never forget that. If we do not accept that, it will appear to our European partners that we have taken for granted everything we have got and that we do not feel we have a further contribution to make.
The beef sector is an area where there is room for further expansion regardless of what people say about the world market. In my view the present Government and Ministers have done their utmost and have been singularly successful in the way they have negotiated so far. I congratulate them and I want to reassure the Opposition that the affairs of the farmers are still in safe hands.
(Limerick West): The Deputy must be joking.
Our farmers rightly recognise that whenever our representatives went to Europe to negotiate on their behalf their affairs were in very safe hands. Think back to the super-levy and consider the fears expressed by the Opposition prior to those negotiations. Exaggerated opinions were expressed about what would happen when the Minister went to negotiate.
(Limerick West): Ask the farmers at the end of this month when they have to pay the super-levy.
Slowly but surely it faded to nothing and the expectations of disaster, expressed by the Opposition——
The Department's officials could not even add.
(Interruptions.)
Order, please.
It all came to nought and the same thing will happen in the present case. These wild opinions and the generation of hysteria which originated on the opposite benches will come to nought. I can assure Deputies that when the negotiations are finished the Minister will have the full support of all Members on this side, and I would like to think also of all Members on the other side of the House, in pursuing the interests of the Irish farmers and of the economy to the best advantage.
I have no reason to believe that the Minister's ability is less today than it was a couple of years ago when he was involved in the super-levy negotiations. I have no reason to believe that he will be any less successful today than he was in those discussions a few years ago. I do not believe there is any need for the Deputies opposite to become unduly worried that suddenly the fortunes of Irish farmers are going to take a downturn or that the Minister is about to have an off day.
The farmers are worried.
It does not do good to any sector of the economy or to any industry for people to utter these doom and gloom cries we have heard so often from the Opposition benches. It does nothing for the confidence of the people involved——
The Deputy is living in cloud cuckooland.
The unfortunate thing about people who shout this gloom and doom too often——
What we want is action and not talk.
(Interruptions)
While they might recognise the fallacy of what they are saying, there may be innocent people throughout the country who might not recognise that. Worst of all, the people on the opposite benches might well convince themselves of the truth of their argument. That would be a serious problem.
All interests in this country should give full support to the strongest possible case being made to ensure that the interests of the major sector of our economy are upheld and kept to the fore in the European arena.
I am glad to have an opportunity of speaking on the most important debate to take place in the House in a long time. The one criticism I would voice is the failure of the Government to make available more time for such an important subject. It is proof of their lack of commitment to the agricultural industry, expecially when the debate did not take place under a Whip with a vote when, naturally, they would be nervous of facing into a general election.
The consequences for Irish farmers and our agricultural industry generally were never as serious. An agricultural-based nation like ours must be granted a special position in Europe. We tend to be apologetic here in all our speeches because of something we appear to get for nothing. It must be stressed that we are not getting anything for nothing, we are getting our entitlement. We are a nation on the periphery of Europe that has been oppressed over a number of generations. No other country of the 12 member states of the Community has the same dependence on agriculture — milk and beef being our two main commodities. We are a relatively new nation, having achieved our freedom only 60 years ago, having been almost tied to the United Kingdom's cheap food policy which did not allow us to expand or develop in the way many other European countries advanced prior to joining the EC.
The main wreckers of the Common Agricultural Policy are the Dutch. They are abusing their concession within the Community to a very large extent, importing massive quantities of cereal substitutes from outside the Community for their factory-type farms. They developed large pig farming operations based on cheap food substitutes over the years. Now they have the largest factory-type farms in western Europe. That is something we cannot tolerate. Indeed it is something we must highlight and expose at every available opportunity. It is ironic that the Dutch Minister is now the President of the Council of Ministers, Mr. Brax, which means that he would have little sympathy with a policy of curtailing cereal imports into the Community. The German Minister has accused the Dutch of trying to destroy the Common Agricultural Policy or the normal EC market because of cheap cereal imports. To date they have shown little concern in this respect.
I was most impressed on reading a copy of the Irish Farmers Journal for the week ending 22 March 1986 to see a headline: “Germany calls for radical shift in CAP thinking” under which it stated that the German Minister for Agriculture, Ignaz Kiechle, has sympathy for the Irish farmer. That is something of which our Minister must take cognisance. The Minister must be seen to rally in behind the German Minister, getting as much support as he can from that area of the EC. Like ourselves, they are a nation who were deprived—who fought a world war — a nation that has built up its economy and agricultural industry. Further-more it was alarming to see in today's Cork Examiner a headline, “German Package to embarrass Deasy” from the point of view of making national aids and concessions available. If the EC travel down that road it will have catastrophic consequences for our farming industry and our farmers generally, bearing in mind our small economy and unsuccessful efforts to generate wealth in order to subsidise that sector of our community.
The main objective of the EC Commission should be to reform the Common Agricultural Policy and not to dismantle it. If the present EC proposals are implemented the Common Agricultural Policy will be sacrificed at the altar of international trade and politics with the blessing and support of the EC Commission. Everybody agrees that the Common Agricultural Policy needs to be reformed. This means there must be more consideration given to market management. Instead of a policy forcing EC prices down to world market price levels, an environment must be created in which farmers will produce primarily only the volume the market requires and achieve prices for those volumes which will guarantee them a decent income level. However, it is clear that the EC have not given any thought to market management in their current proposals. That cannot go unnoticed.
In 1985 the EC imported 14 million tonnes of cereal substitutes. That is equivalent to the amount of EC grain forced into intervention last year, having been displaced by cheap imports such as tapioca, dried orange skins and fillers generally. It is ironic that such proposals should come forward at a time when Holland hold the Presidency of the EC. While Mr. Brax was in Dublin last week he did not give us much hope. Indeed, were it not for the insistence of the President of the IFA I believe he would have returned home thinking that all Irish farmers and the Irish agricultural industry generally were quite satisfied.
Intervention purchases of 400,000 tonnes of beef in 1985 were occasioned almost totally by the importation of 360,000 tonnes of beef from outside the community under favourable terms. That cannot go unnoticed, it must be highlighted, fought and those imports stopped. Eighty thousand tonnes of New Zealand butter continue to be imported at the same time as EC milk producers are being asked to cut back production by 3 per cent.
While common preference was once the cornerstone of a brave new Europe, this right of European farmers to produce food at a reasonable price for the citizens of Europe has now been disregarded because of political expediency which dictated the scandal that large imports should continue into the Common Market though production is already in surplus. The Commission's thrust is to lower prices to a level which would render a great many family farms, the mainstay of our economy, uneconomic. We have a total of approximately 144,000 full time farmers and 45,000 part time farmers. Many of those farmers, because of their slowness to develop, now find themselves with dangerously high bills on super-levy, with no economic future in cereal growing and beef production. The future for grain is dire, with no concessions being given. This constitutes a sell-out from the point of view of the grain farmer. While grain may not be one of our most important commodities it has served our farmers well and we must recognise that fact. The grain proposals for lower prices are a good example of the EC trend to move forward toward world prices. If the price policy on cereals is allowed to go ahead it will require approximately 600 acres of spring barley in 1988 to give a grain grower the average income of an industrial worker. Last year it required only 115 acres to achieve that level of income. That is a frightening prospect for any grain farmer.
Similarly, if the EC proposals on beef go ahead overall beef prices will fall by at least 10 pence per pound this year and 15 pence per pound in 1988, costing the beef industry a staggering £170 million by 1988. There is no need to spell out the disastrous effects such proposals would have for employment in the agri-business sector. They would make the super-levy threat look like a teddy bears' picnic.
There is now an even more serious threat to our agricultural development than when the super-levy was being introduced. The Taoiseach and his Government have done absolutely nothing to offset the consequences of the shattering proposals now being brought before the EC Commission. Our Minister for Agriculture has failed to sell his case in Europe. I am horrified to admit that, when the super-levy threat first emerged, the Taoiseach went on a tour of EC capitals to spell out its disastrous consequences in Ireland. The Government, with the support of the main Opposition Party — I go on record as saying that here in spite of what Deputy Durkan said — rallied to protect our people, to show Governments in European countries and the EC Commission that they were not prepared on behalf of this electorate to be dictated to by Europe.
Our family farms structure cannot be expected to compete in price terms with the Americans where the average farm size is seven times greater than that of its Irish counterpart. It is a sobering thought to realise that if Irish farms were the same size as American ones, there would be room only for 30,000 farms here. This would have a disastrous effect on our rural areas, as against our current figure which is in the region of 180,000 farms. The effect on rural Ireland would be devastating if the destruction of so many family farms was to take place as a result of EC policy. It would lead to wholesale poverty in those areas. Indeed it would be worse than the policy of former generations. It would be like Oliver Cromwell's policy, "To hell or to Connacht". There is also a line being sold that the Common Agricultural Policy costs quite an amount of money. Let us put that in perspective. Last year the increase in the American defence budget was 40 per cent more than the annual cost of the CAP.
The Deputy's time is up.
The US defence budget for 1985 would finance the CAP for the next 25 years at its current level.
In dairying some EC members such as Denmark achieve 100 per cent of their target price while we are consistently stuck at 80 per cent. That is a difference of 20 per cent which is a loss of 12p per gallon to each Irish farmer.
Deputy Frank Crowley, and I understand that there is agreement to divide this ten minutes. That means that Deputy Crowley will have five minutes and Deputy Lenihan will have five minutes.
I would like to make a number of points here tonight. For a start, I disagree with practically everything Deputy O'Keeffe said.
(Limerick West): The Deputy was not listening to him.
He has spoken in a negative way like a man who had no confidence in himself. He spoke as a Deputy who has no confidence in Irish agriculture, in Irish farming, and he has not much confidence in the Minister. I do not share that view and I have no reason to share it. Over the past three years the Minister has proved conclusively in some of his achievements that he is quite extra-ordinarily successful. I would like to compare his record with that of others at any time Deputy O'Keeffe likes and I think he will agree and accept that the performance of the Minister, Deputy Deasy, is superb, and above all his performances on the super-levy which he brought to an extraordinarily successful conclusion in comparison with other countries. Nobody can take that from him.
We can refer to the dairy situation and the EC 3 per cent cessation scheme. Whether it will come this year or next year, one hopes that we will have our own national scheme before that. It is important that our farmers and our co-operatives become more concerned and involved in the creation of this scheme because without it the consequences for dairying, for farmers and for jobs will be devastating. I am convinced that the Minister's job is to bring all of these people together and tell them that they must have this or that, that the co-operatives are owned by the farmers and that the farmers have a duty to put their act together, to put this deal together and retain that 3 per cent which is particularly valuable to this country, perhaps more than to any other country in the EC.
(Limerick West): The Minister must give the lead.
There must be co-operation, but I am not so sure that the Minister should become involved in everything. Governments are far too involved in far too many areas. We should be doing more for ourselves and not going cap in hand for money, leadership, or whatever it may be, to local authorities or Governments for something when we should be up and doing it ourselves. I have no doubt that the co-operatives have the talent and the expertise to do this and we should encourage them to go ahead and do it.
The intervention of beef will create a problem in the next year or so, but again I have absolute faith in the tenacity and determination of the Minister to get the best possible deal for us. This is important. So much is involved here in both the dairying and beef sections because they are interlinked and the consequences of a bad deal on both or either will be tremendous for us all. I do not think the Minister will allow this to happen.
I am sorry Deputy O'Keeffe has gone because this is an opportunity for me to refer to Erin Foods, an industry in the process of closure in north Cork, in Mallow. From the information available to me I am convinced they will reopen much more financially sound and that the expertise available to them will be much better than has been available to them heretofore. I blame Sugar Company management publicly and privately for that closure.
The Deputy should conclude now.
With the new facilities available they will come to successful fruition. I have every confidence that the Minister of State, Deputy Hegarty, will make that come true for the people of north Cork.
A point I wish to emphasise which is not appreciated sufficiently is that this is a national matter which affects everybody in the Irish community. Beef and dairy exports alone account for 22 per cent of our exports, so we are talking here about a big earner of foreign currency that helps to keep the whole Irish community, farmers and non farmers going. This is as important to the urban dweller and consumer as to the farmer. The nation as a whole benefits from a positive agricultural policy that can develop only under a positive CAP within the EC. What is being done now threatens the very existence of the CAP which is the main reason why we joined the EC initially. There is no question about it; we are at the cross roads. Everybody and every party in this House should join in a united fashion in this matter to back every effort to secure the best possible arrangement. That lies in emphasising that Ireland's vital national interest is involved in this whole matter. An EC Council regulation of 31 March 1984 acknowledges that position, and the Minister should pin his case very strongly to it.
If the Commission proposals in regard to cereals go into effect then the price to grain growers will be reduced by almost 15 per cent. That, in effect, means the end of cereal growing in Ireland. It will be as serious as that if that continues without challenge in its present form. The proposal undermines totally the whole price support system as far as cereals are concerned. We must get back to a price support system and a quota system in the last analysis if that is necessary. The cereal substitute scandal has been referred to and the people promoting the dismantling of the CAP are themselves the biggest offenders in regard to importion of cereal substitutes.
One aspect of beef production will be hit disastrously in this country if the proposal to dismantle the intervention buying of beef is introduced. In particular the EC reference price for cattle on which the intervention price will be based is totally unsuited to our requirements because of the national situation in Ireland. Relating Irish intervention to an overall European trigger price is just not on because of Ireland's system of beef production. We must have a national reference price in regard to intervention and I am certain we will get the support of France in that connection.
With regard to the milk cessation scheme, here we have a complete case of Ireland's national interest being involved and we must secure a derogation from that. The dairy industry gives direct employment to 11,000 people, linked into beef production which is 80 per cent dependent on the dairy herd linked, into cereal production, because the dairy element of agricultural production utilises 44 per cent of compound production in this country. Dairy production is six and a half times more important to Ireland than it is to any other member country of the EC.
Finally, I emphasise that it is important to exercise political will on this occasion, to say to our European partners: "This is a matter of vital national interest." If that is pleaded strongly by Ireland we will win out.
I should like to emphasise that we should make positive use of the Euro-currency — Deutsche Mark loan facilities. We may have low inflation here but it is not reflected in lower interest rates. Our interest rates now stand at about 17 per cent and while they may go down to about 15 per cent they are still far too high. We need interest rates for all forms of agricultural production in the region of 6½ per cent to 8½ per cent. Money is available at that rate in Deutsche Marks by way of Euro-currency loans provided the State guarantees the exchange rate. On previous occasions when there was such an exchange guarantee the experience of the Exchequer was excellent. The availability of reasonably priced money for further development in agriculture is the fundamental aspect underpinning agriculture at present. Further development in that industry is dependent on a Common Agricultural policy that is positive, meaningful, and guarantees Ireland, by reason of its special acknowledged position, the maximum utilisation of the CAP benefit for its own circumstances and requirements.
I like listening to Deputy Lenihan and I was not too worried about him going over his time limit. I should like to thank all Members who contributed to the debate. Most of the contributions were constructive. The contribution of Deputy Lenihan was extremely constructive and I should like to think that the magnanimous point of view expressed by him, and his pin-pointing of the difficulties we face, is recognised throughout the House. I got a feeling earlier in the debate that some of the participants would prefer if I slipped on a banana skin rather than be successful in these negotiations. It was the same feeling I had three years ago during the debate on the super-levy. What we are facing now is far too serious for people to indulge in personality attacks or in petty politics. We have our backs to the wall on this issue and it will be a serious setback not just to agriculture but to the economy if we cannot reduce the impact of these proposals. The three of them are absolutely vicious in their intent and would be serious for the country in their impact.
Deputy Lenihan was correct when he said that the proposals represented a frontal attack on the Common Agricultural Policy. They are a barefaced attack on the CAP and we must remember that the CAP is the reason we joined the community originally. What is happening in tandem with these proposals is that an effort is being made by some of the moneyed countries in the Community to bring in national aids to finance their own financial structures knowing well that a country like Ireland that has a disproportionate amount of its economy tied up in agriculture cannot hope to compete on equal terms. That is the kernel of the problem. We cannot match the others when it comes to putting Exchequer funds into support systems for agriculture. The matter is that serious and unless we can offset those proposals considerably we are in tremendous difficulty.
I should like to mention the proposals again. They want to get rid of intervention for beef which would leave us with 80,000 or 90,000 tonnes of beef every year on our hands. We could end up having to dump it and the obvious effect of that would be a collapse in cattle and beef prices. The second proposal is that cereal prices for all practical purposes be reduced by 12 per cent or 15 per cent. That would mean that cereal growing here would not be a profitable pursuit. It would eliminate commercial growing of cereals. The third proposal is an extension of the super-levy in that a cutback in milk production of 3 per cent is being sought. We can ill afford any loss in our milk production.
I should like to point out to Deputy Lenihan that the March 1984 agreement is the basis of our case. The super-levy agreement of that year stated that Ireland would not have any reduction in milk production during the lifetime of that super-levy system and that is the basis of my defence of our position in Brussels. Of course, we must look at the underlying reason why the proposals have been brought in. They have been brought in because the Community has vast surpluses of the commodities we produce here. There are 15 million tonnes of grain in intervention, 1.1 million tonnes of butter and 690,000 tonnes of beef. The Community cannot afford building up those stocks because it has to pay something in excess of £2 billion per year to store those stocks. The community is selling those stocks at a colossal loss, sometimes at a tiny fraction of what they are costing the Community to purchase. It is an intolerable position and it is unfortunate that we are the ones who have to suffer as a result of this untenable situation.
I should like to refer to some of the points made during the debate. Some people think we have an unenviable climate and soil conditions but that is not so. We have an uphill battle when it comes to our climate as we found out last year. We are not the most advantageous country in the commodity where soil and climate are concerned. Almost two-thirds of our country is totally unsuitable for the growing of cereals. In areas where we can grow cereals we have a very serious problem with moisture. That causes us considerable problems with the Commission's proposals. Deputy Noonan suggested that I should have sought an exemption but I must point out to him that the talks are only beginning. If exemptions arise it will be at the eleventh hour in the talks, in about three months time.
Deputy McCartin expressed a different point of view from that of many speakers. He was inclined to lay a lot of the blame on our own doorstep. We should not always blame everybody else. A lot of the blame probably emanates from this country. Deputy McCartin would not entertain the thought that because cereal substitutes and beef were being imported into the Community we should raise such a hue and cry. We have to have a two way trade system within the Community. We have to have a limited amount of such imports into the Community. They did not start today or yesterday. Those imports have been going on since before we joined the EC and the level of those imports was as high back 13 years ago. We have numerous GAAT agreements from which we cannot escape. They are legally binding bilateral agreements from which we cannot withdraw if we do not like the terms we agreed upon originally.
Deputy Byrne criticised the lack of participation by CBF at a trade fair in Spain. We need all the outlets we can have to get rid of beef but I should like to tell the Deputy that CBF do not have a bottomless pit of money. They have a budget to live within but I take the point that they should be represented wherever possible. One interesting thing in all these negotiations is the attitude of the French Government. Traditionally, the French have been our main allies at negotiations in Brussels but on this occasion the French want the price of cereals to be depressed because they feel they can sell cereals on the world market as cheaply as the Americans, the Canadians, the Australians or the Argentinians. Instead of being allied to the French on this issue we find ourselves at loggerheads. Last year when we suggested that a quota system be introduced for grain the French nearly went through the roof. The last thing they want is a quota system for grain. They feel they can expand their grain production and outsell any other country in the world if the price is low enough. For once we find ourselves at odds with the French in that area.
An Opposition Deputy said that the Germans would bail us out at the end of the day. I hope that Deputy is right but I have my reservations because the German economy needs all the money it can obtain. They might like a cheap food policy like the British. It might be a central Government policy decision. We simply have to wait and see but as of now I cannot guarantee the House that we have any strong ally on any of the three main issues. We might find ourselves on our own on some of them. Some of the larger states in the Community are drawing up plans to support their farmers by way of national aid. That is something we cannot do. It is all highly dangerous.
Deputy Durkan in his most sensible contribution pointed out that there remains tremendous scope for expansion in the areas of a number of commodities in respect of which a quota system does not operate in the community. I agree. That is a positive way of viewing matters. However, I would not agree with Deputy Leonard when he says there was not a fair shareout of milk quotas under the super levy system. The west and the north east got more in this regard than was the case in any other part of the country. We could not have been more fair. Regrettably a point that has not been alluded to at any length is the need for a national cessation milk scheme which would operate hand in hand with the EC cessation scheme. We should have a national scheme. It is needed to restructure our industry. It is a vital component of all these talks because it would be in tandem with the EC scheme.
I thank Members for their contributions, some of which were very constructive and some of which were rather petty. However, I was glad to hear the deputy leader of the Opposition being so supportive in his contribution.