asked the Minister for Agriculture and Food whether any benefits will accrue to Irish farmers in 1988 as a consequence of the proposed draft farm price agreement.
78.
Written Answers. - EC Price Negotiations.
20.
asked the Minister for Agriculture and Food if he will outline in financial terms the net loss or gain for Irish agriculture from the recent EC price negotiations.
I propose to take Questions Nos. 20 and 78 together.
Negotiations on the Commission's proposals for agricultural prices and related measures for 1988-89 had been completed but difficulties arose subsequently in interpreting part of the agreement reached. Consultations are continuing between the parties concerned but at this stage it is unclear whether the agreement can now be implemented. If not, the Commission may proceed to take the market management measures which it deems appropriate. The package of measures that had been agreed represented a reasonably satisfactory outcome, given the Community's budgetary situation, the very restrictive measures contained in the original Commission proposals and the further proposals made by the Commission in the course of the negotiations. I would be hopeful that agreement can be reached either today or tomorrow on the interpretation of that part of the agreement relating to the Greek agrimonetary issue.
Following is the main outcome of the agreement reached in so far as Irish agriculture is concerned:——
Beef: The present rules provide that the buying-in price for intervention is the average price for the quality concerned in the member states where intervention is taking place plus 2.5 per cent or the highest price in any one of these states, whichever is the higher. The Commission proposal was that for the future it should in all cases be the average price only. In the final package this proposal was withdrawn and replaced by agreement that the suspension of the existing provisions should take place only in certain market conditions to be determined. There has since been agreement that in order to put a floor in the market, mechanisms would be put in place to allow the buying-in price to be fixed at levels above the average market price if that price fell below 82 per cent of the intervention price. These mechanisms should prevent any downward spiral in the market prices.
The Council also called on the Commission, in its proposals for the reform of the beef market organisation to be tabled later this year, to consider increasing the special male beef and suckler cow premia.
Cereals: The Commission had proposed that from the next marketing year the value of the monthly increments, designed to compensate owners of cereals for the costs incurred in delaying offers until late in the marketing year, should be reduced by half. The Council agreed to limit this reduction to only 25 per cent. Because of falls in interest rates since last harvest this reduction should have little effect on producers' incomes.
The Council also agreed that cereals can again be offered to intervention in 1988-89 at up to 15 per cent moisture content where a 14.5 per cent limit poses practical problems, and up to 15.5 per cent in exceptional circumstances. The position under existing rules would have meant that from 1 July grain with a moisture content above 14.5 per cent would not have been eligible for intervention.
These concessions, which were made following persistent pressure by other colleagues and myself, are worth £5 million per annum.
Milk: A proposal to reduce the intervention price for butter by 2 per cent from 2 July was withdrawn following objections by a number of member states including Ireland. The Council also undertook to deal with the implications of the ruling by the European Court of Justice in the Mulder case and it called on the Commission to consider reducing the co-responsibility levy from the beginning of the 1989-90 marketing year.
Sugar: The proposal to cut intervention prices by 1 per cent from 1 July 1988 was dropped. The Council also rejected the proposal to phase out the regionalised price system under which intervention prices are higher in Ireland, UK and Italy than elsewhere in the Community. This is worth about £2 million a year to Irish beet producers. It will now be examined when the common organisation of the sugar market is reviewed in a few years' time.
Agrimonetary: The Council agreed to dismantle existing negative MCAs on a phased basis between now and 1992. The first stage of dismantling will take place on 1 January 1989 and in Ireland's case will involve a 1.55 per cent reduction in MCAs. For technical reasons this adjustment does not yet apply in the beef sector pending completion of the review of the regime, but when it does it will eliminate the existing Irish beef MCAs.
The agrimonetary adjustment, on 1 January next will be worth about £31 million to the agricultural sector in a full year.
The Commission had not originally proposed any green currency devaluations for any member state other than Greece because the 1988 budget guideline agreed by the Heads of State at the February Summit had been fully committed. As a result, however, of demands from some other colleagues and myself the final package provided for adjustments to phase out the MCAs and re-establish support price unity in the Community. This represented a considerable achievement in the acute budgetary circumstances.
The overall package of measures agreed contains substantial benefits for the agricultural sector in the 1988-89 marketing year and in the longer term. In summary, the value of the agrimonetary adjustment is about £31 million and the withdrawal of a number of the proposals submitted by the Commission about £13 million in a full year.