asked the Minister for Agriculture and Food the policies the Government are pursuing within the EC to reduce the high cost of food to consumers arising from the operation of price support mechanisms; and if he will make a statement on the matter.
Ceisteanna — Questions. Oral Answers. - Cost of Food.
9.
As the Deputy will be aware, the Common Agricultural Policy aims to ensure both a fair standard of living for the agricultural community and that food supplies should reach consumers at reasonable prices. The Government are extremely conscious of the need to reconcile these aims to the maximum extent and have thus been prepared to accept changes in the CAP designed to ensure better market orientation, provided these changes are balanced by measures to safeguard rural incomes. The Government are, of course, also conscious of the need to maximise the value of our agri-food production, the great bulk of which is produced for export. The value to the economy of these exports was, as the Deputy will be aware, highlighted in a Teagasc report published earlier this week.
EC institutional support prices for agricultural products have, generally speaking, not increased since 1984 though in Ireland's case some element of farm price increase has resulted from "green" currency adjustments; these adjustments have had a far less than proportionate impact on consumer prices. In fact, over the past five years increases in consumer food prices have tended to be in line with the general rate of increase in the consumer price index.
Will the Minister agree that the CAP has not been successful in providing a fair standard of living throughout the farming community nor has it been successful in providing a fair price for food for the consumer? Is the Minister further aware that the IFA have admitted that the food bill for an average family of four has been increased by £18 per week arising from the operation of the CAP? Is he aware that 75 per cent of the CAP subsidies go to 25 per cent of the larger farmers? In view of that, will the Minister indicate what action he intends to take to correct this and to give a fairer standard in agricultural areas and a fair price for food to the consumer?
It is fairly generally agreed that the CAP has a stabilising effect generally——
NESC did not say that yesterday.
——in the European Community.
Your Minister did not either.
NESC does not have a monopoly of knowledge in this whole area.
The Government had a very strong input into it.
Let us hear the Minister's reply.
(Interruptions.)
For the consumer, the CAP has assured availability of food, and that has not always been the case in the Community.
Mountains of it going rotten.
Please, Deputy Stagg. The Deputy has put down a question and he has asked supplementaries on it. He should be courteous enough to hear the Minister's reply.
The CAP has assured the consumer of the availability of a wide range of quality foods, without the price and supply fluctuations which are common in many countries. In recent years Irish food prices have increased only in line with the general level of inflation. Between 1984 and 1988 the price of foodstuffs in Ireland according to the CSO increased by 4.7 per cent annually compared to a 4.64 per cent annual increase for all items.
Would the Minister not agree that arising from the present operation of the CAP consumers are hit twice? The taxpayer pays into the Community budget in the first instance and is then taxed on the double by paying high prices for food which effectively is a transfer from the poorer taxpayer into the rich farmers' pockets. Ordinarily, PAYE workers are paying tax and extra food costs to supplement the incomes of large farmers because that is where the income from the CAP goes. Would the Minister agree with that?
The Deputy made that point earlier.
The Government have accepted a number of reforms of the CAP over the past number of years. For example, the Community adopted a very restrictive prices policy since 1984 which has entailed a general freeze in institutional support prices and also reduced support levels through the removal of automatic and open-ended intervention.
For beef, in a big way.
More and more the operation of the Community is without props or intervention support.
I accept that the Minister wants to try to protect the consumer as well. Will the Minister's Department have a continuing dialogue with the Department of Social Welfare in relation to the operation of the family income supplement which might enable the Minister to balance both budgets?
We are having an extension of this question. I must call Question No. 12.