Private Members' Business. - Agricultural Policy: Motion (Resumed).

The following motion was moved by Deputy Connaughton on Tuesday, 22 May 1990:
"That Dáil Éireann calls on the Government to:
(a) recognise the present crisis in Irish agriculture with particular reference to the present GATT round negotiations;
(b) acknowledge the serious income crisis now affecting thousands of Irish farmers;
(c) Implement measures that will help to alleviate some of the problems associated with the present crisis in the areas of milk, beef and store cattle, cereals and sheep; and
(d) make low interest loans available to finance beef production.
The Government is therefore called upon to arrange for the funds to be borrowed on the German market, cover the exchange risk, arrange for the funds to be on-lent by the Associated Banks with a modest handling charge, the lending rate to be kept at or below 11 per cent."
Debate resumed on the following amendment:
To delete all words after "Dáil Éireann" and insert:
"acknowledging that a major restructuring of Irish agriculture and food production is necessary to
—end poverty-line farm incomes
—make the transition to a more liberalised agricultural market which removes artificial upward price-fixing mechanisms
—reverse the concentration of agricultural land into the hands of fewer, wealthy farmers and corporations
—create a more ecologically-sensitive, sustainable food producing sector;
and further aware that the present investment policies of financial institutions are unsuitable to the nature of agriculture investment and capital return, at the terms which reflect the long pay back period of farm investment calls on the Government to ensure that long term credit facilities corresponding with the investment requirements of Irish agriculture are made available to farmers, and in particular to
(a) statutorily require financial institutions (banks, insurance and hire-purchase companies, investment houses, pension funds), to invest 10 per cent of their new annual investment portfolios in Agricultural Development Bonds;
(b) ensure the moneys arising from the purchase of these bonds to be advanced as loans to farmers at fixed long term (e.g. 15 and 20 years), low interest rate terms (e.g. 5 per cent p.a.) for commercial development of their enterprises;
(c) ensure the interest accruing to the financial institutions from the bonds to be tax-free.
That such loans to be made available:
(1) to progressive farmers who are
—engaging in land development and infrastructural projects which will lead to higher value-added production
—switching to import-substitution production in horticultural and tillage sectors
—enlarging farm-holdings and dairy quotas to economic levels
—converting to organic horticultural or livestock farming or introducing more ecologically-sensitive farm practices
—developing alternative enterprises (e.g. agri-tourism alternative livestock and horticulture, farm-house processing, etc.).
(2) for the installation of young farmers.
(3) to farmers with high debt repayments to be eligible for loans to lower their repayment levels.
(4) or to any activity that contributes to the productivity of Irish agriculture;
that these Agricultural Development Bonds and loans to be supervised by Teagasc and the Agriculture Credit Corporation as part of a long term agricultural develomental plan designed to create jobs in the food production and processing sectors of the economy and to increase the number and incomes of family farmers participating in agriculture on a full-time basis (atógáil)."
—(Deputy Stagg.)

As I said last night at the end of the debate, it should be clearly stated that the banks and the financial institutions have a responsibility not only to their shareholders and depositors but also to the community at large and they must be forced, if necessary, to show that social concern. Agriculture, being our primary Irish wealth producer, must have a favourable long term development capital available to it. As I said, at present the banks are the only practical source of loan capital for farmers but over the decades they have been reducing their commitment to the agricultural sector — from 1983 to 1989 they dropped that commitment by one-third. It has been argued that the banks have been shifting their investment to manufacturing and productive areas but the figures do not bear this out and certainly the Quarterly Bulletin of the Central Bank does not bear it out. The figures show that in 1983 over 20 per cent of borrowers came from the manufacturing sector but in 1989 this was reduced to 15 per cent, a drop of over 25 per cent.

The biggest growth in bank borrowing comes from the financial sector. For other lending agencies, such as pension funds and insurance companies, between 1983 and 1989 bank borrowing in this incestuous area increased from 7.5 per cent to 15 per cent, a 100 per cent increase. This type of investment does not create jobs or wealth in society. It funds take-overs, speculation and other parasitic activities in the economy. That demonstrates a lack of social responsibility of the banks and financial institutions. I must conclude that agriculture cannot avail of investment or loan capital from the non-banking financial institutions and banks are withdrawing from the farm sector, except of course for the very rich farmers who can afford the high interest rates and who, I claim, are the subject of the motion before the House. Therefore, all financial institutions should be required to share the cost of reinvesting and modernising the farm sector for the benefit of farmers, consumers, food workers and the rural economy.

The Labour Party propose that 10 per cent of the new annual investment portfolios of the financial institutions be provided for low interest, long-term capitalisation of agriculture. The following figures, again from the Quarterly Bulletin of the Central Bank, relate to all licensed banks in Ireland — I am not referring to governmental or non-residential borrowing; I am talking about non-Governmental residential credit. The amount on lending in August 1988 was £9.847 billion and in August 1989 it was £11.624 billion, an expansion of total credit in that one year of £1,776 million, and 10 per cent of that figure would amount to £177.6 million. The above figures only include banks; they do not include other financial institutions, for example, pension funds and others.

This source of funding for the agricultural sector is available on a recurring annual basis and not on a once-off basis. Given the level of credit being made available by the financial institutions — I have figures only for the licensed banks — there is certainly no need to go to Germany to borrow money for Irish agriculture. There is plenty of capital at home, as is demonstrated by the reports of the Central Bank. Under present legislation the Central Bank have power to persuade the commercial and financial sectors to make that portion of their new credit portfolios available for the funding of Irish agriculture.

The Labour Party, therefore, propose that financial institutions — banks and so on — be statutorily required to invest 10 per cent of their new annual investment portfolios in agricultural development bonds which would be supervised by the Agricultural Credit Corporation and Teagasc. The moneys arising from the purchase of these bonds would be advanced to farmers at fixed long-term, low interest rates for the commercial development of their enterprise. Farmers with high debt repayments would be eligible for loans from this source to lower their repayment levels. These proposals will oblige the financial institutions to invest in agricultural development through the purchase of development bonds and provide cheap capital for progressive farmers on a long-term basis.

I believe our approach is a reasoned and practical one to the capitalisation of Irish agriculture, for the creation of a modern, efficient agricultural sector. Our objective is to maximise the number of family farmers on the land through an effective land use policy; to ensure they have decent incomes and a decent standard of living; to maximise production while protecting the environment and the produce; to create added value in food processing and to create many additional jobs in spin-off industry and agri-tourism, which we know are possible.

The Deputy has two minutes left.

We were late starting.

Acting Chairman

The Leas-Cheann Comhairle allowed for that.

I will not waste further time arguing about a minute. The Labour Party are proposing the development of the rural economy for the benefit of those involved and for the community as a whole.

I commend our amendment to the House. It is a serious attempt to tackle the many problems facing Irish agriculture and to lay a financial foundation for its recovery and development for the common good. I regret that. We must deal only with the specifics in the motion before us and not with the speech made by the Fine Gael spokesperson which seemed to back-off from the terms of the actual motion. It was a non-specific collection of clichés and Fine Gael attempted to throw in everything, including the kitchen sink, and to blind us to their real proposal which is to give cheap money, guaranteed by the Irish taxpayer, to ranchers and beef barons who do not need it. I believe their purpose is to alleviate the short term cash flow problems of very rich people. That is not our problem and I do not believe we have to solve it. They can do that themselves. The Labour Party will not be supporting the Fine Gael motion which is flawed and badly constructed. It is making unnecessary proposals.

It is important to put any discussion on agricultural conditions at home or in Europe in the context of the international situation as it is. It is important that we inform ourselves fully of what those realities are and that we do not confine ourselves to reacting to those developments. We have to play a major and constant role. By way of general introduction there is no point in proposing the quick fix as if the quick fix were the answer to any particular problem. When I analyse for the House and for the Fine Gael Party in particular they may realise that the motion they have proposed may seem to have a certain attractiveness from the party political point of view but in reality it does not demonstrate either a sense of awareness or responsibility in connection with the present situation. One of the international realities we face is the GATT negotiations. In those GATT negotiations some participants have sought to focus attention on the agricultural aspects exclusively and in particular on the Community's support arrangements.

The Community for its part has participated fully in the negotiations to date. As provided for under the Treaty of Rome, the Commission acts as the Community's negotiator on the basis of mandates that have been agreed to by the appropriate Council of Ministers. In so far as agriculture is concerned, the Community's approach is governed by the objectives which were set for the Round and reaffirmed at the mid-term review in April 1989. On that basis, the Community has indicated, as I outlined on 17 May, that it is willing to participate in negotiations to progressively reduce support to the extent necessary to re-establish balanced markets and a more marked-oriented agricultural trading system. It is prepared to seek out better ways to manage international markets and to re-define GATT rules and procedures. The Community is also seeking a rebalancing of support and protection for a number of sectors including cereals substitutes and oilseeds in order to remove distortions in trade between products such as cereals which enjoy high levels of protection and support and certain competing products where insufficient protection exists. Credit is also being sought for reform measures undertaken since 1986.

The Community is not prepared to accept the approach being advocated by the US and others whereby virtually all support and protection for agriculture would be phased out over a ten year period. Such an approach would be likely to extend to internal markets the instability in supply and price which is common on world agricultural markets to the detriment of both producers and consumers. The United States proposal is also unsuited to an agricultural and rural infrastructure such as exists in the EC with its smaller farm size and upward of ten million farmers. Even there with entirely different structures of farming from the south of Greece to the north of Scotland, all the available evidence shows that the adoption of total elimination of support and protection would involve disproportionately heavy losses for the Irish economy. All the available evidence shows that the American producers would not be prepared — whatever their administration might suggest — to accept a position where there would be total elimination of support within that time scale. The real negotiating phase in the GATT is now about to commence.

As President of the Council of Agriculture Ministers I arranged to have the matter placed on the Council's agenda for the April meeting. In fact, this was the first formal discussion which has ever been undertaken at this level. In the discussions, Ministers unanimously supported the global approach to the negotiations being pursued by the Commission and in particular the Commission's defence of the basic principles of the Common Agricultural Policy including such essential elements as the two-tier price system, Community preference and the role of market policy. The Council also agreed that Agriculture Ministers should regularly consider developments in the GATT negotiations which had not happened until the time I put it on the agenda as President of the Council of Ministers. I propose to have a further detailed debate on this issue at the June Council and further discussions will be held thereafter as appropriate. I believe it is essential that the Agriculture Council should play a full role in the Community's input to the GATT negotiations and in promoting the Community's agriculture interests.

The Common Agricultural Policy which has underpinned our agriculture sector over the past 17 years is essential to ensure the continued wellbeing of Irish and Community agriculture. This has been made very clear in the mandate given by the Council to the Commission which was reaffirmed unanimously by the Agriculture Ministers as recently as 25-27 April. This was the first time that all the Twelve, at any level, of the Council spoke unanimously in support of the negotiating position of the European Community. I think I can claim some degree of satisfaction for that result. As I have asserted on numerous occasions, Ireland's principal aims in the negotiations are to ensure that the Community can continue to support farming and rural areas and that farmers incomes are maintained at reasonable levels. I will continue to take a very active interest in this, given the importance of the agricultural sector to the Irish economy. In that regard, it is no harm to point out that agricultural accounts for 9 per cent of our GDP and 25 per cent of exports. In fact, when the low level of import content and profit repatriation in the agriculture-based industries is taken into account, together with transfer payments from the FEOGA Guarantee Fund, it is estimated that exports of agricutural and food products amount to over 40 per cent of net export receipts. That is huge by comparison with any other country in Europe and demonstrates the significance of the Irish agri-food sector to the economy generally and not just for farmers. Employment in the agriculture, food and drinks industries is almost 19 per cent of total employment and is way above anything that exists elsewhere with the possible exception of New Zealand.

Any analysis of the present state of the beef market must take account of the operation of the European Community regime related to beef. There have been significant changes in this in recent years. We have just completed a year in which we saw the most radical changes in the Community's market support measures. There have been major changes in the intervention system and in the various producer premiums. There were certain aspects of the revised regime which were not acceptable and that is why I voted against the package at the Council of Ministers in January 1989.

Despite the fact that there were aspects of the revised regime which were not acceptable to us it is important to remember that we did succeed in getting a number of concessions in the course of the negotiations: the over-all limit for intervention was increased to 220,000 tonnes compared to 200,000 tonnes originally proposed by the Commission; a safety-net clause was introduced to provide for unlimited intervention if prices fell below certain levels; and the Council gave special recognition to the special position of the beef industry to the Irish economy.

The special recognition of the relative importance of our beef industry has been of particular benefit to us in our dealings with the EC Commission since the adoption of the revised beef regime. In March of 1989 we got special intervention measures adopted to deal with problems that arose at the time. In the autumn of 1989 we got agreement to an aids to private storage scheme which was of crucial importance to our industry during the peak production period. Under the new regime of intervention on the basis of tenders we have vigorously pursued the case of Irish producers and it is significant to note that during the first year of the tendering system intervention in Ireland accounted for 47 per cent of the Community total compared to an average of about 20 per cent in earlier years. That demonstrates in a very practical way the effective outcome of our negotiations on a range of issues.

And good marketing strategy.

I am always anxious to ensure that our prices are at the maximum level possible. However, I am equally anxious to avoid a situation that the pessimism of certain parties does not in itself have the effect of depressing prices. I would like to point out that 1990 prices are, with the exception of the very high prices in 1988 and spring 1989, higher than in any year since 1984. In this respect there can be no doubt that the acceptance by the Commission of the importance of the beef industry to the Irish economy which formed part of the Council agreement in January 1989 allowed us to place significant quantities into intervention during the last 12 months at prices which enabled us to support the market both during the critical autumn months and in the early months of 1990.

Let me mention in passing that I have just returned from Brussels via Belfast where I attended the Balmoral Show. It is very significant for anyone who wants to listen objectively to what is being said, that the Northern farmers are saying at last they are happy that they are being given the same facility — or close to it — in intervention as has been uniquely achieved for the Southern farmers. That is a matter of fact, and when we have got that through in this year's price negotiations, they regard that as a major breakthrough and achievement. So much for those who try to dismiss what we have done as of no consequence.

At the most recent meeting of the Council of Ministers agreement was reached on a suggestion from me as President that the delay in payment for beef taken into intervention should be reduced from 120 to 45 days. This decision should be of significant benefit to our producers. It is yet another example of a practical step taken at the instigation of the Irish negotiators which will have a positive impact for our producers. Another welcome decision of the recent Council Agreement was the extension of the suckler cow scheme to small dairy producers.

I realise that our industry could improve its performance. One only has to look back as far as 1988 to find a time when we were doing better, but that was a year when some Third Country markets were very buoyant and our industry was to reap the benefits. Some of these markets have now encountered their own difficulties which means that our exporters have not been able to gain the same access or have had to accept lower prices. We hope some of these markets will open up for us again. In this context I should mention that other markets, mainly in the Far East, are beginning to open up and at the Council of Ministers recently I got agreement to a suggestion of mine that the EC Commission should explore the marketing possibilities in these countries. I am well aware of the problems facing our industry such as seasonality of production and the need to expand further the value-added sector of our industry, but I do not see the solutions as being purely in the short term. I have, therefore, set up a group to identify the industry's problems and to suggest appropriate solutions. This group, which comprise representatives from my Department together with all the farming organisations, meat factories, IDA, CBF and UCD will examine the problems and come up with agreed recommendations, covering both national and EC policies. I am hopeful that their report will be available sometime later this summer and I can assure the House that I will give very careful consideration to their proposals.

In relation to cereals, I note that many committed growers continue to have confidence in the future. One way in which this is shown is in the 40 per cent increase in plantings of winter wheat last autumn. More recently there has been general acknowledgement by all member states that the 1990-91 Presidency prices package represents a good deal for cereal growers and a very considerable improvement on the original Commission proposals, whether everyone wishes to acknowledge that or not. This is particularly so when a comparison is made with last year's package which embodied a series of price cuts. Following the recent price negotiations, the effective support prices for next year will be higher than this year's support price. In fact, the real intervention buying-in price of May 1991 will be some 2 per cent higher than May 1990 given the reduction in the payments delay. Facing into the new harvest, therefore, we have a good floor price for cereals.

Grower's income in 1989 was higher than expected due to the very good price paid by merchants and co-operatives and the dropping of the additional co-responsibility levy amount due. Also, the new arrangements for payment of the additional co-responsibility levy will help on-farm cash flow since just 1.5 per cent additional levy, rather than 3 per cent as formerly, will be deducted from the grain cheque. The total levy deduction will therefore be 4.5 per cent or £6.63 per tonne rather than the 6 per cent originally proposed. In consequence, both farmers and the trade know now the full scope of deductions, facilitating a realistic determination of market price. There will, of course, be no refund mechanism and any greater or lesser amount of additional levy due following the 1990 harvest will be taken account of in the next marketing year.

It is worth noting that Irish cereal prices this past few years have been towards the top of the table in the league of European Community prices. Indeed, Irish grain has been in recent times trading largely above intervention and, in effect, the situation is largely a market-led one which I welcome. Irish malting barley has built up a reputation with the highly selective European maltsters arising from its uniqueness as a spring grown quality product which confers certain brewing advantages.

Of late, the concept of supply management has been advanced by our main farming organisation, envisaging that Community grain production would be controlled through the allocation of a specific acreage per grower related to a reference period. The grower would have to compulsorily set aside the balance of arable land on the farm.

In principle this can be supported as ideally, it should result in moving towards market balance between supply and consumption. I have always supported supply management as the most effective way of dealing with the problems of the cereals market. However, I should tell the House that it is, of course, the Commission who have the initiative and responsibility to introduce proposals in this area, and as yet there is no point in my creating the impression that the Commission is prepared to do that. Before the Council can adopt a procedure, it must be proposed by the Commission. Obviously the matter is one on which we will continue to exert pressure and to negotiate. The prices decision recognises to some extent the need for more action in this regard. As well as undertaking to promote non-food use, effective and balance set-aside and incorporation in animal feed, the Council has asked the Commission to evaluate the implementation of the European Council's stabiliser decision of February 1988 and to make appropriate proposals in time for implementation in the 1992-93 marketing year. This is as much as can be achieved on this front at this stage.

That last statement was included in my speech before I left for the Council meeting this week, and I am glad to say that at that Council meeting we have made very significant progress towards introducing the other elements of the European Council procedure such as the demonstration project for non-food use of cereals and the extension of non-food use to the set-aside proposal. All this should help to relieve the surplus pressure which brought about the European Council decision in May 1988. I may be impatient of it, the Opposition may be impatient of it, farmers may be impatient with it, but there is no point in any of us pretending the European Council did not take that decision and that it is not now part of European law. We hope we will be able to get it reviewed in time.

Nonetheless it is evident that as a consequence of the stabilisers, a number of growers are experiencing income difficulty at present. The situation of more vulnerable arable farmers was addressed in the rural world measures which formed part of the prices proposals. For the next two marketing years, Irish small cereals producers will, subject to certain criteria, continue to receive a full refund of both basic and additional co-responsibility levies.

The consolidation and expansion of quality malting barley exports to Europe, together with Third Country malt exports, will be the major challenge for the early nineties. It will be necessary to foster linkages throughout the industry to enable the capitalisation on Ireland's clean green image both with regard to mainline cereals production and niche markets for organic cereals. In this fashion Ireland's reputation as a producer of quality food, whether as raw material or finished product, will be enhanced and progressed profitably. Also, the producer group concept, with its connotation of quality product for the market will continue to be actively promoted, a matter in which the Minister of State, Deputy Kirk, has been diligently involved. We will seek major progress in that concept over the years.

In an increasingly quality conscious Europe, our green image with comparatively restricted use of insecticides and little or no nitrate groundwater problem will stand us in good stead. However, other member states are rapidly taking action to counteract environmental damage, so Ireland will need to move quickly to capitalise on its image. How best this can be done will form part of the framework of my Department's actions for 1990 and onwards, and will receive attention in the regular liaison meetings held with farming organisations and the trade.

Recently I announced that the Government's review of the disadvantaged areas scheme has resulted in a decision to lodge a detailed application with the EC Commission seeking agreement to: extend the present disadvantaged areas by adding new areas to the list of less severely handicapped areas and by designating certain coastal areas as areas suffering from specific handicaps, an extension of about two million acres; reclassify as less severely handicapped those areas now designated mountain sheep grazing areas; reclassify as more severely handicapped certain areas, 1.3 million acres, now designated as less severely handicapped; and restructure the scheme to provide for an increase in headage rates and for greater modulation of payments to reflect differing degrees of handicap.

In the hopeful expectation that the Commission and the Council of Ministers will accept this, I can tell the House that about 72.5 per cent of the total acreage of the country will be designated as disadvantaged and, in addition, at least that percentage of the total disadvantaged areas will be designated as severely disadvantaged. I leave it to the public at large and make a judgment as to whether that is a significant breakthrough. I do not expect a kind judgment from Deputy Connaughton. He is so predictable.

They will be asking what the Minister was doing for the past three years.

The first item requires a Commission proposal to the Council of Ministers and agreement by a qualified majority in the Council. The other proposals require approval from the Commission itself. Expenditure on the new proposals, together with the existing expenditure under the disadvantaged areas scheme, will attract 65 per cent Community recoupment. That, too, is a major breakthrough.

The timing of the implementation of these proposals will depend on the completion of the EC procedures for approval of the proposals and the availability of FEOGA funds which will be increasing gradually in line with the EC commitment to double the structural resources over the period to 1993. It is expected, however, that the implementation will commence in 1991. When fully implemented the new proposals, together with the abolition this year of the off-farm income restriction, will increase headage payments from £60 million to £100 million a year. In addition, the newly designated areas will benefit from increased investment aids, exemption from the milk co-responsibility levy and the special supplement to the ewe premium.

The Fourth Review was by far the most comprehensive and extensive of all boundary reviews to date and was undertaken in response to almost 1,000 submissions made to the Department by public representatives, county councils, farming organisations, local interest groups and individuals and Deputies of all parties. The field work for the survey which commenced as recently as 29 January 1989, covered an area of 6.68 million acres and a total of 1,636 district electoral divisions and over 20,700 townlands in 22 counties. Almost 49,000 holdings, or 57 per cent of the total submitted, were visited by the Department's agricultural officers and surveyed in detail.

A totally unnecessary exercise.

The proposals to extend-reclassify over 3.55 million acres and increase the overall size of the disadvantaged areas by 19.2 per cent, the largest such increase to date, would benefit some 29,000 farmers and represented a very satisfactory outcome to the Fourth Review. The decision to endorse these proposals and also to increase and modulate headage payments was in keeping with the Government's aim as set out in the Programme for Government in September 1989 "to increase and reorientate headage grants and to negotiate with the EC on a maximum extension of the disadvantaged areas".

I am confident that new areas now being prepared for submission to the EC would be approved by the Commission, Council and European Parliament. I am saying that in advance of discussion by 12 Ministers at the Council of Ministers.

The Minister knows they will pass it.

How do I know they will pass it? Perhaps because I have won their goodwill and respect. Will the Deputy blame me for that?

That is a sham.

(Interruptions.)

This will be in time to allow implementation of the proposals to begin in 1991. Details of the specific DEDs and townlands included in the submission can not, of course, be published until the necessary approval is forthcoming.

I am very satisfied at the successful outcome of the 1990-91 farm prices negotiations and to have achieved such a good result for farmers at a time when difficulties existed in a number of sectors Community-wide.

Agreement was reached by Ministers following lengthy discussions both at bilateral and plenary levels over two days and nights and on the basis of an improved compromise paper which I tabled. The revised compromise address in particular the demands of Ministers in the cereals, rural world, milk and agrimonetary areas and it had the overwhelming support of Ministers with no member state voting against. The revised package represented a significant improvement in support for farmers' incomes throughout the Community and I am pleased that the value of the prices agreement for Irish farmers would approach £90 million in a full year. This figure represents an increase of over £50 million compared to the original Commission proposal. Deputy Connaughton will not want to acknowledge that either. If his time ever comes, he can try to do better in Europe.

The principal benefits for Ireland in the new prices package will result from the green currency adjustment and the substantial reductions in the intervention payment delays in the milk, beef and cereals sectors. Changes in Ireland's green currency will lead to a price increase of 25 per cent in all sectors, with the exception of beef where this increase has already been obtained. The intervention payment period will be reduced in some areas by as much as 80 days and this should have a very considerable impact on maintaining prices at reasonable levels.

I would stress the benefit of the rural world measures for a country such as Ireland with its preponderance of smaller family farms. Measures such as the milk quota buy-up, the extension of the suckler premium to small dairy farms and the special ewe premium would be especially beneficial and I am happy to note the intention of Commissioner MacSharry to come forward with a range of proposals in the months ahead aimed at the further development of the rural world.

Increase in monthly increments for cereals and sugar will be a further help to Irish farmers. I have certain assurances from the Commission in relation to the operation of the sheepmeat stabiliser and I expect this to result in the payment of a higher ewe premium this year than might otherwise have been the case.

It will have to compensate for the loss in price.

The early conclusion of the prices negotiations this year will contribute to greater farmer confidence at this time. I am encouraged by the level of support given to the prices packaged by my fellow Ministers and representatives of the farming organisations here and the level of consensus achieved augured well for the Community in its approach to the final phase of the GATT negotiations which is now beginning. The only dissenting voice was, predictably, that of Deputy Connaughton, but it was not heard too loudly.

The Council had devoted significant attention to the GATT negotiations. Ministers had expressed satisfaction that the basic principles of the CAP were being strongly defended by the Commission in the GATT negotiations and they clearly indicated that these principles were not negotiable. It is my intention to provide for further regular debate on GATT in the Agriculture Council during the remainder of this Presidency.

The success of agriculture is best assured by fostering a stable economic environment in which enterprises can grow and maintain competitiveness rather than by piecemeal intervention which at best can merely prop up a particular sector in the short term. The Government have directed much of their policy to achieve this aim and the result has been very satisfactory.

Interest rates also increased in the past year, by 4 percentage points between April 1989 and year end. Again, the increase in rates was related both to external and domestic factors. There has been a general rise in European interest rates in order to counter inflationary pressures. The gap between Irish and UK rates, which opened up in 1988, remained at 4-5 per cent during 1989.

Tell that to the farmers.

The current satisfactory performance of the economy can only be maintained if improvement in the public finances are sustained and built upon. The current budget deficit in 1989 is estimated at £263 million, while the Exchequer borrowing requirement — EBR — is estimated at £479 million, or 1.8 per cent of GNP, in percentage terms, the lowest EBR for many years. Proposals such as are being suggested, which would increase Government borrowing, could not be undertaken without upsetting the Government's borrowing targets — Deputy Stagg is quite right in that there is no point in making "top of the head" suggestions and then calling for economic control — this would be considered in grave circumstances only and where clear-cut benefits were guaranteed. Previous experience with an exchange rate guarantee scheme suggests that benefits are far from guaranteed and cannot easily be targeted on those most in need of financial assistance. That has been the experience. There is the further difficulty that such a scheme might be regarded as a State aid to the beef industry and as such would be in contravention of EC legislation.

I am not in favour of a subsidised foreign currency borrowing programme, for a number of reasons. The exchange rate guarantee scheme which was introduced in the early 1980s proved very costly to the Exchequer and the taxpayer. A subsequent analysis of this scheme has shown that a sum equivalent to almost a quarter of the original drawdown amount was incurred as costs. Furthermore, these very high costs do not seem to have been justified by benefits from the scheme. The same analysis indicates that the level of investment cannot be manipulated by improving the interest rate alone; only a very limited number of projects could be made viable by such interest subsidies and State subsidised credit was merely being substituted for normal private credit.

This is where the banks come into it.

Furthermore, the present uncertainty of the direction of the European exchange rate movements would make a similar scheme imprudent at this time. The management of the economy here is such as to guarantee that when European rates stop rising ours will come down quicker than the rest.

A lame horse——

Deputy Connaughton wants to ignore the realities. The Deputy should travel a bit outside Tuam sometime to see a little of the world.

We have heard that story before. We travelled though Tipperary before the Minister had anything to do with it.

In any event there is no shortage of credit facilities available from lending institutions for borrowers who can fulfil the usual creditworthiness criteria, and while borrowing rates may have experienced some upswing since last year, these rates remain very considerably lower than those which applied in the early eighties and indeed up to 1987. There is also a generous scheme of grants available under the farm improvement programme to assist in the construction and improvement of farm buildings and facilities.

(Interruptions.)

Experience over the past few years has shown that the best way to improve the prospects of all sectors of the community is to foster healthy economic conditions in which confidence will allow substantial growth and wealth creation to take place. The Government remain committed to this aim which will be to the benefit of the agricultural sector no less than to the rest of the economy.

I want to conclude by expressing my thanks to Deputy Connaughton for enabling me to put some facts on the records in regard to the real world in which we should live at home, the European Community scene and the international scene.

The Minister should go down to Nenagh mart.

Deputy Connaughton should realise that even in Opposition it is not credible any more to ignore the real world by coming in here with quick fixes as if money was falling from the clouds for everyone.

Acting Chairman

I am calling Deputy Joe Sherlock.

(Interruptions.)

Vote for our amendment.

Acting Chairman

Can we have order for Deputy Joe Sherlock?

The crisis in Irish agriculture to which the Fine Gael motion refers is not new. Irish agriculture has been in a crisis of one sort or another for many decades. The policies of successive Governments have been incompetent and inept and Irish agriculture has never been allowed to realise its full potential and create wealth for those living on the land and jobs for those in downstream industries.

In 1971 there were 262,000 people on the land but by 1986 this figure had more than halved to 120,000. Between 1981 and 1986 about 60,000 jobs were lost from farms of all sizes. Farming lost more jobs than any other industry between 1981-86 about 60,000, or 12,000 per year. Manufacturing industry lost 6,000 jobs a year over the same period but there are twice as many people in the manufacturing industry workforce as there are in farming. For every job lost in manufacturing industry four were lost in farming.

I have referred on many occasions to the stark contrast between agriculture in Ireland and Holland. Holland is little more than half the size of Ireland yet only 120,000 people are employed on the land in Ireland compared to 309,000 in Holland. This has been achieved by the Dutch with an average farm size of just 25 acres.

It is against this background that the motion before us has to be considered. No one doubts that many farmers are facing difficulties but I am not convinced that the solution proposed in the Fine Gael motion is the correct one. Having listened continually for more than ten years, to Fine Gael talking about our national debt and the extent of our foreign borrowing and justifying cutbacks in essential services such as health, education and social welfare in order to reduce the level of borrowing, it is ironic to now hear them advocating a new area of foreign borrowing.

The Fine Gael motion seems to ignore the need for a long-term development plan or strategy for Irish agriculture. The motion correctly notes that many farmers are currently facing serious difficulties but it fails to acknowledge that many farmers had one of their best years ever last year. Agriculture will always be subject to some extent to cycles and income has to be averaged out over a number of years to give a meaningful picture.

The motion also fails to acknowledge that not all farmers have the same problems and that aid for agriculture has to be targeted towards those farmers who most need it and who will benefit most from it. The Fine Gael motion and particularly the section relating to the low interest rate loans for beef production would be of most benefit to the largest and most profitable producers.

While we would not necessarily endorse some parts of the Labour Party amendment the general thrust of it does acknowledge the need for longer-term structural changes in Irish agriculture. Therefore, we will be supporting the amendment.

One recent development of particular interest was the establishment of the new farming organisation, the United Farmers Association. The establishment of the new body clearly reflects the level of dissatisfaction among the farming community with the existing farm bodies. We welcome the establishment of the new body and wish it well. I am sure that there will be policy areas on which we will disagree but I hope that the new body will have as a priority the establishment of good relations and co-operation between farmers and non-farmers. I hope they will recognise that every citizen has an interest in seeing more effective and efficient use made of our land.

One of the demands of the new organisation is for the introduction of a two-tier pricing system for agricultural produce. This is a reasonable demand, especially as so much taxpayers money both at national and EC level, is being spent on price support. It has been estimated that as much as 80 per cent of all price support spent on farming goes to the top 20 per cent income bracket. This is clearly not justifiable and the introduction of a two-tier pricing system would ensure that public money would go to those who need it most. A long time ago somebody in my county said that it is the producer and not the product that should be subsidised. If that had been done we might have a different situation in agriculture today.

The dairy sector has been crucial to Irish agriculture and will continue to be of major importance. The value of our dairy exports amounted to almost one quarter of our total food exports in 1988, the last full year for which figures are available. The total value of food exports in that year amounted to roughly one quarter of the value of total exports — £2,899 million out of a total of £12,300 million.

Ireland's share of total EC milk output is only 5.4 per cent of total output and our economy is more dependent on milk than any other EC member country. Ireland is naturally suited to dairying. We have a mild climate and soil that is capable of growing good grass over a long season and the sun does not burn it up in the summer months. More than 80 per cent of usable agricultural land is under meadow and pasture. More than 70 per cent of all dairy products manufactured here are exported.

Ireland's special reliance on milk means that we should receive treatment from the EC and take that fact of life into consideration. Special consideration should be given to two areas. We should be allowed a higher milk quota and get financial assistance to help us with the problem of winter feeding. Winter feed would even out the erratic nature of milk and beef supplies to factories and make possible the winning of markets for a much wider variety of food products.

The compensation is unlikely to be paid by processors because in the one area where at present a steady 12 months supply is guaranteed, in the domestic liquid-milk market, the price per gallon paid to farmers is being cut, or atempts are being made to cut it. The milk quota system has been eased a little by Brussels allowing an additional 32 million gallons to be added to the Irish quota. Out of the extra 32 million gallons, 11 million gallons has been allocated to small farmers and producers with a quota of less than 12,800. Farmers have already applied for the extra quota. It is believed that individual applicants will get between 400-500 gallons and that this can be backdated to April 1989. The penalty for overproduction is severe, £1.10 per gallon. The penalty for 1990, this market year, will be increased to £1.27 per gallon.

The IFA claim that their policy in relation to milk quotas is to allow small farmers first bid for any milk quotas that come on the market, but it requires money to avail of this offer. This may be difficult to raise, especially as interest rates are again on the up and up. Only one-third of the additional milk quotas recently allocated by Brussels went to small farmers. It is because of the importance of the inclusion of disadvantaged areas to the people who depend on the extra grants that will come from the EC that I appeal to the Minister to proceed with all haste to have approval granted.

In the public mind, farming means the EC, the Common Agricultural Policy and milk quotas. Farming, and the General Agreement on Tariffs and Trade — GATT — is a new development to many people. When the General Agreement on Tariffs and Trade come into being in 1948, it was intended to provide a set of rules to bring some order into the marketplace. All the member countries of the EC and others — in all 96 governments — are parties to this agreement. This accounts for 90 per cent of world trade. GATT's professed aim is to liberalise world trade. The depression of the thirties, a time when home markets were protected by high tariff barriers, still haunts many countries and many economists. Ireland followed the thirties' economic policies into the sixties.

GATT rounds of talks were at first, from 1948, directed towards liberalising industrial trade but in 1986 it was decided to include agriculture. This was agreed at a conference of trade Ministers who met in Uruguay in September 1986. They laid down an agreed plan, an agreed target, to reach agreement on agriculture by the end of 1990. The total period of this negotiation is known as the Uruguay round.

Ministers taking part in the Uruguay round see CAP as the obstacle to liberalising agricultural trade and as a matter of unfair competition. Many countries, other than those in the EC, have special measures by which their agriculture is aided. All these matters are now on the table and there is general agreement that they must be resolved by the end of 1990. Irish farmers would lose heavily if agricultural trade was fully liberalised.

The fact is that GATT controls 90 per cent of world trade and 96 countries are known as its contracting parties. With a further 28 countries applying its rules the talks must be taken extremely seriously. The basis of GATT — a principle now to be applied to agriculture — is best expressed in these words, "no country participating in GATT is to give special trading advantages to another or to discriminate against it; all are on an equal basis and all share the benefits of any moves towards lower trade barriers".

GATT's ultimate objective is expressed in the above statement but, for the present, they do allow some exceptions, regional trading arrangements, and developing countries. Even where exceptions are admitted the special measures allowed are of a strictly limited character.

Where protection is allowed to domestic industry it must be in the form of a customs tariff and not through other measures, for example, import quotas. This measure must be agreed and is then binding on members of GATT. Countries can also seek a derogation from particular GATT obligations and emergency action if, for example, imports are putting domestic industry out of action on an alarming scale.

GATT allows us to enter into agreements that are closer than the general rules which govern relations between the GATT contracting parties.

GATT has had, so far, much less impact on agriculture than in other areas. Agricultural protection, although customs barriers have been reduced, has actually increased in other forms during the 40 years of GATT's existence. GATT was in being before the EC was established but the EC was allowed to protect its market against low-priced imports of such products as cereals, beef and dairy produce. The protection took the form of a variable levy system. The EC in exchange for being allowed to protect its market in relation to cereals, beef and dairy produce agreed to bind itself to low or zero import duties on products like vegetable oils, proteins and cereal substitutes.

When this agreement was made, the imports of the products just named was of fairly limited volume, but the volume has greatly increased in recent years as oil industry spin-off products, such as gluten, come in as cereal substitutes or for cheap feed, replaces cereals. This problem needs to be discussed in the present GATT negotiations because of the serious problems faced by cereal producers. Cheap feed leads to cheap livestock production and has led to a beef mountain.

Few, if any, farmers can see any virtue in a return to the pre-quota system of unrestricted production of milk and the accumulation of its manufactured products in storage. Storage costs money. The main difference between the EC and other GATT countries is in relation to subsidies. The USA, and a group of food exporting countries outside the EC, called the Cairns group, and the EC countries are in disagreement on supports for agriculture. The USA proposes that all, or almost all, subsidies and supports for agriculture be phased out or drastically reduced in the next ten years. All levies and quotas, the existing supports, should be translated into a tariff equivalent and, they say, this could then be negotiated downwards or eliminated over a period. Export subsidies, they propose, should be phased out over the next five years.

A number of decisions were taken in 1989. The Brussels Summit in 1988 laid down the financial guidelines within which the market and the price side of CAP affecting the rural and agricultural world would, in future, operate. This applied to the FEOGA guarantee fund up to the year 1992. It laid down production limits for major farm products.

The number of dairy cows always greatly exceeded the number of beef cows and the numbers in the dairy herd, until recent years, have remained fairly steady. The beef cow herd numbers have experienced much more movement. In the years just before entry to the EC — when entry was clearly on the cards — the beef cow herd grew by 16.3 per cent in 1971, 8.9 per cent in 1972, 32.9 per cent in 1973 and 12.4 per cent in 1974. Between 1974 and 1984 the number of cows in the beef herd declined steadily. In 1974 beef cow numbers totalled 732,000. The number fell to 421,000 in 1983, the lowest total since 1970, at 387,000 head. Since 1983 numbers have fluctuated but mostly in an upward direction. In 1989 the total had increased to 562,000 head.

The beef industry export about 80 per cent of what they produce and our income from beef exports in 1988 was £716,874,000 million. The importance of the beef industry to farming is shown in one survey which said that 48 per cent of all farms are engaged in some way in dry stock production.

The picture of the beef industry last year is rather mixed. Net disposals of cattle and calves were estimated to be about 1.5 million head in 1989 a decrease of 10.5 per cent on 1988 and exports of live cattle fell by 20 per cent in 1989. At 170,000 head this was just over half the average level of live exports in 1985-1986. It is the lowest level of live exports since we joined the EC.

The slaughtering of cattle at meat export premises — for the second consecutive year — was 8 per cent lower than the previous year. The 1989 export slaughterings were estimated at 1.2 million head, 103,000 head fewer than in 1988. Slaughtering for the domestic market was 4 per cent lower than in 1988.

In 1989, 8,000 fat and breeding cattle were imported. The output of cattle and calves is estimated at 1,784 million head. This amounts to a 2 per cent increase on the 1988 figure of 1,749 million.

Since the foundation of the State, agricultural policy has been preoccupied with maximising the incomes received by farmers. This is understandable but it also reflects a tendency to see agriculture as an industry in its own right, rather than simply the first stage of an integrated sequence combined with processing and marketing.

Seen in this way, the primary objective of Government policy should be to establish the productive practices among farmers, which are most conducive to effective processing and marketing. For example, the Irish dairy industry currently is characterised by a massive glut of milk during the summer months. It requires a high level of processing capacity to handle this glut, with the result that much of the plant lies idle for the rest of the year. This imposes heavy costs on the processing sector. Lack of continuity of supply during the year also means that the processing sector cannot diversify into other consumer products with short shelf life, such as soft cheeses. Similarly, Irish farmers seem unable to grasp the importance of properly graded and presented produce, which is essential if reliable and dependable long term market outlets are to be secured.

What is required is an integrated and comprehensive development plan for agricultural production, processing and marketing whose central objective would be to maximise the overall contribution of the sector to the economy in terms of income generated and employment created.

The immediate aim should be a policy designed to maximise usable output from our national land resource, in order to provide the materials for an expanded processing sector. In the case of small farms, this requires a programme of consolidation of holdings, in order to create new farm units capable of providing a family with a reasonable standard of living by working these units alone. It should be noted that research has shown that medium sized units of this kind tend to be the most efficient farms in Ireland.

What we believe is needed is the establishment of a farm and food development authority to formulate and implement a comprehensive and integrated development plan covering agricultural production, marketing and processing. The authority would achieve this by including all relevant organisations, agencies and groups within their planning ambit. They should be a statutory agency on the lines of the IDA, located outside the Central Civil Service structure.

To summarise, The Workers' Party believe that: (1) the primary function of the agricultural sector should be to provide food of adequate quality in sufficient and regular supply to consumers, and at reasonable costs; (2) agricultural producers should receive a reasonable income from their produce; (3) agriculture should make the maximum possible contribution to the national economy in the form of optimum productivity at farm level applied to well developed linkages with the rest of the economy, involving both support industries and services and downstream processing and marketing. The present situation in agriculture leaves much to be desired in these areas; (4) agricultural production and processing should be conducted in such a way as to minimise damage to the natural environment; (5) in the interest of maximum efficiency, agricultural producers should be adequately trained, and should have at their disposal adequate resources — including land resources — to allow them to generate an adequate income from farming alone; (6) an effective land use policy — allied to effective employment and welfare policies outside agriculture — is required in order to encourage those with insufficient land resources to make their land available — through sale or leasing — to others who can make better use of it; and (7) it is desirable that farmers should control to the maximum extent possible the downstream processing marketing of their produce, both in their own interest and in order to secure Irish control of this sector of vital national importance. State policy in relation to agriculture should vigorously promote this objective.

The Workers' Party favour a fundamental reform of the Common Agricultural Policy which — as it has worked in the past — has fostered the production of wasteful food surpluses while artificially raising food prices to unnecessarily high levels, has distorted world food prices with negative consequences for producers in developing countries and has been inequitable in its distributional effects by giving the greatest rewards to the biggest producers.

The Workers' Party favour a major transfer of funding from the CAP to the EC Structural Funds as offering a more equitable and beneficial — in terms of its long term development potential — method of securing funding for Ireland from the EC. As the proportion of CAP funding going to Mediterranean products is likely to rise in future years, and as Ireland obtains a higher proportion of structural rather than CAP funding, such a transfer is likely to work to Ireland's overall advantage. As major cutbacks in CAP funding are inevitable in any case, The Workers' Party favour seeking an early and orderly agreement on how this transfer should be effected.

The Workers' Party are confident that, given Ireland's natural advantages in key agricultural areas, an efficient Irish farming sector can prosper in the less interventionist market environment which is likely to prevail in the EC in the coming years.

The Workers' Party favour the establishment of an agricultural development authority, an ADA, akin to the IDA, to oversee the formulation and implementation of a vigorous and comprehensive agricultural policy in Ireland. This authority would offer grants and other incentives in return for achievement of agreed performance targets and would be free from day to day political interference. Their major functions would be to formulate a national land use plan — including utilisation of peatlands, afforestation and amenity areas — with appropriate production targets at national and local level; to formulate and implement an effective land policy; to integrate research and practice and to promote effective integration of production, processing and marketing.

Deputy O'Toole has a maximum of five minutes.

I am glad to have an opportunity to speak on this motion this evening. As usual, I am confident that the Minister will protect our interests in the course of the GATT negotiations which will comprise the most important event in agriculture in 1990.

The phasing out of all support and-or protection for agriculture would be highly undesirable for our farmers. We, being a peripheral part of the Community, need this protection. Our production is derived from natural grass and, because of our location, transport militates against us in competition in the marketplace. The US proposal is not at all suited to a rural based agriculture, comprised of small farms, such as ours. Indeed the removal of subsidies, along with the support and protection we have enjoyed, would involve our farmers in heavy losses. The Common Agricultural Policy has stabilised the whole of the agricultural base. Therefore, we want the Minister to ensure a continuation of that policy, which I am sure he will achieve.

Failure to act with regard to cereal substitutes over many years has led to many problems. Before the conclusion of the GATT negotiations in December next we will be afforded an opportunity to tackle this issue. Cereal substitutes have been dumped continuously on the EC, subsidised to the extent of over £50 a tonne by the United States Government, because they want to get rid of their surplus on to the EC. For that reason it is important that the protection within our farming structure is maintained. I might add that the importation of cheap cereal substitutes to the EC is eroding our livestock competitive advantage, firmly based here on an abundant supply of grass, and as a result, our beef and store cattle production suffer considerably.

The most serious problem confronting our agriculture at present is the outbreak of BSE in Britain and, to a much lesser extent, here. We must tackle the marketing of our beef head on. At present most, if not all, our beef exported to Britain and Scotland is rebranded and sold as Scottish or English beef. If, at a time when we are endeavouring to overcome the BSE threat, we had our own identity or emblem, I would recommend a label such as "Irish beef derived from green grass". Soon we will be able to boast of beef produced from an agricultural base and a totally free from disease herd. For many years we have exported our best beef to Britain which has been rebranded there.

Am I exceeding my time, a Leas-Cheann Comhairle?

I would advise the Deputy that he was probably grazing in somebody else's pastures.

I would need a hour to expound on this. I would welcome a full discussion on the GATT proposals under review this year. I shall welcome an opportunity to say something later in that regard.

If it is acceptable I wish to give the first five minutes of my time to Deputy Hogan.

Is that agreed? Agreed.

I thank Deputy Connaughton for allowing me five minutes of his time to make some pertinent points on this motion.

The Minister's attitude and performance in the House this evening could be compared with variations in the weather. Throughout his contribution he sought to claim credit for anything that happened as a result of the good weather — probably due to a high pressure belt over Tipperary which has fogged his brain over a period of time in regard to many aspects of agriculture. In addition perhaps the bad weather coincided with low pressure emanating from the Eurocrats of Brussels. I can only conclude that he is a fair weather Minister.

In reality there is an income crisis looming for our farmers in 1990. Various contributory factors were evident in the latter part of 1989. The Minister chose to ignore the danger signals for beef and cereal by bluffing his way through the problems then becoming evident.

If one takes a cursory glance at the management data in respect of farm planning issued by Teagasc — the agricultural and food development authority under the aegis of the Minister's Department — one will see various examples of how relevant is this motion. For example, a farmer operating a two year calf-to-beef system would need to be able to sell cattle over 600 kilo weight after two years in order to make a small profit of, say, £18 per head. This performance, in terms of an excellent farmer, is demanded of such farmers at present operating that system, who I might add have not the blessing of the use of hormones they had heretofore. Let us take another example, that of a farmer totally dependent on cereal production. That farmer would need to produce at least two tonnes of spring barley per acre to break even. In fact, a committed cereal farmer would need 200 acres of production at present to merely meet his basic family obligations and/or responsibilities. That is a far cry from the rosy picture with which the Minister tried to hood-wink this House this evening. These data constitute some of the stark realities of Irish agriculture today, outlined by Teagasc under the control of the Minister. Those statistics are a clear indictment of how unrealistic is the Minister in asserting that there is no farm income crisis in agriculture today. That argument could be extended further to all the major enterprises in agriculture. Since the fanfare of publicity on the tremendous outcome of the Minister's agricultural prices negotiations in 1990 milk prices to producers have been reduced by up to 14p per gallon. In addition, lamb prices are so ridiculously low farmers would contemplate giving them away in order to get rid of them because they are eating so much. More and more farmers are forced to put their pride in their pockets and seek the assistance of the Department of Social Welfare in order to weather this latest income storm.

Fine Gael, in tabling this motion, are advancing realistic proposals, based on precedent, which worked to farmers' advantage in the past in terms of low-interest loans for beef and cereal farmers in particular. They do not constitute junk bonds, as Deputy Stagg maintained, or something akin to the land bonds of heretofore. Rather they are realistic proposals of how beef and cereal farmers — which in fact store farmers would like to see implemented also in order to give them a boost in their cattle prices obtained at marts today — might improve their position.

It is clear from the recent contributions here of the Minister for Agriculture and Food and the Minister for Finance that the Fianna Fáil-Progressive Democrats Coalition have little or no sympathy for or understanding of the problems facing farmers today. To find out the actual rather than the perceived position in farming all the Minister need do is ask the farmers within his own constituency.

I thank all those Deputies who have contributed to this debate both tonight and last night. While I was very disappointed by some of the reaction, this is an opportune time to discuss such a notion on the Floor of Dáil Éireann. It is raised at a time when the crisis in agriculture is beginning to bite. It is very important that the Minister, the Minister of State and Back Bench Deputies on the Government side give us their views on what the future is likely to hold for farmers. The first thing we need to do is acknowledge that there is a crisis. The Government will win the vote but it is incumbent on the main Opposition party to raise this matter on the Floor of Dáil Éireann.

If there was any fear you would win the vote you would not have raised the matter.

We also raised this matter in the past when we did not stand back, like you did.

The Deputy got his knuckles rapped for what he said last night.

The Deputy's party voted through their absenteeism.

The Deputy must not have his ear to the ground.

Deputy Sheehan, would you leave the interruptions to me. Deputy Stagg, please do not interrupt.

Everything which has been said on the Government side of the House either last night or tonight clearly indicates that they genuinely believe there is no crisis in farming. If that is the case, God help us in the GATT negotiations. I ask the Government once again to allow rural Deputies of all parties, as Deputy O'Toole has suggested, discuss this matter in Government time in the not to distant future. Why should we agree to a system under which the agreement reached in negotiations with the Americans and others is only allowed to be discused in this House when nothing can be done?

They will not allow us even do that.

The most sensible thing to do would be to allow each Deputy during the next few weeks say what he or she thinks. I hope this will happen. The Minister and the Minister of State, Deputy Kirk, have tried to explain this matter away by saying things could be worse. Last week the Minister for Agriculture and Food said that the cattle trade is not that good but at least it is better than it was in 1987, for instance. So what? What has happened since 1987? All we need do is look at the cost of fertiliser, machinery and borrowed money to see that we are not comparing like with like. If the Minister genuinely holds that view there is a terrible time ahead for agriculture.

Three weeks ago the Minister returned from the EC price negotiations and with a fanfare of trumpets announced what has been achieved. The Minister and the Minister of State have pointed out that the farming organisations are of the view that the Minister did well but given the telephone conversations I had today I wonder if they still think that. Three or four county executives have requested copies of both speches. I wonder what they want them for. Perhaps it is a different story now.

How can the Minister say that things have got better as a result of the increases, valued at £90 million, gained by the Minister at the price talks when farmers are selling every animal at prices up to £100 to £120 below the price obtaining this time last year? Lambs are being sold up to £20 below the price they were fetching this time last year and God only knows what the price will be in a months time. Cereal prices have been cut by 3 per cent and if overall EC production goes over 160 million tonnes a co-responsibility levy will be payable. All the indications are that the European harvest is going to be that good.

As Deputy O'Toole rightly pointed out, cheap substitutes are a major source of embarrassment for cereal growers. What about wool prices? Admittedly this a minor matter but I have never seen wool being sold at 28p a pound during the past ten years. The milk sector is in a state of shock. During the past three to four months creameries have dropped the price by between 10p and 15p per gallon. Contacts within the industry inform me that the price will drop much more during the next two or three months. Taking this along with the four hikes in interest rates during the past 12 months, I fail to understand how anyone could say that the income of a farmer will either remain static or increase this year as compared with last year. It appears the Government do not acknowledge this fact but I can assure the Members of the House that the farming community are only to well aware of it.

There are two very important matters I wish to bring to the notice of the House. First, it is clear that there is a certain amount of hostility from certain quarters of this House towards the agricultural community. The first hint of this was when the Minister for Finance, in the debate on the Finance Bill a few days ago, queried the need for equity given the fact that some 60 acre dairy farmers can earn between £40,000 and £50,000 per annum. Any Minister who believes this is possible is certainly heading for trouble and if he is able to exert influence, as any Minister for Finance should be able to do, we are in serious trouble. He argued because incomes were so high that there was no need for equity. I have to say that Deputy Stagg was far more hostile to the agricultural community than any other Labour Party or Opposition Member I have come across in my life.

I was referring to the ranchers the Deputy supports.

I believe the Deputy would begrudge an acre of land to a small farmer just as he would to a large farmer.

(Interruptions.)

I was referring to the ranchers the Deputy supports and he did not like it when I identified them.

(Interruptions.)

Deputy Connaughton, I suggest that you address the Chair because obviously if you speak so invitingly to Deputy Stagg you are encouraging him to respond.

(Interruptions.)

If the Deputy decides not to look, except at the Chair, I do not think he will be interrupted at all.

The proposals I have put forward on this occasion are sensible, cost effective and will in the short to medium term be of benefit to all farmers, big and small. Deputy Stagg goes on with this lark that it is only big farmers——

It is not a lark. That has been the policy of the Deputy's party for a long time. It obviously still is.

The Chair should protect the speaker.

From whom do beef producers buy store cattle? They buy them from farmers who live in areas such as the one I come from and the one Deputy Stagg originates from.

They are the people Fine Gael always gave money to.

All I know is that the rural Deputies of the Labour Party who depend on rural votes must be terribly disappointed with the tone of Deputy Stag's remarks. I can only assume that Deputy Stagg was taken aside today because he has not the same conviction as he had last night. The Deputy must dislike farmers intensely. That is the only way he could make the contribution he did.

We owe Deputy Connaughton two minutes but for these two minutes perhaps Deputy Stagg would contain his emotions. He does not have to agree but he must listen.

This is an ideal opportunity for every Opposition Deputy who has an interest in rural Ireland to send a clear signal to the Government that we do not like what they are doing. We can disagree on minor points. The major point is that the Government have ignored what has been happening in Ireland and in the EC. Despite the fact that we have the Presidency of the EC it is significant that we never had it so bad as we have had it in the last three or four months since our beloved Taoiseach became President of that outfit and Minister O'Kennedy became President of the Council of Ministers. When the bells ring here for the division tonight it will be an ideal opportunity for all the Opposition parties to vote against the Government to show every farmer in Ireland, big and small, that we have their interests at heart. Afterwards we can talk about the small print.

(Interruptions.)

Nobody could agree with what Deputy Sherlock had to say. We have a unique opportunity tonight and maybe the Government will take notice when they see the Opposition benches crammed and a tight vote on this most important issue.

Amendment put.
The Dáil divided: Tá, 21; Níl, 118.

  • Bell, Michael.
  • Byrne, Eric.
  • De Rossa, Proinsias.
  • Ferris, Michael.
  • Gilmore, Eamon.
  • Higgins, Michael D.
  • Kavanagh, Liam.
  • Kemmy, Jim.
  • McCartan, Pat.
  • Mac Giolla, Tomás.
  • O'Shea, Brian.
  • O'Sullivan, Gerry.
  • O'Sullivan, Toddy.
  • Pattison, Séamus.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Ryan, Seán.
  • Sherlock, Joe.
  • Spring, Dick.
  • Stagg, Emmet.
  • Taylor, Mervyn.

Níl

  • Ahearn, Therese.
  • Ahern, Bertie.
  • Ahern, Dermot.
  • Ahern, Michael.
  • Allen, Bernard.
  • Andrews, David.
  • Aylward, Liam.
  • Barrett, Michael.
  • Barrett, Seán.
  • Belton, Louis J.
  • Boylan, Andrew.
  • Brady, Gerard.
  • Brady, Vincent.
  • Brennan, Mattie.
  • Browne, John (Carlow-Kilkenny).
  • Browne, John (Wexford).
  • Bruton, John.
  • Bruton, Richard.
  • Burke, Raphael P.
  • Calleary, Seán.
  • Callely, Ivor.
  • Clohessy, Peadar.
  • Connaughton, Paul.
  • Connolly, Ger.
  • Connor, John.
  • Cosgrave, Michael Joe.
  • Cotter, Bill.
  • Coughlan, Mary Theresa.
  • Cowen, Brian.
  • Creed, Michael.
  • Crowley, Frank.
  • Cullimore, Séamus.
  • Currie, Austin.
  • Daly, Brendan.
  • D'Arcy, Michael.
  • Davern, Noel.
  • Deasy, Austin.
  • Deenihan, Jimmy.
  • Dempsey, Noel.
  • Dennehy, John.
  • de Valera, Síle.
  • Doyle, Joe.
  • Durkan, Bernard.
  • Ellis, John.
  • Fahey, Jackie.
  • Farrelly, John V.
  • Fennell, Nuala.
  • Finucane, Michael.
  • FitzGerald, Garret.
  • Fitzgerald, Liam Joseph.
  • Fitzpatrick, Dermot.
  • Flanagan, Charles.
  • Flood, Chris.
  • Foxe, Tom.
  • Gallagher, Pat the Cope.
  • Geoghegan-Quinn, Máire.
  • Harney, Mary.
  • Harte, Paddy.
  • Higgins, Jim.
  • Hillery, Brian.
  • Hilliard, Colm.
  • Hogan, Philip.
  • Hyland, Liam.
  • Jacob, Joe.
  • Kelly, Laurence.
  • Kenneally, Brendan.
  • Kenny, Enda.
  • Kirk, Séamus.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lawlor, Liam.
  • Lee, Pat.
  • Leonard, Jimmy.
  • Lowry, Michael.
  • Lyons, Denis.
  • Martin, Micheál.
  • McCreevy, Charlie.
  • McDaid, Jim.
  • McEllistrim, Tom.
  • McGahon, Brendan.
  • McGinley, Dinny.
  • McGrath, Paul.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Molloy, Robert.
  • Morley, P.J.
  • Nealon, Ted.
  • Nolan, M.J.
  • Noonan, Michael.
  • (Limerick East).
  • O'Brien, Fergus.
  • O'Connell, John.
  • O'Dea, Willie.
  • O'Donoghue, John.
  • O'Keeffe, Jim.
  • O'Keeffe, Ned.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Rourke, Mary.
  • O'Toole, Martin Joe.
  • Owen, Nora.
  • Power, Seán.
  • Quill, Máirín.
  • Reynolds, Albert.
  • Reynolds, Gerry.
  • Sheehan, Patrick J.
  • Smith, Michael.
  • Stafford, John.
  • Taylor-Quinn, Madeleine.
  • Timmins, Godfrey.
  • Treacy, Noel.
  • Tunney, Jim.
  • Wallace, Dan.
  • Wallace, Mary.
  • Walsh, Joe.
  • Wilson, John P.
  • Woods, Michael.
  • Wyse, Pearse.
  • Yates, Ivan.
Tellers: Tá, Deputies Stagg and Ferris; Níl, Deputies V. Brady and Clohessy.
Amendment declared lost.
Question put: "That the motion be agreed to."
The Dáil divided: Tá, 44; Níl, 72.

  • Ahearn, Therese.
  • Allen, Bernard.
  • Barrett, Seán.
  • Belton, Louis J.
  • Boylan, Andrew.
  • Browne, John (Carlow-Kilkenny).
  • Bruton, John.
  • Bruton, Richard.
  • Connaughton, Paul.
  • Connor, John.
  • Cosgrave, Michael Joe.
  • Cotter, Bill.
  • Creed, Michael.
  • Crowley, Frank.
  • Currie, Austin.
  • D'Arcy, Michael.
  • Deasy, Austin.
  • Deenihan, Jimmy.
  • Doyle, Joe.
  • Durkan, Bernard.
  • Farrelly, John V.
  • Fennell, Nuala.
  • Finucane, Michael.
  • Flanagan, Charles.
  • Foxe, Tom.
  • Harte, Paddy.
  • Higgins, Jim.
  • Hogan, Philip.
  • Kenny, Enda.
  • Lee, Pat.
  • Lowry, Michael.
  • McGahon, Brendan.
  • McGinley, Dinny.
  • McGrath, Paul.
  • Mitchell, Jim.
  • Nealon, Ted.
  • Noonan, Michael.
  • (Limerick East).
  • O'Brien, Fergus.
  • Owen, Nora.
  • Reynolds, Gerry.
  • Sheehan, Patrick J.
  • Taylor-Quinn, Madeleine.
  • Timmins, Godfrey.
  • Yates, Ivan.

Níl

  • Ahern, Bertie.
  • Ahern, Dermot.
  • Ahern, Michael.
  • Andrews, David.
  • Aylward, Liam.
  • Barrett, Michael.
  • Brady, Gerard.
  • Brady, Vincent.
  • Brennan, Mattie.
  • Browne, John (Wexford).
  • Burke, Raphael P.
  • Calleary, Seán.
  • Callely, Ivor.
  • Clohessy, Peadar.
  • Connolly, Ger.
  • Coughlan, Mary Theresa.
  • Cowen, Brian.
  • Cullimore, Séamus.
  • Daly, Brendan.
  • Davern, Noel.
  • Dempsey, Noel.
  • Dennehy, John.
  • de Valera, Síle.
  • Ellis, John.
  • Fahey, Jackie.
  • Fitzgerald, Liam Joseph.
  • Fitzpatrick, Dermot.
  • Flood, Chris.
  • Gallagher, Pat the Cope.
  • Geoghegan-Quinn, Máire.
  • Harney, Mary.
  • Hillery, Brian.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Wallace, Mary.
  • Walsh, Joe.
  • Wilson, John P.
  • Jacob, Joe.
  • Kelly, Laurence.
  • Kenneally, Brendan.
  • Kirk, Séamus.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lawlor, Liam.
  • Leonard, Jimmy.
  • Lyons, Denis.
  • Martin, Micheál.
  • McCreevy, Charlie.
  • McDaid, Jim.
  • McEllistrim, Tom.
  • Molloy, Robert.
  • Morley, P.J.
  • Nolan, M.J.
  • O'Connell, John.
  • O'Dea, Willie.
  • O'Donoghue, John.
  • O'Keeffe, Ned.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Malley, Desmond J.
  • O'Rourke, Mary.
  • O'Toole, Martin Joe.
  • Power, Seán.
  • Quill, Máirín.
  • Reynolds, Albert.
  • Smith, Michael.
  • Stafford, John.
  • Treacy, Noel.
  • Tunney, Jim.
  • Wallace, Dan.
  • Woods, Michael.
  • Wyse, Pearse.
Tellers: Tá, Deputies J. Higgins and Boylan; Níl, Deputies V. Brady and Clohessy.
Question declared lost.