Let me say at the outset that it is regrettable that the time allocated to debate on this vitally important sector of the economy has been greatly reduced because of the tactics used and obstruction in this House this morning. There is a national obligation on us to implement measures from time to time and if there is one sector where this is evidently so it is the sector we are addressing this morning. I hope during the rest of this day we will demonstrate that we can be somewhat more responsible in the conduct of business.
Situation in Agriculture: Statements.
We have been waiting for this long enough.
I also hope we will not confine ourselves to the luxury of criticism and complaint because this debate presents us with an opportunity to express views, put forward suggestions and hear all observations on what is a very complex issue both nationally and internationally. I hope this debate will enable us to discharge our responsibilities today because that is the only thing that the farmers and the public want from the representatives they sent to this House.
As I say, this debate gives us the opportunity to analyse the major influences, national and international, on a vital sector of the economy. It also offers us the opportunity to outline in a positive fashion the steps which will be required to realise the full potential of this vital sector in an increasingly competitive international environment. Some of the decisions that will have to be taken will be difficult but we must face the facts and avoid the futility of merely complaining about the revolutionary changes taking place in agricultural markets in Europe and elsewhere. That is too comfortable a luxury to indulge in at this stage. We must recognise that in a changing environment it is our role to be in there, nationally and internationally, directing that change to the maximum possible advantage both for our producers and the country generally. Above all else we must realise that in that changing environment the consumer is the lifeline of the producer. To make complaints about difficult decisions, because we are determined to meet the requirements of an ever-more sophisticated consumer market in Europe and the rest of the world, is to ignore the reality and be irresponsible.
If we need to enfore strict regulations — let me give this as an example — in relation to the bovine TB programme to ensure that we can satisfy the highest international standards of consumer preference in food and health in 1993, for instance, then we must not flinch now from taking the necessary decisions simply to satisfy short-term interests. It will be too late in 1993, if the consumers raise doubts about the health status of our beef and dairy sectors in relation to bovine TB, to say that we should not have focused so much attention on the question of whether it should be a 45-day or a 60-day test. Nothing but the highest standards will satisfy. This is the approach I have pursued since I became Minister for Agriculture and Food even though that did require the taking of difficult decisions from time to time.
I ask the House to reflect on the question of where would we be now in relation to the Dutch, German or other markets if I had succumbed to perhaps the understandable reaction at the time and said that we would not enfore the anti-hormone regulations or had listened to some of the complaints made that this was unfair, unreasonable and too harsh? Many of those complaints came from the opposite side of the House.
They did not.
I wish to underline the fact that responsibility must remain a major feature and if someone wishes to ignore the reality let them do so not just at their own peril but at the peril of the interests of this vital sector of the economy and the economy generally.
Deputies will be aware of the extent to which over recent months I, together with my colleagues in the Agriculture Council, have been preoccupied with the formulation of an acceptable Community position on agriculture in the context of the final phase of the current round of GATT negotiations. Indeed, the Agriculture Council is scheduled to resume discussions on this matter at a meeting with Community Trade Ministers in Luxembourg tomorrow. Indeed, I will be leaving for that meeting this evening when this debate ends. This debate is timely and I look forward to hearing contributions from Deputies on this and other matters.
The present situation in agriculture is not an easy one. The markets are under great pressure for a variety of reasons: increasing supplies for instance, in the beef sector; declining demand, particularly in the beef sector and in the dairy sector because of consumer reaction; worries about issues such as BSE which is not indigenous to this country but which has affected demand in Britain and Europe, two of our main markets; the Gulf crisis, over which we have no control and of which we had no knowledge when we formulated our policies in 1987, and, of course, developments in Eastern Europe and Germany of which we had no knowledge and expectation when we formulated our policies. We must recognise that these developments impacted in a rather negative and even hostile way on the policies which were in place and being vigorously pursued. Nonetheless we must continue to follow vigorously the strategy we have put in place.
Let nobody in this House attempt to pretend that the developments I have talked about did not happen and that any consequences are all the fault of the Minister for Agriculture and Food. I do not mind if someone wants to make irresponsible charges but that would do no justice to anyone's intelligence. The ability of the Community's support system to offer protection against these pressures has been significantly lessened by the whole range of policy adjustments which have taken place since 1984. The system — albeit in a slimmed down form — has been a very important safety net for producers throughout the Community and, with great energy on the part of the Commission and extremely strong urging from member states, such as Ireland, it has been applied to those policies to the maximum potential. Without it farm incomes now would be much worse. I need only point to conditions in Australia, New Zealand and other countries to show exactly how much the European farm support system is contributing to maintaining at least a reasonable level, though well below what we would want the incomes to be. They are not available in other countries where those supports do not exist. Without the system farm incomes would be much worse. This, more than anything else, underlines the importance of securing a balanced outcome to the GATT negotiations. I will return to both the GATT issue and the use we have made of the support system later.
I should like to refer briefly to farm incomes. Farm incomes — and I state this simply as fact — rose rapidly in 1987 and 1988 and more or less stabilised in 1989. Compared to 1986 incomes last year were up 45 per cent in real terms. Under the market pressures I have already referred to, they will show a significant decline this year and of that there is no doubt. A reduction of something over 10 per cent but less than 15 per cent, including the effect of interest rate changes, is likely. This is not as pessimistic a view as that put forward in some agricultural circles but is in line with the view of most economic commentators. In fairness, however, it should be said that the drop in income would be greater but for a sharp increase in direct subsidies, some of which I will be able to make reference to in the course of this debate and some of which are of a once-off variety which we have negotiated for this year.
The position is, therefore, that after a three year period of generally rising farm incomes, this year has seen a reverse for reasons which are largely outside the control of the industry and of the Government. This is disappointing for all of us who have worked to secure the advances of recent years and is, of course, causing difficulties — severe in some cases — for the farming community. What we need to do now is see why it has happened, look at what we have been doing to arrest the decline and at what more we can do, in the light of the changing policy and market environment. This debate is important in that context and in my contribution I wish to begin by looking at the situation in the various sectors.
The EC milk quota system regime was introduced in 1984 after alternative methods aimed at controlling Community milk production had failed. The regime is scheduled to remain in place at least until the end of March 1992. Since their original establishment the various national quotas have been adjusted in recognition of continuing disequilibrium in international dairy markets as major milk producing countries outside the Community maintained or even increased output and disposed of product at price levels below the minima agreed in GATT. Within the Community, of course, the decline in butterfat consumption in recent years has further compounded the situation and contributed towards the current difficulties in the sector. As a result, after spectacular increases in the 1987 to 1989 period, producer prices have fallen and there has been a significant rebuilding of intervention stock levels for both butter and skimmed milk powder.
The experience of the 1987 to 1989 period testifies to the success of supply management. I believe that our future policy should aim to safeguard the basic principles of the existing quota system and ensure that other major producing countries adhere to similar restraints. That is a position which I have been pursuing vigorously in the context of coordinating our position for the GATT negotiations. The Commission is, of course, already committed to submitting a report on the operation of the superlevy system by the end of March next and clearly we in Ireland will have a major interest in the resultant discussion, which will concentrate on the situation post-1992.
The importance of the various European Community support mechanisms which operate in the dairy market cannot be underestimated. Recent experience has once again shown that Ireland, due to its traditional dependence on the commodity dairy products of butter and skim milk powder, is particularly reliant on such supports when a downturn occurs in the markets for these products. As a result, producer prices in Ireland, perhaps more than in any other member state, are dependent on the maintenance of adequate support mechanisms to even out the peaks and troughs in the cyclical commodity markets. Members will be aware, of course, that the EC milk regime has undergone fundamental changes since the mid-eighties which has included restrictions on intervention, although we did secure acceptance in the Community that the importance of intervention to the Irish industry would be recognised when these restrictions were being implemented. This has already had an effect on producer returns and the dairy industry is aware of the importance of reorientating its approach in a sector which is now more responsive to the demands of the market.
I am particularly conscious of the fact that any further erosion of the support mechanisms could have a severe impact on the industry. This is particularly so for Ireland given that we export 75 per cent of our dairy products. Indeed, the recent downturn in the world market for commodity dairy products has highlighted the importance which export refunds play in ensuring viable returns from our exports to third countries. The value of the export refund currently represents about 64 per cent and 41 per cent of the return on butter and skim milk powder respectively. Any reduction in the value of the export refund would, therefore, have serious consequences for commodity prices and producer returns in the Community as a whole. That is why I have taken such a vigorous position in relation to the GATT negotiations on export refunds particularly and also why I have made our position in relation to the Court of Auditor's observations — not report — very clear because of the damaging impact unfortunate leaks and illinformed comment could have on a vitally important sector of our economy.
The availability of cheap Eastern European dairy products on the world market at prices below the GATT minima, and the changing patterns of consumer purchasing behaviour are but two of the reasons why, notwithstanding the present GATT negotiations, the dairy sector is facing a more uncertain and challenging period ahead than at any time since milk quotas were introduced.
In particular, the downturn in the dairy market since late-1989 after two years of record growth has re-focused attention on the necessity for our dairy industry to rationalise its processing capacity into more efficient units and to reduce its dependence on commodity products. The take-up by Irish butter of over 50 per cent of total Community purchases into intervention on occasions this year illustrates how far we are out of step with our fellow member states in our dependence on the intervention mechanism. Fundamental re-structuring of the dairy industry is required in order to eliminate the cost penalties which result from excess capacity and to provide the optimum conditions for diversification of our product portfolio — a subject which has been long talked of but which now requires action.
The international food industry is becoming dominated by a small number of large companies. Milk processors in other member states, against whom we must compete are in the main several times bigger than the largest processors here. Big is not necessarily beautiful — indeed there is always room for good quality products serving niche markets — but any industry must have regard to the scale and ability of its competitors. Inefficiency caused by over-capacity or lack of scale will be punished in the marketplace. One has only to look at Denmark or the Netherlands to see the scale of competition the Irish dairy industry will face in the coming years. The long term success of the dairy industry, whatever the outcome of the GATT negotiations, will hinge on the extent to which these challenges can be overcome. Recent developments show that the industry is at last beginning to come to terms with the need to rationalise and I warmly support those developments.
When the quota system was introduced it was evident to me then and, subsequently since I became Minister, that there was not adequate provision for the small producer and the young producer. I regret that and the fact that, when the extra allocation was made available to Ireland because of our lack of development by comparison with the Netherlands and Belgium, we did not target the small producer specifically with that 5 per cent. For that reason I have since then been doing all possible within the constraints to give some degree of compensation to those small producers and young producers and to use all restructuring schemes to make up for what was not done then. I assure the House and the farming community that in any review of the dairy sector they will be my priority.
In Ireland, the beef and dairy sectors are obviously closely interdependent and between them, as is well known, these sectors account for almost three quarters of our total agricultural output.
There is no doubt that in the beef sector Community producers have had to make significant sacrifices in recent years in order to deal with surplus production. The problems of the beef sector were exacerbated by the introduction of the dairy quotas which led to high cow slaughterings and increased surplus production of beef over and above what it would have been if only factors relating to the beef sector itself had been influencing production.
Despite the fact that much of the surplus production of beef arose from action taken in the dairy sector, severe restrictions were placed on the support regime for beef. These restrictions were put in place by the Council of Agriculture Ministers during two key meetings, one in December 1986 and the other in January 1989.
At the meeting in December 1986 the concept of the trigger mechanisms for intervention were first introduced. Under this mechanism intervention could only apply if the average market price for the Community fell below 91 per cent of the intervention price and the member state's price fell below 87 per cent of the intervention price. The buying-in price for intervention beef was fixed at the average price of the member states qualifying for intervention plus 2.5 per cent. In effect, the changes agreed at that stage meant that the buying-in price was reduced by at least 11 per cent.
When the intervention system was reviewed again in January 1989 further changes were introduced. The triggers for intervention were reduced to provide for operation of the system if the average Community market price fell below 88 per cent of the intervention price and the market price in the member state concerned fell below 84 per cent of the intervention price. Furthermore, an annual quota of 220,000 tonnes of beef for intervention was fixed for the Community as a whole. In addition, it was provided that even where intervention was applicable under the trigger mechanisms, the intervention buying-in would be conducted on the basis of tenders. Thus there was no guarantee that intervention would operate at all in the normal circumstances. However, at my insistence — this took days and nights and every member of the Council can testify to my insistence — the Council agreed to adopt a safety net mechanism of vital importance to Ireland. This provided that automatic intervention would apply if the Community average price fell below 78 per cent or if the prices in three or more member states or regions of a member state which account for 55 per cent of the production of a particular class of beef fell below 80 per cent. The operation of the safety net system has been of crucial importance in minimising the effects on our industry of the problems that arose this year due to the BSE scare and the Gulf crisis. Without it we could have seen a collapse on the scale experienced in 1974.
In conjunction with the action taken at Community level to cut back on intervention supports, improvements were made in the Community's premium schemes. At the January 1989 Council it was agreed to increase the rate of the special male beef premium from 25 ECU to 40 ECU per head and to increase the 50 head limit to 90 head. In addition, the suckler cow premium was increased from £35 to £53 per head. All of these were part of my demand before contemplating agreeing to the price mechanism introduced in 1989.
The improvement in these premium schemes has been of considerable benefit to our producers. Indeed, the improved suckler cow premium has been a significant factor in the expansion of our beef cow herd in recent years. Beef cow numbers now stand at their highest level since 1975 and total cow numbers are at their highest level since 1979.
I have consistently said that we must move away from reliance on Community supports and rely more on the market. At Community level there will undoubtedly be further moves to reduce market supports. We will resist these but if they become inevitable we must ensure that more resources are devoted to producer premiums. This has some attractive elements but we will have to proceed with caution. We are the member state with the highest dependence on beef exports. We export some 85 per cent of our production, of which more than half goes to third countries. The Community average for exports to third countries is only about 10 per cent of total production. So it is not necessarily in our interests to shift too rapidly from price supports to premia unless we can achieve major access to markets in Europe which will not be dependent to the same extent on the operation of Community supports. On the general question of improvement of market access I have repeatedly stressed the crucial role of CBF. I will continue to press for the provision of adequate resources to CBF to enable them to conduct an intensive marketing programme for our beef in European markets. These markets must become our main targets to enable us reduce our dependence on volatile third country markets.
I cannot conclude on the beef industry without referring to the BSE scare which has had an unfortunate effect on beef consumption patterns worldwide in the course of the past six months. On behalf of the Irish beef industry, I have been extremely active in counteracting the worst effects of this scare. At Community level and at my initiative, more serious damage to intra-Community trade in beef was averted through the success of the special Council meeting over which I presided last June. In so far as action on behalf of the Irish industry specifically is concerned, I am happy to say that our recent efforts are now showing signs of success with the resumption of traditional trade connections in both the livestock and meat sectors. My recent visits to Iran and Libya have served to convince some of our major customers of the diseasefree status of Irish beef and renewed access to these markets, together with the support afforded through the intervention system, will, I am convinced, see us safely through the current seasonal peak.
I renew my appeal to the media to ensure in making any comment or report on BSE in Ireland where we do not have an outbreak that they report the facts. Could they please refrain from using that frightening, emotive, disturbing "mad cow" term? I have asked that many times and I hope we can call on them to respond in a national effort. The trickle of BSE in this country is on the decline. Last year we had 15 incidents, all traceable to external influences. This year so far we have had ten cases. I ask the media in the light of those facts not to continue to highlight on front and back pages things that can unfairly and wrongly damage this vital sector of our economy. Our farmers are entitled to a fairer representation of their interests.
In the cereals sector the measures taken since 1986 when the Uruguay Round began have mainly been pricerelated and their combined effect has, to date, resulted in a cumulative price reduction to Irish producers of the order of 16 per cent. It is clear, however, that in this sector the price-cutting approach has not had the intended effect. Community cereals production continues to outstrip demand and were it not for the generally adverse climatic conditions of recent years, the current surplus would be even worse. Certainly, my own experience strongly disposes me to the view that supply management offers the most effective method of curtailing excess production while at the same time ensuring a reasonable return to producers and in the context of next year's scheduled review of the EC cereals' stabiliser it is my firm objective to shift the emphasis from price reduction towards the alternative of output limitation. I hope the European Council who imposed the stabiliser taxes can review the position in the light of experience to date, which has not helped to control production and has certainly impacted very severely on the income of cereal producers.
Diversification of production represents another possibility the potential merits of which have by now, I hope, commended themselves to the Commission. I shall be saying more on this topic and on organic production later but in regard to cereals may I say here how pleased I was personally that during my term as President of the Agriculture Council, the Commission's proposals concerning the use of certain cereals for non-food applications was adopted by my colleagues. I regard this as an important if modest beginning. I look forward to the extension of this scheme to other sectors in due course. That is the kind of direction we must pursue in order to find other uses for products that may be in surplus. I set the headlines in this respect during our Presidency and I hope we can continue to move in that direction.
The sugar regime which operates within the Common Agricultural Policy is unique. Not only is production of sugar controlled by a quota system which operates in conjunction with an intervention price which is determined annually, but also the regime is self-financing, in other words, it has a neutral budget effect.
What is the outlook for the EC sugar industry? Despite the action already taken, EC sugar production still remains at a level of about 130 per cent self-sufficiency. It is clear from that that the level of quota cannot be increased. Concentration must rest, therefore, on the question of whether there are grounds for maintaining quotas at current levels or whether they should be reduced. As I said earlier, the Commission proposes to continue with the present quota levels for a further two marketing years but they have not ruled out the possibility of change if the current GATT negotiations warrant such change. We can only wait for such developments. However, one thing is certain. I will not agree to any measures which would decrease prices to such an extent that growers would opt out of sugar beet growing leading to a supply problem for the Sugar Company, which in turn would open the way for imports from other countries and lead to the demise of the sugar industry here. The Sugar Company itself must, of course, be enabled to compete more effectively in the post-1992 market. For that reason, the Government have decided to restructure it so that it can secure a stock market flotation and so open up greater possibilities of diversification and secure the interests of producers and workers. I will be making a formal announcement of this later today but I thought I should inform the House out of courtesy now.
Another very important market sector in so far as Ireland is concerned is sheepmeat. Here as in other areas, the Community has been obliged to adopt measures in recent years, in spite of the fact that EC self-sufficiency is only 83 per cent. Our international obligations, however, oblige us to afford full access to third country supplies, although in recent years voluntary restraint agreements — VRAs — have been negotiated with supplying countries so that, at present, an effective limit of approximately 275,000 tonnes applies. A more significant phenomenon perhaps has been the dramatic recent increase in the Community's own sheep numbers as the impact of production restraints in other livestock sectors encouraged producers to expand their herds in order to protect their margins. This expansion is fully reflected in the budgetary costs of the sector which increased by 135 per cent between 1986 and last year.
The introduction of stabiliser mechanisms in the form of a maximum guaranteed threshold in 1988 will, however, effectively reduce the level of the ewe premium — the sector's underlying support — while other technical adjustments to the regime will further erode producer returns and put a brake on guarantee expenditure on the sector. I am extremely conscious of the difficulties now faced by sheep farmers generally and I am particularly concerned with the income of producers in the disadvantaged areas where much of our output is concentrated. Therefore, during the forthcoming overall review of the regime, I shall be arguing strongly on behalf of those producers just as, earlier this year in the course of the farm price negotiations, I advocated their cause and sought special compensatory measures to counteract the impact of the stabiliser on the level of the ewe premium. Happily on that occasion my pleading and that of certain of my colleagues resulted in Council's agreeing to the payment from next year of an additional premium in the region of £3.50 per eligible ewe in the disadvantaged areas. I do not need to remind the House that that is fully funded by the EC. That is why the regulations in respect of the ewe premium must be implemented by me in accordance with their requirements.
No debate here today could ignore the effects on Irish agriculture of the momentous and stunning political developments which have taken place in Eastern Europe in the last nine months. From an agriculture point of view developments must be closely analysed as to the threats and opportunities. Clearly they were not foreseeable when we formulated our general policy in 1987. Much of the policy discussions at present are based on ignorance of the basic facts relating to production, existing and potential, as well as future market developments. Undue fears that Eastern European production will swamp EC markets are as misguided as the views that these markets themselves will present substantial capacity for disposal of surplus EC production. It would be foolish to deny that there could be an unfavourable impact on our producers if the potential meat and cereal surpluses in the Eastern European countries are given free access to the Community market. This assumes however, that productivity increases will outstrip consumer demand in the Eastern European countries. That will be a major issue.
Rural development is a matter to which I have given specific attention. As the House will be aware we have put in place, on a pilot basis, programmes for rural development covering a whole range of supplementary rural development activities. When the Commission introduce their proposals they will enable us to immediately put in place action programmes across the whole range of agritourism alternative sources of income. I will not say more on that today because of the time constraints beyond saying that we are uniquely well placed to deal with that matter. I will leave it to my colleague, the Minister of State present, to deal with matters relating to organic production which are his immediate responsibility.
The economic environment in which Irish agriculture operates is of vital importance. Deputies will be aware of the market difficulties being experienced in the Community, particularly in the beef and dairy sectors to which I have referred already. The successive economic policies being pursued at home are a positive element in reducing input costs in agriculture, particularly in reducing the cost of funding, ensuring that the penalising experience of the seventies — when there were high interest rates and very high interest costs prevailing due to inflation — is not repeated.
With regard to the GATT negotiations I will make just two or three general observations because there have been many statements made in this respect. Of course they are of vital importance. I might say also that it is a bit late for some Members on the other side of the House to stress now just how important they were since the process began in 1986. The parties opposite were in Government in 1986 when the process started on the Uruguay round in Punta del Este to lay down the conditions for negotiation in agriculture on the other trade elements in that vitally important process. The Government opposite were not represented at those discussions by the Minister for Industry and Commerce, who was responsible for trade, nor by the Minister for Agriculture who was responsible for agriculture. No, the Government opposite were represented at that vitally important meeting — which set the whole trend of the GATT negotiations — by the Minister for Education. It is a bit late now for the same gentleman to complain about the consequences of the negotiations set in train in 1986.
Who represented the European Commission?
It is self-evident that the position I have been pursuing — I leave it to others to judge from contacts with colleagues outside — that Ireland's influence at the Council of Ministers is way beyond our commensurate size and influence economically. If there is any doubt remaining that fact can be seen from the progress we have made already in regard to changing the proposals of the Commission which will be before us again tomorrow. It would be my hope that we will achieve a solid position in line with that on which I insisted during my Presidency, that is, that agriculture is the primary responsibility of the Agriculture Council. For the first time the Council which reviews agricultural decisions will be the Agriculture Council. We will be accompanied at the Agriculture Council meeting tomorrow by Trade Ministers. Let me assure my collegues here and elsewhere that I shall adhere to the position I adopted already despite the demands of other countries.
I want to make one further point in that respect, that is, that the United States is not and will not be allowed to dictate to sovereign states or to the EC how we should implement our policies.
They have done so.
The Minister's own colleagues have done so.
No one has done it. I assure the House that we will defend and vindicate the principles of the CAP, which is a constitutional obligation of the EC, and nobody outside is going to undermine it. While some difficult decisions will have to be taken in that context, I assure the House, and farmers generally, that I will continue in these negotiations to vindicate the position.
If we had more time I could not deal comprehensively enough with the range of vital issues before us, but I wanted to give that as a flavour of the position at this stage. I hope the House will take a comprehensive and responsible view of these issues. I will be ready not only to take note of but to listen to any positive suggestions that may emerge.
Deputy Connaughton has 30 minutes.
That was a most defensive Minister for Agriculture and Food if ever I heard one in action. Irish agriculture as we now find it, for whatever reason, is in a shockingly poor state of health. It has been infected with a creeping paralysis that kills very slowly and very surely. Despite what the Minister has said in the last three-quarters of an hour, I acknowledge and accept the Teagasc finding that farm incomes will decrease by 21 per cent or more this year, as will be seen when the figures are calculated at the end of the year. Never in living memory have we had a drop of 21 per cent in one year. I defy contradiction on that.
Many farmers believe the Government and the EC have turned their backs on them and that nobody seems to have grasped the enormity of what is happening. Many commetators seem to accept that major changes in European agriculture and, therefore, in Irish agriculture, are inevitable. I agree with the Minister that certain political changes in Europe this year could not have been foreseen and that they had a big effect on what we are talking about. Leaving that aside, let the message go out today that all changes are politically inspired one way or another. It is the art of politics to ensure that regimes and regulations which impact negatively on countries or on regions within countries should suit local conditions as far as possible.
We have to accept that a very hostile anti-farmer lobby is building up in Europe. This is well articulated by Commissioner Andriessen, so much so that he appears to dominate the show in so far as Commissioner MacSharry is concerned. I am sorry to have to say that I believe the Minister has thrown in the towel as far as our farmers are concerned. He has a defeatist mentality. He is beaten before he gets on to the playing pitch. In the next 25 minutes I will explain why and, unfortunately, 160,000 farming families will agree with me only too readily.
At home the Minister has stumbled from one controversy to another. His Government's involvement with the Goodman Group has done nothing to bolster confidence in the meat business, particularly in food processing. Furtheremore, the recent claim of alleged irregularities in the dairy industry could present potential problems for our food industry. The fact that the Minister has the details of the charges from the EC Court of Auditors for more than five months, and that An Bord Bainne knew nothing officially about them, speaks volumnes for the attention the Minister pays to important matters. The Minister must reply immediately to those charges——
I replied already.
——to ensure that Ireland's image as a good exporting nation is not tarnished. We hope sincerely that will happen immediately.
I have been trying for more than six months to get the Taoiseach, and the Minister for Agriculture and Food, to give us an opportunity to speak in Dáil Eireann about the GATT negotiations and related matters. For whatever reason they were unable to do that until today. What industry, even one tenth the size of the agricultural sector, would have to wait so long for its problems to be discussed on the floor of this House? The Government are not aware of the implications of what is taking place. The Minister has a dreadful record so far in predicting how agriculture will develop. In his outlook for 1990, which I have, he predicted farm incomes to hold reasonably firm with certain pressure coming on milk and beef. The next foolish prediction came from the Minister after the annual price fixing ritual was completed in Brussels earlier this year. The Minister announced benefits of more than £70 million to Irish farmers which, he said, would cushion to a great degree the mounting pressures on farm incomes. The Minister, and others in his party, made much of the fact that 11 million gallons of milk would be distributed. He said it was very difficult to obtain that extra quota and would help small quota holders substantially. He continued that line of argument a few moments ago. On average small producers got 300 gallons each from his endeavours.
That is better than the way the Deputy's party ignored them.
The bottom was falling out of the market. An Bord Bainne clearly identified massive competition on world markets which was pressurising Irish product prices downwards. CBF, the meat marketing board, clearly signalled a build-up of meat products coming into the EC from new East European sources which had the effect of forcing more Irish products into intervention. Sheep prices began to tumble and, with ewe numbers up dramatically in Britain, our traditional lamb market in France became a hotbed of competition. There were four increases in interest rates in the preceeding 12 months.
Cereal farmers were in the wars also. A rising co-responsibility levy, coupled with the importation of cheap cereal substitutes like corn gluten, forced cereal prices down to the stage where one well known agricultural economist predicted a few months ago that it would now take 200 acres of the best land in Ireland growing spring barley to provide a basic disposable income for a normal family.
The Minister was unimpressed. He told the Dáil there was no crisis and he said that continually this year. He said there may be problems but there was no crisis, and went on to defend his record in office by trotting out the line he was on today, that were it not for his great negotiating skills on the intervention system cattle would be sold for half nothing. The problem is they are being sold for half nothing and he understands that.
I will place on the record of the House just how bad agricultural incomes are and how families are being pushed to the wire. A farmer of my acquaintance who has 70 acres of land with a milk quota of 20,000 gallons had his milk cheque reduced by £3,500 in 1990. He lost £140 each on the sale of 15 weanlings amounting to £2,100. From his 50 ewe flock he sold 60 lambs. In 1989 he averaged £50 each for the lambs but this year his average price was £37 which resulted in a loss of £780. He cannot sell his wool this month. This farmer repaid a loan of £10,000 taken out in 1979-80 for farm buildings and some land drainage. However, in 1989, because of a visit by officials from both the local county council and the fisheries board on an anti-pollution mission, he was advised to invest in a new slatted house and other farmyard developments. He had no alternative but to borrow £15,000 over a 12-year period and this year his repayments amounted to £2,885. His total direct losses in 1990 because of the reduction in farm product prices stands at £6,380 with a £3,000 loan repayments hanging around his neck for the next 11 years. His disposable income was calculated at £9,500 in 1989 which included the limited livestock grants he got.
For this farmer 1990 has been a disaster; what will 1991 be like? All the indications are that milk, cattle and sheep prices will be further reduced. A milk quota reduction of 6 per cent seems imminent. The farmer I speak of has a wife and four children. The children are going to national and secondary schools and are reaching a very expensive age. What compensatory items, if any, will be available to this family in 1991? The area in which he lives is likely to be reclassified as severely handicapped, and this will mean an extra £872 next year if it happens.
He is lucky.
There does not appear to be anything else. Naturally this family will have to turn their thoughts to social welfare. Here again they are likely to go down a cul-de-sac. It appears that the Department of Social Welfare still regard a farmer sending the milk of 25 cows to the creamery, selling 15 cattle and 60 lambs per year, as a big farmer, and he was refused the dole. There is a psychological barrier in the Department of Social Welfare which it seems they cannot overcome. To add insult to injury this family is not entitled to the family income supplement because it does not extend to farmers even though its primary purpose is to augment low paid jobs. Is this not total discrimination? This farmer, who by national standards is above average size, will have no disposable income in 1991.
His options are very limited. He could slow down his repayments to the bank by claiming inability to pay, and trying to renegotiate a longer term loan, but this will only heap up more interest and extend his misery further. The lending institutions will not want to know anyway; they will demand their pound of flesh at the end of the day. He may seek an off-farm job but very few exist. Had he been allowed to collect social welfare he might get a week-on week-off job in his local community FÁS scheme, but the only criteria for such a scheme is eligibility for social welfare.
There are other less obvious factors working against this farmer. Because of pressure on his income over the past few years the lime levels on his farm have run dangerously low and at £13 per tonne he cannot see the situation being rectified for a long time. The Minister can smile but there will be thousands that will not. There is too much smiling going on over there altogether.
The Deputy had better refer to his colleague. I am smiling at a colleague of his on a different issue.
I hope the Minister is not smiling at farmers. This farmer cannot pay for the agricultural advice he needs because of the huge Government cutbacks in funds to Teagasc. Basically good sound advice of the type that is vital to him is no longer available.
The Minister laid great emphasis this morning on the role that rural development projects will play in supplementing farm incomes, such diverse projects as mushroom growing, deer farming and agri-tourism, to name but a few. Let the Minister be fully aware that whoever may get involved in such projects, it will not be the above-mentioned farmer or thousands like him because they do not have the financial ability to do it.
I will accept that there is a place for rural development but the people who are likely to probe and expand into this area of activity are likely to have funding available from sources outside of farming or possess dry cash from other days. That is the ugly scenario for 1990. Teagasc estimates a 21 per cent reduction in farm incomes for 1990, and I believe it is getting worse.
Before I leave that I want to say that that farmer would not, by any standards, be regarded as a small farmer. He is a medium sized farmer. They are the accounts. I will stand over them on any platform. Farmers will immediately identify with the problems I have listed there.
Commissioner MacSharry offered a 30 per cent cut in farm subsidies in the GATT negotiations in Dromoland Castle last August, a major tactical blunder if ever there was one. At a very practical level nobody in the world of business would voluntarily indicate a negotiating position to a competitor or a potential buyer until the asking price was ascertained. The US immediately tasted blood and placed a ludicrous demand on the table.
Irish farmers have two major hurdles to jump as far as GATT is concerned. Because we are a food exporting nation we stand to lose far more on the MacSharry proposals than any other country in the EC. Export of beef alone is eight times more important to Ireland than any other country.
Ireland joined the EC in 1973 for three major and very specific reasons. First, we wanted access to 320 million potential customers in an expanded European Community. We were tied to the British market which for its own good reasons always pursued a cheap food policy; second, we joined because, for the first time in the history of agriculture, farmers could expect to get a reasonable return for their labours through the introduction of the safety net mechanism which everybody identifies today as intervention; and third, we liked the idea of collective responsibility within the Community.
The so-called cohesion factor was clearly intended by the founding fathers to implement standard procedures across the Community in such a way as to ensure that large, wealthy economies could not smother smaller countries like Ireland with national benefits.
All efforts by national governments to finance their own farmers were invariably unsuccessful. However, the MacSharry proposals have led national governments, particularly Germany, to seek exemptions from this code of conduct which would allow aid from the national exchequer to be directed to its own farmers for a variety of good reasons. However, should this development be accepted in the EC, Ireland will become a third world country in a few years. Ireland has a high dependency on agriculture with 14.4 per cent working on the land. Germany has only 2 per cent of its population in farming.
Because of its industrial base Germany could subsidise its industrial farmers on the grounds that it wanted its farmers to have an income comparable to its industrial workers and to ensure that the fabric of rural society did not disintegrate leaving a whole plethora of economic and social problems in its wake.
The principles contained in the Treaty of Rome as enshrined in the Common Agricultural Policy are redundant if the concept of collective responsibility is either watered down or dispensed with.
The Irish economy could not hope to match the potential subsidies that German, French and British farmers could attract from their national governments. This would instantly create an unfair competition for our farm products even within the EC markets, leaving out world trade altogether.
German unification was a spectacular achievement for democracy, with the subsequent liberation of 25 million people from a discredited and redundant communist regime. However, the historical change will redirect massive resources, heretofore available to the CAP, to Eastern European countries with possible devastating effects for Irish farmers.
A precondition for entry by all countries to the EC was that certain economic standards should have been attained. It seems that sight has been lost of this. Many countries like Ireland and indeed Britain were deemed not "ripe" for admission for years before 1973. No doubt national self-discipline and the ability to achieve targets were always regarded as vital characteristics for countries applying for membership. However, due to the reunification of Germany, overnight a new country, East Germany, had to be admitted, and for a variety of good reasons that we cannot argue with. There are signs of major changes in the so-called rock solid principles within the EC and Ireland will be a big loser if this route is taken. That is what worries every Irish farming family today.
I said we had two major hurdles to jump in the GATT negotiations. The US demands are nothing short of outrageous. They want a 75 per cent cut in farm subsidies with a staggering 90 per cent cut in export refunds. The US demands are dishonest in that their 2 million farmers are currently in receipt of twice the level of subsidy per farmer that is available to the 11 million EC farmers.
What the American proposals would in effect do is to have a 70 acre Irish farmer compete head on with a 2,000 acre Colorado farmer. This is not a level playing pitch nor can anybody be certain that, by liberalising agriculture trade worldwide, national food security stocks can be maintained in times of national disasters such as droughts, crop disasters and such factors. Every nation should be allowed embark on a food security policy that will protect its national interest as far as food stocks are concerned.
If the MacSharry proposals are carried, 30,000 farming families will be wiped out. If the American proposals are imposed, 70,000 farmers will be forced to leave the land. When you consider the example I gave of a medium-sized farmer who has no income this year, you can readily appreciate what I am speaking about. There is one significant factor coming through in this GATT debate — the impact our Minister for Agriculture and Food has on policy decisions within the EC is, in my view, literally nil.
In your view.
Yes, and in the view of thousands.
I would not expect the Deputy to have any other view.
The Minister can hardly stand on a public platform at the moment.
I am not surprised.
He is not too fond of going on radio and television to discuss the matter either.
I will discuss it with the Deputy on radio and television any time he wishes.
He got the chance on two occasions in the last month and he funked it. It appears Deputy O'Kennedy has an inferiority complex in dealing with his colleagues around the table in Brussels. When the German Minister for Agriculture — let this be noted today — saw that the German farmers would suffer because of the MacSharry proposals, he put the boot in and looked for special treatment. The trouble with our Minister for Agriculture and Food is that you do not know what you are looking for. You do not know what the bottom line is and you have not made up your mind as to what level you will allow Irish agriculture to go before you shout "stop". I will put it to you here this morning——
Will Deputy Connaughton put his points through the Chair, please?
Sorry, a Leas-Cheann Comhairle. Every farmer wants the Minister to spell out clearly what he sees as acceptable and at what stage he is prepared to pull the plug. That is his test. Recent statements by the Minister clearly indicate he is not prepared to use the veto when a vital national interest is at stake. That is a sign of weakness which is certainly not lost on his EC colleagues.
Rural Ireland has had many setbacks over the years. The thirties and forties were sheer economic misery for farmers and the scars were to be seen for 25 years afterwards. Farmers will never forget 1975, a year when cattle and sheep prices collapsed. However, everything that has happened up to now will pale into insignificance if the MacSharry proposals are adopted. Thousands of farming families expect the Minister to put the boot in. There are certain things he cannot be blamed for and I acknowledge that, but there are certain mechanisms under his control whereby he will have to shout "stop" and I wonder if he has the courage to do that. His party were very vociferous in 1983-84 when the then Minister for Agriculture was negotiating the milk quota. It was on the tip of everybody's tongue to use the veto at that stage but it is 20 times more important to do so now if we are not getting from the system what we believe we should.
Fine Gael are currently inviting signatures for a petition which endeavours to bring to the notice of Brussels and Washington the thoughts, aspirations and fears of all Irish farmers. Many thousands of people have signed this petition and many thousands more will certainly do so in the next week or two.
You would want to get it done quickly.
There will be plenty of time. There is no hurry. By the time the Minister is finished with the Americans a lot of water will have passed under the bridge. Irish farmers feel badly let down by the Minister, Deputy O'Kennedy. While matters like the BSE scare, the Gulf crisis and the eastern European scene have created great difficulties, there are many opportunities open to the Government to alleviate problems for Irish farmers.
Recently Fine Gael launched a ten point plan which, if implemented quickly, would greatly help farmers. I will go through the main aspects of the plan. Firstly, it is very important that intervention should be extended to take the 04 category of cattle, and something will have to be done as regards heavy heifers. I cannot understand why the Minister will not implement the principle of the Euroloans — I will come back to that in a moment. I will refer to the headage payments in the new disadvantaged areas later. I cannot understand the messing that is going on with the reclassification of land. Leaving that aside, I cannot understand why the Minister did not make sufficient arrangements when product prices were falling for an increase in headage payments. For two long years the Government did nothing whatever about this matter.
New Zealand imports of sheepmeat must be resisted at the GATT negotiations. We must have a national plan for the future of the meat industry and a much more pivotal role must be given to CBF. The amount of sheepmeat for sale from 1988-90 doubled but what did we do? We cut the financial budget to CBF, in case they might sell an extra tonne of product. That is unbelievable. No reduction in milk quotas is acceptable. Farmers outside the EC are increasing their volume of milk at our expense. Regulations for the special beef premium scheme must be redefined.
Something very peculiar has been happening to thousands of farmers in the last couple of weeks. It is bad enough when world and European pressures affect our product prices but as regards the different schemes, the beef scheme, the cattle headage scheme and the suckler cow scheme, it has come to my knowledge in the past week that 35 per cent of farmers have been deemed ineligible for payment because of small errors they made when filling their applications. Would the Minister, for the sake of everybody in the country, contact the livestock offices throughout Ireland. I want no dishonesty and I want no farmer to get something he is not entitled to, but the Minister should allow the thousands of cheques which are held up for the most frivolous of reasons to flow out in the normal way. Otherwise these people will have a very bad Christmas. That is within the Minister's control and it could and should be done in 24 hours.
More finance will have to be made available to the Department of Social Welfare for the farmers I have been speaking about. In so far as the EC loan is concerned, no farmer can sustain interest rate payments of 16 per cent on loans. It is possible, under certain circumstances, to make available short term loans to farmers at 11 per cent interest.
The Government have made a grievous error of judgment in their efforts to reclassify areas under the disadvantaged areas scheme. I wish to take issue with some commentators and others who compliment the Minister on getting the data ready in a year. The Government had an ideal opportunity in 1987 to continue to press for reclassification as presented to Brussels by the outgoing Government. Why was there a delay of two years? Did the Government not understand there was a consistent reduction in support prices which was supposed to be transferred to the direct income side, in other words headage payments? Would the Minister not accept that there was very bad planning as regards these headage payments? Could payment not be organised to coincide with the ongoing fall in farm incomes?
Since the EC accepted responsibility for 65 per cent funding of those schemes, the delay in reclassification is even more scandalous. The method by which the criteria to reclassify land has been applied must be questioned. It appears there is a total inconsistency in its application throughout the country. Huge areas of land have been left out of the scheme and this baffles everybody. The Minister must immediately set up an independent appeals tribunal before the areas are officially announced. That tribunal must have authority and must be allowed to act quickly where areas have been omitted. There must be sufficient flexibility in the system to reclassify such areas immediately.
I wish to refer to another matter clearly within the ambit of responsibility of the Government, the payment to farmers by factories for their cattle. In the last fortnight the Minister spoke to the factory managers and Commissioner MacSharry issued a statement on what he intended to do but, so far, there is not a shred of evidence to prove that there is any competition between the factories and they are scooping between £30 and £40 per head from hard pressed farmers. If money is to be made available it should be allotted within the next week or so but, in this regard, the Minister's efforts to date have been unsuccessful.
Never before were the dark clouds so ominous over Irish agriculture and never before was it necessary for a Minister for Agriculture to show such a degree of resolve, application and dedication to this problem. My view — which is shared by many — is that the Minister for Agriculture and Food does not have what it takes when times are bad. We have a very limited time to get our act together and the Minister is not the man for the job.
My party and I welcome this debate on agriculture. I am amazed at the Minister's bland — nearly uncaring — attitude to the crisis facing us. The Labour Party clearly recognise the staggering proportions of the crisis facing Irish agriculture and we are not just talking about income below a level of survival. We are talking about whether a majority of people who are at present involved in agriculture will survive.
Milk has been reduced by about 20 per cent to the producer; that is all right for the big producer but not for the small one who cannot bear any cut in the income he already has. There has been an 18 per cent cut in the price of beef and sheep are available nearly free, certainly in the west, where mountain sheep are being sold for £10, if they are lucky. The wool is costing more to take off their backs — 50p to shear a mountain sheep and 48p is the average price for the fleece — 2p more than the sheep is worth.
We have developed cereals to such a crazy level of pumping fertilisers into the growing to get a couple of extra grains on each ear that we have polluted large areas of the best land in the country and it now takes 200 acres for a farmer to get a modest living from cereals. They are the economics of a lunatic asylum and we continue to say that we should do more of the same. At the same time all this is happening, because of the price support structure, this year we imported £1 billion worth of vegetables which we could have grown ourselves if the Minister of State had done his job in this area of his responsibility. The figures are not mine, they are from the Department of Agriculture and Food; 50 per cent of farmers are now below the poverty line and depend on the Department of Social Welfare and the St. Vincent de Paul Society to survive. The Minister does not seem to be aware of that.
The Labour Party policy is unique among all parties in their support for a radical transformation of agriculture. They are the only party to put forward comprehensive proposals regarding the future of Irish agriculture. The party's policy discussion document —"Land, Work and Wealth"— is the only agricultural policy document published by any political party in the recent past.
Labour are fearlessly on the side of the continuation of the maximum number of people possible in Irish agriculture and having a decent standard of living in their chosen career. We are also fearlessly on the side of securing the fabric of rural society — from which many Members as well as myself come — which is so important and which is being denuded by the present policies. I am pro the vast majority of farmers, pro-agriculture and pro-consumer and I do not see a contradiction in that as they share mutual interests.
The Minister has said repeatedly in this House — he repeated it today — that his job is to create the atmosphere in which agriculture would thrive. He said there would be no interference and a hands-off policy on the day to day workings. What the Minister has now done in this task which he set himself of not having any active part in the agricultural area and simply creating an atmosphere beyond normal reality is to have caused the present crisis. As I said, sheep, milk and beef are in a disastrous situation. We should examine how the Minister proposes to create the atmosphere to which he referred. He said he will not take any direct action and that he will accept, in an uncontested way, instructions from Brussels. There will be a doubtful level of control from his Department on the enforcement of the procedures required. He handed the bulk of the processing industry to one individual who then, of course, used the price support systems to seriously damage the industry and land us in our present trouble.
We are now dealing with a desperate struggle for survival by a fairly large number of people. The competence of the Minister in assisting these people and in creating the situation where they are desperately struggling for survival is seriously in question. The Minister should examine his position and seriously consider whether he is fit to carry through the programme about which we are talking, or indeed any constructive programme to deal with the crisis. If he is not fit to do the job he should resign. I do not normally call on Ministers to resign but this Minister has shown a degree of incompetence in his brief which is extraordinary. He should seriously consider his position in view of the crisis facing the whole rural society and indeed a large slice of urban society.
The Minister — and Fine Gael — have put all their eggs in the one basket of the Common Agricultural Policy and the price support mechanism. This was meant to be the panacea for agriculture, it would cure all ills. Let us examine what it has achieved. A sum of roughly £1,000 million comes directly to Ireland from the European Community each year in the form of price support mechanism and other ways. Who gets the money? If that amount of money is available why is there a crisis in agriculture? We now know — from Brussels and the Minister — that 80 per cent of that sum goes to the top 20 per cent of our farmers who do not need it, they can survive without it. For every £5 coming from Brussels the big farmers get £4 and all the small farmers get £1 divided between them. They are Commissioner MacSharry's figures, not mine. This is a new concept in means testing, the more one has the more one gets. This money is not just farmers' money, it is taxpayers' money — Irish taxpayers and European taxpayers. The more land one has and the more one produces the more one will get. As a result, huge numbers of farmers are being forced off the land. The CAP primarily benefits large farmers. That is accepted by all commentators. The price support mechanisms neither discriminate in favour of small producers or against large producers. While the intention was to secure a good standard of living for farmers, the CAP has singularly failed to achieve that. About 50 per cent of all people now involved in farming are below the breadline.
Between 1975 and 1988 real farm incomes decreased. The increase in income experienced in 1989 will be more than offset by losses in 1990. Over 60 per cent of farmers have incomes of less than half the average industrial wage while a substantial proportion live on a quarter of the industrial wage. Average income for the top 25 per cent of farmers in the EC is 20 times that of the bottom 25 per cent, and 40 per cent of gross incomes for farm families with holdings under 30 acres are accounted for by social welfare.
A sum of £1 billion comes in to Irish agriculture from the EC. That would give every full-time farmer here £10,000 per annum, without selling anything. However some farmers are getting very little while others are getting colossal amounts. For example, in my constituency a farmer with a 250,000 gallon quota, on Commissioner MacSharry's figures, without the value of his produce, gets £100,000 per annum in subsidies. That amounts to £2,000 per week dole for a farmer with a quota of 250,000 gallons. How can we justify that? Why does the Minister not say that there should be a top level at which no further subsidy is granted and then use the money saved for the people who need it to survive? Who pays this? The Irish and European taxpayers pay it, the Irish and European consumers pay it. This means that families of four persons on unemployment benefit pay an average £7 a week subsidy to a farmer who is getting £2,000 a week. How can we continue to justify a situation where somebody on unemployment benefit pays £7 a week to a rancher in County Kildare or anywhere else? That is what is happening. That is the policy the Minister says he will die for, that Fine Gael say he is not fighting hard enough for. These are the policies the Government are pursuing.
I do not suggest that £1 billion per annum is more than enough to develop our agriculture. I am saying that there is gross abuse and misdirection of the funds. The money is not going where it is needed and that is why we have an income crisis in agriculture.
Between workers attached to agriculture and land users, about 300,000 people are involved. That is a figure not often quoted. There are about the same number of people attached to agriculture who have no land as there are land owners — the Minister is raising his eyebrows; however the IFA agree with me.
I am not disagreeing.
Both trade unionists and farmers have mutual interests. It should be noted that there are 100,000 fewer involved in agriculture today than there were in 1973: I am including labourers, factory workers, drivers and public servants in the Department who, the Minister will agree, do an excellent job, albeit a trimmed down excellent job now. It is generally accepted that the CAP in its present form is coming to an end but there seems to be a conspiracy of silence in admitting it. The Minister has not taken any action except shouting "no surrender" in an attempt to protect those most affected. There has not been any attempt to divert the money available to where it is needed or to develop alternatives. All we are getting this year, because the safety net opened, are new mountains of food rotting away at prices that the poor who are subsidising the CAP cannot afford.
The objective of the CAP was noble — to create sufficient food to ensure that there would never be a shortage and to ensure that those living and working on the land would have a decent living. That has now become a false facade. The hidden real agenda being vigorously pursued by the Minister, strongly supported by Fine Gael, the IFA and the European Community, is to drive the maximum number of people off the land. If the spokespersons for farmers and the Minister cannot see that the policies being pursued will drive a huge number of people from the land, they should consider their positions.
I am telling the small farmers, the vast majority of the 140,000 landowners, that they have been conned, led up the garden path and are being consigned to oblivion, but nobody has told them about it yet. Hypocritical lip service is being paid to their continued existence by the Government and the main Opposition Party, by the largest farming organisation and by Brussels, but the intention is to get rid of small farmers. There is no point in the Minister saying anything else while pursuing the present policy. The intention is to replace the small farmers with large corporate holdings of 500 to 1,000 acres and to reduce the total number to about 40,000. That is seen as highly desirable. The Minister and the main Opposition Party were hand in glove in abolishing the only stop to that occurring, when they abolished the Land Commission. That was the only stop, and the cheque book now rules supreme.
The Government, the Opposition, the IFA and the European Community have been plotting for the removal of the small family farmers while pretending to serve their interests. A large part of that plot is now in place. There are 100,000 fewer people in agriculture now than there were in 1973 and rural areas are being denuded at such a rate that it is causing alarm among churchmen who are calling for action to stop the rot. The action to be taken is to reverse the present policies and direct the available money to where it is required.
If the small farmers allow the Government and their own organisations to continue to lead them down that blind alley they will disappear from farming. The farmers should tell the politicians that they have seen through their plot and should give them a massive message in that regard at the first available opportunity. A small fledgling organisation has been formed, not poaching members from existing organisations because membership of the ICMSA or the IFA may continue while one is a member of the United Farmer's Organisation which is exclusively to develop a lobby to protect the interests of small farmers, not just small 30 acre holders but people with holdings of up to 70 and 80 acres. Those farmers would be well advised to join that organisation as quickly as possible before it is too late and the plot to get rid of them is put into final effect. If farmers do not take action quickly they will be driven from their land and on to the dole queues in the cities. Such policies are being vigorously pursued and there should be no doubt about this. The day of the landlord and the huge landowner will return and they will come into their own without any great difficulty.
I want to refer to the effect of CAP on world starvation. A short time ago we asked the Minister if he would consider a slight derogation and allow an African country export 50,000 tonnes of beef per annum into the EC. The Minister said he was sorry that he could not support such a proposal but the reality is that we are allowed, under the agreements we have, to effectively dump our produce in Third World countries with an export subsidy to bring it up to European prices, thereby preventing Third World countries trading with one another. At the same time we impose severe levies against imports from Third World countries into the Community. This is immoral and I believe it is the rich fat exploiters of Europe who are creating poverty at a level where starvation occurs. We do this not to protect our small farmers — the policies we are pursuing are driving them off the land anyway — but to put a lot of money quickly into the pockets of a small number of people. That is an unacceptable practice which I do not support and will speak against.
The Labour Party support a two track strategy of CAP reform and nationally implemented policies. This would involve the dismantling of the price support mechanism over a ten year period while maintaining the overall level of agricultural support. I believe that anything I say in this House will have very little effect on whether that occurs, and I am absolutely convinced that it is going to occur whether I, Deputy Connaughton or the Minister says it. The price support mechanism as we know it is dead and the sooner we accept that reality the better. We should look for an alternative to protect our industry, rather than pretending it is not happening and doing nothing to put an alternative in place.
The funds available for CAP subsidies should be channelled into direct income aid for farmers, radical land reform through a land agency and rural development schemes to increase the level of services and diversification of both farm enterprise and the rural economy. Immediate steps should be taken to implement a two-tier pricing mechanism with a maximum cut-off point. Nobody should get £2,000 per week and I do not think anyone in this House would support them getting £2,000 per week. Action should now be taken to ensure that they do not get any more money or anything like that amount while other farmers are going to England or coming to Dublin to look for jobs. That practice should be stopped and there should be a maximum cut-off point in the interim. The establishment of a land agency is of paramount importance and I am glad the main Opposition party now support that proposal. It is a pity that proposal was not supported earlier. We could have reformed the land agency rather than abolish it. It may be difficult now to get a land agency but I believe it is still possible because the Land Commission is still legally in existence.
A major land reform programme is required — the creation of a national agricultural forum to plan out a development programme for Irish agriculture involving all sides, the workers, the farmers, the unions and everybody else involved, including the consumers. We also propose increased investment in Teagasc as well as the abolition of the farm advisory surcharges. Farmers who need advice from Teagasc cannot pay the charges and it is now effectively a private service for farmers who can afford to pay for consultancy services. That is what the Minister's proposals and actions have turned Teagasc into. The services of Teagasc are no longer effectively available to the farmers who need them and who cannot afford to pay for private services. Teagasc is under such pressure to make a profit out of educating farmers that they are not available to educate the farmers who need their services most and to assist, train and advise them.
We also propose income supplements for farmers such as the existing EC programmes in other countries, the extension of the family income supplement, equal tax treatment with the PAYE sector and tax relief for land and milk quota purchases. The Labour Party believe that the Government's policy should ensure that the maximum number of families are working the land and that they have a decent standard of living. Middle sized farms are more productive in terms of output and employment than large corporate farms. The future of Irish agriculture will depend on its ability to adjust to a market-based price regime. Radical reform of land structure, more efficient organic practices and co-ordination between food production and processing are the best way to bring Irish agriculture into the 21st century.
The Minister put forward no proposals this morning to deal with the crisis in agriculture. He simply told us all the wonderful things he had done and arising from those, the wonderful things that had happened in agriculture. There seemed to be no recognition of the absolutely frightening and staggering crisis before us. Arising from that, I question the Minister's suitability to continue in the office he holds. It is frightening to think that for this special debate he seemed to dust off an old departmental script he used previously when things were fairly good in 1988 or so and presented it to the House as if nothing at all had happened in the meantime. Maybe he was busy doing other things but he certainly does not seem to have applied himself to his brief.
The Minister referred to BSE and his horror at the idea that the term "mad cow disease" might ever be used again. Consumers have a genuine concern about the food they eat and if mad cow disease identifies a particular condition so far as the consumer is concerned that is the term that should be used and not some fancy technical scientific jargon that nobody understands. If the Minister wants to hide behind that type of screen that is his prerogative, but when I talk about BSE I will use the term "mad cow disease" so that people will know what I am talking about. If I say that we do not have mad cow disease in Ireland people know what I am talking about. If I ask the Minister whether he is absolutely satisfied that all the cases of mad cow disease were non-indigenous the Minister will know what I am talking about. I am not going to hide behind terms that the public I am here to serve will not understand.
I wish to share my time with my colleague, Deputy Pat Rabbitte.
Is that agreed? Agreed.
There is no doubt that Irish and European agriculture has entered a period of dramatic change. There is also no doubt that this process of change is causing and will cause great problems for many Irish farmers.
Acting Chairman
I am sorry to interrupt the Deputy but the order of business this morning provided that the main spokesperson nominated by each of the groups, as defined by Standing Order 89, shall not exceed 30 minutes. Therefore, I do not think you can share your time if you are speaking as the main spokesperson for The Worker's Party as defined by Standing Order 89.
I respectfully submit to you that whereas the order defines the speaker as the spokesperson, there is nothing in it which says that the time cannot be shared.
Acting Chairman
It states "The main Spokesperson nominated by each of the Groups (as defined in Standing Order 89) shall not exceed 30 minutes". It seems to give no indication that one may share their time.
I understood there was agreement between the Government Chief Whip and others that time could be shared.
That agreement concerned Members other than front bench spokespersons. We have to be realistic about this matter.
That is incorrect.
Acting Chairman
I am going by what is in front of me. It would seem to indicate that only that person——
I will clarify the matter and come back to you on it.
Acting Chairman
That would be acceptable.
I would remind you, Acting Chairman, that you had put the question to the House, had got agreement and declared the matter was in order.
Acting Chairman
I am only indicating what is in the Standing Order, so I could be——
You declared the matter was in order. However I will continue.
May I interrupt? Is there a problem with regard to the sharing of time?
Acting Chairman
I was going by the Standing Order in relation to the main spokesperson nominated as defined in Standing Order 89.
There is agreement between the Whips that time may be shared.
Acting Chairman
I accept that. Is that agreed? Agreed. I would like to make it known that the Chair was not aware of the agreement.
I wish to point out that four minutes have been lost. Organisations like the IFA are doing their members and the country in general no service by suggesting that the course on which the EC has now embarked could be altered. The priority for all those who have the interests of rural Ireland at heart must now be set about restructuring agriculture to ensure that it is developed in the national interest and that farm supports go to those who need them most. We should have a policy to subsidise the producer, not the product. If such a policy had been pursued by successive Governments we would certainly not find ourselves in this position. Unfortunately, successive Governments have used the Common Agricultural Policy as a substitute for an effective national farm strategy. A farm policy which produces goods for which there is no market and which, as pointed out previously adds up to £15 per week to the cost to the consumer and allows 80 per cent of all price supports to go to the 20 per cent income bracket and has done so little to tackle rural poverty, has no future. Rather than fighting an unwinable battle to preserve Common Agricultural policy spending at its current level, the Government and the farming organisations should be demanding that any reduction in EC farm supports be matched by a compensating increase in EC structural funding for Ireland. Such a development would be of far more benefit to all sectors in Ireland, including farmers, than the present wasteful spending under the Common Agricultural Policy.
The long term aim of national agricultural policy must be to enable the land to provide the maximum number of families with decent incomes and increase its overall contribution to the economy in terms of income generated and employment created. Agriculture is at a crossroads and crucial decisions will now have to be made to determine whether it will remain underdeveloped and dependent almost totally on what is left of the Common Agricultural Policy or whether it can make a real contribution to the development of our economy.
While there is no doubt some farmers are facing significant difficulties as a result of current conditions, there are also grounds for believing that the farmer lobby may be exaggerating the extent of the difficulties. Total agricultural income in Ireland is expected to drop by 10 per cent this year. However, in the previous three years farm incomes rose by 38 per cent in real terms after allowing for inflation. In fact they reached a record level in 1989. Returns from agriculture have always fluctuated from year to year depending on such factors as prices and the weather and it is necessary to look at the returns over a period of a few years to see the trend. Therefore, while 1984 was a good year for farmers, it was followed by two very poor years mainly due to very bad weather. There were major recoveries in 1987 and 1988 with a further slight improvement in 1989. It is in this context that the current slump must be viewed.
Farm incomes in 1990 are likely to be about equal to the average for the previous five years which mixes the good with the bad. However, there are 15,000 fewer working on the land now than there were in 1984 when total income was more or less the same as it is now. Thus the average income per person employed is still significantly better than it was in 1984 which was hailed at the time as a very good year.
While income is expected to drop further in 1991, the decline is expected to be much slighter than this year, at least 5 per cent. Therefore, it is probably a bit premature to talk about a major crisis in the immediate term. Of course while some farmers never had it so good in 1988 and 1989 the fact remains there is a substantial group of farmers who never had it good at all and who have been in crisis down through the years. Average income figures are meaningless as they conceal an elite group of farmers who are doing very well while the great majority are well below the average figure. However, it is the better off farmers who are complaining loudly now because the unusually high incomes they enjoyed over the past two years have not proved to be permanent.
I hope Deputy Connaughton has not written off the 30,000 farmers already but there are 190,000 farms in Ireland. Of these, 35,000 are worked on a part-time basis by people with additional farm incomes, about 45,000 are owned by people in receipt of social welfare payments and a further 45,000 had a net income in 1989 at or above the average industrial wage. The majority of these had incomes of about £15,000, leaving a very large number of farmers, about 65,000 or 35 per cent, who are totally dependent on agriculture and earning less than the average industrial wage. Approximately half of these had incomes of less than £5,000 last year. These are the true rural poor. Furthermore, even in the best of times most of these do not have enough land to aspire to a decent standard.
In this context I want to refer to the uncertainty facing farmers because of the failure of the Government to finalise proposals to extend the disadvantaged areas scheme. The problems facing farmers are worsening because of this uncertainty. Farmers cannot plan without first knowing if they will qualify for disadvantaged area status. In 1986, the Government got agreement from Brussels to extend the disadvantaged areas provided the areas met new criteria. The survey on which the extension was based was conducted in a most unsatisfactory manner and, as a result, well off farmers in rich farming areas were included, to their embarrassment. When one considers that the millionare, Mr. Mulcahy, in Hospital, County Limerick, is included in the disadvantaged areas scheme and that just over the border in County Cork farmers are excluded it is obvious that something is radically wrong.
The only information relating to the north Cork area given to farmers in my constituency was leaked to The Cork Examiner by a Deputy from the Minister's party. The Minister has an obligation and a duty to publish the list of successful applications so that those not included will have the right to appeal under the proposed appeals system which was promised in the Fianna Fáil/Progressive Democrats Programme for Government. The right to the grants available to farmers who are disadvantaged could mean the difference between survival or being driven off the land. If the Minister is serious about assisting farmers in difficulty — as stated in his address — he must act now in this urgent matter. I have listened in many areas, over the past few months at public meetings to the case being made by such people. I agree that the United Farmers' Association appear to be the body which now have a major role to play in defending the interests of the agricultural sector.
While the situation of poor farmers will undoubtedly have deteriorated further this year it is clear that their poverty is not being brought on by the current slump. They have simply been always poor and this is not being changed by the huge amounts pumped into Irish agriculture by the European Community. Since 1973 most of this money has gone, as pointed out earlier, to the bigger producers because it is paid on the basis of the amount of goods produced rather than on economic need. That is why emphasis will have to be placed in the future on the producer rather than on the product. In the long run the prospects for most Irish farmers, given the present structure of the industry, are not good. There are strong pressures to reduce EC supports which would keep prices for the consumer high, while at the same time producing chronic surpluses which are sold off outside the EC at subsidised prices, thereby depressing world markets including markets for many Third World producers. While subsidies to Irish farmers have contributed substantially to the Irish economy there are better ways in which the money could be used to promote economic development.
There are strong arguments in favour of promoting an efficient Irish agricultural industry but this will inevitably involve a reduction in the number of farm units. In order to allow those remaining to compete in EC markets lower prices will inevitably prevail. However, priority should be given to smaller farmers with potential for obtaining extra land rather than allowing bigger farmers to buy it up in the free market, as has been the case, without let or hindrance over a number of years. Because these big farmers had large amounts of income they were able to buy land and made it impossible for many small farmers to compete. It is in the national interest that Irish agriculture be as efficient as possible and permanent subsidisation is unlikely to achieve this. An efficient farming population, supplying good quality produce to an integrated processing and marketing sector, on the basis of long term contracts can substantially expand the level of secure off-farm employment available in Ireland. This should be the ultimate aim of our agricultural policy. It is a policy that can best be financed by transferring from Structural Funds the moneys currently being paid to bigger farmers in wasteful subsidies.
I should like to refer to the situation of one of Ireland's most important agribusiness concerns, one of our most successful semi-State companies which, according to the Minister's statement this morning, is about to be sold off to the highest bidder. I am talking of the Irish Sugar Company.
I did not say that.
I should like to call on the Minister for Agriculture and Food to disclose the Government's plans for the future of the company. I am aware that the Taoiseach met during the year with the company chairman, Mr. Cahill, at the Taoiseach's holiday home to advise that Dermot Desmond will handle the flotation of shares in the Irish Sugar Company while the workers in the Irish Sugar Company, who are now very concerned about the position, have not been so informed. As a former Sugar Company employee I want to inform the House that there is anger among the company's workforce at the manner in which they are being kept in the dark about the Government's plans. The workforce are concerned about a report in the Farmers' Journal to the effect that beet growers are to be given a share in the company. Neither the workforce nor their union have been given any information on this proposal. The failure to keep the workers informed——
I can tell the Deputy that I met the unions twice. The information in the Farmers' Journal is not the Government's position. I also met the unions yesterday.
It would appear that the information in the Farmers' Journal is accurate. Perhaps the Minister would tell the House where that information came from and who gave it to the Farmers' Journal. It now seems virtually certain that despite the progress made by the company in recent years, it has joined the long list of Fianna Fáil/Progressive Democrats targets for some sort of privatisation. There is concern among the employees that having made considerable sacrifices in recent years to get the company back into efficient and profitable order they are now about to be sold off to private interests without consultation or consideration for the needs of workers. In recent years the workers have agreed to a major redundancy programme including the closure of the Tuam and Thurles factories but it seems as if their reward for their co-operative approach is to be sold off to the highest bidder. Can the Minister tell the House what guarantee the Government can give that the sugar quota will be protected for this country? I am sorry the Minister has left because I wanted to remind him that on a previous debate on agriculture in this House he made a statement, in reply to my question, which was not accurate. I cannot continue to have confidence in any Minister who does not give an accurate statement to me in this House.
I referred earlier this year to the allocation of grants under the headage payments which, incidentally, cost this country £165.7 million. We were advised, as a result of the inspections, that total savings accruing to the State amount to about £24.4 million. I would ask the Minister what is going on in his Department and who is running the show in Agriculture House. It is stated that we can withdraw the inspectors now and let fraud creep into the system where headage payments are being paid; fraud will inevitably creep in, if it has not done so already. The Minister should give a commitment to restore the system and have the inspectors carry out the inspection. Reference was made earlier by Deputy Connaughton to the fact that people completing their application forms make mistakes. May I ask how much time is remaining to me?
Acting Chairman
The Deputy is due to conclude at 1.20 p.m.
Before Deputy Rabbitte comes in I want to say that the withdrawal of inspectors, is a matter of great concern to this State because we want to have an efficient system for the disbursement of such grants. That can only be done by having inspectors who have a responsibility to help farmers make their applications and to vet those applications. It is a source of sorrow and disappointment to me that the Irish Sugar Company, the very successful semi-State body, is to be privatised.
I hope the Minister will give an undertaking to publish the official list of applications accepted for inclusion in the disadvantaged areas scheme and honour the commitment given in the Government's programme to enable the tribunal to be set up so that those who have been excluded can appeal. Those people have that right and I am demanding it in their interests.
The dramatic change confronting Irish agriculture has been signalled for some time — despite the strong performance in 1987, 1988 and, to some extent, 1989. It is the beginning of the end for the CAP as we know it. The fall-out will be more traumatic for some farmers than others. To pretend that this process of change can be arrested is the equivalent of the small boy putting his finger in the dyke. The CAP was wasteful. It transferred resources to the top tier of Irish farmers. It encouraged the production of goods for which there was no market. It contributed to higher food prices in the supermarkets and it did little to tackle real rural poverty.
For The Workers' Party the real challenge facing the Minister for Agriculture and Food, and the Government, is not some futile campaign to maintain the existing CAP as it is but rather how any diminution of transfers under the CAP can be compensated for by commensurate increases in structural and regional funding.
Unfortunately successive Irish Governments have grown accustomed to sheltering behind CAP rather than developing a strategic plan for Irish agriculture. It is ironic that in the single sector where an Irish Government did attempt a major development plan, it should have unravelled so badly to coincide with a general cyclical downturn.
The cattle and beef sector accounts for 36 per cent of gross agricultural output and contributes almost 10 per cent to GDP. When export refunds are included, export earnings amount to 7 per cent of total exports. Some progress has been made towards increasing value-added exports in recent years in so much as the export of cattle on the hoof has been reduced from 46 per cent of the total destined for export in 1969 to just over 10 per cent in 1989. The scale of the beef industry is therefore very significant, sustaining almost 100,000 farmers in the production of cattle and employing an estimated 5,000 workers in meat processing.
Unfortunately the grandscale £260 million development plan for the industry promoted by the Government in 1987-88 has served only to undermine the confidence of companies outside of the Goodman Group and to facilitate the threatened demise of the Goodman Group itself. I explained to the Dáil on 28 August 1990, inter alia, how Mr. Goodman grossly abused the unprecedentedly generous package of section 84 loans to sow the seeds of his own disaster. I have often been misquoted since then on this point, but the record shows I made the following statement:
I am now stating in this House that I have information which suggests that Mr. Goodman proceeded to draw down much of the £170 million package of section 84 loans ... that those exceptional credit lines were manifestly not used for the purpose for which they were approved; rather that Mr. Goodman used these facilities to fund imprudent and speculative ventures outside the State that had nothing to do with the beef industry and that in that process the Exchequer was effectively defrauded of substantial revenue.
I have other questions for the Minister for Agriculture and Food and I am sorry he has left the House. I have received authoritative information that a major competitor of the Goodman Group, having secured substantial markets in Iraq in 1987, was extended the protection and benefit of the newly-restored export credit insurance scheme. That competitor I name as Hal-Al which has about 17 per cent of the beef kill as compared to Goodman's 35 per cent.
When Mr. Larry Goodman quickly learned of Hal-Al becoming a beneficiary under the ECIS he immediately intervened with the Taoiseach, who caused the then Minister for Industry and Commerce, Deputy Albert Reynolds, to cancel the protection for Hal-Al. Next day an official in Minister Reynolds' office — Mr. Michael Kelly — telephoned Hal-Al to convey the bad news. Unfortunately, he said, the earlier decision had been an error and the facility had been entirely used up.
Mr. Goodman has always ruthlessly dealt with competitors who stood in the way of his ambitions to get a stranglehold on the market. In this case he used his close political contacts with the Taoiseach, Charles Haughey, TD, and the then Minister for Industry and Commerce, Albert Reynolds, TD, to strike a telling blow against Hal-Al. The effect of the decision was that the future of the Hal-Al plants hung in the balance for some time as the main shareholder calculated whether he could, or should, continue to do business in a country where politics and business worked hand in glove to distort the market.
When I posed such a set of circumstances to the Taoiseach at Question Time yesterday, he seemed to deny any such intervention. In the public interest I should like him to clarify his role without delay. Is he saying that the Goodman intervention took place at the level of the Minister for Industry and Commerce or the then Minister for Finance, or did the Minister for Industry and Commerce take the decision to withdraw cover from Hal-Al on his own initiative? My authoritative information suggests that the intervention took place at the level of the Taoiseach.
I have received separate reliable information which directly implicates the Taoiseach in a separate matter involving Mr. Goodman exerting political muscle. In the preparation of the original 1988 Estimates it was decided, either in Cabinet or by a group of Ministers, to accede to a request from CBF — the Meat Marketing Board — to increase their financial assistance so that they could work at securing new markets for Irish meat products. That substantial increase sought by CBF was agreed. When the Goodman organisation heard of the decision, Mr. Goodman again intervened with the Taoiseach, Deputy Haughey, who instructed the Minister for Agriculture and Food, Deputy O'Kennedy, who I am sorry has left the House not only to reverse the decision but to reduce dramatically the CBF allocation. The record shows that CBF were allocated £965,000 in 1987 and only £515,000 in 1988, a dramatic reduction of 47 per cent. Once again Mr. Goodman's political connections had been used to shut out the prospects of expanding competitors and had ensured that he maintained his pre-eminent position in the industry.
We are not yet in a position to evaluate the damage done to agriculture, to our reputation as a trading nation, to our standing in the international financial community and to our economy. But it is clear that one man's greed and self-aggrandisement allied to the blinkered and, apparently, inexplicable blanket approval of the Government of the day has brought one of our major industries to the brink of destruction.
It is clear that powerful men who aspire to embodying the spirit of the nation have combined to use power as if the livelihood of others were mere playthings and with little regard to the damage likely to be inflicted on our international reputation. While this oligarchical structure was being put in place, those outside the Goodman Group had few friends.
When Hal-Al eventually persuaded the then officers of the IFA to bring the facts and figures to Minister Reynolds, they had scarcely time to get back to the Irish Farm Centre before Mr. Goodman paid them an unscheduled visit. I cannot say whether he parked his helicopter nearby in Baldonnel on that particular day, but I do know that Mr. Tom Clinton, then IFA President, and his colleagues, quickly withdrew their espousal of the Hal-Al cause when Mr. Goodman threatened to refuse to collect the IFA levy for the farm bosses.
It is all too reminiscent of a similar visitation by Mr. Goodman to Liberty Hall when Mr. Goodman was on the acquisition trail and cutting a swathe through traditional union conditions. As he sacked workers right, left and centre and rehired some of them as subcontractors, some trade union bosses felt similarly constrained in their response by financial considerations, since the cost of the superstructure at Liberty Hall makes costs at Bluebell look like a local regional office.
The other source of protest, the largest opposition party, was also uncommonly acquiescent. Not all of this was due to the Tallaght Strategy. Although Goodman was the dominant beneficiary of ECIS, Hibernian Meats also benefited — quite properly, as far as I know — and blood being thicker than water, Fine Gael did not complain too loudly. Another consideration in the minds of party managers in Fine Gael was that they had also become entangled in the Goodman financial web. Mr. Goodman had an ecumenical approach to the purchase of influence and, after Fine Gael used the structure of the IFA President, Tom Clinton, as a go-between to mend bridges between Goodman and Fine Gael, party coffers received an immediate injection of £60,000 in 1988.
All of this confirms me in my view that it is imperative that there be a public inquiry held into the entire ramifications of the Goodman organisation so that our international reputation and Irish agriculture in general can recover from the damage suffered.
Who withdrew the cover? A Fine Gael Minister — the Deputy might have added that.
With the agreement of the House I should like to share my time with Deputy Aylward.
Acting Chairman
Is that agreed? Agreed.
The Progressive Democrats accept fully that Irish farmers are in the throes of one of their worst income crises for years. Many are finding it difficult to provide for their families or retain their land. Many are surviving only by selling off stock and living on the capital derived therefrom.
There is no need to go down the list of statistics on farm incomes to be aware of the crisis. Every farmer selling a bullock or heifer, a gallon of milk, a ewe or lamb, or a tonne of grain knows only too well how prices have fallen since the beginning of the year. They are confronted by a serious problem. Even people outside the farm community are aware that farming is suffering drastically. Teagasc have forecast that farm incomes for 1990 will decline by more than 20 per cent. That is a frightening prediction for people engaged in small category farming. The question is not whether there is an income crisis but rather what can be done about it, especially in the short term. Action is needed on the part of our Government and the EC in Brussels.
Measures to tackle the problem obtaining can be effective only if taken against a background of good overall economic management. Since the foundation of our party the Progressive Democrats economic and taxation policies have wrought large improvements nationally. Had we not managed to bring our inflation rate down to being one of the lowest in Europe the effects of the fall in agricultural prices would be even worse. We need only remember what happened when inflation was well into double figures.
According to the OECD 40 pence only in every pound expended by the EC reaches farmers' pockets. Therefore, more of this money must go where it is needed, to the farmers themselves. Too much is being lost to middlemen who have grown wealthy at the expense of farmers. That is why also headage payments should be increased in line with the overall increases in the Structural Funds and the relevant payments brought forward. In addition, those with low incomes in the most disadvantaged regions should obtain most assistance. The extension of disadvantaged areas has taken too long to be resolved. On the basis of information leaked by some Deputies in a totally unsatisfactory manner, farmers are very angry at the manner in which the proposed new boundaries have been drawn up. Of course mistakes can be made but the Minister must establish a properly constituted appeals system enabling farmers who feel they have been unfairly excluded to represent their cases. Farmers on bad land with low incomes have been excluded from the newly drawn up disadvantaged areas and cannot understand why this should be so.
The agreed Programme for Government negotiated between the Progressive Democrats and Fianna Fáil in July 1989 states specifically — on the insistence of the Progressive Democrats — that an appeals system be introduced in borderline areas so that the justification of decisions in given areas can be understood and be subjected to scrutiny. That appeals system must be implemented. The Council of Ministers at EC level need to have the new reclassification sorted out as quickly as possible. EC direct income aids have been promised. In respect of cereals they were agreed by the EC Heads of Government in 1988. However, some farmers have no chance of providing for their families, not to mention merely surviving in farming, without direct assistance. I contend that, where necessary, social welfare officers must adopt a liberal approach to their problems.
The Government can act independently of the EC in helping such farmers for whom debt repayment has become a significant burden. The availability of Euro currency loans, with the exchange risk being underwritten by the State, would help enormously in such cases. Also within the ERM mechanism the State's exposure should be minimal.
In addition, farmers whose herds have been affected by TB are also in need of help. The overall advisory and research service operated by Teagasc has never been more important. Intensive advice, based on good research back-up, can ameliorate many of the farmers' difficulties. Teagasc and its predecessor, ACOT, have been affected by severe cutbacks. They must be allowed provide a cost-effective service.
In the longer term we shall have to pay much greater attention to the marketing of our food, exploiting the excellent quality of the basic raw materials from our farms. Selling into intervention will no longer give farmers an adequate return. The whole of the industry will have to turn its attention to adding value, exploiting our clean environment, penetrating the sophisticated high-value markets worldwide. Such will be our best long term guarantee of prosperity.
To prevent the present crisis from worsening the Government must continue to defend the Common Agricultural Policy from US attempts to dismantle it within the GATT negotiations.
Finally I must request the Minister to publish the list of disadvantaged areas and introduce an appeals system, thereby enabling poorer farmers with bad quality land to avail of this facility.
I thank Deputy Clohessy for having shared his time with me and allowing me add my voice to this debate.
At the outset I must congratulate the Minister for Agriculture and Food who has been the subject of much criticism in recent months during what has been a very difficult period in agriculture generally. Nobody has worked harder, and he deserves the support of Members of this House.
There is no doubt but that a very serious crisis obtains in Irish agriculture at present with no sector that has not been affected. If I might recapitulate, in the cattle industry incomes have dropped severely in recent months and are set to decline further. In the dairy sector there has been a decline of some 30 per cent this year. When that decline is added to the reduction in the price of calves — in the region of £100 each or 40 per cent of their previous value — it serves to emphasise the difficulties obtaining in that sector.
In the sheep meat trade prices are down also some 25 per cent and the future looks rather bleak there. The way in which the country was inundated with sheep over the past 12 months was unfortunate. There are many people who had made a living from sheep farming over many years and who, because of the liberal attitude adopted and the numbers of sheep bought by people who had never been involved in the sheep trade, find now their income has been reduced to a mere pittance. I know that the 60 per cent advance of the 1990 ewe premium — worth approximately £13.75 per ewe — will cushion the decline in income somewhat. Nonetheless we must acknowledge that the trade is going through a very difficult period at present.
Bearing in mind all of these problems there is need for specific national measures to combat the serious position obtaining in agriculture generally. Full use should be made of the headage payments system in disadvantaged areas by increasing those rates of payment. In this case those headage payments are financed by the EC to the extent of 65 per cent. Our Government should seek also the immediate introduction of the EC direct income scheme when there will be a 70 per cent recoupment from the Community.
Other speakers have mentioned the need for essential working capital to be advanced at low interest rates, something I too would advocate the Government should consider, taking into account in particular current lending rates here.
In relation to extra premiums for beef farmers, it is essential that the proposed premiums for all cattle slaughtered and exported live between 1 January 1991 and 31 March 1991 be put in place and passed on in full to producers. This would help to underpin prices for store cattle this autumn so badly needed. In regard to premiums for beef farmers I must agree with Deputy Connaughton in his reference earlier to the present method of inspection. In my county 35 per cent of inspections have been carried out but, because of technicalities and red tape, some 40 per cent of those farmers have been rendered ineligible through no fault of theirs. The Minister might seriously re-examine the criteria of such inspections because they will mean severe hardship for the farmers concerned.
There are many low income farmers experiencing real poverty at present. These are the farmers who should receive our attention today. An adequate income supplement should be implemented for them, something along the lines of the family income supplement already operative. We know we are entitled to unemployment assistance subject to assessment and means test, but that is a very slow process. With a little imagination some other system might be put in place where something similar to the FIS could be available to farmers. I ask that this be investigated. The Minister has been in touch with certain lending institutions to impress on them the need for a sympathetic approach to farmers' difficulties at present, and I support that.
In the area of agri-tourism there is great scope for additional jobs and income. I hope the pilot scheme which is in place will be introduced nationally as quickly as possible. We are at present entering into negotiations for another national understanding and it is an appropriate time for this Government, the farming organisations and the trade union movement to come together. Let us be honest about it: the trade union movement has as big an interest in the agricultural industry as farmers have because of the numbers of people employed in that industry. It is time for a long term policy for Irish agriculture and I recommend strongly that this be taken on board. We have to look at new marketplaces in Europe and to satisfy those markets, and only by putting our heads together can that be done.
Incomes might have been good in 1988 and 1989 but over the last number of years there has been general mobility from the land. In 1965 there were only six countries in the EC with 25 million farmers. Today there are 12 countries — East Germany has been included recently — and only 10.9 million people are involved in agriculture. Those figures speak for themselves and we should be all seriously concerned about this. It was the policy of consecutive Governments here and EC policy that where possible we would maintain private family farms, but that is not happening. Today so many people are leaving the land that I think we are at crisis stage.
Like the rest of the speakers, I would like to refer to the disadvantaged areas scheme and the reclassification of extensions which have become common knowledge of late. I apportion no blame to the Minister or the Government. They gave clear directives and criteria as to how the survey was to be carried out. Unfortunately, that survey has been carried out and I am disappointed at the result. It makes me wonder about the validity of the disadvantaged areas scheme. Maybe at a later date we should have a debate on disadvantaged farmers rather than disadvantaged areas. That is the approach we should be making. Many anomalies were uncovered as a result of the survey and I hope the Minister will introduce an appeals system as quickly as possible. I suggest that there be a 5 per cent allocation. Mention has been made of 3 per cent, but because of the difficulties the survey has thrown up, I believe there should be a 5 per cent allocation, and this should be done as a matter of urgency.
There has been a drop in incomes since the survey was carried out but if that survey was carried out today the result would be very different and many more areas would be included. There is no doubt that pockets and townlands have been omitted from the extensions and there seems to be no justification for this. There are areas where farmers were told by the people carrying out the survey that they satisfied the criteria, yet they have been excluded. Every system should be seen to be fair. The unfortunate thing about this extension and reclassification is that it is not seen in that light. I think everybody in this House would agree that something needs to be done about this urgently. I advocate strongly that the Minister immediately set up some form of tribunal representative of his Department, the farming organisations and other interested groups, where each farmer can make his case and if he is not included, he can be given the tribunal's reasons for his exclusion. That is important for the system and for the operation of the disadvantaged areas scheme.
Because of the serious situation that exists in Irish and European agriculture at present this is not a time for political sniping or one-upmanship. We all see what is happening in the GATT negotiations. We have our own Commissioner actively involved there. It is time for all of us to come together — I am talking about political organisations and farming — to support our Minister and our Commissioner in the difficult task that lies ahead. For far too long our actions have been divisive and we got nowhere. I hope we will all row in not alone in our own interests but in the interest of every farmer.
I propose to share my time with Deputy Creed and Deputy Sheehan on the basis of seven, seven and six minutes.
Acting Chairman
Is that agreed by the House?
Deputies
Yes.
The debate we are having today is totally inadequate to deal with the situation. As my colleague Deputy Connaughton mentioned, we on this side of the House have made numerous attempts for the last 12 months to have a full scale debate on the GATT and its implications for Irish agriculture and Irish industry in general, and we failed. That has seriously damaged our case in the GATT negotiations. How can observers in Europe, the European Commission, the US and elsewhere among the CAIRNS group, see our reaction to the GATT proposals other than that we accept them simply because we have failed miserably to have a worthwhile debate in this House, a long standing, full scale debate in Government time that would accord the negotiations the importance they deserve? Unfortunately, I have to lay full blame for this failure on the Government.
The Minister's speech was not very reassuring in the sense that it trotted out the old banalities, the old pious platitudes we have heard so often in the past. He did not take into account the ingredients now being put on the table in the Commission which are ultimately going to be discussed with the other partners in the GATT. Only a couple of years ago the Irish people gave the Government and the European Commission a mandate to look after our interests. The Single European Act was endorsed by popular vote, by popular referendum, and by that endorsement the Irish people mandated first the Government, then the European Parliament and particularly the European Commission to look after their interests. The gyrations in those areas over the past six months have led to both the farming community and the industrial community to believe the Irish Government do not know what they are at and the Commission does not care.
As far as I can see the Government seem to have either misread or are unaware of the real situation in Europe. We are all aware of what has happened in Eastern Europe recently, but the Government have missed out in that there has been a shift in the balance of power worldwide and unless this Government and the European Commission assert themselves, they will find they are no longer relevant, that the Europe envisaged under the Single European Act and the Internal Market with the free movement of people, goods and services we were all taking about, will never come to pass. Simply because of the proposals set out in the GATT, it will be irrelevant.
If one looks at the blustering propaganda and diplomacy of the US over the past 12 months in preparation for the GATT discussions which are now taking place, one can read quite clearly what is happening. It appears to me and to many observers that countries like Ireland, whether within or outside the EC, no longer have the pivotal role we had a few years ago. Could anybody in this House today envisage the present GATT proposals taking place five years ago? No, because the world balance of power was different then, and there is no reason to believe that, unless challenged, the GATT proposals will not go ahead. If they do, many of the towns and villages in this country will resemble the towns and villages left behind after the Klondyke goldrush. This Government have done nothing to impress upon their colleagues in Europe the severity and seriousness of the situation. Unless they do so as a matter of urgency within the next few days, unless they accord importance to the role played by agriculture, the only conclusion their European counterparts can come to is that we do not care. Without exception, the response of business people in the small provincial towns and members of the farming community to the prospects for agriculture here is one of dismay at the failure of the people involved to get a clear message across to their counterparts of the seriousness of our situation.
I do not wish to be critical but I have to say it is rather peculiar that at the Houston talks which took place towards the end of June, at a time when we held the Presidency of the EC, the British Prime Minister, Mrs. Margaret Thatcher, not exactly renowned for her support of the European concept in the first instance, announced European policy to accord with the requirements of President Bush. Furthermore, in Dromoland Castle a short time later, our Commissioner for Agriculture conceded before he ever went to the conference table the main proportion of the contentious issues, thereby creating a stick with which he himself would be beaten.
I agree there must be rationalisation in relation to agriculture and so on. The Commissioner said that there will have to be greater emphasis on sales and marketing and less on storage and intervention. I agree with that. Contrast that, however, with what he is reported as saying just after the emergence of the Gulf crisis, that we must now rely once again on intervention. If that is the case we are seriously in disarray when we hear that coming from a Commissioner who, in better times, called for this country's withdrawal from the European Community.
The Deputy's seven minutes are up.
In conclusion, I implore the Government, the Commission and the Minister who should be sitting opposite — perhaps his colleague will convey the message to him — to realise the urgency of the situation and do something about it before it is too late.
The crisis in the agricultural industry today is as bad as it was in the economic war of the thirties. Never since then has the morale of Irish Farmers been so low as it is today. The anger and frustration of our farming community is great. Agriculture, which was always our major industry, is on a downward trail. The numbers of farmers are constantly declining. It is now estimated that over 10 farmers per day are leaving the land.
Farmers who borrowed heavily now find themselves in a no-win situation. Collapse of prices in the cattle and sheep sector, huge reduction in milk prices, threats of further cuts in milk quotas, huge reduction in export refunds, all combine to wipe out a huge section of Irish farmers. What has our EC Commissioner Mr. Ray MacSharry done about this annihilation? His contribution is to throw in the towel before the first round of GATT talks have even commenced by offering a 30 per cent reduction in our export refunds, while he played "yankee doodle dandy" to his guests from across the ocean in Dromoland Castle recently.
What has our Agriculture and Food Minister, Deputy Micheal O'Kennedy, done to restore any degree of confidence to our beleagued farmers? He should know only too well the advantage of export refunds to our Irish farmers.
In 1989, Ireland's beef industry received £450 million from the CAP support system. This sum represents the equivalent of £250 per head on all cattle slaughtered and exported live from Ireland that year. Of this figure of £450 million only a total of £55 million was paid to Irish farmers in the form of suckler beef cow and calf premiums schemes. The remaining £395 million went direct to the factories and cattle exporters. Why does the Minister not take immediate steps to rectify that serious anomaly and pay the £200 per animal directly to our farming community?
This procedure could and would be acceptable to the US in the present GATT talks. Everybody knows the US farmers are getting far higher subsidies paid directly to them than Irish farmers are getting. Furthermore our Minister must take immediate steps to ensure that whatever future cuts come about in milk quotas that farmers with quotas of under 50,000 gallon are exempt from same or that Ireland be exempt from further milk quota reduction if possible.
Coming from a constituency that has fared very badly in this country's proposed extension of the disadvantaged areas, I know only too well the frustration of farmers in County Cork and other counties who lived in hope of being recognised as disadvantaged areas in that recent review. Alas, their hopes were dashed by the inept action of a non-caring Minister for Agriculture and Food who did not do his homework properly and finally consigned our application to dismal failure as far as Irish farmers are concerned. In my capacity as a Deputy for south-west Cork and latterly as Fine Gael spokesperson for disadvantaged areas I have consistently argued over many years that the whole of Ireland could legally be classified as a disadvantaged area and I have very good reasons for holding that view.
As an island off the coast of Europe — and the only country in the EC that can be classified as same when the Channel Tunnel is completed — we are the farthest removed from the lucrative EC markets and have higher transport costs than any other nation. In fact, we have to cross two stretches of water before we become established in that market. Eighty per cent of our agricultural produce is exported and because of this we deserve special treatment. No other country experiences such a disadvantage and this imposes a huge burden on our farmers. The costs of input into the farming and food industry are colossal. We pay far too much for our energy, particularly petrol and diesel compared to our nearest neighbour, Great Britain. When one considers that County Cork is one-eighth the size of this country and only 49 per cent of that county is declared disadvantaged, this 49 per cent being made up of 34 per cent severely disadvantaged and 15 per cent less severely disadvantaged, it is very difficult to reconcile that with the fact that areas of very good land in Galway, Mayo and other counties are classified as severely disadvantaged while much poorer land in Cork and other counties is completely ignored.
Is the Minister for Agriculture and Food serious about the survival of Irish farmers? Does he realise how serious the situation is? Is the Minister aware that there is not one penny available in his Department today to pay Irish farmers for farm improvement grants which are now long overdue? When is the Minister going to move a supplementary Estimate in this House to cater for such a situation? Will the Minister ensure that the entire cattle headage, beef and suckler cow and sheep and ewe premium grants will all be paid to our beleagured farmers before the Christmas season? I call on the Minister to do so immediately.
I would like to concur with Deputy Durkan that this debate is long overdue despite many calls from these benches during the previous Dáil session to have such a debate. It is impossible to have unanimity or accord today, particularly on the way negotiations at EC and GATT level have been conducted. Prior to the recent round of negotiations we had no opportunity to register a strong protest voice from this assembly in relation to those negotiations.
The summer of 1990 will be remembered by the agricultural community for many years to come. During the past six months the incomes of all those involved in the principal earners in Irish agriculture, namely, beef, sheep, cereals and the dairy sector, have tumbled alarmingly. The only hope many farmers had of cushioning the effects of these reductions in incomes was in the proposed extension and reclassification of the disadvantaged areas. However, it was and continues to be handled in such a cavalier fashion that many farmers are now in desperation. It was patently obvious as far back as 1985 that the EC was moving away from price supports towards income supports, and the failure of our Minister to properly process and subsequently secure the approval of the Commission for our submission to Brussels is to his eternal shame.
I appeal to the Minister for Agriculture and Food to publish the results of the recent survey on the proposed extension. It is patently obvious to all observing that all is not well in Agriculture House in Kildare Street. The constant stream of Deputies from the Government benches in and out of Agriculture House during that period proves that there was gross political interference in that survey and the proposed extension. Many areas which met all the criteria laid down in the preamble to that survey have been excluded to the benefit of areas which were pulled in for political benefit. If any citizen applies for a higher education grant, a farm grant or a medical card they get a detailed response from the relevant authorities telling them why they do or do not qualify. It beats me why, when we are talking about taxpayers' money, the same treatment cannot be expected vis-á-vis the disadvantaged areas.
On the question of disadvantaged areas, I would like to ask the Minister about the appeals system. If the system is beyond reproach, why the delay? An appeals system needs to be established before the Commission makes a decision on our submission. The grievance of thousands of farmers is not with the Commission but with the submission which the Government have made to the Commission.
The other big cloud on the horizon of Irish agriculture at present is the GATT negotiations. It is in the interests of everybody that these negotiations are concluded successfully, while at the same time protecting the interests of Irish agriculture. Any return to a trade war between the trading blocks will have disastrous consequences for the Irish economy and Irish agriculture. However, it must be said that the interests of European agriculture, as represented by our own Agricultural Commissioner, Ray MacSharry, and the specific interests of Irish agriculture as vested in the Minister have been poorly served to date. The gaffe by Mr. MacSharry at Dromoland and the consequent posturing by the Minister for Agriculture and Food on the proposed 30 per cent reduction would be almost comical to observe were it not so serious. Initially, the Minister opposed, and rightly so, the 30 per cent reduction but now he appears to accept it as the bottom line. These proposals cannot be accepted because of the very serious implications for thousands of Irish farming families and rural communities.
What we need is a special diplomatic mission spearheaded by the Taoiseach in order to secure within the EC a recognition of the importance of agriculture to the Irish economy. A successful conclusion in this regard would cushion the impact of the concluded GATT negotiations on our economy.
In the early eighties a similar crisis threatened to swamp Irish agriculture. At that time the then Taoiseach, Deputy FitzGerald, embarked on a tour of EC capitals and secured a recognition of the importance of Irish agriculture to our economy. Consequently, our then Minister for Agriculture, Deputy Deasy, succeeded in securing a 4.6 per cent quota increase in the face of quota restrictions of 6 per cent across the board for other members of the EC. I mention this significant period as I believe there are many similarities with the crisis which confronts us today. This is the obvious course to take and any delay in embarking on this initiative will reduce the likelihood of its success. Indeed, the signals of weakness and indecision already displayed by the Minister may have seriously undermined the possibility of success, even here. Irish agriculture, hundreds of thousands of farming families, a whole way of life in rural Ireland, and thousands of agri-jobs are at stake. The stakes are high and we wish the Minister well, but his performance to date, and that of Mr. MacSharry, does not inspire confidence.
It is only by visiting the coalface in Irish agriculture, the farmyards and marts throughout the country, that one can see at first hand the effects of the current crisis. Between now and 7 November the Minister, and his colleagues, will have ample opportunity to experience this at first hand. He will witness far less parliamentary language than he has witnessed today, and Euro-speak and GATT jargon will cut no ice.
Tá an t-am istigh.
In conclusion, I appeal to the Minister to ensure that the crisis is recognised at home and that he intervene with the Department of Social Welfare — this is of particular importance because the crisis manifests itself most strongly in a shortage of cash — in order to secure a recognition of the immediate crisis and a financial and humane response from them to it.
The Chair appreciates the co-operation of the Deputies in the matter of self-discipline regarding time.
(Wexford): I would like to share my time with Deputy Michael Ahern and Deputy Danny Wallace, two colleagues from Cork. First, I congratulate the Minister on the tremendous work he is doing in the face of a very difficult and trying time in agriculture. We all accept that at present there are major difficulties in the agricultural sector. The Minister, by some of his interventions and the concessions he has secured in recent months, has helped to alleviate the major problem that exists in agriculture. He has a difficult role to play in the GATT negotiations and all sides of the House should give him the support he needs to ensure that farmers are protected. The Commissioner, Ray MacSharry, is fighting a tremendous rearguard action at present to try to protect the livelihood of Irish farmers.
The Deputy could have fooled me.
(Wexford): Coming from rural Ireland, he is well aware of the importance of agriculture to this country. I am glad Mr. MacSharry is Commissioner at present because from reading some of the comments of the former Commissioner, Peter Sutherland, I do not think we would be getting too much help from him if he was in that position now.
He did not concede his case before he started negotiating.
(Wexford): He conceded it regularly ever since in the papers when he said there is no other alternative.
The Deputy is in the bunker and he knows it.
(Wexford): There are a number of problems in relation to farming that I ask the Minister to take a direct interest in, particularly in relation to the small family farmers, many of whom are on very low incomes. I support my colleague, Deputy Liam Aylward, who asked for a particular type of social welfare supplement, whether one calls it a farm income supplement or family income supplement does not really matter. At present there is a difficulty in that many of our small family farmers are experiencing severe financial difficulties. In my own county in the early eighties there were something like 5,500 farmers but that number has been reduced to 5,000 in a few short years. If they do not get the help we are looking for farmers will have no alternative but to leave the land with the result that they will be competing in an already overloaded job market. Will the Minister take a particular interest in this area to ensure that some kind of payments are made quickly to those farmers?
Disadvantaged lands were mentioned and in my county there was a substantial increase in this land from 5 per cent to 31 per cent, which is welcome. However, the IFA have said that some areas have not yet been announced, and, therefore, the Minister should make the full list available nationwide as soon as possible to end the criticism and disruption among farmers in different counties. It seems that a number of farmers on low incomes and on poor quality land have been left out and I ask the Minister, through his Minister of State, Deputy Kirk, who has a direct interest in disadvantaged areas, to get the appeals system in order. Indeed 1½ per cent may not be enough; we should be looking for something between 3 per cent and 5 per cent to ensure that many farmers who genuinely meet the criteria and are now left out would be included. It is vital to get permission from Europe to implement the appeals system so that it is put in place as quickly as possible. I understand that a number of areas which have been omitted are at present preparing new submissions to the Department and there is no doubt that the Department will be flooded over the next week or two in this regard. It is important to explain to areas why they have been left out and to tell them that there is an appeals system which will give them an opportunity to make a case for inclusion later on.
That is a face-saving exercise.
(Wexford): All I will say to Deputy Durkan is that 1.9 million acres have been submitted to Brussels for classification. During the term of the last Government no new lands were included, so at least this Government have made an effort in this regard.
Did you ever hear the like?
(Wexford): The Deputy's Government ran away from the problem.
I ask Deputy Browne to maintain his courtesy and not to acknowledge interruptions as I will deal with them. Deputy Browne has two minutes left.
(Wexford): It is important that there are no further cuts in the milk quotas. I ask the Minister for Agriculture and Food to ensure that in 1991 he secures a further 11 million gallons to be distributed to farmers on small quotas, to those suffering hardship and to new and young farmers. This was done last year and it certainly helped to alleviate some of the problems of small quota farmers. It is important that this area is again secure this year and that a further 11 million gallons — or even more — would be got for this section of farming.
The Minister for Finance should take a close look at the policies of the lending institutions. At present they are ripping off the farmers by the high interest rates which they currently charge, which are 2 per cent or 3 per cent above what they should be. I always heard that if inflation was low interest rates should be low, and I cannot understand why interest rates are so high when inflation is low. The Minister for Agriculture and Food and the Minister for Finance should try to ensure that lending institutions give loans to farmers at a reasonable rate of interest, because they are treated unfairly compared to other sections of industry. I should now like to share my time with the other speakers.
I thank Deputy Browne for honouring the time agreement.
I am glad to have an opportunity to say a few words in this debate. I join Deputy Browne and other speakers in congratulating the Minister for Agriculture and Food for the excellent work he has done in the past number of years on behalf of our farmers. His job is not easy and we are all aware of the difficulties facing the farmers. There has been a reduction to the farmer in the price of milk, beef, sheep and pigs over the last year especially, which is causing grave difficulties to many farmers. Without the efforts of the Minister things would have been much worse. The beef industry suffered as a result of the Iran-Iraq problems and prices were depressed. However, the Minister, Deputy O'Kennedy, went to Iran and concluded a deal there. People condemned him for not going but when he went and got a deal he was again condemned. Of course, he had organised intervention in the meantime and people were getting higher prices as a result of exporting to the Middle East. People should have taken into account the extreme difficulty the Minister had in opening up the markets in the Middle East and Libya for cattle on the hoof which will come on stream in the very near future.
The payment of beef subsidies should be allowed for cattle which are kept in over the winter time in April or May instead of in November. We have a glut of animals on the market in the late autumn and winter and the supply of beef in the early part of the year is short. We do not have an even flow of cattle and my suggestion would also help the factories. The subsidies should be paid to those with beef cattle and people in the milking area should only get it for 30 heads.
The change in the taxation system has also been beneficial for farmers. We are all aware that 1988-89 was a very good year for farming and, on the old basis of taxation, farmers would have been taxed on the previous year. The tax bills would have been extremely high for the tax year 1990-91. However, there has been a change to self-assessment and the tax will now be based on the current year which, for most people, will mean the year ending 31 December 1990 or 31 March 1991. The incomes are down this year, so the tax bills are likely to be much lower than if they were based on the 1989-90 year. It will also help cash flow this year.
The Minister ensured that there would be early payment of the ewe premium and he also got an increase of 20 per cent in the level of case in aid, something which had not been thought possible earlier in the year. He also got an increase in the level of aid to make skim milk powder into calf feed.
We have been listening to condemnation of the Minister and the Commissioner by the party which has 19 per cent of the vote at the moment but, when they were in office, they were not very successful. In 1987 there was an announcement by the then Minister for Agriculture that he had submitted an application to Brussels during the election campaign for more aid but it did not yield any results. The work done by the Department is excellent although there are difficulties which must be addressed.
On the surface many areas that have not been included in the disadvantaged areas scheme should have been included. However, we do not have all the details as to why areas were not included. That information should be made generally available to people who have made submissions so that they can make a proper judgment on their entitlement to be included in the disadvantaged areas. There should be a move away from including areas rather than individuals in the scheme. The emphasis should be on keeping on the land people who, because of the size of their holdings, their milk quota or whatever, cannot make a viable living on the land. The country must be populated. If we allow a movement away from keeping people on the land we will turn out like other countries where there are large ranches——
I should advise the Deputy that he is now grazing in his colleague's pasture.
With those few words I will conclude and I hope we will have another opportunity to expand on this at another time.
There is no grazing left.
Deputy Wallace — and the Deputy must confine himself to five minutes.
There has been a serious drop in farm incomes arising mainly from the fall in the price of our livestock products and the uncertainty surrounding the GATT negotiations plus the continuing worry about the crisis in the Gulf. Everybody accepts that the uncertainties in the farming industry are worrying and even frightening. The Government can only do a certain amount to alleviate problems and help the agriculture and food industry to realise their full potential. We have only to look at this Government's financial policy and the various schemes to see the significant contribution they have made to promoting growth and development.
Critical to the future of Irish agriculture are decisions made in EC and international negotiations. We cannot disagree with the general purposes of GATT which is to enable world trade to be carried out in a free and fair way. However, agriculture is very important to Ireland and the Minister, Deputy O'Kennedy, has made our position clear at the Council of Ministers in Europe. We are fortunate that Mr. Ray MacSharry is the EC Commissioner for Agriculture and Rural Development having regard to his knowledge and understanding of the industry here and his long experience of negotiations at international level. Mr. MacSharry fully realises the importance of agriculture to us and other parts of the Community similar to ours. I have every confidence that under Ray MacSharry and the Minister, Deputy O'Kennedy, the CAP will not be changed so as to damage European agriculture. The Commissioner knows that such a policy change would be totally unacceptable to Ireland which depends on agriculture for our national economic and social wellbeing.
Agriculture is the life-blood of this nation. We want to see our farmers survive at more than subsistence level as many farmers are surviving today. I have met deputations from the ICMSA, the IFA and other bodies expressing serious concern. I want to be able to assure these people that there is a future in farming for their families. There is a serious problem in the number of farmers living below subsistence level. There must be some form of social welfare to assist those families.
No other issue has incurred such anger among farmers in my constituency than the extension of the disadvantaged areas scheme. Protests in Munster have been just short of militant. People have been very surprised and annoyed that they have not been included in the scheme. Pathways have been worn to the homes and clinics of Deputies and Senators to make a case. I have no doubt the decisions will be challenged. We must remember that the purpose of the scheme is to assist farmers on low incomes. The scheme is not being implemented satisfactorily. An appeals system will not be satisfactory either if the same criteria is used. I appeal to the Minister to ensure that when reconsidering decisions his officials will take a differnet approach. Using the present criteria, the problem will not be solved and the people most in need will be left out while very many large farmers are included. We are not dividing the resources of the State equally at the moment.
I would like to share my time with Deputies Cotter and Hogan.
Agreed.
From listening to the comments that have been made it is evident that the severe problems facing agriculture under the CAP have not been understood. We should have been granted a week in this House to have a full debate on the proposed GATT negotiations. Europe is watching us to see how we are fighting the proposals on the table. This problem is bigger than Ireland. We are talking about two million farmers in America against the survival of ten million farmers in Europe. Our farmers cannot compete on a one-to-one basis with the American farmers. The Government should give the House a week to debate the problems we will face in the future.
During our Presidency of the EC the Taoiseach failed, despite his tour of the capitals of Europe and his negotiations, to communicate the severe problems Ireland will face if even Mr. MacSharry's proposals are accepted in the GATT negotiations. The Taoiseach missed an opportunity. The Dáil was recalled two months ago to pass a Bill which would alleviate the problems in one particular company. It is not good enough to say that that can be done to help any company which gets into difficulties. Time should be given between now and the GATT negotiations for a full week's debate on the serious problems in agriculture.
Reference has been made already to the disadvantaged areas. It seems very odd that a proposal for an appeals mechanism was submitted with the proposal that was sent to Brussels. Why had that to be done? I accept that it can be good to have an appeals mechanism but we do not know whether many areas will be included or excluded in the disadvantaged areas scheme. Government Deputies have this information but we do not and this is causing widespread concern among the people who do not know whether their areas are included. The Minister gave this information to the members of a farming organisation when they visited him in his office, seemingly to humour them, and pretend things were not all that bad. If the information was given to that farming organisation then it should have been made public. I call on the Minister to make this information public immediately and to stop pussyfooting around.
I want to refer to the beef industry and the problems facing it. It is evident that the Minister has no say with the people in the beef industry in this country. A meeting was held last week and the price of beef was increased by 1p per pound or so. Does the Minister know that the people who are buying beef came together and decided that certain factories should not open up in opposition to others? I doubt if he does. Farmers should be getting at least 3p-4p a pound more for the beef which is going into intervention because the intervention price is far more than the farmers get. The Minister has no say with these people and their meetings are only a camouflage.
I want to refer to the proposed milk cuts of 6 per cent. Farmers in Europe are being asked to reduce their quotas when there is an oversupply of milk but if and when the GATT negotiations are finalised there is a slack in the market, farmers will not, under our present system, be allowed to increase their quotas. That is a very unfair system. Negotiations will have to be held on the serious problems in that area. This is why it is not good enough for the Members of this House to be given only a one-day debate on the problems in agriculture. It is not good enough that those Deputies who represent rural areas should support the efforts of the Minister when there are such serious problems in agriculture.
Debate adjourned.