Deputy Philip Hogan gave notice of his intention to raise the need for the Minister for Agriculture and Food to publish a plan to protect the rural economy from the attack on living standards from the EC and GATT.
Adjournment Debate. - Protection of Rural Living Standards.
I wish to allocate one minute of my time to Deputy Cotter.
That is satisfactory.
Thank you for allowing me to raise this urgent matter. It should be emphasised that agriculture as a percentage of our GNP is substantial — 10 per cent of our GNP compared with an average of 3.5 per cent in the EC as a whole. Hence any reduction in price support or any agricultural trade liberalisation will have the greatest impact on countries like ours which are dependent on agriculture. It has become a cliché but remains a fact that agriculture is still by far our single most important industry in terms of share of national income, exports and employment generated. It should be the objective of Government policy that agriculture make its maximum contribution to national recovery.
Certain key developments must take place. We must make a major effort to improve food quality. There is an urgent need for integrated rural development programmes as a prerequisite for a viable rural economy. Recent negotiations at EC and GATT level clearly show that the focus of attention is on an expansion of EC Structural Funds and the funding of programmes relating to integrated rural development which this may give rise to.
I submit that the basic fabric of agriculture and rural society is now under threat in the light of the stalemate during the recent GATT negotiations. There is a concerted attack on our most important industry. The US has been winning the propaganda war during these talks. Commissioner MacSharry succumbed to this propaganda during the summer when he unilaterally proposed a 30 per cent reduction in EC subsidies without any recourse or reference to the Council of Agriculture Ministers. If this is the result of Minister O'Kennedy's achievements during his much-heralded term as President of the EC Council of Agriculture Ministers, he has been a total failure.
The Government have clearly shown they have no political clout in Europe and have no political allies there. My party, Fine Gael, through the Christian Democrats, have demonstrated their ability to make our case successfully on behalf of Irish agriculture, particularly in 1984 during the super-levy negotiations. While every other country took a reduction in the milk quota, we were getting an increase.
Commissioner MacSharry has shown great weakness following his announcement last July and he has not recovered since from that major gaffe. Is it any surprise that the US has called for the complete restructuring of the CAP, the very cornerstone of our survival in Europe? Immediate steps must be taken. The entire country should be declared disadvantaged. How can we expect to do it under any other Commissioner if we cannot do it under Commissioner MacSharry? The mess which has been made by this Minister is a clear example of the mismanagement of our case within the European Community in relation to the designation of disadvantaged areas. Low interest EMS loans should be introduced for specific purposes, particularly for working capital, and the social welfare code should be immediately reviewed to take account of quarterly market returns. The Taoiseach should undertake an immediate tour of the EC capitals to highlight the case of Irish farmers and emphasise our desire to maintain the basic structure of the CAP. These are measures which can be taken immediately if the Government have the will.
I am happy to support my colleague. The population of rural Ireland is totally demoralised and pessimistic about the future. The Minister should recognise this problem and take some steps to remove this feeling of no hope in rural communities. The position with regard to GATT will definitely hasten the movement of farmers away from the land. It will be accelerated to an enormous degree. This must be admitted and steps taken to deal with it. What steps are the Government taking? We hear from time to time rumours about increased subsidies from Europe. The farming community are certain that many of them will have to depend on social welfare payments. The Government have no policy to deal with the problem. Vague references have been made over the past couple of years to agri-tourism and rural development and these could have become a reality if the necessary steps had been taken. I must ask the Minister to give us some indication of hope.
Agreement at the Agriculture Council on 6 November was secured only after considerable safeguards had been built into the Community's proposals. A major amendment was accepted by the Commission in relation to its proposal on border protection which should ensure that Community preference will be maintained. The Council also reaffirmed its support for the Community's global approach and made it clear that any separate undertaking on export subsidies would be incompatible with maintaining the fundamental principles of the CAP. In addition, both the council and the Commission accepted that account would have to be taken of the difficult situations of producer regions adversely affected by the GATT negotiations when adapting policies and drawing up compensatory arrangements. In particular, the Commission has stated that it considers that the total level of assistance to the less favoured regions should not be reduced as a result of the implementation of the outcome of the Uruguay Round negotiations. The Commission has undertaken to submit concrete proposals supported by appropriate financial solidarity, to ensure a viable future for community farmers based on, inter alia, the reorientation of support to producers, taking as a basis the diversity of the structure of farms and production; and the reinforcing of structural assistance, including production neutral income subsidies, concentrating on producers and regions which have most difficulties in adapting to changes and measures to protect the environment and to improve product quality. I am reassured that these measures will ensure that Irish farm incomes and rural areas will continue to be supported to the greatest extent possible.
The EC Commission participated in discussions at the GATT ministerial in Brussels last week on the basis of this mandate. The negotiations were inconclusive, however, because of the unrealistic demands of some participants. The US and the Cairns Group in their submissions to the GATT proposed a 75 per cent reduction of internal supports over the 10 years from 1991, based on average support levels in 1986-88 and 1988 respectively. Both proposals called for a 90 per cent cut in export subsidies over 10 years and wanted to convert all non-tariff measures into tariff equivalents which would be reduced by 75 per cent over the same period. In addition, they proposed that existing access levels for products should be expanded over the period of the agreement and that minimum access levels be provided to markets where products have no access at present. both the US and the Cairns Group placed particular emphasis on securing specific commitments in relation to internal supports, border measures and export subsidies. I was pleased to note that the Community held firmly to its negotiating stance despite severe pressure from almost all quarters. It is to be hoped that when the negotiations begin again early in the New Year other participants will be willing to negotiate on a more realistic basis and that a balanced result can be reached which will protect the interests of all participants.
It has to be borne in mind that even apart from the GATT negotiations, further adaptation in current support arrangements would have been necessary anyway because of increased production and declining consumption in some product areas. The Commissioner for Agriculture and Rural Development, Mr. MacSharry, has recently announced that he will be submitting proposals to the Council shortly on adapting support arrangements for the beef, milk, cereals and sheepmeat sectors and an outline of the arrangements to compensate producers for income losses. These proposals will take account of the commitments entered into when drawing up the Community's offer in the GATT negotiations. The Commissioner has said that his intention is to ensure a more equitable distribution of guarantee expenditure and to provide for more direct targeting of funds to smaller-scale producers — current estimates suggest that 80 per cent of guarantee expenditure goes to 20 per cent of farmers. While the thrust of these proposals is to be welcomed, I cannot, of course, adopt a definitive position until the detailed proposals have been received and examined. The House can be assured, however, that our response to the proposals will be dictated by the need to ensure the continued viability of the Irish agri-food industry and the protection of smaller farmers' incomes.