I move:
That Dáil Éireann takes note of the Report of the Sixth Joint Committee on the Secondary Legislation of the European Communities; Report No. 10. Reform of the Common Agricultural Policy.
I am very grateful to the House for making time available for a debate on this report of the Joint Committee on the Secondary Legislation of the European Communities on reform of the Common Agricultural Policy.
The chairman of the joint committee, Deputy Barry, is unavoidably absent today but I am grateful that it falls to me to move this motion since I was involved as chairman of the sub-committee on agricultural and fishery matters that did the groundwork on preparing the report.
The joint committee have been the subject of criticism from time to time for their failure to address current or critical issues but I venture to suggest that Common Agricultural Policy reform is one of the most important subjects considered by the joint committee in recent years. I am glad that this has been recognised by this House and that time has been made available for a debate on a joint committee report for the first time in seven years. Such a lapse of time indicates that the House has been negligent in debating such reports. I hope this will be the new pattern for the future, particularly when the joint committee take on their new expanded role on European Community affairs, as has been promised by the Taoiseach.
The report covers a most important subject. Irish agriculture of itself represents 10 per cent of gross domestic product but in one way or another it impinges on the lives and incomes of practically every person here — not only those directly engaged in agriculture and their families, or those engaged in subsidiary industries and in supply of materials, machinery, transport and sales outlets for agricultural products but it must be remembered that the income generated by agriculture and the spending power of the farming community impacts on the economy of the country as a whole. Consequently the welfare of all our population is affected by the ups and downs of farming.
Before getting into the main elements of the report, I would like to thank all those who assisted in its compilation. I must pay special tribute to my colleagues on the sub-committee, particularly those from the Opposition benches who put party politics aside in the common interest of teasing out and clarifying the many and varied implications of the Common Agricultural Policy proposals. Indeed, it is a mark of the current joint committee on EC legislation that there is all round co-operation between the members in their determination to get to the kernel of whatever subject is under discussion and makes this kind of work very worthwhile.
In carrying out its work the sub-committee received considerable assistance in written and oral form from the Department of Agriculture and Food. In addition, the Irish Farmers Association, the Irish Creamery Milk Suppliers Association, and the Irish Co-operative Organisation Society made oral and written submissions to the sub-committee. The United Farmers Association and An Bord Bainne also made written submissions.
I would particularly like to thank Mr. Michael Corry, Mr. Dan Byrne, Mr. Danny Carroll, Mr. Gerry Cody, Mr. Dermot McCarthy and Mr. John Fox of the Department of Agriculture and Food; also Mr. Con Lucey, chief economist, IFA; Mr. Tom O'Dwyer, president, and Mr. Donal Murphy, general secretary, of the ICMSA; and Mr. John Tyrrell, director general of the ICOS, all of whom attended meetings of the sub-committee and generously gave us the benefit of their knowledge and experience. I would also like to acknowledge a written submission received from Mr. Seán Scanlan, president of the United Farmers Association and Mr. Nicholas Simms, market research manager of An Bord Bainne. The number of parties willing and anxious to assist the committee in its deliberations is a mark of the widespread concern at the implications of the reform proposals for the entire farming community.
A special word of commendation is due to our consultant, Mr. Jim Dorgan, for his clear presentation of all the arguments put forward and his analysis of all the proposals and counter-proposals.
The report is an excellent document in that it sets out the background to the introduction of a Common Agricultural Policy and the way in which it developed to its present state. The objectives of the Common Agricultural Policy were enshrined in Article 39 of the Treaty of Rome. Very briefly they were: to increase agricultural productivity; to ensure a fair standard of living for farmers; to stabilise agricultural markets; and to guarantee regular supplies of food and ensure reasonable food prices for consumers.
The Common Agricultural Policy was set up in the fifties and sought to achieve its objectives by the introduction of schemes such as intervention purchase of surplus commodities and selling them when balance had been restored or disposing of them outside the Community; quotas, levies and tariffs on imports to prevent external supplies undercutting home produced commodities; and direct subsidies to producers of certain commodities to keep them competitive with imports.
Agricultural output responded to the conditions created by the Common Agricultural Policy and rose rapidly. By degrees major surpluses built up, particularly in dairy products, cereals and beef. Intervention costs also grew so that in later years support for farming put great pressure on the Community's financial resources. An ironic aspect of the Common Agricultural Policy is that, while production is higher, farm incomes generally are lower in real terms today than they were in the mid-seventies.
A further difficulty is that benefits to the agricultural community have not been evenly distributed with smaller producers gaining least. For this reason it has to be accepted that some reform of the Common Agricultural Policy is necessary. While the report accepts this, it insists that price cutting and the deficiency payments system proposed in the Commission's document, now generally known as the MacSharry document — this is spelt out on pages 12 and 13 of the report — must be resisted strongly on the following basis: they will not on their own remove the problem of oversupply on a continuing basis and will have a very harmful impact on the incomes of the majority of Irish farmers. The deficiency payments will also create greater rural-urban divisions which I do not think anyone wants to see developed in any member state of the Community. The rural-urban divide has been allowed to grow for far too long and it is time we put a stop to this so that we can take a stand against these proposals as a country. In addition, they will not halt the flight from the land.
The proposals which were greeted with the greatest amount of anger and derision were the set aside proposals, which compensate farmers for withdrawing land from production, leaving it lie fallow to grow weeds — an action which heretofore was regarded as totally against good farming practice — and the early retirement scheme for farmers. A person of 50 or 55 years of age who lives in the city might find a lump sum and enhanced pension which would give them the opportunity to become engaged in some other kind of business venture very attractive, but the prospects of doing this for people who live in rural areas is very limited. The package on offer could never be described as a golden handshake. In fact, it could put people well below the poverty line. Anyone with any appreciation of the pride which exists among the farming community who are willing to work hard seven days a week will understand the anger the proposed deficiency payments, hand outs, provoke. The proposals have been rejected by all sections of the Irish farming community. They have been represented as supporting smaller farmers, but they are unacceptable to the farmers in my constituency and throughout County Meath. I am sure other speakers, and in particular my colleagues on the joint committee, will develop these points further during the debate.
The main arguments in the report have been taken up and supported by many farming organisations. In his discussion on the subject with Commissioner MacSharry last Tuesday the Director General of the ICOS referred to this report as an authorative document. The report analyses the Commission's proposals and sets out counter proposals which I am convinced will deal with the problem of surpluses without making any undue impact on the incomes of farming communities or the incomes of those in the service industries who depend on agriculture for their livelihood. The number of downstream jobs threatened by the Common Agricultural Policy proposals is frightening.
These counter proposals are based on three main principles upon which the joint committee believe reform of the Common Agricultural Policy should be based. These are Community preference, effective supply management and combating rural poverty, which is becoming a frightening reality in the west. The joint committee are satisfied that these principles can be achieved by the following means. First, reducing the degree of protection now given to cereals and seeking increased protection against imports of cereal substitutes from non-EC countries. Second, accepting a reduction in production of cereals, milk, beef, etc. but requiring the EC's trading partners to make reciprocol reductions in their production of these commodities. This would ensure that EC reforms are not negatived by increased production elsewhere which would result in a continuing fall in world prices. We must continue to drive home to those who will be involved in the GATT talks the message that to reduce production in Europe and allow production worldwide to increase would be a disaster.
Third, strict control of EC imports of dairy products, sheepmeat, beef and cattle. The need for this is obvious, especially in view of the recent changes in Eastern Europe which will have a detrimental effect so far as Irish livestock production is concerned. Fourth, recognition of Ireland's peripheral position and special dependence on agriculture. No one has to be a genius to realise Ireland's dependence on agriculture.
Fifth, promotion of consumption of milk and beef products by combating adverse perceptions of their nutritional and health qualities. It is important that farmers realise this and would be prepared to give the fullest support possible to the Minister for Agriculture and Food and his officials in trying to combat the use of illegal substances in farming. Even if such substances are used in other EC countries, as they have been for the past number of years, we cannot afford to let our agricultural industry be put at risk by unscrupulous individuals who are prepared to go to any lengths and use all sorts of trickery in order to use those products. I know that when such practices have been brought to the attention of the Department they have taken action in this regard. It is frightening to think of the damage which can be done to our greatest industry if people do not cooperate fully with the Department. I appeal to people who know other people who are using illegal growth promoters, such as angel dust or jungle juice, to immediately bring it to the attention of their local veterinary officer who in turn will bring it to the attention of the Department. We cannot allow these cowboys destroy our main national industry. Even if these substances can be used in Europe, we do not want them to be used here.
Sixth, the introduction of an expanded scheme of research and development into product and market development by processors in peripheral regions. In this context we have been guilty of taking the short route — namely, the intervention route — so far as Irish producers and processors are concerned. Neither the Government nor the industry has invested enough funding in the development of agricultural products. If we are to have a future we need to ensure that our products are both consumer friendly and properly produced so that customers will buy them.
I want to remind Deputies on all sides of the House that there is now a certain urgency and element of self-preservation about having the proposals reconsidered. We have been put on notice that there is likely to be a referendum next March following the Maastricht Summit. In view of the current air of disillusionment about EC membership we can expect a chilly reception when we travel the by-roads of Ireland looking for a positive response to this referendum if the Common Agricultural Policy reform plans are not modified greatly.
Commissioner MacSharry, in defending his proposals, has ridiculed Ireland for constantly coming with the begging bowl and failing to take its place as a mature member of the Community. I want to repeat that while the report makes some case for the special treatment of Ireland this is not the most costly of the recommendations. We did not in preparing this report intend to use it as a begging bowl; it was prepared to deal with the situation facing us. It also points out that the Commissioner's proposals would penalise Ireland for problems of over supply to which Ireland has not been the greatest contributor. We should remember that this time we are not coming with a begging bowl and looking for special treatment for Ireland. Rather, we are coming with a set of well thought out and argued counter proposals which could be of benefit not only to Ireland but to the entire Community.
The House may be interested to know that the report has been circulated to agricultural institutions. It has been circulated also to MEPs and to counterpart EC affairs and agricultural committees in member states. Their response has been favourable. However, we must not be complacent. Every possible avenue must be explored to try to influence the final outcome of Common Agricultural Policy reform.
We set out to prepare this report in the light of the world situation and of the problems agriculture was facing in Ireland. Since then agriculture has gone further down the hill. At present when we see the prices that are available for livestock it frightens me how farmers will be able to exist in the long term. I know the Minister and the Minister for Foreign Affairs are doing their utmost to have the third country markets reopened to our live exports. We should remember that in those third country markets we are now facing a situation where there has been adverse publicity with regard to BSE. Many of the countries which are making those wild statements have much worse records, as far as animal disease is concerned, than ours. We are being hounded in the marketplace by our adversaries and we will have to fight very hard to regain those third country markets.
We have also the question of the Eastern bloc countries which are so short of hard currency they are prepared even to undercut our prices despite the fact that we have the added advantage of the refund system. That frightens me.
I appeal again to the lending institutions in this country, who at present are taking an unnecessarily tight rein with regard to farmers when it comes to stocking winter feed lots, to reconsider their position. After all, if the suppliers — namely, the small farmers of Ireland — are forced out they in turn will do away with the source of income of those who operate the major feed lots. I say, with an air of despondency, that we must now deal with the situation.
Finally, I wish to repeat my thanks for having been given the opportunity of highlighting the subject. I hope that by doing so the powers that be in Brussels will be persuaded to take a second look at the impact of their proposals and at the merits of ours. The talks between Commissioner MacSharry and his American counterpart will be of major importance. It is important that we should explain once and for all that, while we are being asked to suffer as far as the future of the Common Agricultural Policy and pricing is concerned, we are not the main perpetrators of the problems in Europe at present. The mountains and lakes have been created by the farmers of mainland Europe, who have been involved in using cheap cereal substitutes to the detriment of Ireland's grass-based agricultural industry.
I know the House welcomes the opportunity to debate this report. I hope, as I said earlier, that the Dáil takes note of report No. 10 of the Sixth Joint Committee on Secondary Legislation of the European Communities — the report we are now discussing — and that when we finish at 4 p.m. the Members of this House and the Irish public will be much more aware of the crisis that faces us as far as the Common Agricultural Policy and the GATT talks are concerned. These crises are of enormous proportions and it will take a co-ordinated effort by all those involved on all sides of this House to give our full support to the Minister for Agriculture and Food in his negotiations in Brussels in the months ahead. When we finish this evening I know the unity that existed with regard to the preparation of this report by the members of the committee will also exist in this House and that when the Minister goes to negotiate at European level he will do so with the full backing of this House and all its Members.