Dáil Éireann debate -
Wednesday, 14 Oct 1992

Vol. 423 No. 5

Adjournment Debate. - Agriculture and Food and Industry and Commerce Matters.

Mr. Ferris:

My statement refers to a subject which after six years finally disintegrated this week, and that is the GATT negotiations and the implications for the Common Agricultural Policy reform package which the Minister has put in place. I welcome the fact that Commissioner MacSharry, is on record as saying that he is not in favour of conceding any more to the GATT negotiators. However, he went on to say that finally it is a matter for the Council of Ministers. What are the implications for the Council of Ministers and the national economy if we are pressurised, because of political considerations elsewhere, to concede more in order to achieve a consensus in the GATT negotiations?

This pressure is coming from an administration which supported its farmers with thousands of dollars every year. In 1988, the latest year for which we have figures, the amount was £20,000. Recently they gave a further £20,000 and in their farm Bill there is a proposal to assist farmers to the tune of £80 billion. The Minister in the reform of Common Agricultural Policy should not give further concessions to achieve a consensus on the GATT negotiations.

Minister for Agriculture and Food (Mr. Walsh):

I thank Deputy Ferris for raising this very important issue. As the House will be aware, negotiations under the Uruguay Round have been ongoing since 1986. The present position is that following the failure of the various contracting parties to reach agreement, the director general of the GATT produced a draft final agreement last December. This proved to be unacceptable to a number of parties including, in particular, the European Community.

Since December last, negotiations to reach a final settlement have been continuing at various levels, including at a bilateral level, between the Commission and the US. In these negotiations the Commission negotiates on the basis of the Community's position as established in the Council and in the knowledge that any final agreement that it might enter into will have to be approved by the Council of Ministers.

In this context, there were bilateral talks earlier this week between the Commission and the US in Brussels. The talks at Commissioner/Secretary of State level have been suspended while technical discussions continue. They will be resumed if and when progress is made.

I want to state that I have, of course, at all times kept in close touch with developments in the negotiations. In this regard I have regularly discussed the GATT issue bilaterally with Commissioner MacSharry — including last Friday and, in fact, again today — and with my other ministerial colleagues.

Indeed, the issue is discussed by the Agricultural Council at virtually every meeting.

Ireland's position in the negotiations which at all and every opportunity is brought to the attention of the Commission is that while we would like an early conclusion, the outcome must be one which fully protects our interests. This means that the outcome must be one which fully protects our interests. This means that the outcome must not call into question the recently completed Common Agricultural Policy reform measures. As the House will be aware, the reform outcome represented a major achievement and will be of significant benefit to Ireland.

I can assure the House that the Commission, and the Council, is fully aware of our position.

Mr. Nealon:

Every year around this time, the Minister for Agriculture and Food solemnly promises that approximately 95 per cent of all cattle headage payments will be paid in time for Christmas. Just as consistently, every year the Department dismally fail to deliver on this promise. For the next six months of the following year the pay-outs continue in dribs and drabs without any pattern or order known to man or computer. For the farmers desperately depending on this headage payment, it is a lonely wait looking for the postman. Why, for instance, should a farmer in Aclare in County Sligo not receive his headage payment when a man in the exact same position in Ballintrillick, at the other end of the county, can get his? Why should a farmer in Killaragh not receive his payment while a man in Coolaney gets his? Naturally, farmers get very frustrated and vexed.

Mrs. O'Rourke:

There might be a woman farmer.

Mr. Nealon:

Farmers ring the local district office of the Department — there is no blame attached there — or the Department in Dublin on the IFA, the ICMSA and their local TDs. Telecom Éireann annually make the price of many a good bullock on these telephone calls of frustration.

As the Minister knows headage payments are not a luxury. For the farm homes in disadvantaged areas it is an essential part of the household budget. Without it they could not get by and, as with any other payment, it should be paid when due.

There is a general view around the country that the holding up of these cheques is a deliberate ploy by the Department, a book-keeping exercise, to save money until the EC contributions come in. The Department deny this and, if they are right in their denial, why can they not get their house in order and pay farmers their headage payments when they become due? With all the experience the Department have in this area, all the modern technology at their disposal and with the excellent staff in the district offices who handle this work very well and with great courtesy, surely the Department can get their act together and prevent a recurrence of this annual chaos.

I appeal to the Minister with much confidence because I have heard him express his concern, frustration and desire to improve the situation and I hope he will act this year. Nothing short of full payments by Christmas should satisfy him.

Minister for Agriculture and Food (Mr. Walsh):

Deputy Nealon has summed up the situation accurately. I will have my reputation judged on whether I will be able to improve the situation. There is no good reason why farmers should not be paid their due entitlements on time. It is of no benefit whatsoever to the economy, the Department of Agriculture, the Exchequer or anybody else not to make these payments on time.

I assure the House that the steps necessary to ensure payment before Christmas of all cattle headage grants due on foot of applications lodged by farmers in June of this year were taken by me some months ago. Farmers will be assisted and there will generally be a more user friendly attitude on the part of staff in relation to applications. I have personally visited a number of the agricultural offices around the country and have asked the staff to assist farmers with these applications in a consulting room so that people will have the opportunity and the facilities to talk to their agricultural officer and get the kind of assistance and friendliness they are entitled to in relation to these headage payments because they make up a very substantial part of farmers' incomes nowadays.

The processing of the 1992 livestock grants is progressing satisfactorily and as proof of this the 1992 sheep headage payments issued this week, two months earlier than last year's payments. I hope that next week a fair number of the cattle headage payments will be made because it is my view that leaving the whole lot until the run up to Christmas and then trying to get them all out causes problems. I hope to get those payments out from next week onwards. I am confident that all eligible cattle headage scheme grants that were applied for last June will be paid on time. There will be some in relation to which there are queries etc., but all the eligible applications will be processed. As I said earlier, I will stake my reputation on that. There was a considerable delay in making the 1991 payments. Delaying payments until the middle of the following year is just not good enough.

It is intended that more applications for the 1992 EC special beef premium and suckler cow schemes will be taken later this year. It will not be possible, of course, to process these until next spring.

Mr. Yates:

The significant deal and great benefits that the Minister announced in his Common Agricultural Policy form have thrown up a great injustice to about 30,000 small farmers. In the small print of this deal it is provided that if one has a milk quota of anything over 12,800 gallons one could not get one suckler cow premium. For the uninitiated, beef cows, non-dairy cows, are an ideal opportunity for these small farmers to knock out a living and if they are 20 gallons over the limit they cannot claim for one suckler cow premium. This is totally unfair.

The Minister knows from his long experience in the dairy industry that the minimum level of viability would be a quota of 30,000 gallons. I cannot understand how the Minister agreed to this injustice. I suppose if one reads this propaganda often enough one starts to believe it. The fact of the matter is that these young small farmers are being screwed. Not alone that but even their sons or daughters cannot get the suckler premium — even a "farmerette" cannot get it — and that is totally unfair. The national average of a milk quota is somewhere around 18,000 gallons. Up and down the country these small farmers are being denied.

We know we have lost out our special position under the Common Agricultural Policy deal. We know we are not going to get the forage subsidy that others are getting on May silage and so on. But I would ask the Minister to rectify this injustice and to raise the threshold from 12,800 to 30,000 gallons so that, before it is too late, these small farmers will have some basis for earning a living. We know all the rhetoric about retaining the maximum numbers of family farms, but when it comes to details they are denied. They cannot get into ewes and they cannot get into grain because there are quotas and everything else. The Minister should give them a chance to make a living by changing this ridiculous rule.

Mr. Walsh:

First I want to welcome Deputy Yates to his elevated position as spokesman on agriculture.

The position relating to the small farmers he talks about, that is, those with less than 12,819 gallons is as he outlined. It is not a result of the Common Agricultural Policy negotiation. However, during the Common Agricultural Policy reform negotiations the Council of Ministers undertook to review this figure upwards. I am hopeful that the Commission will take into account the acute income position of those small farmers. I expect that at the minimum that figure of 12,819 will be doubled, bringing the quota up to around 25,000 gallons. It would not be particularly in Ireland's interest to have the quota go too high because suckler cow farmers are entitled to an income on their own. I would not like to see farmers with other reasonable sized quotas in milk or anything else getting too far into that area.

The main decisions related to the dairy sector which were taken in the context of Common Agricultural Policy reform were that (1) the proposed 1 per cent quota cut for the current year did not go ahead and (2) the cuts of 1 per cent due to apply from April 1993 and April 1994 must be preceded by a Commission report to Council on the market situation, accompanied if necessary by proposals to revive these decisions. In view of the relatively buoyant state of the dairy market in recent times it would be difficult to justify quota reductions and I am hopeful that this will remain the case. The buoyancy in the market has resulted substantially in increased milk prices being paid this year to producers in this country.

A decision was taken also in the context of Common Agricultural Policy reform to postpone the review of the existing milk quota regime until later in the year. This is now well under way and is scheduled to be agreed by Council by the end of December. In this context, it is my objective that the new system will take full account of the needs of small scale milk producers and will allow for the flexibility needed to continue to give them priority under the various quota related schemes.

All in all, small scale milk producers in Ireland have been given priority treatment in relation to restructuring, temporary leasing and access to unused quota. They have also been given priority treatment under the scheme of grant aid towards the purchase of on-farm cooling equipment for which I have secured a total of 10 million ECU.

I am very well aware of the needs of Ireland's small scale milk producers and in particular of that category of producer to which the Deputy refers. I have in the past shown my commitment to improving their position within the industry and will continue to do so.

Mr. Allen:

In the last number of weeks there has been major uncertainty on the economic front because of the devaluation of the British pound and the increase in interest rates in this country. Here again Seán Citizen, the ordinary person, has been the victim of the uncertainty of recent weeks and the speculators and the greedy have been the winners.

The outfall of the overall uncertainty was an increase in our interest rates. Mortgages have gone up and AIB have announced a 2 per cent increase in their mortgages. People on overdrafts are finding money far more expensive and industry has been badly affected.

We did expect that there would be some compensation for the devaluation of the British pound. Almost three weeks ago I made a public statement asking for vigilance, especially in areas where multiple chain retailers were bringing in goods from Britain. Many of these multiple chains are importing goods almost daily. However, a survey which was carried out in Cork by my own organisation found no evidence of price reductions. To be fair to the Minister, he announced, although belatedly, last week that a new mechanism was being put in place to protect the consumer. However there is no evidence that this is proving to be effective because neither I nor anybody else I have spoken to can see any evidence of real price reductions in our shops for the consumer.

I should say to the Minister that, possibly, her officials were asleep during the first week or two——

An Ceann Comhairle:

No blame should be attached to officials; the Minister is responsible.

Mrs. O'Rourke:

I can promise the Deputy that I was not asleep.

Mr. Allen:

Let us say then that the Department were asleep. The consumer believes that he was caught, on the one hand, and did not gain, on the other. As I said, the consumer suffered while the greedy and the speculators profited during the past few weeks. The public were caught while Government structures were found badly wanting.

Mr. Hogan:

It is a fact that suppliers of good and services which are being imported into this jurisdiction at present are not passing on the price reductions quickly and efficiently to consumers. I have been carrying out my own checks and monitoring the position during the past few weeks in respect of some essential household items, such as clothing, household utensils, footwear, electrical goods and furniture. While there has been a marginal reduction in some instances, it is nothing like what is demanded of importers, wholesalers or retailers given the currency fluctuations.

In addition, there have been only marginal reductions in the price of some luxury items, such as biscuits and sweets, while the price of Scotch whisky has not stirred. It is totally unacceptable that the importers of goods are seeking to make windfall profits at the expense of the consumer who, as Deputy Allen has said, is suffering enough and under enormous financial strain at present, given the hike in interest rates, particularly mortgage interest rates, which has resulted in an increase of £80 per month on a £40,000 mortgage.

A wide range of goods should be 15 per cent cheaper given the currency fluctuations but the only places where one can see any major price reductions are in the multiples and supermarket chains which are waging a price war and undertaking great advertising campaigns to show their bona fides in respect of price reductions in goods imported from the UK in particular. I am disappointed that the Confederation of Irish Industry are seeking to defend those firms which have not passed on the price reductions quickly to consumers. I would have expected them to adopt a more responsible attitude and recognise the need to pass on these reductions quickly in this instance.

I am calling on the Minister to ensure that more rigorous inspections are carried out in the marketplace. She could do this by assigning some of the staff in the Customs and Excise who will be surplus to requirements as and from 1 January 1993 to the Office of the Director of Consumer Affairs and Fair Trade to carry out more inspections in the marketplace.

Minister of State at the Department of Industry and Commerce (Mrs. O'Rourke):

Even at 9.50 p.m., this is the most important matter that has been raised in the Dáil today, given that it affects every man and woman. Each one of us is a consumer; they are not an amorphous body. I thank both Deputies for taking the trouble to raise this issue so late at night in the House.

I am concerned that the benefits of the strong Irish pound relative to sterling should be passed on quickly and in full to the consumer. During the past few days there has been a number of reductions in retail prices and I expect further considerable reductions in the coming weeks. Now more than ever the consumer should only purchase goods from retailers who are passing on the benefits. By doing so and enhancing competition we can achieve a lower inflation rate. I am always amazed at the great alacrity with which prices go up and at the tardiness of the system when they should come down.

Two weeks ago I had a special meeting with the Director of Consumer Affairs and Fair Trade regarding the monitoring of the reductions in prices and I indicated to him my wish and that of the Government that the full benefit of any price reductions should be available to the consumer. Having spoken about this issue publicly by exhortation, I now realise that this is clearly not going to be enough. I have therefore had a further meeting with the director. He is now carrying out a price monitoring exercise, which started this week, in relation to certain goods. These services include food, clothing, magazines and electrical goods. Indeed, if either of the Deputies wishes to present direct evidence I shall be glad to pass it on to the Director. This monitoring exercise which is being carried out by the Director and his staff is not limited, it is very thorough in that he is speaking to managers and looking at the price of goods on the shelves. It is a very intensive survey. The Director will attempt to establish from both importers and distributors what the likely developments will be in the foreseeable future, particularly in the event of sterling strengthening dramatically against the punt. We shall then be able to see immediately if the time lag works the other way.

The House can be assured that whatever action is necessary or appropriate to protect the consumer's interest and the wider national interest, including, if necessary, price control orders, will be taken. It is simply not good enough that those consumers who are paying high mortgages are not sharing in the benefits arising out of the turmoil in relation to currency rates. They are not gaining as they should. I am very determined, on behalf of the consumer, to see that they do.

Again, I thank Deputy Allen and Deputy Hogan for raising this issue. The more we raise it in public the better. Indeed, I was amazed at some of the remarks made yesterday by a reputable organisation.

Mr. Allen:

The Minister should crack the whip.

The Dáil adjourned at 9.55 p.m. until 10.30 a.m. on Thursday, 15 October 1992.