I propose, with your permission, to share my time with Deputy Connaughton and other Deputies in my party.
Private Members' Business. - GATT Negotiations: Motion.
Is that satisfactory? Agreed.
I move.
That Dáil Éireann reaffirms its opposition to the proposed GATT deal as it is currently framed in view of the prospect of reducing gross agricultural output by 5 per cent and as it extends beyond the level of volume and value restrictions on agricultural output agreed by the Council of Agriculture Ministers in June, 1992, as part of Common Agricultural Policy reform; and calls on the Government to ensure that Ireland's vital national interest and employment are protected before these proposals are ratified.
This GATT will have the single most recessionary impact on the Irish economy in the decade of the 1990s. I cannot think of any other single measure that will have such a devastating and negative effect. Up to 20,000 of our most productive jobs will be lost due to reduced food production and additional food imports. The Government must vote against the final ratification of this deal or obtain concessions in the share-out of production cuts in the EC to protect our vital national interest.
Due to the prolonged formation process of the Government following the election and the crises affecting the currency, interest rates and unemployment, public attention has not focused adequately on the fundamental significance to Ireland of the proposed GATT. Irish agriculture and food accounts for 40 per cent of net exports, 17 per cent of total employment in this country, and is worth £3.5 billion annually to us. GATT proposes three fundamental changes in our biggest industry. First, between 1993 and 1999 the level of agricultural EC exports are to be cut in volume terms by 21 per cent. The cut in the value over the same period of export refunds is to be 36 per cent and on the imports side we have to allow in initially 3 per cent and up to 5 per cent of food imports in each product sector. This will cost the Irish economy at least £260 million per annum.
Due to the complexities of the Common Agricultural Policy and the GATT deal, it is necessary to study each sector separately. The impact will be most severe in the beef sector followed by the pigmeat and dairy sectors. Cereal production, poultry, sheepmeat and sugar will also be adversely affected.
It should be remembered at the outset that the world price for beef is 40p per pound in Argentina and 50p per pound carcass weight in Australia. EC beef output is about eight million tonnes of beef per annum. Consumption stands around 7 million tonnes — 6.8 million tonnes is the figure I am advised. This leaves a surplus annually of 1.2 million tonnes of production over consumption and this has to be exported outside the Community. The proposed GATT limit of beef exports for 1994 will be less than one million tonnes and this means a reduction in exports of over 200,000 tonnes of beef compared to the 1992 level. As the EC has taken the base period between 1986 and 1990, the average over that four year period, this is substantially lower than what we exported in 1992. In effect, what we are talking about is a 38 per cent cut in beef production. In terms of reduced opportunities to export beef in 1994 and with an annual reduction of 36,000 tonnes in exports up to 1999, the total cut at EC level is 440,000 tonnes less beef to be exported. That is just the volume cut of 21 per cent over six years.
If we look at the cut in EC refunds, the situation is even worse. The proposal to cut export refunds by 36 per cent over six years will mean a cut of £32 on a 100kg live bullock or a cut of 24p per pound on beef sides. If the EC has to live with a beef export limit of 800,000 tonnes there will be horrendous consequences for this country. At a minimum, there will be wholesale calf slaughtering and £88 will be offered for male calves eight to ten days old to slaughter them. That is an enormous waste in terms of animal production, husbandry, agricultural output and of meat processing jobs. We will also have early intervention for cattle at 150 kilogrammes and this will result in a direct loss of employment. The assumptions are that the consumption of beef in the Community will remain as it is or increase. The situation will get worse if there is a decline in the consumption of beef by consumers in the EC and as Ireland exports 80 per cent of its beef we will be the member state in the Community most affected.
The EC beef intervention intake for 1992 was of the order of 900,000 tonnes. Under the Common Agricultural Policy reform agreement of June 1992 this was to be reduced to 350,000 tonnes by 1997. Where will this unwanted beef go? The stark prospect for Irish farmers is that there will be some unwanted 200,000 cattle and they will be unable to dispose of them. This immovable surplus could devastate Irish agriculture and cause an unprecedented crisis. There is no intervention for heifers as only good quality steers can go into intervention. What will happen to the price of heifer meat when we have 200,000 unwanted cattle dumped on the market? The price of heifer meat could go into freefall after 1994. The full extent of these decisions have not been acknowledged by the Government in its response to date.
With regard to the dairy sector, the proposed 21 per cent cut in the volume of EC dairy exports will mean a 24 per cent cut to milk producers over the 1991 level of production. The common Agricultural Policy reform for dairying outlined two 1 per cent quota cuts. This will not be sufficient to meet the GATT requirements. It is proposed that dairy imports will rise, that 5 per cent of the consumer market will have to be imported products. The combination of extra imports and the volume cut in exports will mean a 5 per cent cut in the national milk quota. The position will be especially critical for cheese exports. I am thinking of hard cheeses, particularly cheddar. GATT may allow an increase in butter exports but there is little worldwide demand for this.
What does this mean for the ordinary farmer? Ireland is going to follow what happened to Denmark. The history of the Danish dairy industry is of profound significance for us. What we have seen over the past 30 years is that there were 185,000 dairy farmers in Denmark. How many are there today? There are a mere 15,000. Their goal is to have one single dairy co-operative and already their most significant dairy co-op accounts for 85 per cent of dairy production. That is the prospect we are facing: wholesale rationalisation, P.45 forms and redundancies in rural Ireland.
In these circumstances is it any wonder the New Zealand dairy board have welcomed wholeheartedly this GATT deal. Their price of 40p per gallon for milk is uneconomic here. It must be pointed out that their production costs are 17p per gallon, leaving a profit for them of 23p per gallon. I also note that land prices in New Zealand are now making £2,000 per acre because they can make a profit at 40p a gallon. They have much lower wintering costs because of their different climatic conditions.
The Minister must make it clear in this debate what confirmation, if any, has been given that America will allow Bord Bainne and others access to 5 per cent of the domestic consumption of dairy products in the United States. As 50 per cent of our dairy exports go to third countries we are particularly vulnerable in regard to these proposals.
Despite improvements in the efficiency of the pigmeat sector, a crisis currently prevails for pig producers. Since last May there has been a 30 per cent reduction in prices. Early 1992 saw profit levels for every fat pig produced for slaughter of about £7 per pig but that has changed to a loss of £8 per pig now. The critical issue for the pigmeat sector is what is called the "aggregation" of imports. This means that if more than 3 per cent of the total meat market is supplied by imports, then pigmeat, poultry and beef can be put together. As current beef imports stand at 9 per cent, this could avoid the need for any additional pig meat imports into the Community. It is vital that we get aggregation, that we allow the existing level of beef imports obviate the need for any cut or any additional introduction of pigmeat imports. The Government must clarify whether pigmeat is to be separated from beef, both on the export and the import sides. The GATT changes could result in an extra 480,000 tonnes of pig meat being dumped onto the EC market.
During 1986 and 1988 EC imports of pigmeat accounted for 0.5 per cent to 0.8 per cent of consumption which was the amount that was imported. If this has to rise to 3 per cent by 1994 and 5 per cent by 1999 there will be a surplus of 480,000 tonnes of pigmeat. I understand the Commission are proposing a massive 25 per cent reduction in the base price of pigmeat. Further losses cannot be sustained by this sector if we are to ensure the survival of the Irish pig industry. We all know the rationalisation process; the notion of a small farmer with a few sows is gone. We are reduced to 4,000 pig producers in this country, we are down to a hard core efficient industry and its survival is at stake.
While sheepmeat does not seem to have been extensively debated in the present round of GATT talks, we have a vested interest in minimising New Zealand imports of lamb. At present there is a voluntary restraint agreement governing such imports but this is up for renewal this year. At present New Zealand can sell up to 205,000 tonnes of lamb into the EC without tariff. New Zealand has been filling its quota in the first nine months of each year and arguing for an increase in that quota. Given there are reports today that the top-up ewe premium will not be extended to 1993 and there is no change in the method of calculation proposed, which is a fundamental injustice to the Irish sheep farmers, the Government must ensure that a very tough line is taken on these New Zealand imports. Otherwise, the viability of our 52,000 sheep farmers will be put in further question.
In relation to cereals, the primary focus of attention has been on oil seed crops, not by the Irish but by the French. The GATT proposal is that the European acreage cannot exceed 5.2 million hectares. This is only a future cut of the order of 750,000 acres of oil seed crops. The French have very little to lose in comparison with our huge overall losses; yet they are screaming about it.
Under GATT the volume of cereals exported must be reduced by 21 per cent between now and the end of the decade. It is not yet known to what extent the Common Agricultural Policy set-aside programme will succeed in reducing grain tonnage terms. The target of grain reduction at EC level of 17 million tonnes and the level of grain exports will depend on the level of internal consumption of Community grain for animal feed as against cereal substitute imports. In other words, the surplus of grain will still be there if we continue to import the cheap cereal imports that are coming from outside the Community. I must add that the wording in the rebalancing agreement in relation to such substitute imports is extremely vague to the point of almost being meaningless. It is fundamental in the Irish interest not to have a cheap grain feed policy because we have a grassbased system and the last thing we want is the factory farm on the continent, benefiting from cheaper cereal inputs that will make their product more competitive against ours.
The Minister must clarify what are the likely effects on the set-aside programme. Some experts have argued that the 15 per cent requirement on set-aside will have to be doubled to 30 per cent on tillage land left barren to grow weeds. This can only result in further imports and further job losses. The Minister must clarify the likely effect on specific crops. Winter grain production will disappear, for example, if a national average is used for individual base areas. If one takes a national average, that will not take account of the spring and winter variation. We have much higher yields in the winter and they will have to conform to those lower yields.
The effects on wheat and malting barley — both have potential for growth in this country — need to be assessed so that Teagasc can give the best advice to our most efficient producers. I believe there has been a huge improvement in the efficiency of our cereal sector but that will be lost unless we can obtain the new markets that are developing. Most galling of all is the fact that this year we are being asked to set aside 15 per cent of our land while in America in 1993 the set-aside requirement for wheat is nil and is a mere 5 per cent for maize. We do not have the same rules for all farmers.
The beef regime is due for a review later this year and I am advised that the prospect is for a reduction in the quota and for a price drop. This must be thoroughly resisted as beef is one of the few profitable sectors of farming currently.
While progress has been made on such matters as exempting direct income aid from GATT cuts, it is clear that market-related premia to bring it up to the guidance price such as the ewe premium will be affected by the cutbacks. The green box exemptions should apply to all direct income aids for farmers universally. Whether it is a cheque for set-aside land, a ewe premium, a special premium, or a spring slaughter premium, all of them should be in the green box and should be exempt.
Following the November US-EC bilateral GATT deal it was expected that there would be an early ratification. The former EC Commissioner, Ray MacSharry, has done a particular job for the European Community. He has played an historic role in relation to these negotiations and has discharged his functions on behalf of Europe, but it is somehow believed that because he is Irish and is a public figure in this country, that he was acting in the best interests of Ireland. He was sworn, as was Pádraig Flynn today, not to act in the best interests of his state but in the best interests of the Community. We have lost out because of the political connections and association of the past and present Government with Mr. MacSharry and have failed to take an adequately robust line like that of the French. It is now clear that the US Congress will not approve the fast track procedure by 2 March. We now have a new deadline and extension of time. The Government must use this extra time to highlight Ireland's vital national interest.
The Taoiseach should meet the EC External Trade Commissioner Leon Britton with appropriate briefing material on the savage effects on the Irish economy. It is abundantly clear that this GATT deal goes beyond the level of Common Agricultural Policy reform. The underlying assumptions are based on most optimistic forecasts for consumption and for production made by the EC Commission. I believe these assumptions to be basically unsound. The EC Commission should have withheld its proposal to Geneva last December until all the studies into the GATT deal effects were completed. There is no point in analysis based on the most favourable assumption.
The contradiction during 1992 between the Dunkel final draft and the EC position papers shows that the GATT authorities do not accept that the Common Agricultural Policy reform as agreed in the June 1992 restrictions is sufficient while the EC Commission is conveying to the member states that it is clearly within the Common Agricultural Policy limits. This is not so and a close examination of the Dunkel papers and what happened in the Common Agricultural Policy reforms is evidence of that.
With a new American President and a more dubious approach adopted by many EC member states, the time frame for finalising this deal is gradually extending. We must not lose any time in insisting that there be full compensation for any further reductions beyond the level of the Common Agricultural Policy reform and we must insist that the share-out of production restrictions be based on individual member states production levels proportionately rather than the contributions to surpluses. That is a fundamental point.
If one looks to any sector — take pigmeat, for example, while it is in surplus — Ireland accounts for 1 per cent of pigmeat; it accounts for a couple of percentage points in all the areas, but because we have the lowest prices in the Community and because we export about 80 per cent of our products we trigger the intervention mechanism. We are dependent on intervention. We are not like German farmers who can bring their product to the consumer markets in Berlin. We are not in the "golden triangle". Therefore our contribution to intervention is much larger than our proportionate contribution to the total production. In other words, those putting into intervention are going to bear the burden disproportionately to their total level of production. We must get agreement that the pain will be absorbed in relation to the percentage of the total level of production, not just the surplus. That is a fundamental point. It is, therefore, unjust that we should bear the burden disproportionate to our overall production level.
Finally, given our unique dependence on agriculture it is not adequate that these matters are left exclusively to the Agriculture Council of Ministers. The Taoiseach and Minister for Foreign Affairs should immediately launch a major diplomatic initiative to seek a special deal for Ireland. This has been done before. Because it will be a number of years before the effects of GATT hit farmers' pockets, the necessary degree of urgency is not being given to this issue. I attended and addressed the massive anti-GATT rally held in the National Stadium last December. There is total unity of purpose in rural Ireland on the rejection of this GATT deal. The Dáil now has the opportunity to reaffirm its position. Failure by the Government to act could result in the loss of up to 20,000 jobs and may mean a lack in growth of GNP because of a drop in our agriculture output. This recipe for Irish economic stagnation in the 1990s is totally unacceptable in the context of our historic level of unemployment of over 300,000.
I wish to share my time with Deputies Connaughton and Sheehan.
Is that agreed? Agreed.
The proposed EC-US GATT agreement will have a devastating effect on Irish agriculture. It will definitely lead to thousands of farmers leaving the land and will result in huge job losses.
The proposal to put restrictions on the volume of EC exports that can be subsidised could decimate Irish agriculture. Over 80 per cent of our agriculture production is exported, with 50 per cent of total exports going to third countries. Therefore, 40 per cent of Irish agricultural production is currently placed on third country markets, all of which are covered by export subsidies. If the new agreement is accepted, 10 per cent of Irish dairy production will have to trade at world prices compared to 3 per cent of the EC average.
With regard to beef, 15 per cent of Irish beef production will be forced onto the world market with no support, in contrast to only 4 per cent of EC production. The impact of export restrictions will be more than three times greater on the Irish dairy industry compared to the EC average and almost four times as severe on the Irish beef industry, relative to the EC average.
It is now almost definite that whatever shape the final agreement will have it will include some form of export restriction. Our Government must ensure that any concessions made in regard to agriculture by the EC as a trading bloc are spread evenly among all EC producers and are not carried in a disproportionate way by peripheral regions such as Ireland. As pointed out by Deputy Yates our Government must ensure that our farmers will not have to carry a disproportionate share of EC concessions.
The agreement will allow US farmers unlimited production while Ireland and other poorer countries in the EC will be subjected to further reduction in quotas and greater competition on the world market from US agricultural products. The US certainly stand to gain substantially. They will have more access to the European markets, combined with less competition on the world market, but they have also retained a structure which will allow them to give subsidies to their farmers at their own discretion. There is an innate danger for us in Europe. What is now to stop the Germans, for example, from introducing their own subsidy scheme under this agreement? I would like the Minister to refer to this aspect of the agreement in his reply. Is this creating a new precedent?
I would like to refer to dairy and beef production in the context of the proposed agreement. While the restrictions on exports will not impact on butter and skim milk powder directly, other products, particularly cheese, will be affected as pointed out by Deputy Yates. The EC Commission claims minimum access plus the reduction in exports would amount to 3.5 million tonnes of milk equivalent or approximately 3.5 per cent of total EC production. It further argues that taking into account the settlement of the Spanish and Italian milk quota problem, 2 per cent of production will be bought up. Therefore, the Commission concludes that the commitment on the EC-US agreement can be met within the framework of Common Agricultural Policy reform. This conclusion by the EC Commission would appear to be rather optimistic. The commitments on access and restriction on exports will probably displace 5 per cent of Community production: 2 per cent from new import concessions; 3 per cent from export restrictions. If this were to happen, quota reductions over the six year period of 5 per cent would be required to hold milk prices at approximately current levels.
There is broad agreement that a commitment on beef raises particular difficulties. Even the Commission estimates the export volume restrictions will be of the order of 5 per cent of EC production. This will have profound consequences for Ireland. The EC claims that this problem would have arisen in any event even without a GATT agreement and that corrective action would have had to be taken to reduce the volume of production.
The Commission referred to a Council regulation of June 1992 which contained mechanisms to reduce production. These include control measures such as male calf slaughter premium, limits on intervention volumes and limits on the maximum weight of animals brought into intervention. However, I am convinced that apart from the above measures, reduction in individual premia quotas will have to be introduced to match EC production in the medium term — in the next three to four years — with the commitments given under this agreement.
This agreement will have to be resisted. It will result in drastic consequences for the farmers of Ireland. I appeal to the Minister and the Government not to stand idly by as they did in the currency crisis. They must get involved in this immediately.
I propose to share the time remaining with my colleague, Deputy Sheehan.
This motion is extremely well-timed because during our lifetime it is likely, particularly in so far as those in rural Ireland are concerned, that we will have an agreement foisted upon us which will have a profound effect on the livelihood of every farming family here. The proposed GATT agreement is vitally important for people who are far removed from rural Ireland, both in terms of location and thought. The ramifications of this agreement will be felt in every town and city of this country.
Everybody must understand the significance of agriculture to the Irish economy. In terms of actual jobs, 14 per cent of the total population is involved in agriculture, a higher proporation than in any other EC country. This does not relate to downstream industries. We must also take account of the foreign currency earned from the export of our farm products. A statistic which the Minister should remember but which he has forgotten in the past, is that both beef and store cattle production here is eight times more important to Irish farmers than farmers in any other EC country.
Will our vital national interest be protected by the EC-GATT negotiators? Events in the monetary area here in the last couple of weeks lead me to believe that the whole question of cohesion in Europe, as I understand it, is now well and truly shattered. If one is big, one plays the big game but if one is small one is sidelined. That was not one of the principles of the Treaty of Rome; yet, Ireland came out the wrong end of the scrum last week.
Another concern of mine is that the Administration of the new American President, Mr. Clinton are ensuring that they assist Canadian, New Zealand and the Australian farmer to obtain a better share of the market throughout the world through the GATT negotiations.
Is the Minister satisfied that the Germans have not changed their position concerning the GATT agreement now that their country is reunified? There is no doubt that this was a welcome development but is appears to me that their stance has changed greatly in the past five to ten years. I do not have to tell this House that Irish farmers are going through a traumatic period. The Common Agricultural Policy reform package was, in my view, agreed over our heads. The Minister for Agriculture, Food and Forestry and the Taoiseach were not up to date with what was happening during the concluding negotiations on the Common Agricultural Policy reform. I have no doubt that if we proceed with implementation of that reform we will have fewer families on the land. That is as certain as night follows day.
The broad thrust of the Common Agricultural Policy proposals is to reduce the output of agricultural commodities both in terms of volume of product and type of product. The reduction in volume will quickly show its ugly face by way of job losses in our creameries, meat factories and livestock marts. Similar job losses will occur on the supply side of farming. There will not be as much need for fertilisers. General stores and stores selling machinery will lose jobs. As production declines so also will input volumes. It is only a matter of time before the job losses affect the general processing and distribution areas. That is why I said that every large town and city in Ireland will feel the effect of this should it continue.
The cornerstone of the proposed Common Agricultural Policy reform is the so-called guarantee of compensation to farmers in the areas of sheep, cattle and cereals production by way of various premia and headage payments. Various regulatory methods are proposed to penalise producers who stock over the proposed limits.
A guarantee was given by the former Commissioner, Ray MacSharry, who seemed to be almost knighted by various sections of the community here, concerning what went into the infamous green box. I am sure everybody understands the meaning of the green box. Basically it meant that whatever was promised in the Common Agricultural Policy reform could not be tampered with in the GATT negotiations. However, that is not the American or the New Zealand understanding. Where does our Government stand if it discovers before the GATT agreement is finalised that the green box will be opened and rifled? I genuinely believe the Common Agricultural Policy reform was a bad deal for Irish farmers, and I remain so convinced. If we are to have another full frontal attack on Irish farmers by way of the GATT agreement we are facing a very difficult time here. Now is the time for the problem to be addressed.
In so far as our influence in Europe and America is concerned, the onus of responsibility is not only on the Minister for Agriculture, Food and Forestry but on the Taoiseach and the Minister for Foreign Affairs to ensure that every contact possible is made with our friends in Europe. Now is the time to identify our friends because after the GATT agreement is finalised friends will mean little to us. It is now we want the support. The biggest single crisis facing Irish farmers and their families is just around the corner and it is up to the Minister to do something about it now.
If the proposed GATT deal is implemented it will result in the loss of £900 million per year, or 60 per cent of the present farm income of Irish farmers, and major losses to the Irish economy. The world price proposals of the United States and the CAIRNS group will sound the death knell of the Irish family farm. Irish farmers are a long way behind their European counterparts. For instance, Holland, which is only the size of Munster, has a milk quota which is double the size of Ireland's and a pig production 60 times greater than this country. It is clear that if a new GATT deal is not renegotiated in time farmers will vanish from rural Ireland. One factory farm in Europe today is producing more milk than that supplied to the Drinagh Co-Operative creamery in the Minister's constituency of south-west Cork. If the production of agricultural products is to be curtailed it must come about by curtailing the factory farms in Europe, not the traditional rural farmer of the south-west and mid-west of Ireland.
I need not remind the Minister of the serious situation facing the agricultural community from Mizen Head to Malin Head. Ten years ago in the Castletownbere peninsula there were 485 milk suppliers to the Drinagh Co-Operative and the dairy disposal company. Today there are only 43 suppliers in that peninsula. The same statistics apply to the Mizen Head and Muintir na Beara peninsulas. There are three peninsula areas in the Minister's constituency where the rural population is fast declining. The Bishop of Cork stated publicly in my parish of Goleen a few weeks ago that it was a dying parish.
I would be grateful if the Deputy would bring his speech to a close. The time available to the Deputy is exhausted.
I will, a Cheann Comhairle. He sent out an SOS to the Government and the Minister for Agriculture, Food and Forestry to do something before it is too late. I appeal to the Minister to eliminate the bureaucracy that exists in his Department, face up to the realities and safeguard the interests of the rural farmer in Ireland today.
I move amendment No.1.
To delete all words after "That" and substitute the following:
"Dail Éireann fully supports the efforts of the Government in its defence of Ireland's vital agriculture and feed interests in the ongoing GATT negotiations."
I thank Deputy Yates for having tabled this motion and the Members for their contributions to date. As has been said, this is a timely motion which should be of considerable benefit at present. While appreciating that Uruguay is a long way from muintir Beara, at the same time, it is very relevant.
As the House will be aware, these talks have been underway now for almost six and a half years, since their launch in Uruguay in September 1986. In regard to agriculture the Ministerial declaration at Uruguay at the start of the negotiations stated that there was an urgent need to bring more discipline and predictability to world agricultural trade by correcting and preventing restrictions and distortions, including those related to structural surplus, so as to reduce uncertainty, imbalances and instability in world agricultural markets. It directed the negotiations towards the aim of achieving greater liberalisation of trade in agriculture and bringing all measures affecting import access and export competition under strengthened and more operationally effective GATT rules and disciplines. This was, of course, only one element of the global negotiations which cover 14 other sectors.
A mid-term review of the negotiations in April 1989 agreed that the long term reform objective for agriculture should be to provide for substantial progressive reductions in agricultural support and protection, sustained over an agreed time period, resulting in the correction and prevention of restrictions and distortions in world agricultural markets. As a result, agriculture for the first time through this round of multilateral trade negogiations is the subject of a serious attempt to reduce international protectionism and is being brought under the general rules and disciplines of the GATT. This results from the fact that in recent years increasing budgetary costs, and ever-increasing disputes regarding trade in agricultural products between the major GATT contracting parties has created a consensus that some remedial action should be taken.
The major difficulties experienced in the agriculture sector of the talks have been caused in the main by a a fundamental difference of interpretation and approach to the entire issue of agricultural trade reform. On the one hand the US and CAIRNS group have been insisting for a major part of the negotiations on the objective of the total elimination of all agricultural supports, with particular emphasis being placed on the EC's export refunds system. Even when they moved from that position, they continued to seek an accelerated level of support reduction in specific areas such as export support, as well as a substantial improvement in market access.
The European Community has rejected this approach and has consistently contended that current difficulties in agriculture should be tackled by addressing all production and trade impacting policies, thus ensuring that agreed reductions in support are determined in an aggregate way. Commitments, related to individual areas, such as exports or imports, should be consistent with the aggregate commitment.
The Community's aggregate or global approach policy has been dictated by the fact that the various support mechanisms of the Common Agricultural Policy are complementary and interlinked. Undue interference with any of them could undermine its continued viability. Border protection measures and export refunds are an integral part of the dual pricing system of the Common Agricultural Policy and inseparably linked to overall support. The undertaking of separate and specific commitments on market access and export refunds could undermine the Common Agricultural Policy and lead to distortions in trade which would have adverse consequences for Community markets in particular, for economies such as Ireland which are heavily dependent on export markets both within the Community and in third countries. Singling out export funds, for instance, for special treatment would have severe consequences for our farmers, processors, food industry and for related industries. On the other hand, the global approach would allow the Community flexibility in choosing the support mechanisms to be adapted to meet commitments and would have the autonomy to choose those that are least damaging to the Common Agricultural Policy.
Despite continued pressure in the many crucial negotiating sessions since the commencement of the round, the Community has managed broadly to defend successfully its global strategy on agriculture. However, its negotiators — despite strong reservations from Ireland and others — in December 1990 indicated that, subject to certain conditions being met, we might be prepared to undertake some commitments on minimum market access and on the volume of products which would have to be exported with export subsidies. Ireland has continued to argue that any such commitments go well beyond the Council's negotiating mandate.
In late December 1991, the Director General of GATT, Mr. Arthur Dunkel, presented his Draft Final Act to conclude negotiations, following which participants agreed a four-track work plan to continue the negotiating process so as to complete the Uruguay Round: This plan involved: (1) intensive negotiations on market access, including all agriculture elements; (2) negotiations on services; (3) legal assessment of texts; and (4) work at Trade Negotiations Committee level to "adjust the package in certain specific places". The Community indicated it had major difficulties with the text in a number of areas, including agriculture, and would be seeking a more balanced and global package.
Some progress was made on the market access aspects in the first few months of last year. All the major contracting parties submitted schedules of concessions to the GATT Secretariat in March. The EC's agriculture schedules contain basic data in each of three areas but the actual level of reduction was omitted as this had still to be negotiated. As regards minimum access, the EC schedule indicated the level of additional product which would have to be imported in each sector to meet the proposed commitment. Prior to submission in Geneva the schedules were the subject of heated debate within the Community. Many member states, including Ireland, strenuously opposed the submission of such data, in particular that relating to quantities of product exported with direct export supports and on minimum access as it would be a clear signal that the EC was willing to undertake these commitments and the Council had not approved this. However, the Commission assumed its negotiating responsibilities and submitted the schedules, albeit with the proviso, at the insistence of the Council of Ministers, that it was without prejudice to the position of the Community on the Draft Final Act. Other parties also submitted schedules, some incomplete, but there was little real discussion on this aspect as the overall issues remained to be resolved.
After several fits and starts the US and the Commission negotiators entered into a series of intensive negotiations in the autumn of last year. These culminated in a meeting in Blair House, Washington at the end of November where an outline agreement on agriculture and oilseeds in the context of the Uruguay Round negotiations was reached. These negotiations centred on agriculture on the premise that an agreement in that sector will enable an overall package to be concluded rapidly.
Details of the agreement were presented in the form of a document submitted to the full Commission on 26 November, 1992. The main elements of the accord are as follows: the Common Agricultural Policy reform compensatory payments/headage payments and similar payments elsewhere would not be subjected to GATT discipline; other internal supports would be reduced by 20 per cent over six years; the commitment would be in aggregate rather than in policy specific terms and credit would be allowed for action taken since 1986; border measures would be converted to tariff equivalents, based on a methodology suggested by the Community, which would be reduced by 36 per cent over six years; access commitments can be met through aggregation; average 1986-90 subsidised exports would be reduced by 36 per cent in budgetary terms and by 21 per cent in volume terms from 1994 over six years; a "peace clause" which is acceptable to the Commission has been agreed; this provides that where commitments on export subsidies are observed, there could be no recourse to GATT dispute procedures and on oilseeds, the Community has agreed to restrict support for production on a hectarage basis and to a minimum set-aside arrangement in that sector.
The outline agreement between the Commission and the US negotiators and other elements of the overall GATT negotiations will have to be approved by the US Congress and, of course, by the other parties to the GATT. Within the Community, the agreement will have to be formally accepted by the Council of Ministers. The understanding is that if the Congress and Council endorse the agreement, it is likely to be accepted in due course by all GATT participants. Following the outline agreement, the Commission again undertook its negotiating responsibilities and submitted revised schedules to GATT in Geneva based on the elements contained in the Washington accord.
We now come to the heart of the matter regarding the general implications of the outline agreement and its effects on the European Community and the reformed Common Agricultural Policy.
Before turning to specific aspects of the agreement, I would like to make it clear that Ireland in the various negotiating fora has always recognised that a fair and successful outcome to the GATT negotiations would provide a valuable boost to the world economy. Indeed the Irish position in relation to the round has been consistently positive and supportive and this stance was faithfully reflected in the statement by Dáil party leaders on the round on 6 November last. Also a failure to conclude an overall GATT deal would not imply a return to the status quo in international trade. This clearly will not be the case and the increasing recourse to unilateral actions and to challenges in GATT in recent years are worrying and growing trends in international trading conditions. However, I have always stressed throughout these negotiations that any final GATT agreement would have to be balanced and global and take full account of our particular concerns.
The Community's mandate made it clear that there could be no question of an agreement which in effect only covered agriculture or which required the Community to bear an unequal share of the burden of reform of international markets. In this connection it is also worth recalling the Council's position that any agreement must be compatible with the Common Agricultural Policy reform outcome which was only concluded after long and arduous negotiations last May. The impact of these reforms is only now being fully appreciated within the Community and it would be totally unreasonable and irresponsible to expect European Community producers to make even further sacrifices in the context of GATT.
It is against that background that we have to assess the European Community/ US agreement. We have, of course, examined the Commission's outline of the agreement and its assessment of its compatibility with Common Agricultural Policy reform. We have also seen statements made by the US side on the outcome. However, we also need to have a more detailed explanation of the agreement and to have it evaluated at Community level with full particulars being provided by the Commission. For these reasons I sought and obtained a Council commitment at the January meeting of Agriculture Ministers that this detailed evaluation should be undertaken immediately so that Community negotiators can be given appropriate instructions in the ongoing GATT discussions in Geneva.
From my own preliminary analysis of the draft agreement, I accept that improvements have been secured on the Dunkel formula, in particular the apparent exemption of Common Agricultural Policy reform and disadvantaged areas payments from GATT disciplines. These provisions contained in the outline accord with the US will, of course, have to be transposed into a GATT agreement — a very important feature to be pursued in the future negotiations. The Community will also have to secure general acceptance of its approach to tariffication and access.
Notwithstanding the improvements secured vis-à-vis the Dunkel approach, we have major difficulties with the overall agreement. Our evaluation to date shows that the Community would be required to bear a disproportionate share of the burden of reform. We also believe that the undertakings could not be accommodated within the parameters of the Common Agricultural Policy reform agreement in a number of sectors. Indeed, this assessment is accepted in the Commission's own analysis—specifically in relation to beef and implicitly for some other sectors.
Such an outcome would create major and severe problems for Ireland given the contribution which agriculture makes to our economy and I have brought this fact to the attention of the European Community negotiators. Our concerns are exacerbated by our heavy reliance on export markets which makes us particularly vulnerable in an over-supplied market. This matter has been raised by a number of Deputies, including Deputy Yates. I accept we have major concerns and worries in this regard.
From our point of view, the main risk arises from the proposed volume restraint on subsidised exports and the methodology to be used in meeting commitments. The 21 per cent reduction together with the access arrangements will, inevitably, require the Community to reduce production much further than envisaged in the Common Agricultural Policy reform in a number of sectors, particularly in the beef sector. The problem is made even more acute by the requirements to reduce exports in the first year below 1986-90 levels and by linear cuts thereafter with minimum flexibility. That is the front-loading which is extremely serious for us.
In the beef sector, this would require the Community to reduce exports by more than 200,000 tonnes on current levels in the first year and by 500,000 tonnes in the final year. The Common Agricultural Policy reform measures will not reduce Community output by these amounts and, even if we wanted to do so, we cannot now put measures in place to reduce beef output by 1994. We also understand that the restriction on subsidising exports to East Asia is to remain in place. This makes the situation even more difficult.
While similar problems will arise in other sectors — milk is a major concern of ours also — the problem is most acute in the beef sector. There is also a problem with cereals. There are also other questions such as the precise terms of the peace clause and the way in which sizeable intervention stocks will be disposed of before the commencement of the agreement. The latter is raised as a problem in the Commission's analysis paper but a solution has not been proposed. This aspect is of particular concern given the level of current Community stocks of cereals and beef.
The foregoing gives a flavour of our concern in regard to this stage of the negotiations but we need to be absolutely clear as to the full implications of this accord. We can do this only by an examination on the lines I suggested earlier. If, as I believe, the commitments involved are not capable of being contained within the Common Agricultural Policy reform arrangements, then a totally new situation exists and this must be addressed. For this reason the evaluation exercise of the compatibility of the outline agreement with Common Agricultural Policy reform now under way at expert level in Brussels, is of paramount importance to the next and possibly final stage of these negotiations. I want to make it crystal clear to the House, as I have made it clear to our European partners, that I will not accept an outcome which goes beyond Common Agricultural Policy reform parameters unless such an outcome is accompanied by firm commitments that our vital interests will be protected in the further measures that would then be necessary. If the agreement cannot be accommodated within those limits then that situation will have to be dealt with either by moderating the terms of the agreement in the further negotiations or by putting in place acceptable measures to defend our vital interests in the further measures which would then be necessary.
The timing of the final stages of these negotiations is not too clear at the moment. When one considers that every deadline in this round of talks has been broken, it is unlikely that there will be an early conclusion of the negotiations. A lot will depend on the attitude of the new US Administration and our latest information from Washington suggests that the new US negotiating team will be seeking an extension of between six to nine months of the US fast-track negotiating procedure. This was due to expire at the beginning of next June and would have necessitated an agreement in GATT by the beginning of March in order to comply with Congressional examination and approval requirements. These early deadlines now appear unrealistic and it looks as if more time will have to be provided to conclude the round. Furthermore, recent comments from Washington suggest that the US side itself may have some problems with certain elements of the EC/US outline accord, on agriculture, and in other areas of the talks, which the new Administration will wish to take up in the ongoing negotiations.
Our position on the outline agriculture deal is quite straightforward and fully appreciated by our partners in Europe and I have availed of every opportunity to explain our concerns.
In brief, these are that we would have major difficulties with any agreement which is not compatible with Common Agricultural Policy reform; volume restraints on subsidised exports pose a serious difficulty for Ireland and no one should underestimate the extent of the problem which this aspect creates for us, the agriculture aspect cannot be dealt with in isolation or before a complete analysis of the overall GATT outcome has been undertaken. Ireland has always been committed to an early comprehensive and balanced result to the round. Equally, we have been absolutely clear that our critical interests on agriculture, and indeed other areas such as textiles, should not be sacrificed on this particular altar. That remains our position and only when all the issues have been negotiated to the point of maximum possible consensus, can the Government adopt its final position on the round. In regard to agriculture, I would re-emphasise that in that final position we will not accept an outcome which goes beyond the Common Agricultural Policy reform parameters, unless it is accompanied by binding commitments which protect our vital agriculture and food interests.
I should like to share my time with Deputies Cox and Tom Foxe.
Is that agreed? Agreed.
I wish to make it clear at the outset that the progressive Democrats Party supports the terms of the Fine Gael motion although its wording could give a wrong impression. Deputy Yates's motion seems to assume that there is an agreement on agriculture within the General Agreement on Tariffs and Trade whereas there is only a bilateral agreement between the United States and the European Community. This bilateral agreement was drawn up by two individuals who have since retired from politics and it related to one sector only. It should be made clear that the Government cannot be bound to accept this deal drawn up between those two politicians as a fait accompli.
I listened carefully to the Minister's speech. When a major crisis confronts a key industry here, it would be helpful if all parties were seen to take a united stand on behalf of that industry. Was it necessary for the Minister to alter the terms of the motion by putting down his own amendment? On this occasion it would have been fitting to accept the amendment as it was put down.
I understand that a working party of the European Community's Council of Ministers Special Committee on Agriculture is investigating the compatibility of the MacSharry-Madigan arrangement with the decision made last June to reform the Common Agricultural Policy. This deal is of particular importance to Ireland. Our agriculture and food sectors are more export dependent than those of any of our EC partners. Approximately 42 per cent of our net foreign earnings and 26 per cent of our exports are generated by Irish food products, whereas the average for the Community as a whole is just 9 per cent. It is fine for the United States to talk about liberalising agricultural trade when only 2.5 per cent of their labour force work in that sector; we are seven times more dependent on agriculture. Obviously, with the spate of threats and counter-threats of imminent trade wars, GATT needs to be replaced by a more effective global agreement. There are very few angels among the main protagonists in the new GATT round. US Government spending accounts for 25 per cent of the total earnings of American farmers and the relevant figure for the European Community is well over 30 per cent. It is incorrect to say that the US does not support its farmers. It is interesting to note that there are 2.4 million farms in the United States, whereas there are nine million in the Community. However, the average size of an American farm is 175 hectares and the average size of a European Community farm is only 13 hectares. Therefore, it is clear that US farmers have a competitive advantage vis-à-vis EC farmers.
We must put the trade talks in their proper context, particularly in regard to important areas such as the dairy sector where a mere 7 per cent of world milk output is traded. The problem for our food industry, for our farmers and the economy as a whole is that Ireland is such a major exporter of agricultural produce. Over 70 per cent of what we produce on our farms has to be exported. Our dairy industry has expanded and is now a major motor for development in our economy. Irish dairy companies have developed into international food companies with processing plants located as far apart as Budapest and Wisconsin. Significant advances have been made in the white meat sectors — pig and poultry meat — by our major dairy processors. For 20 years output remained stagnant but, as a result of the IDA and FEOGA supported programme, we have experienced a 25 per cent increase in pig meat production since 1989. We are one of the most efficient producers of pigs in the European Community and even in this relatively non-subsidised area more than 50 per cent of produce has to be exported.
Discussions in Brussels on a deal that will fundamentally alter the terms of trade are critical to our economy, our farmers, our food exporters and employees in the food industry. The key elements of the MacSharry-Madigan package are improved import access to the Community, primarily through increasing imports from 3 per cent in 1994 to 5 per cent in 1999, reduced internal EC support culminating in a 20 per cent reduction in internal Community supports and a reduced commitment to exports, with export subsidies to be cut by 36 per cent. The volume eligible for subsidy will be reduced by 21 per cent. A key issue that confronts us is the base period against which these cuts are to be measured. The choice of a base period of 1986 to 1988 means that the cuts proposed seem lower than they actually are. The 21 per cent cut in the volume of products that can avail of export refunds translates into much higher figures in reality. For instance, in the beef sector, the volume of products will have to be reduced by 33 per cent in relation to 1991 export levels. The same figure in the white meat sector is a cut of 40 per cent in subsidised exports.
A second critical issue for Ireland is our particular level of dependence on exports. We export 80 per cent of all dairy products and one-third of our total production is exported to third countries. Under the proposed deal approximately 10 per cent of Ireland's dairy products could be forced to trade unassisted while, for the remainder of the Community, this figure would be as low as 3 per cent. In the beef sector, 15 per cent of Irish production could trade at world prices while the average for the rest of the Community would be 4 per cent. The impact of these proposals goes far beyond the reforms agreed under the Common Agricultural Policy reforms last June. To take the dairy sector as an example, the net effect will be to increase import of dairy products into the Community from 1994 to 1999. For example, imports of cheese are set to double in that period. Given the already painful adjustments in the dairy sector brought about by the imposition of milk quotas, any measures which will have the net effect of creating an imbalance in the dairy market must be vigorously opposed.
A recent study by the ICOS analysed the impact of those measures. The total amount of extra imports proposed is equivalent to 3 per cent of our national milk quota. The decreases in the volume of products supported on the export market is equivalent to a further 2.4 per cent of the quota.
Therefore 5.4 per cent of our milk quota will be jeopardised. This is significantly greater than the cuts agreed last June. The Commission's estimate is that we should have a Community surplus of 5 per cent in the beef sector. This could translate into a much higher cut of up to 10 per cent of production in Ireland. The combined effect of the GATT proposals and the Common Agricultural Policy reform will put approximately 452 jobs at risk in the dairy sector. A further 440 jobs will be put at risk in the beef sector. Those figures do not take into account any further reduction in farm employment as a result of the measures. This runs counter to the Government's stated objective in the Programme for Government of maintaining the maximum number of viable farm households and of maintaining employment possibilities in agriculture.
The two major farming organisations, the IFA and the ICMSA, put the cost of the proposed deal at £318 million and £250 million respectively in terms of the cuts in the value of agricultural outputs. This will seriously affect economic activity here. It is clear in the present circumstances, with some 302,000 people unemployed, that the proposed GATT deal is a further and totally unacceptable threat to existing Irish jobs. I ask our Minister to take a very firm stand and fight, using all the available resources, the deal as it has been worked out to date to ensure the protection of our agricultural industry and those employed in it.
I listened with care and attention to the Minister's contribution and I am uneasy about it because its tone was passive. The Minister in the course of his address referred to the European Commission being prepared to undertake commitments on minimum access, non-subsidised exports and so on and stated that he outlined our concern about this. However, our concern did not prevent the European Commission doing something that will land us in the soup in some months' time, perhaps later this year. The Minister said the Irish Government and others opposed the submission to Geneva of the relevant figures for consideration under GATT. However, the figures were submitted and it did not seem to make any difference because all the things we hoped would not happen have come to pass. If this continues we will have to get tougher in our tone, diplomacy and substance in terms of our interests.
I agree with the Minister that if the GATT reform goes beyond Common Agricultural Policy reform and if it costs more we must be compensated for it. I have one basic problem in this regard; following the Edinburgh Summit some weeks ago, we are party to agreeing a financial perspective for the European Community which sets the ceiling on spending for the entire Community for every area of policy up to 1999. We got a commitment of £8 billion for Structural Funds, but the price was an agreed financial perspective with a ceiling. If we fail — and so far the Minister has failed in the GATT round to hold back the Commission — where will the compensation come from? The perspectives and budgets are in place but compensation is not provided for.
The Minister is in a very difficult position politically and I sympathise with him, but if we get it wrong this time, as we got it wrong relying on others to intervene in the currency crisis, our farmers will pay a horrendous social price which we cannot afford. In respect of GATT and Common Agricultural Policy reform, we all agree they are interlinked and in a sense inseparable. In regard to rural society and protecting family farms, the fabric of rural life, the main criterion is what they can generate in agriculture from farming. Of course we want agri-tourism and the Leader programme but all those put together are penny halfpenny schemes in comparision with the basic income derived from agriculture.
Ireland has a special case. We do not need to reiterate it here but it is worth observing that we depend more than any other member state on trade in beef and dairy products. We have a beef dependence in terms of our overall agricultural output nine times the European average and a dairy dependence seven times the European average. We could complete with the United States — if we got rid of four-fifths of our farmers, the efficient one-fifth could compete with anyone but we do not want to do that. What may we now expect?
As a member of the European Community we have quotas on output and further quotas on the way in some sectors. That is self-evident from objective analysis of the figures. However, other countries may continue to increase their output and are not subject to any quota. How did this come about? It resulted from the EC and the United States doing a bilateral deal within GATT. We now have no long term protection and although we had tough things to say about what we wanted along the way, after the MacSharry-Madigan meeting in Dromoland Europe went soft and gave everything in terms of agriculture; the United States in net terms has given nothing but have gained a lot. Of course, it is not a final deal but if it is not modified it will be disastrous for the net vital national interest of our farming industry and the economy. What will it mean? Ireland, the most trade dependent country within the EC, will export less and import more under Common Agricultural Policy reform. The Minister is aware that at the tail end of that reform process, we who are heavily dependent on intervention will sell half a million tonnes of beef less into intervention than at the beginning. It is our job to sell it to the consumers in the market but under the minimum access requirements under GATT another half million tonnes will flood in. There will be a further one million tonnes of beef in circulation in the Community together with an increase in supply but no increase in demand. We all know how markets operate. If supply increases in a market where there is a fixed level of demand, the bottom falls out of the market and the price falls. If we agree to Common Agricultural Policy reform and add an equivalent amount by way of minimium access condition for others, the dramatic scale of the price fall will mean a cleaning of the land of farms similar to what happened over the past two or three decades in the United States.
To a lesser degree, but to a significant and worrying extent, the same concern applies in regard to the quota provisions that will arise in dairying. The implications of this are magnified for Ireland because of our greater relative dependence on those product areas and on trade. Overall the Minister talks about trying to hold the line with the European Commission but experience should teach him that he is losing. The Commission will go to Geneva with figures the Minister did not want submitted and will grant concessions to the United States. It is a battle that the Minister is already losing and in regard to the possibility of compensation, there is already a ceiling on the financial perspective of the Community.
The Minister should adopt the policy he referred to with a tougher tone, attitude and vigour. That approach should also be adopted by the Taoiseach and the Minister for Foreign Affairs. The Irish diplomatic service has a big battle on its hands and if it is lost the fabric of Irish rural life will be diminished. It is a battle that requires toughness in all respects.
I will finish as I began by saying that there is a certain passive tone to what I have heard, we must now learn lessons here. I am a very committed pro-European but after the past few weeks, like everyone else, my eyes have been opened. There is no point in being committed but naive. If GATT reform goes beyond Common Agricultural Policy reform, I do not know where the compensation will come from and I do not know what the Minister proposes for the fabric of rural life besides providing a few initiatives which will come from the Structural Funds, the Leader programme and agri-tourism which are all fantastic add-ons if you have a basic income. If there is no basic income there is no basic fabric to rural life and that is what is at stake here.
The implications of the GATT proposal for our farmers is the most serious problem we have ever encountered. The technical details have been clearly stated by my colleague, Deputy Yates. The real problems here in relation to the meat industry cannot be over-emphasised. How did those problems arise? They resulted mainly because of German unity and the free access of meat and livestock products from Eastern Europe about which very little was done. Suddenly we had massive intervention stocks and the consequential problems. That has helped to increase the power of the US to force us to make commitments to curtail our meat outputs in the years up to the end of the century. That commitment cannot be met unless farmers' incomes are dramatically reduced resulting in subsequent losses in output, jobs, the agricultural industry and our economy.
Since we joined the quota regime in 1983 the position in the dairy sector has been similar. That quota has been lowered almost every year since 1983. Our quota in 1983 was brought about not just by the Minister for Agriculture fighting for us in Europe but by the then Taoiseach, Garett FitzGerald, travelling from country to country to ensure we got the best possible deal. The position in relation to this GATT is similar and our Taoiseach should support the Minister to ensure that we get our fair and proper share. However, if we are to go by what happened in the currency crisis in the last few weeks we have little hope of such support in this case.
We have been asked to curtail our output from now until 1999. What have we got in return? Have the US or New Zealand been asked to make any cuts in their outputs? I am not aware of any agreement relating to New Zealand, Australia or America agreeing to quotas or to cut back output. History has shown that each time Europe curtailed its quota output, two years later output increased in the US and New Zealand to take up the slack which meant that, once again, we had to curtail our output. We have an extremely serious problem in that, unfortunately, an Irishman acting on our behalf in Europe accepted all the cuts with no guarantees about future quotas. The consequences of the curtailment of output here will be a major reduction in farm incomes, subsequent job losses and a lowering of our output.
Much of the income is supposed to have been replaced by Common Agricultural Policy reform by means of subsidies. The Minister will recall that there was great enthusiasm to expedite those subsidy payments last November. When documentation reached the local office in Ballybay cheque payments were issued. That is not the current position. Those who were not paid then continue to wait patiently while their bank managers pressurise them in regard to their loan repayments. This change is the result of Common Agricultural Policy reform and it will be the procedure for the future. If there are any small technical errors farmers will have to wait indefinitely for the subsidy payment. Media reports have highlighted small technical problems within the Department. I hope jobs will not be lost over that as farmers who fail to meet every technicality have suffered losses in their income for two years. That is only a minor detail, the reason for this debate is that the GATT is extremely important. We must generate enthusiasm in the negotiations. The Minister and his team of civil servants, who no doubt will do their best, must be seen to have the active support of a united Government. The Taoiseach and all the diplomats must make a stand once and for all to ensure our vital national interest is upheld and preserved and that farmers right across the country get their entitlement.
In regard to the poultry and pig sectors it is considered that GATT reform will be advantageous and will mean cheap grain and food inputs but that is not so. History has shown that if the Americans have a surplus they will sell it to Europe at any price, but as soon as any crisis occurs, for example, resulting in a shortage there, they will increase their prices. Having been involved in farm organisations some years ago I recall an official of the American Embassy travelling around the country advertising the value of soya beans and that we should pick up their soya bean surplus which provided protein for animal feeds. Less than 12 months later that product or the official promoting it could not be found. Weather conditions in the US caused scarcity of the product — and we could no longer buy soya beans at a realistic price. That is the position in which we will find ourselves if we stop grain products and we depend solely on the US for cheap products. Our poultry, pig and other animal feeds producers will suddenly find themselves totally dependent on a small number of importers, wheeler dealers will put prices up and we will no longer have the supposed adge as a result of the lowering of grain prices promised in this famous Common Agricultural Policy and GATT deal.
There is an onus on the Minister to fight this issue and to make the strongest possible case to ensure the interest of farmers here are fully protected. Forty per cent of our output comes from the agricultural sector and that figure is based on natural production, not on imports. If farmers' interests are not protected the Minister and his Government will have a major problem when they face the electorate. If the Government fails to provide the proper basis for our agricultural production and if we accept the GATT proposal as it stands people will not continue farming and we will have serious problems. Having been involved in the dairy industry in the past the Minister is aware of the importance of dairy farming. My colleague pointed out the number of farmers who have got out of that business in the south and the same applies to Cavan, Monaghan and parts of the west. We want to ensure that as many people as possible remain in production. That can only happen if the Government takes GATT seriously and protects us in the present negotiations.
Debate adjourned.