Dáil Éireann debate -
Thursday, 12 Nov 1998

Vol. 496 No. 5

Written Answers. - Farm Subsidies.

Proinsias De Rossa

Question:

22 Proinsias De Rossa asked the Minister for Agriculture and Food the position regarding proposals from the European Commission that responsibility for paying a quarter of direct farm subsidies would be transferred to national governments; the potential cost to the Exchequer of this move; and if he will make a statement on the matter. [23100/98]

Minister for Agriculture and Food (Mr. Walsh)

On 9 October 1998, the European Commission submitted a report to the Council on the operation of the Own Resources system. In addition to reviewing the system, the report also considered the issue of budgetary imbalances as between member states. The report suggested three options for addressing these imbalances if there were broad agreement on the need to do so. One of these options involves national co-financing of CAP expenditure on direct payments at a level of 25 per cent.

Ireland is totally opposed to this option. The financial burden involved would fall disproportionately on the less prosperous member states, such as Ireland, which are most dependent on agriculture. Moreover, this option would contribute only in part to correcting the budgetary imbalances of the member states concerned. Also, as the Commission's report itself states, "budgetary balances measured by the simple difference between contributions to and receipts from the EU budget, represent only a narrow view of, and fail to fully account for, the benefits accruing to member states from participating in the EU".

The potential cost to the Irish Exchequer of the 25 per cent co-financing option would be in the region of £85 million in 1999 rising to £160 million in 2006.

The Commission's report is being examined at official level in Brussels in preparation for further consideration at Council level.