I invite the Minister to make his opening statement on CAP reform, the overview on Irish farming and the proposed animal health remedies regulations.
Overview of Irish Farming: Ministerial Presentation.
The current negotiations on the mid-term review of Agenda 2000, the next world trade round agreement and, to a lesser extent, the enlargement of the EU will impact on the Common Agricultural Policy and could be of major significance for the future of Irish and European farming. Accordingly, the year 2003 will be critically important for Irish farming.
The Agenda 2000 agreement, which was agreed by the Heads of Government in Berlin in March 1999, provided for a mid-term review. Outline proposals for the review were published by the EU Commission in July and have been discussed every month in the meantime by the Council of Ministers. They are also the subject of consultation with the European Parliament. The Commission is now expected to bring forward detailed proposals early in the new year and the Council will continue its examination of the proposals for some months. It is likely to be well into next year before any decisions are taken.
There are four main elements to the mid-term review and Commissioner Fischler's proposals: decoupling of direct payments, dynamic modulation of direct payments, rural development and changes to commodity regimes. The Commission's proposals go beyond the review envisaged in Agenda 2000. In particular, the proposals relating to decoupling and modulation represent a fundamental shift in policy. Agenda 2000 was intended to provide a framework for seven years up to 2007. Although some aspects of Agenda 2000 have not yet been brought into effect in 2002, Commissioner Fischler has tabled major, fundamental reform proposals. Farmers and the agriculture industry are entitled to rather more security and should be allowed to plan ahead on a longer term basis. It is most unfair to deny them the period of reasonable stability envisaged in Agenda 2000 for which they had legitimate expectations.
With regard to commodity regimes, the main proposal in which we have a direct interest relates to milk. The Commission has published an options paper setting out four possibilities for the future of the milk regime, including the two extremes of continuation of the current quota arrangements or their abolition. Agenda 2000 provided for a reduction of prices by 15%, with part compensation in the form of a dairy cow premium. Both the price reduction and premium were to be phased in over three years commencing in 2005. The appropriate approach should be to decide what arrangements for the sector should apply after 2008 as part of the negotiations on the next financial framework.
On cereals, another commodity area in which we have an interest, the Commission is proposing to reduce support prices by 5% and part compensate growers through increased direct payments. The European Union has been exporting cereals without subsidy and importing cereals without tariff for most of the current marketing year. Therefore, the case for a further reduction in cereal prices is not apparent.
Decoupling would have some advantages. Individual farmers have said that if their premiums, by way of cheque in the post, were issued without their having to raise and finish livestock, they would be better off as there is a cost involved in that production process but no corresponding profit. They argue that, in effect, they are forced to produce livestock in order to collect the premium. As I said earlier in the Dáil, first and second premium, extensification and slaughter premiums amount to €540 per animal. However, on the downside, a major disadvantage is that if farm payments were made entirely on the basis of the direct cheque in the post, there would be no incentive to produce any livestock. That would have a direct negative effect on our processing industry. Dr. Brendan Kearney has carried out a study of the likely effects in this regard. My Department has also undertaken a study which will be to hand before Christmas. Dr. Kearney's study indicated a possible drop of 35% in cattle output which would obviously have a major impact on employment in our meat processing plants.
The modulation proposal involves a 20% reduction in direct payments over seven years with the money being diverted into rural development schemes such as the Leader programme. Obviously, nobody would be happy with a 20% cut in income. Direct payments now represent approximately 68% of farmers' incomes. The question arises as to what better use could be made of this money under the new proposals. While Leader and other programmes are valuable in their own way, I do not agree with taking money from one system to another without having credible schemes in place to utilise the money. Apparently, the intention of the European Union is to deduct the money from farm payments in the first instance and subsequently dream up schemes and programmes to utilise it. At the very least, both in relation to decoupling and modulation, we need a comprehensive study of the impact on farming, agribusiness and the rural landscape. Money is best invested in schemes directed at keeping farmers in rural areas, thereby sustaining rural development, maintaining rural communities and providing for continuation of the vital role of farmers as custodians of the landscape. The countryside would be a very strange scene without normal farming activity. It would become a deserted, overgrown wilderness or "national park". The current EU proposals would have far reaching effects and require comprehensive impact studies.
Commissioner Fischler has outlined his main reasons for decoupling. Direct payments to Irish farmers amount to €1.6 billion annually. In the context of the WTO trade negotiations, other countries such as New Zealand which offer no such support for their farmers would argue that we have an unfair advantage. Developing countries are also opposing the current EU direct payments on the grounds that the European Union is using the payments to dump excess production, thereby undermining their economies and preventing their industries from developing. Clearly, therefore, EU direct payments to farmers will come under severe assault in the WTO trade negotiations. Commissioner Fischler argues that the only way to avoid such a challenge is to decouple the payments from production. He talks of switching payments from the Blue Box to the Green Box, thereby enabling payment to continue. From the Brussels summit meeting last month there is a financial framework to maintain the payments until 2013.
The mid-term review and the WTO negotiations have enormous potential for good or evil in relation to Irish farming with particular reference to direct payments and export subsidies. While I do not wish to engage in further discussion on the Egyptian market at this stage, the reality is that we have no prospect of a successful beef export trade to that country without export subsidies. We currently sell 80,000 tonnes of beef to Russia each year, which is equivalent to approximately 250,000 cattle. There is no hope of maintaining this trade without the aid of export refunds or subsidies. Our beef exports to Egypt amounted to 150,000 tonnes per year before we were excluded from that market due to BSE and foot and mouth disease problems. It is vitally important for us to regain it. In an effort to assist in that regard, Commissioner Fischler offered to provide an additional 30% over and above existing export refunds to enable the beef industry to export to Egypt. All of these subsidies will be under threat in the WTO round of negotiations. At present farmers get around 90p a pound in old money and about 70p, taking the €540 per animal on top of that. The Russians are getting that same beef for around 48p to 50p a pound. In their case there is a degree of subsidy involved which could come under threat in the next world trade round. We must therefore try to protect farmers' incomes and the degree of direct support for them. They will come under pressure in both the mid-term review and in the world trade round.
Enlargement is another matter on the horizon. While we support enlargement because it will bring in another 109 million potential customers, it will also mean competition for us. Farming methods in Poland, Hungary and some of the other applicant states are behind the times, probably similar to our own in the 1950s and 1960s. They will catch up and leapfrog fairly quickly and pose some additional competition, but we are well ahead at present in technology, production, yields and systems generally, and we have a good food industry which is also well ahead. There should be no fear from that point of view.
There are a number of matters coming up - the mid-term review, the world trade round and enlargement. Each has the potential to pose difficulties for Irish farming. We succeeded in previous negotiations on CAP reform in the early 1990s and on Agenda 2000 in getting a good deal and in getting alliances with other like-minded states, the French in particular. I am confident we can do the same in these negotiations. We must put our best foot forward and be professional about it. I wanted to share, with the committee, aspects of some of the issues arising over the next 12 months. I would like to hear the comments of members of the committee in relation to it.
I suggest that separate questions be asked. Does the Minister want to discuss the overview on Irish farming and the proposed animal health remedies regulations?
Yes.
We will do so briefly.
Apart from myself, other members have appointments or engagements or other matters to which they must attend.
The year 2002 was a difficult year. The CSO estimated that aggregate farm income declined by 8.5%. However, farming is a cyclical business and we must take a few years together to get a true picture.
In response to the very difficult summer weather, I instigated a series of actions within the Department and at EU level to alleviate the situation. These included strengthening market support for milk. On several different occasions we got increases in export refunds, incorporation of butter into various other products and increases in casein and caseinates export refunds. There was also an increase in the amount of butter and powder that went into intervention. Nobody likes intervention very much because it is no way for a food product to end up. We had a ceiling of 109,000 tonnes and the lid had to be taken off that and additional powder and butter put in. Even though we produce about 4.6% of the EU milk total, we have 30% of the product in intervention.
There is a problem with our marketing if we have to rely on intervention, especially for milk where we have made such strides in products such as caseinates, infant formula and so on. It was a difficult year globally for the milk industry and that impacted on the prices paid to farmers. We got agreement from Commissioner Fischler to pay an 80% advance in premia payments which are normally paid at 60% and that was helpful. We also got an earlier payment of the 50% advance in arable aid and were allowed use set-aside land for grazing because of the poor weather. There were also improvements in farm assist. I do not know what the problem is but farm assist is not working well, even though I and my colleague the Minister for Social and Family Affairs, Deputy Mary Coughlan, agreed to change the rules to base it on current year income rather than on historical income because 2001 was a bit better than 2002. Even with that change in the rules, a relatively small number of farmers are availing of farm assist.
On a positive note, the Department paid out about €1.2 billion of the €1.6 billion and the rest will be paid before the end of the year, except for problem cases. Direct payments now account for a staggering 68.5% of farm incomes. This is represented by an average payment of €13,000 per farmer and is paid out to around 125,000 farmers. Farmers are entitled to these payments because they are part of the supply control system in return for which Irish farmers agree to a quota system of supply control. I mentioned New Zealand which has no limit. In order to have a supply control system, we get compensatory payments.
However, in spite of all efforts, I am conscious that low income remains a problem especially on the small farms. People have talked about the number of people leaving the land but it is not to the extent that many believe - around 1.5% leave the land annually. It is too much but that is how it is. We all know of incidences in our extended families or in our localities of farmers, for the first time in several generations, finding it difficult to get a successor to carry on farming. People have other options which, in many cases now, are in Ireland. One hopes such options will be in the same locality as well and that there will not be so much migration to the main cities.
What I am trying to do is make the option of farming a bit more attractive. It does not help if spokesman after spokesman talks down the industry because there is much that is positive about farming and a fair bit of support for it. We have a fairly good beef industry which is supported to the tune of about €1.25 billion. One wonders how it would work without that level of support each year. That support is made up of €540 per animal, the first and second premium, the extensification premium and the slaughter premium. That totals in excess of €800 million per annum. There is also the process for rendering and getting rid of fallen animals. There are compensatory payments and export refunds. That totals more than €1 billion each year in support of our beef industry alone. There is considerable support for the industry. The industry has made great advances. There are many attractions for farmers. There is an increase in the number of younger farmers attending agricultural colleges. There is also an increase in the number of people doing agricultural science in UCD. For all the criticism there has been of the budget, at least for younger farmers we were able to get a three year extension and stamp duty exemption.
The stamp duty exemption is considerable at 9%. One would not get much of a farm now for €700,000, €800,000 or even €1 million, if there is any type of quota with it, and some 70 or 80 acres of good arable land. That 9% could be €90,000 or €100,000 on such a farm. In addition, young farmers get more than €9,000 from the farm installation aid scheme while farmers in the 55 years age bracket, or thereabouts, benefit from the farm retirement scheme. The farm retirement scheme is not implemented across the Border or in Britain; they could not be bothered with it because it costs a bit of money. It is only 50% funded from the European Union but we have those incentives for younger farmers to stay on the farm and make a living out of it. That is why I am not enthused about the decoupling proposal nor am I enthused about some of our cereal farmers saying they want a greater percentage of set aside. In other words, they want the money because they believe it is no longer worthwhile to produce grain. We have some natural advantages in Ireland including adequate rainfall, although we do not want too much of it. We should be able to do better with the soil and climate we have here.
People talk about imports, especially in relation to beef, poultry meat and pigmeat. We consume about 62,000 tonnes of beef in Ireland, 12,000 tonnes of which are imported. Those members who are good at sums can work out the percentages but it is a fairly high percentage. On the other hand, we export 500,000 tonnes but at the same time the level of imports of that product alone is fairly staggering and nobody other than Irish people is consuming it. Bord Bia operates a Féile Bia scheme and it expects everybody, including ourselves, to make sure that the rashers and the steaks served in our favourite hotel or bed and breakfast establishment are Irish. How many of us do that because 12,000 tonnes of beef are imported here? That figure is even higher for poultry meat. Virtually all the poultry meat in catering is imported, and a substantial amount of pigmeat is imported. In fact, the total food imports into Ireland amount to 1.8 billion tonnes.
In a country with good farming and a good agriculture base, we should do a bit better than that. I know some of those products are exotic, tropical and so on but a very high percentage of them are products that we can and should produce. Members know people living in rural areas and they know that even the kitchen garden is now a thing of the past. Were it not for imported ordinary food we eat on a daily basis, we would have a famine in some parts of the country because people do not produce these products.
We have some ground to make up in this area and we can and should take more measures in that regard. National and EU support is considerable. Some of our farm leaders could inculcate a better effort on the part of producers. We certainly could do with a better effort from processing factories. We need to produce what the consumer wants and signal that to our farmers because if we do that, we can do as well as any other country. The entire industry will also have to address the major concerns that will arise in the next 12 months.
What about the animal health remedies regulations?
On animal health, I am aware that the committee met representatives of the Animal Health Association, ICOS and the IFA on 27 November last to discuss a range of issues relating to veterinary medicines. In this regard, there are a number of ongoing issues relating to intramammary antibiotic medicines and vaccines. We also have the Commission proposals on EU medicines legislation. I will not read out the list; I will leave a copy of it with members.
Having completed the consultative process, the Department of Agriculture and Food is now in the final stages of drafting a workable, practical and orderly regime for intramammaries which will meet the essential concerns of public health and also animal health and welfare. Ideally, this regime will involve the existing range of outlets. By that I mean our co-operative structure throughout the country and so on. Since I last came before the committee, I have had intensive discussions with ICOS, the umbrella organisation, and I said we can do this in the context of a mastitis control programme because it is not my wish that an unfortunate farmer who is under pressure in a milking parlour has to get a professional person to come out and tell him how to use a mastitis tube. That is not what is envisaged. I have been around long enough to know that one does not have to go into town to the local pharmacy to have some pleasant person give one a particular intramammary or medicine and expect that to improve animal or public health in some way. That is not the case.
The whole question of animal medicine and intramammaries is a public health matter. That is the rationale which lies behind the proposals, which are internationally accepted, to address those concerns. A number of years ago, school children got sick because there was a high level of antibiotics in milk. We do not want our immune systems to be turned upside down as a result of residues of various drugs and medicines which are used in general on farms. We have to protect public health but the fact is that every consignment of milk is now tested and retested for fat, protein, lactose, residues, antibiotics, etc. We could not make a tub of yoghurt or ferment a vat for cheese making if there was a level of antibiotics present because it would kill all the bacterial organisms. We have gone a bit beyond the old days when there was a very high level of antibiotic and residue free milk in our dairy herds and going into our multipurpose processing plants. At the same time, however, we have concerns about the growth of antibiotic resistance in the human population because the protection of human health is paramount and our approach has to be guided by that principle. We cannot have a free for all but I will introduce a practical and workable system.
I thank the Minister and his officials for coming in here today. I am conscious of the time so I will be brief. I will start where the Minister concluded, namely, intramammaries and vaccines. I do not know exactly what the Minister is saying but I ask him to take on board the view expressed to us. There appears to be little evidence of residues or abuse of the system and if some of these medicines were to be classified as POMs it would incur an extra cost. I ask the Minister to take that into consideration before he comes up with his proposals.
With respect to the overall view of CAP reform, I hope I am not at fault but perhaps I am to a degree. It is easy to go down that line. The same is the case with contaminated water where fear is played on. One would think that with the expression of outrage one's effectiveness is judged. It is important that we send out the message that farming is a wonderful way of life. I do not come from a farming background, but when driving to Leinster House early in the morning I think to myself that I would like to hang around for the day and do a bit of farming. I am not saying it is as simple as that and that one would be thinking of the cup of tea at 11 a.m. I hope that does not get me into trouble.
Farmers like consistency and a consistent policy. Policy in this area is dictated by European policy. The point the Minister made about Agenda 2000 and having something consistent is true. Agriculture is an industry that is slow to change, but now that the consumer is king perhaps it will have to change.
The Minister mentioned the figures of 68% and €1.6 billion. The farm Establishment is very much against CAP reform about which I will not spend too much time talking because in many respects we are talking in a vacuum in that we do not know the details or what will be the findings of economic impact studies. It is the fear of losing €1.6 billion, if the policy changes, more than anything else that has set the Establishment against CAP reform. I am sure the officials in the Department who drew up the policy papers pointed out the many positives in respect of the Fischler proposals.
Many of the problems with the current system such as quotas and inputs and many of the policies currently in place hinder the structural development of farming, which has regressed since the new policy was introduced vis-à-vis payments. In many respects there is a contradictory policy when one examines closely the problems about which people are talking. Many believe the current system caused the problem. In regard to subsidies, it is difficult to stand over and advocate such a system rather than produce for the market. When the findings of the economic impact studies are issued and the exact reform proposals published, every sector of the industry will have to examine them in an honest manner to decide where we must go from here.
I cannot understand the reason responsibility for rural development was taken away from the Department of Agriculture and Food. It was a retrograde step. Does the Minister have a view on this?
With regard to the animal health remedies regulations, I welcome what the Minister is saying, although I am not sure that we are on the same wavelength. A suggestion based on the report presented to us by the Irish Medicines Board would be impractical. The Minister knows that I would be the first to scream if I thought there was any risk of compromise on human health. We are light on statistics, not only nationally but also internationally, on the implications of the treatment of animals with antibiotics, particularly by way of local application. Some Scandinavian models are referred to frequently in the document. As we are dealing with a completely different approach, there is a need for flexibility. The alternatives proposed by way of rigid control and prescription only medicines would be negative. There would be a number of associated negatives, of which I ask the Minister to take account.
In relation to the Common Agricultural Policy, I am sure the Minister is aware that the publication of the Teagasc report yesterday revealed that 50% of farmers believed the Fischler proposals to reform the CAP would not have a positive impact on their incomes. Perhaps we should take account of this report.
I welcome what the Minister said about the animal health remedies regulations. I stated at a committee meeting last week that farmers were professionals. They are well trained and tops at their business, particularly those engaged in farming full time, especially dairy, sheep and pig farmers. I hope the Minister will get agreement on the regulations, as the committee agreed with what representatives of the IFA and ICOS had to say about them. If he gets their agreement on them, he will get general agreement.
The issue of farm incomes is a hobbyhorse of mine. I do not want to talk down agriculture or farming, but the reality is farmers would not be able to survive on their farm income and can only cope because they have another source of income. I come from a county where there is good land. If farm households were not in receipt of income from other sources, they would not be able to survive.
I agree wholeheartedly with what Deputy Timmins said about rural development which is part of the agricultural structure. We should consider it in that context in future.
I concur with much of the Minister's presentation and probably share his views on the issues of set-aside and decoupling. I am not sure, however, that I understand what he means regarding the animal health remedies regulations, particularly as they relate to POMs. While the regulations insist that vets diagnose and provide initial treatment, the Minister said he had not finalised this provision. If it is agreed, there is a danger that it will open up an avenue for unscrupulous individuals to capitalise on the situation. This possibility must be factored in to the consideration of the regulations.
I foresee difficult times ahead, particularly with the review. We all share the same sentiments regarding the concerns of the farming industry and the decline of the farming population. There is a strong perception this trend will continue and concern about its knock-on effect on rural Ireland about which I share the Minister's concern. There is a big battle to be fought, which I hope can be won.
I commend the Minister on his knowledge and interest in farming. With regard to the WTO, he talked about the reduction in payments and the 35% reduction in stock. Will he elaborate further on this? Will the 20% reduction in payments follow the 35% reduction in stock, or are they separate measures?
I was pleased to hear what the Minister said about the animal health remedies regulations and need not tell him that farmers are professional about their work. They realise the seriousness of symptoms presented and bring them to the attention of veterinary surgeons. These proposals have been pushed by the veterinary association. If there was an investigation into the service provided by veterinary surgeons, it would reveal a need to examine the current position in respect of some of those the association has taken in from other countries to help it provide a service. Vets are coming here with a poor knowledge of English which makes it difficult to understand them. There is concern about this development which should be examined.
I wish to raise under the heading, "overview of farming", the nitrates directive which should be examined individually. There is no scientific based evidence to show that Ireland should be taken as one overall unit. That should be examined. If one looks at the larger towns and cities in the south and east, they are worse off than those in the west and north. There should be a subsidy available for farmers to spread lime because roughly half of the fertiliser used by farmers is lost. It would be a good incentive to farmers and might go a long way towards dealing with some of the nitrates problems.
The Minister should look at the sheep tagging issue. It should be done on a herd basis, such as a herd number. Donegal has primarily small farmers and Deputy Hayes is correct that smaller farmers cannot exist anymore without some type of sideline. It is impossible. The bureaucracy has become so strong that they have to try to keep ahead all the time with regard to education and so forth. It is becoming almost impossible. Farming alone is not enough to generate an income. We should not lose sight of that.
The Minister contrasted New Zealand to Ireland in terms of supports. New Zealand is regularly mentioned by growers in north County Dublin. They feel like New Zealand farmers because they do not benefit from supports such as headage payments, premia and so forth. If one is in the horticultural sector, the law of the jungle applies. To that extent, many growers are leaving the sector. We need to discuss that in more detail at another time.
With regard to the world trade talks and the World Trade Organisation, it will be a serious issue if Ireland does not push hard for the interests of Irish farmers. Currently, the WTO allows the importation of food where we might not agree with the standards of welfare and so forth in its production. Poultry imports might be worthy of investigation in that regard. With the introduction, in 2012, of a ban on the use of battery cages in the European Union we are facing severe competition from countries outside the EU. We will have to work hard to maintain this country's interests.
With regard to set-aside, it has been suggested to me by cereal farmers that much of the cereal grown in this country is not good enough for baking or human use. Most of it is used for animal feed. The set-aside scheme could be encouraged to provide for more extensive poultry farming, for example. It is an idea that could be examined with a view to benefiting Irish agriculture in general. We have failed to promote farmers' markets here. The Minister said people are not growing produce. The relationship between the farmer and the consumer is not close enough for people to appreciate the problems farmers encounter. Farmers' markets are a good way of building up that support. We saw that type of support during the foot and mouth disease crisis when everybody seemed to appreciate the common goal and the common good.
The nitrates directive needs further debate. We will have to grasp the nettle but I do not know if it will be possible to deal with it in the local way Deputy Blaney mentioned. Many young farmers, like others, are facing the CPO arrangements under the National Roads Authority plans. Currently, the CPO arrangement provides for a pot of money from which one is expected to buy replacement land. It is not possible to follow through on that expectation. Not only does capital gains tax apply, and even more so after the budget, but there are also land value difficulties and the inability to acquire land. We should give more consideration to swapping land. Does the Minister consider it a possibility?
The Minister might consider over 65 year old retiring farmers not worthy of an early retirement payment but this issue has become a hitch in the system. Where farmers hang on and do not wish to leave farming, young farmers cannot get involved because the early retirement scheme does not apply in that situation. Young farmers who are members of Macra na Feirme have pointed to this problem.
Our beef and sheep production has come a long way since the heavy use of antibiotics. It is now close to being organic. We should embrace that closeness and determine that more farmers are given the benefit of advice on conversion by Teagasc advisers, some of whom might also need more advice and training than they have at present. Those conversions should be pushed where farmers are close enough to using organic methods already and in a position to take advantage of it. That, in itself, would be a benefit to our export markets as it would show Ireland to be a country capable of meeting those standards.
I compliment the Minister and his officials on their report. I am delighted that the animal remedies Bill will be practical and simple but will also protect public health. Will the Minister have any good news on destocking between now and the new year for farmers?
I thank the Minister for his comprehensive overview of the situation and welcome his comments on the animal remedies regulations. There was strong consensus among committee members when we met with ICOS and the IFA about these remedies. There was a firm commitment to ensuring that any changes would not impose additional on-farm costs on farmers. I am happy with what I heard from the Minister in that regard.
It is hard not to be staggered by the scale of meat imports. We will have to address this as a matter of urgency. It is something the committee could deal with in the future because something will have to be done to achieve import substitution. The main offender in this regard is the catering industry. Farmers and the public have accepted and are committed to a traceability system. It must be possible to oblige people in the catering trade to identify the country of origin of the products they are serving in their restaurants, hotels, function rooms and so forth. It is most desirable that we move towards having such a system. If legislation is necessary to achieve it, it should be brought forward. The media have highlighted the BSE difficulties - think of the number of times one has seen the staggering friesian on RTE - so perhaps the national broadcaster could investigate the countries of origin and the methods of production of the 12 million tonnes of meat being imported at present.
I wish the Minister well in the negotiations on CAP reform. The future of Irish agriculture is in his hands and whatever deal is made, it must be one that enables farmers to plan with certainty for the medium term at least. We cannot have a new agreement that will be renegotiated a year or two later.
I thank the Minister for his simplified view of farming. His first-hand knowledge of the subject and the figures he provided were informative.
I suppose people of my age - who lived, worked and reared their families on the land - might have a rather sentimental view of the land which is not shared by the younger generation. I want to illustrate what is happening in rural areas. Many Members would be familiar with the Mount Mellory area in Waterford. Thirty years ago, 60 suppliers sent milk to the local creamery. Today there are 12 suppliers and there will be fewer in the future. It is well to remember that, during the period to which I refer, other young men and women left the area for good. In the new Ireland there is employment locally and that is a good development. However, in its own way the new Ireland has also contributed to the decrease in the number of people staying on the land because it has brought better jobs and more time off. Time off is important and jobs which offer it are far more attractive than farm work, for which long hours are required.
It is good to hear the Minister refer to the current position of farming. Now is the time to have a serious look at Irish farming. We are at a stage where whatever we decide to do must be done with a view to long-term planning. In the past, the planning periods used were a little too short while the situation changed too quickly.
I am delighted to hear the Minister's views on animal remedies. I trust that when he arrives at final conclusions, he will do the right thing. I wish him well in his negotiations in the future. There are very serious times ahead for our small country. No doubt the Minister will represent Ireland well when the time comes.
I acknowledge what the Minister said about the animal remedies regulation. Considering the comment the Chairman made at the last meeting, he should also be pleased. I welcome the Minister's approach. Among other organisations, ICOS was here and its presentation was excellent. The Minister referred to his meeting with that organisation.
I agree with the Minister's position on de-coupling. Modulation is also a problem. When we joined the EEC, CAP was a social policy to enable people to stay on the land in rural Ireland. When Mansholt attended the rally in Killarney in 1969, there was a feeling abroad that he would bring about a policy which would denude the land of the people. This is happening and I find that rather strange.
I am one of the few members present who lives and farms in a rural area. If farming is as bad as has been said, why is land for sale at €10,000 or €15,000 an acre? Why are we now talking about figures like €1 million for a farm? The Minister referred to this in his contribution. We both come from west Cork, where a farm was recently sold for that price. There is something wrong. I challenge the farming leadership to come out and state clearly that farming is a good way of life. It is a great way of life, a tough way of life. We have good years and we have bad years, but we overcome them.
I am concerned about these depressing statements. Farming leaders would do a better job if they recognised that there is something good happening and that farming is a good way of life. It is not attractive anymore for our young people and we must ask why that is so. I do not know the answer, but I know that there are problems. Are people talking down farming because they are greedy and want to take possession of the land and of what we produce from the land? I do not know if that is the case, but I would ask that those who talk it down might look at it.
I am a little concerned about our discussing quotas and control of food production. My view on these matters is slightly different to those of my colleagues. The world's population is increasing and will double. How will we feed that population? Quotas and restrictions in production and removing people from the land will certainly not help to feed them. As Deputy Wilkinson stated, we need to look at the long-term. The Minister stated that decoupling is not a good policy and that, like me, he does not favour it. Decoupling would lead to less production. We should continue to engage in food production because we have a good system. We also have a good system of milk production.
We have a problem with beef. I am aware that the Minister chaired a meeting the other day between the industry and the producers. Unless we get both groups together and working well, we will lose the beef industry and lose a very good system. This is a major export industry and it must be catered for and developed properly. The beef animal is the one we will put into the market place because the consumer will determine what will be bought. There is no use in producing four legs, a tail and a head. We need quality beef and that can come from breeding and feeding management. It cannot come from anything else. Protection is also required. I welcome the initiative announced by the Minister the other day and I hope it will be successful. It is with those two groups - the producers and the processors/marketers - that we can retain the beefindustry.
I want to return to the central issue of food production, which is the blood of life. There are millions of people starving in the world. As a country which has suffered from starvation, we should know a great deal about this matter. I ask that at some stage the committee should look at what can be done to aid the starving populations of the world. We are told that in some countries there will be a shortage of food, that millionswill die and that there is only so much foodcoming in from the United States and other countries.
Would it be possible, through the European Union and on our own initiative, for Ireland to lead a campaign to allow us produce food and give aid where there is starvation and where populations are being wiped out. The blood of life can only come from the land. Unless we are prepared to engage in that debate and steer it down the route to which I refer, we will not succeed as a society or as a nation. We will support the Minister in that endeavour. He should take that mantle because he has led well. Every time he engages in negotiations on behalf of Ireland, he has done extremely well. The Government has done well in negotiations, but it is critical that we preserve our name as a nation of people who care about and feel responsible for starving people throughout the world.
Rural development is the responsibility of my colleague, the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív. He is doing a good job on behalf of the islands and remote areas. I wish him well as I work closely with him.
Deputy Upton and almost every speaker said they wanted a practical, simple and workable solution to animal remedies, vaccines and so on.
The nitrates directive is critically important and the committee would do well to discuss this with the Minister for the Environment and Local Government, whose immediate responsibility this is. The directive affects agriculture but is the responsibility of the Department of the Environment and Local Government. Perhaps the committee will get an opportunity to discuss the nitrates directive because we cannot shy away from it. It must be addressed. We have vacillated now for ten years; it is an early 1990s directive. It must be addressed.
I remember the lime subsidy and it was a very good scheme. In the end, it was only available to the islands. It should never have been abolished because a balance of nutrients in the soil is important. People pump nitrates and everything else into the soil whereas it would be better if they had some lime to reduce the pH and acidity slightly. However, the European Union has a problem with re-introducing the lime subsidy. I thought at one stage I might be able to reintroduce it under the REP scheme. As members raised the issue, I will examine it further.
Regarding decoupling and modulation, the first will be a problem if farmers are to be paid without the need for production. It would result in an estimated 35% reduction in throughput for processing. That said, perhaps farmers will continue to produce because there is an opportunity for high quality production. We know the Scots have done this with Angus beef. We are also aware of other niche products such as Parma ham. We certainly have the capability and capacity to produce top class, top rate products for a specific market. There is an opportunity in that. People have a right to farm and it would be a good thing if a certain amount of high quality farming were to take place. We need an impact study and we do not have it yet.
Modulation will result in a 20% reduction over seven years. The problem is what will be done with that 20% reduction in farmers' direct payments. We need to know what plans the European Commission has for that because, even with the best will in the world, I do not know of any rural development scheme that is as good as retaining farmers on the land. There is a threshold in the proposals whereby any farmer who does not receive more than €5,000 will not be affected by this reduction in modulation.
There are approximately 140,000 farmers in Ireland. For about 80,000, farming is their main way of life while the remaining 60,000 have another income. They need that because they cannot make an adequate income from farming. In recent years we have sought to ensure that this 45% with another income are not penalised for being part-time farmers. At one time a person had to spend 50% of his or her time on the farm and earn at least 50% of his or her income to qualify for schemes. Now we ensure that part-time farmers receive full support because we know it is a feature on almost half or about 45% of all farms for either spouse or both to have another income. We help them to live in rural areas and obtain planning permission to allow their sons and daughters to stay in their local community, if they can get a job within 15 or 20 miles. That is a challenge, but it is worthwhile to retain that essential facet of farming.
Deputy Carty raised the issue of de-stocking. I am trying to be helpful in this regard. I am aware that a large meeting was held in Castlebar the other night with several hundred people in attendance. I cannot mention here what they had to say about me because it was desperate.
Deputy Ó Fearghaíl referred to the amount of food we import. Yesterday I had a study in this area presented to me. The chairman of the group who compiled the report, Ned Sullivan, is to be complimented because he spent only three months producing the study. It concerns the labelling, origin and contents of food. Let us think of all the times we have seen "highly nutritional" or "high fibre" and so on written on food labels. It means nothing. Regarding actual meat content, we saw recently where imported poultry was adulterated with water and soya protein. That must be and will be addressed.
Senator Callanan made an impassioned plea on behalf of the Third World and developing countries. We are all concerned about them and help them out as much as we can. The European Union is the largest importer from those developing countries. We recently agreed that, to assist them, there would be no tariff on or barrier to their exports to the EU.
On relatively smaller farmers, I attended a conference in Killarney recently and a Robert Shannon from Ballinascarty, County Cork, gave a speech. He has 28 cows on a 32 acre farm and was able to make £40,000 out of his dairy enterprise alone, never mind his additional cattle. This was because he was a good farmer who practised good husbandry and used high levels of protein which resulted in a high fat content in his milk. If a 28 cow farmer on a 32 acre farm can do the business, many more can do it too.
Deputy Sargent asked about New Zealand and World Trade Organisation poultry imports.
Country markets are a great idea and I visit one in my town of Clonakilty. They are becoming very popular, so it is a matter of placing some type of structure on them.
Skibbereen and Milltown are also in the Minister's constituency.
Milltown is a bit off-limits for me as I would be arrested were I to be found there, but I have great interest in the area from Skibbereen all the way west to Castletownbere. Country markets are important.
There was reference to land leasing as a means of accessing land, because people cannot always buy land. Senator Callanan referred to land selling for €10,000 to €15,000 an acre. This creates a problem if a person wants to access land. I am trying to encourage the leasing of land because some people may have young families and could lease the land for some time.
In other cases, people do not want to be 365 days of the year on a farm trying to milk and care for a few cows. If two such people could operate in partnership, they could do a good job. Partnership arrangements with legal structures are now in place and are working very well. It is a matter of promoting that. Young people on farms want time off at weekends to go to the occasional fleadh cheoil or whatever else. They also want to go on holiday. They are entitled to it and we must take that into account.
I was delighted to hear Deputy Sargent speak about how close we are to organic farming. I have always said the method of farming in Ireland is almost organic. I have a problem with the three or four organic groups that seek to represent organic farming because they have different criteria. If we could get them to work more closely together, it would be very helpful to us.
Sheep tagging must remain because there is a problem with traceability. The French market is an important one because it buys 80% of our lamb. It is a very good market with a great return in recent years. Not only does it want traceability, it is considering removing the spinal cord from all lambs more than six months old. It also wants the date of birth. We are having a problem getting a derogation as it wants traceability. I have made matters as simple as possible and attended many public meetings in recent times about destocking and sheep tagging which is not such a big problem on the ground and on which we have tried to be as helpful as possible. We do not impose such matters. If we had our own domestic market, matters would be much easier, but when one is dependent on exports, one must respond to what the consumer is looking for.
I thank the Chairman and the committee which have been most helpful. I have taken many notes, as have the experts here with me. We will go through them with a fine comb and take them into account. I will be glad to return at any time. I have given an open invitation to anyone who wishes to visit and examine the minutiae of any of the policy issues about which I have talked.
I thank the Minister and wish him well in the negotiations on CAP reform. We are lucky to have a man of his capability and experience of the negotiations of recent years. I know he will not be found wanting in this regard. I thank him and his officials for coming to the committee this evening and wish him, his officials and Ministers of State a very happy Christmas and the best of luck in the year ahead. This has been a constructive meeting. I hope we will have more such meetings with the Minister, his officials and Ministers of State in the year ahead.
I ask members to remain for a few minutes as we must deal with a small number of matters. I wish them, the clerk to the committee and his staff, the editor of debates and his staff and all technical staff and officials a very happy Christmas and the best of luck in the new year. I remind members that we will meet tomorrow in the Members' restaurant at 12.45 p.m. and hope all will be there.
The joint committee went into private session at 8.10 p.m. and adjourned at 8.15 p.m.