No, I am not and I never will.
I welcome this opportunity to address the Joint Committee on Agriculture and Food. I am pleased to have this chance to set out the facts in respect of the social partnership negotiations and the reasons participation by IFA in a new national agreement has been made impossible by the Government to date. I also wish to outline the major challenges facing Ireland's agriculture and food industry, arising from the Fischler CAP reform proposals and the WTO negotiations.
First, I must remind Members of the farm income situation and the major spending cuts and increased charges imposed on agriculture by the Government in the past three months. Most of these cuts and charges have now been voted through the Dáil. Members will recall that, in response to the farm income crisis, we held two rounds of meetings last autumn with our public representatives to gain recognition of the problems facing farmers and lobby for some support from Government. Our case has since been proven by the CSO figures. National farm incomes fell by 13% in 2002, when inflation is taken into account. The average farm income in the previous year was only £15,800.
Instead of a supportive response from the Government, the Book of Estimates and the budget delivered disproportionate cuts to agriculture. There was no recognition of farmers' problems and the farm income situation was totally ignored. When all the cuts on agriculture and increased charges are added up, the total comes to over €300 million. The commitments in the national development plan on REPS, farm investment schemes and forestry have been undermined, disease levies have been doubled and the agreement on the roads CPO payments has been broken. Now we find that a further €44 million charge to dispose of meat and bonemeal is being passed on to farmers. We have published the detailed breakdown in the national papers and a copy has been circulated to the members of the committee.
Our industry is facing major changes from CAP reform and the WTO, which I will outline later. Clearly, the IFA wished to work closely with the Government on a "change agenda" for Irish agriculture to prepare for the future. We presented a detailed submission last November in advance of the partnership negotiations. However, the €300 million clawback from agriculture was the worst possible background to the new partnership negotiations.
The Taoiseach has said he regretted that the farming organisations did not recommend the proposed partnership agreement, including a section on agricultural issues. The reality is that IFA has not left social partnership. We were pushed out when the Government negotiators stated that they could go no further than the very general paper on the table containing no specific commitments. They told us that no budget cuts could be reversed and that they had not one extra euro to spend on agriculture. During our "tractorcade", the Minister for Agriculture and Food called on IFA to come in and talk to the Government. We had weeks of talks, but the cupboard was bare. It seemed to have nothing at all in it.
As the ICTU and IBEC pillars are taking up to 26 March to ratify the proposed agreement, I still see an opportunity over the next few weeks to reopen negotiations. I am prepared to again put on the table our proposals for a change agenda for agriculture. However, just as the public service unions are being paid 25% of the benchmarking agreement up-front as a statement of good intent by the Government, the farming pillar cannot progress the negotiations until we receive a commitment from Government to reverse two of the most abrasive recent budget decisions, namely, those on the doubling of disease levies and the abolition of roll-over relief on land purchased under CPOs.
The change agenda I am proposing to Government includes a number of key elements. First, we need an agri-environmental package - including a workable agreement on the implementation of the nitrates directive, a substantially improved REP scheme and a more comprehensive scheme for on-farm investment. Second, we require re-negotiation of the special areas of conservation scheme, including proper consultation with the individual farmers affected and realistic stocking levels for farmers with commonage land. We require a commitment that, in the crucial mid-term review of the national development plan taking place this year, the original budgetary commitments relating to agriculture and rural development will be respected and that there will be a serious effort made to meet the targets on REPS, early retirement and forestry.
The need for innovative measures to accelerate structural reform in Irish agriculture is an obvious key element of a change agenda. With an average farm size of 78 acres in Ireland, how can farmers be expected to compete with their US counterparts, whose properties are then times that size, or with those in Australia, New Zealand or South America? The IFA has put proposals to the Government to achieve a rapid and effective enlargement of farms through an incentive package for land leasing. This was rubbished by the Government in the partnership negotiations, but it put nothing better on the table. We need a real response on this issue. We need a commitment that if we were to sign up for partnership, the Government would not impose further spending cuts or increased charges.
The fact that we were involved in the PPF did not prevent the discriminatory cuts in agriculture in the 2003 Estimates and the recent budget. Already we hear rumours that cuts on higher education grant entitlements to farm families are being planned, by introducing an "asset test" into to the assessment of income. This would be totally unfair as the farm is only the means of producing an income.
I am saying to the Taoiseach that I would prefer to be working closely with the Government within the framework of social partnership in addressing the change agenda arising from the major challenges of the WTO, CAP reform three and EU enlargement. However, the agreement must be based on firm commitments backed by financial resources, not vague aspirations. The agreement on benchmarking of public service pay is backed by an annual resource commitment of more than €1 billion. The proposed programme, as it now stands, is essentially a pay deal for unions and employers and a very expensive one because of benchmarking. I regret to have to say that, in the several weeks of negotiations with the farming pillar, not one euro was put on the table even to redress the cuts. I hope that the Government will re-assess the lack of balance in the proposed new partnership agreement, which is now only a pay deal by another name, and make an offer which would allow farmers to continue in genuine social partnership.
The negotiations on a new world trade round are already advanced, and recently the chairman of the WTO agriculture negotiations, Mr. Harbinson, presented an alarming set of proposals. These include a 50% to 60% cut in EU import tariffs, elimination of export subsidies and a 50% cut in CAP direct payments. Even the EU negotiating offer includes a commitment to cut EU import tariffs on agricultural products by 36% over six years starting in 2006. The two main food-exporting regions of the world, the US and the CAIRNS group of countries, have proposed large cuts in tariffs and have launched a major attack on the CAP. The final outcome of the WTO remains to be negotiated, but even in the best case scenario the EU appears prepared to hand over a large slice of the European food market to the US, South America and other low-cost countries.
I am critical of the Commissioner for Agriculture, Mr. Franz Fischler, because last July he proposed a further major reform of the Common Agricultural Policy, the third in a decade. His timing was wrong and it should not have been reform but a review. The Agenda 2000 decisions were in place to the end of 2006 and there are no serious market or budgetary problems. Farmers deserve a period of stability in the Common Agricultural Policy following the Agenda 2000 reforms. Mr. Fischler was wrong to show his hand to the rest of the world in advance of the WTO negotiations. He has fatally weakened the EU case in the WTO.
In January the Commissioner re-launched his Common Agricultural Policy reform proposals with the intention of pushing them through the Council of Ministers this year. This CAP reform goes much further than the earlier MacSharry reform and the Agenda 2000 reform. Clearly the Commission anticipates a negative outcome from the WTO. The Fischler proposal involves decoupling of direct payments from production as an easy way of winding down farm production in the EU in order to make way for increased imports. It involves degressivity, which is euro-speak for cutting farm supports. Taken together with the WTO agenda, it means that the cornerstone of the Common Agricultural Policy would be dismantled by the end of the decade. The role of Common Agricultural Policy price supports and market management was to provide reasonable incomes to farmers and stable prices to consumers.
Furthermore, as the CAP budget up to 2013 has been fixed by the EU Heads of Government last October for an EU of 25 countries at little more than the current budget for an EU of 15 countries, there is no possibility of compensation for the WTO cuts. Even the existing level of direct payments in the future will be dependent on environmental audits of farms - a new form of red tape.
The implications for Irish farm families and the Irish economy from CAP reform and WTO are clear. Total farm income will fall and the level of farm production will fall. Agriculture will be able to support fewer farmers at acceptable living standards. Decoupling will have a more negative impact on Ireland than on other EU country. The economy will lose in the region of €1 billion in export earnings, costing jobs in the food industry and leading to rural decline. Many more farmers will be dependent on off-farm jobs, if such jobs are available in rural Ireland. Those who survive in full-time farming will require increased scale and investment, including investment to meet the ever-increasing environmental demands.
The Government has a duty to address this changed environment in agriculture, as it would for any other sector of the economy, including measures to promote competitiveness and diversification. The Minister for Agriculture and Food should be working closely with me to lead this change. I regret to say this is not happening.
The IFA has been in social partnership for 15 years, through good times and bad. We are not lightly walking away from social partnership, but we can only sign up if there is something worthwhile in it for our members. It is a voluntary arrangement and a threat of exclusion will not influence our decision. Any balanced assessment of the facts will show that the problem is not on our side of the table. With or without social partnership, the Government in our democracy has responsibilities to our sector, including responsibility to vigorously represent interests of our farmers in Brussels and Geneva.