JOINT COMMITTEE ON AGRICULTURE AND FOOD debate -
Wednesday, 17 Sep 2003

Vol. 1 No. 21

Visit by Delegation from the Parliament of the Czech Republic.

Chairman

I welcome Mr. Ladislav Skopal, chairman of the committee on agriculture of the Parliament of the Czech Republic, and the other members of the delegation visiting Ireland this week. The delegation is most welcome to this special meeting of the Oireachtas Joint Committee on Agriculture and Food. The delegation has already met some members of the joint committee and I apologise for the absence of our main Opposition spokespersons, Deputies Timmins and Upton, who are unavoidably absent due to parliamentary party meetings elsewhere in the country. As I explained earlier, our joint committee comprises Members of both Houses, Dáil Éireann - our House of Representatives - and Seanad Éireann - our Senate. There are 15 members of the joint committee, and for the purpose of dealing with legislation we sit as a select committee, which consists of Members of Dáil Éireann together with the Minister for Agriculture and Food or his Ministers of State.

I now invite Mr. Skopal to speak after which we will have a question and answer session.

Mr. Ladislav Skopal

I thank you, Chairman, and your colleagues, for the opportunity to have a discussion with the committee. On 1 May 2004, the Czech Republic is due to become a member of the European Union and we are very happy to have the opportunity to discuss with the committee prior to that date some issues which are of elementary importance to us. Our agricultural committee has 19 members and our delegation consists of people representing both Government and Opposition parties. The deputy chairman of the agricultural committee is Mr. Petr Zgarba who represents the Social Democratic Party. Mr. Miloslav Kucera, a member of the committee, represents the strongest Opposition party, the Civil Democratic Party. Ms Miloslava Vostra represents the Communist Party of Bohemia and Moravia. Mr. Michal Hasek is a member of the committee and represents the Social Democratic Party. I also represent the Social Democratic Party. Along with the delegation I would like to introduce Czech representatives who do not represent political parties: Mr. Martin Vitek from the Czech Embassy; Mr. Frantisek Holik, the secretary to the committee; Ms Natalie Trantinova who represents the department of foreign relations within the Parliament.

I am very happy to have the opportunity to talk to the committee about some of the problems of concern to us. I will start by presenting my country, the Czech Republic. It is one of the smaller countries of Europe or the future European Union. It has ten million inhabitants. In saying that we are one of the smaller countries of the EU that is a bit ahead of time - that is because of my optimism. We have 137,000 farmers which represents 5% of jobs in the national economy and produces 3% of the GDP. If we add to it the food processing industry, water management, forestry and chemical industry providing for agriculture it amounts to 20% of the GDP. Since 1989, everything has changed dramatically in agriculture. There has been major reform of a situation where everything in agriculture was either in state ownership or co-operative ownership. Everything has been privatised.

I will give the committee some rough figures about the structure of agriculture in our country. About one quarter of the agricultural units are private farms. In 25% of cases we have either joint stock companies or companies with limited liability where the owner is clearly identified. About 50% of the units are co-operative farms, which still exist but the format has changed slightly. The transformation has not yet been fully accomplished. The food processing industry has been fully transformed and privatised. About 65% of forest area is held by the state. Most of the water management is in the hands of state-owned companies. The state has retained the ownership of some 800,000 hectares of agricultural land but it seeks to sell it off in the framework of a privatisation process which is still taking place.

This is a very brief presentation of the Czech Republic's agricultural system. Obviously, we are here to answer any questions but I would like to start by asking the committee two questions. The first is about the Structural Funds and the way Ireland gets profit out of EU such funds. The second question is about anything that is home produced. Is there any support for the marketing abroad of local products? Are any companies or other structures involved in promoting produce from Ireland?

Deputy Ferris

First, I welcome the delegation. I feel privileged, with my colleagues, to be given an opportunity to share information with the delegation. It is tremendous that agricultural committees from other European countries can meet like this. I am delighted that we are part of a greater Europe working with other member states in harmony for the benefit of all our people. Ireland has traditionally been an agricultural country. Over recent decades it has developed a more industrial, urbanised base, but our roots are still in rural Ireland. On the question asked about Structural Funds, we have become quite dependent on them for the survival of our rural communities and agricultural base. Without them, it is fair to say that the devastation inflicted on rural Ireland, particularly over the past 30 years with the massive transition from a rural-based economy towards a more urban-based, industrial economy, would have been greater.

In the past 30 years we have seen a great reduction in the number of farmers. The tendency is towards bigger producers, with the medium to small-sized farm becoming a thing of the past. As the Czech Republic is new in Europe, my advice is that the necessity to maintain that fabric of society is of vital importance. If I was asked to make one suggestion to the delegation, it is to do everything in its power to ensure that this fabric of its society survives. The tendency in Europe is to move towards bigger holdings and so forth but I would caution against that. Together, as small nations working against the more affluent, bigger countries, it is necessary for us to form alliances to ensure our voice has equal status at the negotiating table.

I thank the delegation for its presentation and I look forward to hearing other contributions as the debate develops.

Chairman

On subsidies for export of our products, we depend largely on refunds from the European Union to export our products to third countries. We would not survive without those safeguards. Some delegates at the current WTO talks in Cancun are doing their utmost to see that such refunds are discontinued. If that happens it will be detrimental to Irish agriculture but our Ministers at the talks are fighting to try to retain export refunds in Ireland's interest.

Mr. Skopal

I was referring to institutions which exist in countries such as Austria, Finland or Germany whose aim is to promote production and export. The Czech Republic has opened itself to EU exports for several years while EU countries, predominantly Germany and Austria, have remained largely closed to our exports. This will change when we accede to the European Union. We realise, however, that without an efficient marketing company or strategy our products will have difficulty competing on the EU markets. In 1992, when we signed the association treaty with the European Union, we had a positive balance with EU countries in foreign trade. The surplus was CZK2 billion. Since then we have fallen to a deficit of CZK20 billion so we realise that more marketing will be needed if we are to reverse that. We would like to know about the food chamber organisation in Ireland which helps the exporters or the producers with marketing.

Chairman

The Irish Trade Board is a marketing body and it sends representatives to different countries to try to sell Irish products on behalf of exporters. That has worked very well in many countries. Unfortunately, we lost several markets for beef in particular due to BSE and foot-and-mouth disease but we have regained a substantial portion of those markets. Before the outbreak of foot-and-mouth disease and BSE we were exporting 500,000 tonnes of meat and live animals. We have regained half of that level which is a welcome development. In December 2000 the Czech minister of agriculture announced a ban on Irish beef imports as well as beef imports from the EU. Would Mr. Skopal change his mind on imports of Irish beef after his experience yesterday?

Mr. Skopal

Time has moved on since the major outbreak of both diseases, an outbreak which was widely publicised and perhaps somewhat exaggerated by the media. Many things have evolved since then. We are eliminating measures preventing imports from various EU countries to the Czech Republic and I would not object to seeing Irish beef on the Czech market, especially after yesterday's experience. I am almost certain the ban on beef imports from EU countries has been already lifted. On the other hand, we too may need support from Ireland. Ireland has its trademark in beef while we have some of our trademarks in beer, one of which is Budweiser. There are important legal disputes over the trademark of Budweiser. The American brewer, Anheuser-Busch, is the holder of the trademark but the Czechs are holders too. The dispute is currently being settled around the world and we may need some support from Ireland on this matter.

Chairman

We will certainly give all the support we can. It is advisable to eat plenty of beef prior to drinking as it gives a good foundation for drink.

Mr. Skopal

I wish to discuss the CAP reforms with the committee, as there is an ongoing discussion of these. One of the changes to the CAP may result in the dismissal or reduction in direct payments. The policy is now supposed to encourage the development of rural areas and not benefit the producers. We can accept that, but we are keen to see the reform steps balanced so as to maintain profitability for our farmers. The reason I ask about these reforms is that we would like to orchestrate our position with the Irish one. We would like to consult the Irish as there will be a meeting in Rome of the chairmen of the agricultural committees of EU member state parliaments in October.

Chairman

I wish to inform the delegation that Deputy Batt O'Keeffe who has joined us is the Chairman of the Committee on Health and Children. He is minding the health affairs of the nation while the Minister for Health and Children is examining the smoking ban in New York.

Deputy Wilkinson

I welcome the delegation. I am pleased they will soon be members of the greater European Union. Ireland has a number of difficulties not experienced by the Czech Republic by virtue of the fact that we are an island nation. Transport to our markets is, therefore, more expensive. We export almost 90% of what we produce.

On Mr. Skopal's question on decoupling and modulation, three out of the four Irish farming organisations were opposed to decoupling before the CAP reform talks began. That position now seems to have changed. All four organisations seem to be in favour of full decoupling. However, discussions are still ongoing and Ireland has not made a final decision. Modulation then means that some of the funds will be clawed back over time. We are hoping that these funds will be used to maintain the Irish countryside in some shape or form. That is the direct answer from our side to Mr. Skopal's two questions. I wish the delegation well in its deliberations.

The EU has been immensely beneficial to this country, and while the number of active farmers is falling, our young people are probably better educated and not as anxious to work the seven day week their fathers worked. The EU has, therefore, changed their thinking. We currently have full employment, so there are jobs available in agriculture and industry for the graduates, despite a levelling-off at present. We hope we can maintain that.

Deputy Carty

I, too, welcome the deputation from the Czech Republic. I am especially pleased that the Czech Republic will be admitted to EU membership during the time when Ireland will hold the EU Presidency. Ireland, and in particular its agriculture industry, has benefited hugely from EU membership.

From an agricultural point of view, Ireland can be divided into three sections. In the eastern part of the country, much of which the deputation has seen over recent days, the land is very good, with a high production of beef and grain. In the south, where the climate is milder and where there is also some good land, there is a great deal of dairy production. In the western region, where the land is of poorer quality, and mountainous, there is hillside sheep farming, a low level of dairying, and suckler cow production. There has also been a huge input of money into forestry in that region.

As an island nation it is vital for Ireland, which exports so much of its production, to have easy access to the markets of mainland Europe. Among those is the French market for sheep meat, which is very important for Ireland. In recent years we have been exporting much livestock to Spain and Italy. Ireland exports 90% of its produce.

Ireland also relates to the Czech Republic in terms of tourism. Many Irish people now holiday in Prague, the capital of the Czech Republic, and they all return speaking of its beauty. I hope that our two countries will get on well together and help each other in the future in Europe. In conclusion I should like to ask, what is the main agricultural product of the Czech Republic?

Mr. Miloslav Kucera

Prior to answering the Deputy's question, there is something quite important I would like to say to the committee. This is a special occasion for us, and I would like to make use of it by explaining what I think about the Common Agricultural Policy.

Since it was formulated some years ago, the CAP has lost a good deal of its substance. It is no longer in line with present developments. I would like to know if the committee members have any concrete idea of what the CAP should look like in the future, under four points. The first of these relates to food safety. To what extent will member countries be allowed to sustain their agricultural production so as to be self-sufficient in case of emergency? The second point relates to the maintaining of landscape while the third relates to the contributions which will be granted to the individual member state in proportion to their production. Finally, there is the issue of how the resources thus accumulated might be redistributed, and to what extent the redistribution situation may change.

Mr. Skopal

To answer the question about our main products; in plant product, it is grain, wheat in particular, and rape seed. Animal production is focused on dairy and pork.

Deputy Ó Fearghaíl

I am happy to join with colleagues in extending a warm welcome to our friends from the Czech Republic. I hope they have enjoyed their stay in Ireland and that they will continue to enjoy the remainder of their visit. CAP reform has been the No. 1 issue on the farming agenda here for the last year or more. Irish farmers were seriously disappointed that what was supposed to be a review of the Common Agricultural Policy in fact became a fundamental change. On the questions posed on food safety, the Food Safety Authority of Ireland ensures that there is a high standard of food produced across all sectors. Indeed, the EU Commissioner with responsibility for food safety is an Irishman and he spoke to this committee only last week. Among the farming community in Ireland the common view is that the standard surrounding food safety has been so high as to force many small producers out of business, while allowing the large food corporations to grow and expand.

We now have a developing craft food industry, however, and there appears to be a more realistic approach on the part of both our own FSAI and the EU to the standards acceptable from small craft food businesses. Finally, on the question of protection of the environment and landscape, we have operated a rural environmental protection scheme - REPS - for many years, using EU funding and that has been very successful throughout the State. A major controversy has developed more recently about rural development and the building of houses in the countryside.

Chairman

Senator Callanan, do you want to make a short comment on grain?

Senator Callanan

I wish to join in the welcome that has been extended to our visitors and I congratulate the Czech people on joining the European Union, along with the other new member states. We had a useful discussion over lunch on grain, genetically modified food etc. and I think we should avoid it at this time unless someone else wishes to raise it. I would like to hear from the delegation about the agreements the Czech Republic received in its negotiations on EU entry relative to agriculture, for example, and the Structural Funds mentioned; the aids sought and achieved and the number of years involved.

Mr. Skopal

We believe the conditions negotiated in the accession agreement are now well balanced. Our farmers fear that the financial support which will be granted to them will be lower than that enjoyed by their EU counterparts. As a result they fear they will not be able to withstand the competition.

Mr. Petr Zgarba

There have been dramatic changes in agricultural production since 1989. In many respects agricultural production was capped substantially: in beef it was capped by 50%. This was mostly due to the fact that the Czech market was totally open after 1989 to all products from EU countries, especially from our close neighbours. It was not possible, therefore, to compete against that. In tandem with that was the pressure exercised by the large international food producers and retail companies.

I should like to give the committee some specific figures about the conditions negotiated for the accession. Our farmers will be entitled to 25% of direct payments and there is a possibility of compensation up to a level of 55% from local resources, and our farmers are unhappy about that. Echoing to some extent what my colleague, Mr. Kucera, said, Czech farmers and agriculture experts in the Czech Republic are curious about the Common Agricultural Policy, not in three or five years only but in the long-term. After all agriculture is a long distance run, is it not?

Mr. Kucera

I would like to return to my questions, specifically on the future of the Common Agricultural Policy. To what extent does Ireland, in formulating plans for the future of Irish agriculture, rely on the standing conditions and to what extent does this country expect that substantial changes will appear in the Common Agricultural Policy? The point which is particularly important in this context is that, together with the Czech Republic which, I assume, will not be a problem for the EU and its agriculture, Poland will be in the first wave of candidates. Due to its agrarian character, Poland, alone, can shatter the Common Agricultural Policy of the whole Union. This really is a problem and I am convinced of that. I would like to speak about that, but I am afraid that this is too vast a problem and perhaps we would not have time to discuss it thoroughly. I would like to make contact with any member of the committee to discuss the problem.

Chairman

The delegation will be meeting officials and experts from the Department of Agriculture and Food tomorrow and that is one issue that could be taken up with them. Of course, we will have no problem in continuing this discussion when we visit the Czech Republic next year.

Deputy Ferris

I wish to refer to a question on the effects on the landscape. As a result of EU regulations, many areas here have been designated as special protected areas, which is proving on occasions controversial but is generally welcomed. Wildlife measures are also driven by the European Union. These protected areas can cause many difficulties.

There is also an objective of disease eradication within the area of animal welfare. This is also being driven by the European Union and it is quite commendable.

Another aspect has to do with planning, which was mentioned. In many parts of our country, obtaining planning permission is complex because of the height of the water table and the effluent coming from sewage entering the water table. European directives to deal with that in a positive way are promised

Ms Alena Hanusova

Was the last point about the water table and sewage?

Deputy Ferris

There is controversy here over sewage treatment plants and septic tanks. Stringent regulations are promised to address the problem.

Deputy Wilkinson

I am pleased the Czech delegation is meeting Department officials in the morning to discuss the future of agriculture. It is very difficult to predict what the future will be here as the country is in a period of great change. The smaller farmers are part-timers. The farms are getting bigger. In many cases the objective is to try to protect the rural countryside. It is hard to know what the future holds but there is one certainty, that food will always be needed. We seem to concentrate increasingly on quality food for which there is a market. I could not make any further predictions. I wish members of the delegation well in their discussions with representatives of the Department of Agriculture and Food, who will have more detailed knowledge of the CAP reform. I also wish them well in the rest of their stay here.

Chairman

A little more than 30 years ago, we had the same concerns that the delegation have expressed today. Joining the European Union has been good for us. When one considers the improvements in agriculture, infrastructure, education, health and other so on, one must come to the conclusion that were it not for the money from the European Union we would not have been able to survive. While we have lost many small farmers and small shopkeepers we would have lost much more if we had not joined the European Union.

Contact between our country at ministerial and official level is frequent. The visit by the Taoiseach to the Czech Republic in January 2003 was particularly significant. The Tánaiste, our Deputy Prime Minister, visited the Czech Republic in June and her Minister of State visited in March. There will be visits by the Minister for the Environment, Heritage and Local Government and the Minister for Education and Science in the months ahead. In October 2002 the Deputy Prime Minister and the Minister for Foreign Affairs from your country visited Dublin. I hope this co-operation between the two countries will continue.

I again thank Mr. Skopal and the members of the delegation for meeting us today. It has been an interesting exchange of views and I hope that the remainder of the visit to Ireland will be interesting. I know the delegation enjoyed the visit to Grange and Newgrange yesterday. Tomorrow the delegation will meet officials from the Department of Agriculture and Food.

Mr. Skopal

I thank the committee for the welcome and for having provided the first contact between our parliaments and our first contact with Irish agriculture. As I said during lunch, we would like to invite a delegation of the members of the committee to Prague and I hope we will continue our discussions there. In the future I hope we will support each other in negotiating various issues within the CAP and certainly we will co-operate. I thank the committee once again. I am sincerely looking forward to our meeting in Prague.

Chairman

It was a pleasure and we look forward to our visit to the Czech Republic, which I hope will take place next year when we will be able to taste your beautiful beef and wine.

The joint committee adjourned at 4.20 p.m. until 3 p.m. on Tuesday, 23 September 2003.