I welcome Mr. Pat O'Rourke, president, and Mr. Ciaran Dolan, general secretary, of the ICMSA who are with us today to make a presentation to the committee on the World Trade Organisation negotiations. Before asking Mr. O'Rourke to commence his presentation, I draw the attention of the witnesses to the fact that while members of the committee have absolute privilege, the same privilege does not apply to them.
WTO Negotiations: Presentation.
I thank the committee for the opportunity to put forward the ICMSA's concerns on the world trade talks. We are putting forward a specific proposal which we hope the committee would consider.
The 2005 background to the our concerns on the world trade talks, which will conclude in Hong Kong in December, is as follows. On the current state of agriculture, yesterday the CSO released figures which show that the input prices for the agriculture sector have increased by 4.5% in 2005, whereas the output prices have only increased by a margin of 0.3%. It is quite clear we are under what one could call a price squeeze at the farm gate. All sectors apart from cattle have shown a decrease in output prices, whereas inputs, other than feedstuffs, have shown an increase. Those statistics show clearly there is a difficulty but that difficulty is multiplied on the basis that a 4% switch in terms of trade, that is, the relationship between output prices and input prices, represents a fall of between 8% and 12% in farm income. That is the alarming part of the situation.
Our concern from a farming perspective is how the world trade talks match up with the mid-term review. As far as we are concerned, the Commission, under Commissioner Mandelson in the negotiations to date, has gone beyond the mid-term review agreement and has inflicted most serious damage, both from a European point of view but particularly from an Irish point of view. Our view is that this only became clear when the French, with the support of the Ministers for Agriculture and Food and Foreign Affairs, convened an emergency meeting of the European Council of Ministers where the Commission was reined in on the basis that it had gone beyond its mandate in offering concessions beyond what was agreed under the mid-term review.
Subsequently, what was agreed, which is certainly useful, is that in any further negotiations, particularly in the Hong Kong negotiations, the agriculture Ministers would be briefed by the Commission on the basis of the impact of whatever proposals it puts forward. That is a positive development and I take this opportunity, as I already have done at other fora, to compliment the Ministers for Agriculture and Food and Foreign Affairs in taking a strong stance, with the French, in reining back the Commission. Unless the Irish and French lead the defence of the Common Agricultural Policy in the negotiations at European level, it would appear we would be in major difficulties.
I wish to quantify the impact on Ireland of Commissioner Mandelson's proposals in which he had gone beyond the mid-term review. It is our view that the proposals Commissioner Mandelson put forward would, on an annual basis, have a negative impact of €350 million on the beef sector and €85 million on the dairy sector.
We also draw the committee's attention to the fact that Commissioner Mandelson has indicated to the European Parliament that he will not go any further in offering additional concessions. While that is welcome, it has not addressed the issue of the damage that he has inflicted and the fact that he has gone too far in our view.
The key concerns for the ICMSA is that a Hong Kong agreement, if reached, must respect the decisions that have been taken in the mid-term review and go no further. We suggest that the committee would consider a debate in the Oireachtas on the world trade talks and, indeed, the mid-term review, and that there would be no increase in concessions above the existing level of imports. Our fear is that the norm will become what has been offered by Commissioner Mandelson, rather than what it was, namely, the mid-term review and no more. If the Oireachtas debated the issue and made that resolution, it would strengthen the hand of the negotiating team in Hong Kong.
The other major concern relating to the world trade talks is that the model of the European family farming structure is under attack. Put simply, everyone accepts that the Americans and New Zealanders are the definition of factory, corporate farming. On the other hand, there is the European model of agriculture which is in general the family farm structure, of which Ireland is a clear example.
The wider issue of free trade is frustrating for farmers. This is trade on the basis that food will be supplied by non-Europeans, etc. It is similar to the debate taking place in other sections of the Irish economy. In Europe, food production will be outsourced outside of Europe. From an Irish perspective, or indeed from a European perspective, this is of concern on the basis that, first, we as producers in Europe and Ireland have a standard which is very high in regard to complying with environmental and animal welfare. However, having complied with these regulations and having kept our side of the bargain, there is a suggestion that Brazilian beef, for example, will be given greater access to the European and Irish market and standards do not matter. We want to ensure that European citizens, under the Common Agricultural Policy, which was designed to ensure food was available and produced in an environmentally-friendly manner, will have access to food which is safe. This is the key issue.
We believe the standards that apply to food production in Europe and Ireland are the highest in the world. We are extremely concerned that this reputation could be damaged on the basis that produce is being imported into this country which does not meet that standard. We have highlighted on a number of occasions Brazilian beef which is being imported from a region in Brazil where there was a different method of traceability, one that does not meet the standard that applies here. We are also concerned that animals with foot and mouth disease were being vaccinated but the disease was not eliminated, and that it is only a matter of time before it will be confirmed that there are serious outbreaks of foot and mouth disease in Brazil. This causes great concern to beef producers in Europe and Ireland. If there are significant volumes of beef in the country, ordinary consumers will not be able to differentiate between Brazilian and Irish beef. We may talk about labelling and so on but the reality is that labelling does not arrive on the plate; it arrives in the butchers or the supermarket.
We believe the Hong Kong negotiations should end in failure rather than reaching an agreement whereby agriculture, particularly from an Irish perspective, will be sacrificed for other trading interests. We are of the view that no deal is better than a bad deal. Given our experience in Cancún, the right course of action was taken there. There was no deal because the deal that was on the table would have had a significant negative impact. From an Irish perspective, the importance of the special Council meeting convened by the French and the Irish is that the ground rules are now clear. Whatever happens in Hong Kong, the Commission's proposals will be analysed each step of the way by the Minister for Agriculture and Food on the basis of the impact it will have on Ireland, which is useful. It appears the Commissioner, Mr. Mandelson, has said to the European Parliament that he will not go any further. Instead of offering concessions, he should undo the damage that has been done because the mid-term review is the only mandate Mr. Mandelson was given to negotiate. He had no authority, either legally or otherwise, to go beyond that.
I will ask our general secretary to go through some of the specific technical details in regard to the impact of this policy. We made these details available to some members last week during the lobbying session.
Mr. Ciaran Dolan
We tried in a brochure we circulated and in an additional chart to depict the magnitude of this very complex issue. We can all get bogged down in a host of technicalities and language, even though the document has been written in English. The WTO documents are very complex when one tries to make rules for the whole world in terms of trade.
I have been involved with farming organisations for 25 years and I have never seen such uncertainty. Perhaps at times we should move away from statistics and what is happening on the ground. As a result of political decisions, correct or otherwise, we have witnessed in a matter of a few weeks the demise of the sugar beet sector. The sugar beet growers in Ireland had achieved a level of management and technical know-how which was unrivalled within Europe in the sense that they had overcome climatic difficulties and were able to reach respectable yields vis-à-vis the more favoured areas in the European Union. We saw in a short time the rise and fall of the mushroom sector. From an output of in excess of €100 million, providing much needed employment in rural Ireland, the industry has now almost disappeared.
On the cattle and beef sector, are we at that threshold where we will see the same level of decline, tending towards zero? Mr. Goodman is not one to exaggerate, and members have heard his comments. The Minister of State, Deputy Parlon, examined our submission and said he would broadly agree with it, even if we are wrong to a factor of 20% or 25%. It paints an unsustainable picture for all sectors, bar one, which is a marginal call. The exception is dairying, which would require individuals suffering a substantial income cut with the current level of output. Considering the issue from an economic and rural perspective in Ireland, it is a major development on our doorstep. It may not happen overnight but it will happen within three or four years, not a decade or two decades.
The European model of agriculture is a nonsense in reality if we are confronted by offers to amend the WTO rules. Beef production in Ireland will be totally undermined from a financial point of view. Any individual who will contemplate investing his or her time or, more important, investing in facilities to meet the nitrates directive would want to be mad. We have not said it yet, but we may have to say it. If one is involved in beef production and totally dependent on beef or related livestock activity on a farm, one should think twice or three times before investing in control of farmyard manure under the nitrates directive. One will not recoup one's investment in a reasonable time. Teagasc should be honest in this regard, although I am not suggesting that it is not honest. If we are faced with this situation under the nitrates directive, we should not allow individuals to invest in an enterprise that will not yield an income. What then can we do? As Mr. Pat O'Rourke said, we believe that should the ministerial meeting in Hong Kong fail to agree, that might not be a bad outcome and would give the European Union the opportunity for a "moment of reflection" — a term used after the rejection by the Dutch and the French of the constitutional treaty. Everybody accepts the Ministers will not now reach agreement, but may disagree, which is slightly different.
The view of my association is that the offer from Commissioner Mandelson goes outside the limits of the mid-term review. If this is the case, the Council of Agriculture Ministers should be fully informed by statistical and technical information on the European Union stance. That is the essence of democracy. Not just the farming sector of the 25 states, but all member states and sectors, including consumers, have a right to know that it may emerge five years hence that there is actually a scarcity or that food security, an element of food safety, is threatened. These issues have not been fully analysed.
I do not intend to go through the various points made in our document as I am conscious of the time available. I refer briefly to two graphs on page 4. The first relates to butter and is an attempt to graph the current situation. I will go through the butter graph only, because the same concept is repeated in the following graph which concerns beef. The first bar, the lilac one, shows the current position of the internal price in the European Union. The second bar is yellow and brown. The yellow represents the world price and the brown represents the current tariff. The two of them, combined, are clearly in excess of the first bar, indicating the level of protection. There are no imports of butter into the European Union, apart from the 85,000 tonnes by way of concessionary imports, primarily, if not exclusively, from New Zealand.
Based on the offer already made by Commissioner Mandelson, the last bar shows the situation that would prevail, assuming that world prices remain constant. I had to presume that to get some indication of the magnitude of what has been offered. Clearly, the internal price cannot exceed the combined world price and the reduced tariff level. The difference is the red box. In our view, this is a graphic demonstration of how the current offer has gone outside the mid-term review. These prices follow the mid-term review and are, therefore, in addition to any price adjustment required as a result of that review.
In order to obtain classification of certain products as sensitive products, the trading block seeking that designation would have to agree to greater access and open its markets further. The single page we have circulated demonstrates how this might work. While it does not refer to a particular sector, it can be taken that it broadly equates to the current EU beef sector. The graph is a slight modification of a graph produced by the European Commission. One can see how we get caught in a bind. Having offered a reduction in the tariff we are confronted with the situation that in order to avoid a cut in price we must try to get sensitive product status. The price to be paid for that is that one must allow further access into the European Union, not a great situation.
To say the least, the proposals are a major challenge. Unfortunately, it is not a question of adjustment. If the outcome of the WTO is based on what the EU has offered, this will have major implications for the beef sector. It will have major income implications for the dairy sector and its long-term viability will be in jeopardy.
I thank Mr. Dolan and Mr. O'Rourke for their presentations.
I would like Mr. Dolan to clarify the last chart. What do the letters TRQ stand for?
Mr. Dolan
They stand for tariff-related quota. That is the quota allowed in at a zero or reduced tariff. This question proves my point about terminology.
The stark reality is that our sugar industry looks like it is virtually gone and if the nitrates directive goes through as it stands, our pig and poultry industry will also be gone. If the WTO proposals go through as they stand currently, our beef sector will go too and our dairy sector will be in jeopardy.
Irish agriculture is in a serious situation. The proposals of between 50% and 60% cuts in tariffs on beef and dairy products coming into the European Union would have a devastating effect, in conjunction with the abolition of export refunds. This is the proposal on the table. My understanding is that the WTO is not prepared to give any recognition to the production standards within the European Union as part of the agreement. Perhaps the delegates will elaborate on this. If countries import into the European Union, they should compete on a level playing pitch in terms of standards. Will the delegates elaborate on the situation regarding beef? The example was given of cattle being vaccinated against foot and mouth disease in Brazil. Is it not the case that any animal vaccinated within the European Union, cannot, under any circumstances, go into the human food chain?
It is important to point out that the 130 poorest countries in the world are very much opposed to the proposals put forward by the European Commission. At the moment, they get preferential access into the EU markets. If this proposal were to go through as it stands, these countries would not have that preferential access. In conjunction with that, the likes of Brazil and New Zealand would wipe out any trade they would have outside their country and could damage their markets internally such that they would not have the opportunity to build up the development of their industry in order to try to compete with major producers. Will the delegates comment on this? This issue seems to have been brushed under the carpet in this debate.
With regard to consumers, we have an issue currently with Irish Ferries. If this situation were to occur across the board with all ferry companies involved and a blockage of ports ensued, either just in Ireland or within the European Union, it would threaten the supply of food into the Union, unless a country was self-sufficient. That issue cannot be ignored. I already mentioned the issue of food safety, on which, hopefully, I will get a reply.
The European Union should withdraw the proposal it has put forward for three reasons. The Commission has gone beyond its mandate and beyond the reform of CAP with its proposals. I believe the proposal put forward is contrary to Article 30 of the Treaty of Rome, which clearly states that one of the objectives of the European Union is to increase the individual earnings of persons engaged in agriculture. This proposal is contrary to that principle and therefore does not comply with the Treaty of Rome.
I will cite the main reason it should be withdrawn. In response to the EU proposal, the United States has proposed what is termed a "letter of intent". It proposes to bring forward a farm Bill in 2007 which will propose changes. The difficulty is that the year 2007 is the eve of a presidential election as well as Congress and Senate elections. There is no way the US proposals will get through the Houses of Congress on the eve of an election. It is farcical to discuss putting everything on the table on our part while the United States has put nothing on the table. This is the ideal opportunity to withdraw our proposals.
I thank Mr. O'Rourke and Mr. Dolan. They answered one of my questions which was whether it would be a good thing if the Hong Kong Round were to fail. Many people might not feel too upset if that were to happen. I am coming from the perspective both of Irish agriculture and also from the least developed countries as it would appear we share a common cause with them. We do not want a bad deal and no deal might serve us all better for the moment. A bad deal would be a disaster because we would be stuck with whatever is the outcome.
Ireland has often referred to its clean, green image although we may have been flying on a wing and a prayer in that respect because we did not have the data to back it up but this is no longer the case. The Teagasc food purity database has produced the scientific evidence to back this up. I am in agreement with the delegation on the traceability and standards this country is expected to achieve and was forced to do so because our products would have been rejected otherwise. The delegation referred to the outsourcing of food production. If outsourcing were to happen, what about the lack of guarantee for the quality and safety of our foods? Outsourcing appears to be happening in other areas of our economy and about which we all are concerned.
The recent Foresight Perspectives document includes a comment that there is a high dependence on agriculture which is heavily subsidised at levels that cannot be expected to continue through to 2025. What are the views of the delegation on this statement and on the subject of food subsidies and the direction they might be taking? What should happen and what will happen? On the projections for agriculture, the numbers in full-time farming will certainly have diminished by 2025. Will the delegation comment on how that might shape up and what can be done, in the delegation's view, both within the context of WTO and also at national level? Where will that take us as a still very important contributor in respect of agriculture within the economy?
I welcome the president of the ICMSA, Mr. O'Rourke and Mr. Dolan and I thank them for their presentation. While there are big challenges I would not be as pessimistic about agriculture as some are. There is no doubt the news about the sugar beet has had a massive effect on farmers and even farmers who are not sugar beet growers. It is an enormous loss. On top of that is the nitrates directive. If that is implemented as suggested, it may not finish but it will do enormous damage to the poultry and pigmeat industries. Members of the committee travelled abroad recently and saw the different standards in Spain. We have been very compliant with EU guidelines and I wonder whether any recognition is given for that. I acknowledge we are in a difficult situation by virtue of the fact we are an island nation. The EU will have to look at itself and decide where it is going because there is an enormous challenge to agriculture.
Mr. O'Rourke said that the present proposals should be withdrawn. I think Great Britain should be asked to withdraw Mandelson as well. His track record in anything he does has been disastrous especially for this country. I presume I will not get a proposer or seconder for that motion. He seems to have no regard for and very little knowledge of the agricultural scene.
It might be best if the Hong Kong talks fail. However, things will happen again. Agriculture faces a massive challenge. Our Ministers have much to do. I have great confidence in them to negotiate their way but support is not great for our position.
I wish to make a comment rather than ask a question. I was in the company of some UK colleagues over the weekend as part of the British-Irish Interparliamentary Body and what I heard was very frightening. One of the delegates was talking about agriculture in a sub-committee. He more or less said it only represents 1% of GDP and it did not matter whether food was sourced elsewhere. His remarks gave me a very clear indication of Labour Party thinking on the issue and where Mr. Mandelson is coming from. I have no problem seconding the motion that he should be asked to withdraw his proposal.
However, I also worry about our own Government and its handling of this matter. We were assured by former Minister, Deputy Walsh, that what we did as far as the single payment was concerned would have to be the bottom line for agriculture. As my colleague, Deputy Naughten said, the sugar beet issue is dead and gone and if there are not massive changes regarding the nitrates directive, the pig and poultry industry, in which my constituency of Cavan-Monaghan has a renowned involvement, will be under threat if not finished entirely. If the WTO talks as printed were to come into being, the whole beef and dairy industry would be in danger. The dairy industry is on its knees in difficult land areas. It may be all right in the Golden Vale area but in high cost areas it is on its knees.
There is ample proof of what affects price. That came in the case when meat from Brazil was blocked or at least slowed down and immediately the price increased. In October 2004, I listened to the father of someone involved in the meat industry talking about how good the meat was in Argentina. Only a few weeks later a contract for supermarket business in Northern Ireland was lost to Argentinian beef. The idea that we can swallow all these imports under a new WTO agreement does not stand up. Our industry which exports 90% of its produce would be devastated. Does the ICMSA have any suggestions as to what we can do?
Speaking to UK colleagues in Edinburgh this week their underlying ideals became clear to me. I believe the best deal possible now would be no deal. At least the UK would no longer hold the EU Presidency and we might have a hope of getting somewhere. If this deal is to go through it would signal the end of agriculture as we know it. As the study group found, all remaining farming would be in the south east and certainly not in the west or northern parts of the country. I apologise to the president of the ICMSA for being late. However, I know him well enough to know his stance, which we would certainly support.
I thank the president of the ICMSA and Mr. Dolan for their contributions. To a certain extent we are rehearsing the debate we had here with the officials of the Department of Agriculture and Food two weeks ago. We all left gravely concerned about the future of Irish agriculture. We must now look forward and decide on what action we can take to protect Irish interests and the interests of agriculture across Europe.
I agree with the two speakers that it could be said that Mr. Mandelson has been guilty of treason against the agricultural interests of Europe and particularly those of Ireland. As Senator Callanan and I said at the previous meeting, no deal would be better than a bad deal and I believe that is the unanimous opinion of the committee. We must aspire to the collapse of the Hong Kong talks. We also need to look to the Austrian Presidency in January in the hope that the Austrians might adopt a different approach.
It would be useful for us to explore to what extent we can retreat from the offer made by Mr. Mandelson at this point. We cannot see the implementation of the offer he has made. It is cold comfort for farmers across Europe to be told that Mr. Tony Blair and he do not want to go any further. I do not want to live through a period in which we see Irish land becoming a recreational rather than a productive resource, which will happen unless positive action is taken. Following discussions with colleagues after the last meeting it was felt that the committee could actively engage with the Members of the European Parliament who could meet us to discuss the challenges and see how, through working together, we could achieve a better outcome than is now envisaged.
I join Deputy Wilkinson in paying tribute to the Minister for Agriculture and Food, Deputy Coughlan, who is doing a superb job on our behalf. She has won enormous respect in the agricultural community and among her colleagues in Europe. It behoves us all to put party political interests aside in this debate and to be unanimous in fighting the cause of Irish and European agriculture.
Deputy Naughten asked whether Europe recognises the huge cost involved in the very high standards of food production required of producers. Unfortunately the answer is "No". While we have standards to which we must adhere, it appears that, for example, and as we have already pointed out, the same standards of traceability do not apply to imported produce, particularly beef. If any region in Europe had the same foot and mouth disease problem as encountered in Brazil, there would be an immediate ban on the export of the product from the region. We have this limbo situation. While we have clear veterinary guidelines we also have the political arena. Political concessions have been made to some countries allowing them to export a particular quota to Europe. The condition of that quota does not meet the standards in terms of traceability, the environment, etc. Therein lies part of the problem.
From the point of view of beef producers and particularly those in Ireland where nine out of ten animals need to be exported, we have always bought into whatever standard is required. An exporting country such as Ireland must meet such standards in order to be able to compete. However, it is mind-boggling that Europe has a deficit of approximately 310,000 tonnes in beef. We have long moved away from the idea of intervention and beef mountains. The WTO negotiations will further dismantle the beef-producing sector in Europe. It is now proposed to increase the deficit and source more beef outside Europe, which defies logic. Given the existing production level in Europe, we need to make sure that we source as much of the food in Europe to feed European citizens and ensure we have the balance. Europe can implement standards in Europe but cannot apply those standards if food is to be sourced from outside Europe.
I will ask the general secretary to speak about the legal status. At a recent briefing session he outlined whether a legal challenge on the basis of Article 30 can be made to what Mr. Mandelson has done. I agree with the Deputy in what he said about negotiating. We made the initial offer at the mid-term review and accepted that we would need to farm on the basis that the Fischler reforms would meet in their entirety our obligations under the World Trade Organisation talks. That was our understanding and we bought into that.
It is now clear that difficulties exist. There is no way we can allow further concessions to be offered and at the same time allow the Americans to continue simply to offer something imaginary in the future. This is not acceptable and I hope that Europe and obviously Ireland will not accept buying into a promise rather than buying into quantifiable moves by America. I believe the Americans will not concede and on that basis I can say with some certainty that no deal will be reached in Hong Kong.
The Europeans do not place the same emphasis on food security as the Americans, which is the fundamental issue. If Europe decides that we want to ensure we have a continuous supply of safe food produced in an environmentally friendly manner, I am sure that Irish and European farmers will continue in business and we will not see a repeat of what happened in the sugar beet sector, which was simply wiped out in favour of a policy to source sugar outside Europe.
I was asked about the future of the 2025 report. It is clear that report expected we would do nothing and concede in every round of trade negotiations, and that we would dismantle Irish agriculture in its entirety. If it could be taken that whatever applied in the sugar sector would become the norm, we would have meltdown and production in parts of Ireland would discontinue. None of us wants to concede defeat at this stage. It is clear that there are opportunities for Irish producers, given that they can sell their produce to 500 million European citizens. Europe is one of the wealthiest regions in the world, which means that its citizens have huge per capita wealth. Ireland has many advantages — it is a member of the European Union, it has high standards and it knows what consumers require. Irish farmers need to harness, utilise and maximise their advantages, rather than raising the white flag and accepting that farming will be confined to one or two regions in the future.
I have been asked to clarify whether the ICMSA believes agriculture should be subsidised. While it is obvious that farmers are the recipients of subsidies in this instance, in return for producing agricultural produce to the highest standards and requirements, they have to try to stay in business. If subsidies are removed and the same standards are demanded, consumers will have to pay more. The economics of the matter will not work out in any other way. They have to ask themselves whether they will be prepared to pay more if they want standards to be maintained after the removal of subsidies. The ICMSA does not have any difficulty in defending the subsidies. The reality is that subsidies do not necessarily benefit producers — they benefit consumers by ensuring that the highest quality product is available to them. The price they pay for the product is subsidised by means of a subsidy being given to farmers at production or farm gate level.
I appreciate that the nitrates directive will not be discussed at the WTO negotiations, but it is important because it could cause serious difficulties. I have spoken about the need to ensure there is a level playing pitch. Irish farmers who produce a product in the dairy sector, for example, will be in competition with their counterparts in New Zealand. Their hands are tied behind their backs in such competition because completely different production standards are required here on the basis of the stocking rate and the utilisation of growing grass. The nitrates directive will curtail Irish farmers in that regard, but farmers in other countries will face no such restrictions. The other problem that will be posed by the directive is that many farmers will no longer be able to reduce costs by spreading pig slurry, in particular, onto grassland farms. It is quite a simple matter — slurry from pig units is very valuable because it aids the growth of grass and thereby reduces the demand for chemical fertilisers. The level of such activity will be significantly reduced under the nitrates directive, however.
I do not want to get into the technical details of the relevant regulation, but I will highlight one aspect. The advice of Teagasc in its documentation on good farming practice is that an intensive dairy farmer who is utilising grass should apply phosphate fertiliser up to what is known as "index 3" level, to get the maximum output without damaging the environment. The new directive will reduce the level that can be used to "index 2", however. At a practical level, that will mean that grassland farmers will be unable to spread pig slurry on their farms. Not only will that create major problems for pig producers, but it will also mean that organic fertiliser will be replaced with chemical fertilisers, at a higher cost. The ICMSA is working to ensure that "index 3" levels will be allowed under the nitrates directive, thereby alleviating the problems for pig producers without causing further environmental damage. A final decision has not yet been made on that issue.
I was asked to state whether the ICMSA is optimistic or pessimistic about the future of the farming sector. Every person who gets involved in farming needs to be a born optimist. He or she will be a pessimist by the end of his or her life, however, after encountering various difficulties and challenges. Farmers have faced challenges like complying with the many regulations, investing in their farms and doing everything they have been asked to do and more. They are now being told that food production is about to be outsourced elsewhere, with different standards being applied. Farmers have to be optimists. Market access is the key issue for any business. The European market is the market that is most important to the Irish farming sector. It is not unreasonable for the ICMSA to suggest that Irish farmers should have the first call on that market.
I will outline the ICMSA's difficulty with the WTO negotiations. Tariffs keep non-EU produce out of the European market in the same way that the dikes in Holland keep out the flood waters there. If one lowers a dike, there will be a flood. If one lowers a tariff, there will be a flood of produce from overseas. That will cause difficulties. It is right that there are major concerns among farmers. There is a high degree of pessimism about how individual farmers will be able to work their way out of these problems. If farmers need to increase their output while maintaining current production costs, they will do so, as they have done in the past. It is clear from figures provided by Teagasc that the farm gate output has increased significantly. Farmers are frustrated and pessimistic because decisions about the future viability of farming are being made in the political arena, rather than at the farm gate. I ask my colleague, Mr. Dolan, to consider the legal question of whether the EU Commissioner, Mr. Mandelson, has gone beyond his remit and to outline the current position in that regard.
Mr. Dolan
I would like to make some points about product standards. I understand the proposals contain some general references to animal and plant health, but they do not contain the level of detail with which EU producers have to contend. The Brazilian example is a very good one. Brazil is important because it exports beef into the European Union. Australia and New Zealand are demanding greater market access. Members of the committee are aware that Australia and the US do not import a single kilogram of fresh beef. All beef from Brazil must be treated. The policy adopted by Australia and the US is based on veterinary advice and reports. Such countries often claim they will lift their bans on imports in six months.
It is worth reading the reports of the veterinary experts who were sent by the Eurppean Commission to Brazil, which are available on the Internet. When the experts made their second-last visit to Brazil 18 months ago, they gave the Government and the regional authorities in that country a timetable for the reform of traceability there. It would have been bad enough if the experts had found that no progress had been made in that regard, but in fact they found that the situation had worsened. The veterinary reports should have led to a complete ban on imports of Brazilian beef, in advance of the outbreak of foot and mouth disease in that country. The ICMSA accepts that the Minister for Agriculture and Food recently wrote to the Commission to ask it to explain why such action has not been taken. The scientific and veterinary case for a complete ban has been made by the Commission's experts and should be acted on. It would not be any harm for Ireland, as an EU member state, to use the WTO negotiations to call for greater controls, if not a total ban. The ICMSA believes that the US has succeeded in overcoming the legal obstacles, as it has put in place a complete ban on imports of fresh beef from Brazil.
The Chairman of the joint committee attended a briefing session on this matter, when a number of Members of the Oireachtas asked whether the EU could be challenged in this regard, for example under Article 30, as suggested by the Chairman. Later that day, the Advocate General issued a report on a case taken by the European Parliament against the European Commission. As two EU institutions were arguing with each other, it was a good family row that did not involve any outsiders. The European Parliament wanted to ascertain whether the Commission had acted within the law in supplying the names and addresses of passengers travelling between the EU and the United States. The Advocate General ruled that the Commission erred in law and breached EU legislation in that regard. The Commission has seldom been taken to task to the extent that its representatives were required to attend an extraordinary meeting of the General Affairs and External Relations Council in Luxembourg on 18 October last.
A number of Deputies have spoken about Ireland's responsibility to developing countries, or the poorest countries. Effectively, the Council placed a large question mark against the extent and quality of the briefing it was receiving from the Commission. The second paragraph of the Council press release issued at the conclusion of its meeting states:
The Council underlined its support for Commission efforts to secure an outcome in line with the mandate. In that context, it welcomed the Commission's commitment to continue those efforts and to strengthen the mechanisms to ensure that the Council is fully informed, on a regular and systematic basis, of developments in the negotiations. This process would include explanations to the Council, confirming that the Commission's action remained within the mandate, including, as necessary, the use of technical analysis.
I do not believe the Council was fully assured that the Commission was doing as prescribed. If no agreement is reached, as is likely, the European Union will make progress slowly, including on the question of its greater responsibility to developing countries. Let us make a decision based on full information and analysis of the position. No such analysis has been carried out.
On vaccination, I understand that if one vaccinates an animal, one cannot allow it to enter the human food chain. While I am not up to speed on this issue, I hope there is no question of meat from vaccinated Brazilian animals entering the European trade as any such practice would probably be illegal.
The ICMSA would like a robust, full examination to be carried out on the impact of all proposals made at the world trade talks on the poorest countries. Members should note that the European Union imports 85% of total exports from Africa. The impression must not be given that a Chinese wall of sorts has been built around the European market because the contrary is the case.
On the ongoing theoretical and academic exchange on the number of farmers Ireland will have in 2025, much of the debate revolves around the question of definition. Clearly, however, the figure of 10,000 mentioned in the recent report will not be far off the mark if the World Trade Organisation proposals are accepted. The report has a number of merits; for example, it provides an indication of possible scenarios in 2025. It would not serve any purpose to repeat the arguments and discussions on the issue but many commentators make the same argument as the report, albeit using different terminology.
A key issue, one which I experienced first-hand with regard to the previous round of negotiations in Cancún, is that the world trade talks are being portrayed as an opportunity for developing countries to increase their exports and give them access to the lucrative European market. This argument falls down on the basis that the countries in question already have access to the European market. The greatest problem facing some of the poorer regions is not the need to be able to export but the ability to feed their own people, as many of them are far from having surplus food.
If one examines the countries running the world trade talks, one finds Brazil, the United States and New Zealand, none of which could be described as a developing country. The developing country agenda has been hijacked by countries to try to dismantle export subsidies, tariffs and so forth for their own interests, rather than for the benefit of developing countries. It is clear developing countries are not in favour of the current proposals because they would remove some of the advantages they enjoy in terms of access to the European market. I hope the general public realises the prosperity of Irish and other European farmers does not come at the expense of developing countries. We must get this message across to counteract the view that we are profiting from the misfortune of African countries.
Is it agreed that the clerk to the committee will refer the ICMSA presentation and the views of members thereon to the Minister for Agriculture and Food?
The documents should also be sent to the Minister for Enterprise, Trade and Employment.
That is agreed.
I thank members for giving the ICMSA an opportunity to raise the organisation's concerns. Presidents of farm organisations do not always remain in office for their full term and, as such, do not get an opportunity to express personal thanks to members of the committee. As I will retire in December, I thank members for their hospitality and understanding of the issues raised by the ICMSA. I am grateful for the opportunities the committee has given us to discuss issues of concern to us and wish members well in the future.
On behalf of committee members, I thank the ICMSA delegation for appearing before us. We are all saddened that Mr. O'Rourke is about to depart the scene. It has been a pleasure to work with him. I have met him on numerous occasions at various functions and meetings of the joint committee. He has always worked in the best interests of farmers and I wish him many years of happiness in his retirement. I am sure he has his eyes set on other things and perhaps we will see him again at the committee wearing a different hat, which has happened before.
The Chairman should watch his seat.
Senator Bannon might have something to say about that.
I am sure certain political parties will be interested in Mr. O'Rourke.
I echo the Chairman's comments and wish my constituent, for another couple of months at least, well in his retirement. I am sure it will be short as Mr. O'Rourke will have plenty more to do. I thank him for his commitment to Irish agriculture in the past six years and the work and time he has invested in the sector. He has been a tremendous advocate for farmers and agriculture and I am sure we have not seen the last of him.
I join my colleagues in expressing good wishes to Mr. O'Rourke. I am sure we will see him again and it will not be far from farming issues.
Sitting suspended at 4.08 p.m. and resumed at 4.11 p.m.