We have been before this joint committee on many occasions and we have always been received in a positive manner, for which I thank the Chairman. Bearing in mind all the threats we have discussed at meetings of this committee, I can say without fear of contradiction that the greatest threat to Irish farming, the food industry and employment in rural Ireland of our generation is the present EU position in the WTO negotiations in Geneva. I am accompanied not only by the senior staff members of the IFA but by all our national officers and the chairmen of our various commodity committees, which demonstrates the seriousness with which we regard this issue.
I welcome this opportunity to inform members of the committee on the precarious circumstances in which Irish agriculture finds itself, arising from the likelihood that a WTO ministerial meeting in the next two months will "initial" a final agreement. Members of the Oireachtas will be aware of the major reform of the Common Agricultural Policy, CAP, undertaken by former Commissioner for Agriculture, Rural Development and Fisheries, Franz Fischler, which was completed in June 2003. A solemn commitment was made at that time that the major reform and reorientation of the CAP would be the European Union's contribution on agriculture in the WTO Doha development round.
The EU Commissioner for External Trade, Mr. Peter Mandelson, has shamefully and blatantly reneged on the commitment of Mr. Fischler and of the Council of Ministers in 2003. We are not just facing further reform of the CAP, we are also facing its destruction. When I addressed the Oireachtas Joint Committee on European Affairs three weeks ago, I stated:
The Commissioner is working behind closed doors at the moment in Geneva in what we believe is a reckless destruction of the CAP. He is prepared to sell out the beef industry to get a deal at any cost. He is engaged in a race to the bottom, to the lowest standards of food safety, animal welfare and the environment.
Since I addressed the Joint Committee on European Affairs, the problem has become more acute. The Government's strategy so far has done nothing to prevent Mr. Mandelson from promising further concessions on agriculture with a view to obtaining a deal. The only winners in Mandelson's globalisation agenda are the multinationals, commodity traders and corporate ranchers. Without being personal, I also include Mr. Mandelson's own career. It is indefensible that the European Union is on the verge of unwinding the CAP, thereby abandoning food security for Europe's 500 million consumers at a time when global food commodity markets are changing dramatically. In 2007, the world's population of more than 6 billion people consumed more food than was produced. Food stocks are at an all-time low, with less than 30 days' supply now available.
The food industry is the largest Irish-owned manufacturing sector, accounting for more than 50% of exports. Ireland's food and drink exports were worth €8.6 billion in 2007, representing 17% of Ireland's net export earnings. Farming, the food industry and the service industries depending on agriculture provide 300,000 jobs, which amount to 25% of all jobs outside the greater Dublin area. The WTO deal on the table in Geneva threatens food exports and 50,000 jobs in rural Ireland.
With the finest raw material in the world, the Irish food industry is the means of achieving higher value-added consumer products, given a fair chance, but if Mr. Mandelson gets his way, it will never have that chance. What a shame. Despite the fact that the Doha negotiations commenced in November 2001 and the European Union made its formal offer in October 2005, the Department of Agriculture deliberately never published its calculations on, or assessment of, the cost to Irish agriculture of the Mandelson offer on the table in Geneva. Notwithstanding this, the IFA economics section has calculated the cost to the economy at €4 billion per annum, with 50,000 jobs lost in manufacturing and services and a further 50,000 farmers put out of business. In the presence of the Taoiseach and Minister for Agriculture, Fisheries and Food last week, officials from the Department of Agriculture, Fisheries and Food did not disagree with these figures.
The European Union set out to achieve a so-called balanced deal involving non-agricultural market access, NAMA, and services, in addition to agriculture. I challenge anybody here — be he or she associated with the Government, Opposition or business interests — to demonstrate the tangible benefits to Ireland from the proposed deal on the table. One cannot even demonstrate potential gains to offset the certain losses in the agriculture and food sectors from the present deal.
The greatest threat to Irish agriculture from the WTO negotiations comes from the major cuts in import tariffs. For beef and dairy products, the two major sectors which account for 65% of agricultural output, EU import tariffs would be cut by 70%. For other products such as lamb, pigmeat, poultry and cereals, tariffs would be cut by between 55% and 70%.
The IFA's assessment is that a 70% cut in beef tariffs would severely depress cattle prices in Ireland to an unsustainable level of €2 per kilogram, or 70 old pence per pound. When account is taken of the increased volume of imports after a WTO agreement and the EU becomes the dumping ground for South American ranchers, the likely price for Irish cattle could be as low as €1.80 per kilogram. These prices would not remotely cover the cost of production.
Butter is the most vulnerable of the main dairy products. Following a 70% tariff cut, the imported price would be 16% below the EU price. This price fall, combined with lower skim milk powder prices as a result of the 70% tariff cut, would reduce the milk price in Ireland to approximately 24 cent per litre, which would have a devastating effect on confidence and development in the dairy sector.
For lamb, the EU already imports 283,000 tonnes annually, including 228,000 tonnes from New Zealand at zero import tariff from previous trade agreements. These preferential imports, equivalent to 26% of EU consumption, will be increased further in a new WTO deal, particularly with Australia which will export millions of sheep. The normal import tariff on lamb would be cut by between 55% and 70%.
Committee members will be aware of the income crisis in the sheep sector in recent years. Evidence of the attrition that has occurred in the sector is available to the Minister. Sheep numbers are down by 40%. An increase in EU imports under WTO would decimate lamb prices and the sheep industry in Ireland.
As regards pigmeat and poultry meat, the import tariff, already relatively low, would be cut by between 55% and 65%, depending on the particular product. The result would be little or no protection for European producers who must meet high standards and EU costs while not producing in dollar-a-day economies.
While again not wishing to be personal, I want to refute the propaganda being peddled by the European Commissioner Peter Mandelson that we are only interested in protectionism. In 2008, Europe will be the largest food importer in the world. This year the European Union will import €100 billion worth of food products, a quarter of the food exported from all over the world.
To aid economic growth and progress in developing countries, the unilateral agreement, known as the Everything But Arms deal, by the EU provides for unrestricted imports of all products from the 50 poorest countries in the world. We believe this is an enlightened and liberal strategy to lift the economies of and people in the poorest countries, particularly in Africa. However, by destroying the European food market, Commissioner Mandelson is also destroying the opportunity for these poor countries held out in the EBA agreement. No other wealthy country in the world, the US, Canada, Japan, Australia or New Zealand, has made such a tangible commitment to the 50 poorest countries in the world.
The winners in Mandelson's scheme are not the poorest countries but the agricultural superpowers such as Brazil. Even in these countries, the poor and landless will never benefit, as wealth and agricultural property is concentrated in the top 5% of the population.
In last week's welcome debate in the Dáil on the WTO negotiations, the Minister for Agriculture, Fisheries and Food, Deputy Coughlan, was rightly critical of the concessionary approach of Mandelson in the negotiations, when she stated that the European agrifood sector must not be sacrificed for the sake of a deal. While she did not say so, I earnestly hope the Minister includes farmers in the European agrifood sector. I remind her that without farmers in the future she may well be referring to the European agri-imported food sector.
In her speech, the Minister failed to put on record the devastating cost of a Mandelson deal. If Mandelson gets his way, Europe will be flooded with beef from South American ranches where landless labourers are paid only subsistence wages. Produced with lower costs, lower standards and on enormous ranch-scale units, dairy products, lamb, pork and chicken will be shipped to the EU from all over the world. The European model of agriculture based on the family-farm structure will be destroyed. Corporate ranchers, multinational traders and shippers, and international supermarket chains will reap huge profits. Once they have control, consumers will pay the price they set for food. There is no evidence jobs will be created in industry or services in Europe to offset the massive €17 billion losses in European agriculture.
Mandelson is a failed negotiator. For all his concessions, the US and other countries have offered nothing. All three candidates for the forthcoming US presidential elections are committed to protecting their farm and food industry as a vital national interest, stating quite clearly food is a security issue for the US. For Ireland, beef and livestock is a vital national interest. Ireland is the fourth largest exporter of beef in the world. Beef is three times more important to Ireland than wine is to France.
The Minister's speech was silent on the following facts. Under Mandelson's deal, Ireland's livestock industry would be decimated. Cattle prices would fall to €2 per kilogram, and more than 100,000 cattle farmers would be made redundant and 1 million suckler cows slaughtered. Milk prices would fall to 24 cent a litre as increased butter and other dairy imports undermine the EU market. There would be serious losses in the sheep, pig, poultry and grain sectors. Sugar beet growers have already been sold out as a result of WTO. Beef, unlike sugar beet, once gone cannot be brought back.
The Minister in last week's Dáil debate was also silent on the €2 billion loss of export earnings and the €4 billion in total loss to the economy as a result of Mandelson dealing away Irish agriculture. The 50,000 job losses in rural towns in meat processing, co-ops, suppliers and services were also omitted from the Minister's speech. I do not need to remind committee members that in 50 towns throughout the country, meat, milk and other food processing services are vital employers and wealth creators, in some cases the only enterprise in a town. Neither was mention made of the 50,000 farmers who would lose their livelihoods from beef.
I am not presenting these figures to embarrass the Minister for Agriculture, Fisheries and Food. I am presenting them to remind her and the Taoiseach that this is the case they must make in Europe, so there can be no doubt as to the gravity of the situation.
These must be red-line issues for the Minister and the Government. Otherwise, they will be sleep-walking into the destruction of the Irish beef industry and severe damage to dairying and the rest of Irish agriculture.
The Minister appears to be investing much political capital in maintaining the green box for the single farm payment, which she describes as a red-line issue. Vital as the single farm payment is, it is not under attack in the Doha round. The Minister is deceiving herself if she thinks she can present saving the single farm payment as a satisfactory outcome for Ireland while losing on tariffs and market access that will devastate product prices, farm incomes and production. The Minister is in denial if she thinks this would be a satisfactory deal for Ireland as the loss of production will have long-term consequences for the raw material base for the food industry, jobs, food security and the environment.
In her speech to the Dáil, the Minister quoted from the Doha mandate at the launch of the negotiations on the commitments on import tariffs, domestic support and export subsidies. However, there was a further commitment in the Doha mandate to which the Minister did not refer. That commitment states:
Take note of the non-trade concerns reflected in the negotiating proposals submitted by members and confirmation that non-trade concerns will be taken into account in the negotiations.
While the Minister refers to the importance of the fair application of equivalence in animal health and welfare standards, this issue has been allowed to disappear off the table in the Geneva talks. The issue is ignored in the paper by the WTO's agriculture chairman, Crawford Falconer.
I am critical of the fatalistic approach of the Minister for Agriculture, Fisheries and Food and her Department that sooner or later there will be an agreement. No agreement is better than a bad agreement. This is a bad agreement. Commissioner Peter Mandelson is shredding Article 39 of the Treaty of Rome, which was the foundation stone of the Common Agricultural Policy and European integration over the past 50 years. Dismantling the Common Agricultural Policy will invariably lead to re-nationalisation, causing stress and tension in the European Union.
While creating fear about the consequences of lack of agreement, the trade Commissioner cannot demonstrate a single tangible concession from the other trading blocs in the negotiations. In any case, world trade has continued and expanded since 2001, when the Uruguay Round was fully implemented. The Uruguay Round rules will continue in the absence of an agreement. No agreement is better than the very damaging agreement on the table. The Minister and the Taoiseach should say so at the earliest possible opportunity.
The world is changing before our eyes. The three key resources for the future are food, water and oil. Already many food exporting countries are putting limits on their exports, as food security and inflation control are now their greatest priorities. In other countries, irrigated agriculture is being wound down, as water is needed directly by the people. With global warming, the temperate climate zones in most of Europe are best placed to produce food, and Ireland has many advantages with its mainly low-cost, grass-based potential. We must stop Commissioner Mandelson. If he succeeds, he will destroy our production potential, and that can never be recovered.
The down-turn in construction will impact heavily on rural Ireland, with many IFA members losing off-farm employment. The WTO deal coming down the tracks will have an even greater impact on job losses. The loss of the sugar beet industry was devastating for the towns of Mallow and Carlow, but beef is 20 times greater in significance to rural Ireland. While the impact will vary in different towns, the loss of jobs and spending power in Mallow and Carlow will be repeated in 50 towns across the country, except this time the economy will not be as robust in providing alternative employment.
I want the Minister for Agriculture, Fisheries and Food, Deputy Mary Coughlan, to reflect these realities at the Council of Agriculture Ministers meeting in Brussels next Monday. Only the Minister and the Taoiseach can put down a non-negotiable marker for Commissioner Mandelson and Commission President Barroso. For Ireland, a small country in the European Union, a vital national interest is at stake. There is no balance in this deal. Irish farmers, the food industry and the workers who will lose their jobs see no balance in the agreement. What they see for certain is that they are being sold out by Commissioner Mandelson.