On behalf of the joint committee, I welcome the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, to today's meeting. The Minister will provide an update on World Trade Organisation negotiations.
WTO Negotiations: Discussion with Minister for Agriculture, Fisheries and Food.
I am pleased to have the opportunity to address the joint committee to bring members up to date on recent developments at the World Trade Organisation. I propose to put the joint committee in the picture concerning the July ministerial meeting. In so doing, I will cover the background to the WTO Doha development agenda, Ireland's priorities and how we have sought to influence the negotiations to date. I will also outline the possible future direction of the negotiations.
Members will be aware that the WTO ministerial meeting convened in July last in Geneva and ended without agreement. The purpose of the meeting was to agree modalities for the agriculture and non-agricultural market access, NAMA, negotiations. In addition, it was intended to hold consultations among Ministers on the services, rules and TRIPS elements of the WTO negotiations. In particular, a signalling conference on services was held during the ministerial meeting in order that WTO members could outline their proposals for progressing these negotiations before the end of 2008.
If agreement had been reached on agriculture and NAMA modalities at that time, it was expected that, in the period needed to produce detailed WTO schedules, the other areas of negotiation would be concluded so that a final overall agreement would be in place by the end of 2008. In the event, the ministerial meeting failed to reach agreement on agriculture and NAMA modalities, despite emerging convergence on a range of headline numbers and detailed technical issues. The sticking point was irreconcilable differences between the United States, India and China on the extent of remedies developing countries would be allowed to apply to counter import surges in agricultural products which might arise following the import tariff cuts proposed. However, a range of other issues had not been addressed at that stage and no formal agreement had been reached in agriculture of the points under discussion.
The specific issue between the USA, India and China related to the SSM or special safeguard mechanism available to developing countries. The SSM allows developing countries to increase their tariffs if volumes of imports rise above a certain base level or import prices fall below a certain level. A series of volume triggers is in place, which means the more imports exceed the base level, the greater the additional duty that may be applied. Under an overriding provision, in all cases the increased tariffs may not exceed the rates of duty which were bound under the Uruguay Round. Although India pressed for a derogation to this provision in certain circumstances, the negotiations fell because of differences between the United States, India and China on the extent to which the derogation could apply.
In closing the ministerial conference, WTO director general, Pascal Lamy, and other participants spoke of the need to preserve the progress achieved, notwithstanding the failure to agree on all matters. Mr. Lamy is currently making major efforts get the process going again. However, the process for moving the negotiations forward from this point is far from clear. The main trading partners are reflecting on how to proceed and discussions are continuing at official level, with meetings taking place last month among the so-called G7 group of countries. G7, in this case, refers to the European Union, the United States, Brazil, India, Japan, Australia and China.
While it is anticipated that discussions will continue at official level, my expectation is that the constraints of the forthcoming US and Indian elections and the appointment of a new European Commission will delay serious political decision making for the foreseeable future. While it cannot be ruled out that attempts will be made to bank the convergence already achieved, the negotiations are conducted according to the premise that "nothing is agreed until everything is agreed".
It is important that we remind ourselves of the main objectives of the Doha development agenda. The round was launched in November 2001 in Doha and covered a wide range of trade liberalisation issues, including agriculture, industrial goods, services, trade facilitation and trade rules. It had a particular emphasis on development issues and for this reason is known as the Doha development agenda, DDA.
As one of the most open economies in the world, Ireland wanted a comprehensive, ambitious and balanced trade deal. This remains our negotiating position. We were strongly committed to supporting trade in the least developed countries and have already given them duty and quota free access to EU markets under the "everything but arms" measure. This also remains the position. We urge other developed countries to match the European Union's arrangements for duty and quota free access for the least developed countries. As the EU has shown, there is no need to wait for a multilateral agreement to implement such an initiative.
In the negotiations we firmly defended our agriculture interests and sought the best advantage for our industry and services. The other participating countries, of which there were more than 150, also had ambitions.
During the run-up to the Geneva ministerial meeting a large number of technical issues were agreed by the trading partners. Nevertheless, a number of key points remained outstanding. The discussions on agriculture in Geneva were based on a text produced by the chairman of the WTO agriculture committee, Crawford Falconer. It is no secret that Ireland was not happy with some of the proposals on the table. Our main area of difficulty, although not our only problem, was market access and, in particular, the implications of the proposed import tariff cuts for the Irish beef sector. Equally, we had concerns about the impact of tariff cuts on the dairy and sheepmeat sectors, the elimination of EU export refunds without any reciprocal cuts in export subsidies by other trading partners and the pressure for changes to the definition of the green box which could have implications for our direct payments to farmers. The chair's text did not allay our concerns about the impact of these proposals on Irish and EU agriculture. As a result of the lack of balance across the negotiating pillars, we believed agriculture, Irish agriculture in particular, was bearing a disproportionate burden. Our view was that the European Union had already made significant contributions to the negotiations and should be pursuing its own offensive interests, while ensuring the other WTO negotiating partners made equivalent contributions.
In the period since the previous ministerial meeting in Hong Kong the European Commission had made a large number of advances on its October 2005 offer on agriculture with a view to maintaining the impetus of the negotiations and generating reciprocal concessions from trading partners. While this strategy may have kept the negotiations alive, in Ireland's view it put the European Union in a weak negotiating position. The concessions proposed by the Union were largely taken up by trading partners and incorporated in the Falconer text but there was little evidence of reciprocity in areas of interest to the Union. In essence, coming into the July ministerial meeting, the proposals on the table exceeded in virtually every strand of the negotiations the reduction or discipline commitments offered by the Union in 2005.
The Taoiseach, my colleagues in Government and I took every opportunity to outline Ireland's dissatisfaction with the direction of the negotiations and the serious difficulties that could emerge for Irish agriculture from some of the proposals on the table. We used our position in the negotiations to influence matters and mitigate the more damaging aspects of the proposals. We co-ordinated and worked closely with like-minded member states. We participated actively in the group of 14 like-minded member states by hosting and chairing a preparatory meeting of the group in the run-up to the meeting in Geneva and facilitating other meetings in the course of the ministerial meeting. We were successful in drawing the attention of the Commission and other member states to potentially serious amendments to the definition of the green box. The green box payments are worth almost €2 billion annually to Ireland and it was vital to ensure their continuity. Initially, the Commission was sceptical about the concerns we had expressed but, with support from ten other member states, we were successful in persuading it to take our concerns seriously.
We also held a number of meetings with the Commission to express our concerns about the market access proposals. We drew specific attention to the problems that would ensue for the beef industry from increased imports of beef and made a series of suggestions to mitigate the effects of these problems.
As the discussions progressed in Geneva, the WTO director general, Pascal Lamy, put his own compromise paper on the table in an effort to secure agreement on outstanding high level issues such as the level of cuts in overall trade distorting domestic support, the reductions in import tariffs for top band products such as beef and most dairy products, the number and treatment of sensitive products, the special safeguard mechanism for developing countries and the special safeguard clause for developed countries. We were not enthusiastic about some of the details proposed in this compromise and moved quickly to make our views known to the Commission negotiators both orally and in writing. In the event, the compromise paper was not sufficient to secure agreement. It is worth noting that other so-called detailed technical issues were not addressed in the course of the negotiations, including cotton, tariff simplification and in-quota tariff rates. These equally had the potential to unravel the process. When negotiations resume, these and a host of other issues will remain to be addressed.
The fact that no deal was agreed on this occasion does not cause any immediate disruption in the international trading environment. It simply means that we continue with the current international WTO arrangements. In that respect, we must continue to focus on ensuring we produce high quality and innovative food products for our valuable export markets in the European Union and other parts of the world. Competitiveness, quality and innovation will continue to be the key elements in our agri-food export success, irrespective of any changes in the regulatory trading environment.
It is also important when the talks resume that we ensure due account is taken of the changes that have taken place worldwide since the Doha round commenced in 2001 and, in particular, that we give proper recognition to the new challenges of food supply, food security and climate change. We need to ensure Europe retains its agricultural production base in order that we can meet the future demands of our population for food, feed and bio-energy, while at the same time supporting the least developed countries to meet their increasing food needs.
We must also be loyal to the objectives the European Union has set itself in terms of the Common Agricultural Policy and the European model of agriculture. CAP reforms have meant that European agriculture is better prepared for globalisation and more competitive and has improved compliance with food safety requirements, increased environmental sustainability and heightened consciousness of animal welfare requirements. These outcomes reveal the multifaceted nature of the CAP and demonstrate that European agriculture policy is designed to deliver much more than economic benefits to society. This needs to be preserved.
I thank the Minister for his presentation and his officials for the extensive briefing they gave me on a previous occasion.
From the point of view of Irish agriculture, we are extremely fortunate that the WTO negotiations collapsed. If ever we wanted stark economic confirmation of this, we need only look at the Teagasc report published this week. It projected a direct income loss for farmers of €180 million as a result of the removal of sensitive product status for beef. One must also calculate the cost for the food processing sector in terms of the consequences for jobs. In the absence of sensitive product status and with a 70% cut in tariffs which was on the table when the negotiations collapsed the consequence for the beef sector would be a loss in income for farmers of €450 million. In stark terms, the Minister was about to sign up to this future. We were lucky that extraneous matters, including the inability of the United States and India to reach agreement on other issues, meant that the principle of nothing is agreed until everything is agreed pushed the 70% cut in tariffs off the table.
The WTO has not gone away and Pascal Lamy is on a global tour to restart the negotiations. As the Minister noted, the US presidential election and other global political developments may mean that the timeframe is not critical but it is alarming that Mr. Lamy has not indicated whether he intends to make any effort to consult the European Union on its negotiating position because this is considered a done deal. The challenge we face is how to put the genie back in the bottle in terms of the Mandelson proposals. Simply put, removing €450 million from the Irish beef industry would have consequences not only for food processing but also the entire economy. If that happens, Irish agriculture as we know it - the family farm structure and all the positive social and economic consequences flowing from it - is gone. That is not to overstate the position. It is alarming that Pascal Lamy's endeavours are now with all the other negotiating partners as it is considered that what is agreed at European level is still on the table. That is extremely alarming.
In the context of the collapsed negotiations, we heard much about a fair and balanced deal. We were blue in face from listening to the phrase "a fair and balanced deal" from the Minister's predecessor, who is now Tánaiste, Deputy Mary Coughlan. We heard it from the current Minister and the Taoiseach on occasion. Nobody ever spelled it out to us. Perhaps it is purely accidental that we have now quantified what is on one hand considered fair and balanced, a €450 million write-down for agriculture. I oppose this and will fight it tooth and nail.
I fail to see the quid pro quo on the other side in terms of alleged gains in the services sector or elsewhere. I made the point previously that I fail to see why, in the context of all the issues which must be factored, in such as food security, climate change etc., the fourth largest beef exporter in the globe should be sacrificed on the altar of these negotiations for the world’s leading services exporter. I fail to see how that is in any way a fair or balanced deal.
Outside of the immediate glare of ongoing negotiations, will the Minister tell us where was the intention of the Government negotiators to use a veto? When the negotiations were at their height we were offered what was effectively a piggy-back from the French to get on board at an early stage and indicate clearly that what Mr. Mandelson proposed was unacceptable. Until the last moment of those negotiations, when it became apparent other issues would scupper the deal anyway, we belatedly hitched a ride from others in Europe leading the campaign.
The pitiful message emanated in the middle of these negotiations that we were to defend the green box, which was subsequently characterised by Commissioner Fischer-Boel as a disservice to the ongoing negotiations, and it was never actually under threat. This relates to the single farm payment etc. It was a face-saving exit strategy which fortunately did not have to become a reality because of other factors that scuppered the negotiations.
What we need to know is how we are going to put the genie back in the bottle with regard to the Mandelson proposals so we can avoid a scenario where there would be a meltdown in the Irish agricultural economy. It is interesting that up to now we never had quantification of what exactly the Mandelson proposal of a 70% tariff cut would mean from the Department or State agencies. We have that now. It means €450 million to farmers so nobody could viably produce beef in Ireland at that level. We have clear indication that two thirds of Irish farmers in the beef industry are dipping into their single farm payment to survive as their operations are not financially viable without that payment.
One can imagine what such proposals would mean. It would be the end of the family farm structure and all the social and economic benefits flowing from it. How do we put the genie back in the bottle and start from scratch to renegotiate a European position that puts food security and climate change at centre stage? It should put forward the environmental and animal welfare conditions that producers in Europe have signed up to in a contract with consumers. As a small and open economy we accept there must be trade and imports but we insist it should be on a level playing pitch.
We insist that Irish producers are not disadvantaged by allowing in through the back door a product that is not produced to the same standards. It should be illegal for Irish or European producers to produce at that standard. These are the key issues.
I have yet to see, either at European or Irish political level, indications that there is a plan to start anew and not just take up where we left off in terms of the Mandelson proposals.
I welcome the Minister and wish him well in his new portfolio. This is his first official day here as Minister and we look forward to working with him in the coming years.
As an agriculturist and farmer, I agree with much of what the previous speaker said. We were lucky as a country and member of the EU that the WTO talks were scrapped as it looked like we were giving much and gaining very little. Having said that, I compliment the Government on the stand it took in the WTO talks. It gave a commitment that the veto would be used if necessary. I compliment the Government on this as it means we would not sell Irish farmers down the swanee, and this act should be recognised by this committee.
The 70% tariff cut would have had serious repercussions for Irish farmers. This shows why we need a strong Commissioner, sympathetic to farmers and their concerns, representing us from a European perspective. Such a Commissioner should not look to his own personal interests and those of his country with regard to cheap food. That was one of the problems. After the European elections next year, perhaps we should consider who will be the Commissioner representing us in future negotiations with the WTO.
I will not say much more on the issue. I am glad the deal on the table was scuppered and I do not like to hear of it being banked. Its provisions have repercussions for the Irish beef sector in particular. I hope the deal that has been banked will be considered before we enter the WTO negotiations again. It would not be good for Irish farming as we seem to give much and gain little. In every deal made there must be quid pro quo in that one gives and gets. With this deal, we seem to give much and get little in return, and I worry about the effect on Irish farmers and their future. Having said that, we must recognise the €2 billion we get in subsidies from Europe, which is part of what is keeping us alive in agriculture. As has been stated, we are using this funding on a daily basis to keep our farmers going. We must keep those subsidies coming.
Overall, we must learn from the failed negotiations. Whenever we return to the negotiating table, our country must get the message to Europe that we need a stronger negotiator working on our behalf and the future of agriculture, not only in Ireland but in Europe as a whole. I know we have support from other countries in Europe in this regard.
I thank the Deputy. To let those who may have been late arriving to the meeting know, we must finish no later than 2.15 p.m. to allow a quarter hour to change over to the next meeting, which deals with the Estimates. The Minister must be out of here by 3 p.m. so I ask members to be brief.
I thank the Minister for coming in to make the presentation today. I will be very brief as I agree with much of what has been said by the previous two speakers. We are very fortunate the proposals put forward by Mr. Mandelson and the associated negotiations did not result in agreement. This highlights the importance of the decision of the electorate, particularly with regard to the Lisbon treaty, in having an EU Commissioner. The people took the decision that we will not accept what is put down by certain Commissioners, particularly the proposals from Mr. Mandelson. If one reflects on the outcome of the Lisbon treaty referendum and considers the strength of the vote in rural Ireland, one can see it was an indication of the concerns of those involved in the agriculture sector. There is a message for all of us in their strong rejection of the treaty. I am concerned about the fact that during the negotiations the Government did not appear to be prepared to use the veto which, as was said here, was only a piggyback veto. The Minister is right in saying that it is coming back to it again. Further negotiations will take place, probably after the American and Indian elections, as the Minister mentioned. As an Opposition spokesperson on agriculture, I will give the Government every support, provided it stands up to any erosion of the entitlements and rights of our rural and agricultural community.
I too welcome the Minister and officials and wish the Minister well in his portfolio.
As others have said, we have had a breathing space to consider where we are. The Minister has outlined the position in detail. From what I know of Irish farming, with which I have been involved for quite a while, farmers cannot afford to take any drop in their incomes. They are just hanging in there, as the Minister will be well aware. Any measure that would reduce their circumstances would be detrimental to farming. The Minister is aware that the situation is grave. The only point in our favour is that nothing is agreed until everything is agreed. That is the hope I see. We will use every mechanism possible to protect the interests of farming.
I thank the Minister for his presentation. In his summary he identified where we were and where we should go. He rightly points out that we need to produce high quality, innovative food products for our valuable export markets. He also mentioned the word "competitiveness". However, we are working with one hand tied behind our back due to the current regime of food labelling which is definitely not doing anything to enhance our competitiveness. We are competing against countries that are able to market food as being European produce when, in fact, the country of origin is not clear. Bad labelling, in this instance, is worse than none.
With regard to the Doha round, we need to reset the clock in the light of the changing world climate since 2001. How does the Minister propose this be done? What measures should we take? How do we convince the relevant people?
The Minister highlighted the importance of the CAP. The statistics show that food is being produced in this country for sale at cost price because the income consists of the single farm payment; sometimes the entirety of the cost is not even met directly by the returns. We are actually producing food for the consumer at the price of production. Bearing in mind Mr. Mandelson's remarks about the CAP being a weapon of mass destruction, how does the Minister propose to defend it?
I welcome the Minister and commend him on his wonderful efforts on behalf of Irish agriculture and farmers. I also commend his patience at the WTO, where he sat through the negotiations for the whole duration. I take issue with the comments of my colleague Deputy Ferris on the Lisbon treaty referendum, although we often agree on other issues. Ireland is the poorer today for not having voted for the treaty. One of the issues was the mix of the WTO and the treaty. When we consider events of the last few days in the area of finance, we can see we would have much more strength and security, in fighting to get our proposals through in Brussels, if we had voted for the treaty. The mid-term review will also make things difficult for the Minister, as the Lisbon treaty is an issue. We must face up to this. We have benefited to the tune of €84 billion since we joined the European Union. We cannot ignore this fact, as the money coming into the country has given us the success we have enjoyed.
The WTO negotiations are very complex and Pascal Lamy is determined to push things through if he gets his way. Countries such as New Zealand and Brazil are looking for Ireland's market share in beef and dairy products in Europe because that is the most lucrative market. This must be carefully watched. I agree agriculture is going through a difficult patch. However, I do not blame the Government or the Minister for this; it is part of what is happening in the world.
As for commodity prices, the milk sector is in difficulty because of the oversupply in New Zealand, while beef prices are strong, but no one knows what is going to happen.
I fully agree with Deputy Doyle's comments on labelling, an issue we have discussed here often and it is now on the agenda again. If the European Union is not interested in approving a new system for country-of-origin labelling, with the associated complications, the situation will not improve. It will be a hard slog, but if we do not have proper country-of-origin labelling, providing a choice for the consumer in the shop, Ireland's food industry will not be able to market its products effectively. There must be choice if people are to buy native products. The major products to which this applies are white meats such as pigmeat and poultry. Once food arrives in Rotterdam and is transshipped onwards, a European label may be placed on it. This is happening freely and there is nothing we can do about it.
Recently at another meeting we joined forces with the Joint Committee on Enterprise, Trade and Employment to talk about country-of-origin labelling and what we could do in terms of a joint effort. Employment is also an issue. The Minister is committed to dealing with it, as he represents the constituency of Cavan-Monaghan, where a lot of white meat is produced. He Minister mentioned the quality of the land but these are places where indigenous food is produced. With his help, we will fight the battle together and may be successful. I wish him well in his endeavours and hope he keeps the WTO out of Ireland.
I too welcome the Minister and his officials. Having known the Minister for some time I am sure he will do his best to ensure we get the best deal possible in the world trade talks when they resume. When they previously broke up in disagreement, they were only postponing the evil day. There will probably not be any agreement now until the American elections are over.
How much clout do we have in Europe now? As far as I can see, the European Union did not make great progress in the world trade talks. It is the big trading partners - the United States, India and Australia - that dominate. I ask the Minister to be vigilant and garner as much support as he can in the international sphere to ensure we can drive home a good agreement when the time comes.
Are we good Europeans? We seem to be out of the ordinary. A letter from the Secretary General of the Department states the deadline of 31 December 2008 for completion of work under the farm waste management scheme is a condition of EU state aid.
That matter will be dealt with when we come to the next item.
This is the condition of EU state aid. I was in Italy on a pilgrimage——
The Deputy should keep to the agenda.
I am just proving a point. I was in Italy two weeks ago on a pilgrimage to Padre Pio's home town of Pietrelcina and I was also in Assisi. They told me they have not seen a shower of rain for the past five months in that part of Italy.
We could sell it to them from here.
We could bottle it.
It never dried up here and owing to weather conditions farmers were not able to complete their work.
We now have the Minister across the table from us. I do not like to raise this matter in the Dáil when a junior Minister might be the one to answer the question. Surely there must be some give and take in the European Union for countries such as Ireland that suffer from huge amounts of rain during which work cannot be carried out in time on the farm
I ask the Deputy to stick to the WTO.
I am sure that if the Minister were to make a firm case to Europe he would get an extension of six months to complete that scheme. It is badly needed.
I return to the WTO talks. Deputy O'Keeffe mentioned that food labelling is essential for our produce. I have seen chickens coming in from China and eastern European nations and having a bit of stuffing added to them in this country. They are then labelled as Irish products just because they have a bit of stuffing inside. The fact that the chicken is reared in China can be covered over by stuffing in this country.
We will deal with that next week.
That is disgraceful. That is what put Cappoquin Chickens out of production. The turkeys in the Chairman's own region, Cavan-Monaghan——
If the Deputy looks at the agenda he will see that matter is to come up next week, on Wednesday at 11 a.m.
By and large——
What will the Deputy debate the following week?
By and large——
The Deputy must stick to the WTO. His time is up.
The WTO talks have now collapsed and there is not even a deadline for their resumption. We are talking through our hats, therefore, because they may never take place. What is the starting date?
I thank the members for the issues they have raised. I will take them altogether. I hope Deputy Sheehan thought of all of us when he was on his pilgrimage to Italy. I notice that he did not confine himself to one pilgrimage site.
I made representations and I do not know how successful they will be.
The Deputy would have to pray to St. Jude for the Government but I would say he put his own party first.
Never mind St. Jude or the holy water. I ask the Minister to stick to the WTO.
Deputy Sheehan asked the point in talking if we do not know when the WTO negotiations will commence again. The reality is the negotiations are still there and have not gone away. The Deputy may have missed the start of the meeting. We pointed out, as did some of our colleagues round the table, that the WTO's director general, Mr. Lamy, has been very active in trying to advance the negotiations. He has been with all the major trading blocs and has had discussions with Mr. Mandelson, the European Commissioner. There have been talks at official level. We must remain vigilant on this issue and be very diligent. We cannot say that because the ministerial talks failed at the end of July the issue is over and done with. It is still out there.
The reality is that we have the political situation to consider. There will be a new administration in the United States regardless of who wins the election in the first week in November. A new President will take office in January and his administration will come into place subsequently. The United States, naturally, is one of the major players, one of the group of seven that are the keen negotiators. A general election is due in India in 2009 and that country is another major partner and negotiator. A new European Commission will be established in November 2009 and in the meantime there will be elections for the European Parliament. I do not know the political scenario in the other four major trading blocs.
Deputy Ferris referred to the Lisbon treaty. I share Deputy O'Keeffe's views on that. I was very disappointed that the Irish electorate did not accept that proposal. Deputy Ferris also made a point about the European Commissioner. The rejection of the Lisbon treaty created difficulties with regard to the number of Commissioners. The Nice Treaty provided that there shall be fewer than 27 Commissioners but the Lisbon treaty contains a provision that the heads of Government can make a decision to alter the number of Commissioners. When those among us campaigned and stated that Ireland would lose its Commissioner under the Lisbon treaty, the problem was then compounded because the existence of the Nice treaty was assured rather than the Lisbon treaty. We all know about the false arguments concerning the Lisbon treaty. It is not our job to debate that issue now but we should remember that by not enacting the Lisbon treaty we created problems concerning who will and who will not have a Commissioner.
Deputies Doyle, O'Keeffe and Sheehan referred to the problem of food labelling. That is a damaging issue, particularly for pig and sheep meat and poultry, as Deputy O'Keeffe noted. We all know that there is country of origin labelling on beef products. This country put very detailed proposals, via the Department of Health and Children, to the European Commissioner and to the Commissioner for Health in respect of the need to have country of origin labelling for pigmeat, sheepmeat and poultrymeat. We stated that it should be plain straight-up labelling that does not mislead anybody. Those proposals were not accepted by Europe and came back to the Department of Health and Children. Obviously my Department works closely with that Department and with the Food Safety Authority of Ireland. They put further queries to us to which we responded and we have again put very strong proposals to the European Commission with regard to the needs of the consumer. The source of food should be clear to the consumer. That is not the position, as the three Deputies have attested. It is an issue of concern to us.
I am conscious of the difficulties that producers of poultrymeat, pigmeat and sheepmeat have suffered over the years. My work as a constituency Deputy and in the Department of Agriculture, Fisheries and Food makes me aware of the difficulties that face those sectors due to the considerable amount of imports coming into the European Union. The phrase used, to which Deputy Sheehan referred, is "substantial transformation". This is the process whereby a product comes into the EU and some work is done to it, leading consumers in individual member states to believe the product comes from those states or from within European Union.
Deputy Doyle referred to the status of the Common Agricultural Policy and its future. The CAP was the first common policy of the then EEC, the Common Market. The second clause of the Treaty of Rome established the Common Market of six member states with the intention of ensuring that the Common Agricultural Policy would provide a secure supply of safe food for the citizens of Europe. That is as valid today as it was then. Each contributor referred to the different circumstances that we find ourselves in today, as I did in my opening remarks. These include climate change, difficulties that may emerge with security of food supply and the growing world population.
Thankfully, there is an increasing awareness within the European Union of the need for the citizens of Europe to have a self-sufficient supply of food. I was Minister of State at the Department of Agriculture, Fisheries and Food some years ago and attended Council of Ministers meetings with the Tánaiste, Deputy Coughlan. I have been attending those meetings again since last May and I detect a greater awareness of those issues today than there was previously, which is beneficial for Ireland. At present we have 800% self-sufficiency in beef, we export 90% of beef products and 80% of dairy products, and our food is produced to a very high standard. There are exacting standards on farms which we all know. We have very strong veterinary and regulatory practices applied on our farms and in our processing facilities as well. We now send premium food to markets all over the world, especially beef to the European Union market.
We have just begun a process within the European Union and I would like to see this committee involved more. Last Monday week the first meeting took place, under the French Presidency of the EU Council, of the debate on the Common Agricultural Policy post-2013. The French Minister indicated to my officials and I some time ago that he intended to initiate the debate during the French Presidency, even though 2014 may seem a long time away. He argued, and we strongly agreed, that now is the time to set out the Common Agricultural Policy post-2013 before the financial perspectives and the budgetary framework are finalised for Europe for 2014 and beyond.
At that meeting, there was strong support among the 27 member states for the need to continue the Common Agricultural Policy given its effectiveness and its importance to the citizens of Europe. Not all member states shared the same views. However, the overwhelming viewpoint expressed was supportive of the Common Agricultural Policy, the need to maintain it and the need to fund it well. We are not only talking about what some commentators call, in a juvenile fashion, subsidies to farmers. This is about ensuring Europe is as self-sufficient as possible in a supply of safe, quality and nutritious food for the citizens of Europe. The policy is also about bio-diversity, the rural environment and ensuring that we have sustainable rural communities. In my contribution at that meeting, I said that I would initiate a good debate in our Parliament with all stakeholders on where the Common Agricultural Policy should go post-2013. I am sure we will have a opportunity at this committee in due course to have a good discussion on that issue.
The committee will be represented at a meeting in Brussels in November on this issue.
I welcome that fact and I hope there can be as wide a participation as possible from the members at the meeting in Brussels. I presume that has been arranged by the French Presidency of the EU to follow from the ministerial meeting. It is very important that we would speak on the same issues with the same viewpoint. We can help with any background information or data that may be useful and which could be readily available for committee members in advance of that meeting.
I thank the Minister.
I believe it was Deputy Ó Caoláin who spoke of the 70% tariff on beef. The position is that the deal that was on offer allowed for 4% of tariff lines to be declared as sensitive. This was clearly understood, and Ireland for some time was very active within the Council of Agriculture Ministers in lobbying for Europe to declare beef a sensitive product. It was understood that if a deal was agreed and beef was declared a sensitive product in the framework that was being proposed, the tariff would be 23%.
As for the green box, there was misinformation put out while we were in Geneva at those negotiations. During that ministerial meeting we were successful in drawing the attention of the Commission and other member states to potentially serious amendments to the definition of the green box. The green box payments are worth almost €2,000 million per year to this country. Obviously, they represent an essential payment to the farming community so it can meet ongoing costs and they are a major part of family farm income.
The initial response from the Commission to our concerns was sceptical. However, we garnered support from ten other member states and we persuaded the Commission to take our concerns very seriously. On Monday morning, two specialists from the Commission were brought to Geneva to meet representatives and officials from member states with responsibility for this area to discuss the issues we identified as of concern to us. These specialists provided some clarification.
Subsequently, Commissioner Fischer-Boel said that some of the issues would be addressed by the Commission and that we would get the required assurances. When the talks finished on whether there was a deal agreed, along with eight other member states we put a very detailed questionnaire to the Commission. It is my recollection that by the conclusion of the meeting we had not received a final response to this. There were other countries with whom we jointly signed a letter following the work of our respective officials including Austria, Belgium, Cyprus, France, Greece, Hungary, Lithuania, Italy, Poland and Portugal. Spain and Holland to my recollection shared the same concerns as us. It is not correct for people to say that the green box was not an issue. It was certainly a crucial issue, given that it guarantees almost €2,000 million per year to our farmers, a very necessary and important part of their income.
Some members inquired about our priorities. Along with my colleagues including the Taoiseach, Deputy Brian Cowen, the former Taoiseach, Deputy Bertie Ahern, Minister for Foreign Affairs, Deputy Micheál Martin, and the former Minister for Foreign Affairs, Deputy Dermot Ahern, at every Agriculture and Foreign Affairs Council of Ministers meeting we stated that agriculture could not be sacrificed for the sake of an overall deal. We outlined clearly that Europe reformed the Common Agricultural Policy to prepare for WTO negotiations and we should not be expected to pay twice for any deal that might emerge. Domestic supports are crucial. We were adamant, we fought and made progress that the green box payments would be exempt from reductions under the new round.
Our priority is to ensure there is parallel elimination of all forms of export subsidies and to seek the maximum flexibility in the phasing out arrangements for export refunds.
Market access has been referred to by different members. Our aim is to retain an effective level of protection for our producers and exporters and we have consistently pressed the Commission on this matter.
I spoke earlier of the group of 14, plus like-minded member states who worked together to keep a focus on agricultural issues within the Council. That group was chaired by France. When the French assumed the Presidency of the European Union on 1 July 2008, it was requested that we take the chair of the group of 14. I chaired the subsequent meeting. We kept that group working together in advance of the ministerial meeting in Geneva and throughout the negotiations. It is wrong to say we were piggy-backing on any member state. We vigorously defended Irish agricultural interests and were to the forefront with other member states within the Council of Agriculture Ministers throughout the negotiations in Geneva and well in advance of the ministerial meeting commencing in July in Geneva. That is the position. We were extremely active in ensuring that the concerns and legitimate interests of Irish agriculture and European Union agriculture were kept to the forefront in those negotiations throughout that ministerial meeting.
In regard to the green box, the office can supply the particular information to any member who wishes to have it in respect of the items we had highlighted and on which we still had not got adequate clarification or assurances even when the ministerial meeting concluded.
I would welcome the opportunity to see the documentation to which the Minister referred in the context of the green box.
I will send it to the Deputy.
The Minister's predecessor is recorded on the Official Report, as is Commissioner Fischer Boel, as saying that the green box payments were not under threat in the context of the WTO negotiations. How can we rescue the situation in which we find ourselves? That is what interests most farmers. On the sensitive product status designation for beef and the Teagasc research into it, which is on its website today, the FAPRI-Ireland Teagasc report has found that the value of output from the Irish beef sector declines €120 million or 8% per year with beef designated at sensitive product status. Is that a conclusion with which the Minister can live? Is that a price the Minister considers - to use the phrase most favoured by his Department and his predecessor - a fair and balanced deal? From our point of view that is not fair, it is not balanced and is not acceptable for a whole range of reasons - social, economic, food security, climate and so on. It is not an acceptable, fair or balanced deal. Is that an acceptable outcome from the Minister's point of view?
Commissioner Mandelson is the bogey man but it must be acknowledged that in the chain of political command, the Commissioner takes his riding instructions from the Council of Ministers. They are the people who set parameters within which Commissioner Mandelson must negotiate. That Mr. Mandelson may have strayed from his negotiating mandate is a political indictment of the Council of Ministers, the Minister and his predecessor. That is the blame game. How can we now engineer a situation, and it may be facilitated by the political changes in terms of the Commission composition, whereby we start these negotiations by taking off the table sensitive product status that cost the Irish beef industry at a minimum €128 million per year and, perhaps, at the 70% tariff cuts much more? How do we start afresh in terms of the political accountability and the Minister's and the Council's responsibility for Mr. Mandelson?
Within the Council of Ministers there will be further discussions on WTO if there is a clear indication that negotiations will be advanced at political level. In my earlier remarks I intended to refer to the FAPRI report. FAPRI-Ireland is an econometrics project and its partners are Teagasc and the five Irish universities. FAPRI launched two reports earlier this week, a baseline 2008 outlook for Irish and EU markets and an analysis of the impact of a possible WTO deal. The FAPRI report on WTO presents an analysis of the possible impact of a WTO deal along the lines of the proposals made last February by the chairman of the WTO agriculture committee. The paper which was under discussion in Geneva was somewhat changed from the February report. The FAPRI reports have come into the public domain only in the last few days. I have had an initial study of them, not a detailed one, but obviously my officials are examining them. FAPRI assesses the likely impact of such a deal by comparing what it thinks would happen if there was a deal with what would happen without it, in the period up to 2017. It looked at two possible WTO deals, one where beef was declared a sensitive product and, therefore, had a tariff cut of 23% and another where beef suffered at the full 70% tariff cut. As the committee is aware, there is much detail and complexity in that analysis.
Can the Minister quantify it?
The key findings are that farmers would have suffered an income loss of 5%, the equivalent of €128 million, if beef was declared sensitive or 13%, which would equate to almost €320 million, if it took the full tariff quote.
Is that fair and balanced?
It comes as no surprise that FAPRI found that the sectors experiencing the biggest losses from the tariff reductions were beef and sheepmeat. It estimates that beef production will be 507,000 tonnes in 2017 without a WTO deal, but this would fall to 502,000 tonnes if there was a deal with sensitive product status. Do I accept the analysis? It goes without saying that the FAPRI analysis is very thorough and is a useful piece of work.
Has the Minister any word to the contrary?
All of us in the sector are fortunate to have such detailed independent analysis available to us. The FAPRI results broadly conform with the results of analysis undertaken within the Department but the two are not directly comparable. The projections include various assumptions about the deal that would have been agreed and must be looked at in that regard and also it is an econometric modelling exercise. Any particular economic model cannot be in a position to reflect the real world.
Is that a fair and balanced deal? In terms of sacrificing agriculture to that extent, is that what the Department considers fair and balanced in respect of what we may gain? We had never quantified what we might gain. Is that the price the Department must be prepared to pay?
No. What I said in my introductory remarks was that the text under discussion in Geneva was the text produced by the chairman of the WTO agriculture committee, Mr. Crawford Falconer. We outlined very clearly, time and again, before, during and after Geneva that we were not happy with those proposals tabled on agriculture.
We heard that Geneva was about the green box. We never heard anything about——
Allow the Minister to answer the questions.
We heard the term "fair and balanced" subsequently on the radio, but we never heard what is regarded as fair and balanced.
Allow the Minister to respond. He did not interrupt the Deputy.
I am conscious of the clock and I am anxious to get to the bottom of this.
The Deputy asked a question. He should allow the Minister to answer it.
The Minister will not answer. He is talking down the clock.
Excuse me. The Deputy is the man who wanted us to come home from Geneva in the middle of the talks.
I did, because if the best the Minister could do was safeguard our green box that was going to be a sell-out.
I invite the Minister to continue.
The Tánaiste is on record as stating that the green box was not——
Please, Deputy Creed.
Deputy Creed is saying that the €2 billion annual payments to our farmers are not worth protecting.
No. Ask any farmer out there——
I invite the Minister to continue.
Deputy Creed's view may be that an Irish Minister or any Irish representative should not take due cognisance of working towards ensuring that the sum of €2 billion in annual payments is protected, but I do not share that view. I ask the Deputy not to speak absolute nonsense.
Is that fair and balanced? We have listened to the phrase "fair and balanced" for so long.
Please let the Minister continue.
What I want to know is whether a sum of €128 million per year is fair and balanced——
What we said was——
——or is the green box the best the Minister can do?
Please allow the Minister to answer the question.
The green box was one important issue, as is market access and other matters. There were no final papers on the table in Geneva for discussion with which we could agree or disagree. It was an ongoing process. We consistently outlined our serious concerns regarding the proposals being put before us.
What was the bottom line? What were we getting on the other side?
Please let the Minister continue.
Does the Deputy think we would go into the negotiations, tell people our bottom line and weaken our negotiating stance? Before the World Trade Organisation was ever heard of, we had the bartering process. In those times when there were no sophisticated trading systems, people protected their negotiating stance from the outset. As an Irish negotiating team, we ensured we protected our negotiating stance. We stand over everything we did during every minute we spent negotiating in the interests of the Irish people and farmers.
I thank the Minister and his officials for their presentation and answering the questions raised. For the information of the Minister and members of the select committee, the meeting of the select committee will commence in 15 minutes to consider a Supplementary Estimate.
The joint committee adjourned at. 2.15 p.m. until 11 a.m. on Wednesday, 8 October 2008.