JOINT COMMITTEE ON EUROPEAN AFFAIRS debate -
Tuesday, 29 Jan 2008

Lisbon Treaty: Discussion with ICOS and ICMSA.

Chairman

We will now have an exchange of views on the Lisbon treaty with the Irish Co-Operative Organisation Society and the Irish Creamery Milk Suppliers Association. The ICOS delegation will make its presentation first. Its members are Mr. Padraig Gibbons, president, Mr. John Tyrrell who, unfortunately, is not yet available and Ms Carol McGinley, the EU affairs officer. The usual format is that a member of the delegation makes a short presentation, which is followed by a question and answer session and a second raft of questions may be posed.

I draw attention to the fact that while members of the committee have absolute privilege this privilege does not apply to witnesses appearing before the committee. Members are also reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name in such a way as to make him or her identifiable.

I thank the delegation from ICOS for attending to address the committee. I invite Mr. Padraig Gibbons to make his presentation.

Mr. Padraig Gibbons

As chairman of a co-operative and president of ICOS, I would like to have that privilege at some of the meetings I attend. Could a rule be introduced to assist us in that regard?

I thank the committee for this opportunity to address its members and put forward the views of ICOS on the Lisbon treaty. It is my first time to appear before an Oireachtas committee. ICOS represents approximately 150 co-operatives in Ireland. It has a turnover of €12 billion and directly employs approximately 16,000 people. We have a major interest in the treaty and are proactive in regard to the EU. As my colleague will explain, we will recommend a "Yes" vote when the question is put to the people.

I will not delay the committee unduly only to point out that our organisation and I, as a farmer, view the EU in a positive light. We are of the view that voting in favour of the treaty is the right decision even though we may lose some of our representation but as my colleague, Ms Carol McGinley, will explain, it is something that probably must come to pass. I will hand over to Ms McGinley, who is based in our Brussels office, and has more up-to-date information on the position

Ms Carol McGinley

As our president said, I am based in Brussels for the Irish Co-operative Organisation Society. We thank the committee for this opportunity to give our views on the draft Lisbon treaty. A reform treaty that aims to simplify and modernise the decision-making process in the European Union is welcomed by us. Extending the EU's competencies to areas such as energy strengthens the Union's ability to tackle new changes that will arise in the next few years.

In terms of the impact the reform treaty will have on the agricultural remit, the most obvious difference will be the increased role of the European Parliament in the co-decision procedure, rather than its current one of mere consultation. Though reduced in numbers, the European Parliament will become endowed with more power in the Community's decision-making process. While ICOS welcomes more powers being conferred on the democratically elected institution, we are aware that it will take longer to adopt legal Acts compared to the current system — which is a concern we have — due to the fact that decisions will have to go through two readings rather the current one reading under the process of consultation.

Regarding the Commission and the changes being made within it, the reform treaty will result in a reduction in the number of Commissioners. Thus, Ireland will lose a permanent seat on the Commission. However, we do welcome the fact that the treaty states explicitly that representation is on a strictly equal basis and that no discrimination will be made between member states on the basis of size when it comes to representation.

Although I do not want to speculate, we are aware that due to the reduction in the number of Commissioners, the cultural and rural development portfolio within the Directorate General for agriculture will possibly merge with another portfolio such as environment. It would be good to have clarification on such issues but we do not see them impinging on the efficiencies of the Directorates General.

We also welcome the increased role that national parliaments will be playing when it comes to legislative proposals emanating from the Commission.

ICOS supports the reform treaty and looks forward to having further dialogue with the joint committee if needs be. In the referendum in May it is important that a "Yes" vote comes from Ireland.

Senator Feargal Quinn

I welcome all the representatives and I was delighted to hear the points made by Ms McGinley. Having travelled abroad in recent weeks I have a concern in this regard. In other parts of the world the criticism I hear is about "fortress Europe". This is particularly so in Central America where it is believed that Europe is still defending the interests of its farmers against those of poorer countries who wish to export their agricultural produce to Europe. Does Ms McGinley feel the reform treaty will make it more difficult for ICOS to maintain its position in representing agriculture, or is there a solution that will enable the farming community to survive in light of the Doha and WTO agreements? Although we have not done so yet, we in Europe will have to face up to the belief that agriculture can still be protected against the wishes of those in the rest of the world who are devastated because they cannot export their goods to the European market.

Deputy Billy Timmins

I welcome the ICOS president, Mr. Gibbons, and the society's EU affairs officer, Ms Carol McGinley. I also welcome the decision of ICOS to support the reform treaty. At the time of the Nice treaty, many organisations in Ireland were concerned about the impact EU enlargement could have on the supply of agricultural products within the Union. History and recent events have shown us, however, that EU enlargements are of benefit to our agricultural industry. While dairying has been the jewel in the crown of that sector, it stagnated a couple of years ago but things are currently looking quite bright for the dairy sector.

Ms McGinley mentioned that some 16,000 workers are engaged within the co-operative movement. It is important for ICOS to disseminate information on the reform treaty and to let those workers know ICOS's position. Ms McGinley said we would not have a full-time Commissioner but we will have an equal amount of shared Commissioner-time, so to speak. Indeed, we will have a greater percentage than we had prior to 2004 when some of the larger countries had two Commissioners each. I often hear the argument that we will lose our Commissioner, notwithstanding the fact that countries do not have Commissioners as such. The Commissioners are not there to represent countries--

Chairman

That is right.

Deputy Billy Timmins

- -they are there to represent the European Commission. We will now have as level a playing pitch as we have had since 2004 and it will be more equal than was the case prior to 2004. The Lisbon treaty is not complex, it is very simple, although it is contained in a cumbersome document. That is because it amends previous treaties and must refer to them, thus covering a lot of texts. When it is deciphered the purpose of the treaty, and what it should achieve, is quite simple. It is important that we send that message out. We in Fine Gael are positive about the treaty. Sending out a message that it is a complex treaty is wrong and assists the "No" side in that it scares away people who think that it is a complex matter that is beyond them.

I call on the Government to establish the referendum commission as a matter of urgency so that we can get the information out. The most important action those on the "Yes" side of the campaign can take is simply put out the detail of the information on the treaty and what it hopes to achieve, and not get engaged in a tit-for-tat campaign with the "No" side who home in on issues that have been hashed and re-hashed over a few generations, which will not come to fruition under this treaty.

Deputy Joe Costello

I welcome Mr. Padraig Gibbons and Ms Carol McGinley here. I was pleased to hear their short, crisp and succinct presentation and their positive approach to the Lisbon reform treaty, as I like to call it to get over the problem where some call it the Lisbon treaty and some call it the reform treaty. It is a reform treaty signed in Lisbon. It is really the Lisbon reform treaty — that covers the two bases.

Am I correct in thinking that the Irish co-operative movement is the oldest farming organisation in the country? It was established under Horace Plunkett, if I remember my history correctly.

Deputy Billy Timmins

That is correct. That is fairly good for an inner city representative. The Sligo roots are coming to the fore.

Deputy Joe Costello

I wish I got so much support for my other remarks. It is in that sense the pristine organisation. Perhaps Mr. Gibbons and Ms McGinley might speak of the organisation's operation. It is incredible that it has a throughput of €12 billion and 16,000 people employed, and how the organisation has developed over the years. It would seem that the CAP reform, even though not essentially part of this treaty, would be along the lines of their thinking, that it would shift the focus somewhat from the farming community to the consumers so that the farming community would have greater flexibility in producing the goods the market required, rather than the rather rigid system that was in place before. Perhaps they might refer to that when they are responding.

Will they tell us whether they have any views on the present health check? At present the commissioner is in town looking at the review of the CAP.

Now that the organisation has decided to recommend a "Yes" vote, how does it intend to do that? Will it set up a campaigning structure? Will it produce documentation? Will it put forward its arguments? How will it inform its members of its views on the treaty and to what extent it intends to play a robust role in delivering a "Yes" vote for the treaty?

Senator Déirdre de Búrca

I welcome both speakers to the committee and thank them for their presentation. Like others, I welcome their expressed support for the treaty, but do their members and employees hold that position or what are the levels of supports among their members? A number of recent polls on the treaty indicate that there are high levels of "Don't knows", that is, people who do not feel well informed about the treaty, but also certain surprises. There was a poll on the membership of various political parties and I was surprised to see the levels of support among members of the Fine Gael Party. In a party that would traditionally have been closely linked with the farming community, the levels of support were not as high as one might have expected. What might be the level of support among members of ICOS? Will Mr. Gibbons and Ms McGinley indicate what, if any, are the issues of concern that might arise for their organisation's members in order that reassurance might be provided? I would be grateful if they could clarify the position in respect of the matters I have raised.

Senator Terry Leyden

I welcome Mr. Gibbons and Ms McGinley from ICOS. They put forward a very positive view in respect of the treaty.

I agree with Deputy Costello on the naming of the treaty. There is a certain amount of confusion in that regard. We refer to it as the reform treaty but abroad it is referred to as the Lisbon reform treaty. It is important that a single title be chosen in order that people might know that to which we are referring.

I do not know whether Mr. Gibbons or Ms McGinley have an opinion on the timing of the referendum. I am of the view that it would be more appropriate to hold it in September or October because that would provide people with an opportunity to discuss and consider this matter. Members of the public have an important decision to make.

I welcome the fact that the Constitution is 70 years old. It is extremely robust and ensures that we must hold referenda in respect of major decisions relating to Europe. Some people would prefer if, as is the case with the parliaments of the other 26 member states, the Houses of the Oireachtas had responsibility for making the decision. However, I am delighted that a referendum will be held and I look forward to debating the treaty during the forthcoming campaign.

I also look forward to hearing the arguments that will be put forward by those who oppose the treaty. I watched "Questions and Answers" last night and the people to whom I refer do not appear to have any reason for voting against the treaty other than the fact that they oppose it in principle. There is no tangible reason for people to oppose the treaty. As Ms McGinley stated, Ireland will not have a commissioner for five out of every 15 years. However, the position will be similar for France, Italy, Germany, Britain and other member states. Under the previous structures that obtained in the Commission, larger states had two Commissioners whereas now they have only one. Henceforward, they will have the same rights as countries such as Luxembourg and the states that have just joined the Union. One could, therefore, put forward a good argument in favour of the treaty in this regard. As Deputy Timmins stated, the role of the Commissioners is to safeguard the interests of everyone in the European Union. In addition, the European Parliament will be strengthened by the introduction of the co-decision model.

Everyone has a role to play. The committee has an extremely important role because it has been charged with scrutinising the treaty. The Joint Committee on European Scrutiny, of which I am also a member, will play an important part as well because there will be a need to refer the relevant legislation to it. When that legislation is published by the Commission, it will have to be sent to the national parliaments of the 27 member states. Again, this will help to address the democratic deficit in the European Union at present.

Having studied the treaty, I am of the opinion that it is a positive document. However, the position was the same with the Nice treaty and we did not get matters right regarding the first referendum held in respect of it. I do not believe we will have a second opportunity to vote on the new treaty because by the time the referendum is held, it will already have been ratified by most of the other member states. It would not be acceptable for us to decide that the treaty should be vetoed at that point. I am of the view that we will not be given a second opportunity to vote on it.

I urge those in Europe who are either for or against the treaty to desist from canvassing or campaigning in Ireland. We can deal with this matter ourselves. The "Yes" and "No" camps in this country are well able to put forward their arguments and it will be a matter for registered voters here to decide the direction Europe will take in the future. Some people will resent outside interference in the referendum campaign. I am delighted that ICOS, which is an extremely important organisation, will be campaigning in favour of, promoting and supporting the reform treaty.

Senator Peter Callanan

I thank the Chairman for affording me the opportunity to contribute. As members are aware, I am not a permanent member of the committee.

I join the Chairman and previous speakers in giving a warm welcome to the delegation from ICOS, namely, its president, Mr. Padraig Gibbons, and its representative in Brussels, Ms Carol McGinley. They represent my nominating bodies, so I must be careful about what I say.

Chairman

"Circumspect" is the word.

Senator Peter Callanan

I hope everyone will agree that the work of ICOS in the development of the co-operative movement down through the years has been superb. The organisation has helped to take the co-operative movement forward but work remains to be done and I look forward to that happening. I am a farmer and food producer and I take exception to Senator Quinn's comments. However, I would like to record my appreciation on behalf of the farming community and the co-operative industry of the good work done by ICOS together with the co-operatives. Will that ensure my nomination for the next Seanad?

Chairman

The Senator will go well.

Senator Peter Callanan

I have been concerned for a while about the possibility of the agriculture and rural development portfolio merging with another portfolio, to which Ms McGinley referred in her report. It could be compatible with the environment portfolio but if agriculture is downgraded in Europe, there is a danger it will be downgraded in Ireland. Agriculture has taken the third back seat in world trade talks, not the second or the first, for which I blame Commissioner Mandelson's negotiating position in the talks. Without food, society will not survive.

If every child, man and woman were given two meals every day, there would not be enough food in the world for them. Insufficient food is being produced and with the anticipated increase in the world's population, we are facing mass starvation. Farmers produce to the best of their ability what the market wants and can bear, and it is not all about profit. However, I am concerned about Europe's policy in this regard. The CAP was the only policy the EEC had under the Treaty of Rome to ensure self-sufficiency in food production. Europe has deviated from that, but ICOS and the other farming organisations can play a leading role, as can all of us, regardless of our political views, to ensure an adequate food supply for the survival of mankind.

How will the milk quota policy pan out over the next few years? The agriculture Commissioner is talking about keeping it well back. If the country is to go forward and meet the level we can produce there is scope for bringing the quotas to an end sooner. I expect and hope that all stakeholders, whether we are working with the co-ops, on the land or in stores such as Senator Quinn's, all have a stake in ensuring that this treaty is passed. Down the centuries, Ireland gave a lead to Europe. In a couple of months we can give that lead again.

Chairman

Thank you, Senator. There was a very interesting contrast of opinion among some of the submissions. They will provide considerable food for thought. The two sides of the same argument were presented by Senators Quinn and Callanan, representing consumerism and production in the agriculture sector.

A great deal of time, energy and emphasis is now placed on security of supply in the energy industry. Security of supply in the food industry could become a serious issue in a very short time. The two issues are related. In certain agricultural production one has the option of producing crops for alternative energy or food. In the past two or three years, Europe has moved from self-sufficiency in food production to needing to import food. This should be borne in mind in all present and future negotiations. We cannot blame the European Commission for this situation. It is a matter for ourselves and our own negotiators to ensure that this issue is borne in mind. The Europe Union, with a population of 500 million, has a responsibility not to leave itself short of food or energy. The two are very important.

Mr. Padraig Gibbons

I agree with Senator Callanan's view of Senator Quinn's analysis of the issue. His seat is secure, as far as ICOS and I are concerned. People might say, "What else would he say? He is a farmer." I am a farmer too but I do not wish to go down that road. For the first time in my lifetime, or even in the lifetimes of my father and grandfather, the importance of food is appreciated in the European Union. I do accept that it was recognised through the Common Agricultural Policy. The difference between supply and demand is only 1% or 2%. It is a very thin line. We must be very careful. When farming organisations and ICOS complain about outside countries sending food into Europe without checks one can see why we are concerned.

Deputy Timmins asked how we communicate with our workers. We are in regular contact with all our board members and they, in turn, advise the members. Our workers have seats on the boards of many of our co-ops, so we have a good network through which to get the word to our workers as well as our farmer members.

Senator Déirdre de Búrca asked how we know our workers support the stance ICOS is taking. Our organisation tries to be as democratic as possible and we listen to the opinions of all our workers. One cannot expect 100% agreement in any situation but, in general, the co-operative movement and the people who work in it realise that the treaty is good for Ireland, for jobs and for their future in Ireland. I would be very surprised if a majority was against it. I am happy with that. There are probably individuals within our organisation with a different opinion, but democracy rules there, just as it does everywhere else. There will be some problems, but no more than in any other walk of life. These will depend on what happens and whether the European Union pulls the plug on something, which people might use as an excuse to go against it. In general, we feel it is right to support the treaty and that is what we will recommend.

Deputy Costello raised the issue of health checks. There are different opinions within the farming organisations on this issue. I note the ICMSA will make its presentation after us and it has its opinion. We are in favour of Irish farmers being given the opportunity to develop and expand. We expect that over the next four to five years quotas will be abolished. The proposal is to abolish quotas by 2015. We would like quotas to be phased out gradually so that farmers will have a soft landing. We support the concept of an increase in quota of from 1% to 3%. The Government proposes 3%, but we are not sure that is feasible. We would be happy with 2% because that would allow farmers with the ability to do so to expand. This would be good for the country, the industry and workers.

We have some concerns with regard to health checks, although these concerns may not go down well with some of our rural development neighbours. We are not too happy with the proposal to switch the modulation fund from pillar 1 to pillar 2, or vice versa. We are not happy for it to be removed from the pillar currently supporting farm schemes. We do not see this as the way to go if the Government is serious about developing rural areas. We see farmers as the custodians of rural areas, and they should be allowed continue with that work. There is nothing wrong with the provision of a fund for schemes in rural areas, as long as it does not diminish the farming community.

I have not thought much about the timing of the referendum and do not consider the time of year relevant. However, if the timing is particularly relevant, we should be informed of that. Ms McGinley will now elaborate on issues I have not covered.

Ms Carol McGinley

I will take up the issue of timing. The timing of the referendum is important from the perspective of when the treaty, if ratified by Ireland, is due to come into effect. It is due to come into effect on 1 January 2009. If we only ratify it in October, it will then have to go through procedure in Brussels. After 1 January 2009 we will have new Commissioners and a new European Parliament. The treaty would take effect from 1 January 2009, but the new Parliament could decide it wanted to go back to the drawing board on issues such as the health check as it has only then got consultation rights. It could then go back to co-decisions. Timing is, therefore, very important. The earlier the referendum takes place, the better. There is much food for thought in what has been said.

Our organisation was set up in 1894 by Horace Plunkett. We are not here today to defend the CAP or to defend the subsidies that have come to Ireland from the European Union, but we have a very different CAP policy and agri-industry policy in Europe today than was the case even ten years ago. Many changes have happened within Agenda 2000, within the 2003 mid-term review and as a result of the health check. The Commission has tried to portray a different image of European agriculture through concrete policies. It now happens that we have issues in the green box in WTO that formerly were in the blue box.

On the issue of market access, the European Union at the WTO table has offered more on domestic support than any other country. We have cut domestic support more than the United States who need to cut theirs more than the EU. I will not discuss the health check as Mr. Gibbons has touched on it, but I definitely think that gone are the days when it was fortress EU with regard to CAP, to agricultural policy. We now have no export refunds on dairy products as last year these were slashed to zero on many products for which the dairy industry had been receiving export refunds for 20 years.

Mr.Gibbons referred to the dissemination of information to our members. I refer to the notes which are available to the committee. The ICOS board endorsed those points so therefore this is coming from the ICOS board and not the information point of ICOS Brussels. It is an important point to note that this comes from the members and not from the Brussels office.

The reforms which have taken place are related to market orientation. This has already happened as a result of last year's cut in export refunds down to zero for many dairy products. Senator Déirdre de Búrca referred to the areas of particular concern. We have had discussions thus far and there are plenty more discussions to be held. A main concern would have been how a co-decision with the European Parliament affects the agricultural budget. The European Parliament has always had strong powers within the budget remit and this would have been a concern.

Another concern of ours is the length of time it will take. While we support the European Parliament having more powers, we are critical of the fact that it will take a lot longer for decisions to be made. Brussels has already been criticised for the length of time it takes for any decisions to be made. It can take a year or more for decisions to be processed and this is a worry. If the reform treaty is ratified, we would like to see some procedures put in place to simplify the process and so shorten the time it takes for policies to go through. I have already touched on the timing issue.

ICOS wishes to thank Senator Peter Callanan for his support of the organisation. From my short experience in Brussels, when it comes to the importance of co-operatives in society, I work with many colleagues in Brussels or with my counterparts in other organisations from other countries where co-operatives are either weak or do not exist. Even before the health check legislative proposals are produced in May, one can see the problems which will be encountered with producers and suppliers as a result of the lack of co-ordination which co-operatives bring. The importance of co-operatives is evident when I meet with counterparts in Brussels. I thank the Senator for his support in this matter.

On the point made by Deputy Durkan about food security, this issue is gaining prominence in Europe. Ireland is no longer self-sufficient. The more the market is liberalised, we have no choice but to compete on a world market with our products, with or without a WTO agreement. Commissioner Fischer Boel has stated clearly that with or without a WTO agreement, extra refunds are going. It is just a matter of timing now if there is no WTO agreement. I touched on food energy. The EU can tackle food energy. It is one of the reasons we need to have a more simplified and modernised decision-making process with the reform treaty. As far as I am aware, I answered all the questions and I apologise if I did not.

Chairman

I thank the representatives of ICOS. Their submissions and comments will be used as a basis for our debate with the wider community as we approach the referendum date. While we do not know when that will take place, it is important that we know soon from a different point of view. St. Patrick's Day and Easter occur within a week of each other resulting in an elongated break, for want of a better description. We would prefer to have a reasonable run-in to the debate in the field rather than having only a week or two. It is important that we know when it is to take place.

I thank the witnesses for attending. Their points are noted. The question of "fortress Europe" and a sufficiency of supplies has been raised a few times. Regarding disease and compliance with international standards in production, etc., it is too late to deal with the subject when it gets that far. We should have trapped the subject long before that. The European Union is not to blame in that. It is a matter for us and our negotiators. It was obvious to some of us five or seven years ago what was likely to happen somewhat further down the road.

Members of the previous incarnation of this committee visited a sheep station in Australia, which was part and parcel of the propaganda that was very much in vogue at the time. I almost cried because the poor unfortunate producers in Australia were obviously on their uppers. They were in a desert and had no chance of presenting a threat to anybody. Of course we all know that is not true, as we realised at that time. As we sit here millions of rain forests are being converted into agricultural production areas, with huge negative environmental consequences, which will ultimately result in the importation of food into Europe from across the globe, which is an extraordinary contradiction in terms of what we are now discussing. It is in Europe's interest to keep in mind that the less carrying of food supplies in vehicles, ships and aircraft, the better. Food needs to be delivered every day as it is consumed every day and cannot be put on hold

I wish to comment on the merging of interests in the rural development programme and agriculture. If I wanted to be cynical I would say there is a weaning of the agriculture sector away from supports and eventually it will be floating on a raft in the wide open sea. This question goes much further than Europe and it has evolved with the WTO. As we proceed, industry has been relocated to south-east Asia because costs are lower there. It is conceivable that agriculture and the food production sector would go to a different location, with some going to South-East Asia, some to Latin America and some to the US, which is in a position to export food once again into Europe and is anxious to do so. There are many interests involved, none of which is the responsibility of the Commission or of European bureaucrats. They are our responsibility. It is our job to fight our case and live with the consequences, including those of us in politics.

I again thank the witnesses, who have given us useful food for thought. We look forward to meeting them in the course of the campaign.

I welcome Mr. Jackie Cahill, president, and Ciarán Dolan, general secretary, of the ICMSA. We know they have considerable interest in this debate and we look forward to their submission. A similar format will be followed.

Mr. Jackie Cahill

I am grateful for the invitation to address the committee on the important matter of the Lisbon treaty. In its letter of invitation, the committee asked us to deal with those aspects of the Lisbon treaty, which I will hereafter refer to as the reform treaty, that are of particular importance to us, as farmers, and I intend to do so. Equally, however, there are overarching and peripheral matters to consider if we are to really examine the likely impact of the reform treaty on Ireland and the agrifood sector in particular.

The ICMSA has not yet made a formal decision regarding the reform treaty but, as the committee knows, in the past when there have been referenda on Europe, the ICMSA recommended a "Yes" vote with the approval of its national council. Like other organisations, and reflecting a general trend among the Irish population, there is a growing level of concern, to put it mildly, about developments at European level. I stress that expressing concerns and holding strong views about the direction of Europe are factors not to be misinterpreted. It should not be assumed, for example, that we are reluctant Europeans.

The concerns to which I refer are twofold. First, they stem from the lack of practical information about the ultimate direction and the process of the EU. Second, there is the growing complexity of the European Union both in terms of its institutional make-up and its ever-increasing impact on businesses as well as almost every single aspect of economic and social policy, and law.

The reform treaty is not a constitution. We believe it was wise to step back from a constitution for Europe and to focus instead on member states working together and pooling their sovereignty for this purpose. The reform treaty makes it quite clear that the EU is based on the principle of conferred powers, which guarantees that the Union cannot extend this power or competence at the expense of member states without their prior agreement. It is important, nonetheless, to point out that the EU is to be established as a legal entity in its own right, capable of entering into international agreements on behalf of member states. With reference to the agribusiness sector and the importance of the WTO agreement, there may be no real change in the sense that the European Community is a legal entity capable of binding all member states at the WTO. I will return to this point later.

The establishment of the Union as a legal entity and the streamlining of other matters, for example, the three separate pillars, is a welcome development not only in terms of efficiency of operation but also in terms of ease of understanding. One of the problems, despite all the modern means of communication, is that European structures are very complicated and are changing significantly. This change is ongoing and evolving. The resultant sense of confusion leads to suspicion, so where simplification can be achieved, it should be aspired to. Greater understanding and certainty would help to allay the fears that we are transferring our independence and sovereignty.

A revision of the treaty includes the possibility to adopt a treaty that is a European Community treaty, as renamed, and a treaty of the European Union. The Attorney General has advised the Government that a constitutional referendum is required for Ireland to ratify the reform treaty. It is not clear whether the inclusion of articles in the reform treaty — the so-called bridging clauses — to extend the areas covered by a qualified majority or the flexibility clauses to extend the European Union's competence could give rise to the treaty being modified in the future without reference to the Irish people. While a somewhat similar article exists in the European treaty, there is some doubt about the extent the amendment will have to reach before the principle laid down in the Crotty case would require the issue to be put to the people by way of referendum.

We believe the Oireachtas should clarify this point to bring more certainty to the matter. There would be nothing to stop the Irish Constitution having a specific provision that Ireland could not agree to any change to the treaty without reference to the people in the form of a future referendum. While I fully accept that these self-amending clauses require unanimity, the issue is whether it falls within the power of the Government of the day or the people to exercise that choice.

With regard to the decision of the Government to opt out of the provisions on justice, this was a wise and practical decision given our common law position and the fact that Britain has also decided to opt out. Equally, Ireland may opt in at any time on these matters. Clearly, these are not academic reasons but ones that can affect every single citizen, both in private life and in business.

Overall, faced with a choice, we believe the Government has made the correct decision. There is no doubt there will be fundamental change in the way decisions are taken by the EU following the adoption of the treaty. While there are some minor changes in the level of power being transferred from member states to the EU, there are considerable changes in the way power will be allocated among the various EU institutions. The transfer of power away from the Council of Ministers is a matter that requires considerable thought. We must examine what can be done to ensure these changes, which are demanded in the name of efficiency, are counterbalanced as far as Ireland's interests are concerned.

The increased power of the European Parliament, particularly in respect of the budget, could have implications for small states. Equally, the double majority rule in regard to the number of member states and the proportion of the overall EU population is a factor that might work against us. While this particular measure may be more democratic, it is not a one-way advantage for Ireland and other smaller member states. The agreement reached in Greece in 1994, which is to last until 2014 or 2017, will, in the early stages, protect vital interests that may otherwise be ignored.

The extension of the legislative co-decision procedure involving the Council of Ministers and the European Parliament, including matters relating to the Common Agricultural Policy will give the Parliament power comparable to that of the Council of Ministers. The same will apply in regard to the EU budget, where the Parliament's powers of approval will be similar to those of the Council of Ministers.

The principle of conferred powers is critical. From a practical point of view, however, the statement about the three categories of competence is also important and will have practical implications, particularly for domestic policies and the role of the Oireachtas. While the reform treaty does not grant new and exclusive competence to the EU, there is, for the first time, a clear expression of the respective roles of the Union and the member states. Included within the Union's exclusive competence is the conclusion of international agreements in accordance with its mandate. This is crucially important with reference to the World Trade Organisation.

With regard to shared competence between the Union and the member states, the two headings of particular interest to us are agriculture and the environment. The days of exclusive reliance on the CAP are over; in reality, they were over long before the reform treaty. We are fully supportive of the selection of those areas where member states retain exclusive competence, for example, human health care, culture and education.

Arising directly from the above categorisation is the question of subsidiarity. The Union must not take unto itself more power than is necessary to undertake the responsibilities it has been given under the various treaties. The principle of subsidiarity has invariably been ignored, but we should recognise that the fault rests not only with the EU institutions but also with national parliaments, including the Oireachtas. The provision in the treaty to afford an active role to national parliaments is a necessary and welcome development, but it does not encompass all that the Oireachtas can or should do. The new role for national parliaments must reduce the so-called democratic deficit. Criticism of the EU in this regard is sometimes misdirected. While EU institutions must take some of the blame, the Oireachtas has not, with respect to the parliamentarians present, always lived up to its own responsibilities.

A consideration of how the Oireachtas has dealt with applying EU legislation in the State is illuminating, beginning with the European Communities Act 1972. This originally provided that ministerial regulations implementing new law must be confirmed by the Dáil. Although this was changed in 1973, the Act did not, until last year, give the Minister authority to create indictable offences by way of ministerial regulation. Over time, the Oireachtas has given enormous and uncalled for powers to Ministers and civil servants to introduce far-reaching legislation giving effect to EU directives. The Supreme Court judgment in the case of Maher v. the Minister for Agriculture and Food makes clear that where a statutory instrument introduces radical change, there is no constitutional objection to the Oireachtas dealing with the relevant EU matters by way of legislation. Moreover, some legal authorities are of the view that the Oireachtas cannot, under the Constitution, delegate law-making to Ministers in the context of European law where it is necessary to do so.

The Oireachtas can and must regain its law-making power in regard to implementing EU legislation in accordance with what is set down in the Constitution. A determination to protect this law-making role is in perfect harmony with its new role under the reform treaty. This involves an early warning mechanism on legislation, which has been proposed by the Commission. The Oireachtas on its own or in conjunction with other national parliaments will be able to force the Commission to review proposals. Equally, the Oireachtas for the first time will have the right to take an action to the European Court of Justice when it considers its capacity and position within the structure laid down by the European treaties is being infringed, particularly in respect of subsidiarity and law-making. The decision to establish an Oireachtas Joint Committee on European Scrutiny is a welcome development and has the potential to improve substantially parliamentary oversight by the Oireachtas in respect of the existing treaties and the reform treaty.

I refer to European farming and the agrisector. Ireland's membership of the European Union undoubtedly has given the Irish agrifood sector the market opportunities and supports that have resulted in its modernisation beyond all recognition. Equally, it has given us the right of access to the most rewarding markets in the world, as well as a level of opportunity unknown to generations of farmers prior to the advent of the Common Market. However such opportunities constitute a right of membership and while we are grateful for them, this cannot mean we are unable to express concerns regarding future or likely trends or that we are somehow forbidden to criticise constructively the manner in which the EU implements or decides policy. Most of the negative attitudes that obtain in the farming sector towards the EU undoubtedly arise from the raft of inspections, which is perceived as being far too restrictive and bureaucratic, while at the same time a blatant double standard is operated by the European Commission regarding food imports.

Some of the frustrations felt by farmers spring from the perception that member states have little control in such matters and the Commission demands strict adherence to its laws without taking into account their practical implication at ground level, as well as variation among member states. The importation of beef into the European Union from Brazil is a textbook example of the double standards that breed resignation and, subsequently, contempt.

While some improvement has taken place with regard to the necessary controls in Brazil, I am not confident that the European Commission will demand the same level of standards in Brazil as it insists on and requires of European farmers. In addition to being involved in a double standard with regard to food safety, the Commission is willing to import food produced under conditions that it would not dream of tolerating in Europe. This state of affairs cannot continue and is bringing into question the credibility of all European institutions. At present, the ICMSA is finalising a formal complaint to the European Ombudsman against the European Commission arising from its failure to observe proper standards on beef imports from Brazil. To some extent, this illustrates two issues. First, it demonstrates the growing tendency of the Commission to act without regard to criticism from and concerns of member states. Second, it shows that a means exists within the European structure by which an organisation such as the ICMSA, in conjunction with other organisations, can seek redress in the form of a ruling from the European Ombudsman.

Another area of importance concerns the setting of rules of trade for Irish and European farmers under the World Trade Organisation. In the present context, it serves to demonstrate the need to keep the European Commission under continuous scrutiny. The Commission is required to negotiate on a strict mandate at the WTO talks on behalf of member states and the power that has been given to Commissioner Mandelson in the WTO negotiations is far-reaching and unique. Member states such as Ireland and France have argued consistently that the Commission has gone beyond its mandate to an extent that necessitated the calling of a special Council meeting to attempt to rein in the Commissioner and demand regular reporting. Given the crucial importance of the WTO, it is vital to avoid a repetition of the Commission's arrogant refusal to be accountable. European institutions should be forced, if necessary, to operate in accordance with the treaties, the rule of law and the political direction given by the governments of the member states.

Detailed and restrictive rules on the environment, some of which do not stand up to scientific scrutiny, also are a source of growing dissatisfaction for farmers. They face the unfortunate combination of rules drawn up by a purely bureaucratic entity, the Commission, with very little oversight by the European Council, which are then transposed into Irish law by Ministers and the Civil Service and are implemented by a multitude of inspection systems. This is unfortunate and the perception at present is that the Oireachtas has little control of such matters. I argue strongly that this cannot continue and that greater accountability would ensure the taking into account of legitimate interests and the achievement of more effective control of the environment at a lower cost and with less fuss.

The reform treaty is not a simple document. It brings about major changes in a number of key areas and a multitude of minor changes in other areas. While it simplifies certain procedures, it adds other layers of complexity to an already complex structure. The reality is that the treaty in its current form will not be modified.

The most productive focus would be to concentrate on how we can work the reform treaty to our advantage and offset its downsides to the maximum degree possible. A more proactive approach by the Oireachtas and the Joint Committee on European Affairs and the Joint Committee on European Scrutiny would substantially remedy the democratic deficit.

The people are very capable of making a rational decision if they are provided with the necessary information. This also applies to the reform treaty. It would be a mistake and a disservice to say that the treaty is all bad or all good. However, political parties in Ireland have a responsibility to fully explain the reform treaty and its ramifications for the people. The challenge will be to get the people who are inclined to vote "Yes" to come out and do so. The referendum should not be lost to the usual groups in the anti-everything lobby.

While the referendum commission will, no doubt, set out the case for and against the treaty, as it has done in the past, the Oireachtas and this committee are to be complimented on their decision to undertake an information and public awareness programme.

Chairman

I thank Mr. Cahill. Senator Quinn is anxious to get embroiled in this debate again. He is the first to indicate, followed by Deputies Breen, Costello and Treacy.

Senator Feargal Quinn

I thank the Chairman. I was very impressed by Mr. Cahill's marvellous presentation, which was articulate and incisive and paid a great deal of attention to the challenges we are going to face. However, I fear he may be looking at it through rose-tinted glasses if he is speaking on behalf of his members.

I will take the committee back in history. From 1800 to 1921, decisions about this country were made in London. We would, very reluctantly, find ourselves handing over too much power to another ruler, this time in Brussels. We want to be careful to ensure that the steps we take are in the interests of the people.

There is a difference of opinion as to what are the responsibilities involved, particularly those of the farming community and the members of the Irish Creamery Milk Suppliers Association. If we look back 160 years, we see a famine that was to a very large extent the responsibility of our rulers in London. If, in 160 years time, people look back to Europe today, they will see that in a world of over six billion people, more than one billion went to bed hungry every night — yet we live in a community which pays our farmers not to grow something. I do not understand set-aside. In ten, 20, 30 or 160 years, people will talk about how we lived in Europe at a time when people were starving and going to bed hungry but our farmers were paid money on condition that they did not produce food. I would like somebody to explain how this will be explained to future generations. How will it be explained today?

The new Europe must make decisions at some point or another between its consumers and its farmers. I am not sure how many farmers are among the 480 million people in Europe but there are 480 million consumers in Europe. When decisions have to be made, we will, for the first time, hear the voice of those consumers who will certainly voice concerns about the safety of food coming in from whatever location. I understand Mr. Cahill's concerns about Brazilian beef or beef from anywhere else. However, under the Lisbon treaty, we will lose some power in the future. The debate will be whether this is worthwhile and whether it is in our long-term interest to lose some power for the efficient running of a new Europe. I am not sure whether the matter has been thought through seriously. It is not a question of voting against the treaty and bringing it down; there are other options. Norway and Switzerland decided not to join the EU but have been given access to it. They are doing well through their exports. Another option is to opt out of Europe and to have an agreement not unlike that of Norway and Switzerland. However, they have no say in the running of Europe as we have. I spent quite some time in Brussels and was impressed by the Irish influence in Europe. A small country does not gain influence because of its voting power. Rather, it is gained through the work of Ms Carol McGinley and others who are influencing the Union.

The world will change quickly. It is not a matter of just the WTO, although that will have influence. The world cannot allow the type of situation that prevailed during the past 50 years whereby Europe's farmers acted in their interests against the interests of Europe's and, in particular, the world's consumers. We will lose power through this treaty but, on balance, it is probably the right thing to do. Let us be aware that the world will change.

How do our guests, who have given this matter a great deal of thought, foresee the farming community handling such a loss of voting power in terms of decisions being made between consumers and farmers? I was impressed by our guests' presentation, but what is their response to my question on how the future will develop when the consumers of Europe have more power than previously, and farmers have less?

Deputy Pat Breen

I apologise for not being present for the ICOS presentation. I attended another meeting that did not conclude until 2 p.m.

There is no doubt that we face a significant challenge in the EU reform treaty. The farming vote played an important role in other referenda, as Mr. Cahill pointed out. From listening to our guests, ICOS is taking a cautious approach to the treaty. It has not given the committee any indication as to whether it will support the forthcoming treaty. ICOS has an important role to play on behalf of farmers. Speaking as someone from a rural background — I represent County Clare — farming organisations such as the IFA, ICOS and the ICMSA play an important role because it is from them that farmers will take direction regarding this treaty. When does ICOS intend to make a decision on the treaty at national level?

Senator Quinn referred to problems faced by Irish agriculture. Recently, dairy farming in west County Clare has been reduced by half. Will the electorate, particularly the farming electorate, use the problems in agriculture as a means of opposing what is occurring in Europe, especially EU directives? I attended a meeting in Tulla in County Clare on the hen harrier and its habitats. People were frightened that many of their farms would need to be set aside. Much of this was due to false information, but the discussion that night was on not voting for the reform treaty because Europe has directives for everything. In addition, the amount of form filling is causing farmers problems. They are being penalised for mistakes in form filling and this is a major problem. The farming vote is a big vote.

The delegation referred to taking a case to the Commission regarding the importation of Brazilian beef. How sympathetic is the Commission in respect of the proposals made? We will only have a Commissioner for ten out of 15 years. An Irish Commissioner has played an important role over the years and we have had good Commissioners. Will the absence of a Commissioner for that five year period have a negative role in Irish farming and what it can achieve at a European level? I thank the delegation for its presentation. We value its opinion.

Deputy Joe Costello

I thank Mr. Cahill and Mr. Dolan for the excellent contribution. I appreciate what Mr. Cahill stated in respect of the Oireachtas and Oireachtas scrutiny, including the Joint Committee on European Affairs and the Joint Committee on European Scrutiny. There is also the National Forum on Europe and the new special role of national parliaments as set out in the Lisbon treaty. Steps have been taken to eliminate the democratic deficit about which people complain and to monitor what is happening in Europe to ensure competencies are not interfered with.

There seems to be considerable leeway given to member states to process directives through statutory instruments. The new role of national parliaments will examine this more closely and what is enacted by statutory instruments will be examined more closely than in the past. Even though the legislation was only passed last year, it was a retrograde step because we need maximum scrutiny of what is passed and all legislative proposals should come before the full Houses of the Oireachtas.

Europe has been of great benefit to the farming industry. I cannot think of another sector that has benefited more than farming. The Common Agricultural Policy effectively eliminated the British monopoly on cheap food for Irish produce. It provided a major extension of markets to farmers. That has continued and Europe has emphasised this over the years.

In recent times, reform of CAP has shifted the emphasis to a degree. As Senator Quinn has mentioned, this shifts the focus and the strength of the farming lobby. This has been gradually happening over the years as the number of people working in agriculture has diminished. Naturally, the influence will be less extensive than it had been. The emphasis has been placed on the vast quantity of consumers who need good quality food. I accept the point that the Commission may have two standards in allowing Brazilian beef to be imported, but it has acted on influence and on the complaints made. Since November, many of the regions in Brazil are no longer allowed to send beef to the EU. In other words, the Commission has responded to the lobbying of the farming community and others, which is part of the democracy that operates. It is not a case of the Commission acting in a vacuum. With the existence of other methods to introduce policies, the Commission will not have quite the same role with the limited number of Commissioners and portfolios and a more streamlined approach with greater restraints will have to be taken with regard to what comes from the Commission.

How does the delegation view the expiry of milk quotas in 2014 and the Government's proposals to obtain a 3% increase prior to this date? Members of the delegation did not speak much about the dairy industry and perhaps they will comment on this area.

The ICMSA has not yet made up its mind on the Lisbon treaty. What is the procedure for the ICMSA to make this decision? What level of consultation occurs? How does the ICMSA intend to conduct a campaign? While a formal decision has not yet been taken, in all previous referenda it adopted a "Yes" position. How does the ICMSA intend to communicate information on its views to its members when the time comes?

Issues raised during the referendum on the initial Nice treaty and in the polls on the Lisbon treaty, which are of concern to all of us, include the large number of people who state they do not know how they will vote and the lack of awareness on the substance of the treaty and its implications for Irish people.

Deputy Noel Treacy

Like Deputy Breen, I was caught at another meeting and I regret missing the opening contributions of Mr. Gibbons and Ms McGinley. I welcome them along with Mr. Cahill and Mr. Dolan and I thank them for their leadership and commitment to agriculture and the country and for their partnership with the Government throughout the social partnership process and the success we have achieved. Farming organisations have played a major role in the evolution of our economy.

I agree with a great deal of what my colleagues stated about the success of Irish agriculture. I do not agree with everything Senator Quinn stated but I agree with him on the set-aside scheme. I fought this battle in Europe on several occasions and I cannot understand how we, as the food basket of the world, are not allowed to produce to capacity and that the negative set-aside scheme exists which deprives people of an opportunity to ensure we can have maximum production. It is difficult to get the Commission to listen to arguments on this issue.

The success of ICOS co-ops, their major resources, the large amount of employment they provide and their global operations would never have been achieved were it not for the opportunities and the stream of confidence created as a result of our membership of the European Union since 1973.

I agree with Deputy Costello's comments. Ireland's position when we joined three and a half decades ago was that we were exporting 75% of all our produce to the UK. Since then, we have quadrupled exports to the UK but it accounts for only 20% of our current volume of capacity. This shows the major successes we achieved, particularly from an agricultural point of view.

Mr. Cahill's contribution was extremely detailed and measured. Perhaps it was slightly conservative, with a slight sense of fear about the future. I do not agree with Senator Quinn that the reform treaty holds a major threat for the future. We are simplifying the European mechanisation from a political, parliamentary, structural overarching management point of view and we are absorbing democracy to take account of the fact that today the Union has 27 member states as opposed to the six member states it had when we joined in 1973, at which time it increased to nine. If one looks at the success of your own organisations and the way they have been changed and tweaked to deliver to your membership and to modern Ireland, one can see that Europe is the same. We are still maintaining the Irish Constitution, the sovereignty of the Irish Republic and the key role played by the democratically-elected members of our own Parliament. Along with that, we are now creating a new system whereby decision making by the Council of Ministers and the European Commission will be simplified and much more power will be given to the directly-elected European Parliament in a co-decision situation. This will ensure that all decisions taken in the future, both at Council and parliamentary level, will be reached by at least 55% of participants and will reflect the views of 60% of the population of Europe. What could be more democratic?

Mr. Cahill spoke about subsidiarity and statutory instruments. If one examines the Meagher case, the issue was a technical and legal one, whereby the statutory instrument did not refer to the 1972 European Communities Act and on that basis, the Supreme Court struck it down. That has been rectified by Parliament. That case shows the importance of ensuring that the legal situation is always correct.

I submit that it is critically important that the reform treaty is passed and that Irish farmers and farming organisations are deeply involved in achieving such a decision so that we can ensure the sustainability and efficiency of the European Union and make it more democratic. We must give the right to individuals to petition the European Parliament and the Commission on particular issues. We must also sustain the Common Agricultural Policy, which has been a legal entity since the foundation of the European Union. It is vitally important that we have the full support of the farming organisations. I am confident that the efficiencies that are brought to bear will only enhance the opportunities for our farming community.

Senator Déirdre de Búrca

I thank the representative who spoke on behalf of the ICMSA. It was a very interesting and wide-ranging presentation. I agree with Deputy Treacy that some of the interpretations of the treaty's provisions were a little conservative. It all depends on how one approaches the treaty. There are always concerns when changes are made to institutional arrangements that they may not work to the advantage, for example, of small countries like Ireland. However, there is every reason to believe that these new institutional arrangements will ensure that Ireland's influence within the European Union will continue to be as strong and effective as it has been to date.

An interesting point was made regarding the role of the Oireachtas. It is important to point out that there are steps the Oireachtas could take, in terms of scrutinising the decision making of Ministers within the Council of Ministers, well outside of the treaty. It is not necessary for any treaty to be ratified for the Government or the Oireachtas to make a decision that it, like other parliaments, including the Danish, Finnish and Austrian Parliaments, should have the power to issue binding opinions on which way Ministers should vote on the Council of Ministers and to discuss and debate fully forthcoming decisions of the Council of Ministers in various policy areas. That is something that the Oireachtas could decide to do without any Lisbon treaty. The point raised by the representatives was very relevant.

I am also delighted that the witnesses have welcomed the new powers of scrutiny and oversight by the national parliaments and the opportunity for them to show a yellow card, so to speak, if they are not happy that the principle of subsidiarity is being fully respected. However, stronger rules for national parliaments can be introduced by the Governments of individual member states without looking to the European institutional arrangements to bring that about.

Reference was made to the European Commission and concern was expressed about the fact that Ireland will no longer have a Commissioner. In that regard, I echo what others have said and point to the fact that there will be strict equality between all member states, including the larger states, which is a difficult position for them to take, namely, to have gone from a position where they had two Commissioners to one, and now to a position where it will be absolute equality and where they will not have a Commissioner for a five year period.

The Commission is supposed to look after the general Community interest. The Commissioners are not supposed to represent or promote the interests of the individual member state from which they come.

It has always been useful to have somebody who understands the particular circumstances of individual member states. One of the issues about which I would have questions is that of the cabinets because it has always been helpful to individual member states to have been able to access permanent representatives within the institutions of the European Union, particularly the Commission, and that those officials would understand and have that connection with the individual member states. I am sure it will continue to be the case that although the Commissioners will not represent every one of the 27 member states, there will be permanent officials and members of cabinets who will reflect linkages with all of the member states of the European Union.

Senator Quinn also asked whether Ireland would be better off outside the European Union. That is really the question that must be considered by any organisation encouraging its members to support the treaty or not. An organisation must consider how Ireland would survive and promote its interests, for instance, within the World Trade Organisation or in other fora, as an independent and sovereign state as opposed to being a member of a trading bloc such as the European Union. Whatever one's concerns about some of the kinds of decision that appear to be coming out of the World Trade Organisation, it seems that Ireland can only be better off as a member of a stronger trading bloc than on its own. Perhaps we might get our guests' response to that.

I thank the representatives of the ICMSA for their presentation. I hope they decide to recommend to their members that they should support the treaty because, on balance, it is a good treaty which will be in the interests of the agricultural community in Ireland.

Senator John Hanafin

I take the opportunity to welcome all the speakers, in particular, Mr. Jackie Cahill who is a neighbour in Thurles, County Tipperary. We heard a useful and practical expression of the speakers' concerns. I would like to think that there will be a clear distinction drawn between voting for the EU reform treaty and people's many laudable questions, whether on the practicality of where we are within Europe, on how the EU operates in terms of GATT and the level playing field in terms of Brazilian beef, and on the question of there probably being too much red tape in the farming sector. Those difficulties should be clearly put to one side when discussing the merits of the treaty. It might be a good opportunity to discuss these matters, but they should be clearly separated from the question of how Europe will operate better with 27 member states.

Chairman

We heard a diversity of opinion once again. There is an important item coming up, namely, the question of credit in the European and global contexts. A couple of matters come to mind.

Like everybody else, I could never understand intervention. It was laudable in the beginning, but it was retained too long and the measures were not put in place. Intervention was self-serving and it did not do any favours to anybody. It was costly. In the case of setaside, there are now alternatives which can be pursued. They were slow in coming but they are now available.

Senator Quinn raised an interesting subject. For instance, the issue of a cheap food policy is still pursued by the UK. They have not changed. When Commissioner Peter Mandelson negotiated the CAP reform, obviously in the context of the WTO, who was it supposed to benefit most? It was supposed to be fairer. It was supposed to benefit poor farmers in Africa, Commonwealth countries, for want of a better description, and around the world. However, they did not benefit. Those who benefited most were the multinational corporations involved in food production and food processing. A number of members of the committee visited Brazil and Argentina six or seven years ago. We were asked at the time why we were doing so. The reason for our trip was to ascertain what was likely to arise in the next WTO negotiations. What we saw convinced us that a serious problem was likely to come to light. We also visited Australia for the same reason. We did not travel to either New Zealand, because we knew it was going to be part of the equation, or the African countries.

What we saw in Latin America were vast agricultural areas that were the subject of irrigation and intense production. The members on the trip had never previously seen the like. One could only see what was happening from the air. This is factory farming on the largest scale. There is no way European farmers can compete with this in the area of food production.

The CAP was previously of some benefit to poorer farmers in Africa. Provision was made to give aid directly to these people. However, under the changes that occurred, such aid no longer goes to them but is instead given to the multinational producers and corporations. That is extraordinary, particularly when one considers the large tracts of Africa that are conducive to agricultural production. We want, therefore, to differentiate with regard to what is good for the planet, the food corporations, the producers and the consumers. A balance must be arrived at. At the time of the CAP reform, all the emphasis was placed on the major benefit going to poorer farmers in Africa. If one asked them now what benefits accrued to them, they would say that not many had done so. However, the multinational corporations have benefited to a tremendous degree.

CAP reform also ensured that, for example, Poland would no longer be a major beneficiary in the context of the agricultural sector. Poland has major potential but it is a European state and that is why it was excluded.

If I was asked by anyone outside the room to identify where our interests lie, I would state that they must lie in a trading bloc within Europe. We should not reduce our economic clout in order to be seen to be fair in a worldwide context. There are those who have other interests in respect of this matter and all may not be what it seems.

The position regarding setaside has changed and there are other options available. However, there are events that occur from time to time which are strange in nature. On alternative energy, for example, it is extraordinary that a reason could be found for discontinuing the activities of the sugar beet industry in this country, particularly when it was obvious that an alternative existed. It would have been the simplest thing in the world to encourage movement towards that alternative. The European Commission was not responsible for what happened; we did it ourselves. Everyone thought it was a great development. In order to identify where problems might arise, we need to be ahead of the posse by approximately five to seven years.

Seven years ago, a previous incarnation of this committee identified that it would be necessary for a committee to meet on an ongoing basis in order to vet EU legislation. As Senator de Búrca stated, all the emphasis is not on the Oireachtas. The Executive also has a function. More importantly, it has the overall function. The committee and the Joint Committee on European Scrutiny now have separate functions. This development will assist in addressing issues that previously fell by the wayside. In that context, Ministers now come before the committee and are forearmed with its response before attending Council of Europe meetings. As Members of the Oireachtas, we must, therefore, be vigilant at all times.

I recall advising constituents of mine who are members of the farming community, during negotiations on CAP reform, that some of the things that were happening were not to their advantage. No one accepted what I said until after the fact. In life one is always recognised after one is gone.

Mr. Jackie Cahill

A variety of observations were made and questions asked. The general secretary will reply to the questions about the timing of the decision and other technical issues.

Senator Quinn referred to the growing influence of the consumer. The boot will be on the other foot. For the first time since 1968, the EU has no intervention stocks and, therefore, food will be a scarce resource in the 21st century. Many people experienced nervous tremors in 2007 about the amount of grain in store and the amount of wheat in stock. Farmers will be increasingly appreciated as the century progresses. Food will be a scarce resource and the availability of water will be a determining factor in where it will be produced. Western Europe will be better geared to producing food than other parts of the world. Consumers will appreciate farmers more and more. Food security was one of the basic principles of the Treaty of Rome when it was agreed more than 50 years ago and it will become a greater issue going forward.

Deputy Breen and Senator Hanafin referred to negativity about the EU. The treaty must stand or fall on its own merits and other issues within the EU should not be allowed to influence people's vote. However, as Senator Quinn stated, that would mean us looking through rose tinted glasses. Issues in Brussels such as the nitrates directive, Brazilian beef, inspections and overregulation will influence the rural vote. Whatever about all the good intentions in the world, those issues will have an influence. We have work to do to divorce these issues from the treaty debate. Between now and the poll, the Commission could take action to allay concerns among the rural community.

With regard to the loss of a Commissioner, the position is the same for super powers within the EU as for Ireland. Our negotiators achieved a good deal to ensure the 27 member states are treated the same way. While it will be a disadvantage not to have a commissioner at the table, we cannot grumble about it.

Many questions referred to the manner in which the agriculture industry has benefitted from Union membership. There can be no argument about the EU serving farmers and Irish farming well. We would not be where we are today if we had not joined the EEC. I would not like to follow the road taken by Norway and Switzerland and become a fringe member of a European body, as that would not benefit the country going forward.

I refer to the debate on milk quotas. Ireland faces a health check this year, under which it is proposed to amend reforms from 2009 onwards. The Commissioner put forward a proposal to increase quotas from 1 April 2008 in advance of the health check. I attended a stakeholders forum in Brussels two weeks ago and there was unanimous agreement that quotas should increase this year. However, commodity markets have weakened in recent weeks. The dairy board price in November 2007 was 49 cent per litre but it had dropped to less than 32 cent per litre by the middle of January. That has changed the thinking of many member states. Six member states do not favour a quota increase from 1 April and others have expressed reservations. If the number not in favour increases to seven, those member states will have a blocking minority and the increase will not happen. That demonstrates how the Commission works. A minority of member states can stall a Commission decision.

With regard to quota increases, the ICMSA is not against expansion but we are very concerned about price. In 2007, we saw a very significant recovery in dairy markets and in prices for Irish dairy farmers. It was the first year since the 1980s that we got any kind of price increase. This year's prices showed that a viable income can be made on Irish dairy farms.

Whatever changes the health check brings about, the family farm unit, which was the basis of the Common Agricultural Policy, must be able to return a viable income. By all means we should have quota increases but the market must be able to absorb whatever increases are proposed. We must remember that we export the greater part of our produce. While supports have not been abolished, they are set at zero. Without any quota increase, the EU needs to export 200,000 tonnes of butter without refunds. We are cautious about the quota increase. Analysis of the market may show that it can be absorbed but we say we should tread cautiously. As Mr. Padraig Gibbons said, it is proposed that quotas will be abolished in 2015. We cannot ignore that and we must get ready for the changes it will bring.

We have had a very significant increase in costs in the last couple of months. The price of concentrates has risen dramatically because of the demand for bio-fuels. The price of fertiliser has risen by almost €100 per tonne in the last couple of weeks. These increases will affect profitability. Changes in policy cannot be allowed to undermine price. While the ICMSA may be more cautious than other organisations with regard to the increase in quotas, we must get ready for 2015. As we approach that date, we recognise that quotas must be freed up to some extent. The family farm structure, which is a quintessential part of the EU, must be the cornerstone of whatever changes are made in EU policy.

Deputy Treacy and Senator de Búrca described our presentation as conservative. I do not regard that as a misdemeanour. I would never mind being accused of being conservative. In representing our members, when changes that fundamentally affect our livelihood are proposed, it is best to be cautious. We fully examine the pros and cons of any changes proposed in an EU treaty. To be conservative about changes does not mean we are against the proposals. To be cautious and to do everything to ensure that Ireland gets the maximum benefit of whatever reform is coming down the tracks, is not a fault.

Mr. Ciaran Dolan

We set out today with two purposes. The first was to give our view of aspects of the reform treaty and of how it may impact on our sector. I hope we have done that. Mr. Jackie Cahill, in his presentation, made it quite clear that the reform treaty, as drafted, is a done deal. We either reject it or accept it.

We have supported all previous referendums. Our future rests within the European Union and not outside it or in some form of associate membership. Our organisation will go through the normal democratic process on the issue. This referendum could be lost by issues not related to the subject matter or by a feeling that another tranche of power is being surrendered by the Oireachtas to Europe. I will set out our views as non-parliamentarians of the role the Oireachtas can play. I agree with Senator de Búrca that the Oireachtas does not require the permission of the European Union to develop the issue. Since the second Nice treaty the Oireachtas has improved its structures and the new role of the Oireachtas within the treaty will combine with oversight.

I will leave aside for the moment the institutional and constitutional changes and concentrate on policy. It might be no harm for all of us to go back to the content of the still valid treaty. Article 33 of the treaty establishing the European Community sets out a number of issues that must be the basis of our Common Agricultural Policy. These include: to ensure that supplies reach consumers at reasonable prices and to stabilise markets. We have signed up to this and it will be renewed by way of a modification to the new treaty.

Let us look at the global situation with regard to food. Over a period of 100 years, food commodity prices have fallen by 0.5% per year, up to recently. After the Second World War, Europe had a problem with agriculture and developed the Common Agricultural Policy. We, together with other organisations, have stated clearly that we are in favour of fair trade, not free trade. Approximately 100 countries, members of the WTO, have full concessionary rights to export to the European Union. Equally, Europe as an affluent entity has a moral obligation with regard to global food supply. It would, therefore, be totally immoral for us to do anything that would jeopardise our production capacity, but at times we have done that. We have been careless with animal and plant health and have allowed sectors to run down by bringing forward rules that make them economically not viable. The Chairman commented on the sugar sector. It was demands on the WTO relating to the EU sugar regime that brought about the closure of our sugar sector. Morally we accept we must produce——

Chairman

The same would not happen in France.

Mr. Ciaran Dolan

I agree. I am talking about the pressures. The European Union — this is a criticism of the club of which we are and will remain members, not one we wish to exit — shares a common attitude on, for example, workers rights. We would not tolerate having conditions similar to the meat processing sector in Brazil. We have moved away from that. Neither would we tolerate the destruction of the forests in Brazil. Therefore, we have added environmental conditions to the issue of food safety.

Food safety is an important issue. It is no longer just concerned with old-fashioned issues such as cheap food supply. Recently, the Commission stated clearly that it will not insist on the same traceability from Brazil as it demands from EU producers. A person who offers for sale a product produced in Europe which does not have full traceability could face a criminal prosecution. This is not discretionary. We are fully aware, and it is to be hoped that Europe at all levels is also aware, of the moral obligation regarding food supplied globally. One has a duty not to do anything that would undermine countries that are dependent on food exports or on their own indigenous food producing sector. The big "but" is whether this means we will take everything from Brazil, Australia and New Zealand, such that it will completely undermine the beef and dairy sectors in the same way it undermined the sugar sector overnight. Why should we do this? We should look for fair trade in the way that other sectors have because Europe demands a higher standard of food production. I do not believe that these issues will be addressed differently if the reform treaty is accepted because they are separate.

I refer to our case before the Ombudsman. We have made a formal complaint against the Commission. Mr. Cahill referred to this in his presentation because the subject matter is important and the actual process available is equally important as a demonstration that the European institutions can be made to work to defend the rights of a relatively small organisation in terms of resources. We have been given a very positive and co-operative response from the Ombudsman's staff. This shows that even a massive international entity such as the European Commission is accountable and that the institutions of Europe are quite robust. We will be using this as an example of why Europe is still a good friend of Ireland, whatever the outcome of that particular determination. We will go through the process.

We believe that this committee and the Oireachtas has an opportunity to reassure people that we are involved in a process in this treaty that has no additional flow of sovereignty from Ireland and that in fact there are additional safeguards to ensure accountability. I have been in this business for 26 years. From my knowledge, the regard of the Irish people for Members of the Oireachtas, both TDs and Senators, is very high. It is important that people are informed correctly about the oversight which TDs and Senators have regarding the impact of European legislation on Irish legislation.

I refer to a comment by Senator de Búrca. We would not necessarily see that the Oireachtas should have a binding opinion on Ministers in all cases as this would limit Ireland's negotiating position. I know this is not what the Senator is suggesting as she was referring to other countries. I do not believe this is necessary as, on balance, it would probably be harmful in the sense that if the situation changed as a Minister found himself or herself in Brussels, he or she would not be able to express an opinion and our tradition of involvement at European level would not accommodate this.

Chairman

I thank the delegation. This has been an interesting discussion and there have been many speakers. I hope the delegation's submission will be borne in mind in the compilation of a report which will take place in due course. This report will be the handbook by which we will continue the campaign throughout the country when the time comes. It is hoped this will be approximately six to eight weeks before the date of the referendum. There is not much point starting it in February or March if the referendum does not take place until October or November. I again thank the witnesses for their attendance.