Joint Committee on the Secondary Legislation of the European Communities debate -
Wednesday, 10 Dec 1975

Proposal for a Council Regulation on the Transitional Common Organisation of the market in Sheepmeat.

Chairman

The minutes of the last meeting have been circulated. I presume I can take them as read and sign them.

The next business will be the consideration of a number of draft reports. The first of these reports deals with the proposed regulation establishing a transitional common organisation of the market in the sheep meat sector. We are fortunate in having the attendance of three of the members of the European Parliament and I am sure they will be of assistance to us in considering this report. Would any member like to make any general comments on the report?

Deputy J. Gibbons

I should like to congratulate the people who prepared this document on the excellent quality of the research that went into it. The recommendations embodied in these documents are of a general character and this is understandable. I would like, if possible, to sharpen up the areas where recommendations could be made. There is a general rejection of the Commission's proposals with regard to the organisation of the sheep meat market. As of last Monday the Agricultural Committee of the European Parliament also rejected the Commission's proposals and endorsed certain suggestions of mine.

Deputy Nolan

I should like to be associated with Deputy J. Gibbons in congratulating the Chairman on this draft report.

Chairman

Paragraphs 1, 2 and 3 are factual and explanatory while paragraph 4 outlines what is in the proposed Regulation. The important factor to be noted there is that it applies from 1st January, 1976 to 31st December, 1977.

Deputy J. Gibbons

We begin to itemise our criticisms at that point. It is not at all clear why the Commission undertook a transitional arrangement. In the recommendations of the Commission there are a great many drawbacks. For instance, the utter failure to approach the subject of third country imports at all. Needless to say there are no price support mechanisms or protections for the consumer. My first criticism which arises under paragraph 4 of the report is the transitional nature of the draft Regulation. It is not clear why a definitive Regulation ought not to be made at once. I suggest that the Committee might consider making that the first of the criticisms.

Senator Robinson

I understood that the paragraph on the top of page 4 of the Report makes it clear that from January, 1978 the effect of the Court of Justice decision in the Charmassen case would mean that it would not be necessary to have a Regulation of this sort; that no country could have a national market organisation in the agricultural sector which would preclude the application of Article 33 of the Rome Treaty.

Deputy J. Gibbons

It is not at all clear what we are transitioning. It is true to say, that as a result of the Charmassen case, the Irish will be in a position to take legal action for the opening of the market at the end of the period. That would take longer than a couple of years and there is no apparent reason why a definitive Regulation ought not be introduced now.

Chairman

That is unassailable. Our view comes later.

Deputy J. Gibbons

The report is a factual one so far.

Chairman

In paragraph 5 the report deals with the substance of the question. Our analysis of the situation indicates to us that further measures are essential if the objectives of eliminating obstacles to intra-Community trade in the sheep meat sector are to be eliminated. Paragraph 6 deals with imports from third countries. Our view is that the proposed Regulation does not deal with that problem.

Deputy J. Gibbons

On that question I have suggested to the Agricultural Committee of the European Parliament, and they have accepted my suggestion, that the idea of a minimum import price for sheep meat supplies from third countries should be broached with the suppliers. Unless this is done the available prices to producers, especially in the United Kingdom and Ireland, will be governed and controlled by the availability of cheap supplies especially from New Zealand. There is a supply of store sheep coming from Eastern Europe into EEC countries. It is not a serious factor as far as the Irish industry is concerned, but I suggest that the Committee consider the advisability of asking the Commission to examine this question of minimum import prices for third country supplies. I had a conversation with a representative of the Commission after the Agricultural Committee meeting on Monday and he indicated that the Commission would look favourably on this idea.

Chairman

I take it that the Deputy does not quarrel with the last sentence which seems to be in line with his thinking :

It seems to the Joint Committee that if the objectives of the Common Agricultural Policy are to be attained in this sector, the market must be founded on the principle of Community preference which involves effective protection against imports from third countries.

Does that cover, in principle, the Deputy's point?

Deputy J. Gibbons

Yes, but we have to recognise the impossibility of seeking an embargo on New Zealand supplies because it would not be permissible under GATT Regulations. Therefore, one has to resort to the expedient of minimum import prices.

Chairman

Does the Deputy not consider that the paragraph entitled " Prince Support " covers that?

Deputy J. Gibbons

Yes, except that it leaves the recommendation rather general.

Chairman

Let me read it as it stands now:

The Joint Committee regards the absence of any provisions in the proposals for the market support of sheep meat as a serious defect which unfairly discriminates against sheep farmers as compared with other farmers. In its view there should be in the sheep meat sector, as in the beef and veal sector, a system of price support sustained by intervention and supplemented by levies on imports. A guide price should be fixed at a level which takes full account of the production costs in all regions of the Community and should be adjusted seasonally. An intervention system should be introduced with an intervention price derived from the guide price.

Does the Deputy wish to add to that?

Deputy J. Gibbons

Yes, on a question of seeking intervention the reality is that there would be great reluctance to extend the intervention system to sheep meat supplies. Having regard to that undoubted fact, this undoubted reluctance, I suggest that we float the idea of deficiency payments in exchange for the existing intervention system which is not such a great system anyway from the producer's point of view. We saw that last year in the cattle sector.

Chairman

Would the Deputy go on to say: " failing the inauguration of an intervention system the Committee would recommend ", or " in the absence of the establishment of an intervention system "?

Deputy J. Gibbons

Paragraph 7 more or less plumps for intervention. It is reasonable that it should. But it ignores the fact that it is unlikely to occur; a common organisation, without some protective mechanism for the producers, is not on as far as the Irish producers are concerned. Therefore, if we do not go for intervention we should go for deficiency payments. It would have the merit of protecting the producers of store sheep, as the producers of young cattle and mature cattle were protected under the old British deficiency payments system. This was the major defect of the intervention system in the cattle sector last year in Ireland. There was a good measure of protection for beef producers. A similar situation could conceivably arise in the sheep trade. It would be safer from the Irish producer's point of view to have deficiency payments.

Chairman

Would the Deputy agree to a sentence along these lines :

In the absence of an intervention system the Joint Committee would favour the introduction of a deficiency payment system on the lines of that operated for beef in the United Kingdom.

Deputy J. Gibbons

Funded by the Community of course; a Community deficiency payment system.

Chairman

Our final paragraph acknowledges the considerable help given by the Irish Farmers' Association. I take it that the report, subject to that amendment, meets with the approval of the Committee.