Unfortunately, Senator Robinson is in Brussels and, therefore, is not able to deal with her report on work-sharing.
Consideration of draft Report postponed.
Agricultural Prices and Measures to Balance Markets and Streamline Expenditure.
Work-Sharing.
The Sub-Committee met to consider the Commission's proposals concerning the changes in the common agricultural policy to balance the market and streamline expenditure and on the proposals on the fixing of prices for certain agricultural products and on certain related measures. In framing the proposals the Commission claim that it was guided in the main by the principle that producers should bear the cost of getting rid of future increases in surplus products and bring about a balance in the agricultural markets especially for milk and sugar through increased consumption where feasible and restricted production. They argue that if the market situation and the budgetary position were the sole determining factors they would be recommending no price increase for agricultural products for this year but because of the fall in real agricultural incomes in 1979 they are recommending that the Council approve an increase in common agricultural prices varying from product to product and ranging from 2 per cent to 3.5 per cent except for milk, sugar, beef and veal. In the latter sectors the increase proposed is 1.5 per cent subject to its applying in the milk sector only to milk proteins and not to butter.
The Commission's proposals for restoring balance in agricultural markets are basically, in addition to the co-responsibility levy which came into existence last year, a supplementary levy, a revised regime for sugar and adaptations in the regimes for beef, rye and starch. In addition to a co-responsibility levy to be levied on producers at the rate of 1.5 per cent of the target price in 1980-81, the Commission propose that an additional levy should be paid by all undertakings treating or processing milk purchased from producers who produce a quantity exceeding 99 per cent of the quantity purchased in 1979. Our Sub-Committee have examined this matter. We had submissions from the IFA, ICMSA, Bord Bainne and meetings with officials of the Department of Agriculture and we would like to express our thanks to them for meeting us. However, it was clear to the Sub-Committee that this proposal discriminates against the Irish producer and fails to take into account the regional imbalances in the community. Some countries have had the benefit of the common agricultural policy for as long as 20 years and have had an opportunity to develop their milk sectors and are now producing virtually double the amount of gallons per cow that we are. The proposal does not take into account the variation in the cost of production where in Germany and parts of Europe there is what is called the factory cow. Taken all in all the Sub-Committee found the supplementary levy totally objectionable from the point of view of this country. While we acknowledge that we must consider ways and means of dealing with the surplus products, we feel that encouragement in the beef area and perhaps a reduced levy and other matters will have to be considered.
In relation to sugar the Commission's proposals are to reduce production quotas by a million tonnes. Effectively it is to reduce the Irish " A " quota from 182,000 tonnes to 164,000 tonnes. This is based on the best of the previous four years which unfortunately creates a problem for this country in that since 1972 production in the sugar industry has increased by over 60 per cent. The proposed reduction in the " A " quota at a time when we have not developed the sugar industry and beet production to the fullest possible extent has to be fought rigorously and the Sub-Committee are obviously opposed to the proposal.
In the beef and veal sectors the Commission propose to establish Community classification of fat cattle carcases and we welcome this. They also propose to fix guide prices in relation to reference quality, dead weight and to make intervention available only when the Community average price for the intervention categories is at or below the intervention price. To consider the question of intervention and not having it from early or late spring into the summer is not very appealing from an Irish point of view. We have a number of processing units that have already considered scaling down at that time of the year. Anything that would encourage further development along that line would have to be opposed on employment grounds and on the grounds of making sure that there were adequate outlets for that type of production at that time.
As regards the implications for Ireland, if the market balance proposals were adopted unchanged Ireland would suffer substantial losses. For the Community as a whole this rate of supplementary levy on dairies is estimated at 3 per cent and, as I have already mentioned, the proposals discriminate against a country like ours and do not take into account or do not try to deal with countries that are really the cause of the present milk surplus. In relation to imports from third countries, to the extent that the surplus is built up by imports into the Community from countries outside of the nine some mechanism would have to be devised where they would carry a share of the cost of disposing of the surplus.
We mentioned the fact that it takes little account of regional differences. The real income of farmers has been dropping and input costs rising and the Joint Committee fail to see how these facts are reflected in the Commission's price proposals for 1980-81.
I was troubled by one sentence on page 14, paragraph 30. I take the point about the beef imports and the countries the report refers to, but when it comes to the ACP countries I would have thought that we should be slow to take a line which would in any way damage them. Is there any way we can express that so that the cost of taking in what is supplied from those countries is not borne alone by the Community producers? The point really is that it should be a Community cost and not recovered from the Community producers of sugar. It is an overall Community political decision, and a right one, to assist those countries by taking their goods. However, the producers of sugar should not alone be chosen to bear the cost. It should not be charged to FEOGA. Perhaps I could leave it to Deputy Smith to have a look at it.
The Sub-Committee felt that, while the words were strong, unless they were put that way we would not be able to get the type of overall change we are trying to get in relation to the whole Community bearing the cost, rather than the producer. We acknowledge the help being provided for these countries and we would like to see it continued. We do not want the cost charged to the producer.
The report is extremely informative.
Deputy Leonard
I must agree with the view that the cost of third country agreements should be isolated in the Community budget and not attributed to the Common Agricultural Policy. I notice in the report a note that there is now a move here by small farmers from milk into beef production. They are going into an area where there is only 50 per cent profitability. That is accepted irrespective of what type of land they are farming. Is it all the scares about milk mountains that is causing this shift and the panic among small producers? We have the situation now where £2½ million allocated for milk tanks and cooler grants was not taken up. According to a report for the 12 months up to January there were only 5,000 applicants in the 12 western counties. The grants were designed to help producers in those countries and the expectation was for 9,000 applicants. It is expected that £1 million will not be collected by small farmers in those areas who should have been concentrating on a better quality of milk. They did not avail themselves of those grants in an area where they could get 60 per cent of the cost, up to £200 for coolers or £260 for tanks. They would also qualify for a 30 per cent grant from the Farm Modernisation Scheme on top of that.
The result is that sponsors of the scheme have to apply for an extension of the scheme which they may not get. Factory cows are mentioned in the report, but the variation between the more progressive dairy farmers here and those who are not making an effort to improve is great. Good milk producers have a 1,000 gallon cow and the small ones have only half, 400, 500 or 600 gallons, and the latter is common throughout the country yet.
I agree with the point about small farmers who are moving out of milk. It is hard to see why they are being advised to do it. Unfortunately, the picture over a number of years has been that, while milk production continues to increase, the number of farmers engaged in dairying has been on the decline. It means in total terms that we have more small farmers not engaged in dairying than are engaged in it. Viewing that from the point of view of output per acre, on the best information available to us the output on a reasonably well-managed dairy farm is more than doubled from dairying than could be expected from any other farming enterprise. We have to take into account that a lot of farms here are disjointed and are not suitable for intensive dairying. That is one problem. A number of farmers of course are in part-time employment, but a considerable number are not in dairying. It would appear that their income from the type of farming enterprise they are carrying on is scarcely sufficient to maintain them. I do not know what can be done to encourage it. Farmers at that level from an economic point of view should go into dairying but the overall international outlet situation does not seem to be great.
In relation to cows and their output, some farmers are getting up to 1,000 and 1,200 gallons per cow; but they are the exceptional ones. Our average yield is still slightly over 600 gallons, which is away too low. Certainly it is at a point where we could not agree to being restricted from developing our full capacity in this area.
Paragraphs 1 to 21, inclusive, agreed to.
PARAGRAPH 22.
I move:
In the fourth sentence, to delete "the cost" and substitute "costs which would not have arisen in the absence".
Amendment agreed to.
Paragraph, as amended, agreed to.
Paragraphs 23 to 29, inclusive, agreed to.
PARAGRAPH 30.
I move:
In the first sentence, to delete "accept that Community producers should not be penalised because of the cost of exports which correspond to ACP imports" and substitute "take into account the fact that some of the cost falling on EAGGF in respect of export refunds arises because of imports from third countries, Community producers must not have to bear the full burden of this cost".
Amendment agreed to.
Paragraph, as amended, agreed to.
Paragraphs 31 to 36, inclusive, agreed to.
Draft Report, as amended, agreed to.
Ordered: To report accordingly.