No, that is a different issue, the co-responsibility levy. It is also a fact that the Community's budgetary control has improved in recent years, the present threat to the guideline notwithstanding. I indicated that there is a clear understanding that some exceptional allowance must be made for the budgetary and market consequences of German unification. If we are going to accommodate the welcome development of German unification we must make the appropriate budgetary adjustments on levels which were drawn up before unification.
A Chathaoirligh, my approach to the forthcoming price negotiations will be a constructive one. This, however, does not imply that I am willing to compromise the future livelihoods of Irish producers or that I am ready to contemplate support withdrawal to such an extent that the viability of Irish agriculture and the rural lifestyle which it sustains would be undermined. Accordingly, I am determined to seek substantive adjustment of the Commission's proposals as presented and to do my utmost to ensure that the various commitments the Government have given in relation to agriculture are delivered. In this context I welcome the discussion in the House and I believe that the contributions of Senators will greatly strengthen my own negotiating position.
Two years ago I delayed the Council for two days and two nights when the new beef regime was being introduced because I insisted that I could not risk a free fall in beef prices and I was not prepared to agree to a new regime unless there was a built-in guaranteed safety net which would ensure that that free fall in prices would not take place in Ireland. Through persuasion, insistence and determination or whatever, and not, incidentally, by being less than aggressive — I would only ask those who have other views to consult with my colleagues in the Council where the real issues occur as to how effective that was — we did get the safety net. What we achieved then will obviously not be lightly conceded now and while the Commission propose the abolition of the safety net I will be seeking a safety net that will apply specifically to Ireland for the benefit of producers or at least for alternative mechanisms that would have the same effect. That is the issue we will be addressing for some time.
I would now like to turn to the GATT negotiations as they relate to agriculture. Perhaps it would be appropriate to begin with a quick run through the background to the negotiations and the progress to date. I want to make one point which is not included in the formal text but it is of vital importance. During the course of our Presidency last year, and before we entered into these negotiations, I insisted, as a matter of priority, that, for the first time, the GATT negotiations, as they affected agriculture, would have to be determined by the Agriculture Council.
Senators will know that the GATT negotiations in so far as they relate to external trade negotiations have always been exclusively a matter for the General Affairs Council. At my insistence, however, in consultation with colleagues, we got agreement from the Commission that because of the significance of agriculture in these negotiations they would have to relate to the Agriculture Council and would have to be guided and regulated by the decisions we reached in giving them the mandate for negotiation. We held at least three consecutive meetings of the Council during our Presidency to achieve that and this has been followed by the incoming Italian Presidency.
That has been one of the most significant issues for protecting agriculture in the GATT negotiations because the solidarity which we established was reflected all the way through, particularly at the Heysel negotiations in Brussels at the beginning of this year where we did not accede to the unreasonable American demands. Solidarity that might otherwise not have been there, was a key element and I am determined and confident that this solidarity will remain a feature of our negotiations when they resume now.
The current round of trade negotiations was launched at a ministerial meeting in Punta del Este, Uruguay, in September 1986. At that meeting a commitment was given to enter into a programme of phased and substantial reductions in agricultural supports. It is important to remember that this was the commitment and the purpose in 1986. When I came into Government in 1987 I was faced with that fait accompli. I am not saying it would have been different had I been there but I do want to say that it is significant that every member state was represented there. However, believe it or not, the Irish Government for whom this vital sector was the dynamo of the economy were represented not by the Minister for Agriculture but by the Minister for Education. The Minister for Agriculture in that Administration did not consider it important enough to be present at the beginning of these negotiations. I only hope that when we go to discuss some issues relevant to education in the international fora that I, as Minsiter for Agriculture and Food will not be asked to attend. I want to emphasise that to those from the Opposition benches who from time to time have made the case that all difficulties are of this Government's making with no reference to the views coming from other partners. There was a dismal failure on the part of the Government of the day to make sure that we were represented properly at that discussion.
These current trade negotiations were launched against a background of international trading difficulties and increasing budgetary costs of agricultural support during the seventies and eighties. They were introduced against a background of international trading difficulties and increasing budgetary costs of agricultural support during those two decades. It was due to be completed by the end of 1990. The overall objectives of the round are to further liberalise and expand world trade, stengthen the role of GATT, increase the responsiveness of the GATT system to the evolving international economic environment and to foster concurrent co-operative action at the national and international levels. Negotiations involve 15 subjects including agriculture.
For agriculture, it was agreed that there should be a greater liberalisation of trade and that import access and export competition should be subjected to strengthened GATT rules. That was agreed in 1986. This was to be achieved by improving market access, disciplining all direct and indirect subsidies and other measures affecting agricultural trade and by minimising the adverse effects that sanitary and phytosanitary regulations can have on trade. This effectively committed the Community to reductions in support and to opening up Community markets. Effectively, the commitment was given then. The negotiations since then have concentrated on the extent to which this would happen.
Negotiations continued over a considerable period and it was agreed in mid-1990 that the negotiating parties would submit by last autumn specific offers on reductions in support and protection. This was to pave the way for the conclusion of the negotiations at the GATT Ministerial conference in December in Brussels.
When the offers were submitted it was apparent that there were still quite considerable differences between the parties. This was especially so between the US and Cairns Group on one hand and the Community on the other, who had, for the first time, achieved a source of solidarity.
The US proposed a 75 per cent reduction of specified internal supports over the ten years from 1991 based on average support levels in 1986-88, a 90 per cent cut in export subsidies over 10 years and the elimination of export refunds on processed products by the end of 1996-97. On border protection, the US wanted to convert all non-tariff measures into tariff equivalents which would be reduced by 75 per cent over ten years. In addition, the US proposed that existing access levels for products should be expanded over the period of the agreement and that minimum access levels should be provided to markets where products have no access at present.
I would like to make an observation on the US position. It is now clear from surveys that have been conducted and projections that by the end of this decade, as we turn into the next millenium, 85 per cent plus of the population of the US will live within 150 miles of the coast on either side and the rest of the broad belt will contain 15 per cent of the community. I indicated to Clayton Yeutter in the course of discussions that if that is what they wanted for their society with all the consequential problems of congested cities having no sense of community or inherited culture or of the great richness of rural latitude, I was not prepared to contemplate that that same mistaken sequence would take place in our country.
That is one of the key issues — this so-called market domination is not the only element to be taken into account in these discussions. That is why we are into very protracted and difficult negotiations on this issue. The Americans and particularly their farmers, might learn from the negotiations. Any Senator who has had the opportunity of visiting part of the mid-west of America that were originally thriving agricultural communities will see the position — ghost towns and devastation. Where are the people now? They are in the cities, with all the unfortunate consequences. That is not what we are prepared to accept in our country.
The Cairns Group proposals were generally along similar lines to those of the US. Both place particular emphasis on securing specific commitments in relation to internal support, border measures and export subsidies.
The Community's proposal, which was agreed at Council on 6 November only after long and difficult discussions, proposed a 30 per cent reduction in aggregate support for groupings of the main products over ten years from the 1986 levels with a 10 per cent reduction for other products. Why 1986? Because 1986 was when the process started. The Punta del Este process started in 1986 and we have already taken difficult decisions — many of them difficult for our producers — and I insist on getting credit for the support reductions we have implemented since all of this started in 1986 before the Americans participated.
That is one of the key issues involved in the negotiations. All non-tariff border measures would be converted into tariff equivalents and would then be reduced by an amount reflecting the rate of reduction in support prices. In addition, there would be a rebalancing of protection essentially between cereals and competing products. Export restitutions would not be subject to any specific level of reduction but would be reduced as a result of reductions in support and protection and because of more precision in their calculation. We are prepared to confirm to our GATT negotiating partners that there will be reductions in export subsidies but reductions which will follow automatically as a consequence of the internal support reductions. We are not prepared to say, however, that our primary target is to remove the export subsidies.
That is an issue on which we should be able to expect a reasonable response because we will be able to demonstrate that there will certainly be reductions in export subsidies support as a natural consequence of the internal support reduction which we are prepared to put in place. In addition, the Community would commit itself not to introduce export subsidies for commodities for which they have not been applied in the past. This, in effect, was the basis on which the EC Commission, which negotiates on behalf of the Community under a mandate from the Council, had to conduct the negotiations.
During discussions at Council, considerable safeguards were built into the Community's proposal at the insistence of member states, including Ireland. At the various Council meetings on the GATT offer — seven in all in October and November last which went on day and night — I had been particularly insistent that producers had to be compensated for losses attributable to the GATT outcome. I am glad to say that, in the end, persistence paid off and we secured from the Commision various undertakings on complementary measures, the ensuring of Community preference and a clearer commitment on safeguarding export refunds. Those measures will not be announced unless and until we reach the actual conclusion in the GATT negotiations but the commitment to introduce them is now a firm decision of the Council.
The Commission has accepted that any future adaptations to support arrangements that will be necessary shall take into account the difficult situation of certain categories of producers and certain regions. It has also agreed that the total level of assistance to the less favoured regions should not be reduced as a result of the implementation of the outcome of the GATT negotiations. The Commission, too, has undertaken to submit concrete proposals, supported by appropriate financial solidarity, to ensure a viable future for Community farmers based on, inter alia, reorientation of support and reinforcing structural assistance. All of these commitments are of considerable importance to Ireland and I will be insisting on progress on these moving in paralled with the GATT negotiations.
Little progress was made in the December ministerial meeting because, for the most part, the main parties were unwilling to change their fundamental positions in a number of the negotiating areas, including agriculture. Towards the end of that week of negotiations the Commission negotiators, who act on behalf of the Community in such negotiations, indicated that the Community, subject to certain conditions being met, might be prepared to undertake some commitments on minimum market access and on the volume of products which would be exported with the aid of export subsidies. The Council has not agreed to such an approach and made it clear on several occasions that the Community negotiators had to respect the mandate.
In the event, agreement was not reached at the GATT meeting in Brussels and the US in particular felt that Community's position on agriculture remained insufficient. The Director General of GATT, Mr. Dunkel, was requested to pursue intensive consultations with the negotiating parties to try to bring about agreement in all the areas where there were differences. Those consultations continued over the best part of two months and finally on 20 February, Mr. Dunkel on his own initiative put forward a basis for further negotiations in a number of the negotiating areas, including agriculture,
On agriculture, he proposed that the participants conduct negotiations aimed at achieving specific commitments in regard to domestic support, market access and export competition and towards reaching agreement on sanitary and phytosanitary issues. When Mr. Dunkel presented his ideas in the GATT they were not commented on by me or by the Commission or by the other main participants in the negotiations. There were good reasons for this. They have no status beyond his own conclusions as to what he thought should be done. We will have come back to our discussions with Council and with the Commission. Technical discussion are now due to get underway on a number of agricultural points and these tasks will go on for some time. In the meantime, the US Administration is expected to seek approval in Congress for extension of its fast-track authority and a decision on this may take up to the end of May. It is unlikely at this stage that the GATT negotiations can be concluded before the end of the year.
The CAP reorientation and the GATT negotiations are going to consume all our time during the rest of this year and I hope people will make observations on that basis and give us the benefit of their views and reflections so that we can take them on board. We must not assume that the American position is what is going to emerge nor, in the other instance, that the CAP orientation is already as indicated in some leaks of precise proposals from the Commission.
As I stated earlier, in the GATT round, the Community has been prepared to consider reductions in export support and import barriers in a related way to reductions in internal support. This remains the formal Community position, and I will continue to insist that no offer be made which implies a reduction in any of the mechanisms of the CAP which exceeds the agreed reduction in overall support levels. I will also continue to insist that the Commission must maintain in the GATT negotiations the broad line laid down by the Council of Ministers on 6 November after seven consecutive meetings.
It must be remembered again that it was agreed at Punta del Este in 1986 that reduced support and protection levels should be brought about as a result of the GATT negotiations. So we are faced with that fact. I am not suggesting that if I had been there we would not have reached that conclusion. This was seen as essential if the agricultural trading system was to be made more market-oriented. Given this scenario, my priority is to ensure that the outcome of the GATT negotiations will not preclude the Community from maintaining adequate supports for its agricultural sector and that the impact of reductions in support and protection on agriculture in Ireland and on our economy generally will be kept to a minimum. The compensatory measures to which I referred earlier will be an essential element in any GATT package and I will be insisting that Ireland's interests are fully recognised in formulating the compensatory mechanisms.
The agriculture horizon is certainly cluttered with challenges as never before. The CAP is under the microscope both on the internal Community front and internationally in the context of the GATT. As the title of Commissioner MacSharry's paper suggests, it is a time for reflection — reflection on where the Common Agricultural Policy has brought us and where we go from here. The debate has only started. In common with other Agricultural Ministers, I have put and will continue to put my country's position to the Commission as it prepares to finalise its CAP reform proposals. When the proposals emerge in a few months' time the Council of Agriculture Ministers will commit itself to a thorough examination of them and I expect many months of debate and amendment before a final package emerges. Despite serious misgivings with some elements of the Commission's thinking on CAP reform, I am nonetheless very much heartened by the Commission's continued commitment to maintenance of the fundamental CAP mechanisms. I am confident that, when the Council's consideration of the CAP reform debate concludes and when the GATT commitments fall to be carried through, the Community will be left with an effective Common Agricultural Policy mechanism to see our agriculture through to the third millennium in a state of excellent health.
That is the broad line I wanted to introduce to launch the debate within a reasonable framework. I have to make some observations in addition in respect of the actions that we might take here at home, while always insisting that it is the European Community and the Common Agricultural Policy that must be the fundamental guarantee for our future policy. To put it in context, the total transfers from the European Community will exceed £1.5 billion this year, whereas the contribution from the Exchequer, which includes administrative costs, will be approximately £350 million or £400 million. There one can see the significance of maintaining a common position on policy in the European Community.
I want to refer to a number of areas in which we have the right of initiative ourselves, albeit backed by support from the European Community. One is the matter to which Senator Raftery referred and I have to put on record that what he has presented is inaccurate and I want to correct it. The previous administration did not apply for any extension of the disadvantaged areas in Ireland. The record is there in Agriculture House for anyone to look at. What the previous administration did after the start of a general election campaign in February 1987 — and this record is also in Agriculture House and in the Commission — was to put in a general request to the Commission to reclassify all of the disadvantaged areas in Ireland already designated as severely handicapped. I want to deny what a member of the European Parliament with a Fine Gael interest alleged. It is an outrageous untruth, which I have asked him to withdraw but which he has not had the grace to do, to say that I personally withdrew that application for reclassification. He called it an application for extension. I did no such thing. I was hardly three weeks in my office when the Commission came back very clearly, very directly and very formally rejecting the application that had been submitted on the basis that it did not take into account in any effective way the degree or modulation of handicap in the areas concerned. It is only right that Mr. McCartin, who is a member of the European Parliament, and Deputy Deasy, should give credence to that when they talk about the reports from Brussels, knowing full well that the only report coming from Brussels was that of the said Mr. McCartin. He should now acknowledge that that was not the case.
The second thing I want to say is that the same gentleman, again supported by Deputy Deasy, claimed that the Commission had rejected to a large extent the extension that I submitted. This again was widely reported and again is totally untrue. I do not know why mature, responsible persons represent that kind of position. At present the Commission is finalising its consideration of the Irish submission. I expect that they will decide on my proposal within weeks.
Let me repeat what that proposal is: that the disadvantaged areas hitherto covering 58 per cent of the national territory of Ireland will now be extended to 72 per cent of the national territory of Ireland. I find it a little difficult to listen to unfounded criticism from those who did not extend it by one square perch during their period. I heard Senator Raftery this morning talking about the delay in this matter. They had four years to extent it by even one square inch. It takes detailed surveys — we surveyed over half the country, every second farm — to get such an extension and so that I might persuade my colleagues at the Council of Ministers, where eventually it will be decided, that it has been properly formulated. I am confident that we will get a decision from the Council after it has gone through its procedures.
It is a matter of procedure. All the indications I have are that up to 98 per cent of what we submitted will be accepted. If we got 100 per cent there would be someone, understandably, saying we should have put in for a lot more. We, incidentally, thought that if 2 per cent were going out, we should try to get another 2 per cent in.
We succeeded in doing that too. When they have done that they will then prepare their package to put to the Council. It must go through the working party procedures of the Council before it comes to the Council of Ministers. I cannot change that. I am satisfied that when it comes to the Council of Ministers I will be able to rely on the goodwill and support of my colleagues with whom I have been working in a spirit of goodwill and co-operation over the last four years.
The House will be aware that before anything can be passed into law by the Council there must be an opinion from the European Parliament. Therefore, we can only hope that all Members of the House will communicate with all colleagues in the European Parliament, which I will address, to introduce the urgency procedures so that we get that opinion.
I have decided to set up an appeals procedure for the first time. This will mean that, from the date of the Commission decision in a few weeks time, I will immediately set up an appeals tribunal in which the Department of Agriculture and Food will not be represented. I do not want to be the judge in my own cause by way of appeal or otherwise. We will have two farmers' representatives on the basis of suggestions from the farm organisations, we will have an independent agricultural economists and two other people of impeccable experience and quality. I propose that they would then go on a circuit tour to specific locations to hear the appeals and adjudicate. The results will enable us to have the successful appellants included as well.
Senator Raftery referred to the hormone issue. I recall the same Senator not only opposing the hormone ban which was already in place before I joined the Council — I inherited that position — but actually having to bring it to the attention of his then leader that in the course of a tour of the USA, Senator Raftery actually vigorously argued in America against the European Community ban on hormones, thereby undermining the legal position of the Community and undermining us who were adhering to the European Community law and saying there was no basis in science or fact for it. That was certainly not what you would expect from a representative who had the interests of Irish agriculture at heart. Whether there was a scientific basis was not for me to judge, because it was already decided. I was only concerned that it was the law and if the consumers of Germany, Holland or France do not want hormone treated beef we should not produce it.
The consumer is my best friend, as Minister for Agriculture and Food. I also believe that the consumer is the farmer's best friend. If one or other of us rejects that consumer, then we are going to have a sworn enemy and that is why the insidious attempt on the part of some few in this country to literally undermine our whole beef industry by the application of bela aginis will not be tolerated. There are prosecutions already under way and I want to assure the House that I will not rest easy until such time as those who are engaging in that suicidal, irresponsible action will be brought to book. Irrespective of what kind of arguments they advance, we will not see the quality of our product undermined by an irresponsible few. I have given an outline of the difficulties that are there, but it is one role to try to overcome them.
Another important element that the House might like to address is the programme for rural development. All I wish to say that this point is we anticipated this in advance of any other country in the European Community. I set up 12 pilot schemes. We expended no money except by paying by co-ordinator in each of the pilot areas.
The total commitment of expenditure was about £500,000, and I am glad to say that, as one always felt about rural Ireland, the value we got from those pilot programmes underlines the significance of what is now going to be a nationwide programme. It was a bottom-up exercise. There was no extra money of any kind and something like 268 new jobs and about 600 part-time jobs were created by these communities in their own areas and there is a prospect of an extra 1,000 jobs in those pilot areas.
If we could introduce any industry with that record we would have the brass bands playing in O'Connell Street to bring them in. Here it was being done by the people themselves from the bottom up because of their conviction about their own place. When it goes nationwide — it is in the final stages the House will be aware of the agri-tourism, the deer farming and some aspects we have not touched on yet — it will be a major new component in developing a new dynamic in rural Ireland. I would not have launched it if there had been an implication that this was to be a substitute for farm support and agriculture. This must be complementary and supplementary, and it must be approached in that way.
We must maintain the environment. That is our guarantee of getting a premium price on these markets. The House will welcome the fact that very recently I announced further pilot projects in environmentally sensitive areas. We will go nationwide with them when we get responses from these areas. There is one in the Slieve Bloom area and the other is in west Connemara. The purpose of these projects will be to give grant incentives to farmers to engage in environmentally friendly action or to refrain from using anything, such as fertiliser or nitrates, that could damage the environment. It is essential that we do everything possible to promote that. When people talk about organic farming I would like to think we will be able to demonstrate, by adhering to this policy, that we are not just talking about a small select group who will be engaged in organic farming in Ireland, that the nature of our total production will be, as it traditionally was, organic in the proper sense of that word, and that we would always be able to guarantee the flavour and quality of our produce. We do not get the same flavour now we used to get from the food supplied by the farmers to towns like my own town of Nenagh. This unique flavour must be restored and that is what I wish to see in the promotion of this programme.
Viable commercial farming is essential and I will do everything possible to maintain and protect it, but I also want to say that the small farmer, the small producer, is the core of our society. They feature in our literature — and that is not by accident — they feature in all of the great efforts of the Irish people over the years, and they feature in the sheer generosity and warmth of their character and their struggle against the odds. I will ensure they will be a priority in any action.
I want to give just one example. It is the old story of beart de réir mo bhriathair because there is no point in pontificating if you do not demonstrate it. When the milk quotas were originally introduced — and I was not there then — and we got an adjustment at that time because we had not reached the same stage of production as Denmark and Holland in the operative year of 1983, that the 10 per cent extra that was applied to us to make up for that should have gone into a pool specifically for small scale producers and young producers. If you happened to have a quota of 100,000 gallons an extra 10 per cent gave you an extra 10,000 gallons. If you had a quota of 10,000 gallons you got an extra 1,000 gallons. That was not the proper way to apply that decision to Ireland.
Since coming into this office I have done everything possible, within the overview of quota, to ensure that we righted that wrong, and we got an extra 11 million gallons which was specifically and exclusively for small producers and young producers. I will continue that with whatever I can get in this area. The restructuring scheme that I introduced had one purpose and one purpose only — and I will continue to insist on it and I will penalise co-ops that try to depart from it — to ensure that the power of the cheque book would not determine who buys up the quotas that come on stream but that priority is given to producers under a certain level of quota. I say this not with any sense of envy of or opposition to large scale or efficient producers. Far from it. Small producers can, by definition, and in many cases are, more efficient. I want to give a commitment to the House that I will continue to operate this policy.
Over 18 months ago I asked my Department to apply their minds in a very detached but realistic way to reviewing all aspects of policy in the light of the scenario I have just presented here, to giving me an overview of policy that would at least stimulate debate, ideas and direction. As you will be aware, I received that review about six weeks or two months ago. The only recommendation I immediately adopted — because it warrants very serious discussion and consideration — was the recommendation that there should be a forum set up to consider all of the implications of the issues. I announced on that day, over two months ago, that I was setting up such a forum. Hence it was that I was surprised to see recently in some submission from a party that they were going to request that I set up what I had already announced I was setting up long ago. I do not understand how or why and it took me by surprise.
The consumer is the best friend of the farmer, the guarantee and the lifeline to his success. Therefore, it will be a forum which will involve consumers as well as producers, experts, officials and anyone else that I feel will have an appropriate role to play in the long term, ongoing review of this vital element in our economy.
Gabhaim buíochas leis an Teach as ucht éisteacht leis an méid a bhí le rá agam. Tá seans ag na Seanadóirí an cheist tábhachtach seo a phlé anois. Scrúdóidh mé go géar na pointí a dhéanfaidh siad agus tá súil agam go mbeimid in ann comhoibriú le chéile.
Senator B. Ryan and Senator Dardis rose.