Seanad Éireann debate -
Wednesday, 10 Feb 1999

Vol. 158 No. 3

Fodder Shortage: Motion.

Mrs. A. Doyle

I move:

That Seanad Éireann:

–recognising the current fodder crisis facing farmers,

–acknowledging the significant reduction in agricultural supports to emerge from the finalisation of Agenda 2000,

and

–deploring the Government's failure to initiate any meaningful plans to stimulate rural regeneration,

calls on the Government to allocate the proceeds of the disposal of ACC Bank, an institution built through the support of the agricul tural community, to a programme of investment aimed at sustaining the tradition of family farming in rural Ireland.

With the agreement of the House, I wish to insert three words, "equivalent of the", which were inadvertently left out of the motion. I accept responsibility for that. They do not change the meaning of the motion substantially. With the addition of those three words, the motion would call on the Government "to allocate the equivalent of the proceeds of the disposal of ACC Bank". That was a typographical error on my part for which I apologise.

Mr. Ross

I am not sure that I agree.

Acting Chairman (Mr. Dardis)

Is this a point of order?

Mr. Ross

It is a serious point of order because the agreement of the House is being sought. I will not agree to the change of wording unless we have a serious explanation of the difference between one point and the other. In other words, I will dissent unless we receive a serious explanation. I do not know the reason.

Acting Chairman

That is not really a point of order. it is relevant to a point of order but it is not a point of order.

Mr. Ross

It is certainly relevant, whether it is a point of order or not.

Acting Chairman

Perhaps we will have a debate on the wording at the conclusion of the debate.

Mrs. A. Doyle

I wish to move my amendment.

Mr. Ross

The agreement of the House will not be granted unless an explanation is given.

Acting Chairman

As in the case of the Dáil this evening, we have an amendment to the amendment. We will put them in sequence at the end.

Mr. Ross

That is correct, but the motion should stand as it is. It can be amended at the end, but not at this stage. Is that not correct?

Acting Chairman

Yes, but we can decide on the amendment, as amended, at the end.

Mr. Ross

At the end, correct.

Mrs. A. Doyle

Thank you, Chairman. I am speaking to the amendment as I have amended it, with your agreement.

Mr. Ross

It has not been amended yet.

Mrs. A. Doyle

Family farming is about far more than just industry and economics – it is a way of life. The survival of family farming is essential for both rural and urban Ireland. If families cannot be sustained in rural areas, the drift to the cities and towns will continue apace, putting further pressure on services in urban areas and on the need for further job creation, more housing and more services and so the circle will continue.

This Government's reaction to the fodder crisis, which became apparent last November, is clearly illustrated by the Minister for Finance, Deputy McCreevy's, comment that farmers were "hyping the problem". That is our Minister for Finance's view on the present fodder crisis. The Minister for Agriculture and Food stayed silent. One Minister is antagonistic towards farmers and rural communities while the other is totally disinterested. The broader implication of this response from the Government is extremely serious. It indicates a complete lack of understanding of farming structures. When the scale of the crisis, with over 30,000 farmers affected, became apparent, all the Government did was to resurrect an old response: to broaden the scope of the farmers' dole. It refused to treat farmers as other citizens and allow them family income support. In 1999 the Government is spending only £5 million on the 30,000 farmers who are in crisis today. That is an extension of £160 per head in extending the farmers' dole. Could we expect any more with, on the one hand, an antagonistic Minister for Finance and, on the other hand, a disinterested Minister for Agriculture and Food?

Last week there were headlines concerning a £70 million package that had been announced. The facts are that £50 million of this package comprise payments already due to farmers through the EU schemes that have been brought forward by six weeks. The balance of the £20 million was a response to the animal welfare crisis. This was not a response to farming and to farmers' plights nor to farm families, but to the animal welfare crisis.

What is the message for agriculture, for rural Ireland and for urban dwellers from this Government? It is very simple. There is no planning, no strategy and even no understanding of the problem. Is there any evidence of a strategy for the non-urban economy? Since coming into office over 20 months ago there has been nothing for rural renewal with the exception of one measure in the 1998 Finance Act for the upper Shannon area. However, as every resident of the upper Shannon knows, a year to the day after the publishing of the 1998 Finance Act the EU has not even considered it. It is known that two key elements, the double rent relief and the rates relief, will not be approved. The upper Shannon renewal plan was to be an experiment or pilot study, not a strategy on rural renewal for the country. There has been no progress one year to the day later and the Government has made us bad Europeans. The continued disappearance of family farms and family farming as a way of life is inescapable, but nothing has been done to help these families and rural communities to find alternatives.

How have we become bad Europeans having been model Europeans to date? The genesis of this can be traced to the Government, especially to the quick fix and stroke mentality of Fianna Fáil Ministers. The previous Government quietly and efficiently negotiated and shook hands with Brussels on a single lower rate of corporation tax. However, this Fianna Fáil led Government had to go back to try and get a 10 per cent rate and, with undisguised crassness and greed, turned the Commission against us in one stroke. What has followed? The 12 per cent corporation tax rate, despite the agreement with the previous Government, has not been finally approved. This policy is critical to our ongoing national development. The Custom House docks designation is stalled, the upper Shannon incentives I mentioned have not even been considered, double rent and rates relief vital for smaller business promotion have been abolished and there is no sign of new urban renewal schemes critical to the regeneration of towns with populations greater than 5,000. This is all due to our reputation in Europe being sullied by the Government.

In contrast, when the previous Government introduced enterprise zones around airports and in Rosslare Harbour, these were approved within months of their introduction in the 1997 Finance Act. We have only to compare the reaction in Brussels to, on the one hand, the application for the upper Shannon scheme and, on the other, to the enterprise zones of the previous Government to realise how our relationship with the Commission has been radically changed and soured by the Government. Between now and the end of March we need a well disposed EU Commission as never before as we face the finalisation of Agenda 2000 and the allocation of Structural and Cohesion Funds. We are one of 15 countries in the EU fighting our corner, and the one group we need on side is the Commission. It is the one body which, by its actions, has shown that it no longer regards us as good Europeans.

We have seen during the fodder crisis a Government which has no interest in agriculture. The most we have heard from the Taoiseach and the Minister for Agriculture and Food as we attempt to avoid drastic cuts in the level of agricultural transfers is that they will "rigorously oppose" the proposed reforms in Agenda 2000. Everybody with a modicum of common sense knows that reform is coming and that some is inevitable and necessary. The Government's track record on agriculture, coupled with the antagonism it has created between Ireland and the European Commission, leads me to send a warning to the rural community that it must brace itself for savage cuts in the level of EU support for Irish agriculture.

Now is the time to speak out. All we will get from the Government is rhetoric of the kind a former Fianna Fáil Taoiseach displayed when grandly proclaiming £8 billion in EU supports, which in reality turned out to be £6 billion. That was £2,000 million worth of hype from that Fianna Fáil Taoiseach. We are facing cereal cuts of 20 per cent, beef cuts of 30 per cent, milk cuts of 15 per cent and headage cuts from per head to area payments. The proposed cuts in Agenda 2000 will decimate rural Ireland and not just family farms. While the EU market must be brought into balance, it should not be at the cost of the family farm and rural communities. It brings new meaning to the term "flight from the hungry land".

The other important negotiations in progress are on the Structural and Cohesion Funds. As the media debate on the division of Ireland by ministerial regulation into two super regions continues, I sound a word of warning to those in the 15 counties for which the Government is seeking Objective One status. The Government may have decided on Objective One status, but to be meaningful and to translate into delivery of transfers to Ireland, a strong negotiating position is needed. We do not have that. We are going into discussion as the strongest economy in the OECD knowing the EU budget is tightening, that a new German Government wishes to cut the principal contribution to the EU, and that the enlargement of Europe is on the horizon. We are going in as supplicants with a reputation for being poor Europeans.

The Taoiseach, the Minister for Finance and the Minister for Agriculture and Food are not safe on our critical relationship with the EU. We suspected they were not safe on agriculture and this has been proved by their reaction to the fodder crisis, which the Minister for Finance calls hype. The Government is not a safe pair of hands dealing with Brussels. Witness the litany of disputes, delays and reversals of tax initiatives. Before we hear the response of the Minister of State, Deputy Davern, whom I welcome, I predict that, if he mentions Agenda 2000 at all, it will be to say that the Government will "rigorously oppose it". There will not be a hint of a strategy which would indicate some competence and warrant some faith that he might achieve something and retrieve the Irish position, and this is just six weeks before the most fundamental negotiations to affect Ireland since 1973 have to be concluded. I fear that where the fishing industry went in 1973 in the carve up of the Common Fisheries Policy, agriculture and rural Ireland will go in 1999 through incompetence and disinterest.

It is known that 30,000 farm families are in the gravest difficulty, that the minimalist approach of the Government has been stalled by Brussels, that finalisation of Agenda 2000 will result in significant cuts to agriculture support, and both I and my party believe that the Government's relationship with the EU will result in even greater cuts than might otherwise have been expected. It also known that the level of Structural and Cohesion Funds which we will receive up to 2005 will be significantly lower than at present. We believe that the outcome of the Structural Fund discussions will also be significantly lower than expected as the Government is unsafe in its dealings with Europe.

Something must be done and I call on the Minister as a minimum response to ensure that the equivalent of the proceeds of the sale of the ACC, which we are given to believe will be about £200 million, is earmarked to help address the serious structural problems in agriculture and in rural Ireland. The ACC was built on the savings and banking activities of farmers and rural Ireland. The least they can expect and, unfortunately, the minimum they need, is that this type of money be reinvested in the preservation of rural communities through alternative enterprises, reskilling, new technology and modernisation. Coincidentally, the Common Agricultural Policy changes will cost the country approximately £200 million in lower farm funding. This investment is needed to provide meaningful support for rural areas and to promote off-farm job opportunities in those areas.

The Institute of European Affairs study on Agenda 2000 makes the point that, if the promotion of rural development as an important aspect of the negotiations is to be meaningful, this is the direction it should take. It states that this is the best means of sustaining local economies. The report states that "the development of rural areas and the stabilisation of the population requires an extension of policies beyond agriculture towards more diversified forms of rural development. The potential for creating value-added and employment in rural areas is probably greater in the non-farm than in the farm economy".

This is the bleak picture we now face. The CAP changes could cost £200 million in lower farm funding. This equates to about 10 per cent of current aggregate farm income. The value of farm output is predicted to fall by 17 per cent. Cohesion Funding will drop by 50 per cent or £500 million per annum. Structural Funding will be phased out by 2005, resulting in a major reduction in EU transfers. Many of the more than 166 different measures currently co-financed by Structural Funds will be curtailed or eliminated.

We are constantly told that nothing is agreed until everything is agreed. It is very hard to have confidence in the current state of the discussions or in our negotiators – a disgraced Irish Commissioner, an antagonistic Minister for Finance and a disinterested Minister for Agriculture and Food. Looking at our team, it does not bode well for the future of Irish agriculture, rural communities or the urban communities which will have to embrace those who will be driven from the hungry land.

Mr. Coghlan

I welcome the Minister of State to the House, even if he does not welcome what I have to say.

Mr. Davern

It depends on what the Senator says.

Mr. Coghlan

There is no doubt about the situation which presents itself to us and I am glad the Government Members, in their amendment, recognise the current fodder crisis facing farmers. However, in the same amendment, they acknowledge the threats and opportunities to the agriculture industry emerging from the finalisation of Agenda 2000. I challenge them to list the opportunities contained therein because I fail to see any. Then they applaud the Government's efforts and initiatives. Again, I challenge the Government to tell us something about these "efforts and initiatives to guide the industry". The word "guide" is misplaced. The Government has left agriculture rudderless. I am interested to hear what the Minister has to say in that regard.

There is a major crisis facing agriculture. The future of farming and rural life is under severe threat. The situation is so critical that, unless immediate and drastic action is taken by the Government, many of the country's 150,000 farmers will be put out of business this spring. Surely this cannot be allowed to happen.

The meagre and paltry fodder scheme top up of £150 offered by the Minister to some affected farmers is an insult. It is totally insignificant and it would hardly buy a few tonnes of feed. At a minimum, farmers should have been able to lay their hands on between £4,000 and £5,000, preferably interest free or, if not, at a low rate of interest, to help tide them over. The Minister has taken no initiative to control feed prices or to introduce a low interest scheme for the purchase of animal feed.

The current crisis is due in no small measure to the Minister's overall failure to address the broader needs of the agriculture industry. We now have a record seven million animal herd, due mainly to the Minister's failure to open up the live export trade to promised markets. Many farmers, lured by false promises of a vibrant live trade, have ended up with unwanted cattle which they cannot sell. In addition, the Minister has failed to face down the meat factories on prices. These people, who have unbridled control over sales, continue to make large profits at the expense of farmers.

Under the negotiations on Agenda 2000, farmers will receive compensation of only 60 per cent in regard to beef. There is a projected fall of 20 per cent in line with lower prices for sheep. Compensation of only 60 per cent is offered on milk and 35 per cent on cereals. What other section of society would suffer such a loss? We would have a national strike on our hands if that happened in other areas.

The question of milk is not often mentioned because there is a mistaken belief that milk producers are doing all right. The butterfat base for Ireland is 3.58 per cent and the figure for the Kerry group is 3.48 per cent. I suggest that Kerry is being discriminated against. Kerry's actual butterfat level was 3.61 per cent and the quota fine for 1997-98 was £3.4 million – all butterfat – which was paid by 2,500 farmers with quotas mostly under 30,000 gallons. Kerry's actual butterfat base for 1998-99 is 3.71 per cent which means that Kerry farmers will have to reduce their volume supply by five million gallons or pay a fine of £6.65 million. The actual butterfat level for the country is 3.68 per cent which is 0.1 per cent over the reference base. This will lead to a super levy fine of £23 million. In order to avoid this fine Ireland's volume quota will have to be reduced by 20 million gallons. I suggest that the national reference level should be raised to 4 per cent, which is the average for the EU. Again, I would like to hear the Minister's views on this and what he proposes to do about it. I will be patient and wait for him to speak.

Mr. Davern

Did the Senator ever think of protein?

Mr. Coghlan

The Minister can educate me further about that when he makes his contribution.

An increase of 0.42 per cent would result in a saving of £115 million to the country and this increase would mean £100 per cow to Kerry farmers. Every farmer I meet in my county – recently we met the IFA and the ICMSA – is bitterly complaining, which is understandable and natural. Even a man with 30,000 gallons who might have bought in 5,000 gallons within the past few years is back to having 30,000 gallons because he is suffering from the constant erosion of his quota. I respectfully suggest that the Minister is not doing much about it. The Government is doing nothing about it. However, I will be patient and await the Minister's response in that regard.

Under the German Presidency the Government is being asked to sign off on a deal on 25 March. These negotiations will have profound consequences for the future livelihoods of all Irish farm families and for the national economy. If Agenda 2000 proposals go through in their current form, farm incomes will be reduced by £260 million and there will be a loss of £600 to the economy. We are now at the critical stage of negotiations and it is essential that Ireland secures a satisfactory outcome. Unless the Government wishes to preside over the decimation of rural Ireland, it will have no choice but to steer these negotiations over the end line of the German Presidency. I strongly urge the Government to do that in the national interest if it has any sense. The Government's response has been pathetic but, in the national interest, I wish it well in the negotiations. I hope it will secure what the farmers need because we must draw a line under the numbers which are remaining on the land and not a line in the sand.

Mr. Connor

They are dangerous.

Mr. R. Kiely

I move amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

"–recognising the current fodder crisis facing farmers;

–and acknowledging the threats and opportunities to the agricultural industry emerging from the finalisation of Agenda 2000;

applauds the Government's efforts and initiatives to guide the industry to a more stable and profitable future.".

The Government is tackling this fodder crisis in a meaningful manner. Recently the Minister for Agriculture and Food, Deputy Walsh, announced a further £20 million in fodder aid for farmers on top of the £21 million paid out before Christmas on fodder related schemes. This brings the total Government contribution to £41 million and marks a substantial contribution to the problems arising from the bad weather of last summer and the collapse of a number of key markets.

The scheme will be applied to farmers in all disadvantaged areas, excluding those DEDs which have already benefited from payments made in December 1998. Eligible farmers will include suckler cow farmers, small dairy farmers with quotas less than 35,000 gallons, and lowland sheep farmers with breeding ewes. People were confused about the situation of small dairy farmers because, when they saw farmers with larger quotas in the DED areas, they thought they would also qualify. They did not read properly what was outlined and it had to be explained to them.

Payment rates will be the same as in the 1998 scheme, subject to the same ceiling of £300 per beneficiary. In excess of 40,000 farmers will benefit. Many people are saying that £300 would not buy much but, according to the cost of feedstuffs, it could buy three tonnes. As a farmer I bought fodder for £110 per tonne and I heard it was available for £100 per tonne. I compliment the feed compounders for maintaining the low prices so as to benefit these farmers. In recognition of the fact that farmers who have already received support in the December scheme are located in the worst affected areas, a 50 per cent top-up on that payment will be made available. There are 45,000 farmers in this category.

A special fodder hardship fund will operate for suckler cow farmers, small scale dairy farmers with quotas of less than 35,000 and sheep farmers with breeding ewes located outside the disadvantaged areas. The objective is to confine this aspect of the scheme to small farmers almost totally dependent on a relatively small farm enterprise as a source of income. Fodder shortage would have to be demonstrated by each applicant and certified by a Teagasc adviser.

Senator Coghlan alleged that the Minister failed to control feed prices. Feed prices were controlled. One must remember that round bales of silage are selling for more than £25 whereas last year they were selling for £12, hay is selling for £27 to £30 per round bale compared with £15 last year and straw is making £16 per round bale compared with £8 last year. If the Minister were to control such prices further he would meet with objections from suppliers. Roughage feed is not being imported. It is sold by farmers to farmers.

I read an article in today's Irish Times which bore the headline, “Cattle fodder donated to farmers in west”. The article states:

The first consignment of cattle fodder to be donated by farmers from Waterford for farmers in the west arrived in County Limerick yesterday evening.

The 100 bales of hay and silage were donated by the Mount Melleray branch of the Irish Farmers' Association to hard-hit farmers in County Limerick.

It [the IFA] has established 12 collection points in County Wexford where fodder will be donated free and transported to County Clare later this week.

I compliment the IFA on embarking on this scheme to help their less well-off farming colleagues in other areas. This is how things should be done and the IFA must be commended for embarking on this scheme. It is a pity it was not done sooner. If it had, we might not have such a deep crisis in areas near to my home in west Limerick.

In further recognition of the difficulties faced by farmers, the Minister for Agriculture and Food has confirmed that his Department is making an all-out effort to bring forward fodder payments that would normally not be due until well into March. A sum of £50 million is issuing to farmers on foot of the 20 per cent balance of payments under the suckler cow scheme and on foot of other payments to REPS participants.

The Minister for Agriculture and Food has made it very clear to meetings of the Council of Ministers that the Agenda 2000 CAP reform proposals in their present form would seriously damage Irish agriculture and the Irish economy. Last week the Minister and the Taoiseach met Commissioner Fischler and made it clear to him that the CAP reform is not acceptable to Irish farmers in its present form. The Minister indicated in the strongest possible manner his concerns about the effect of the proposals on Irish farm incomes and about the lack of equity between member states and different types of production. The Minister is doing everything possible to ensure that Irish agriculture will not be damaged by the proposed CAP reform.

Mr. Ross

As the original motion has not yet been amended, I propose to speak on the motion as originally tabled.

The first part of this motion is not particularly contentious. However, when I read the second part for the first time yesterday, I thought the Fine Gael Party had taken leave of its senses. Having read the motion and having heard what has been said, I do not depart from that point of view. My view is that, embued with enthusiasm for the elections for the European Parliament, Senator Avril Doyle has run amok. She has gone completely and utterly over the top. I telephoned the Fine Gael press office yesterday when I saw this extraordinary phrase about the Agricultural Credit Corporation. I asked if this was Fine Gael policy. As always happens when one telephones the Fine Gael press office the person I spoke to promised to ring me back. Of course, no one telephoned me and I had to telephone the press office again. Eventually, the press office told me they did not know if this was Fine Gael policy. I asked what was Fine Gael policy on this issue and I was told that Fine Gael does not have one.

This debate is a farce. It has nothing to do with farmers or with differences between Fine Gael and Fianna Fáil. This motion is an attempt to attack Alan Gillis, MEP. This debate has everything to do with the European elections and farmers' votes in that election. Poor Alan Gillis is not in the House to defend himself.

Acting Chairman

I am glad you have reminded the House of that fact, Senator.

Mr. Ross

He will not be able to reply to this attack in kind. If Senator Doyle is lucky there will be headlines all over Leinster tomorrow saying, "Doyle wants ACC funds for farmers". This will do Senator Doyle considerable good in her election campaign. The motion is bizarre and is not Fine Gael policy. If Fine Gael enters Government with Labour, Fianna Fáil or the Progessive Democrats there is no hope that the proceeds of the ACC bank will be used for the purpose proposed. The proposal is nonsense. At a time of crisis in other areas and of admitted crisis in farming, it undermines this House and it undermines the issue to make such a throwaway suggestion on such a serious subject. The logic of this proposal is absurd.

The ACC does not belong to the farmers or to the Department of Agriculture and Food. It belongs to the State and to every person in the State. When it is privatised it may realise £200 million or it may not. When that happens those funds will go into the Exchequer. The idea that they should be distributed to those people who, the motion says, supported the ACC is absurd. This is like saying that Telecom Éireann will be sold for more than £3 billion and the entire amount given to people who have telephones. We know this will not happen. Telecom Éireann tried to do this by giving a little to subscribers and they were told they could not do it. Telephone subscribers will not receive any of the proceeds of the privatisation of the Telecom Éireann.

Senator Doyle's motion is based on the false premise that the ACC was built through the support of the agricultural community. That is complete and utter nonsense. ACC has supported the agricultural community, and not the other way around.

Peter Barry, who Senators Connor and Doyle have probably heard of and who was here not very long ago, said the ACC was very necessary when it was established, although he did not say anything more than "necessary". He said it was lending money to farmers, large and small, who, because of the lack of profitability in farming for almost half a century, found it extremely difficult to borrow money from normal commercial sources. Decoded, that means the ACC was there to lend money to farmers who could not get money from the banks because they were a bad risk.

I am not saying that was right or wrong, although personally I do not think it was a very good idea. However, that is the history of the ACC. The ACC, through the State, has supported farmers and kept them going. The ACC owes farmers nothing; it is farmers, if anything, who owe the ACC a debt of gratitude over a number of decades. To suggest now that the proceeds should go to those who have already been the subject of ACC munificence, is really gilding the lily. It is saying to farmers that, because they are so used to being subsidised by the ACC, we are going to sell the ACC and give them the proceeds. This is utterly absurd.

The ACC will admit that during the 1980s, particularly 1980 to 1982, when farmers were having a particularly difficult time due to high interest rates, as were the rest of us, it had to write off enormous bad debts. I cannot find out – perhaps the Minister of State can enlighten us, although I doubt he can because I could not find out by asking today and looking up the accounts – how much was written off in bad debts at that time. These debts were written off in a non-commercial way.

Anyone who knows anything about the ACC will say, as will ACC spokespersons, that the ACC was very "understanding" of farmers at that time. It subsidised them and did not close in on them. It took the view that it had a social role as well as a commercial one, which it did, and it wrote off debts in circumstances where a normal bank would not have done so. That is admitted by farmers, farming spokespersons and the ACC. As a result, the ACC lost £15 million in 1987. The taxpayer and the State were paying for all this. The State was subsidising the ACC which was, in turn, writing off loans to farmers. The motion states that we should give farmers a bit more by giving them the proceeds of the sale.

The ACC only started to make money when it branched away from the farming community. When, in 1987, it took the position of being a purely commercial enterprise and went into products and areas where it had not gone before and was no longer purely agricultural, it started to make much money. That is what makes it an attractive commercial proposition to the market and outside suitors. If it concentrated purely on agriculture, that would not be the case. The majority of ACC's business now is no longer done with the agricultural community. That is why it is going to the market and will possibly raise £200 million, if market conditions remain right.

It is being proposed here today that that £200 million should go to the agricultural community, which it has already subsidised. That is an appalling suggestion which is made purely for electoral purposes. I do not blame Senator Doyle – I might do exactly the same if I were in her position However, it should be pointed out, on behalf of the unfortunate Mr. Gillis who is not here to defend himself, that that, and nothing else, is the agenda behind this. The proceeds of the ACC should not go to the farmers.

There is an agenda behind this motion which I should point out. The attempt by Senator Doyle to amend the motion, which the Chair quite rightly did not allow, was an attempt to back track from something which was embarrassing to her party because of its absurdity. We should oppose this motion.

Minister of State at the Department of Agriculture and Food (Mr. Davern)

I am glad to be here. I thank Senator Ross for the final part of his speech because it leaves me free to deal with the other two parts of the motion. Perhaps being in Government with Democratic Left rubbed off on Fine Gael in terms of selling banks – I understand Democratic Left was quite accustomed to the bank business.

I decry the second part of the motion which states "acknowledging the significant reduction in agricultural supports to emerge from the finalisation of Agenda 2000". For a party to put its name to that is to lie down before negotiations start. That is not the spirit with which we are entering into this. I would hate to leave it in the hands of—

Mr. Connor

That is the worst joke of all.

Mr. Davern

I did not interrupt the Senator.

Acting Chairman

The Minister of State, without interruption. Senator Connor showed admirable restraint when Senator Ross was speaking and he should show the same restraint now when the Minister of State is speaking.

Mr. Davern

I am sorry Senator Coghlan has left because I was going to point out to him that 13 million gallons of milk went missing in 1983 under the European negotiations at that time.

The Opposition's motion links the fodder crisis and the Agenda 2000 proposals with the totally unrelated issue of the flotation of the ACC Bank. Management of the ACC Bank, its flotation and any proceeds from that flotation are, as anyone would know – particularly someone who was a Minister of State at the Department of Finance – entirely a matter for the Department of Finance. The motion is possibly an electoral gimmick.

According to the latest CSO estimates released yesterday, aggregate farm income fell by 5 per cent to £1,885 million. This is undoubtedly a disappointing performance, mainly caused by the poor weather conditions and the collapse of the Russian market, which had a disappointing impact in the middle of the year. Of course, the aggregate figures mask a wide variation in the fortunes of farming.

Because of bad weather and market difficulties during 1998, a range of actions were taken, including increases in export refunds for beef and pigmeat, introducing aids to private storage for sheep and pigmeat, improving access to intervention for heavier cattle, increasing the rate of advance payment of suckler cow and special beef premia, speeding up payments to farmers, approval of additional shipping capacity for export of livestock and introducing before Christmas a special fodder package of £21 million, including £12 million in fodder payments, £6 million for mountain ewe destocking and almost £3 million in sheep headage top-up.

Senator Doyle and the other Fine Gael speaker failed to decry those who have deliberately profiteered from the misfortune of other farmers by increasing the price to £35 this week – not, as Senator Kiely said, £25 – for bailed silage, which is ridiculous. Thank God there are men of spirit in Mount Melleray in the Knockmealdown mountains, which is not exactly the wealthiest farming area in the country, who have given feedstuffs voluntarily. I understand there are more to come from Wexford and other areas.

Mrs. A. Doyle

Wexford is doing the same.

Mr. Connor

It is a nice commentary on the Government that that has to happen.

Mr. Davern

Direct payments by my Department reached a record level of £1,038 million in 1998 and now account for 50 per cent of farm income. These payments did a great deal to support farm incomes in 1998 and, as a result, Irish farmers fared somewhat better than their colleagues in the UK and several other member states.

Last week, the Minister, Deputy Walsh, announced a further £20 million in fodder aid for farmers, on top of the £12 million paid out before Christmas on fodder related schemes, bringing the total Government contribution to £41 million. The new scheme will be applied to farmers in all disadvantaged areas excluding those who have already benefited from payments made in December. Eligible farmers include suckler cow farmers, small dairy farmers with quotas of less than 35,000 gallons and lowland sheep farmers with breeding ewes. Payment rates will be the same as in the 1998 scheme subject to the same ceiling of £300 per beneficiary. In excess of 40,000 farmers will benefit. In addition, the Department is arranging that the 45,000 farmers in the worst affected areas, who received payment under the 1998 scheme, will benefit from a 50 per cent top- up of that payment, bringing the ceiling for such farmers to £450.

A special fodder hardship fund will operate for farmers who satisfy certain eligibility criteria. The objective is to confine this aspect of the scheme to small farmers almost totally dependent on a relatively small farm enterprise as a source of income. In the interests of equity, stringent criteria would have to be met to qualify for this special package. Therefore, a substantial amount of money has been made available to help with the fodder problem. No Government and no Minister can solve the fodder problems of any individual farmer, but a very considerable effort has been made to address the situation.

In further recognition of the continuing difficulties faced by farmers, the Department is making an all out effort to bring forward payments that would not normally be due until well into March. Last week alone, some £50 million issued to farmers on foot of the 20 per cent balancing payments under the suckler cow scheme, and in payments for REPS participants. In addition, more than £30 million will issue to sheep farmers this month under the ewe premium scheme.

This year will see the introduction of a revamped farm assistance scheme costing £43 million in a full year to support low income farmers. In response to the difficulties now being experienced, it has been decided to bring forward the implementation of this scheme to April. Entitlement to payment under the new scheme will be effective from the first week in April 1999. However, in order to allow for the necessary preparatory work, including means testing, the first payments will issue in the first week in June. The scheme will not only benefit small farm families with children, but will also provide increased payments to couples without children and single farmers. The scheme will benefit in the region of 13,400 farm families, including the 6,600 already participating in the existing scheme. I regard the farm assist scheme as a very important innovation and a clear expression of this Government's commitment to practical action on rural poverty.

We are now approaching the critical stage of the Agenda 2000 negotiations. As Members are probably aware, the summit meeting in Vienna last December confirmed that political agreement should be reached on the entire package no later than the end of next month. The German Presidency, in its typically efficient manner, is determined to reach agreement on agriculture at the Council meeting in the week commencing 22 February, less than three weeks away.

The overall thrust of the proposals is to continue along the lines of the 1992 MacSharry reforms, with lower support prices, compensation for farmers in the form of direct payments and further reinforcement of structural, environmental and rural development policies.

While we accept the need for reform to meet the impending challenges of WTO negotiations and EU enlargement, Ireland does not accept the detailed proposals unveiled by the Commission last March. From the outset, the Government has indicated in the strongest possible manner our concerns about the effect of the proposals on Irish farmers' incomes and about the lack of equity – Senator Doyle owes me a fiver as I did not say the words she expected me to – between member states and between different types of production. The Minister, Deputy Walsh, has taken every opportunity to put this case in bilateral meetings with Commissioner Fischler and ministerial colleagues.

It is significant that we obtained acknowledgement of the importance of the beef and milk sectors to Ireland by having written into the conclusions of the Agriculture Council meeting last May a statement that the dependence of particular member states on specific sectors would be taken into account in the final agreement. In the crucial coming weeks, the Government intends to ensure that this Council commitment is honoured in full. A complicating factor in the negotiations is the future funding arrangements for the CAP. The recent review of the EU financing arrangements arose from complaints by some member states, and by the new German Government in particular, that the burden of their net contributions is excessive and they are aiming to take this opportunity to alter the balance. One of the solutions suggested by the Commission is that the expenditure side of the budget could be amended to provide for national co-financing of CAP expenditure on direct payments at a level of 25 per cent. We acknowledge that the concerns of member states with large net contributions have to be addressed. However, we believe that the co-financing option is not an appropriate solution.

The Common Agricultural Policy has been built up over 40 years on three central principles – market unity, Community preference and common financial responsibility. It has contributed enormously to the solidarity which has cemented the Union over the years. We cannot now begin to dismantle that achievement in order to provide a partial answer to a problem that goes far beyond the CAP. While it is fairly clear that stricter budgetary discipline will be applied to the reform, we will be insisting that the resources available must be adequate to fund a worthwhile and equitable reform. There is no point in carrying out reform that is inadequate, simply to save money.

The most difficult problems to be addressed relate to the beef sector. The 30 per cent price reduction and the supply control measures proposed by the Commission go far beyond what is needed to restore market balance and will fall disproportionately on extensive producers. We believe it is possible to achieve market balance through a lower price reduction and a different approach to supply controls and we have put forward ideas for a solution on those lines.

Another issue of major importance to Ireland is the level of compensation in the beef sector. The Commission proposals aim to shift the balance of compensation in favour of intensive production; changes will have to be made to favour extensive production. It is also central that an effective intervention system is retained to reassure producers that, in the event of temporary market disturbances, intervention will be available to ensure a floor in the market.

A further difficulty in the beef negotiations is that there is a perception among the other member states that Ireland fared particularly well under the 1992 reforms. This is a simplistic argument – the 1992 reforms were carried out for a reason and supported a particular vision of agriculture. However, the Minister, Deputy Walsh, does not intend to give way and has pointed out that our beef prices are as much as 25 per cent below European levels. There are also concerns about the impact on the sheep sector. For some time we have expressed concern about the flaws in the sheepmeat regime, and the consequences of the proposals on extensification would make the situation even worse.

The milk proposals involve a 15 per cent price reduction and compensatory premiums which compensate for 60 per cent of the price reduction. This inadequate compensation is totally unacceptable. The milk quota system has had a stabilising influence and returns to farmers have remained consistently high without undue budgetary pressures. The Irish position is that we should not be embarking at this stage on changes that would be both expensive and of limited benefit. We would prefer to see the current regime continuing for the present but with provision for a review, in say 2003, in the light of developments at the WTO. We have made it clear that if a quota increase is to be part of a final agreement, Ireland will not accept discrimination against us in its allocation. The Council declaration that Ireland would be given priority in the allocation of any increase in quota was an integral part of the 1984 agreement – where the 13 million gallons went missing – and is of vital importance.

On arable crops, the compensation being proposed for the 20 per cent price cut is inadequate, representing only half of the income loss to producers. We are seeking to have this redressed as well as maintaining the separate base area for maize.

My Department has been mindful, throughout these negotiations, of the need to consult as widely as possible about the implications of the Commission's proposals and on alternatives to them. That is why four consultative groups were set up early last year, to which farmers, pro cessors, academics and other interested persons were appointed. We are also conscious of the value of direct consultations with the farm organisations and, indeed, the Minister, Deputy Walsh, will be meeting the organisations just before the February Council meeting.

Ireland is not alone in rejecting the Agenda 2000 proposals as they stand at present and in spite of some of the difficulties to which I have referred, we are not without allies on certain important issues. One of our tasks will be to maximise the value of these alliances to bring about a balanced and equitable agreement. I assure Members we will be doing our utmost in the negotiations to bring about a final outcome which will provide a favourable framework within which Irish agriculture and farm industries can continue to develop for the benefit of those engaged in those industries and of the economy as a whole.

The agri-food sector remains very important to the Irish economy. Primary agriculture is more important to Ireland than to any other member state, except Greece, and its contribution to GDP is twice the EU average. The sector as a whole – agriculture, food, drinks and tobacco – accounts for 13 per cent of GDP and 12 per cent of employment and exports.

The environment in which the sector operates is changing rapidly and will continue to change over the coming years. Agenda 2000 and the next round of WTO negotiations will result in more competitive markets. This new environment will offer both opportunities and threats to the agri-food industry. In order to face the threats and maximise the opportunities for exports and income growth, the Irish agri-food sector must be highly competitive, focused on consumer demands and supported by high quality public services.

In order to prepare the industry for the future, my Department will focus on getting the best possible deal for Irish agriculture in the Agenda 2000 negotiations ensuring that expenditure on agriculture and food in the next round of Structural Funds will address the structural constraints faced by the industry and completing a White Paper on rural development which will address rural development as a broad multi-functional process involving the economic, social, cultural and environmental conditions which influence the quality of life of rural communities.

Recognising the challenges ahead, the Government has decided to establish an expert group to look at the future of the sector. The group will be established once the Agenda 2000 decisions are made and will be expected to provide a thorough analysis of the sector. It will also take on board the conclusions of the White Paper on Rural Development, which will be published, I hope, by the end of March, to ensure a consistent approach to all aspects of rural renewal.

In order to face the threats and maximise the opportunities for exports and income growth, we need an agriculture sector that is highly competitive, tightly focused on consumer demands and actively supported by high quality public services. Given the measures which I have just outlined, the continuing efforts and initiatives of the Department of Agriculture and Food and the ongoing support and commitment of the Government and the Taoiseach, there is a very strong future for agriculture and the Irish agri-food sector.

Mr. Connor

One is delighted to participate in yet another debate on agriculture which comes on the eve of the most important negotiations for the country in recent generations, namely, CAP II reform, which the German Presidency insists will take place at the Council of Agriculture Ministers, commencing on 22 February. There is an insistence that the position be completed and signed by the meeting of the heads of state which, I think, takes place on 23 or 25 March.

The purpose of the motion is to seek the Government's position on these negotiations. One greatly regrets that the Minister has come to the House and engaged in a form of aggressive bluster which says nothing. His speech tells us nothing, other than the generalities and banalities to which we have become so used both from him and other spokespersons in Government and I deplore this.

I wish to refer to some of the comments made by Senator Ross. I understand he is the financial editor of a leading Sunday newspaper and as such I find it extraordinary that he should give such a selective and inaccurate history of the Agricultural Credit Corporation, now called the ACC Bank. I am sorry the Senator has left the House – he probably did not want to hear me saying this—

An Cathaoirleach

The Senator should not refer to the presence or absence of another Senator.

Mr. Connor

Facts are facts, and I am sorry I cannot refer to a Senator who is absent – the Senator is not present. However, in a sense that is unimportant.

The ACC was established in 1927 as a special bank for farmers because the then commercial banks did not think it commercially useful or good for them to lend to the farming community. In an enlightened move the Government set up the bank as a lender and development bank for the agricultural industry. It operated along commercial principles during its lifetime. It always made small profits and over 95 per cent of its customers from the 1920s to the 1960s were farmers. In other words, it loaned to farmers, got deposits from them and made some profit purely from a farmer customer base. Senator Ross would tend to tell us this is not true, but that is the truth. The ACC was forced to change its approach when the commercial banks in the 1970s saw it was then commercially good and viable for them to loan to the agriculture industry, something they did not do to any great extent up to that. The ACC then found itself in competition with the commercial banks in terms of lending to the farming community and industry. The ACC had to change in response to this and it became a full commercial bank, with its activities resembling that of a full commercial bank.

The ACC would be long since gone if it lost its exclusive farmer customer base which it had for the first 40 or more years of its existence. These are the facts and the truth, and nobody can deny or gainsay them.

This is about the sixth time this House has had a debate on agriculture. We have a very special responsibility to agriculture, with 11 Senators being elected from an agricultural panel. Therefore, we must speak for and represent all aspects of the agricultural industry. At least one or two of the nominated Senators have a very special agricultural expertise. For these reasons the House often discusses agriculture. I deplore the fact that I have hardly ever seen the Minister for Agriculture and Food in the House to hear what Members have to say about agricultural policy. Why is the Minister hiding? On the proposal for a 30 per cent cut in the price of beef—

Mr. R. Kiely

The Minister cannot be in two places at the same time.

Mr. Connor

By 2000 the intervention price of beef will be 60p per lb. The market price will be similar or less by 2000. What are the Minister's proposals to meet that challenge? What will he say at the negotiations commencing on 22 February to gainsay that proposal for Ireland? What will the Minister say in the context of the proposed reduction of 20 per cent in the price of sheep? The beef industry has lost millions of pounds in income over the past two and a half years. The loss is incalculable and the Government has not responded to it.

This has been the worst year in terms of prices for sheep meat for generations. The Government did not raise its little finger to assist in any way during the crisis. The Minister might hear some good advice in the House. What will the Minister do at these negotiations in relation to the proposed reduction of at least 20 per cent in the price of sheep meat, on top of a probable 30 per cent decrease in price since 1996?

What will he do in relation to the dairy sector, the largest, most profitable and most important sector of agriculture? According to these proposals the price of milk will drop by 15 per cent by 2000. What proposals will the Minister put forward to fight or gainsay these proposals? We did not hear, in the tissue of banalities which was his speech, what he intends to do. It is the same speech – hardly a word has changed – that his colleague, Deputy Ned O'Keeffe, delivered in the House before Christmas. Members of the House are serious and we would like to know the Mini ster's proposals. We ought to know and the Minister ought to be able to tell us.

Today it was reported on the news that 500 hungry cattle were turned loose without fodder in County Leitrim. The Minister introduced a fodder scheme which was first announced at the Ploughing Championships, saying £50 million would be provided. He then introduced a selective scheme throughout the country. I live in Roscommon which was hit very hard – the Cathaoirleach knows what I am talking about. More than half the farmers, some of whom had no fodder, did not qualify. We pointed this out in the House on the Order of Business and in the debates on agriculture before Christmas. We said this was an imbecile of a scheme. The Minister did not understand – I think he was laughing at us.

Farmers who sold their fodder got the grant and farmers who did not have a wisp got nothing because they happened to live in the wrong district electoral division. I accept there was an improvement in the Minister's announcement last week, but there are still thousands of farmers who do not fall into the category to qualify. Those are purely livestock farmers in western counties who do not have cows, sheep or milk quotas of less than 30,000 gallons. There are thousands of such farmers in the traditional cattle raising parts of the country in Counties Roscommon, Galway, Mayo, Sligo and Leitrim. Their animals do not have a bite of hay, silage or cereal to eat and those farmers are getting nothing from this scheme. I appeal to the Minister to reconsider that scheme and make it sensitive to the real needs.

Mr. Gibbons

May I share my time with Senator Dardis?

An Cathaoirleach

Is that agreed? Agreed.

Mr. Gibbons

I welcome the Minister. On the fodder situation, it is worth noting the very strong community approach in rural Ireland, in that people from the Mountmelleray area, Wexford and others parts of the country have contributed excess fodder to help out people who do not have any. That is the type of spirit we must develop and encourage in rural Ireland. We are losing some of this spirit and the CAP II proposals will not help. That is why we must address the matter so strenuously. Last week Senator Doyle said she was the recipient of fodder aid, although she did not require it. I have no doubt she sent back that money and, obviously, somebody else will have benefited from it.

Mrs. A. Doyle

We will send the hay to Clare instead.

Mr. Gibbons

I note one of the guidelines the Commission has set itself as regards reform of the Common Agriculture Policy is to ensure competitiveness in EU and export markets through price cuts and off-set such price cuts by increased direct aid payments to safeguard producers' incomes. That is interesting. There is a huge contradiction between the proposals and the Commission's objectives. The proposals, as they stand and as outlined in great detail by the Minister, will not compensate people fully, yet it is the Commission's objective to do so. That must be a great bargaining position for us.

For Senator Connor to ask the Minister what approach he will take at the negotiations is like asking the manager of a soccer or hurling team who they will pick for the team so they can manipulate it. That is ludicrous. One does not show one's hand in negotiations and to demand it is against the national interest. We should unite behind one another, the Minister, his negotiating team and the Taoiseach to fight for the national interest as vigorously and effectively as possible. I will not ask the Minister to show his hand or to state how he will pursue the matter. Based on what he said, we will have a strong case in Europe which will be fought vigorously.

Another guideline the Commission set itself is to reinforce action on the environment through increased resources for agri-environmental measures and by encouraging low input cultivation and extensive beef production. There is no other country in which beef is produced as extensively and in such an environmentally friendly way. We produce beef from grass and yet the Commission wants to retain the subsidy for maize silage. From an environmental point of view, maize silage is produced with the use of the carcinogenic chemical, atrizine. That is a huge contradiction. We produce grass and use nothing other than fertiliser. If that is what the Commission wants to do, it should encourage us to do more of it rather than discourage us. It should suggest a 30 per cent cut in our prices and compensation to the extent of 60 per cent.

I know the Minister will take these points to the negotiating table and fight them. I appeal to everybody involved in the agriculture industry to unite behind our negotiating team which will be lead by the Minister.

Mr. Dardis

I thank Senator Gibbons for sharing his time. Nobody in this country, at any level, least of all the Minister and the Department of Agriculture and Food, underestimates the difficulties caused by the weather in the last season or the difficulties facing us as we enter the crucial phase of the negotiations on CAP reform. A person would have to have their head firmly in the sand if he or she were to ignore those realities.

We must accept all this is predicated on a move towards world trade. It is positioning the European Union towards the world trade talks which will open in 2000. That is what it is all about. How can Irish agriculture survive within that environment? I thank the Leader for agreeing to provide a full day debate on Agenda 2000 and CAP reform next Thursday, when we will be able to explore these matters fully.

The Minister enunciated the record of the Government in respect of the measures it has taken since it came into office. At the outset, I said I would judge the Minister for Agriculture and Food on his record, not on the spin doctors or the PR machine. The record stands very favourable scrutiny and measures have been delivered efficiently and quickly, unlike some of those which were asked of the previous Administration led by Fine Gael and which took considerable time to come through. I believe I am correct in saying aid for potato growers or horticulture was one of those areas which would have required a lot less money to sort out. I am happy with the record which stands up to scrutiny.

We must do what the President of the IFA asked us to do this afternoon in the Shelbourne Hotel, that is for everybody, irrespective of their political persuasion, to unite in a national effort to protect a vital national interest, an industry which is more dominant here than in any other country, so that people may continue to live and survive on their farms. That is the bottom line and the nub of the negotiations. It would be improper to reveal the negotiating strategy. The Minister, however, has left us in no doubt as to the matters which will be resisted. Co-financing is not on and the trend towards renationalisation of the Common Agricultural Policy would be disastrous for a small country such as ours where agriculture is so dominant.

I have not heard a practical suggestion as to what might be done to address this issue from the opposite side of the House. It is surprising that a party has produced a policy document on agriculture, but nobody on that side of the House appears to have read it.

Let us bring reality to the debate. There must be full compensation. It has been suggested that there will be losses of between £200 and £250 per annum as a result of the CAP reform package. A sum of £200 would be like a drop in the ocean. Whether the equivalent of the ACC proceeds or the ACC proceeds themselves, it would represent a very bad use of that money if it were allocated for anything other than capital investment. It would be disastrous if it were used for current account purposes.

Senator Ross is correct in saying the ACC supported farming. I am one of those who in the 1960s benefited from that support. It is also true to say farmers supported the ACC Bank. I was a beneficiary of that bank when it was impossible for farmers to get money anywhere else.

Ms O'Meara

I welcome this opportunity to speak on the motion. I agree with the comments made by Senator Dardis. Members will agree that, as the Government faces into critical negotiations on Agenda 2000, this is an issue of national interest. I was at the Shelbourne Hotel today, as other Senators were, and my party spokesperson Deputy Penrose made the point that parties should not be divided on this issue. This is an issue of national interest and we must support the Government. I hope the negotiations will be as successful as possible for Irish farmers and for the future of Irish agriculture. Our stance does not mean that we cannot be critical of the Government's response so far nor that we cannot make suggestions. It is the role of the Opposition to point out deficiencies and to give constructive criticism where necessary.

The Labour group feels that linking the ACC Bank with this issue is inappropriate. The notion of expending the proceeds of the sale of the ACC on rural development and agriculture sounds fine in theory but would have to be very carefully explored. The role of the ACC is not simply in relation to farmers but the entire rural communities it supports.

The fodder crisis which has been the subject of so much comment and concern is only the tip of the iceberg of the crisis which faces agriculture. Coming as it does as we face into very difficult negotiations on Agenda 2000 it engenders in rural communities a considerable degree of anxiety and concern about the future of agriculture and rural Ireland. I come from a rural constituency and I know other Members would agree that people want to know where we are going and what will happen. There is a sense, particularly with regard to EU intervention and EU support for Irish agriculture, that the good times are over. While I support the Government in terms of securing a successful outcome in Brussels in the coming weeks, the ground has shifted considerably in recent years in terms of our relationships and our position within the EU.

Enlargement of the EU has been referred to but let us look at what it means in practice. In Poland, one of the countries which hopes to join the EU in the first phase of the next round, there are one million more farmers than there are in the entire EU and the vast majority of them are poor. They are at the same level as that of Irish agriculture in the 1950s and 1960s before we joined the EC. We cannot make the case that we need the same level of support that they require. Similarly, our position in terms of our economic performance in the EU has considerably changed. This is evident in our discussions on Objective One status and our requests and negotiations on Structural Funds. We are not in the same strong position as we were in the past because our economy is doing so well. That fact cannot be denied and it is a factor in the discussion about Agenda 2000.

With these negotiations we are inevitably moving towards a more market led approach and away from what some would describe as an over dependence on EU intervention. At the moment no rural community would say we are over dependent on EU intervention. As we all know, without that level of support many farming families would simply go under.

My brother is chairman of the farm apprenticeship board and he informed me that the number of people applying to the colleges is decreasing all the time. When I was at the Shelbourne Hotel today I made the point – I have made my views known to the north Tipperary delegation – that the successful IFA public relations campaign on the state of the agricultural industry and the difficulties facing farmers has resulted in a negative image of farming. This is a major issue in relation to the future of our rural communities.

The Minister in his address said that the White Paper on Rural Development will be published by the end of March, after the Agenda 2000 negotiations have presumably ceased, and that an expert group will be established arising out of that. This is like playing the fiddle while Rome burns. The crisis is upon us. We know that Commissioner Fischler and the German Government are determined that there will be changes. Senator Dardis correctly pointed out the global backdrop to the Agenda 2000 proposals. We cannot pretend that this is not happening. We cannot pretend that our position within the EU and our relations with our European neighbours have not changed.

On the one hand, I accept the point made by the Government side that the Government should not show its hand in advance of negotiations but it is difficult for this side of the House to place any faith in the Government's approach when it appears that the Government has not handled agricultural issues as well as it should have done. While I wish the Government every success in the negotiations I would like to see an element of realism in its approach. We would support it if it adopted a credible, realistic approach that is designed to secure the future of Irish agriculture in a time of great change.

Mr. O'Brien

I wish to share my time with Senator Jim Walsh.

An Cathaoirleach

Is that agreed? Agreed.

Mr. O'Brien

I welcome the Minister to the House. The past year has been one of the most difficult for agriculture, with the collapse of the Russian beef market and the worst summer weather in living memory, leaving farm families with great problems. We experienced the worst weather conditions during the summer of 1998 that I can remember. Farmers and agricultural contractors had great problems getting silage cut because the ground conditions were so wet in May, June and July. It was impossible to make hay and in many cases the silage that was cut was of a very bad quality and, therefore, of lower feeding value.

Whatever about the quality of fodder the real problem now is quantity. The ground was so wet in August and September that cattle had to be housed or fed silage outside and this used up much needed supplies of silage for the spring. The early feeding of cattle is now causing massive problems for farmers. With little stocks of silage remaining on many farms the situation is very serious, especially in parts of Cavan and Monaghan.

All involved in the agriculture sector must unite to assist those most severely hit by the fodder shortage. We must work together to ensure those in greatest need are helped through what for many will be two very difficult months. I regret that there are those who want to engage in political point scoring at this difficult time for farmers.

Farmers need assistance now, and I welcome the announcement by the Minister for Agriculture and Food, Deputy Joe Walsh, of a further £20 million in fodder aid on top of the £21 million paid out before Christmas on fodder related schemes, with £12.5 million for the general fodder scheme, a mountain ewe destocking scheme worth £6 million, and the sheep headage scheme worth £2.75 million, bringing the total expenditure on fodder related schemes to £41 million.

The announcement of the new fodder scheme will be of great benefit to all farmers in disadvantaged areas. I especially welcome the fact that it will cover all of counties Monaghan and Cavan giving assistance of £300 per farmer, to over 40,000 farmers nationwide. With 50,000 farmers already assisted under the December scheme, a further 50 per cent top-up on that payment will now be made, bringing their payment to £450.

In recognising that there farmers in great difficulty outside the disadvantaged areas, the Minister has also announced a special fodder hardship scheme to assist full time farmers with fodder shortages. The Government and the Minister for Agriculture and Food must be complimented on their response to the current difficulties facing farmers. Being a farmer I know the scale of the problems being faced in many parts of the country. However we should remember these were caused by factors outside the control of the Government, namely, the weather and the collapse of valuable markets. While I urge the Government to continually monitor the situation on the ground, the fodder schemes will assist as will the early payment of beef and suckler cow headage payments.

As I stated earlier, all involved must unite. I warmly compliment Teagasc and its advisory staff on their excellent work in advising farmers how best to manage the tight fodder situation. Advisers around the country are currently available day and night to assist concerned farmers. I will conclude there so that I can share my time with Senator Walsh.

An Cathaoirleach

Senator Walsh may not wish to share at this stage as there are only two minutes remaining.

Mrs. Taylor-Quinn

I do not mind sharing a minute or two of my time.

Mr. Walsh

I welcome the Minister to the House. The proposer of the motion dealt with various topics, including urban renewal, and the £8 million secured by Deputy Reynolds when he was Taoiseach.

Mrs. A. Doyle

That was not secured by him.

Mrs. Taylor-Quinn

It was £6.9 million.

Mr. Walsh

Senator Ross went on to say the proposition had more to do with the forthcoming European elections. I would never accuse a colleague from Wexford of that.

Mrs. Taylor-Quinn

That is cynicism.

Mr. Walsh

There are genuine difficulties in the agriculture industry at present. In particular, the major implications arising from Agenda 2000 for family farms deserve that we do not engage in political gamesmanship. It is an important issue nationally. Agriculture has traditionally been the backbone of our economy.

I compliment the Minister on his initiative prior to Christmas and on his expediency in recent times in coming forward with a package of a further £20 million to assist farmers in need. That will be focused on those who availed of the scheme in 1998 – approximately 40,000 farmers – and they will receive £150, 40,000 farmers who did not benefit at that stage will get £300. That is to be welcomed.

While it was essential to help everybody and get the money out immediately, some farmers in extreme difficulties may not get the help they require. A small fund, which was mentioned in the Minister's speech, could be focused and targeted on the real needy areas where there is a severe fodder shortage. Perhaps State agencies such as Teagasc and some of the farm leaders could ensure the help goes to the farmers in real need. That would be a very beneficial addendum to the very good assistance already given.

Mr. Gerry Maguire from the Wexford branch of the IFA is here. The IFA is to be complimented for taking a very positive and constructive step in securing fodder in their counties where there was a surplus and delivering it to Clare to assist the needy farmers there. I am sure the next speaker will thank Wexford for that. Hopefully they will reciprocate in the All-Ireland in September.

Mrs. Taylor-Quinn

And in the Seanad elections.

Mr. Walsh

Agenda 2000 will impact very severely on the agriculture sector. There will be a loss of £600 million to the economy; the net income loss will be £260 million. There will be a flight from the land. This runs contrary to the policy of various Governments and certainly runs contrary to the ethos and founding objectives of my own party, Fianna Fáil. I wish the Minister well in opposing it to ensure we will succeed in trying to maintain farmers on the land.

In the past 25 years, since we joined the European Union, we have been more successful than many of our EU partners in controlling the decline in the farm population. In the dairy sector alone we had almost the same number of farmers – 72,000 as against 74,000 – as Denmark in 1973 but in Denmark that figure has declined to 11,000 farmers while in Ireland it is 34,000.

The Fischler proposals which are predicated on lowering prices to world market prices has to be challenged on the basis that if we are to bring prices down we must bring them down to a level playing pitch. Where we have various controls relating to the environment, stock, pollution, identification, hormone control, traceability, limits and the like, it is important that we look for a regulated similar type of control system so that we are competing on a level playing pitch. The cost of production in Europe is twice that in places such as Argentina. Bringing everything to the lowest common denominator is not always the best thing to do. Essentially when we are dealing in the food area, it is not right to bring everything to a level which the consumer will ultimately not welcome.

An Cathaoirleach

Senator Taylor-Quinn gave Senator Walsh almost three minutes of her time. Perhaps that was in appreciation of the fodder sent to Clare from Wexford.

Mrs. Taylor-Quinn

There may be an element of that in it. I am delighted to see the Minister of State, Deputy O'Keeffe, in the House again. He is a regular visitor and we appreciate it. However, I wonder where is the Minister, Deputy Joe Walsh, from west Cork. We have not seen the Minister for Agriculture and Food in the 21st Seanad. I am open to correction if anyone wishes to check the record, but I cannot recall him being present for a debate in this Seanad. We have repeatedly seen the Minister, Deputy O'Keeffe, and the Minister from south Tipperary, but we have not seen the Minister from west Cork. One wonders where is he and what is he doing.

There is a major crisis in agriculture and we have had numerous debates on the subject in this House. The Government continues to respond with statements from the Minister. However, the reality is that the crisis for those working in the agricultural sector becomes more disastrous week after week and day after day. This is the worst crisis in agriculture since the foundation of the State. Unfortunately, the Government continues to talk about the Celtic tiger and the wonderful economic boom in the country while a section of the population is in dire economic straits and in huge social distress. There will be a major social fall-out from the crisis that exists at the moment.

The fodder crisis was mentioned. The Minister was complimented on the wonderful work he is doing in this area, but it took him a long time to respond to the crisis. He eventually responded in a paltry fashion by allocating £300 to farmers in certain DEDs. The lines were drawn according to DED and farmers on the wrong side of the line, who might be worse off, got no support. These farmers will now get a 50 per cent increase in allocation. This is to be welcomed because some farmers need it while others do not. This scheme was not properly thought out or applied. It is a paltry amount of money which would buy only a few bales of fodder.

Senator Gibbons referred to the fodder crisis and the fact that Senator Doyle received assistance under the fodder scheme. What Senator Doyle and the farmers of County Wexford are doing is an indication of the lack of response from the Government and the Department of Agriculture and Food. Farmers throughout the country have decided to forget about the Department of Agriculture and Food and the Minister and help themselves. The farmers of Wexford are generously contributing to County Clare bales of silage and whatever feedstuff is available. This is being transported, free of charge, by Clare Marts to County Clare. By tomorrow evening 500 bales will be transported from County Wexford to County Clare. This is thanks to the farmers of Wexford, Clare Marts, the IFA in Clare and Wexford and Teagasc.

As far as the Department of Agriculture and Food is concerned, it is like whistling past a graveyard, it is a disaster. These people are like a crowd of political eunuchs who are absolutely incapable of taking action. Reference was made earlier to the number of cattle dying throughout the country. The reality is that most burn houses have bought extra lorries to transport dead animals to their premises. In some cases farmers cannot afford to pay the £20 required to get the dead animals off their land. There are a number of dead animals on farms throughout the country. Despite this there is highfalutin talk about World Trade Organisation talks, CAP reform and Agenda 2000 discussions taking place in Brussels which are due to conclude in three weeks' time.

Senator Connor was criticised because he asked what action the Minister would take during the course of these negotiations. I understand why Senator Connor asked the question because no one knows what the Minister's policy is. Given the economic boom, has the Minister any agricultural or rural development policy to secure the existence of farmers? No one knows what the Minister's policies are. He is the most mysterious Minister for Agriculture and Food ever. Coming from County Roscommon, I am sure the Cathaoirleach can identify with the farmers of Clare. The Minister who comes from west Cork, where there are similar problems, seems to be blissfully oblivious of the reality on the ground. Senators opposite should demand action from the Minister. When Deputy Yates was Minister for Agriculture and Food, he produced results.

Mr. Moylan

I welcome the Minister of State, Deputy O'Keeffe. Listening to the debate, one could be forgiven for thinking the Fianna Fáil-PD Government was in power for the past 20 years. What took place up to 18 months ago? What was done during that period to ensure that farming would continue for the long haul?

The motion refers to the fodder crisis. We all recognise there is a fodder crisis. This Government has allocated in excess of £41 million to solve the problem. The farm assist scheme is very relevant to the farming community and many small farmers will benefit greatly from the scheme. The Minister, Deputy Walsh, is negotiating with the banks to help farmers. Teagasc is giving free advice to farmers. Up to now, farmers had to be on a registered list to obtain this advice. Advice is now available to everyone and we thank Teagasc for the excellent help they have given farmers. They gave advice in advance of people running out of fodder. This enabled farmers to spread the fodder over a longer period and bring them into the grass season, which, hopefully, will be in a month or so. The Minister allowed for more intervention grain to be made available to farmers.

The Government must get credit for what it has been doing in this regard. Farmers whom I talk to recognise that the Government has made a real effort to lessen the hardship caused to them by the very bad weather and shortage of fodder. The Minister is working hard to ensure that farmers get the maximum help through the Agenda 2000 negotiations. If the Minister of State says the Minister, Deputy Walsh, is in Brussels, then he is in Brussels. He would not say he was in Dublin Airport trying to ensure a lifeline for Irish farmers when he was in Senator Doyle's constituency looking after his constituents. To date, the Minister for Agriculture and Food has done an excellent job in a very difficult climate.

The motion refers to the Government's failure to initiate meaningful plans to stimulate rural regeneration. We should look at the funding going to different boards dealing with this issue. We need to examine the funding going to rural areas from enterprise boards, Leader companies and partnerships. They are helping to ensure that farmers stay viable and remain in rural areas.

We have been discussing the disbursement of funds raised from the sale of ACC. The EU may conclude that Ireland is a country trying to get a better deal, yet Members of the European Parliament are suggesting the sale of State banks and the disbursement of the funds to agriculture. That will not go down well in Europe nor will it strengthen the Minister's hand in the negotiations.

Farming bodies today spoke about reductions. When Ray MacSharry was Commissioner there were severe proposals which were scaled down. I am confident the Minister will get a good deal for farmers and for Ireland in the next round.

I support the amendment and see no reason for the motion. It has been pointed out that the motion may not have been in order. My understanding is that proposals to sell ACC are financial matters for a different forum. We all recognise the difficulties in agriculture. However, we also recognise the excellent job being done by the Department of Agriculture and Food, the Minister and Ministers of State.

Mr. Norris

I find it difficult to take the motion or the amendment seriously. This has all the appearance of a phoney war. There is very little between the motion and the amendment except the marvellously bizarre idea of selling off a bank and giving the money to farmers. Is this going to be a consistent Fine Gael policy? Are we going to liquidate other banks and give out the money? I would like to see this line followed as vigorously as possible, particularly as banks such as AIB owe the taxpayer quite a bit of money.

When I say I find it difficult to take this motion seriously, I do not mean that I do not take seriously the situation faced by farmers. My grandfather was a farmer and one has to be loyal to one's immediate ancestors. However, it is obvious that a small number of wealthy farmers are mercilessly hoovering up every available grant. There may be a larger number of small farmers experiencing difficulties, but I would like to ask one principled question which is all there is to my speech.

This debate is about fodder which, as an urban citizen, I will define as approximating to hay which is produced in large quantities by farmers. What is the problem? If farmers are producing the hay then, presumably, farmers are the villains of the peace by selling it off at inflated prices to less fortunate small farmers. This ought to be sorted out among farmers and we should not all be penalised for it.

The motion refers to recognising the current fodder crisis, which I have just solved, and acknowledges the significant reduction in agricultural support. If there is a significant reduction in agricultural supports from the EU then presumably this is because it believes this will have a beneficial effect. This may be wrong and a harking back to some form of 19th century laissez-faire economics – let the strong survive. However, this seems to be the EU's policy. The motion suggests liquidating a bank in order to swim against the tide of European policy. I wonder if that is wise.

However, I rest confident that our valiant politicians will be able to deal with this in a more sophisticated manner than I have done. I was struck by what I can only describe as Senator Taylor-Quinn's poetic approach when she stated that the appropriate response was to barge into the Minister's office and hammer on the table. Presumably the Senator was taking her headline from John Donne:

I struck the borde and cryed

No more. I will abroad.

I cannot match the sophistication of this response. I am not sure if it will work. The debate is, by and large, a waste of time as it demonstrates there is no division between the two principal parties. They just snipe at each other in a partisan fashion in order to score points. At the end of the day they are virtually the same party so I will have considerable difficulty deciding which way to vote on the several votes I am confident will be taken. I will be advised by my farming correspondent, Senator Ross.

Mrs. A. Doyle

I thank the Senator, the Ministers of State and their officials for their support on this issue. I am flattered by the nervousness and defensiveness displayed by Senator Ross on behalf of his Wicklow constituent. For almost five years he has had his own parliamentary forum from which his expertise on agricultural issues continues to be well ventilated. I take the Senator's bluster and false indignation about the motion as a compliment. I was elected to this House on two occasions on the agricultural panel and I was shadow spokesperson on agriculture on two occasions. I was born and reared on a farm and continue to live on a farm. I need apologise to no one for my interest in agriculture nor for the number of times I have contributed to agricultural debates in this House, and I will not start by doing so this evening.

I asked that the motion be amended and I trust the House will support me on that issue. There is an important point regarding the earmarking of funds and the sale of ACC bank. I ask that the equivalent of funds raised by the sale of ACC should be earmarked for rural regeneration and rural communities. I agree with Senator O'Meara that this does not just concern farmers but the rural community. However, it is equally important to the urban community that we support a vibrant rural community. If the flight from the land continues, the pressure on transport, housing, schools and unemployment will continue unabated and will cause major problems in urban areas. Apart from the need for proper land use management and environmental protection, we need the rural community to stay in rural Ireland and to sustain rural towns and villages.

It would be irresponsible to ask the Government to spend extra moneys on rural regeneration grants and strategies unless we earmarked, approximately, from where those moneys should come. I will not apologise for saying that the equivalent of the proceeds from the sale of ACC should go to agriculture. The sale of ACC will generate considerable revenue for the State and the bank will have served the farming community extremely well. Farmers helped make the profits, as rightly pointed out by Senator Connor when giving the brief history of ACC.

Mr. Norris

We are providing the profits of AIB and the Bank of Ireland.

Mrs. A. Doyle

The Senator should look after them and see what he can do.

Mr. Norris

I will do my best.

Mrs. A. Doyle

It is a valid point that the equivalent of the proceeds of the sale of the ACC bank should go back to rural regeneration and strategic planning. Senator Dardis agrees broadly, provided it goes to capital investment and not current spending. That is a fair point.

It is most important that we do not divide on the essential issues. The Government and Opposition differ on how this should be handled. However, my major point in relation to the negotiations which must be completed within six weeks is that the Fine Gael Party has no confidence in the negotiating team. I want it to succeed and we wish it well. However, the Minister for Finance said the problem was being hyped. It is dangerous that the Minister would let the world know that the problem was being hyped.

Mr. Walsh

What about the national interest?

Mrs. A. Doyle

The Minister for Agriculture and Food is invisible and apparently disinterested and there is a disgraced Irish Commissioner. This is the team to whom are looking to bring back the best from the negotiating table in Europe.

Mr. Walsh

The Senator is wrong to undermine the team at such a sensitive stage in the negotiations.

An Cathaoirleach

Senator Doyle without interruption.

Mrs. A. Doyle

I hope that they can deliver to rural as well as to urban Ireland what is needed to sustain a vibrant rural community. Without that, the main sufferers will be urban Ireland because people will leave the land and go to towns and cities searching for the Celtic tiger which they have yet to understand. I am referring to the 30,000 farmers at the bottom of the pile and not the few large farmers Senator Ross mentioned. There is a specific constituency of farmers that the Government and the Fine Gael Party know are suffering dreadfully at present because of the fodder crisis and the collapse of their stock markets.

Amendment put.

Tá

Bohan, Eddie.Chambers, Frank.Cox, Margaret.Cregan, John.Dardis, John.Finneran, Michael.Fitzgerald, Liam.Fitzgerald, Tom.Fitzpatrick, Dermot.Gibbons, Jim.Glynn, Camillus.

Keogh, Helen.Kiely, Rory.Lanigan, Mick.Leonard, Ann.Lydon, Don.Moylan, Pat.O'Brien, Francis.Ó Murchú, Labhrás.Ormonde, Ann.Quill, Máirín.Walsh, Jim.

Níl

Burke, Paddy.Caffrey, Ernie.Connor, John.Coogan, Fintan.Cregan, Denis (Dino).Doyle, Avril.Manning, Maurice.

Norris, David.O'Dowd, Fergus.Ridge, Thérese.Ross, Shane.Ryan, Brendan.Taylor-Quinn, Madeleine.

Tellers: Tá, Senators T. Fitzgerald and Keogh; Níl, Senators Burke and Ridge.

Amendment declared carried.

An Cathaoirleach

As amendment No. 1 has been accepted, the amendment which Senator Avril Doyle wished to propose cannot now be moved.

Amendment No. 2 not moved.

Question put: "That the motion, as amended, be agreed to".

Mr. Ross

Votáil.

An Cathaoirleach

Will the Senators who are claiming a division please rise?

Senators Norris, Ross and Ryan rose.

An Cathaoirleach

As fewer than five Members have risen I declare the question carried. The names of the Senators dissenting will be recorded in the Journal of Proceedings of the Seanad.

Question declared carried.

An Cathaoirleach

When is it proposed to sit again?

Mr. T. Fitzgerald

Tomorrow morning at 10.30.