I should like to make a statement to the House on the results of the Council of Agriculture Ministers which was held on 30-31 March. The Council reached a comprehensive agreement on the adjustment of the Common Agricultural Policy which had been under discussion since last summer and on the price arrangements for 1984-85.
The main difficulty for us related to the super-levy on milk. Farmers here rightly saw the proposal put forward by the Commission as directly threatening their viability and indeed most people outside of agriculture saw it as having serious repercussions for the whole economy.
The Commission had proposed that a super-levy should apply to milk deliveries in excess of the 1981 level plus 1 per cent. The choice of this base was in line with earlier arrangements from 1980 onwards on the control of milk production, which were formalised in 1982 by the adoption of a production threshold for the Community for 1981 deliveries plus 0.5 per cent a year, the estimated growth in consumption. The cost of disposing of production over the level would be recouped from producers. The threshold for 1983 was therefore 1981 deliveries plus 1 per cent, which amounted to 97.2 million tonnes for the entire Community. Actual production in the Community in 1983 was in fact some 6.5 million tonnes above that level.
If the cost involved were to be paid by producers, it would have necessitated an increase of more than 6 per cent in the co-responsibility levy or a price reduction of more than 12 per cent. In those circumstances the Commission felt that the super-levy was a more acceptable and effective method of enforcing the production threshold, and controlling milk production which is running at some 20 per cent above the Community's internal requirements.
For Ireland the Commission's proposal would have meant a production cut of almost 14 per cent on our 1983 level. This was clearly unacceptable in itself and in addition all future expansion would be ruled out. Following an unprecedented campaign of persuasion by the Taoiseach, other Ministers and myself, our partners accepted that we had a special case on the super-levy but they found great difficulty in accepting that it should be met by concessions in regard to milk production. Structural aid to us was their preferred solution. Our difficulties became more pronounced when at a Council meeting on 13 March the other member states agreed to a base of 1981 deliveries plus 1 per cent with some concessions to Italy and Luxembourg. We refused to go along with this agreement and continued to maintain our demand for special treatment.
However, after some very difficult negotiations, we succeeded in reaching an agreement that gave us a basic entitlement of our 1983 level of deliveries, plus more than 4.6 per cent. In addition, it was agreed that not only could this entitlement not be reduced in future years but that we would have priority in regard to the distribution of any additional quantities which become available, for example, from production shortfalls or market improvement.
Against the background of the Community's serious financial difficulties and the surplus situation in the milk market, the arrangement achieved for this country is remarkably favourable. It starts us off on a basis well above that applicable in most of the Community. This is a satisfactory outcome indeed and goes well beyond what seemed possible throughout most of the negotiations. This is borne out by the reactions in other EEC member states, where public comments are unanimous in regarding the deal as exceptionally favourable to this country while accepting also that the unique importance of dairying in the Irish economy warranted some special treatment for us.
