asked the Minister for Agriculture if he will make a statement on the progress being made concerning the proposal by the EC Commission to review the intervention system for beef and the effect it would have on beef production in this country.
24.
Ceisteanna—Questions. Oral Answers. - Common Agricultural Policy.
5.
(Limerick West) asked the Minister for Agriculture if he will inform the House as to the latest position on the proposed restructuring of the Common Agricultural Policy; and if he will make a statement on the matter.
I propose to take oral Question No. 5 and priority Question No. 24 together. Proposals involving some changes in the Common Agricultural Policy mechanisms have been included in the recent Commission proposals on agricultural prices and ancillary measures for 1986-87. The proposed changes are on the general lines of the Commission's Green Paper of July 1985, its subsequent communication of December 1985 and its memoranda on beef and cereals. While the problems facing the Common Agricultural Policy must be recognised, the proposals on milk, beef and cereals as they stand would present considerable difficulties for Irish agriculture. On beef in particular the proposal to curtain intervention support does not take sufficient account of Irish needs in that sector.
The price and ancillary proposals for 1986-87 were discussed for the first time in the Council of Agriculture Ministers of 24 February. On that occasion I made my objections very clear to the Council. In further Council discussions on the matter, which are expected to extend over several months, it will be my endeavour to obtain the best possible outcome for Irish agriculture.
(Limerick West): Has the Minister in mind the basic principle of the CAP which is the protection of the family farm? Having that in mind, does he agree that all of the proposals are very serious but the proposal with regard to the further reduction in our milk quotas will affect fundamentally that principle of the family farm? Will he consider introducing a milk cessation scheme as attractive as the EC one in order to obviate the possibility that we might lose a further percentage of our milk quota, in other words having our milk quota extinguished?
I am aware of the difficulties that these proposals would create for Irish agriculture if they were implemented. At this stage, however, they are just proposals. As regards a milk cessation scheme, I am basing my case on the wording of the minutes of the March 1984 super-levy agreement which states that Irish milk production should not be reduced during the period of the super-levy regime.
Two cessation schemes have been spoken about. The Community cessation scheme, if introduced, would reduce production in each country by 3 per cent. Then there is the national cessation scheme where each country would be allowed to redistribute 3 per cent of its milk production. Discussions have been going on for some time in this country, overseen by ICOS, the umbrella organisation for the co-operative movement, to try to draw up a scheme nationally. However, I am afraid difficulties have arisen and I hope that the problems can be overcome. At the moment some co-operatives feel that the national scheme which has been proposed would not satisfy their needs, and word has come from the Commission that it would not accept a scheme along the lines which have been proposed. We have difficulties both at home and with the Commission. It would be my earnest wish that we would get a national cessation scheme in place as quickly as possible so that there would not be a demand, if the worst came to the worst, for a Community cessation scheme.
(Limerick West): Is the Minister over-optimistic when he states that he gets comfort from the minutes with regard to the decision taken when the super-levy was introduced? From what countries does he see support coming in his opposition to these proposals?
I am not talking about optimism or pessimism; I am talking about realism. The discussions have only just started and I am explaining the basis for our case. We are basing it on the minutes of the super-levy agreement.
As regards the countries who support us, I would not say that any country supports us at the moment but the discussions are at a very early stage. A number of other countries feel that they should have exemption from the EC cessation scheme and these include, as far as I can remember, Spain, Portugal, Italy, Greece and Luxembourg. They all have different reasons for their wish to be excluded from the scheme. It will be months before we know what the outcome is likely to be.
(Limerick West): Well into the summer?
It will definitely be early summer, in my view.
Does the Minister consider that if there were a national cessation scheme it should be within the confines of the co-operative areas? The experience on the last occasion was that there was an outflow of milk from my county where the disease eradication programme was not so developed. Secondly, even if there were an EC cessation scheme, would the Minister not agree that countries outside the EC, for example, the United States, the USSR and Australia, are going to increase their milk production and create problems in the Community?
In reply to the first question, the reasons outlined by the Deputy are precisely why the Commission will not agree to the type of scheme that we are formulating or attempting to formulate. They will not agree to a scheme based on a co-operative area. It must be a truly national scheme covering all co-operatives and milk purchasers in the country. On the other hand, the co-operatives do not want the Commission proposal because, as the Deputy says, it could quite likely lead to an outflow of milk from areas such as the Deputy's in the northern part of the country to the larger co-operatives in the south. The fact is that more people in the Deputy's part of the country would give up milk production and there would not be sufficient people there with the money to purchase the milk, whereas people in the richer parts of the country would have the money to purchase the milk. There is the dual difficulty which I have outlined.
As regard the Deputy's second question, I am very disturbed that other countries are not doing what the EC have been doing — that is, curtailing the production of milk. It is rather pointless that in the western world where there is a vast surplus of milk, the United States and New Zealand in particular are encouraging increased production which is bound to create serious problems for all of us on the world markets. I should like to see a certain synchronisation of milk production between all these countries and the member states of the Community.
Ceist a sé.
(Limerick West): A Cheann Comhairle, we are taking two or three questions together here and one is a priority question. I want to ask two further suplementary questions, one with regard to the proposal to introduce a coresponsibility levy for cereals. That is serious enough, but quality control is far more serious as far as this country is concerned because of our climatic conditions. Surely the Minister is aware that this can have a disastrous effect so far as our farmers are concerned. I support the Minister in his opposition to these proposals, but his opposition should be more positive in so far as our crop farmers are concerned.
Secondly, with regard to the other proposal to interfere with the intervention system for beef, has the Minister any forecast as to how it would affect our beef prices if it were implemented in its present form or even in a watered down form?
The answer to the first question is that the proposal with regard to cereals is most serious. I do not know what the Deputy means about not taking a positive approach. I have said outright that I am not accepting that proposal and I cannot do any more than that at this stage. There are two areas in the cereals proposal which would be damaging for us, one which we could wear and the other which we could not. The one which we could wear is a 3 per cent co-responsibility levy on cereals. That would be tough enough in itself, but the other element of quality control could mean a price reduction on cereals in this country in the range of 9 per cent to 12 per cent. That is the range of the penalty clause and it is totally unacceptable. I do not know if I should go into the background of this, but there are some countries which, like Ireland, cannot accept these proposals because of the penalisation clause — West Germany, in particular, and the British also. The French feel that they can sell cereals on the world market more cheaply than the Americans and the Canadians if the Community bring down the price. They think that they can produce so much extra grain that it would compensate for the price reduction by increased output, better quality and more efficient methods of production. Therein lies the background to the difficulty, that the Commission are backing up the French in this exercise. It creates enormous difficulties for us, or would if it went through as a proposal, but there is a long way to go yet.
On the second question about the beef proposals, the curtailment of beef intervention as proposed by the Commission would probably have the most serious effect of all on the Irish economy because of the magnitude of the beef output here. If the cattle trade is going badly, agriculture generally is going badly and the country is going badly. Curtailment of beef intervention would have very serious repercussions. We put 17 per cent of our beef into intervention, amounting to 80,000 to 90,000 tonnes a year. We would have to find markets for that quantity, otherwise we could not sell it. If we could not sell it, the price would drop dramatically. Again, it is a proposal. A number of countries other than ourselves do not like it and there will be much discussion before any final decision is taken.
(Limerick West): A final supplementary. Would the using of the veto in these circumstances be justified because the three proposals affect our vital national interests?
I do not want to lead anybody astray and think that we will get away with a veto. It is very difficult to see how we would. One must remember the background to and reasons for the Commission's proposals. They are simply that the surpluses in the Community are unacceptably high. There are 690,000 tonnes of beef in intervention, over one million tonnes of butter, 15 million tonnes of grain. The Community have a genuine difficulty and a very serious budgetary problem. This is the Commission's proposal to ease that problem. It is not as straightforward as some might like to believe. We must look at the difficulties in which the Commissioner finds himself. Having said that, the discussions will take months and what finally emerges may be — and I think will be — considerably different from what has been proposed to us.