Vol. 389 No. 2
asked the Minister for Agriculture and Food the elements in the compromise EC farm price proposal put forward by the Presidency which differ from the price proposals originally introduced; and if he will outline the current position in the negotiations.
58.
asked the Minister for Agriculture and Food the effective price increase from the adjustments to the MCAs; and what it means in income for Irish farmers.
64.
asked the Minister for Agriculture and Food the changes on their original farm price proposals which have been introduced by the European Commission during the course of the Council negotiations; and the significance of these changes.
I propose to take Questions Nos. 49, 58 and 64 together.
Agreement was reached on agricultural prices and related measures for 1989/90 on 22 April. The final compromise was based on the Commission's proposals submitted to the Council in January last but included measures submitted by the Commission and a number of issues raised by member states during the prolonged negotiations. The package contains significant benefits for Ireland in the agri-monetary and milk sectors and these adjustments will be worth about £50 million to the farm sector in a full year. The balance of payments gain will amount to £42 million.
Details of the most important adjustments in so far as Irish agriculture is concerned are as follows:—
The Commission had originally proposed the dismantlement of the residual negative Irish MCAs in the milk, cereals and sugar sectors and a reduction in the monetary gap for sheepmeat and these proposals were agreed as part of the prices package. These adjustments involve green rate devaluations and consequential price increases of about 1.5 per cent for the milk, cereals and sugar sectors and 3.25 per cent for sheepmeat and are worth about £30 million to the farm sector in a full year. Throughout the negotiations I also demanded an adjustment of the green rate for beef to eliminate the remaining monetary gap of 2 per cent and this was conceded in the later stages of negotiations. This concession is worth about £9 million in a full year and in addition to increasing export refunds and other support measures, it will have a beneficial impact on triggering access to intervention under the revised arrangements agreed earlier in the year. This green rate adjustment, together with the adjustment which took place on 27 February, will restore the Irish intervention trigger price to the level which applied before the reform of the beef regime at the beginning of this month. The green rate adjustments will come into effect at the start of the respective marketing years.
I consider that the abolition of the negative Irish MCAs which have applied continually since 1986, and the agri-monetary adjustments for other member states is a significant step forward in restoring common price levels in the Community and in creating an appropriate environment for the abolition of all MCAs by 1992.
In its price proposals the Commission had proposed shortening the intervention period and further price reductions through cutting the value of the monthly increments for cereals and related crops by 25 per cent and reducing the number of increments. These increments are designed to offset the cost of storing cereals and delaying offers into intervention until later in the marketing year. The Council agreed to limit the reduction to only 12.5 per cent and to leave the status quo continue as regards the number. The Commission's proposals to reduce the intervention period from 8 months to 5 months over the next two years was unacceptable to Council and agreement was eventually reached to reduce the period by one month. The Council also agreed that cereals can be offered to intervention at up to 15 per cent moisture content without any penalty in the form of a reduction of the buying-in price as proposed by the Commission at an earlier stage of negotiations — without this agreement the maximum moisture content would have fallen to 14.5 per cent from the present 15.5 per cent. The Commission's original proposals on intervention would have involved losses of £7 million for the Irish cereals sector but the green rate adjustment and the concessions secured during the negotiations have virtually eliminated these potential losses. There will, however, be a reduction of about 3 per cent in cereal support figures for 1989/90 arising from the effect of the stabiliser decisions last year but this reduction is cut to 1.5 per cent in the case of Irish producers as a result of the January green rate adjustment.
The Commission agreed to report to the Council on how the set-aside system might be improved and how the administrative difficulties associated with the co-responsibility levy might be eliminated. This opens the prospect of improving the arrangements to control cereal production and hence limit the likelihood of the threshold being exceeded. In addition I will, of course, continue to press in the GATT negotiations for more balanced trading arrangements between cereals and cereals substitutes.
I opposed the proposal to cut support prices for sugar by 5 per cent as did the majority of member states. Agreement on a 2 per cent cut was eventually reached but when account is taken of the effect of the levies the reduction in the case of sugar beet is reduced to 1.7 per cent. In Ireland's case this reduction is more than offset by the 1.5 per cent green rate devaluation on 1 January last and the further 1.5 per cent devaluation which will come into effect on 1 July 1989.
Following repeated requests from some other colleagues and myself in the recent prices negotiations an adjustment of the milk co-responsibility levy system was agreed which was not originally proposed by the Commission. In the disadvantaged areas the levy will be reduced to zero for all producers while in other areas a levy of 1 per cent will apply to those producing under 12,800 gallons and of 1.5 per cent for other producers. This adjustment is worth about £10 million to Irish producers in a full year. As an offsetting compensatory measure the butter intervention price will be reduced by 2 per cent but in current market circumstances this support price reduction should have a minimal knock-on effect on market prices.
There was agreement that this would be the first stage in a process leading to the dismantlement of the levy and that there would be a further stage in the price package next year.
In response to pressure from my French and German colleagues and myself to create an additional quota reserve to provide quotas for development and other priority farmers, the Commission has undertaken to prepare a report on the market situation and the conditions affecting such categories before 31 July and to submit any appropriate proposals to the Council.
I would hope that the decisions to be taken on foot of this report will be another step in the action taken to meet the difficulties of small scale and other producers with special quota difficulties.
