I understand that Deputy Deasy is to move the motion and he has 40 minuters at his disposal.
Private Members' Business. - EC Proposals on Agriculture: Motion.
It is most likely that I shall share some of my time with Deputy Andrew Boylan.
Is that satisfactory? Agreed.
I move:
That Dáil Éireann, mindful of the importance of agriculture to the Irish economy in terms of farm incomes, employment in associated industries and exports, totally rejects the proposals of the EC Commission on Agriculture which, if implemented, would seriously erode our benefits from the Common Agricultural Policy, and which, taken in conjunction with the trend of the GATT negotiations, would seriously damage the nation's economy.
The political turmoil of recent months has taken the focus off the very major economic difficulties confronting the country. Nowhere is this more evident than in agriculture. We are facing the most critical period since our entry into the European Community in terms of the talks involving reform of the Common Agricultural Policy and of the GATT negotiations.
To date the Government have shown no leadership or initiative on these most serious of issues to the extent that the outgoing Taoiseach has not seen fit to raise our grave concern at the thrust of the Common Agricultural Policy reform proposals at any of the EC Heads of State meetings since the reforms were first mooted, and that includes the Maastricht Summit. By my estimation, there have been three summit meetings since the leaking of the Common Agricultural Policy proposals. After much badgering by me in the House, the Taoiseach came back and said he had raised the issue at the summit of June 1991. There is no record in the minutes of the June summit of Heads of State that the issue was raised at all. Far from making an issue of the Irish case, our dependence on agriculture and the importance of agriculture to the nation's economy, the issue has not been raised effectively at a summit meeting. If implemented, the proposals will devastate this country's economy.
The present position is very different from that under Deputy Haughey's predecessor, Deputy Garret FitzGerald. When there was a lesser issue to debate, such as the milk quota, it was top of the agenda at a succession of EC summit meetings and as a result Ireland received major concessions.
Now we face an issue that is fundamentally damaging to the structure of not only the agricultural economy but also the country's economy, and that issue is not even raised officially. Deputies asked repeatedly in the House that the matter be included on the agenda for successive summit meetings but, obviously, it was not included.
I wish the Taoiseach, Deputy Haughey, peace and rest when he retires on Thursday, but I would be failing in my duty if I were not to say he has failed miserably to highlight our predicament. I say to the Taoiseach's successor and to the incoming Government that the issue must be highlighted: we are equal partners in Europe. How could a man who can treat his contemporaries in his own party with such comtempt fail to take on the other Heads of State in Europe at summit meetings? That question defies understanding, or perhaps it does not; perhaps there is a simple explanation. The Irish Government should have taken a stand on the issue at one or all of the most recent three summits.
So far as support for the less well off countries is concerned — I think the word used is cohesion — the running in recent months has been made by the Spaniards, the Portuguese and the Greeks, all of whom have indicated that they will invoke the veto if the proposals put forward do not protect their vital national interests. What has Ireland been seen to do? We have been seen to hang on to the coat-tails of those countries, although our interests and those of the other three countries I have mentioned are often diametrically opposite. Ireland has not put down a marker that we will not accept fundamental changes in the Common Agricultural Policy that will damage our economy. That is the essence of the matter.
Tonight the Fine Gael Party demanded that the Government to be nominated on Thursday next put down that marker. We will not have a continuation of the present position. By coincidence, Thursday happens to be the eve of the signing of the Maastricht Treaty, in which the protection of Ireland's rights as outlined in the Treaty of Rome is very indefinite.
The best speech made in the House in 1991, irrespective of party affiliations, was by the leader of our party, Deputy John Bruton, on the outcome of the Maastricht Treaty but sad to relate, that speech was very poorly reported and commented on. The whole matter was a little too complex for the pundits to understand, and it is a reflection on them that they could not grasp it. The only commentator I know of who demonstrated his ability to grasp the issues involved, to realise their impact and to comment on them was Stephen Collins, the political correspondent of The Sunday Press. Everyone else seemed to be interested only in catch cries, backbiting and mud-slinging. A magnificently constructive speech that spelled out the dangers inherent in the Maastricht Summit was not reported in the manner it deserved. That was alarming, and made me wonder whether all the Irish news media had become comparable with the tabloid press in Britain. Our news reporting seemed to be based on sensationalism rather than facts. It is particularly worrying that substance does not seem to matter any more.
I wish to return to the issue of the veto. The Spaniards in particular were adamant in the run-up to the Maastricht Summit that if the eventual agreement — if it could be called an agreement, because they would not agree with it — contained proposals with which they did not concur, they would use the veto. The Portuguese and the Greeks also stated strongly that they would use the veto. When I questioned the Taoiseach in the House eight or nine months ago about the use of the veto on the reform of the Common Agricultural Policy, he had the audacity to reply that he did not think the veto had any relevance in this day and age, if it ever had. The Taoiseach did not think the veto had any relevance, yet the Spaniards, the Greeks and the Porguguese were letting everyone know that if the proposals put forward at the Maastricht Summit were damaging to their national interests, they would use the veto.
Our Taoiseach announced here publicly that he did not recognise any merit in the veto — what a way to negotiate, what a way to meet our counterparts in Europe. The Taoiseach was showing the white feather before leaving this country's shores. That is not the way to get concessions in Europe. We have to fight our corner to the ultimate; to give away our negotiating stance by saying we will not invoke the veto is not good enough. It is clear the eventual outcome of the Common Agricultural Policy negotiations will be tremendously damaging to this country unless there is a new urgency and emphasis on the part of the Government.
Renationalisation of agriculture is the order of the day where many countries of northern Europe are concerned. The Germans, French, British, Danes and the Dutch will financially assist their own farmers in producing the products we produce, such as milk and beef, to the detriment of our farmers and to the delight of the Mediterranean countries who will see more money for their producers becoming available. The tragedy is that we are not in a financial position to subsidise our farmers in a realistic manner. That is the grim reality. Renationalisation is slowly and surely taking place. For those who do not understand the term "renationalisation" it means that we will go back to the situation that existed before we joined the EC, and before the EC was created. The countries with strong economies based on industrialisation can afford to subsidise their own farmers. We cannot because we do not have that industrial base.
The Germans in particular who have been the paymasters of the European Community prefer nowadays to finance their brothers from the former East Germany and their neighbours who have large ethnic German populations, for instance, Poland, Czechoslovakia, Hungary, Romania and Yugoslavia, to name a few. As we learn more about the Soviet republics we find there are German ethnic connections there as well. The Germans will spread their money among their own.
We had the benefit of membership of the EC and the financial gains that came with it for 19 years but we have not been particularly diligent in using the moneys we got from Europe. Now we will find it difficult to exist unless we can make a stand where it counts, at the negotiating table whether in Brussels or more likely at the heads of state summits. That is where we put down our marker, where we let them know what we want and that we will not take anything less than a fair deal. We must get a fair deal. If intervention and export refunds are eliminated or dramatically reduced over the next six or seven years there will be a massive drop in farm incomes here resulting in an enormous loss to the economy. Everybody will suffer, not just the farming community. The associated industries who service the agricultural industry will suffer. Every sector will feel the effects. We must ensure that the supports we have been used to are not removed overnight, that we are given a chance to build up our food industry and to ensure we can sell everything we can produce on the open market.
The prices of milk products and beef are under serious attack through the weakening of the price support system, particularly intervention. We must be given exemption from such cuts until we can diversify into production systems where we can produce products that can be sold on the open market without subsidisation. The loss of our meat markets in the Middle East and in North Africa have seriously affected our agricultural economy as sales to those countries are aided by export refunds from the EC. A most graphic illustration of this is seen in a report published yesterday by the National Food Council which shows a drop of £300 million in the value of our agricultural exports in 1990. The report commented that that downward trend in the value of our agricultural exports was continuing in 1991. These are the latest figures available. Deputy Walsh as Minister for Food should be very concerned at that alarming report. With such a drop in the value of our agricultural exports in 1990 what will happen if the Common Agricultural Policy reform proposals come into being? We are at the very beginning of the cuts. They have been minor. They are like flea bites. Wait until they really take effect. Of course, it is the job of Government to ensure that does not happen, that the cuts will not be allowed to be implemented where we are concerned. Much of the fault lies with ourselves but two wrongs do not make a right. We must be given a chance to put our house in order, to get away from our dependency on subsidies, whether intervention or export refunds.
Commissioner MacSharry has been making a big issue out of payments of compensation to farmers who are forced to produce less and who are to be paid less for their produce. The Commissioner has been constantly talking about compensation and has been backed up by MEPs Mark Killilea and Paddy Lane, ad infinitum. They have said there will be no problem, that farmers will be better off with the compensation they receive. However, I have not heard much about that since a bombshell was dropped before Christmas and not many people here realise the implications of that bombshell. It now transpires that the GATT negotiations which supersede the EC in importance in the world ranking can deem compensatory payments to be illegal, to constitute unfair competition. What a calamity it would have been if the Common Agricultural Policy reform proposals had been agreed on the basis of compensatory payments and then we found that compensatory payments were illegal. We would end up with nothing. It is essential that the GATT negotiations be concluded before the reform of the Common Agricultural Policy takes place, otherwise we could be penalised on the double. What I have said is probably an understatement — we could be devastated.
I do not believe that the GATT negotiations will conclude within the next few months, as people in Brussels, including Commissioner MacSharry, Commissioner Andriessen and the President of the Commission, Mr. Delors, are saying. It is my view that the GATT negotiations will drag on until after the American presidential election in ten months' time. President Bush two weeks ago made a fairly major speech indicating that he would demand that the EC abolish all their subsidies, particularly intervention and export refunds. He is a politician like the rest of us and he is under serious threat. Opinion polls indicate that he will have a very difficult job gaining re-election. He is playing the farming lobby in the United States, which is not inconsiderable. We can be sure that he will not allow negotiations which might make him look foolish and weak to conclude before the presidential election. If the GATT negotiations were to conclude before that election it would mean trouble for us. If the outcome was good for the United States it would be pretty awful not just for the EC but for Ireland, the weak ones in he EC. We are dealing in the same products, grain, beef and milk.
Commissioner MacSharry needs to qualify his statements. He and the two MEPs, Mr. Killilea and Mr. Lane, must not walk us into a trap which would cost us billions every year. We were on the verge of it before the enlightened statement from Brussels just before Christmas. Now it transpires that it may not be possible to pay compensatory amounts because it might be in contravention of GATT trading rules. Our objectives must be to become self-dependent and to sell everything we produce within the EC at the going rate. We must not depend on subsidies and/or compensation. Our objective should be to get rid of our dependance on subsidies, be they intervention or export refunds, and to sell all our produce in the EC marketplace, which has a population of 320 million. We have free access to a market of that size although we are a nation of only 3.5 million.
An outsider looking at this objectively would be absolutely amazed that a country producing food of the highest quality could not sell into a market of 350 million people. It defies understanding or explanation. At present over 50 per cent of our milk products go into intervention storage and over 40 per cent of our beef production goes into cold storage intervention. Those products are held for a certain time, perhaps three years, based on the opinion of the experts as to their healthy lifetime, and are then sold off to the Russians or to countries in the Middle East or in the Caribbean and in Central and Southern America. The price is usually 10p a pound and one is doing well to get 20p or 25p a pound. The initial cost was 100p a pound and the storage cost 50p or 60p a pound. It is an enormous drain on the Community's budget and we are largely responsible for that cost. Unless we show a willingness to change our methods and produce things we can sell, for example, soft cheese, we will not get much sympathy. We must show resolve and determination to do things right, which we have not been doing for 19 years.
We must not fool ourselves into thinking that getting rid of the EC food mountains in the form of food aid to Russia and third countries will solve the general problem of surpluses within the Community. It is an illusion we would be wise to rid ourselves of. While it is a very laudable gesture to give all this food for nothing or for very little, it may well be a once-off occurrence. In the long run the former Communist countries will not be just self-sufficient but probably exporters of milk and beef products. Most if not all of those countries will become EC members and will be able to sell into the EC legally, rather than illegally as at present and distorting the market. The present arrangement may look attractive. We are giving them food because they are in dire straits, but within a few years the Russians and the East Europeans will be trading with the best. They are very resilient people.
If the Middle East and North African markets for beef become available again, as I hope they do, there is no certainty that we will be able to compete even with the aid of export refunds. My information is that the Australians and the South Americans, particularly the Brazilians and the Argentinians, are selling into those countries at extremely competitive rates. I am told that even with the aid of EC export refunds we may find it extremely difficult to compete in those markets. I do not wish to be alarmist by referring to a most unwelcome development in recent months. It was reported at the weekend that we have had two further outbreaks of BSE in Kerry and Cork. That type of occurrence is most unfortunate. It is one of those freak incidences and nobody is to blame, but it could set back the date for reopening those valuable markets in Iran, Iraq, Egypt and Libya.
We agree that the Common Agricultural Policy must be reformed and while we may suffer some hurt in the process we must determine to play a major role in shaping the manner of the reforms. We cannot just be spectators taking a back seat and getting pushed around. We must be there calling the shots. We cannot allow abuses of the system and other anomalies to continue here or in the rest of the Community. The Common Agricultural Policy has a bad name because of abuses, some of which have occurred in this country and are probably being investigated. Abuses have been going on since the foundation of the EC in much larger countries and to a much greater degree. Fiddles in places like Italy are beyond our comprehension but they are industries in themselves. The bottom line is that we are equal partners of the European Community. Let us assert ourselves as never before. Otherwise our agricultural industry and economy as a whole will have a terribly bleak future.
I fully support the motion tabled by Deputy Deasy and compliment him on his excellent contribution which I hope will not have fallen on deaf ears. I welcome the presence of the Minister for Agriculture and Food, his Minister of State, Deputy Joe Walsh, and Deputy Leonard. Perhaps at long last the message about the depression obtaining within agriculture generally has been received or is it the case that they have been so preoccupied over the past two years with turmoil within their party that they have overlooked what has been taking place? I hope the problems obtaining will be resolved once and for all and that the Government and Ministers will begin to deal with the mainstay of our economy, the agricultural industry, and its attendant problems. Agriculture has a major role to play but it is in a desperate state at present with many farming families on the breadline.
I am sure that those sitting on the opposite benches also receive the type of telephone calls I and my colleagues here do from farmers and their wives, from single farmers who had expected to receive their headage payments within the calendar year ended 31 December last, whereas six weeks later they are given no idea when they will be paid. Is this fair for people who had expected reasonably-sized cheques in order to settle their accounts, something most rural people like to do? Those headage payments were to form part of their income for that year, something with which Deputy Deasy dealt earlier in his budgetary contribution. It must be re-emphasised that the Government have reneged on their promise to our farmers of an increased headage payment to be made on the due date. I might draw the attention of the House to the fact that if payment is overdue on other aspects of revenue collection interest is charged. Surely what is sauce for the goose is sauce for the gander? Therefore, I recommend that, when making these headage payments in ensuing months, the Government pay interest theron.
My information from headage grant offices is that the final payments will not be delivered for at least another two months, which is not acceptable. After all it is an EC proposal, EC money, involving reform of the Common Agricultural Policy, which was intended to help strengthen dwindling farm incomes brought about solely by the neglect of the people opposite, particularly on the part of the former Minister for Agriculture and Food. I cannot blame the present Minister but, if he remains in that portfolio next week, he will have to pull up his socks and will have a tremendous amount of work to tackle. It is not sufficient to give our farmers token aspirations at present because there is real work to be undertaken in the agricultural sphere generally.
There was the policy statement of the much publicised Mr. Larry Goodman, with the Taoiseach at his shoulder, that our food industry was to be the engine room within which jobs were to be created. We might well ask now: where does our food industry stand under their management? The answer is, it is in tatters. We have endeavoured to table parliamentary questions to ascertain the truth or justification of the many rumours rife when we were told we were out of order and were not allowed raise such questions. Yet those questions are being answered at the Tribunal of Inquiry into the Beef Processing Industry, which is costing millions of pounds and is of no benefit to anybody but merely dragging down the country's good name. As Deputy Deasy pointed out, there is a European market of 350 million people anxious to purchase quality food products which we have the ability to produce. We can overcome our recent bad image but will not do so if the approach to be taken is that which led to the establishment of that inquiry.
Before being elected to this House I was involved in the co-operative movement in my region and know what can be achieved by a good marketing board. For example, An Bord Bainne had a number of excellent people, including Mr. Joe McGough and Mr. Tony O'Reilly, who penetrated world markets for our dairy produce, in particular advertising the brand name "Kerrygold", recognised as being acceptable on tables worldwide. Why can we not do the same for our beef industry and many other food products we can produce which are second to none? It all reverts to our attitude, which is wrong. It is not the fault of farmers; they have done their job, but have been let down by the people leading them. I have been appalled at the number of farmers who have telephoned me to ask: Is it true what I see proposed by Commissioner Ray MacSharry last week, as reported in bold print in the Farming Supplement of the Irish Independent—“the Ray MacSharry male calf disposal scheme”?
In the name of all that is honest and decent what is that man about, harking back to 1932 to the then economic war, when a farmer received five shillings for cutting a calf's throat at the back of a ditch. Sixty years later are we to commemorate or repeat that outrage perpetrated by de Valera and the then Fianna Fáil Government, who contended they would starve the British and our farmers. Sixty years later Commissioner MacSharry proposes the solution to the beef mountains here and in Europe — the Ray MacSharry male calf disposal scheme, £88 to be paid to a farmer when he cuts the calf's throat at birth.
Are we serious about this proposal? What reply can the Minister give Commissioner MacSharry? Commissioner MacSharry served as Minister for Finance and Minister for Agriculture. Surely he is aware of the devastation this proposal will cause in farming circles? Is this to be taken as the yardstick for his other proposals? Will they be equally outrageous? It is just not acceptable. It cannot be allowed happen. Commissioner MacSharry can forget about it. As soon as any such proposal is implemented there will be a campaign mounted that will drive not alone him but those who support him out of people's minds forever. It is preposterous to ask farmers in the spring — with sheep lambing and cows calving and farmers and their wives up at night — to implement this proposal of his. But Commissioner MacSharry says to them: take out the breadknife, cut the male calf's throat and I will give you £88. I hope that message will sink in. I did not hear either Mr. Paddy Lane or Mr. Mark Killilea, MEPs, make any comment on this proposal. I look forward to their comments. Indeed their silence in recent weeks has been notable vis-á-vis Government neglect to pay the proposed headage payments, cut by 10 per cent, on the due date. We must remember the overall quota restrictions on small farmers producing 15,000, 20,000 and 25,000 gallons of milk. Now there is talk of a beef, sheep and cereal quotas, when people were just getting off the ground.
My party were to the forefront in supporting EC membership whereas Fianna Fáil reluctantly campaigned. We are not ashamed to admit that we led the field. The reason people voted overwhelmingly in favour of entry was its potential benefits for our agricultural industry, seen then to be the cornerstone of our economy and remains such. What has taken place between the years 1973 and 1992 which has led to so much depression within the agricultural world, with mismanagement, bad management. Indeed deals fought hard for by former Ministers for Agriculture, Mr. Mark Clinton and Deputy Deasy in relation to our quota and the surplus we managed to obtain for this country have been eroded, calculated to have been reduced by 10 per cent over the past two years. How much longer will this be allowed to continue before there is a public outcry to stop?
I appeal to the new Minister for Agriculture and Food, Deputy Woods, to begin to undo the damage perpetrated by his predecessor. It would be my hope that he will take his former colleague, Commissioner MacSharry, aside, and ask him whether he realises the devastation his proposals are causing our people, the people who sent him to Europe in the first place. Indeed he has a duty to ensure fair play, which is all we seek. After all, as a nation, we have not contributed to the beef and dairy produce mountains. Our contribution within the EC context has been minimal but we have a quality product that can be sold on the open market without resorting to the soft option of intervention for dairy produce and beef for which we are now paying.
In conclusion I compliment Deputy Deasy in bringing forward this motion which I hope will have the support of every Member of the House. Whether one is rural or an urban Deputy, everybody's income is affected at the end of the day because it is outside the farm gate the most telling blow will be struck if we do not say we are not accepting these proposals.
I move amendment No. 1:
To delete all words after "That" and substitute the following:
"Dáil Éireann supports the efforts of the Minister for Agriculture and Food to secure an outcome from the current negotiations on reform of the Common Agricultural Policy and in the GATT which responds to the needs of Irish farmers and the longer term development of our agriculture industry and to the overall needs of the economy.
I am delighted Deputy Deasy put down the motion because it gives me an opportunity to give a report to the House at this critical time. I thought the Deputy would recognise the fact that I have been fighting a very hard battle in Europe for Irish farmers. This point is recognised by the farming organisations. I meet them regularly on a consultative basis before each European meeting and I am aware of their requirements and of the needs of the economy.
I welcome the opportunity presented by this debate to inform the House of the present situation in relation to both Common Agricultural Policy reform and the GATT negotiations. It is important to take both together because they are currently running in parallel. The Government are taking a firm line in these crucial negotiations. I say "crucial" because of the major role which agriculture and the food sector play not only in the lives of farmers and those engaged in related activities but because of the vital contribution which the agriculture sector makes to our economy. Agriculture is over three times as important in economic terms in Ireland as in the EC as a whole. I never cease to emphasise to our colleagues in the Council that agriculture is vital to us, that it plays a dominant role in our economy and we must protect our agricultural sector.
Agriculture and food directly and indirectly account for 20 per cent of our GNP, 20 per cent of our employment, and contributes close to 40 per cent of our net foreign earnings. The livestock sector accounts for 85 per cent of our agricultural output. It is this sector together with arable crops which would mainly be affected by the Commission's proposals. Agriculture is important not only in economic terms, it is also central to the stability and vitality of our rural communities.
I will not accept decisions on Common Agricultural Policy reform or in the GATT that put at risk the economic or social contribution made by agriculture to Irish life.
At a time when the creation and maintenance of employment and the expansion of exports is of prime national importance, the wellbeing and viability of our most important industry is essential. Whatever shape Common Agricultural Policy reform takes it will not be acceptable to me unless it secures the viability of family farms in Ireland and allows for the continued development of the vital commercial element of our agriculture. Both are equally important to us. We will never lose sight of the importance of family farms but we must also provide a future for the commercial aspect of our agriculture.
Behind the hard statistics I have quoted lie the hard work and endeavour of the farming community and those working in related industries. I am keenly aware of their concerns arising from the current negotiations on Common Agricultural Policy reform and the GATT. Without doubt these negotiations are the most important in the field of agriculture since we joined the Community. I can assure everyone involved that the Government fully recognise this fact. Our approach has been clear and unequivocal from the beginning of negotiations.
Since becoming Minister last November I have made it clear to everyone — my colleagues in the Council, Commissioner MacSharry, farmers and workers employed in the agriculture industry — that the Commission's proposals for Common Agricultural Policy reform are unacceptable in their present form. I have spelled this out clearly again and again.
I recognise in common with informed opinion throughout Ireland and the Community that an unreformed Common Agricultural Policy is not a realistic alternative. Deputy Deasy made quite clear the difficulties that have arisen in recent times and the contribution we are making to those difficulties is substantial. Notwithstanding that, if we had not had the intervention system over the last two years it would have been a disaster for agriculture in Ireland and for the economy as a whole. We have to keep a balance between the two and that is what we plan to do.
The reform of the Common Agricultural Policy has been inevitable for some time. Growing surpluses in several sectors, rapidly increasing expenditure and falling farm incomes have made reform necessary. The changes in agriculture support arrangements in the community since the beginning of the eighties have all failed to secure the necessary responses other than for short periods.
The present reform negotiations are aimed at securing more fundamental change. They aim to achieve a more market oriented agriculture and production control to bring markets back into balance. We have to do the two things together; bring the markets back into balance and do what Deputy Deasy mentioned, that is develop the market oriented approach.
The Commission's proposals have been spelled out in this House in the past. Essentially, the approach is based on a large reduction in the price of cereals, followed by related price reductions in the livestock sector together with output restrictions. Direct income aids would be introduced or increased to compensate producers. These income aids would be related to intensified farming practices and biased to a certain extent towards smaller to medium sized producers.
The debate on the reform of the Common Agricultural Policy proposals has been going on in the Council of Agriculture Ministers since last autumn. All member states have acknowledged that reform is desirable but there has been little or no progress in the discussions. Views are extremely diverse on the form the revised agriculture support arrangements might take. I should mention that there has been solidarity between the countries. In the private discussions there is great solidarity between the nations on the Common Agricultural Policy — first, on the need for some reform in the policy for the future and, second, on the interests of the different member states and how crucially they would be affected. However, that becomes a different question when it comes to the kind of changes that will emerge eventually.
When you come to real nationalisation.
No, that is not happening at the moment. I know there may be those who want to see that happen but I can assure the Deputy that solidarity across the membership of the Council is very strong. It is one of the very heartening aspects of the Council of Ministers and of that whole system as it operates, particularly in defence of small nations and nations who have, in particular circumstances, special problems and difficulties.
At the meeting of the Agriculture Council on 27-28 January the new Portuguese Presidency presented a working document to Ministers outlining a number of possibilities for directing the reform debate in the coming months. I met the Portuguese Minister shortly before that in Dublin when we had a long discussion on Ireland's needs in this regard. I made sure that the Portuguese were fully aware of our position. The Presidency recognised that the proposals needed discussion in greater depth if solutions are to be found. This view was certainly confirmed in the contributions by all Ministers in the ensuing debate. The Council of Ministers will be returning to the Common Agricultural Policy reform discussions next week when a more detailed working paper is expected to be tabled by the Presidency. There is no doubt that this is a crucial time.
I have made clear my opposition to the reform proposals as they stand and I have been extremely hard hitting in putting Ireland's case. I have left nobody in any doubt that I cannot accept the Commission's proposals as they stand. As far as I am concerned major changes will have to be introduced in several areas before the proposals begin to approach acceptability. I will go as far as is necessary to ensure that is the case.
I have stressed in the Council that price reductions should be less severe and phased in over a longer timescale. Effective market price support arrangements, including intervention, must be maintained to underpin the agreed price levels. Compensation for reduced price support must be permanent and adequate. Community financial resources must be guaranteed. The premia proposals for both beef and milk are not acceptable and they will have to be adjusted to reflect the realistic requirements of family farms. The comparative position of grass-based production must be maintained. I emphasised again and again our special and unique position in Ireland where there is extensive grass-based production. This is one of our great advantages in that natural produce is a selling point in Europe. It is crucial, having regard to the developments taking place, that our unique position in this regard be fully recognised. Community preference must be maintained and effective import controls must underpin the market. The reforms must ensure sufficient flexibility to accommodate the needs of suitably qualified young farmers who wish to enter farming. The proposed milk quota cut is not acceptable given the current state of the dairy market and, in the absence of reciprocal action at international level, the reforms must dovetail with the outcome of the GATT negotiations.
The permanence of compensatory payments, and the assurance of adequate and durable Community financial resources to underpin these payments, are vital requirements for me. It is essential that farmers, and the agriculture sector, continue to have the same security in a revised Common Agricultural Policy as under the more normal price support system. Common Agricultural Policy reform will not be acceptable without these assurances.
The need to maintain the competitiveness of our traditional grass-based livestock production systems is another critical area for me. I am demanding that premia be paid to extensive grass-based producers in a way which fully conpensates them for any price reductions. I am asking that the scope of the premium system be widened; that premia be paid in such a way as to ensure that producers generally benefit in full and that more realistic stocking rate criteria and farm limits be provided for.
The stocking limits envisaged in the proposals are a major concern for me. They do not take realistic account of what is required to maintain the economic basis of modern family farms. The low limit proposed for disadvantaged areas will be especially damaging and will have to be changed. We have made this point again and again and will continue to do so because it is of crucial importance to our farming sector. I believe that farmers in disadvantaged areas should be regarded as meeting the stocking rate criteria. In other words, since they will have to comply with other criteria they should be regarded as meeting the stocking rate criteria to do away with bureaucracy from Brussels which is causing endless difficulties in those areas. The stance I am taking is that farmers in disadvantaged areas should de facto be regarded as meeting the stocking rate criteria. The low limit proposed for disadvantaged areas will be especially damaging and will have to be changed.
I do not in principle object to a partial switch from market measures to direct payments but returns from the market should continue to form the main source of farmers' incomes. I do not want to see us reach a point where farmers are only in receipt of hand-outs. Even though compensation must be permanent and long-term returns from the market should form the bulk of farmers' incomes. That is the responsibility of the Community irrespective of what talks or discussions are taking place.
It is essential that agreed price levels are maintained and that the necessary effective price support arrangements are in place to ensure this. I have in mind particularly support arrangements such as intervention which must be retained in a format which continues to underpin prices. Other essential supports must include the maintenance of adequate border protection and ensuring that we can exploit new export markets. We must continue to have that freedom. These latter points in particular will be influenced by the outcome of the GATT Uruguay Round, the other vital element to which I will now turn.
Members will be aware that the GATT negotiations have entered the concluding phase. This follows the presentation of a draft final Act in late December covering all aspects of the negotiations. The text on agriculture was drawn up by the director general of GATT, Mr. Dunkel in the absence of a negotiated agreement among the major trading partners. Following the much publicised high level meeting between the Community and the United States in early November it seemed that both parties could reach an agreement in the agriculture sector. In the end the differences proved too difficult to surmount.
I will outline briefly the main elements of the Dunkel paper. The proposal is to reduce over six years 1986-88 internal support levels by 20 per cent; tariff and tariff equivalents, resulting from the conversion of variable levies and other border measures, by 36 per cent for products, 15 per cent for each tariff line and 1986-90 budgetary expenditure and volumes exported with direct export subsidies by 36 per cent and 24 per cent respectively.
The proposals also provide for the maintenance of average 1986-88 access levels, minimum access of 3 per cent rising to 5 per cent and a very restricted green box — Common Agricultural Policy compensatory payments and most likely existing payments to disadvantaged areas would be excluded. In other words, as a result of not being included in the green box they would be subject to the disciplines of GATT and, therefore, reduced. They would be consistently reduced over time which would be disastrous from Ireland's point of view.
I have made it very clear that this is not a basis for negotiating a final outcome. It ignores completely the Community's fundamental requirements. It is biased in favour of other participants. In particular there is no coherence between the separate undertakings. It does not exempt Common Agricultural Policy reform compensation or disadvantaged areas payments from reduction commitments, the green box, a critical point for the Community. I should say in this respect that the Commissioner is ad idem with us and is totally committed to seeking a comprehensive green box which would protect those elements which are of crucial importance to us.
The tariffication methodology, minimum access provisions and the volume limitations on the direct subsidised exports would, if accepted, result in greatly increased import levels into — and much reduced export volumes from — Community markets. As much as one million tonnes of meat and 300,000 tonnes of milk could be left on the Community market with consequential implications for producers and prices. The impact of these concessions would be to fundamentally undermine European agricultural support systems while other producers took an ever-increasing share of Community markets. Many countries, including the US, would have to do very little — or nothing — and could take advantage of community cutbacks to develop their own agricultural sectors.
The Community has always accepted that the negotiations would result in some support reductions and greater competition on the internal market. This is something which the Community has accepted in the past and still accepts. We are very anxious to have increased world trade. Ireland wants openness to the world market but not at the expense of devastating our agricultural economy. Even if it means no GATT, that is how it will have to be. However, participation in the negotiations has always been on the clear understanding that the burden of redressing existing imbalances would be shared equitably by all who contributed to them; there would be a balanced outcome across all sectors involved and the Community would be able to support and protect the agricultural sector and rural economies generally. The Dunkel approval meets none of these basic criteria and would represent a completely unbalanced outcome for the sector. The text has been considered by the Council on a number of occasions. On each occasion I have outlined in detail my fundamental objections to it. I have clearly stated that it is not an acceptable basis for reaching a conclusion in the agricultural sector.
I am very pleased that this view has been endorsed by the overall Council. It has declared that, as the text calls into question the foundation of the Community's agricultural policy, it is not acceptable and will have to be modified. Our trading partners are in no doubt that the Community's interests must be accommodated if there is to be a GATT round. In the period leading up to last Christmas I know that there was an attempt to get the Community to agree to this paper, on 23 December. We ensured that at this meeting of Trade Ministers, an Agriculture Minister sat beside every Trade Minister. That was the decision of the Government regarding which the Minister for Industry and Commerce and I were totally in agreement. We sat side by side and we made certain that there would be no breach in our national policy and no quick slipping through of any paper which might be presented. That was very effective, we got a very appropriate decision from that meeting and when a further meeting took place we got similar support from the Council as a whole.
I am very pleased that this view has been endorsed by the overall Council who declared that, as the text calls into question the foundation of the Community's agricultural policy, it is not acceptable and will have to be modified. Our trading partners, therefore, are in no doubt about our views at this time.
Mr. Dunkel has set a timeframe of mid-April for the conclusion of the talks. It is not certain that this deadline can be met. The Community has fundamental difficulties with the Dunkel text and the US position is hardening in the face of difficulties in its domestic economy and the campaign for presidential elections in November.
I have made it clear at EC level that the Community must not be pressured into an agreement. We have made a good offer and we have a legitimate interest to protect what is critical for the survival of rural communities. Negotiations between the Commission and the US will continue over the next few weeks with a view to finding an acceptable alternative solution.
A stable trading environment is in the interest of all of us but this cannot be achieved at the expense of the livelihoods of those in Irish or European agriculture. If we in the Community cannot secure the necessary improvements it is seeking then it would be better to have no agreement at all. I am not prepared to undermine the livelihoods of a major portion of our workforce in agriculture and the agri-food industry. I will not accept agreement at any cost. It is essential that Agriculture Ministers in the Community continue to be involved in the negotiating process. I intend to ensure that they are.
The outcomes of the negotiations on Common Agricultural Policy reform and in the GATT will have a critical bearing on the development of agriculture to the end of the decade and beyond, but the industry can do much itself to influence the situation. Ireland has many advantages when it comes to producing food. Our relatively mild climate, good soil and high level of husbandry enable us to produce high quality food at favourable economic cost. Our clean environment and "green" image mean that consumers have a favourable perception of the wholesomeness and goodness of Irish food products.
We must make better use of exploiting these assets. Irish agriculture and the food industry must develop to the full and maximise their vital role in our economic life. The Common Agricultural Policy and GATT reforms should encourage us to exploit the undoubted market opportunities which exist, particularly in the Community, for consistent supplies of high quality food products.
Nobody is in any doubt about the importance of agriculture and food to the Irish economy. It is far and away our biggest sector and is central to our social and economic development prospects. None of us wishes to see the sector endangered or its long term development impaired. All in the House have repeatedly confirmed that view. It is long past argument.
What is perhaps not yet past argument is how it can be protected and sustained in these negotiations. We have been major net beneficiaries under the Common Agricultural Policy which has for almost two decades underpinned our agriculture and food sector. Without a viable Common Agricultural Policy we are in severe difficulties and aspects of the present Common Agricultural Policy operations are threatening its viability. Therefore, we simply cannot afford to take up the ostrich position suggested in the motion and refuse to look at some reform proposals. The important issue is to get the balance of the reform right.
I refuse to approach the issue of Common Agricultural Policy reform in a negative manner. A positive stance, based on a clear recognition that the opportunity exists to adapt the policy in a sensible way, presents us with a unique opportunity to make a major contribution to the shape of the Common Agricultural Policy into the next millennium.
It is our task to secure the amendments we need to safeguard the position of Irish farmers and of the whole agri-food sector — a task to which I am fully committed. I am confident that when the negotiations reach a conclusion the decisions taken will be the right ones from Ireland's point of view.
Our approach to Common Agricultural Policy reform is a reasonable one and I am certain from numerous bilateral contacts with my colleagues in the Council that we can rely on their understanding based on the principle of Community solidarity. We will ensure that the balance of policy adjustments agreed will not seriously disadvantage any region, particularly the more vulnerable regions of the Community like Ireland where dependence on agriculture is at its greatest, and will allow us at long last to develop a modern, efficient and market oriented food industry, the kind of market to which Deputy Deasy referred.
I can assure the House that I will stand firm on these issues during the negotiations. I have the support of the farming organisations for my position and it would help me enormously if I could have the unanimous support of this House. The House can underline that support tomorrow by supporting my amendment which I unreservedly recommend to all Deputies and which can help to settle the argument about how best to protect our interests in the current Common Agricultural Policy and GATT negotiations.
I welcome the motion as it gives us an opportunity to discuss the GATT negotiations and reform of the Common Agricultural Policy at this time. However, I appeal to Members on the opposite side of the House to be positive, constructive and helpful in their approach. I can assure them the Government recognise the critical and vital importance of these difficult discussions.
The Commission proposals on the reform of the Common Agricultural Policy which have been known to the Government since December 1990 will have major implications for farmers, the food processing sector and our economy generally. The challenge posed by the changes to EC farm policy and GATT is of fundamental importance to us as it threatens the future viability of Irish family farms.
It would have been far more preferable if this debate had taken place in the context of a motion which would have enabled the House to express a concerted view on the entire issue. Surely it should be possible, given a reasonable degree of goodwill, for the Dáil to agree a motion which would have the unanimous support of all sides. This would strengthen the hand of the Government and the Minister at the negotiations on the MacSharry proposals in Brussels. However, as things stand, the Fine Gael motion will probably be defeated tomorrow night and the Fianna Fáil-Progressive Democrats amendment which calls on us to support the Minister in his negotiations will be adopted. I should like to remind the House that on 20th March last year the Minister of State, whom I am glad to see in the House tonight, tabled an amendment to a similar motion on Common Agricultural Policy reform——
There are a number of Ministers in a state.
That may be so. The amendment to the motion on Common Agricultural Policy reform, called on us to support the Minister in his negotiation efforts. The amendment tabled by the Minister tonight is very similar to the amendment tabled by the Minister of State in March 1991.
Some things never change.
In his amendment to the motion in March 1991 the Minister of State asked us "to support the efforts of the Minister for Agriculture and Food to have the forthcoming negotiations on reform of the Common Agricultural Policy progressed in a way which best promotes the interests of Irish farmers and the longer-term development of our agricultural economy." We are being asked again tonight to support the Minister in his efforts to promote the long term development of our agricultural industry and the overall needs of the economy.
The motions might not have changed much but the Minister has changed.
I do not know whether Deputy Kavanagh is inviting assistance or interruption but I would like to hear him speak without interruption.
I am sure I will get your co-operation, a Leas-Cheann Comhairle, in doing that. The point I am making is that if the results we have seen since last March are going to be replicated as a result of the Ministers amendment being carried tomorrow night then we will all have reason to be concerned and we will need further assurance from the Minister.
What happened to the promises made by the former Minister for Agriculture and Food? He told everyone he was going to Brussels to bang on the table on behalf of the Irish farmers and the agricultural sector. His efforts to ensure that the views of Irish farmers were heard must have been very weak as there has not been much reference to Irish interests in the proposals which have been emanating from Brussels since last march. While there has been a change of Minister, I hope we do not have a continuation of his policies.
The Minister outlined the goals he wishes to achieve. These are somewhat similar to proposals we have heard in the past. I hope the present Minister for Agriculture and Food has a stronger personality than the previous Minister and that he will put forward the views of the Irish agricultural sector loudly and clearly in Brussels.
The Labour Party want the Minister to secure a specific commitment on linkage between reform of the Common Agricultural Policy as proposed by the Commission and the Council of Ministers on a quid pro quo basis of agreed transfer payments to ensure that all farmers who wish to remain in farming can do so and to ensure the long term viability of rural communities. We want to secure a commitment from the Minister that any revision of national commodity production quotas, which will facilitate the development of employment in Irish agriculture and Irish agri-business, will be a fundamental requirement for acceptance of any Common Agricultural Policy reform proposals. In the event of such a commitment not being secured we want him to ensure that the vital national interest provisions of the EC treaties are invoked and any Common Agricultural Policy reform proposals, similar to these we have had in the past, will be vetoed. The Minister assured us tonight that he will go to the furthest lengths to secure these commitments. If this is so, he must accept that the most important issue is our vital national interest. He must see to it that EC treaties make allowances for this and ensure that any proposals which are not in our interests can be vetoed at Community level. Agriculture, our largest industry is of such vital importance to this country that we can ask for nothing less from the Minister in the negotiations on the Common Agricultural Policy reform.
Since these proposals became known 14 months ago Members on these benches have been putting forward their views on them. I believe they are worth restating here tonight. The first realistic test which must be applied to the so-called MacSharry plan is whether it will work. In the Irish context this means, will it strengthen Irish agriculture or weaken it? Will poverty be eradicated on the family farm? Will agriculture continue to play a central role in the economy? Will our agri-business continue to be viable? On a first reading of Commissioner MacSharry's proposals, the immediate answer to all these questions must be couched in the negative. This plan is aimed at getting farmers out of farming as painlessly as possible from the point of view of the European Community. Essentially, the plan will ask milk producers to produce less milk, ask beef producers to produce less beef and ask cereal growers to grow less cereal. If the plan is implemented in full, Irish agricultural output will be significantly lower than it is at present. According to the plan, the main reason for this will be that without the reforms proposed by the Commissioner, and adopted by the Commission annual surplus production will be well in excess of foreseeable export outlets. In other words, there will not be enough markets and intervention cannot be tolerated any longer; therefore, farmers must get out of farming.
It is easy enough to see the logic of this approach when it is looked at from a purely European perspective. However, from an Irish point of view the long term implications of this plan are potentially horrific. These implications must be examined without giving undue weight to the compensatory arrangements built into the plan which are essentially transitory.
If this plan goes through in its present form Irish farmers will produce less beef, milk and cereals than they do now, there will be fewer farms and the average farm incomes will be significantly lower than they are now. In addition, the balance of trade will be much worse for the country as a whole, with all that implies for a small, open trading economy like ours. If we produce fewer products there will be less to process and the unemployment knock-on effect will be substantial — perhaps as many as 5,000 in the vital growing processing industry.
The food industry in Ireland employs one in every five manufacturing jobs compared with one in 12 in the Community as a whole. It is worth noting that there are no proposals in the MacSharry plan to deal with the wreckage that the plan will leave behind throughout the agri-business sector. Clearly, it is difficult to get an objective assessment of the overall damage this plan will do. The most independent estimates come from the ESRI who forecast a decline in agricultural output of £429 million, or 17 per cent and a decline in farm incomes of £200 million. The knock-on effects in industry and services would amount to 5,000 jobs. In addition, ICOS estimate that ultimately the plan will lead to a decline in the number of farmers of 22,500, coupled with an increase in family farm poverty.
The social consequences of these estimates, while impossible to quantify, would clearly be devastating. Therefore, the plan will not work for Ireland, and its publication represents a major crisis for us. It will not work because Ireland is much more dependent on agriculture than every other economy in Europe. The last thing we need in Ireland is a redundancy package for our largest industry. The last thing we need here is a complacent Minister for Agriculture and Food; content to utter soothing words of concern while at the same time taking no action to ensure that Irish concerns are highlighted while the plan is in its formative stages. On several occasions last year the then Minister for Agriculture and Food was warned by the Labour Party, among others, of impending developments in relation to European approaches to agriculture. For example, he was warned by me of the impending farm price package. On each of those occasions the then Minister insisted that it was not his place to respond to leaks or to act until after a decision was made. Perhaps he felt it was safe to rely on the notion that old friends are best in his dealings with Commissioner MacSharry. We now know how wrong he was, as can be seen by the details which have emanated from that plan.
Farmers will not need to have long memories to remember the promises made by the Taoiseach just before the last local elections that he was going to bang the table at the Luxembourg Summit to ensure that our concerns about the future of our largest industry were known and understood at the highest level in Europe. Farmers, and everybody else, will not need reminding about how the Taoiseach clapped himself on the back on his return from the Summit, telling us that the issue had been put firmly on the European agenda and that Heads of State and Governments were fully apprised of the centrality of agriculture in our concerns. Obviously, they were not sufficiently concerned to pass on the Taoiseach's interest in the matter to the Commission.
It was not even mentioned in the minutes.
Perhaps it would be more true to say that on that occasion the Taoiseach was motivated more by the embarrassment of the leaks of the MacSharry proposals and the damage it would do to his party during the local elections. Such performances which are aimed entirely at domestic political audiences seldom carry much weight in Europe, and the Taoiseach surely knows that now. Indeed, it did not carry much weight in the local elections either. We must recognise that the essential reason for the reform proposed is that pressure is being brought to bear from the United States of America in the GATT talks. While a case can be made for reform on its merits there can be no case for capitulating to this pressure if it is to cost the future of our most important industry.
Another issue here is a moral issue. The Commission is proposing to spend £4 billion a year in order to produce less at a time when Third World countries are starving. At the same time the Commission talks about export markets not being readily available. How can a policy be justified that pays farmers to remain idle and lays off perhaps one-third of the workforce in the food manufacturing industry when there are millions of people crying out not only to be fed but also to be helped towards self-sufficiency in the future? While it is clear that some of the products we manufacture and produce are unsuitable as exports to the Third World, particularly butter, it is morally unacceptable that there are huge mountains of skim milk powder and cereals held at considerable expense all over Europe at a time when virtually the entire top half of Africa is hungry and with many parts of the Continent facing famine. It is totally unacceptable that the only Community response of substance to that crisis is to put forward a plan for putting food producers out of business. The £4 billion extra per annum the Commission is proposing to spend would virtually solve the famine problem if it was channelled into diverting surplus production into those countries where it is most urgently needed.
When he spoke here last July on a motion on the Common Agricultural Policy the Leader of the Labour Party, Deputy Spring said:
Because I believe that there must be total solidarity with the industry in the interests of a rational and sustainable future I want to put forward a proposal here. I am calling on the Minister and the Government to establish a forum which would enable the political and industry interests that are vitally concerned in this debate to come together to develop an agreed, united and cohesive strategy for the future. It is not too late for us to avert the threat implicit in these proposals as they are presently structured but it will soon be too late. I am calling on the Government to work with the rest of us, not in isolation, to deal with this situation.
Tonight I repeat that proposal from the Leader of the Labour Party. It is obvious from what the Minister said in his speech, and from Members from all sides of this House, that everybody is agreed beyond doubt that the proposals in the MacSharry plan on Common Agricultural Policy reform, will have a disastrous effect on the agriculture industry. The ESRI in their medium-term economic review estimated that we will be required to make alternative expenditure reductions to make up for the £700 million which will be required by 1995. The Common Agricultural Policy concessions to the US which are now probable will be made in the current GATT negotiations. This country cannot afford extreme expenditure losses, the loss of employment and the devastation of family farms.
There is no need for the Government to bring in a Minister to repeat the promises that were made to this House as far back as March of last year. We do not need a Minister to come in here and say he is doing his very best. We want the Minister to go forward with the united support of Dáil Éireann and, I am sure, of Seanad Éireann, and propose that, if necessary, he will use the veto in order to protect our vital interests. The Minister has said he is prepared to go as far as he can, which should mean using the veto if he does not get full satisfaction.
Debate adjourned.