I propose to take Questions Nos. 22, 23, 34, 37, 38, 56, 65, 72, 84, 85, 319 and 322 together.
Details of the Commission's proposals for reform of the Common Agricultural Policy and of Ireland's approach in the negotiations have already been outlined in this House on a number of occasions. In addition, an up-to-date report on the current state of the negotiations was given to the House on 4 March last. Since that date, the proposals together with the amendments proposed by the Presidency have been considered further at meetings of high level Community officials, at bilateral meetings between member states and the Presidency/Commission and at the Council of Ministers on 30/31 March. At the Council which starts today the Presidency will outline the conclusions it has drawn from this series of meetings. While it is not expected that agreement will be reached at this Council, it is hoped that progress can be made with a view to agreement being reached in the very near future.
Notwithstanding the fact that the Commission's proposals, in outline or in detailed form, have been before the Council since February 1991 substantive differences remain to be reconciled before agreement can be reached. At the same time, all Ministers in the Council accept that retention of the current Common Agricultural Policy mechanisms is not a viable option for a number of reasons including the facts that: despite substantial increases in expenditure on the Common Agricultural Policy in recent years, farm incomes have not been maintained; expenditure on the Common Agricultural Policy is approaching the ceiling for agricultural expenditure; if current mechanisms are retained prices will have to be reduced on an on-going basis but there would not be compensation; Community stocks of a number of important products are at unsustainably high levels; and there is a need for a better distribution of Common Agricultural Policy support.
A number of adjustments have been made to the Common Agricultural Policy, particularly over the past ten years but none of these has provided lasting solutions to these problems. Therefore, it is clear that only a more fundamental reform of the Common Agricultural Policy will secure its future and provide a framework to support the agriculture and food sector.
I have already outlined to this House the unacceptable aspects of the Commission's proposals and my objectives in the negotiations. While the Presidency has proposed a number of significant changes to the Commission's proposals, they still do not go far enough to meet our essential requirements. I will continue to seek the necessary changes and will take whatever action is necessary to secure an outcome to the negotiations which safeguards the future of our farming and agricultural-related industries.
The reform proposals have not been discussed at the European Council to date. However, the negotiations have to be seen in the context of commitments given by the Council of Ministers and the Commission to take into account the particularly difficult situation of certain categories of producers and certain regions. Under the Treaty provisions, the Council is also obliged to take into account the objectives of social and economic cohesion in implementing all the common policies including the Common Agricultural Policy.
In addition, the Commissioner has given a definitive commitment to the Council that the compensatory payments will have the same status as current market support arrangements and that adequate Community funding will be provided to meet the costs involved.
A number of studies have been undertaken by bodies and individuals on the impact of the Commission's initial proposals. These indicate, inter alia, that the farming sector would suffer income losses in overall terms, that large scale intensive producers would be most affected and that there would be some consumer gains. However, as the Commission's proposals have already been modified and as they will have to be further changed before they are accepted by the Council the full implications of Common Agricultural Policy reform can be definitively assessed only when the negotiations have been concluded.
However, it is clear that the implications of not reforming the Common Agricultural Policy outweigh any effects such a reform might have. The alternative to reform is to continue the present system which would result in continuous reductions in output and/or in prices to producers without compensation. This would adversely affect producer viability, agricultural output and, as a result, employment and the overall economy.
While we would have preferred if the Common Agricultural Policy and GATT negotiations were concluded in parallel, it is now unlikely that the Uruguay Round can be concluded in the near future. In the circumstances, I believe that Common Agricultural Policy reform should proceed in order to provide a degree of certainty for farmers. In that situation, however, there must be a clear and explicit understanding that a later GATT agreement will not undermine Common Agricultural Policy reform. This requires inter alia the safeguarding of compensatory arrangements under a reformed Common Agricultural Policy and the maintenance of Community preference. As regards the latter, the proposals put forward by the Director General of the GATT for the conclusion of the Uruguay Round would require the Community inter alia to provide substantially increased import facilities for a range of products.
The Community has rejected these proposals and the Commission is currently conducting bilateral and multilateral negotiations in an effort to secure the necessary improvements. At the same time, it has to be recalled that one of the main objectives of the Uruguay Round is to increase trade flows and some increases in imports cannot be ruled out. However, the Community is seeking to ensure that any such increase will be within very strict parameters and that access opportunities will become available elsewhere for Community and Irish products.