Vol. 433 No. 1
23 Miss Harney asked the Minister for Agriculture, Food and Forestry if he will ensure that the full 11 per cent green pound devaluation is applied to all 1993 Common Agricultural Policy reform compensatory premia; and if he will make a statement on the matter.
86 Mr. Dukes asked the Minister for Agriculture, Food and Forestry the steps, if any, that are being taken to ensure that the full effects of the devaluation of the punt are applied to EC farm prices and supports in this country with effect from 1 July 1993; and if he will make a statement on the matter.
I propose to take Questions Nos. 23 and 86 together.
I have asked the Commission of the European Communities to make the necessary proposal to devalue the Irish Green Pound with effect from 1 July 1993 in order that the full effects of the devaluation of the Irish pound, which took place earlier this year, can be applied to farm prices and supports. My request will be dealt with at the Agrimonetary Management Committee tomorrow. The effect of this adjustment will be to increase all EC support prices and a range of market related premia and subsidies by a little over 2 per cent. I estimate that the full year benefit of this Green Pound change on incomes in the agriculture and food sector to be in excess of £40 million. This change will also have the advantage of more than offsetting the decrease of 1.3 per cent due under the EC's agrimonetary arrangements for all our major sectors from 1 July.
In the case of premia or compensatory payments under the Common Agricultural Policy, the operative event or date which governs the agricultural conversion rate to be used for such payments for the following 12 months, varies from sector to sector. Where a devaluation takes place after the operative event, the new rate cannot be used until the date of the following operative event. It is not always possible, therefore, to apply the effects of a devaluation in a particular year to all premia or compensatory payments. The full effects will, of course, apply in subsequent years.
I am glad the Minister has responded to the urgings of the Progressive Democrats in this matter and has taken the initiative. Is he optimistic that his request will be granted at the meeting this week?
I am confident that it will be granted.
I am sure it was also the Minister's intention to reply to Question No. 86 in my name on the same subject. Can he confirm, given what he said about the operative dates, that the full effects of this adjustment will not apply to headage payments in 1993 and that it is unlikely they will apply to ewe premiums and, if I understand him correctly, to a great many of the beef premium payments? In view of this, why did the Minister wait so long to apply for this devaluation? After all, devaluation took place on 30 January and because of the delay in requesting it we have lost a full year's benefit of a further 2 per cent in the case of headage payments, ewe premiums and the great majority of beef premiums. Has the Minister any explanation for this?
First, I took Questions Nos. 23 and 86 together. Nothing has been lost in relation to the operative dates because 1 July is the key date. The Green Pound rate for most livestock premia is set on 1 January each year. Therefore, the full effects of the Green Pound devaluation will not be felt until 1 January 1994. Where the devaluation takes place after the operative event or date which governs the agricultural conversion rate used the new rate cannot be used until the date of the following operative event. Thus it is not always possible to apply the effects of devaluation in a particular year to all premia or compensatory payments. The full effects will, of course, apply from 1 January 1994.
Will the Minister tell the House the number of operative dates between 30 January and 1 July?
From 1 July 1993 payments will be improved——
That is not an answer to my question. I asked the Minister the number of operative dates between 30 January and 1 July?
Ireland has not lost any money to improve headage payments. The key date is 1 July. The farming organisations, the meat factories and Bord Bainne, who have been closely monitoring this operation, did not seek this further devaluation until this week, which will be of the greatest benefit to our economy.
