Dáil Éireann díospóireacht -
Thursday, 14 Feb 2002

Vol. 548 No. 4

Written Answers. - Agenda 2000.

Bernard J. Durkan

Ceist:

114 Mr. Durkan asked the Minister for Agriculture, Food and Rural Development the degree to which his Department has evaluated the impact of Agenda 2000 to date on the agricultural sector; the potential for the future in this regard; and if he will make a statement on the matter. [5223/02]

Minister for Agriculture, Food and Rural Development (Mr. Walsh)

A static analysis undertaken by my Department immediately after the Agenda 2000 agreement in March 1999 estimated that the agreement would deliver a gain in aggregate farm income of €502 million over the period 2000 to 2006. The national gain over the period was estimated at a total of €846 million, because of additional benefits to the national economy from lower product prices.

Using econometric modelling techniques, the FAPRI-Ireland partnership published a more detailed and dynamic analysis of the Agenda 2000 agreement in May 1999. This compared the Agenda 2000 changes with a baseline, defined as no policy change, over the period to 2007. This analysis concluded that the Agenda 2000 changes represented a total gain of €971 million in aggregate farm income over the period 2000 to 2007. Both analyses indicated that the Agenda 2000 agreement represented a remarkably successful outcome for Irish agriculture and the economy in general.

The Agenda 2000 changes are being phased-in over a number of years: in the arable sector, price reductions and increases in premium payments were introduced in two equal steps in 2000 and 2001; in the beef sector, price reductions, increases in premia payments, new slaughter premia and national envelope payments are being phased in over the period 2000 to 2002; in the milk sector, a special quota increase for Ireland, three other member states, and for Northern Ireland, was introduced in two steps in 2000 and 2001; price reductions and compensating premium payments will be phased-in from 2005 to 2007. Therefore, the Agenda 2000 changes are not yet complete.

Because of the BSE crisis which emerged towards the end of 2000, the Commission introduced proposals for certain changes in the beef regime to address the attendant market difficulties. These changes included an increase in the intervention intake ceiling to support cattle prices, as well as reductions in stocking density for premium purposes, with an estimated reduction of €6 million a year in premium income for Irish farms.

The Agenda 2000 agreement provided for a number of reviews: a review of the Agricultural Guideline, that is the legal limit on the volume of agricultural expenditure; a decision on whether to further reduce guaranteed prices and to further increase direct payments for cereals; a review of the oilseeds market; a review of the milk quota regime; and a review of expenditure to ensure that it does not exceed an annual average amount of €40.5 billion in 1999 prices.

It now seems likely that these reviews will be combined in an overall review of the Agreement this year. I expect that the Commission will publish its initial proposals in June, and negotiations on these are likely to continue to the end of the year at least.