Written Answers. - Common Agricultural Policy.

Bernard J. Durkan

Ceist:

34 Mr. Durkan asked the Minister for Agriculture and Food the likely economic impact of the CAP mid-term review on food producing countries, with particular reference to the economy; and if he will make a statement on the matter. [19093/03]

While considerable analysis has been carried out on various aspects of EU Commission proposals the economic impact of the outcome of the mid-term review agreement in food producing countries is not known at present. The mid-term review agreement contains a broad range of changes in the direction of the CAP which will be implemented over the period 2004 to 2007.

The most fundamental aspect of the agreement relates to the options for decoupling or partial decoupling. Each member state will have to decide between the menu of options available. Only when these decisions are made in regard to the particular options will the potential economic impact become clearer. Furthermore, the consequential production decisions taken by individual farmers will also be important factors.

The FAPRI Ireland study published in May of this year and based on the mid term review proposals at that time showed a possible decrease in beef production of 6%, sheep production down 5% and aggregate farm income up 8% by 2012. This study found that a majority of farmers would be better off and the industry as a whole more competitive and efficient, as the motivation to continue market-loss making enterprises would be removed. Further study is, however, required following the agreement on the mid term review reached last week by the Council of Ministers.

I emphasise that the outcome of the negotiations protects the very substantial draw-down in direct payments for Irish agriculture.

Martin Ferris

Ceist:

35 Mr. Ferris asked the Minister for Agriculture and Food his views on whether full decoupling as part of the implementation of the CAP reforms agreed in Luxembourg present the best prospect for the future development of Irish agriculture; and if so, the way in which he proposes to proceed. [18898/03]

The agreement reached last week on the mid-term review was extremely satisfactory from Irelands point of view in so far as it allows a range of options to member states in relation to decoupling. The flexibility now permitted allows member states the opportunity of selecting the option which best suits its needs. In this regard I will shortly commence a process of consultations with the social partners, and any other interested groups or individuals before deciding on which system to implement.