Vol. 710 No. 2
27 Deputy Michael Creed asked the Minister for Agriculture; Fisheries and Food the efforts he has made to oppose the proposed Mercosur trade deal; the discussions he has had with his EU counterparts on the issue; and if he will make a statement on the matter. [22296/10]
I conveyed our Government's serious reservations about the decision to re-engage in negotiations with Mercosur directly to Commissioner Ciolos when I spoke to him on Monday, 17 May. In my discussion with him, I expressed our deep concerns over the decision to relaunch the negotiations and the threat which these negotiations could pose for Irish and European agriculture, at a time of great sensitivity in the context of discussions on the CAP post 2013, and in the context of the significant challenges already facing the sector.
Ireland has been to the forefront in urging caution in relation to the resumption of these talks. Having sought the inclusion of Mercosur as an AOB point for the Agriculture Council, Ireland helped to draft a joint paper which was co-signed by France, Austria, Finland, Greece, Hungary and Poland, raising concerns on the resumption of the talks, the possible concessions on agriculture that will be required to achieve an agreement and seeking clarification and assurances in relation to any future talks. The concerns expressed in that joint paper were also echoed by many other member states in the Council.
At the Agriculture Council, we highlighted the serious losses for European agriculture and the greater market access concessions that could result from an EU-Mercosur free trade agreement. The importance of agriculture as the largest indigenous manufacturing industry in the context of Ireland's economic recovery was stressed. The impact such an agreement would have on the beef sector and in particular on the high quality beef cuts market in the EU was detailed in our intervention. I have specifically requested a detailed analysis from the Commission of the social, economic and environmental impacts of the anticipated outcome of these negotiations, a request supported by many member states in the Council.
While the talks have been relaunched, it is in effect a reopening of talks that were originally opened a number of years ago but which were effectively suspended in 2004 after 16 rounds of negotiations, arising from major differences between the two sides in terms of expectations across a range of headings including industrial goods, agriculture, services and intellectual property. Doubts still remain among many member states that there is a sound basis for a positive engagement or outcome in these talks.
Will the Minister agree that the general sense of relief within the Irish agrifood sector when Mr. Peter Mandelson packed his bags in Geneva and the WTO talks collapsed some 18 months ago is now misplaced? This has happened as a result of an internal initiative within the European Union to conduct bilateral trade talks with the Mercosur countries. If there is one thing worse than a bad agreement on tariffs and trade, it is a series of bilateral trade agreements within which it appears that similar to the general agreement on tariffs and trade, GATT, food and agriculture is always the sweetener thrown in to pave the way for consensus in other areas.
I accept the Minister's bona fides on this issue, but what is the possibility of securing a fair deal in these negotiations where equivalence is the corner stone? In other words, if they want access to our markets, can the Minister insist that the Commission in conducting these negotiations ensures that they meet the same production standards that are critical for Irish and European farmers?
As Deputy Creed quite rightly says, we are all very concerned about this proposal. It is no secret, and it has been in the public domain, that President Barroso, head of the European Commission, has been the driving force behind this particular initiative to re-open these talks. It is no secret either that there were robust discussions at the college meeting of the Commissioners in early May when this issue arose. It is in the public domain as well that three Commissioners, namely, Máire Geoghegan-Quinn, Commissioner for Innovation, Research and Science, Michel Barnier, Commissioner for Internal Market and Services, and Dacian Ciolos, Commissioner for Agriculture, made particularly strong interventions in opposition to the proposal that was being put forward by President Barroso, and they were supported by the other Members of the Commission as well. Indeed, that is indicated in the meetings of the college on that particular day.
At the recent EU-Latin American Summit in Madrid, the Taoiseach was quoted in one of the newspapers the following day as outlining our concerns in relation to the difficulties that would arise for the beef sector in this country. I believe the points Deputy Creed made earlier are well taken regarding the need to ensure that Europe is not putting more up for offer, with the danger that we could lose even further. I would be very opposed to that in the event.
Has the Minister invoked the help of the Taoiseach to ensure, given the fact that fully fledged negotiations are now under way, any deal is based on the principle of equivalence? In other words, if they want access to our markets, they must meet exactly the same standards under which we operate. Would the Minister accept that the fact that the new Agricultural Commissioner Ciolos was bowled over by the President of the Commission's commitment to this deal does not augur well for his ability to secure an adequate budget for the CAP?
I would not underestimate the commitment or the capacity of the new Commissioner, who is totally committed to the agriculture sector and to maximising the best possible budget we all want post-2013 towards an adequately resourced CAP. At the Council of Ministers, Ireland, together with France, Austria, Finland, Greece, Hungary and Poland, submitted a joint paper which was discussed at the Agriculture Council on 17 May. Some 19 member states intervened in that particular debate and most of them echoed the concerns outlined in the paper we co-authored. Commissioner Ciolos reassured member states at the meeting that he was very well aware of their concerns and said he would be vigilant, to say the least, in ensuring that EU agriculture was properly protected. He pointed out that the recent decision was merely to reopen negotiations. The original mandate given by member states had not changed, he said, and there would be further opportunities for them to influence negotiations.
For Deputy Creed's benefit, this is a Commission initiative and it is within the competence of the Commission to reopen these negotiations. It is not a matter for the Heads of Government, unfortunately.
28 Deputy Seán Sherlock asked the Minister for Agriculture; Fisheries and Food his views on the mechanisms that are needed to address the diversity of production systems and range of risks across the 27 member states in the context of Common Agricultural Policy negotiations; his further views on the need to address increased market volatility and the effective mechanisms that are needed to manage this post 2013; and if he will make a statement on the matter. [22117/10]
The continuation of a strong decoupled direct payments system is of fundamental importance, in my view, to stabilising farm incomes at times of market volatility. Decoupled payments remain the best way of underpinning the incomes of small family farms, while allowing them respond to market opportunities. In this context, it is essential to acknowledge the linkage between the income stabilisation role of direct payments and the market stabilisation role of our current market management measures.
I consider that existing market support tools are appropriate and I believe there is broad agreement on this among member states. The application of intervention and APS in the dairy sector during 2009 illustrated the usefulness of these measures in contributing to market recovery and stabilisation, albeit at very low prices, and the need for them to remain in place. There may be a need for additional flexibility or adjustments, for example, in periods of application and volumes. Nevertheless, these measures are pitched at safety-net level at present and should remain available to us after 2013.
In addition to the current market supports, there is an increasing emphasis on risk management mechanisms such as subsidised insurance and mutual funds. I believe we should look closely at the possibilities offered by such measures. Ireland does not have extensive experience with insurance systems and I would be cautious about the benefits of establishing EU wide insurance regimes. My main concern is that the diversity of production systems and range of risks across the 27 member states are too wide to accommodate a single EU-wide scheme. Therefore, I would like to see a suite of options available to member states to use at their own discretion within funding limits.
There is also a need to address increased market volatility and to have effective mechanisms to manage this. I believe we should consider the potential usefulness of new, additional tools to combat increased market volatility. In that regard, I am open to examining in greater detail the mechanisms used by other countries such as the US, particularly those concerned with underpinning farm revenue or income. I am not suggesting that we immediately adopt similar measures in the EU but I would like us to examine them in greater detail to see whether they would deliver benefits on the EU market.
I welcome the Minister's response and I am seeking to ascertain definitively whether he is giving any credence to the idea of introducing a de facto minimum income for every farmer so as to buttress against potential market instability in the future. The recent volatility in the dairy sector showed us, along with other factors, just how volatile farm incomes are at present and the fact that there will have to be an EU-wide response to this.
What I am really trying to ascertain is whether the Minister is giving credence to the notion of a minimum payment for farmers and, if so, whether there is EU-wide support for such a measure.
The point made by Deputy Sherlock is that, regardless of the mechanism, we need to have some stability in income. We need to put a floor on farmers' incomes. The best way this has been achieved to date is through the direct payment system. Allied to the stabilisation of income, we also need to achieve stability through anti-volatility measures. As I have said in the House a number of times, there will be a major effort to retain the budget for CAP. We have all discussed that and agreed that the first priority for CAP post-2013 is to ensure the system is adequately resourced.
There are conflicting views around the table at the Council of Ministers about how payments should be disbursed. We are in favour of retaining the historical model of direct payments and ensuring that pillar 1 of CAP is the prime pillar. There is also the provision of public goods through the wider rural development programme and the environmental pillar. We must try to make the industry more competitive throughout Europe.
The Minister mentions the historical model of payments, and I acknowledge the speech he gave to the Seanad recently in which he expressed a preference for the retention of this model. What I took from that speech, however, was that the historical model would come under increasing attack and that it is not guaranteed into the future. That is the basis upon which the Minister could state, at least, that there is a degree of stability of income, but it is not necessarily guaranteed to continue if the model changes, unless the Minister states otherwise. If the historical model changes, will that compromise basic incomes to farmers?
Deputy Sherlock makes a valid point about the divergence of opinion. We are much in favour of direct payments, but some within our own country will argue that the reference period should be changed. If we did an analysis of agriculture overall, we would see that not much has changed over a period of eight to ten years in terms of the number of people participating and the types of activity in which they are involved.
What are the options for the single payment? Most member states, including Ireland, are carrying out their own analyses to determine which system would suit us best. Among the potential payment models that are under consideration in the informal process are the historical model, an EU-wide flat rate, or a payment to cover the cost of purchasing power. We have outlined our total opposition to the idea of a flat rate. Other options are a regional or national flat rate, a base flat rate plus tiered additions, upper and lower limits, caps on payments, the application of the single area payment system to the 27 member states, more targeted payments linked to the delivery of public goods, and counter-cyclical payments. Thus, there is a wide range of alternatives to the existing system.
Overall, the existing system needs adjustment in some areas to ensure that young people and farmers who are active today but were not in 2002 are not discriminated against. There is much work to be done and I appreciate the work of the different political parties in bringing a greater awareness to the public at large, be it through regional meetings, conferences in south Tipperary, or whatever. All of that is important in creating a greater awareness of the need for adequate resources.
29 Deputy Michael Creed asked the Minister for Agriculture; Fisheries and Food his views on the corporate governance issues which need to be resolved at the National Stud arising from recent information in the public domain regarding expenses paid and legal settlements agreed and contracts awarded without proper tendering; and if he will make a statement on the matter. [22297/10]
The Irish National Stud Company Limited, INS, is a commercial State body established in 1946 and is a company registered under the Companies Act. It does not receive grant aid from the State. The INS is operating in a competitive international environment and the international bloodstock industry has not been immune from the consequences of the global economic downturn in recent years.
The board of the INS is responsible for the operations and management of the company. Appointments to the board are made by the Minister for Agriculture, Fisheries and Food following consultation with the Minister for Finance. Recently, I appointed two new directors to the board of the INS, and a further four appointments will be made as vacancies arise in the coming weeks.
The Government has established a system of corporate governance to ensure State agencies are directed and managed in such a way that they serve the interests of the State. A code of practice for the governance of State bodies was issued in 2001, and an updated version of the code was issued in 2009. The revised code is evidence of the Government's recognition of the need to adapt to a changing environment, setting out an enhanced system of corporate governance for State agencies for the future. Prior to 2009, State bodies were obliged to adhere to the requirements of the earlier code, published in 2001, and it was this earlier version of the code that was in place when the events to which the Deputy refers took place.
Back in 2001 my predecessor, the Minister for Agriculture, Food and Rural Development, former Deputy Joe Walsh, wrote to the chairman of the INS drawing attention to the introduction of the code and its mandatory nature across all State bodies. In addition to frequent departmental correspondence, I also wrote to the chairman of the INS in November 2008 and again in October 2009 about the board's responsibilities with regard to corporate governance.
My Department monitors the compliance of the INS with the terms of the code of practice, ensuring that the annual report and audited annual accounts are submitted in a timely manner and, following presentation to Government, are laid before the Houses of the Oireachtas. It is important to distinguish between the role of the board in meeting the requirements of the code and those of the Department in monitoring compliance with the terms of the code. It is not the responsibility of the Department to have in place a parallel system of management to that of the board. Since the introduction of the 2001 code, my Department has received assurances on an annual basis from the chairman of the INS that the company is compliant with the code.
Like the Deputy, I was most concerned when I learned from press reports in September 2009 of certain financial matters affecting the company which had the potential to damage the reputation of the company. I immediately sought and received a full report from the chairman of the INS on the matters raised. The chairman confirmed to me that she was satisfied that the expenses to which the Deputy refers were approved and adjudged to be necessary for the conduct of the business of the company; that international travel is an integral part of the CEO's functions; that no first-class travel had been incurred by the former CEO; and that the board has since revised its travel policy with a view to achieving greater efficiencies.
Additional information not given on the floor of the House
Excessive and unnecessary expenditure is not acceptable in any Department or State agency, and I have consistently emphasised, both within my own Department and to the agencies under my Department's aegis, the need to reduce administrative costs, not least in the area of travel, and to achieve the greatest possible efficiencies.
The INS chairman has assured me that the company has complied and will continue to comply with the code of practice for the governance of State bodies. I have also had discussions with the chairman and representatives of the company, and emphasised the continuing need for the company to ensure it fully complies with all corporate governance requirements. The chairman and the newly appointed CEO have assured me this will continue to be done. I have also sought a report on the financial position of the company, and the chairman has indicated that this will be provided shortly.
I welcome the acceptance by the INS of the invitation from the Oireachtas Joint Committee on Agriculture, Fisheries and Food to appear before the committee next month. I am sure the representatives will be happy to address the concerns of the committee and deal with the various issues that have been in the public domain recently.
In his reply the Minister indicated that he had written to the board in October 2008 and November 2009 reminding it of its functions and appropriate corporate governance. What was the trigger for that correspondence? Did he follow up on it? When did he first become aware, personally, that there were issues with corporate governance at the INS?
I will let the Deputy have some interplay on this, as there are a number of questions mounting up.
It was in the context of ensuring the best possible value for money in State expenditure that I wrote to all bodies under the aegis of my Department in October 2008 and November 2009. The INS does not receive any grant aid from the Department.
The first time I became aware of the expenses issues was on 18 September 2009, when I wrote to the chairman of the INS asking for a full account of the expenditure items that had been reported in The Irish Times that day. The article highlighted travel expenses incurred by the then CEO. I sought a full report on the matters raised in the article, and I received a reply shortly afterwards from the chairman.
Did the Department's representative on the board ever raise these issues with the Minister? Notwithstanding the recent appointments of two fine and able people, does the Minister not accept that the cloud hanging over the remainder of the board of the INS requires that the board now tender its resignation? In order to safeguard the interests of this valuable industry, which has a global reach and is one of the few areas in which we distinguish ourselves internationally, and to protect all the associated employment, a new board is required. We need to move on from this. There are issues with regard to expenditure and so on which will need to be teased out, and I understand the INS is to appear before the Oireachtas Joint Committee on Agriculture, Fisheries and Food. In order to start with a clean slate, and excluding the two most recent appointments, is it not now time, given the magnitude of the failure of corporate governance, for a new board to be appointed?
I do not accept the Deputy's contention. The chairman of the Irish National Stud has assured me that the company has in the past and will continue in the future to comply with the code of practice for the governance of State bodies. I emphasised the continuing need for the company to ensure it fully complies with all corporate governance requirements. The chairman and the newly appointed chief executive officer have assured me this will continue to be done. I have also sought a report on the financial position of the company and the chairman has indicated it will be provided shortly. Both the chief executive officer and the chief financial officer were appointed relatively recently. That work was done outside the house by an accounting firm. Recently, on foot of a suggestion I made in view of the new 2009 corporate governance criterion that the audit committee should include a person from outside the board, an eminent external person has been appointed to that position.
Deputy Creed rightly made the point that the Irish National Stud is a body of international repute. It is a small player with a huge international reputation and is a vital component of our important bloodstock industry. It attracts up to 150,000 visitors to Kildare each year and is a useful training school for young people entering the equine industry. We are fortunate to have as chairman a person who is a breeder of international repute whose family also has a notable stud in Normandy. The chairman has trained horses that are well known internationally and have had great success.
The board comprises people of specialist expertise in different areas of the bloodstock and equine industry as well as those with specialist expertise in the financial area. As the Deputy acknowledged, the two newest appointees are a person who has done extremely valuable work in the Irish dairy industry and a person who is a renowned trainer. In the coming weeks, before the end of June, I will be making four new appointments which will include those with expertise in the bloodstock industry and persons with expertise in finance and law.
To clarify, I am not casting aspersions on any individual board member. Rather, I am pointing to a collective failure of corporate governance that has serious implications for the industry and its reputation. That is the context in which I am calling for the appointment of a new board.
We have run out of time for this question.
This is a long-running issue, encompassing more than just the recent FÁS-like expenses regime or the industrial relations issue in regard to accusations of harassment and bullying. A Garda inquiry took place some years ago in respect of the disappearance of cattle from the stud, an investigation which I understand ran into the ground and had no successful conclusion.
I ask the Deputy to conclude.
All has not been well for some time.
The Deputy cannot simply ignore the Chair. I must call the next question.
What direct accountability has the board to the Minister and what communication does he have with his nominees?
The Minister may give a very brief reply.
It is the duty of the board to manage, lead and direct the day-to-day operations of the company. Industrial relations and human resources issues are a matter for the board. I understand some of those issues are before the courts and I will not elaborate on them here. The linkage between any Department and the boards under its remit is through their chairman. It is the chairman of the Irish National Stud who makes contact with me.
Is there not a departmental nominee?
No. A director of a company——
I have given double the allotted time to this matter. We must move on to the next question.
30 Deputy Seán Sherlock asked the Minister for Agriculture; Fisheries and Food his views on the historic basis of direct payment; if he has formulated a view in relation to changing from the current historical model for determining single payments; and if he will make a statement on the matter. [22118/10]
My starting point is that I see no compelling reason to change from the current historical model for determining single payments. That model has a distinct advantage in linking the payment with level of farming activity, albeit activity in 2000 to 2002. I have made my views on the benefits of the historic model clear at meetings of the Council of Ministers and in bilateral discussions with other member states and the Commission.
However, it seems Ireland is in a very small minority of member states that hold this view, with many of our partners in Europe now questioning the credibility of this system for determining direct payments. We must, therefore, be open to looking at alternative models that might command the support of a larger number of member states and also be beneficial to Ireland. While I am prepared to look at the alternatives, particularly if other countries move from the "historic camp", there is a need to find a basis that is acceptable and fair to all member states and that meets Irish objectives of improved competitiveness and sustainability.
There are no concrete proposals as yet on this matter but it is clear that most member states, including Ireland, are carrying out analysis to determine which system best suits their needs. From our analysis so far, we have concluded that Ireland would lose out under a simple European Union-wide flat rate by nearly 20%, based on current EU single payment scheme, SPS, funding levels. We also know that movement to a regional or national flat rate, based on our current national envelope, would broadly have the effect of shifting funding from farmers in the east to the west and from cattle fattening and tillage farms to cattle rearing and sheep farms with little change on dairy farms. It is clear there is a long way to go in this debate. I will be seeking to have the option to maintain our current system and, failing that, to ensure there is a fair and equitable division of funds that supports family farm incomes in Ireland and allows farmers to get on with the business of farming.
The Minister's reply is taken directly from a recent speech he gave to the Seanad. The own initiative report on this issue was authored by Mr. George Lyon, MEP, a Liberal Democrat representative for Scotland, whose party is a member of the same group within the European Parliament as Fianna Fáil. Mr. Lyon refers to the desire to go beyond 2020 for phasing in the move from historic to area-based payments and to significant differences in terms of the criteria to be used for the distribution of single farm payments to member states. As far as he is concerned, it is a foregone conclusion that the historical model will be no more. I acknowledge the Minister's point that there is increasing pressure for that to occur.
If it is a foregone conclusion that the majority of member states will seek to move away from the historical model of payments, then what is the current thinking within the Fianna Fáil group in the European Parliament as to what will be the replacement? Is Mr. Lyon speaking for all Fianna Fáil Members of the European Parliament when he speaks about a movement towards area-based payments?
The Minister answers questions on behalf of the Government, not on behalf of any group in the European Parliament.
I did not hear exactly what the Leas-Cheann Comhairle said but I wonder if I can ask——
By way of explanation, the Minister is answerable to this House on behalf of the Government for its actions; he is not answerable on behalf of his party, either the collective of this House or in any other House.
Appreciating the latitude the Leas-Cheann Comhairle has already allowed me, I was just about to state that at meetings of the agriculture committee of which Mr. Lyon is a member, Ireland's position would heretofore have been put forward by the Minister, but that is no longer necessarily the case because of the new structures in place following the ratification of the Lisbon treaty. It is on this basis that I give great credence to what he is saying because it could be reflective of the position of the group within the European Parliament to which he belongs.
Deputy Sherlock has made some interesting points. However, I can envisage that there are views expressed by the socialist group in the European Parliament which Deputy Sherlock would not propagate in Ireland and which his party would not support. We should all be careful in quoting fellow members of our group. I met Mr. Lyon when he visited Ireland along with Irish MEPs from that committee and we had a detailed discussion in which he indicated his agreement with our position on many of the issues contained in our submission. He also met the farming organisations during his visit and I found, when I met the presidents of those organisations that evening on other business, that they were relatively pleased with their discussions with him. In fairness, he was acting as rapporteur for the agriculture committee in drawing up the report to which the Deputy referred and not all of its contents would necessarily represent his own view point. We have been engaging in the co-decision making process, which is a whole new ball game for everybody involved in decision making. It is no longer down to the Council of Ministers on its own. As a Department we have been actively involved in briefing all our MEPs on these important issues.
With regard to the historic camp, more people have moved away from it. There are not many of us steadfastly in support of the historic model. We are doing analysis of the different models in terms of how they would affect us and how we would lose and benefit from different systems. I could offer a briefing to the party spokespersons, on a confidential basis for the moment, as we continue to do in terms of their work on the different models but there are so many variations and proposals put forward and there is huge pressure coming from the 12——
I want to call Deputy Sherlock for a brief supplementary.
I accept what the Minister is saying about the political considerations but I am sure he will acknowledge that George Lyon's position on this issue will be very influential in terms of the final outcome. I also acknowledge that there are approximately 700 amendments to that particular report currently before the European Parliament.
The key for us at this stage of the process is to try to nail down a more definitive Government position, that is, to ascertain whether the Minister has come to a conclusion regarding the new system for payments for farmers post 2013. If I understand him correctly the Minister is saying that is an ongoing process and if that is the case, I accept that answer.
I outlined our preferred option and I do not believe there will be any disagreement in this House. There was no disagreement in the committee on the occasions I attended. We want direct payments retained. We want adequate and improved market support measures. That reflects the important comment the Deputy made earlier about income stabilisation. We must have adequate anti-volatility measures which are not currently within the European Union. We also want to ensure that pillar 1 is the prime pillar. Pillar 2 is important from the point of view of the environment and the provision of public goods.
I see that in most of the public commentary Commissioner Keolas makes now, whether it is a presentation to the European Parliament or another country. An issue I discussed with him in his first week in office was the need at this time, in advance of the conclusions and the budgetary allocations, to get the message across that CAP is not about farming but is for the benefit of every citizen in the 27 member states. That message has not got out successfully in the past and we would hope that in advance of decisions being made by the Commission, there is a recognition and an awareness of the importance of an adequate and well-resourced CAP. If we do not get off to a good footing in that regard, we will have an even bigger hill to climb.
What about the breadwinner?
These are priority questions, as the Deputy well knows. I call Question No. 31 in the name of Deputy Andrew Doyle.
The Minister of State, Deputy Cuffe, is taking that question.
Níl sé i láthair.
Can we move on and go back to it?
This is a priority question.
This is a bad show on his first opportunity——
Does the Minister have a copy of the answer?
We will then move on to other questions.
The bicycle must have broken down.
Ceist 32 in ainm an Teachta——
A Leas-Cheann Comhairle, I presume if the Minister graces us with his presence you will come back to the question.
Once we proceed beyond priority questions it will not be possible to come back to them. Ceist 32.
That is an insult to the Deputy who has tabled the question.
Can you do——
I will see if we can facilitate the Deputy.
