I welcome Mr. Pat O'Rourke, president, and Mr. Ciarán Dolan, general secretary, of the Irish Creamery Milk Suppliers Association to the meeting. Before asking Mr. O'Rourke to begin, I draw to his attention the fact that while members of the committee have absolute privilege, the same privilege does not extend to witnesses. Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses or an official in such a way as to make him or her identifiable.
Irish Creamery Milk Suppliers Association: Presentation.
I thank the committee for giving us this opportunity to address it. Agriculture is going through unprecedented change. The editorial in yesterday's edition of The Irish Times referred to the serious decline in agriculture and stated that it should act as a wake up call for the Government. Unfortunately, this editorial bluntly but accurately summarises what the association and I have been saying for some time.
I will not, however, take up the committee's time by spelling out the litany of lost opportunities and mistakes made in the past but will outline our vision for the future in agriculture. That vision should not be based on a romantic idea of rural Ireland, but on an agricultural policy that will allow rural areas to survive and thrive. To achieve this the Government must implement important policies. We must be pro-active to ensure that full-time farmers can earn a decent income from their farming activity and that farms are commercially viable and internationally competitive. The food sector must be given the opportunity to grasp the new markets that will open up following European enlargement. There must be policies to assist part-time farmers and to create opportunities in rural development, with a commercial focus on established groups that do more than talk endlessly while not achieving anything.
Agriculture is vital but in the past ten years farm leaders have not highlighted sufficiently its importance to and the contribution it makes to the economy. The agriculture and food sector accounts for over 50% of the output of the industry, over 60% of its exports and 25% of net foreign earnings, which is substantial. On that basis we would be foolish to ignore the major difficulties the agricultural food sector will face. We also want to ensure that we exploit the opportunities presented and put in place policies and finances to harness them. While the problem we will face cannot be underestimated, there are and will be opportunities which we must seize.
Farmers are determined and professional, and we are risk takers. We sow in the spring to reap a harvest in the autumn which some may describe as crazy and others as a risk. We are prepared to do that but we need the proactive and unashamed assistance of Government to support the agricultural food sector. We can achieve that in several ways, but I am not suggesting that we take a proactive approach in supporting agriculture at the expense of other sectors. We must ensure that policies on regulations recognise the legislation at European or national level without stifling agriculture. The nitrates directive, for example, will have a significant negative effect.
Government is not the only agency which can put policies in place. The industry and farmers must also face the challenges. For example, in the dairy industry, which is of primary importance to our association, the co-ops and marketing personnel should focus on achieving greater efficiency, particularly with the mid-term review. We must continue to focus on being efficient, addressing costs and being able to compete at European level on the basis that our product and costs are the best in Europe. We will not survive if our farm gate costs and efficiencies are not competitive at European level. It is for others in the industry to ensure that the processing sector too leads the way on costs and marketing. The Irish Dairy Board has been successfully involved in marketing our product and that success must continue. Then we will have a future. Following the mid-term review the Irish and European markets will be determined on the basis of a more open market, with more competition and the market will decide our income whether one is a farmer in west Cork or west Donegal.
The Common Agricultural Policy has undergone significant change. We will not witness in the next ten years the type of change to which we have now agreed and that will be implemented in the coming months and years. The WTO proposals, however, were not agreed and although the talks broke down we proceeded to implement the mid-term review, which was the formula whereby Europe would negotiate in those talks. We must take care to avoid a second reform of the Common Agricultural Policy in order to meet whatever is agreed in the WTO, whenever it succeeds in resuming talks. I hope the Government will support this as it has done to date. Irish farmers, particularly in the dairy sector, have paid the price for the mid-term review and we cannot, either from a sense of fairness or from an economic point of view, pay again by taking a drop in income or supports. The key issue in the dairy sector is to maintain our income.
It is unprecedented that a cut in support at European level has not been matched with equal support in direct payments. Under the MacSharry reforms any cuts in the support for the beef regime were matched with 100% compensation in the direct payments. That is not the case in the dairy sector which has been and continues to be a disaster. No matter how optimistically we look at this challenge, dairy farmers' income will be cut by up to 30% at a time when our incomes are under pressure. That decision has been taken and it will become a reality if we do not put in place an action plan. It affects our organisation, individual farmers and the dairy industry and we must ensure that the disaster of a 30% cut does not befall us.
The market will dictate terms to farmers. Our product, price and the returns from the consumer must be addressed. The Central Statistics Office indicates that for every euro spent on a litre of milk the farmer receives 36 cent. In the beef sector, for every euro, the primary producer at the farm gate receives 38 cent. That is unfair. No one in the retail sector has been able to explain to us why two thirds of the price the consumer pays is lost by the time the primary producer is paid at the farm gate. Now more than ever we are in a situation where the marketplace will determine farmers' income and future. We need to ensure that the dominant position of the major retailers is not abused and that they are not allowed to continue to take unreasonable margins.
There are great challenges for the dairy sector but the ICMSA does not intend to allow this important sector to be denuded of its profit and see it collapse. The outlook for the beef sector is reasonable and that has been achieved through a better balance in the marketplace. According to Bord Bia, Europe is 400,000 tonnes of beef in deficit which is welcome news and marks progress because the days of beef intervention are over. That progress should be reflected in better prices for the beef sector which will survive on the basis of the price that the farmer receives justifying his or her effort, commitment and investment. Due to the decoupled payment in the beef sector beef farming will not happen unless it is commercially viable as all commentators on that sector have recognised. It is crucial to ensure that we have competition. The market will determine the future for beef farmers.
Live exports are essential to competition in this sector. The ICMSA noted the Supreme Court case in which Pandoro Limited successfully lifted the injunction on live exports. In the hearings, the company indicated its intention to discontinue providing a facility allowing Irish beef farmers to continue exporting live cattle to mainland Europe. This is a serious issue of concern to farmers. We know from statistics that when Ireland had active live shipping, cattle prices were higher. We do not need to experiment with this competition. If live exports disappear, it will have a negative effect on Irish farmers' incomes.
The ICMSA has a proposal to address this issue. No country would tolerate a situation where the route to market was blocked by a company that selects which product can be carried on its ships to the market place. Europe, particularly in the beef sector, gives us opportunities for greater markets and income. EU enlargement on 1 May will offer us more market opportunities. Under the Irish EU Presidency, regulations on the transport of live cattle are being finalised. I compliment the Minister for Agriculture and Food, Deputy Walsh, in getting agreement on this matter. The regulations that apply in Ireland will now be the template for the EU. It is ironic, however, that Ireland, with the best transport regulations in the EU, will have no ferry service to take our product to the EU market. Any company operating out of Irish ports must adhere to the policy of all freight or no freight. The 1947 shipping Act should be suitably amended to give statutory effect to this rule whereby the State and the relevant industry decide what products can be exported.
In comparison, no one would accept that a company in the dry freight sector should decide to take only computer parts and not television parts. That would make no sense. The roll-on, roll-off freight service operating out of Irish ports is funded by the taxpayer with EU assistance. However, a situation has emerged where companies will decide what product can be exported. This is unacceptable and undemocratic. Legislation must be introduced to ensure that what is produced in Ireland, so long as it complies with Irish and EU regulations, has access to the market place. If the Single Market means anything, it means access to it.
The mid-term review of the Fischler proposals are perceived to have been sold on the basis that regulations would be removed for the freedom to farm. The message communicated to farmers was that if the Fischler proposals were accepted, as recommend by the Minister for Agriculture and Food, there would be less bureaucracy and red tape, allowing farmers to win more markets. This was laudable and what every farmer wants. The message from Teagasc and others is that if farmers want to survive in the future, they must become more efficient and market-focused. I have no difficulty with this. However, the recently introduced nitrates directive will outlaw efficient farming. It will penalise up to 14,000 farming families that have a stocking rate of over one livestock unit per acre. Teagasc advises that an efficient farmer is one who maximises the output per acre. A benchmark of one livestock unit per acre would classify most farmers in west Cork or west Donegal as efficient.
However, the Minister for the Environment, Heritage and Local Government, Deputy Cullen, stated to the ICMSA yesterday that the nitrates directive will be introduced to operate at the 170 kg level. This means that a farmer with a stocking rate of over one livestock unit per acre will be breaking the law. Worse still, the single farm payment that will soon be administered in the dairy and beef sector - though it will not meet the losses incurred - can be entirely confiscated from farmers who do not comply with cross-compliance of the directive. Cross-compliance means that farmers must adhere to all environmental regulations such as animal welfare. The ICMSA has no difficulty with the animal welfare regulations. However, there are difficulties when it is suggested that a farmer operating one livestock unit per acre is breaking the law and will be penalised. This runs contrary to what Teagasc has advised and the directive needs to be re-examined.
A choice on the nitrates directive is offered by the EU Commission in allowing member states to decide on how to operate it. It can be on a whole country or regional approach. This is the only discretion that the Commission gave Ireland on this matter. The ICMSA believes that 70% of the country can be exempted if a nitrate vulnerable zone approach is undertaken. This means that an action plan is put in place in areas where a nitrate vulnerable problem has been scientifically proven, while areas with no problems are exempted.
I hope the committee will support the ICMSA's nitrate vulnerable zone approach in complying with the directive. An EU directive cannot be ignored but the opportunities to comply with it can be maximised, while ensuring the continuity of commercial farming. The nitrates directive must be approached on the basis of what is in the interest of Irish agriculture. To date, no scientist has proved that a farmer in west Donegal or Cork with one dairy cow per acre is polluting the environment.
I thank the committee for the opportunity to put across the ICMSA's viewpoints on the difficulties in the agriculture sector. However, opportunities far outweigh present difficulties. As an optimist, I believe that rather than concentrating on the difficulties Irish farmers have, we should maximise the opportunities. The EU will soon be enlarged to a market of 450 million citizens. Ireland has the quality produce but the route to market must be kept open.
Thank you for your presentation, Mr. O'Rourke. You covered a lot of ground in the agricultural area.
I thank Mr. O'Rourke and Mr. Dolan for their submission. It is refreshing to hear such an emphasis placed on the commercial aspects, because the romantic rhetoric and the notion of dancing at the crossroads have not served agriculture well over the past few decades. The policy makers are the last to realise this, but the people involved in the industry realise that these notions have done them no service. All the focus was on volume rather than substance.
The future of agriculture depends on our ability to plug into the global market, and that depends on efficiency in input, quality product and access to the market. Mr. O'Rourke has stressed these goals.
The ICMSA has raised the question of the nitrates directive, and I thank the organisation for supplying information. The vulnerable zones were in effect ruled out by the Minister and Minister of State at the last committee meeting. The 210kg approach countrywide has gone, and the 170kg approach, including the derogations, is the only option. I realise that it is mainly the ICMSA members who are hit by this, and any derogation that can be got should be got.
If the ICMSA could ask the Minister to change one aspect of policy, what would it be? Does the ICMSA think that enough is being done in this country for marketing? I know the Dairy Board does work for the ICMSA. I met a Bord Bia representative in Chicago some months ago, and he is the only representative for some 300 million to 400 million people. I look forward to the ICMSA submission because it is good to hear of a positive approach. Unpalatable as it may be for many of us, the emphasis must be on the commercial in order to ensure viability. Farmers around the country are voting with their feet.
I thank Mr. O'Rourke for his presentation, and also Mr. Doran. I agree that the mid-term review is likely to hurt the dairy sector more than any other and I have noted that fairly regularly whenever I spoke on this issue. At the end of his presentation, Mr. O'Rourke mentioned the accession countries. I think these will be very significant in terms of the future of all agriculture. There are opportunities, but also some threats which must be dealt with, without in any deliberate way disadvantaging the accession countries. How would the delegation like to see those opportunities exploited and what are they? A bigger market was mentioned but clearly there will also be an influx of products from the accession countries. We have to acknowledge that and deal with it. There may also be issues of quality and standards which we have raised in a different arena regarding what would have been described as Third World countries, particularly the South American countries, in connection with labelling and traceability. We have been assured with regard to the accession countries, that standards will be maintained. I would like to hear the delegation's comments.
I too welcome Mr. O'Rourke and Mr. Dolan and I thank them for the presentation. On occasion in the past, I have been critical of farming organisations for being negative. The kind of negativity seen then was not helpful. I now see a great change. I welcome the presentation and its positive approach. There are opportunities as well as problems and as farmers we know there will always be problems. However, farming has changed over the past five or six years and there will be major changes in the next ten years.
I have noted on a number of occasions that our young people are making up their minds. Our sons and daughters do not have the same sentimental attachment to the land that we had. They have access to education and opportunities and free time that we never thought about. That is a whole new aspect which presents a major challenge for agriculture.
I compliment the delegation on its approach and its grip on the situation. The old ways could not continue to work. We were turning out products for which there was no market and the time came to face the issue. At a very early stage we were getting the word from farmers that they wanted change and that they favoured decoupling. This is what farmers were telling us on the ground. I do not know if everyone fully understood what the changes would involve and perhaps nobody knows. Time will tell. I encounter much optimism among people now moving ahead in farming, though problems remain. I have great faith in our Minister for Agriculture and Food. He has represented Ireland well and will continue to do so.
Mr. O'Rourke stated that there would be a cut of 30% in the dairy price. I am not so sure about that, and Mr. O'Rourke might elaborate. I am not disputing what he said but I am not quite sure this will happen.
I thank Mr. O'Rourke for his presentation. I agree with him regarding our live exports. In Northern Ireland and in England the shipping companies are compelled to export live animals and if this is allowed to continue, it will be very serious for Ireland. The committee will have a meeting on this issue next week with representatives of the Irish cattle exporters. This is the most serious issue currently facing the cattle trade. Regarding the nitrates directive, it may be as Deputy Timmins says that there will be a derogation for certain areas. Currently, the initial proposal appears to stand.
The biggest issue facing this country is the live exports situation and the regulations about to be introduced which will ensure that the situation continues as it is.
I again compliment Mr. O'Rourke on his excellent presentation. Where does the delegation see farming going under the Fischler proposals and full decoupling? We all know that exports are very important for this country. As a result of the proposals put forward by the EU Commission, we invited Commissioner Byrne to this committee some time ago. The committee pointed out very strongly the importance of live exports from Ireland and the role they have played. They have stabilised prices. I do not want to be too critical of factories which have their part to play, but live exports have given a lift to prices and provide some competition. It is very important that they remain in place and we hope that perhaps under the Irish EU Presidency the problem can be resolved in this country's best interests.
Regarding EU enlargement and the accession countries, where does the delegation see Irish agriculture competing? Will enlargement be beneficial or, in plain language, will it be a disaster for Irish agriculture? That is what some farmers are concerned about. As we all know, farmers are very concerned about the nitrates directive, as is this committee, which has discussed it on numerous occasions with different farming organisations and departmental officials. We know that commercial farmers are being hit badly, and we are aware of their importance to this country. Like all farmers, they have a major part to play in job creation and we hope a derogation can be secured.
At previous meetings Deputies Wilkinson and Timmins raised the very important question of storage and the spreading of slurry. When we consider the spread of blight and how it is publicised on the news and forecasts, we see that the very same should happen regarding the spreading of nitrates. If something of this nature was put in place, it would be beneficial to all. With the weather we have witnessed in this country over the last 12 months or so, there were not two months during the period when one could not spread slurry normally. The big danger that we must bear in mind, and which everyone fears, is that, when the date comes to spread slurry, irrespective of what type of weather we witness, everyone will be out doing it. That will do much more harm than spreading it over a longer period.
These are the issues we have raised. Every member of this committee has brought them to the attention of the officials and Ministers concerned. This committee is fully behind fair play and regulations to be brought forward that will not be detrimental to the country. I know that we have each other's support in trying to get a realistic solution to this problem.
I will go through the specific questions in the order in which they were put. Deputy Timmins made a suggestion on the market, clearly our destiny. That is a fact for us, as farmers, on which we must concentrate.
Regarding nitrates, the Minister for the Environment, Heritage and Local Government, Deputy Cullen, said his view was that a whole-country approach was the way forward. He accepted that the figure was at 170. At least, he has now stated his position clearly. There had been a misunderstanding during negotiations under the new partnership agreement that the nitrates directive would be implemented and that we would start off not with a figure of 170 but 210. The European Commission clearly told us at a meeting that we would be starting at 170. On that basis, we need to go back to the drawing board and see what the best option is.
In any operation, how can either of us - or any Minister or official from the Department of the Environment, Heritage and Local Government or the Department of Agriculture and Food - say this to a farmer in County Donegal? I use County Donegal as an example since no one has been able to prove scientifically that there is a nitrates problem there. Scientists have tested the water which has been found to comply with the directive. Who would be brave enough to stand in front of that farmer from County Donegal who is operating a very efficient, focused commercial farm and say he must now either reduce stock numbers and output or forfeit the single farm payment? Scientifically, he has not polluted the water but for some other reason such as administrative convenience he must now incur huge losses and additional costs. I fail to support or understand the logic of condemning that part. There are many other regions where there is no nitrates problem and if that is so, they should not be subject to the directive.
I hear others saying that, if one takes a whole-country approach, there will be administrative advantages. However, we must weigh matters up by asking ourselves how we comply with the directive, as we must, and minimise the cost and impact on the industry. That must be our focus. If we do this, we will probably come out in favour on the nitrate-vulnerable zone, particularly at the figure of 170. We must debate this. The issue is not over but time is running out. The Minister said to us yesterday that in the past we may not have boxed cleverly regarding the nitrates directive. Now we must box twice as smartly. We must get it right in the coming months rather than years.
Deputy Timmins asked if I had a single issue to put to the Minister. That is very dangerous since, if one picks one, people will say it should have been about 40 other issues. However, the key issue we have highlighted, even during the social partnership talks, is income. If agriculture is to survive, as has been made very clear by several members, it must do so on the basis of commercial viability. The next generation will not take up farming because it is a vocation but because it is commercially viable. Income will be the determining factor in ensuring this. If I was able to raise one issue with the Minister, I would tell him to concentrate on income. He should start by recognising our present position.
Farmers' income has slipped in the wrong direction relative to the average industrial wage. We have, therefore, a great deal of ground to make up and introduce policies with the objective of improving farm income. I could go through all of the areas such as costs, regulation and opportunities in the market. We should set income as the key and then put in place policies to achieve this. We welcomed the Minister's announcement of the 2015 committee which one hopes will produce proposals to deal with income as a key issue, something we insisted upon. That is the foundation on which we will build in agriculture.
Are we doing enough to win markets? Let us take two areas in which we have considerable involvement, the Irish Dairy Board and Bord Bia. The former is an outstanding success since it was funded by farmers. They had the vision that they needed to produce the product. They also needed to ensure they had centralised marketing and that the products of Irish farmers were not competing on one supermarket shelf, winning that share on the basis of the lowest price. They developed the Kerrygold brand label. It gives me tremendous satisfaction, as an Irish farmer, to be able to state here that Irish butter sold in Germany commands a 20% premium on the local product being produced. That is the definition of successful marketing. We have done this for dairy products with the Kerrygold brand label, and I have no doubt that, now that we have achieved this, we can extend it to other products.
Bord Bia is another body on which we are putting considerable pressure, also regarding marketing. As the committee is aware, nine out of every ten animals must be exported. Therefore, the market is everything. Recently Bord Bia has had tremendous success, since we are the biggest exporter to the United Kingdom for beef products which we have achieved through quality and competitive pricing. We are gaining greater shares in other European markets and will continue to do so. As farmers, we see the market rather than intervention as our saviour. Bord Bia has marketed Ireland on the basis of a quality product produced by professional farmers and the acid test is that we are winning a greater market share. However, there is much more work to be done.
On Deputy Upton's point about European enlargement, there is no doubt about the opportunities this affords for the development of new markets. As a farm organisation, the ICMSA took the decision to unequivocally support the Nice treaty referendum. While others may have dithered, the ICMSA saw opportunity while also recognising that there would be threats. That opportunity must now be capitalised upon.
The markets are available. The difficulty I foresee is that they could be taken away from Irish or other European producers and given to non-Europeans on the basis of some agreement - either under the World Trade Organisation or a liberalisation of GATT - with Brazilian and Argentinian beef flooding into Europe. I cannot say we want to keep all of that produce out as the European consumer has a choice but it must be on the basis of a level playing pitch. The same environmental costs endured by Irish and other European farmers must apply to Brazilian, New Zealand and other producers. If that is done, there will be no difficulty about taking them on and beating them in any world or enlarged European market. However, we must all be working on the same level playing pitch. I do not, however, see any great competition from the accession countries as regards their ability to compete with us in Europe, apart from the Poles. We do not see any major increase in beef or dairy products. There may be in tillage but there will be no significant production challenge from the new countries in the dairy and meat sectors, the two areas in which we are interested.
Another key issue has been raised by Deputy Upton on a number of occasions: the need to ensure markets are available and that the investment the industry and farmers have made in complying with the regulations ultimately produces dividends. I am concerned, however, about the liberalisation of the market. Take chicken, for instance: chicken produced in Europe complies to the highest standards. Irish chicken is the best but if one consumes European chicken produced under the various regulations, it is absolutely safe. The difficulty arises with chicken imports undermining the good reputation of European products. Most European consumers will not differentiate between Irish, European or non-European chicken. They will simply condemn everything if a chicken product has gone wrong. We need to be clear about this. We have raised the problem with Commissioner Byrne on a number of occasions. Labelling and the protection of the good reputation of Irish and European food are essential.
On Deputy Wilkinson's point concerning young farmers and the idea that decoupling will provide the next generation with opportunities, I hope it does but I am concerned that it will not as regards the dairy sector. It is agreed and accepted by everybody that there is a cut of 28 cent per gallon. In the MacSharry proposals the compensation principle was that for every 28 cent per gallon cut a direct payment of 28 cent per gallon would be made. There was, therefore, 100% compensation. In the proposals now adopted we will only get 17 per cent per gallon compensation. Some may say farmers are getting over 50% compensation but every cent cut per gallon represents a reduction in profit. That is how I have arrived at the figure of 30%. Our costs will still be the same. That is the reason I argue that the dairy sector has been dealt a serious negative blow.
As regards decoupling, many farmers subscribe to the idea of cutting out bureaucracy and enjoying the freedom to compete if that is what will be achieved. However, they concede there will be cross-compliance: in this regard, there will be 18 conditions for them to comply with, to draw down the single farm payment. The difficulty is that this will have to be audited and certified. There is a cost involved and there will be considerable paperwork. I, therefore, do not believe bureaucracy has been eliminated.
Another difficulty which must be recognised and addressed as regards decoupling relates to the beef sector: whatever has been drawn down in the base years now becomes a permanent payment. The trading system that operated, particularly in cattle weaning, meant that farmers sold cattle without drawing down the premium which was reflected in the price they received at the mart. Traditionally, in disadvantaged areas in the west, animals were sold without the premium being drawn down. The animals were delivered to the eastern part of the country and finished. The premium was then drawn down. One sees significant amounts in European supports being permanently transferred from disadvantaged areas to the eastern and south-eastern parts of the country. This presents a difficulty on the basis that the market transfer of that payment has now been removed. The ICMSA has suggested that this has to be addressed through the mechanisms in place as regards the national reserve.
On the nitrates issue raised by Senator Scanlon and the difficulty of compliance, we estimate it will cost €1.6 billion, a massive amount, as regards required slurry storage capacity. I do not know whether the Government is prepared to come up with this funding. I do know, however, that the sector is not in a position to fund it given the present level of profitability. It would be an enormous burden to expect the sector to deal with it.
The Chairman asked where farming was going after the mid-term review. The market will determine whether farmers will continue and the industry will survive. We have many advantages, one of which is that production in Ireland is grass-based. We will be able to beat all of the European countries but not New Zealand in the production of beef or milk because Ireland comes out on top as a grass-based agricultural economy. We probably have the best cost based production system in Europe, an advantage which needs to be exploited. On this basis, particularly in the dairy sector, the industry will survive, even though it has to contend with massive difficulties.
The Dutch have a high-cost system. Their average quota is 123,000 gallons or four times the figure in Ireland. However, average income for a Dutch dairy farmer is only €24,000. They have high output and other huge costs. In a new scenario they will face major difficulties in surviving. I know some may say it is wrong of me to assert there is an opportunity for us in the demise of other European producers. However, that is the commercial reality in the marketplace. That is how we see it as regards decoupling.
The beef sector will only continue if it is profitable. The farmer - whether in the east, south-east or west - will now receive his or her decoupled payment whether he stays in beef production. That is secured. He or she may decide to continue in beef production, not because he or she is drawing down a premium - since he or she does not have to anymore - but because the enterprise is profitable. If it is not, he or she certainly will not continue.
Crucial to ensuring he or she does is the fact that live exports enhance competition. I remind the committee that under the injunction granted by the Supreme Court, over 400,000 animals were exported. This was reflected in prices, our greater market share in Europe and the tremendous demand. The Minister for Agriculture and Food, Deputy Walsh, has been supportive of live exports. In 1997, when there was a difficulty, before the granting of the injunction, he was supportive in ensuring farmers got their products to the market.
I would like to comment on the use of slurry and the idea of farming on the basis of a calendar. Any main street of any town or city in the country will be thronged with shoppers on Christmas Eve because that is the tradition. If farming is allowed to operate on the same basis, that on a particular date every farmer will spread slurry, rather than taking the weather, the environment and the farmer's practice into account, it will be an unmitigated disaster. As farmers, we have a vested interest in protecting the environment. We want to make sure the legislation that is passed recognises that for hundreds, if not thousands, of years farmers have contributed positively to the economy and made sure the next generation of farmers will be able to continue farming.
Some 99.9% of the water used for drinking is free of nitrates. It is not true to say the present generation of farmers have gone out and wrecked the countryside. We produce an excellent product and protect the environment with the expertise available to us. The regulatory authorities need to recognise the professionalism and commitment of farmers to the environment. We have a vested interest in making sure we leave the land in the same, if not an improved, state to the next generation of farmers.
Mr. Ciarán Dolan
Our organisation has invested a lot of resources in highlighting the dangers of the directive on nitrates as it is currently written because we live in a European Community based on law. We will ignore the directive at our peril, which is what, as a State, we have done. One part of the directive deals with modification with regard to advances in science. It is quite an old directive and we are not the only member state that has a difficulty with it. This committee should recommend that Ireland, while holding the EU Presidency, should press for a review or even an amendment of the directive at European Council level, taking into account the advances made in science, greater environmental regulation and its implementation. Greater flexibility for member states is also required.
It would be the view at EU level, apart from those whose job it is to implement the directive, that we need to look at it. Pending that review, the various actions taken by the European Commission against member states should be put on hold. We are not suggesting that we should turn our back on the directive and ignore it; we cannot do that as we would be before the courts. Neither are we suggesting that Ireland should bring forward at EU level a set of proposals to amend the directive which would not stand up to scientific evaluation. However, we are convinced that the directive needs to be changed. This committee could play a useful role in this regard. This would not be the only member state which would seek that change. We are not blaming the European Court of Justice which must implement the law as approved by the Council.
We are in frequent contact with the meteorological service on its agricultural output. We will take up the committee's suggestion that we try to incorporate scientific based data in the regulations in order that we will not be straight-jacketed with calendar regulations.
Johnnes disease is becoming very common. I am sure other members have come across a similar problem to that which I have encountered in my constituency. Farmers were destocked because of BSE, then restocked but soon after found they had this problem, in respect of which there is no destocking programme in place or compensation payable. I have come across some very sad cases of farmers who have suffered both blows. They can no longer sell their maiden stock or in-calf heifers. This represents a serious financial burden for them.
The single farm payment was issued yesterday and to be fair to the Minister, certain concessions were made. Does Mr. O'Rourke's organisation have a view on the farm retirement group which did not include the non-family member and was set to lose out?
I think Mr. Dolan would make a great politician as he pulled the trump card from his pocket when talking about the directive. Following the comments he made, perhaps the clerk to the committee should write to the Minister for the Environment, Heritage and Local Government and ask him for a view on the directive. How up-to-date is it based on the scientific information available since 1991? While there is a danger that we could end up with a more penal directive, we should get a view without overexploring.
I do not think we would have any problem with that. That is agreed.
The difficulty with regard to Johnnes disease is that there are some areas where the criterion for supply to the market is that a product must come from a herd free of the disease. It is unreasonable that a farmer, through no fault of his own, can find himself or herself in difficulty. Our view is that if the Department's is going to restrict a herd because of the existence of the disease for which the farmer is not responsible, there has to be an arrangement whereby he or she is adequately compensated. There is no point in ignoring Johnnes disease because if the market dictates that a product has to be free of the disease, we have to address this. We can do so on the basis that individual farmers whose herds are caught with it but the farmer is not to blame receive some form of compensation.
Deputy Timmins referred to the single farm payment. Progress was made yesterday, of that there is no doubt. The key issue for us is that changes will now occur and there will be significant losers and other anomalies which we will have to address. One of the issues involved, land rental, has been addressed to some extent. If a farmer rented land in the past, he or she will no longer have to rent the same amount, he or she will only have to rent approximately 50% of it.
There are also anomalies with regard to retired farmers. The difficulty is that whereas now there is a mechanism in place to deal with them, there will not be sufficient funds in the national reserve to deal with the issues that will now arise. Retired farmers, those who bought land and those who sold animals without drawing down premium are all going to lose. We have to recognise this and ensure there are sufficient funds to make good the losses.
We welcome the concessions, for which we had looked. To be fair, the Minister and his officials were successful in getting them. Initially, the Commissioner would not entertain the idea, which shows that if one preseveres, one can succeed.
Mr. Dolan
We have some scope in the sense that we can refer to the traditional diseases of brucellosis and TB. The level of reactor removal has come down. It is our view that we imported this but it is better to eradicate it at an early stage rather than let it become well established. It is important that we have a very good record in terms of the health status of our animals and products and, if a disease has to be eradicated, it does not matter to an individual farmer whether it is brucellosis TB or any other. In the case mentioned, there is some scope in regard to funding.
In the context of the new Europe and associated opportunities, the ICMSA contains a body of persons with marketing expertise. The view, as referred to by Mr. O'Rourke, is that over time a movement in agricultural production may be seen, whereby livestock and livestock products may tend towards northern Europe while the arable sector will tend towards central and eastern Europe, which would clearly be to our advantage. I am not suggesting that our grain farmers are not competitive as they definitely are, despite a climatic disadvantage; technically, they are achieving higher standards than any other producers in Europe, even the French. However, comparative economic advantage suggests that in a European single market without barriers livestock and livestock products will be concentrated in the northern and western parts of Europe - our area - while grain and arable products will generally be concentrated in central and eastern Europe.
With regard to traditional products in the dairy and beef sectors, we will be able to market our products within the single market and, with reference to the Kerry Group and others, will be able to add technology, in terms of research and development, to seasonally produced dairy output and sell it on all world markets.
The issue of research and development must be widened in the context of public policy on marketing. There cannot be a properly managed situation where a wrong choice is made to support research and development from a taxation point of view. Companies which must invest money in research and development will clearly focus this as closely as possible on market returns. I know of a food company which last year invested €90 million in research and development. Within the scope of EU legislation and restrictions, and in the context of developing this sector to generate wealth for all, research and development and marketing will pay dividends.
On behalf of the joint committee, I thank Mr. O'Rourke and Mr. Dolan for attending and contributing to an excellent and very informative discussion. Those who lost out are the unfortunate members who could not be here with us. Commissioner Fischler will be with us on 11 May at 4.45 p.m. and the ICMSA is welcome to send a representative to oversee the meeting.
We will adjourn until 2.30 p.m. on Tuesday, 6 April when we will hear the Irish Cattle Exporters Association. We also have a meeting at 3 p.m. on Wednesday, 7 April when we will hear from Ms Mary Carroll, equality officer of the IFA, on the issue of women in agriculture.
The joint committee adjourned at 1.25 p.m. until 2.30 p.m. on Tuesday, 6 April 2004.