The first report for consideration is Deputy Walsh's report on Marketing of Fishery Products.
Marketing of Fishery Products.
The Joint Committee in its Seventy-seventh Report adopted in June 1980 dealt with many aspects of the common fisheries policy, for example, total allowable catches, member states' portion of this catch, access to inshore waters, structural measures, conservation and scientific research. However, in that Report the Joint Committee did not cover the fisheries marketing policy, as it was not published at that time. It is this aspect of the policy which is dealt with in the draft report to which I now propose to refer.
For the Community as a whole, particularly for Ireland, the marketing policy is of vital importance in view of the many fishermen who have been suffering low quayside prices for their fish in recent time. Allegations of dumping at very low prices by third countries, and even by Member States, have been widespread. The object of the marketing regulation is to reinforce reference prices so that withdrawals of fish at those prices are adequately policed and do not end up being resold.
I should like to refer briefly to the history of the common organisation of the market in fishery products. It was established on January 1971 on the basis of Regulation 2142/70. In 1976 this Regulation was consolidated by Regulation 100/76. The present proposal replaces that Regulation. It takes account of the market developments, including the substantial increase in production of deep-frozen and processed fish. It also takes account of the changes which have occurred in fisheries in recent years. It is based on guidelines brought forward at the Fisheries Council meeting on 15 and 16 December 1980. I propose to describe the three main features of the proposal which are: firstly, producers' organisations, secondly, prices and intervention and, thirdly, trade with non-member countries and import arrangements.
There is a provision for increased aid for setting up producers' organisations within five years from the entry into force of the Regulation and for strengthening the production and marketing rules which can be imposed on fishermen who are not members to prevent them from impeding the organisations' efforts to regularise the markets. These producers' organisations, which are, in effect, intervention agencies in the fish sector formed by fishermen on a voluntary basis, have been assigned a central role in the day-to-day running of the markets but have not in the past always been able to play this role properly, either because of the level of membership, which was too low, or because the provisions governing their intervention in the market were too rigid. Compulsory membership is not envisaged but the financial incentive to join is being improved.
Secondly, there is scope to allow a producers' organisation, which is considered to be representative in a given area or port, to extend its price and production rules to other fishermen landing within the same area or port. Lastly, the producers' organisations are being permitted to modulate their intervention in the market in the light of the market situation prevailing at the time. This will enable them to serve their members' interests better than in the past and to induce more producers to join.
In Ireland there are two producers' organisations, the Irish Fish Producers Organisation Limited, which represents the whole country, and the Killybegs Fishermen's Organisation, which represents the north-west solely. Those two organisations represent over 90 per cent of Irish fishermen and cover all areas of the State for intervention purposes. Accordingly, we see no merit in the creation of any further producers' organisations as it would lead to fragmentation and would not be in the best interests of the Irish fishing industry. However, the measure should help to strengthen the existing organisations and give them more control over the market.
I shall now deal with the second aspect of the proposal, the prices and intervention system. Under current rules guide prices are fixed on a mathematical basis, that is on the average market prices recorded during the last preceding three years. It is proposed under Article 10 that in future account will be taken not only of the mathematical criterion applied in the past but also criteria such as production and demand prospects, and the need to support producers' incomes while taking into consideration consumer interests. Adjustments are being made to the list of designated species for which guide prices are set, as well as to the list of species for which a private storage premium may be granted, which would be available only at times of relative market weakness.
Guide prices, which are fixed by the Council for the whole Community, form the basis for calculating (a) the Community withdrawal prices below which fish may be withdrawn from from the human consumption market, with financial compensation, and (b) reference prices in relation to which import prices are monitored. The proposal fixes the Community withdrawal price between 70 per cent and 90 per cent of the guide price. The producers' organisations are authorised to apply a withdrawal price which is within a 10 per cent bracket of the Community withdrawal price. This should introduce more flexibility into the system. Producers are also encouraged to adjust supply to actual demand by means of a decreasing system of financial compensation related to the quantities withdrawn from the market with no compensation in cases of high withdrawal where the quantities withdrawn exceed 20 per cent of the annual quantities sold, that is under Article 13 (3).
The Sub-Committee considered that 20 per cent is on the low side, particularly in an Irish context, and should be increased. While appreciating the difficulties which this might create, we nevertheless feel that the limit could be increased to, perhaps, 30 per cent with appropriate adjustments in the scale of payments. Also there is provision for a premium to be granted for quantities of withdrawn fish which are processed and subject to a limitation of 15 per cent of the annual quantity of the product sold. This provision is designed to prevent undesirable destruction of fish withdrawn from the market. Such destruction holds the fishing community and the market system up to ridicule. We feel strongly that further efforts should be made to dispose of such stocks in some better manner — for example, through charitable organisations, through advertisements on radio, on television and newspapers — and we recommend that the Department of Fisheries, or BIM, should pursue this matter.
If this is not possible an alternative would be processing for animal foodstuffs. Regarding treatment of withdrawn stocks we are advised that Member States generally want to avoid the danger of building up a fish mountain. Their opposition is based on past intervention experience with certain agricultural products. However, we feel the same likelihood is not there for fish as they have a much shorter life. In Ireland the intervention system has operated since 1976 mainly for eight chief species landed but the bulk of intervention has been for mackerel. In 1979, 24,000 tonnes of mackerel were caught, of which in excess of 7,000 tonnes were withdrawn. In 1980, approximately 41,000 tonnes were caught. About 10 per cent of this quantity was withdrawn.
I will now deal with the third aspect of the proposal, that is trade with non-member countries and import arrangements. The Commission's aims in this area are to ensure regular market supplies and to guarantee adequate protection against imports at abnormally low prices, which are likely to disturb Community markets. The Commission accepts that the present import arrangements are unsatisfactory. Regulation 100/76 provides reference prices for imports below which imports may be suspended to prevent market disturbances. The Commission state that such suspensions are too abrupt and do not take sufficient account of the need of the market for regular supplies, particularly of products for the processing industry. At the same time the conditions for suspension are such that suspension cannot be implemented in practice until the market has already been disturbed. Moreover, where the suspension of imports is not applied, or is applied late, imports from non-member countries are given preference as regards sales on Community markets, to the disadvantage of Community producers who cannot sell their produce at less than the withdrawal price. The reference price should be the same as the Community withdrawal price but they have started to diverge in recent years and this has caused some difficulties.
More flexible import arrangements featuring several stages of protection are therefore being provided for, which will be implemented in accordance with pre-established criteria and before market disturbance occurs. The proposed regulation amends the manner in which reference prices for imports are set so that protective measures can be applied progressively according to the risks of disturbance of the Community market. The range of products covered by reference prices is extended and an individual reference price may be set for each presentation of a species marketed on a large scale so that protective measures can be applied selectively.
In regard to imports from third countries, they do not affect the Irish market directly as our imports are relatively stable but they would affect our exports to the Community market. Of course imports are necessary for processing industries within the Community. We welcome the fixing of the reference price at the same level as the withdrawal price and we hope that the measures proposed will avoid a repetition of the divergence which occurred in recent years. We trust that the improved monitoring procedures set out in the Regulation will be adequate to enable the protection mechanisms to be brought into force with the least possible delay.
In relation to the financial implications of the proposal, 50 per cent of the aids granted by Member States to producers' organisations will be refunded from the guidance section of the European Agricultural Guidance and Guarantee Funds. This expenditure on intervention from the guarantee section in the fisheries sector is relatively low — 20-25 million European units of account in 1979 and 1980 respectively — but has increased in recent years owing to the increase in the number of producers' organisations. The Commission estimates that all the envisaged amendments will not involve a big increase in expenditure and that this increase should amount to about 7 per cent. Since the intervention system for fishery products was introduced in Ireland in 1976 approximately £2.1 million was recouped to producers' organisations from the guarantee section for payments of financial compensation for fish withdrawals to the end of 1980. A total of £96,000 was paid to producers' organisations in Ireland as grant aid towards formation expenses, 50 per cent of which is recoupable. As the rate of intervention in the fisheries sector fluctuates from year to year it is impossible to estimate the financial benefits likely to accrue under the proposal for future years.
If I may now sum up the views of the Sub-Committee, we are satisfied that Regulation 100/76 is not operating in the manner envisaged. The proposed regulation is, in general, an improvement but we have reservations on some aspects and suggest amendments in certain other areas. Naturally we welcome the improved price structure which embraces the guide prices and consequential withdrawal and reference prices. They should help to stabilise the market by ensuring more orderly and regular supplies and by enabling measures to be adopted against imports at abnormally low prices. Regulations with non-EEC countries appear to have created major difficulties during the fisheries negotiations. EEC imports went up from 750,000 tonnes in 1975 to in excess of 1 million tonnes in 1979 and several EEC countries are now demanding better protection for EEC produce.
I understand there is general agreement on the broad lines of the draft but that the text has to be finalised and the proposal is bound up with other aspects of the Common Fisheries Policy. I recommend this report for approval.
Thank you for your very lucid summary of this report from the Sub-Committee of which you have just been appointed chairman. I do not know what other members may have to say but I have just a couple of points. Might I direct your attention to paragraph nine of your sub-committee's report which is on page nine? There is a sentence there which you may prefer to amend and strengthen the first part of it. It is absolutely an amendment in the direction of the sentence already; it entails no variation of it. The opening part of it says: "The destruction of withdrawn fish holds the fishery Community and the market system up to ridicule . . ." and then you go on. I wonder could that be strengthened to read: "The destruction of withdrawn fish where there is existing human need for food is unjust and the fishery community and the market system are properly subject to ridicule and criticism as a result", and then go on, as you do, to recommend.
Yes, indeed, anything that would indicate our——
It just seems to me to strengthen the point. There was earlier reference to this in relation to human consumption. My second comment is in regard to page 3 where the report reads: "There is provision for increased aid for setting up producers' organisations within five years from the entry into force of the Regulation and for strengthening the production and marketing rules which can be imposed on fishermen, who are not members, . . ." Now that raises a question because organisations can make any rules that they want to themselves, subject to whatever the law may require them to agree or not to agree, but it is not possible to make rules which are imposed on people who are not members of an association unless there is law to that effect. I just wondered whether the regulation contains provision whereby the decision in the Irish case, of these two bodies, which would be intended to affect people who were not members of the bodies, would in fact have legal effect? Perhaps I should have raised that point with you before the meeting but I only saw it as the meeting proceeded. Perhaps if we pass this report the secretariat could have a look at that point and, if necessary, invite the view of the Sub-Committee on these references, as to whether there is any point there that needs to be made by us. It is on a technical level. Would you agree with that?
I would agree, yes. It is an unusual arrangement where you have an intervention agency which these producers' organisations set up on a voluntary basis——
Yes, they are given power to tell somebody else what he is to do and not to do. Somebody has to authorise that.
I would agree with the Chairman in regard to that amendment of paragraph 9. I wonder could we have a system or recommendation that, where necessary food is to be wasted, it could be given as a contribution from the EEC to starving nations.
I am sure Deputy Walsh had that in mind, that whatever was found to be appropriate, because time might not make it possible to do something, without doing more damage to the market and generally to——
It was a distribution problem in relation to this very factor all along the line. Is it a distribution problem more than anything else, more than the goodwill of the people, fishermen or whoever?
I think it is the inability of the market to absorb it all from time to time.
Absolutely, and we have strongly recommended in the report that every useful avenue which would channel this good food into the human food chain should be exploited and, failing that, the processing of the fish into the animal feed stream should be exploited, if we cannot get it channelled for human consumption.
It really would be a scandal if this were happening and we did not recommend that it should not happen. There should be arrangements made to see that it is not wasted.
We should emphasise this strongly in the report.
Would the Committee like me to read out the sentence as I have it or would Senator Mulcahy——
No, the Chairman might continue. I have another matter to raise later.
This is at the beginning of the last sentence on page 9 and would read: "The destruction of withdrawn fish where there is existing human need for food is unjust and the fishery community and the market system are properly subject to ridicule and criticism, as a result . . ." and then go on, that the Committee recommend that further efforts should be made to dispose of such stock, in some better manner, for example, to charitable organisations, through advertisements on radio and television or in the newspapers. I think that brings out Deputy Walsh's idea quite well.
It does indeed.
It makes the point that other members also wished to make.
I should like to ask Deputy Walsh, the chairman of the Sub-Committee, if they had discussions with Bord Iascaigh Mhara on this?
No, we had not. We had discussions with personnel from the Department of Fisheries and Forestry and we had submissions from the Irish Fishermen's Organisation.
It seems to me that the whole marketing arrangements for fisheries seem to be somewhat disjointed and not co-ordinated. I was under the impression that Bord Iascaigh Mhara had responsibility for developing a market system. In the light of the fact that there are other problems — there are people walking up and down outside the gates at present — it seems to me that there is a difficulty here, that you have an organisation like Bord Iascaigh Mhara which on the one hand is giving resources to fishermen to finance boats and, on the other hand, has responsibility for the marketing of or helping to market the product. Is this functional? Did the Sub-Committee have any discussions on those issues? Obviously you are identifying a marketing weakness here and you are making recommendations, or you are agreeing more or less with what is coming from the EEC discussions. But it seems to be part of a much wider problem. I take it the Sub-Committee did not get down to that.
Is this report acceptable to the Committee? I propose its adoption.
Could I just suggest that if the Sub-Committee look at the fishery aspect again — which they might — they might keep my point in mind? I see a problem there, particularly from the work I have been doing with regard to the fishermen; there is something going on there. It has to do with the structure of our marketing system.
Paragraphs 1 to 4, inclusive, agreed to.
PARAGRAPH 5.
I move:
In subparagraph (i), in the first sentence after "members" to add "but who would have certain safeguards under this proposal".
Amendment agreed to.
Paragraph, as amended, agreed to.
Paragraphs 6 to 8, inclusive, agreed to.
PARAGRAPH 9.
I move:
In pages 9 and 10 to delete "holds the fishing community and the market system up to ridicule and" and substitute "where there is existing human need for food is unjust and the fishing community and the market system are properly subject to ridicule and criticism as a result".
Amendment agreed to.
Paragraph, as amended, agreed to.
Paragraphs 10 to 15, inclusive, agreed to.
Draft report, as amended, agreed to.
Ordered: To report accordingly.