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Seanad Éireann díospóireacht -
Wednesday, 26 Nov 1997

Vol. 152 No. 15

Agriculture—Santer Proposals: Statements (Resumed).

I was talking in general about the social costs and implications of changes to rural communities, particularly where there is a decline in the population, and the questions they raise. To what extent will we allow what is happening to continue, for instance, the cost to rural towns of the growth of our cities and particularly the inordinate growth in the Dublin region and the eastern seaboard extending to counties Wicklow, Kildare, Louth and Meath? Will the Dublin area continue to be allowed to expand at its current rate? Looking at the implications of that, does it mean that as cities, and in particular Dublin, grow, is the rest of the country to be a kind of weekend playground where an affluent middle class go to breathe fresh air and take their children to see real animals? Are tourism and recreation to be only non-agricultural sources of employment outside Dublin and the larger cities?

It does not have to be like that. We can and must make choices to halt rural decline and ensure that rural communities do not suffer the worst effects of the trends we are witnessing. Rural communities are far too important for that to be allowed to happen to them.

The choices that have to be made include a deliberate policy of bringing jobs to rural towns. I referred earlier to what appears to be the current IDA and Government policy of bringing large scale employment to cities such as Limerick, Galway, Cork, Dublin and its hinterland including Leixlip, at the expense of rural towns. I have carried out some investigation on this matter and, without going into it in great detail, it is not beyond the bounds of possibility to bring jobs to towns such as Nenagh, Thurles, Templemore and Roscrea. It would require a policy change as well as more work and a different style of approach by agencies such as the IDA. Shannon Development and other agencies are doing great work in that regard, but they need more Government support.

Rural areas are ideally placed to take advantage of the potential of the information superhighway, which simply requires a high level of investment in technology which, in the long run, will pay great dividends. The global village can be as real in Rearcross as in any of our bigger towns and cities. Rural communities deserve to have as much access to the information superhighway, its positive spin offs and benefits by way of jobs and investment as any other part of the country.

Another point that should be taken on board with regard to halting decline, promoting investment and developing a policy of rural renewal, is recognising the importance of the social economy. This was referred to in the NESF report on combating social exclusion in rural Ireland. It talks about rural community employment programmes — a subject which comes up on a weekly basis. The report recommends, on page 69, that such programmes should be upgraded to the highest level of training and work experience and that this should be a priority for FÁS. It talks about the importance and potential of the social economy. This has been taken up in Partnership 2000 and is the subject of a working group whose report and recommendations I look forward to receiving.

Community employment schemes are of huge importance in areas such as Silvermines, for example, where the traditional mining industry has ceased leaving behind a largely male workforce now in its late 40s or early 50s. Because this workforce is unskilled it does not get the opportunity to partake in the normal economy. Community employment schemes provide an opportunity, particularly to men who have become unemployed through changes in the employment market, to play a role in their locality. Whether the type of work is with tidy towns competitions or the GAA, graveyards, heritage or schools, it is of huge value to those individuals and to the community of which they are a part. Not a week goes by when I do not hear from somebody asking why they have to leave such a scheme after three years or take a break after six months?

Because of the major changes in employment where we do not see the same levels of unemployment or labour market conditions, the Government should consider a change in policy by FÁS in relation to community employment schemes. Such a policy change might involve a pool of workers in a community who get their share of such schemes and do not necessarily come off them after three years because there is no value in doing so.

The younger workforce is, happily, largely employed. Those younger people who are unemployed have a different set of needs that must be dealt with by training. That would recognise the value of the social economy in rural areas and I intend to pursue the matter at a different level in the future. I will be seeking the working group's report when it is published.

Increasingly the farming community will have to take on the notion of partnership with the non-farming community in relation to two issues — consumers and the environment. The BSE crisis showed us the extent to which our agricultural industry is dependent upon the vagaries of the consumer in the supermarket. It demonstrated the need for a partnership approach between the agricultural community and the consumer not only to the issue of food quality but also in the battles ahead to support our agricultural communities.

We know there will be compensation and that has been signalled, but it will be on the same basis as assistance which is offered to all other sectors across the EU both urban, which are growing, and rural, which are in decline. If a townsperson loses his or her job, the compensation package is not offered to every dweller. In the rest of the community those in need of help are identified and helped directly. Large groups are not generally subsidised, only when some of their members are poor. There are far too many other demands on the EU's purse to provide computers for the nation's schoolchildren or to cut hospital waiting lists, yet these are the competing demands against which farmers will be fighting.

It is especially true in this country, where so many people are from a rural background, that the wider community is willing to help farmers who need assistance to adjust to a new world agricultural order. However, permanent subsidies will not be on offer for much longer and the farming community will have to adjust to that fact.

By selling the highest quality food both here and abroad we can show the non-agricultural community that working together benefits the whole economy. We cannot take agriculture in isolation, we must see the issue as a whole.

Eutrophication of water supplies in our lakes and rivers is a side effect of greater agricultural production. This is an issue throughout the country, particularly in north Tipperary, where Lough Derg has suffered over the years. I welcome the campaign by Teagasc, an independent research body, to reduce the amount of phosphates in our waterways. Figures published by Teagasc show that farmers are using up to 30,000 tonnes of excess phosphate every year at an overall national cost of £25 million. This means that in some cases farmers would not need to apply phosphate for four to five years. This campaign operates on the basis of supporting farmers. This issue must be tackled. I hope that farmers work in partnership with the wider community and that we do not have to penalise them for overuse of phosphates and for causing pollution.

We are not facing up to the need for an integrated policy on rural renewal. This must be our aim for the future. Any discussion of the Santer proposals or any other EU proposals for change must be seen in the context of halting the decline in rural communities and meeting the needs of not just those engaged in agriculture but those dependent on them.

I want to raise two issues with the Minister. The seed potato industry in my county was destroyed thanks to one or two individuals in the Department of Agriculture and Food who set up a company for millions of pounds and then sold it for £10. They destroyed a valuable industry which produced a cash crop. This country had a tradition of successfully selling seed potatoes in the Middle East for which we had orders every year. I hope I have another opportunity to raise this issue which has been forgotten. Perhaps the Minister will refer to it in his reply.

Has the Department of Agriculture and Food any machinery to assess the quality of imported milk? This is a serious problem in the Border counties and in Dublin, where two litres of imported milk retail at 79p. We have heard different stories about water hoses being placed in tanks after the fat content is tested. This might be folklore but I ask the Minister if it is possible for the Department to examine the quality of imported milk. It is important to allay the consumers' fears in this regard. Two litres of home produced milk retail at 99p. A 20 per cent reduction is substantial, so its quality must be questioned. Many young families buy cheap milk, which is part of their staple diet. I ask the Minister to allay the fears of those who buy the cheapest milk on the market.

I thank Senator McGowan for his short contribution. I am used to his long contributions, which are always worth listening to because of his great commitment to rural development. I will address his two points at the end of my reply.

I listened with great interest to the remarks made by Members. A number of them raised questions about the implications of the Agenda 2000 proposals. Any estimate of the net effect of the Agenda 2000 proposals on Irish agriculture must be regarded with extreme caution. Any such estimate is crucially dependent on future market prices, which are notoriously difficult to forecast. Even if it is assumed that the market prices for the three commodities concerned — beef, milk and arable crops — will fall by the precise amount of the proposed reductions in support prices, there are still difficulties about arriving at a reliable estimate.

There is the question of which rate to use for the conversion of ECU values to Irish pound values. There could be a difference as big as 8.5 per cent between the two extreme options available. In addition, the Commission's proposals are incomplete and the crucial detail which could significantly affect the impact of the proposals are as yet unknown. For example, we do not know what the Commission will propose in the form of measures to encourage extensification or environmental preservation and enhancement.

With all these qualifications, the net effect of the proposals on prices and on premia could be a loss of approximately £125 million a year. This necessarily tentative estimate is based on what is known of the proposals in relation to market supports at this stage. It does not include any estimate of the effect of changes in Ireland's receipts under the structural heading where the Commission's proposals are, at this stage, even less developed than their market proposals. I again emphasise the tentative nature of this estimate. It is my intention in the period between now and the emergence of the Commission's detailed proposals and the subsequent negotiations that will follow in the Council of Ministers to ensure not only that no loss will accrue to any sector of Irish agriculture but that the final outcome will be positively advantageous for Irish farmers individually and will provide a platform for the further development of the Irish food industry.

Rural development and the Structural Funds were raised by a number of Members. To be a real Union it was clear from the outset that interventionist policies would have to be adopted to level off economic development and standards of living. The structural and cohesion policies of the Union will continue to play a key role in establishing those economic and social foundations for European integration. Ireland has received significant transfers under those policies. It has used the transfers in a wise and progressive fashion. We are testimony to the success of the EU's cohesion policy. Care must be taken to ensure that this success is nurtured and sustained and that EU transfers to Ireland will continue to have an important role in achieving this.

The Agenda 2000 negotiations must take account of the fact that Ireland continues to have significant development needs. These include our relatively underdeveloped infrastructure and our continuing employment needs, particularly our high rate of long-term unemployment. In addition, because our movement towards average Union GDP is so recent, we have not had the opportunity to accumulate the national stock of wealth and capital available in other member states which have been relatively prosperous over a longer period. As we are an island nation, we will have transport problems. That gives us confidence to challenge the reduction in the Structural Funds on that basis. That must be taken into account in the future.

It is essential for us that the aims of Objective 1 are met fully and on a sustainable basis. It is in everyone's interest, especially that of the Community as a whole, that a cycle of dependency be avoided and that Ireland's relative success story continues. A period of consolidation is definitely required if Ireland's present achievements are not to be undermined.

With regard to the Structural and Cohesion Funds, the Commission has recognised that any transition from Objective 1 status must be gradual and has proposed transitional provisions for regions which exceed the threshold for Objective 1 status. We will be exploring in more detail what the Commission has in mind. The principle idea it has proposed would have to be effective throughout the next funding period in a way which would ensure a continuity of development. We will, however, require considerably more precision from the Commission as to what they have in mind in this regard. I welcome the acceptance that membership of Economic and Monetary Union will not preclude countries from eligibility under the Cohesion Fund.

Senator Kiely is of the view that we must increase our share of the world dairy market. Commission analysis suggests that the market for dairy products is expanding. I broadly share this view and believe this will continue to be the case over the coming years. If the EU dairy sector is to grow and develop to its full potential, it is crucial that the EU maintains a strong presence on that expanding market. Any retreat from this position over time would seriously undermine the long-term viability of the EU dairy sector.

In order for the EU to retain world market share, possible adaptations to the quota regime might have to be considered to allow for more flexibility while at the same time minimising disruption to the existing system. Serious consideration should be given to possible arrangements which would allow the EU share in the expanding world market and which could facilitate transition to a less restrictive regime beyond 2006. An A & B quota is one of many ways of expanding production and all of these will have to be looked at.

Senator O'Brien sought a premium for heifers. Clearly, the economics of heifer production would be extremely precarious following a 30 per cent fall in cattle prices and, unless appropriate measures are taken, there would be a serious question mark over the future of this segment of beef production, which accounts for 27 per cent of total cattle slaughterings in Ireland.

A number of Members raised the question of limits on, and modulation of, direct payments per holding. It is difficult at this stage, in the absence of definitive proposals, to comment meaningfully on the ideas put forward by the Commission to limit the amount of direct payments per holding and to allow member states to modulate their payments. Any meaningful comment can be made only when we see, in the detailed proposals, what precisely the Commission have in mind.

A number of Members were concerned about reductions in the level of funding being provided for certain schemes. The reduction in the Estimates for 1998 in the four measures covered by the Operational Programme for Agriculture, Rural Development and Forestry under the Structural Funds is due to the fact that we are now entering the fifth year of a six year programme of Structural Funds and the Department of Finance and the European Commission allowed us bring forward some funds into the earlier years, that is, 1994-97. A special amount of £15 million has been provided in the Supplementary Estimate for on-farm improvement in the 1997 Estimates and this exaggerates the difference between 1997 and 1998.

The delay in payment of premia was also raised. Payments are continuing to issue to farmers under all premium and headage schemes. While the requirements of the Land Parcel Identification System, which is fully operational in 1997 under EU rules, have been a complicating factor in processing the various premium and headage applications this year, I expect substantial levels of payments to be made in the coming days. The Department of Agriculture and Food have been working long and late to overcome this difficulty and substantial payments will be made to farmers this week. It is about time we gave up the political nonsense of talking about late payments. Practically all the area aid payments to grain farmers are being made. It is good political talk. I suppose we can no longer make speeches at church gates.

Senator Gibbons raised the issue of vaccination for brucellosis. The issue of brucellosis has become one of major concern over the last year, not least the deteriorating disease position and the implications that this may have for trading purposes. It is, therefore, fair to say that brucellosis is a nationwide problem which demands concerted national action. This is especially true when one considers the consequences for our export trade in milk and dairy products.

Given the serious brucellosis situation, there is no alternative but to introduce further measures, including the tightening up of the pre-movement test requirement. This will ensure our continued ability to trade all agricultural produce. In order to maintain the official brucellosis free status for herds we would be reluctant to use vaccination but we are currently reviewing this issue.

Farmers have more to lose as a result of brucellosis and animal disease than anybody else. There is a small minority of people who are causing the problem and, if there is not discipline at farmer level in the control of the movement of cattle, we will never get rid of animal disease. It is up to the farming community, in conjunction with the Department, to put the issue of the eradication of animal disease to bed once and for all. The Department and regional vets will make a concerted effort to rid the country of brucellosis. Brucellosis is a bacteria infection and it is not a major problem but there is a high instance of it at present. Negotiations are taking place with the farming organisations and the Minister will make an announcement in that regard.

When will that announcement be made?

Within a few days. We cannot shy away from the fact that there must be a pre-movement test. There is a vaccination but it is not approved by the EU and our status would be affected by the use of vaccination.

There ought to be greater control in the movement of cattle. I am disappointed that the livestock marts have withdrawn from the special sales because they were a way forward and an example of multidiscipline.

There is a small minority of people who continue to behave in a bad way, blackguarding the system and causing the difficulty, and this problem will be addressed.

Will pre-movement be part of it?

Yes. There will be a package. Following Minister Walsh's visit to Egypt in September, when he met both the Deputy Premier and Minister for Agriculture and the Minister for Trade and Supply, work has been continuing on plans for a trial shipment of live animals which would meet the conditions set by the Egyptian authorities. The possibility of such a shipment had been agreed at the September meeting.

A detailed proposal for a trial shipment, which includes veterinary and technical assessment of the handling and slaughter facilities to be used for Irish cattle in Egypt, has now been sent by Minister Walsh to the Egyptian Ministers for their consideration. This proposal, which was drawn up in a joint exercise by my Department and the Live Exporters Association, and which builds on the outcome of a recent visit to Egypt by technical experts, will hopefully allow a trial shipment to take place in the near future. I regard this as the best approach to pave the way for a full resumption of trade.

I should point out that the ultimate decision on the import of live cattle from Ireland is, of course, for the Egyptian authorities. I believe Ireland has addressed the specific concerns raised by the Egyptians with a view to convincing them of the safety of Irish cattle. No effort has been spared in this regard and I look forward to a successful outcome.

Ireland has a large market in the Middle East.

I had a meeting with the Libyan Minister for Agriculture in Rome at the FAO Conference and I also met the Iranians. The former Taoiseach met the Iranians and they promised to send a technical delegation but that did not come to pass. They have now renewed that promise. There is a good market for Irish processed beef in Iran and the live cattle trade would be ideal for Libya, so we must keep our fingers crossed that something productive may happen in the new year. The Libyans have contracted to buy Australian stock until about January from an Irish exporter but we can look into it. Beef prices are good at present at 86p or 87p per pound. They are better than they were this time last year, so the cattle industry is looking up.

Surely the Minister is not saying that 86p per pound is good?

We are looking at a good scene, and there are premiums on top of that. There is fear for the farmers of County Roscommon.

I thank the Deputies who spoke for their interest in this very important issue. I believe that for the foreseeable future agriculture will continue to be a substantial employer and creator of wealth in Ireland as productivity improves, although employment in primary agriculture is likely to continue to decline. There are 136,000 people in Ireland with agriculture as their primary occupation, with another 157,000 approximately working part-time in agriculture. Gross agricultural production in 1996 was just over £3,514 million or 8.3 per cent of GDP. Total Irish receipts from the CAP in 1996 were £1,365 million or 3.2 per cent of GDP. It is in Europe's and Ireland's long-term interests that European agriculture should become more competitive on world markets and be developed on a sound, stable and sustainable basis. A fundamental plank of our position will be to ensure the maintenance of a fair income for farmers or, in the words of the Treaty of Rome, "to ensure a fair standard of living for the agricultural community".

Farm incomes must remain at an acceptable level, not only for reasons of equity and social cohesion but also because the predominance of agriculture as an economic activity in rural areas makes it so important to those areas. The system of compensation will have to be fair and equitable; this means that the economic interests of member states in the products concerned will have to be fully respected and that one type of production cannot be disadvantaged by reference to another.

The future reform of agriculture should not be presented as the stark alternatives of responding to the markets, on the one hand, and preservation of the interests of the agricultural community, on the other. The essential point is to respond to the realities of the market and at the same time to ensure that the aims of Article 39 of the Treaty of Rome are fully respected.

My aims in the CAP negotiations will be two-fold: to protect farmers' incomes and have a vibrant rural development policy at home and to place Irish and European agriculture on a proper footing to meet the challenge of the next trade round and to avail of future world market opportunities. It is clear that the challenges facing the agriculture sector are significant and I want to assure all concerned that my aim and the aim of Minister Walsh is to ensure that we are well positioned to meet these challenges and that the agriculture industry overall continues to make a significant contribution to economic life in this country.

I thank Senators for their contributions. I compliment Senator Tom Hayes who led the debate on the Opposition side for the constructive approach he adopted. I admire his knowledge of agriculture and I am sure he will be involved in public life for many years.

Senator McGowan referred to potato marketing. I met the Israeli Ambassador and his agricultural attaché for lunch today and we discussed Donegal seed potatoes, which Israel has imported for the past 70 years. If I had been aware of the Senator's concerns I could have brought them to the ambassador's attention. Senator McGowan also raised the assessment of imported milk by the Department. This issue is probably covered by the Consumer Information Act and the dairy hygiene regulations. However, I do not believe the latter are relevant because the product is not indigenous to Ireland. If it is imported, it is covered by the Act to which I referred. If the Senator continues to have doubts about such milk, my officials will take note of them and we will contact him about the matter later.

Senator Gibbons referred to installation aid. This matter is currently being assessed. He also raised the policy of a national management plan. Everyone recognises that there has been over-use of fertilisers such as phosphates, which are a major problem on the east coast, and nitrates. I support any measures designed to improve the environment, reduce phosphate levels and maintain our water tables.

Senator Rory Kiely referred to proposed standards and milk quotas, with which I have already dealt. Senator Connor referred to farm investment and I assure him that payments will be on target.

They cannot be on target because 31 October was the closing date.

Under the former Minister — a member of the Senator's party — the Department had an overrun of £51 million.

The former Minister paid everyone on time.

There was a £51 million overrun so the Senator cannot boast about his party's achievements.

The Minister of State should not try to mislead the House.

I believe I have dealt with the points raised and I again thank Senators for their contributions. I enjoyed the time I spent as a Member of this House and I look forward to many future debates with Senators.

When is it proposed to sit again?

At 10.30 tomorrow morning.

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