Mr. Aidan O'Driscoll:

I thank Senators and Deputies for their many well informed questions. I will try to deal with all of the points raised as quickly as I can, but first I will make some general points.

It is very important to understand the kind of proposals Ireland has been pushing for as a state and is now making as President are about giving member states flexibility to do certain things. The member state must then decide what it wants to do. That is a key point. It is a question of ensuring national sovereignty in decision-making. Each country is different and the agricultural circumstances as between Cyprus and Finland, or Ireland and Hungary, Romania and Bulgaria are very different. We believe in providing as much flexibility as is reasonable within a common policy and that affects our approach to the distribution of funds and greening.

I will deal with the points as they were made. On the outcome of the MFF negotiations, the reduction, as against the Commission's proposal, was approximately 3% in real terms under the CAP. That was a good outcome. In negotiations we have to deal with the proposals in front of us. The Commission has a big influence on all negotiations by virtue of the fact that it has the sole power of initiative in the European Union. If it places a proposal in front of us, that is the proposal on which we negotiate. We have to move forward or back from it. We wanted to maintain the full CAP allocation as proposed by the Commission, but it ended up being cut by 3%. This is in the context of a cap on the overall EU budget which was cut for the first time ever. Therefore, we have to be realistic. There may sometimes be confusion between comparisons with the percentage reduction in what was proposed by the Commission as compared to the percentage reduction in the last round, which gives two figures. There is no doubt that in comparing it with the last round it would be a bigger cut, but that would be true of the entire EU budget.

The issue of capping was raised several times. We do not yet know the outcome. As part of the MFF decision, the European Council decided that capping would be voluntary. It is a very short sentence in the conclusions and does not expand on what precisely it means. That is something Agriculture Ministers will have to consider in the reforms, but we have not yet reached that point in the negotiations. In early March we will commence discussion of the consequences or fall-out from the various decisions made by the European Council. We needed that little gap for people to reflect on what was decided in the European Council and exactly what it meant.

Deputy Éamon Ó Cuív asked whether we would table a proposal to provide for flexibility in capping.

During our Presidency, we must consult all 27 member states, see what is the centre ground and ascertain what the Commission has to say about European Council conclusions. From an Irish perspective, we believe there should be flexibility for member states in where to place the cap.

The issue of coupling was discussed in the Council during the Cyprus Presidency. The European Parliament has also been discussing it, proposing some increases in the provision for coupling. The Council discussion under Cyprus was closed with the existing Commission proposal in place. That will go into the trialogue negotiating process and we will have to see what comes out of that.

There is the issue of areas of natural constraint, formerly known as less favoured or disadvantaged areas. Unfortunately, there are multiple names. The issue was mentioned on a number of occasions. What is important is how one decides what qualifies as a disadvantaged area, to use the Irish term. The Commission has put forward new proposals on the determination of disadvantaged areas, including a series of objective biophysical criteria such as stoniness, slope in the soil or wetness. They are used to determine exactly what qualifies as an area of natural constraint and there is continued provision for it under Pillar 2-----