Mr. John Bryan:

Agriculture creates huge employment in the country and we see that as critical. It represents value for money for the European taxpayer and value for money for the Irish taxpayer. Whether one is a productive farmer or has a smaller-scale operation, one operates in Europe according to completely different regulations from those that operate in New Zealand, the US or South America. New Zealand has taken the free-for-all attitude that if a farmer milks 550 cows and owes €10 million to the bank, he can survive, but everyone else must go and get a job elsewhere. That is the New Zealand model, but the Irish and European model is the family farm model, based around a medium-sized operation, preferably with family labour, and trying to derive an income. Whether a farmer is from Germany or Ireland, he will not survive without that single farm payment because of environmental regulations that do not exist to the same extent in New Zealand or the US. We are talking about dairy expansion or the cost of maintaining a suckler cow. More than 50% of the cost comes from slurry storage. In the US or New Zealand, they just dig a hole in the ground and nobody worries about the environment. We do not have access to hormones, GM products or other technologies that are freely available to the commercial farmers of the Americas. If the European farmer is to compete and produce the food that the European consumer wants, with high environmental and animal welfare standards as well as full traceability from birth to death, there is a cost associated with that. That is where the single farm payments come in.

The payments were based on production. People invested that money. They built sheds, bought machinery and built up stock. The recent CAP reform was flawed from the start, because it failed to take into account that jobs and production must be supported. We have achieved a compromise whereby the Minister has the discretion to minimise that through the approximation model, variable greening and a 60% minimum payment. These are all areas in which we will be supporting the Minister. Within the overall budget, there are very productive farmers - several in Wexford - in lower income sectors such as sheep and suckler cows. We feel that a combination of Pillar 1 and Pillar 2, along with Government support, will have to be established to maintain production. Otherwise, the cost to the economy in lost jobs will be far greater. It is a matter of getting a balance, but at the same time using very tough objective criteria to minimise the cuts. We cannot pay people for doing nothing. There have to be stocking rates, and in particular we are talking about targeted payments. We want to minimise the cuts but maintain the maximum production. That must be our objective. There is no use in sitting here in three or four years and wondering why 20,000 jobs were lost in the agricultural sector because we took our eye off the ball.

We support the tackling of environmental problems, but targeting payments at vulnerable sectors delivers far better value for money. Moving the resources around to get better value for money will have to be a part of the reform, because otherwise there will be a loss of jobs. With the Irish economy under such pressure, nobody can design a programme that will not be about maximising jobs and exports. The end result must be targeting the payments as best as possible.