Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

Next week's meeting will the final Council presided over by the Greek Presidency. Next month, Italy will assume the Presidency. As with all end of term Councils, the agenda is long. This reflects the custom at the end of each rotating Presidency to take stock of developments over the previous six months. The bulk of the items for discussion are progress reports outlining the state of play on dossiers discussed since January last or conclusions drafted by the Presidency for approval by the Council on those dossiers.

I am happy to go through the agenda but many of the issues are still being discussed in the preparatory body for the Council, the Special Committee on Agriculture, SCA, which is meeting in Brussels today to clear up technical issues and reach agreement on the less political points. This means that the final agenda for next week’s meeting may change in the light of developments today and members might bear that in mind as we go through the issues.

The first item is the future of milk policy. From Ireland’s point of view, the key issue for discussion is item 8, the report of the Commission on the development of the market situation in the dairy sector. Under the terms of the milk package, which is the set of accompanying measures agreed in 2011 to complement the exit from milk quotas, planned for next year, the Commission is obliged to submit a report to the Council by the end of June on the milk market situation and the functioning of the milk package. This report will only be released later and, therefore, I am unable to brief the committee on it but the key focus of discussion is likely to be on the Presidency’s proposed Council conclusions on the future of the dairy sector. A draft of these conclusions was discussed this morning at the SCA but the outcome was inconclusive. We will have to wait and see what happens before the Council.

The situation in the dairy sector has been discussed at every Council under the Greek Presidency. It is no surprise to hear that Ireland has been vocal during these debates. The position is that the Council is divided on the steps that should be taken in the run-up to, and following the abolition of quotas. Ireland is among an increasing number of member states that are arguing that the soft landing envisaged for expiry of quotas is not happening in all member states. It is certainly not happening here. We have lobbied for measures to be taken to address this, notably through an adjustment of the butterfat correction coefficient. Our allies on this include Denmark, the Netherlands, Germany, Austria, Poland, Luxembourg, Estonia, Belgium and Latvia. However, another large group of member states, including France, Spain, UK, Sweden and Italy, are opposed to taking action. Some are linking this issue to the policy direction to be taken after quotas expire - in particular France - and there are subtle hints that some, at least, would like to see the reintroduction of some form of supply control in case of a crisis in the sector.

I will argue strongly at next week’s Council for immediate action to address the short-term issue of the soft landing and I will be unequivocal in my opposition to reintroducing any form of supply control when quotas cease next April. I favour intensive monitoring of market prices and the rapid deployment of existing instruments such as intervention prices, aids to private storage and so on should a crisis occur. The key issue on the milk package, which is the most important issue for us next week, is countries that were not overly keen to abolish milk quotas are trying to use the butterfat correction coefficient to negotiate market controls post-quota abolition should the price fall. In other words, they would like countries such as Ireland, which are planning to increase output, to be curtailed from doing so should the price fall and we will vehemently oppose that. We have been preparing for four years for quota abolition. Our farmers have invested heavily, and continue to invest, to do this while our processing sector has spent the guts of €500 million in preparation for the change. Most of the markets we are planning to expand into with the increased volume we will produce are outside the EU. They include China, Russia, the Middle East, north Africa and so on. Even though we are planning for rapid growth, the overall percentage this will contribute to the Union's milk pool is relatively small. There will be price volatility in the diary sector, whether Ireland produces more milk, but we will not tolerate a scenario where Ireland will be penalised because it could become the fastest growing producer of milk in the EU following the quota abolition.

The problem is we are trying to negotiate the butterfat correction coefficient. That is the only flexibility the European Commission has without having to go back through a co-decision process to help ease us out of quotas. The commission has the power to change a technical measurement tool such as the butterfat correction coefficient and that would give a country such as Ireland an additional 2% in milk quota this year, which would help us reduce the super levy fine that many farmers will be subject to because they are planning for expansion by building their herds and so on. This year, we will not have the advantage of the additional 1% in quota that we secured last year and the year before as part of the soft landing policy, which is why the butterfat correction coefficient would be useful for Irish farmer to reduce the fines. I will answer questions on this later.

The next item is school fruit and school milk schemes, which are relevant to Ireland because they have helped to finance programmes such as Food Dudes and the milk scheme that has been available to primary schools.

Items 4 and 5 concern the Commission's proposal to merge the two separate EU-funded school schemes, the school milk scheme, promoting consumption of fresh milk, and the school fruit scheme, promoting consumption of fruit and vegetables among schoolchildren. The Presidency will present a progress report on this proposal. The key issues outstanding are the scope of products that should be eligible for these schemes and how funding for the school milk element will be allocated between member states. We favour broadening the scope of products to include cheese and yogurt. We also believe that funding for the milk element should be allocated on an objective basis according to the population of schoolchildren as a proportion of the overall population. Ireland is unusual in that it has more schoolchildren per head of population than any other country in the European Union. If not, we are certainly in the top two or three. School fruit is already allocated on that basis, but most member states would prefer allocation based on the historical use of funds, for obvious reasons.

The next issue relates to producer organisations in the fruit and vegetables sector. The Presidency will present draft Council conclusions on how the producer organisation provisions in the fruit and vegetables sector have worked since the regime was reformed in 2007. The draft conclusions welcome the Commission's report, share its assessment that producer organisations are spread unevenly across the EU, and highlight the need for a clear, unambiguous and simple set of rules for sharing best practice and the effective use of market management measures. We fully support the text. One of the ambitions of the new CAP between now and 2020 is to create stronger producer organisations that can negotiate collectively for farmers and primary food producers, and more effectively than has been the case in the past. That is not so relevant to the dairy sector, but it is hugely relevant in beef and fruit and vegetables.

The next item is an optional quality term, which is "product of island farming". I suspect that Deputy Ó Cuív and Deputy Pringle and some other Deputies from coastal communities that contain islands might be interested in this. The Presidency intends to present draft Council conclusions on the case for an optional quality term, "product of island farming". In other words, it would be a new category of food production in the European Union. Notwithstanding that a Commission report was sceptical about the benefits of such a term, some member states are keen on the idea, namely, Greece - whose Presidency it is, which is why it is pushing it. I have an open mind on this. While there has been no demand to date from island communities here for a particular labelling structure of this kind, I believe that we should do all we can to address the disadvantages associated with island farming. I have already shown my commitment to island farming by providing in the draft RDP for a top-up under the new scheme for areas of natural constraint. However, some member states are opposed to the idea of introducing an optional quality term for island farming, so we will wait and see what happens next week. If we can get something out of this for island communities in Ireland, I am all for it, but there are problems in terms of what it means for PGI status, for example. It is an issue where we should look for an opportunity. It does not solve all problems, but it is an option worth pursuing.

A possible item for discussion and adoption is a draft decision authorising the opening of negotiations on agreements between the EU and third countries on trade in organic products. This is about ensuring mutual recognition of organic production systems between the EU and third countries, with a view to enhancing the EU’s export opportunities and protecting against imports that are not authentically organic. This issue has existed for some time and we hope to resolve it.

Ministers will also have an exchange of views about the implementation of CAP reform at a national level, and I will be outlining Ireland’s plans in that regard. As the committee will know, I have made a number of detailed announcements concerning both Pillar 1 direct payments and our rural development plan. I thank the committee for its very useful submission on the RDP. I have already taken on board a number of its proposals, notably concerning organic farming, which will receive a significant increase in support, and locally led environmental schemes. We plan to expand what has worked - in the Burren, for example - to other parts of the country through a competitive process so that the best projects are financed. We also intend to support our on-farm investments and the new GLAS scheme as far as is possible within the funding envelope. I know that the committee had proposed higher top payments in relation to GLAS, but we are trying to get as many farmers into it as we can as well. Let us not forget that this is a scheme that, when it is fully up and running, will be worth about €260 million. I know that Deputy Ó Cuív is concerned about delays to payments, but perhaps we can deal with the detail of that when we have our question-and-answer session. I can assure him that there are no delays on our side.

Of course, the draft rural development programme is not finished yet, although we are at an advanced point. The strategic environmental assessment is under way, the consultation period for which closes on Monday. We aim to submit a draft RDP to the Commission by the end of this month and thereafter there will be a period of negotiation and discussion with the Commission before the plan is approved. That may take a number of months; in other words, we might not have the RDP approved until close to the end of the year. If one is opening a GLAS scheme and planning on bringing in 25,000 or 30,000 farmers, it will take a number of months to manage that many farmers applying for one scheme.

There are two fisheries items on the agenda that are of relevance to Ireland, but perhaps we can discuss fishing separately at a later stage. If there are any other questions that members have on LPIS, penalties or beef round tables, I will happily answer them, but I do not want to hog the entire meeting. Perhaps it is appropriate to open the meeting to questions at this stage.