Mr. Tom Moran:

Members have before them the six-monthly report on developments in the EU for the crucial period January to June 2013. The report gives members the details of dossiers progressed and will give them a full sense of the strategic importance of that period. It was a busy time for the Department, coming at a crucial juncture in two very important EU negotiations. We had two major priorities, namely, to complete the negotiations on the reforms of the Common Agricultural Policy, CAP, and the Common Fisheries Policy, CFP, while at the same time, we had the additional responsibility of managing the rotating Presidency of the EU. Our interaction with key players in advance of the Presidency, through numerous meetings with other member states, relevant Commission officials at political and technical level and contact with the European Parliament, particularly the rapporteurs for the major dossiers, paved the way for excellent working relationships, which I think assisted us in achieving the objectives.

At the January Council, the Minister, Deputy Coveney, outlined Ireland’s plan for the six-month Presidency in the agriculture and fisheries sectors. While the key priorities were the reforms of the CAP and of the CFP, the list of legislative dossiers in the agriculture and fisheries sectors covered a broad spectrum of proposals ranging from small and low key to significant and politically challenging. The joint committee already has the list of files on which agreement was reached and the list of dossiers advanced during the Irish Presidency. Before turning to the CAP and the CFP, I would like to briefly highlight a few and update members on where these dossiers now stand.

We reached first reading agreement on the farm accountancy data network, an instrument for evaluating income and the effects of the CAP on farmers. We also concluded on the so-called breakfast omnibus package. This is a series of five directives, which set out specific composition and labelling rules for various products associated with breakfast foods. First reading agreement was also reached on the pet passport regulation, which makes it easier for EU citizens to take their pets into other EU member states and on the directive on the health requirements governing intra-Union trade in and imports into the EU, of dogs, cats and ferrets. Following on the overall agreement reached in June with the European Commission and the European Parliament on the aromatised wine proposals, the Lithuanian Presidency, which currently is in the chair, obtained political agreement on the text in October and the dossier is now concluded.

We had expected publication of the package of five proposals on animal and plant health, seed marketing, official controls and food and feed expenditure early in the Presidency and it had been our intention to expedite examination of these in working groups during the first six months of the year. It was not until 6 May, however, that the four proposals, known collectively as a new package for healthier animals and plants for a safer food chain, were adopted by the Commission. The fifth proposal relating to the management of expenditure in these sectors was adopted by the Commission on 7 June. Department officials attended this joint committee last month to assist in the scrutiny of these proposals.

Turning to the major dossiers, political agreement was reached on reform of the Common Fisheries Policy in May and the newly reformed policy comes into force from 1 January 2014. The reforms agreed will govern the nature and operation of Irish and EU fisheries for the foreseeable future and are designed to usher in a new era of more economically, environmentally and socially sustainable fishing across EU waters. The new policy will allow for the rebuilding of fish stocks in European waters through long-term management of stocks, reducing and eliminating discards where possible and rebuilding stocks to maximum sustainable yield. All of these measures hold the potential to substantially increase catches by Irish fishermen in the short and medium term. The successful conclusion of the basic Common Fisheries Policy regulation, as well as the common organisation of the market in fisheries, involved a huge amount of effort by the Department, involving ten trilogues and numerous technical meetings. In addition, a significant body of work was carried out on the European Maritime Fisheries Fund by the Irish Presidency, thereby enabling the Lithuanian Presidency to reach a general approach at the July Council.

As to the Common Agricultural Policy, political agreement between the three EU institutions was reached on its reform on 26 June under the Irish Presidency. It was the result of months of intense negotiations, initially within the EU Council of Ministers and subsequently between the Council, the Commission and the European Parliament. More than 40 trilogues were held with the Commission and Parliament, with similar numbers of technical meetings, informal contacts and high-level groups. Ireland represented the Council at all of these meetings. Leading up to the agreement, in May the Minister, Deputy Coveney, hosted the informal Council of Agriculture Ministers in Dublin Castle. In a departure from normal practice, given the dossiers on hand – indeed for the first time ever – the Council was joined by the European Parliament rapporteurs on each of the four CAP reform dossiers and the co-ordinators from each of the Parliament's political groups. Normally, the European Parliament attendance at such meetings is limited to the Chair of the Agriculture Committee. However, this additional attendance allowed all three institutions to have a meaningful exchange of ideas and to better understand each other’s positions on some of the key outstanding political issues.

The agreement reached in June sets the policy framework for the EU agriculture sector up to 2020 and secures strong and sustainable growth in the agriculture and food sectors into the future. Elements related to the multi-annual financial framework, MFF, were finalised under the Lithuanian Presidency on 24 September and the reform package was endorsed by the Agriculture Committee of the European Parliament on 30 September. The package was adopted by the Parliament at its plenary session on 20 November and it will be formally adopted by member states at the Agriculture Council on 16 December. This paves the way for the entry into force of the regulations on 1 January 2014. However, to allow member states sufficient time to organise implementation of the reform, the majority of the new measures will apply from 2015. While financial elements, such as the new financial ceilings and share-out of funds between member states, will apply from the beginning of 2014, transitional measures have been put in place for the bridging year of 2014 for the majority of measures. Initial negotiations on the transitional rules took place in the first six months of the year under the Irish Presidency and the Lithuanian Presidency has now finalised this dossier.

I mentioned a moment ago that parts of the CAP agreement hinged on the parallel negotiations taking place on the multi-annual financial framework for the next EU budget from 2014 to 2020 . Although the Heads of State and Government reached agreement on the MFF at the European Council on 7 and 8 February, final endorsement of the MFF elements of the CAP package was only obtained from the European Parliament at the end of September. Last month, after months of difficult discussions, the European Parliament adopted the MFF for the 2014-20 period, setting the expenditure ceiling for heading 2 at €373 billion.

For Ireland the CAP will deliver in excess of €11 billion over the next seven years.

The Minister, Deputy Coveney, already addressed this committee on a number of occasions regarding the substance of the reform agreement. Without going in to excessive detail, and as a useful summary, the key aspects are: a greater emphasis on sustainability through Pillar 1 "greening" measures and Pillar 2 environmental measures; generational renewal through supports for young farmers under both Pillar 1 and Pillar 2; a continuing move towards greater market orientation, with support measures available only as a safety net and specific provision for crises; and flexibility for member states to adapt the policy measures under both Pillar 1 and Pillar 2 to deal with their own specific competitiveness and sustainability challenges. One of the key elements that we were negotiating throughout the package was that member states would have flexibility to adapt the policy to their own specific needs.

One of the most important issues for many member states was the method for distribution of direct payments within member states. On this issue, we faced proposals from the Commission for mandatory movement to a flat rate of payment per hectare which would potentially have had a negative effect on our capacity for sustainable production. The agreement that member states have the option to apply the partial convergence model, as suggested initially by Ireland, subject to a minimum payment of 60% of the national or regional average payment per hectare by 2019, is a reasonable and balanced compromise and a good outcome for this country.

Some of the other important issues of the package from Ireland's perspective are as follows. On greening, the reform package guarantees a minimum level of environmental protection which, for the first time, is enshrined in direct payments under Pillar 1. There is a good balance struck between the three institutions on the practical implementation of the three greening criteria of crop diversification, maintenance of permanent grassland and ecological focus areas.

On young farmers, Ireland was one of the first member states to propose such a payment so as to encourage generational renewal in the agriculture sector. The agreement to introduce a mandatory top-up to Pillar 1 payments was welcome.

Under rural development, that is, Pillar 2, a new framework for the drawing up of rural development programmes has been agreed. Programmes must contribute to the achievement of three headline objectives, fostering the competitiveness of agriculture, sustainable management of natural resources and achieving a balanced territorial development of rural economies and communities. Also, there was agreement to abolish sugar quotas by 2017 and confirmation that milk quotas will cease in 2015.

I mentioned earlier that the agreement reached gives a high level of discretion to member states regarding implementation. Consequently, in July last the Minister initiated a process of consultation with all relevant stakeholders to ascertain their views on the most appropriate application of the Direct Payment Regulation in light of Ireland's unique agricultural profile and circumstances. The consultation process closed on 20 September with a total of 46 submissions and these are receiving careful consideration. In addition, modelling of the various scenarios that have arisen is also ongoing within the Department. This committee has already received a detailed briefing from senior officials on the various options involved and the Minister indicated publicly his hope to be in a position to make decisions across the range of alternatives during the next few weeks. Incidentally, the committee contributed to the consultation process with a useful document which is on the table as well as part of the issues we are considering. Drafting of the rural development programme is also already well underway but we will leave that until later.

That concludes my opening statement and I am happy to take any questions or provide clarification on points that might arise.