Denis Naughten (Longford-Roscommon, Fine Gael)

The European Commissioner for Agriculture and Rural Development, Ms Fischer Boel, proposed to the European Council last week that a cut of 4% in each farmer's single farm payment should take place from 2007 as a means of alleviating the looming crisis in the EU budget from that date. It is shocking that the Commissioner charged with defending the rights of farmers and the agriculture sector seeks to undermine the Common Agricultural Policy, CAP, agreement less than three years after each member state, including the UK, signed up to it.

These cuts will come on top of the modulation cuts which will reduce farm payments over the lifetime of the CAP. The single farm payment is not index-linked and will inevitably reduce year on year. Farmers cannot be expected to take a second cut. They have not received the first single farm payment and already there is talk of changing it. The CAP deal, struck in 2002, pledged to preserve agricultural spending at its current level until 2013. This pledge must be fulfilled.

While the UK tries to squeeze the CAP budget it refuses to examine the terms of its own generous rebate scheme. The UK rebate is worth almost €5 billion annually and has operated since 1984. Mr. Blair appears to ignore the fact that in the intervening period there have been significant reductions and cutbacks in CAP. The level of spending on agriculture in the overall EU budget has fallen by 30% in the past 20 years but the UK rebate level has not fallen.

The UK and the Commission want the farming community to foot most of the €8 billion bill for incorporating Romania and Bulgaria into the European Union, but that is not acceptable. The UK recently attempted to couch its opposition to the level of subsidies paid to EU farmers in the simplistic terms of its impact on the poor African states. For example, a cut in EU sugar prices would have a negative impact on underdeveloped African countries which gain from the high guaranteed prices they receive for the amount of cane sugar they can sell into Europe.

Trócaire has called for the maintenance of these quotas for underdeveloped African countries and improved market access for them. It also recognises there must be room for domestic production in Europe. Changes to the sugar subsidy regime, however, would benefit big players such as Thailand, Brazil and Australia where sugar production remains in the hands of wealthy ranchers whose incomes increase even more, without return to their peasant workers or to small-scale sugar farmers in the everything but arms countries.

EU leaders must return to this issue to resolve the budgetary problem soon. I urge the Minister for Agriculture and Food to hold firm on the commitment to ensure the CAP will not be further eroded. The EU cannot renege on its deal. The Minister for Agriculture and Food will have her first opportunity to press home this issue later this week when Ms Fischer Boel makes her first visit to Ireland. The Minister needs to hammer home the point that the UK's attempt to revisit the CAP agreement is too late. The deal is closed and cannot be revisited. We must stand firm on this issue.

The Minister must also emphasise that farm cuts have gone far enough, particularly when one considers the cuts through modulation funding and that the Commissioner's comments do not help member states to uphold the CAP agreement.

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