Denis Naughten (Longford-Roscommon, Fine Gael)

I welcome the opportunity to speak in this debate. On Tuesday the Central Statistics Office published statistics revealing that farm incomes have fallen by approximately 10% owing to a cut in margins of 4.2% this year. To compound this there is a very real and significant threat to EU agriculture in the upcoming WTO talks. The European Commission has made too many concessions too quickly. The revised Commission offer put forward at the end of last month now proposes the complete phasing out of exports refunds and a reduction of tariffs on food imports by between 30% and 60%. Specifically, the Commission has tabled a 50% cut in imports of milk products and a 60% cut in the imports of beef products. These proposals are outside the mandate given to the Commission by the Council of Ministers, which was that the Commission would go no further than the mid-term review of CAP. The proposals are also contrary to the Treaty of Rome, Article 39 of which states that one of the objectives of CAP shall be "to ensure a fair standard of living for the agricultural community by increasing the individual earnings of persons engaged in agriculture". There is now a serious danger that the current offer to the WTO will destroy the EU Internal Market for food, wiping out Irish agriculture and decimating farmers' livelihoods and the rural economy.

The Commission's proposals are not the deal that Irish farmers signed up to when agreeing to the mid-term review of CAP and the introduction of the single farm payment. In October 2003, the then Minister, Deputy Walsh, stated: "We now have a reformed CAP which protects payments to Irish farmers and is based clearly on the principles of market orientation, sustainability and environmental awareness." However, payments are not secured and are under threat from the UK. The WTO is giving no recognition for sustainability or environmental protection. In addition, on the issue of markets, our sugar industry is about to be mothballed, pig and poultry producers will be closed down by the inflexibility of the Departments of the Environment, Heritage and Local Government and Agriculture and Food in the nitrates directive and our beef and dairy sectors will be decimated by the current WTO proposals.

The UK's demand for budgetary concessions on CAP is clouding Mr. Mandelson's judgment and forming a bias in his negotiating ability. The reality is that the level of spending on agriculture in the overall EU budget has fallen by one third in the past 20 years whereas Britain's level of rebate, valued at almost €5 billion annually, has not. It is imperative that Ireland ensures that the proposal on trade tariffs and income supports for farmers is taken off the table and that the EU negotiating position returns to the view that we have already reformed our agriculture supports and these will remain in place until 2013. I have previously called on the Taoiseach to take ownership of this process and to visit each of the leaders of the other member states to rally support for the retention of CAP reforms. I ask him as a matter of urgency to send the strongest possible message to the Commission noting the deep concerns and reservations of the Government and demanding that the Commission immediately withdraw its proposals to the WTO.

Let us examine the current proposals. In return for the proposed EU cuts the United States has submitted a letter of intent on its planned cuts in its supports for agriculture which would be introduced in the 2007 Farm Bill. In reality the US proposal is worthless as it is based on legislation that has not and will not be approved by the US Congress, which will not accept any proposed cuts in US farm subsidies on the eve of an election in the United States. The Minister for Agriculture and Food, Deputy Coughlan, must immediately call for an emergency meeting of the Council of Ministers prior to the opening of the WTO talks. Such a meeting would provide EU Agriculture Ministers with an opportunity to draw a line in the sand, caution the Commission on using agriculture as a bargaining chip, and call on it to revoke its offer in the absence of firm and tangible proposals from the US.

EU farmers cannot compete on an equal footing against foreign imports because EU production standards add significantly to the cost of production, which must be taken into account in the case of any agreement. In addition, substantial regulation and red tape attach to Irish agriculture, for example, the impending nitrates directive, while similar stringent standards do not apply in the case of countries importing into the European Union. For example, the cattle tagging and traceability scheme in Brazil has been abandoned for the past 13 months, which highlights the fact that there is a very regulated system for Irish farmers producing beef but a very lax regime for Brazilian farmers producing beef for the same market.

The demand of the WTO for trade liberalisation is diverting us from the vital issue of the production of quality, safe, healthy food for the EU consumer. Food is now an increasingly international commodity and poor standards in one region of the world can have significant food safety implications in another. A real consequence of the removal of trade barriers is the greater frequency of food scares. A key question for the Commission, therefore, is how much we value the need to have a European domestic food supply with assured quality and safety. If the CAP were wiped out, as Mr. Mandelson's mentor, Mr. Blair, wants, we would run the risk of having food production at the mercy of factory farms, hypermarkets and dodgy imports which cannot be safely scrutinised.

An important point is that the EU takes 85% of all agricultural produce exported from Africa. The knock-on effect of the Commission's proposals on Third World farmers will be the elimination of a high value market where they can obtain a premium price which can then be used to develop their food sectors. While many plead the development agenda as a justification for major cuts in CAP, there can be no doubt that cuts in tariffs will wipe out the special preferential access enjoyed by the world's poorest and most vulnerable countries. The developing world needs market access and the benefits of high EU prices but these can only be maintained by market management, not by unlimited access to EU markets, a move which would destabilise agriculture and food markets for all farmers. The real question of how to bring benefits to third world producers must include an analysis of who controls world commodity markets. We need a system which ensures that producers, whether EU or non-EU, get a fair proportion of the final price paid by consumers for food.

This is evident even in countries set to benefit most from the elimination of trade barriers, such as Brazil, where the smaller family farms will suffer continued poverty. Full liberalisation of trade would see Brazil's income rise by more than €3.6 billion a year, yet 60% of its rural population would still have an income below the absolute poverty line. It is important to note that in these negotiations the poorest countries of the world are as opposed to the Commission's proposals as farmers within the EU. This is because the poorest countries know that if the proposals go through unchanged, they will lose the preferential access to premium EU markets they enjoy and the return on product they receive from EU markets will be substantially reduced. This will lead to a curtailment of the development of the food industry in these countries.

It is also important to note which countries benefit from the proposals, namely, Brazil, Argentina, New Zealand and Australia. These countries will have unbridled market access throughout the world and they will wipe out many of the developing economies in Africa which are trying to develop their agriculture and food sectors. This has not been acknowledged in the debate to date. While the United States has been pushing the agenda in regard to the abolition of CAP, it will not allow access to its market for products produced in African countries which would help to develop their economies.

The Commission's proposals in their current form must be withdrawn. To allow them to be used as a negotiating tool is to destroy the agricultural economy of this country, condemning the countryside to desolation as well as destroying the potential of African countries to develop their food industries and putting the health of future generations in this country at increased risk from sub-standard cheap imported foodstuffs.

I wish the Ministers involved the best of luck with the negotiations, for which they have the support of Fine Gael. I hope there will be a fair deal for Irish and African farmers.

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