Simon Coveney (Cork South Central, Fine Gael)

The Deputy's final point is very relevant. It is also important to recognise that when prices were not so good, many farm families had alternative sources of income. A couple of years ago approximately 47% of farm families did not have an alternative income coming into the home; now the figure is approximately 56%. That is the obvious consequence of unemployment. Therefore, the income being derived from the land and through direct payments is more important than ever. This must be acknowledged.

On the Deputy's question as to whether I am making progress with the Commission, I have met the Commissioner to discuss this issue on a number of occasions. In fact, practically every time I meet him we discuss it. He has not decided to make significant compromises at this stage. That is a political decision. At some stage, however, he will have to compromise on a series of issues to get agreement in both the European Parliament and at the European Council because a co-decision is required. To date, we have been working hard to ensure he, his advisers and cabinet understand in detail why Ireland simply cannot work with the proposal as it stands.

We have received support from countries such as Spain, Italy and France which are very concerned about the level of redistribution that will occur as a result of these proposals. These are big, powerful countries and I am hopeful that at some stage towards the end of the year we will be making progress on this matter. I do not want to pretend, however, that the problem is solved because it is not. We are currently outlining in clear terms why this cannot work. I can assure the Deputy that many EU states are adamant that countries like Ireland and others will be forced to move away from a historical basis of payment because they see that as unfair competition in terms of the levels of payment that go with that. There is a political negotiation to be done here around flexibility. While Ireland wants flexibility in this area, we must understand that other countries want flexibility in other areas.

One of the advantages we have in trying to get a deal on this is that we will hold the EU Presidency for the first six months of next year, when the CAP will be agreed. Therefore we will be in a position to influence the compromises that will emerge, because I will be in the chair trying to do that. I hope that will allow us to find a solution to this problem for Ireland as well.

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