Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

-----that would leave me there whenever I decided I wanted to go home. As I am sure Deputy O'Donovan will be aware, as a Deputy one does not normally get home at sociable hours. I cannot see the day that there will be a bus service to Corr na Móna at one o'clock or two o'clock in the morning. Maybe this Government will promise it, like many other things they promised before they came into power.

The agrifood sector has weathered the storms of the recession to continue to play a central role in our economic life. Agriculture provides 60% of employment within the agrifood sector, which supports over 300,000 jobs across the country. Agriculture, including forestry, is still the engine of the rural economy. When one attacks and undermines the basic unit of that industry, the family farm, it will have implications for the broader economy.

Looking to the future of the industry, the sweep of the Food Harvest 2020 objectives sets out a bold vision for what we can achieve in Ireland. On a document prepared by the previous Government, it would be fair to say that the Minister has certainly bought in to trying to increase the take from agriculture. The major investment in both on-farm facilities and broader industrial capacity over the past decade has enabled our largest indigenous industry to grow and expand. There is untapped potential for the agricultural sector to flourish as the main employer in rural Ireland. However, this will be dead in the water if the price return to farmers is completely hollowed out.

The price has become vital in the context of the reduced funding available in the latest round of CAP funding and no matter what way we dress it up, there is quite a drop in funding. For example, direct payments between 2011 and 2013 dropped by 10%. They are down again this year and they will be way down next year, and the new CAP is a much smaller CAP than the last one. The Rubicon of reducing the CAP budget has been crossed and will inevitably come under further pressure in future years. EU subsidies will be harder to maintain over the next round of negotiation. This highlights the pressing need to emphasise a fair price return for farmers in the future. When the issue of export refunds was mentioned to officials on a recent visit to the European Union, the "No" was so firm. If the market will not pay the price and the subsidies are reducing, one can understand the pressure the farmers will come under.

Under Pillar 1, the single farm payment to Ireland has been reduced by €42 million per annum, from €1.255 billion to €1.213 billion, a 3.3% cut. With modest inflation of 7% over the period of the CAP, this is a 10% cut in real terms over the seven year period. Under Pillar 2, €2.2 billion in EU funding for Ireland amounts to €313 million per year. This is a 14% decrease in EU funding. With inflation at 7%, this is a 21% cut in EU funding over the seven year period. As that got cut, of course, the matching funding from the Government got cut. Overall, Ireland will see a reduction of 10% in Pillar 1 and 21% in Pillar 2 up to 2020. This fall in funding will be felt inside the farm gate in every farm in Ireland over the long term. This shortfall must be met by a fair return to farmers for their produce from processors and retailers. Under current manipulation, the CAP is effectively being exploited by these big supermarkets and processors to subsidise themselves by keeping farmers financially viable via State aid rather than through a fair price.

Addressing the issue is vital to the long-term viability of the agrifood industry in Ireland. All we have to do is think back to last Christmas and the manipulation of the vegetable and horticultural sector, and the huge effect that had on producers. We are aware of the situation with liquid milk. When one buys a litre of a milk in a shop for €1, for example, 11 cent less of the price goes to the farmer now than was the case in 1995 and 11 cent more goes to the processor, or the supermarket. In most cases the processor is a co-operative, however, and we know the money is not going to co-operatives. That is despite the fact that the labour input into a litre of milk in a supermarket is minimal because the processor puts it on the shelf and customers take it off the shelf. All the supermarket has to do is provide the space and to scan the barcode at the checkout. In many supermarkets staff do not even have to do that because people scan the barcode themselves at the automated checkout.

In the past year since the price issue came up it is interesting how many times the Minister said we should let the market look after itself. It took the Minister a long time to set up the beef discussion group but it is only a talking shop. The Minister will tell me one must allow the market to function, as that is what he has said to me previously

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