Michael McCarthy (Labour)

I accept your ruling. Senator Callanan's contribution would have been noted by others if they were present in the House.

The Common Agricultural Policy was established in the 1960s, before Ireland's entry into the European Economic Community in 1973, to secure Europe's food supply and stabilise prices to the benefit of both producers and consumers. In the 1950s food was scarce and expensive and choice and quality were extremely poor. The Common Agricultural Policy encouraged a constant supply of home produced food by providing farm price supports. In this way the instability in world market food prices was avoided through a combination of food import tariffs, export refunds and market management.

Since the foundation of the EEC European agriculture has been subject to political intervention and financial supports which have proved very beneficial to both food producers and consumers alike. Consumers benefit through cheaper food prices and by being assured of quality food produced with the highest food safety and traceability standards. The first CAP reform in 1992, coupled with the inclusion of agriculture for the first time in the General Agreement on Tariffs and Trade, forced a major change in European farm support systems.

On prices and incomes, in a recent review of the differential between the money farmers receive and the price consumers pay for beef it is clear there is a major difference between what the farmer is paid for an animal and the value of the meat to the supermarket. It appears from the calculations that the supermarkets, in particular, are doing very well in their profit take in that farmers only get 38% of the retail price. This means that 62% of the value is mopped up somewhere along the way by others. Even allowing for the cost of slaughter, overheads, distribution, storage and packaging, it is a huge gap. The losers appear to be farmers and consumers. The middlemen in this case, in particular the supermarkets, appear to be the net beneficiaries of the production system.

A similar exercise by others recently showed equivalent gaps between production of milk, lamb, beef and salmon and the price paid by the consumer for that produce. For the sake of farmers and consumers this problem has to be investigated and resolved. We have to ensure there is a fair and equitable difference between what the consumer pays and the farmer is paid.