Noel Coonan (Fine Gael)

I welcome the Minister to the House and acknowledge that, from a personal point of view, he did his best in the negotiations. Unfortunately, however, as in other cases, his best has not been sufficient. Farmers have reacted with anger and many are depressed. Newspaper headlines such as "Dairy Farmers Sold Out" have appeared.

There is no doubt that this is a bad deal. According to the leader of the IFA, John Dillon, "The Minister went to Luxembourg without a proposal," and according to ICMSA president, Pat O'Rourke, "The Minister failed to defend Irish farming interests and the national council is rapidly losing confidence in the Minister to defend farm incomes and the agri-food sector in Ireland."

Even the Minister's colleague, Deputy Ned O'Keeffe, recognised the devastating effects of the Fischler proposals. He has concluded that they will cripple the dairy industry in Munster, where 40% of Ireland's milk is processed. He has indicated that the CAP proposals will lead to job losses as a result of the reduction in output. The co-operative movement, ICOS, estimates that the industry will lose €327 million by 2007.

The dairy sector, which was the pillar of farming up to now and the only one which was maintaining confidence in the farming community, has been decimated. Mr. Fischler has given with one hand, but taken twice as much away with the other. Dairy reform has been brought forward one year in order to begin in 2004, so the adjustment period for the dairy farmer is further reduced. The minimum price for butter has been cut by 10% on top of the 15% set out in Agenda 2000 – a total reduction of 25%.

The minimum prices for skimmed milk powder will be reduced by 15% over a three year period, beginning in 2004. The proposal to abolish the target price for milk remains, which is a cause for concern because it would allow the Commission to manage the price down to or below the intervention price. There will be no milk quota increases in 2007 and 2008 and the reformed dairy quota system is to be prolonged until 2014 and 2015.