Peter Callanan (Fianna Fail)

We discuss matters and are still on talking terms. I am delighted to see that the Minister, Deputy Joe Walsh, has also secured a favourable outcome for the special beef premium overshoot, which will be worth some €8 million to our farmers annually. The Minister has brought forward a package of measures that will safeguard the whole Irish agriculture industry in future, making it more relevant to the rest of modern society. The Commission's proposals were for the most radical reform of the CAP since its foundation and have been the subject of detailed analysis and intense public debate, both here and throughout Europe. The issues and concerns of farmers, consumers and taxpayers have been identified and have been well known for some time.

The decoupling of direct payments from production is a fundamental change to the CAP. It will have two major beneficial effects on farmers. First, Irish farmers will now be free to provide a product for the market and the consumer. They will get a single EU income support payment, irrespective of the farm enterprise that they pursue. That will give them the opportunity to produce quality cattle that in turn will enable the meat industry to market the highest-quality Irish beef at home and abroad. Of course, the meat factories have a role to play in this new approach by starting to pay farmers to produce quality cattle. It is time that the factories came on board, stopped their negativity and met their obligations.

Second, the major advantage of the new single income support payment arrangements is that we now have the opportunity to dismantle the dreaded mountain of bureaucratic paperwork that is part and parcel of the array of schemes currently operated. The paperwork attracted a great deal of criticism from farmers, farming organisations and everyone else. Those schemes brought large amounts of money to farmers under their various headings. As they have all been grouped together into the single payment, it will make life easier and overcome the difficulty many farmers felt existed. They were pleased when the schemes were there, but the difficulty of form-filling was one hell of an issue.

Designing and implementing the new payment system will provide the Minister with a major challenge. I have no doubt that he has chosen the model best suited to Irish requirements from the point of view of maximising efficiency and competitiveness and protecting the rural economy. I also have no doubt that the new arrangements he will put in place for 2005 onwards will minimise the bureaucracy that has plagued farmers in recent years. Senator Coonan referred to the anomalies that will exist in a totally changed situation. I am absolutely certain that the Minister and the Department will take cognisance of those and try to ameliorate them as far as possible.

The Minister's complete rejection of the Commission's original degression proposals was a major success, as was the reduction in the proposed rate of modulation from 6% to 5% when fully operational. The retention of the €5,000 exemption will ensure that more than half the farmers in this country will not have modulation applied to them at all. I say to the Minister of State, Deputy Aylward, and the departmental representatives that almost all the modulated funds retained in Ireland for rural development measures should stay in Agriculture House. It is important that the fund be retained there for certain measures where assistance is required. I will ask the Minister either to enhance the existing REPS scheme or introduce a similar scheme that would further benefit farmers. I emphasise that because it has been, and could be, of major benefit to at least 50% of them.