John Paul Phelan (Fine Gael)

I also welcome the Minister of State. I am glad to have an opportunity to contribute to this debate on the upcoming reform proposals of the Common Agricultural Policy and the vital role CAP has played in rural Ireland since we joined the EU, a role which it will continue to play.

It has always been my firm belief that the best form of rural development is trying to keep as many people actively involved in agriculture in rural areas as possible. This should be and probably is the Government's starting point in the upcoming review of CAP. As the Minister for Agriculture, Fisheries and Food stated, the Government will be under significant pressure to change the way the national envelope is distributed to rural communities, namely, less emphasis on direct payments and more emphasis on rural development issues. However, direct payments to farmers are of most benefit to rural Ireland. Money given to farmers in this way is spent in the rural economy on services that provide real and sustainable jobs in those communities.

A number of the preceding contributions were interesting. I do not have a great deal of new information to add to the debate, but I was taken by the Minister's reference to the fact that he was considering events in the United States of America with regard to market supports. It was a suggestion I was going to make to him. A farm Bill enacted in the US not that long ago comprised a range of new market support measures. Most Senators who have contributed to our debate mentioned the detrimental effect of price volatility on the people involved in farming. Many cannot sustain long periods of below-cost production. The Americans have undertaken a number of initiatives aimed at ironing out volatilities in the prices farmers get for their products. Before the review is formalised, I urge the Minister of State and the Department in their negotiations to consider events in the US in a bid to determine whether CAP could adopt some of those measures.

It is worth pointing out that CAP and agriculture in general comprise the only aspect of the European economy that is fully integrated across the Union. Many of the actions taken by the Government in the agricultural sector are dictated by agreements at European level. I agree with Senator Bradford and others who stated that the overall aims and objectives that CAP was set up to achieve have been achieved. We have a secure supply of food for the European market. After the Second World War, there were significant food shortages, but that is no longer a difficulty. In the overall GDP figures within the EU, the amount being spent on CAP is a small price to pay for ensuring a safe and reliable food supply.

I emphasise the points made by a number of Senators regarding the nature of agriculture in Ireland, namely, how our industry is largely grassland-based, and its significant environmental benefits over some other more intensive forms of agriculture. There should be a pay-off for farmers in light of their activities in land management and looking after the countryside, the benefits of which have accrued over a long period.

At a time when everyone has a heightened awareness of the climate and climate change, the significant problems stemming from deforestation, particularly in South America, are worth pointing out. The EU has an open system, in that product is accepted from many third country markets. As well as being of spurious quality in some cases, this product has led to considerable environmental damage in some of those third countries. Ireland already has in place the landscape to produce top quality food without impacting the environment as adversely.

It is vital that whatever comes from the CAP review should ensure farm families are not forced to produce at below the cost of production indefinitely. The Minister referred to this matter and I agree fully. We must provide a sustainable future for young people in agriculture. The current CAP regime and direct payments system pose a difficulty in that they comprise a historical system, making it more difficult for young people who want to get into agriculture to gain access to some of the entitlements still being paid to some people who have ceased production. This matter will have to be addressed. Expecting the European Union to continue to pay in full, based on an historical system with a reference period that stretches back almost ten years, is an approach which cannot be sustained. By the time the review is complete, the reference period will stretch back further than ten years.

Another substantial issue that has arisen during my time in politics is that of the standards relating to products. While I disagreed with some of the comments made by Senator O'Toole, I agree with what he said on the implementation of the different standards, directives and regulations across the European Union. He stated the standards which applied in France and countries in continental Europe in respect of markets, produce and the butchering of animals were very different from those which applied here. It is the fault of the Department of Agriculture, Fisheries and Food and the Government that we have continually used the strictest forms of wording when implementing European regulations, particularly, as Senator O'Toole stated, in respect of butchering and abattoirs.

In every parish throughout the country one or two people would have been responsible for slaughtering lambs or cattle. People brought their animals to these individuals who operated to a very high standard to have them butchered. A service was provided and the moneys generated remained within local economies. On foot of the legislation dealing with abattoirs that has been put in place, the practice to which I refer has been almost completely wiped out. In County Kilkenny there are now only two or three abattoirs involved in the slaughter of animals. That is shocking, particularly when one considers that in any village in France one will find a butcher who is involved in the slaughter of animals. One will also find all types of other local industries that provide services for and create employment in their communities. The French have managed to retain this aspect of rural heritage which has been lost in this country. The Government should reconsider the way we implement EU rules and regulations, particularly in the context of the butchering of animals.

There has been much criticism to the effect that the Common Agricultural Policy does significant harm to agricultural production in Third World and developing countries, but nothing could be further from the truth. The European Union is the biggest importer of food from such countries and allows free access to all of its markets for the 20 least developed nations in the world. Our friends in the United States and other countries should be encouraged to adopt such a model.

The Common Agricultural Policy was described in one of the briefing documents we received in advance of this debate as a social contract between farmers and society. That is certainly true. I grew up in a rural environment. I am not a farmer or directly involved in agriculture but both of my brothers are farmers. It must be central to our policy on this matter that we encourage as many people as possible to be viably employed in agriculture.

The figures relating to agriculture are stark. In real terms, farm incomes have fallen by 50% since 1995. No other sector of the economy has experienced such a drop. Rural areas have been devastated as a result of the collapse of the construction industry. Many young people from farming backgrounds who left education early and went to work on building sites are now out of work. Given that the Government has suspended installation aid and the early retirement scheme, it is becoming very difficult for those to whom I refer to become involved in agriculture. There is a need for significant reforms to be introduced. However, we must support the overall allocation for Ireland in the context of funding from the European Union for agriculture.