John Ellis (Fianna Fail)

I welcome the Minister to the House in an effort to keep us up to date regarding the forthcoming talks on the CAP. I wish him well in those negotiations as he will have an uphill battle if he is to maintain Ireland's level of funding. He should be fully supported by the farming bodies and all Members of the Oireachtas because the negotiations will not be simple.

We come to this debate in the context of an ever-changing agricultural community. On the one hand, some of its members are elderly and, on the other, so many young people are trying to become involved at various levels that our agricultural colleges were not able to accept every applicant this year. The reason is simple. While agriculture may have its ups and downs, it is more level and provides a better future for young people than some of the other opportunities that might arise for people from farming backgrounds.

Major changes are under way in the food industry, which will have a significant role to play in the CAP negotiations. People might not say that processors are producers, but those processors will need to become producers of food that is acceptable to people. We cannot expect European farmers to produce food to the standard required by European consumers and still compete against other groups that produce food by various methods with cheap labour, cheap land and poor standards of quality and supervision. This matter will lead to a major clash when negotiating the new CAP. Certain countries within Europe will want cheap food irrespective of the consequences for consumers. They will want it for nothing if at all possible.

Globally, food prices are increasing. Some commodities are worth more in certain parts of the world where they are unsubsidised than they are worth in Ireland. Recently, the Farming Independent reported that live cattle were worth $3,000 per tonne in Egypt, far in excess of the value of the same stock in Europe. This raises a question. Are producer prices being suppressed within the EU? I honestly believe they are, but I am not in a position to do the research. Irish farmers' prices are being suppressed because they are being paid €170 less for animals than they would were those animals processed in the UK. This raises major questions about where the CAP is going and how producers will be protected from supermarkets and processors. The margins being taken by some supermarkets are depressing the prices received by primary producers. Neither are those margins always of great benefit to the consumer. Europe's current food supply will only last 26 days. This is a low stock of food available to people within the EU. If the Irish rate of production continues to decrease as it has done in the past two to three years, we will have national problems with certain areas of the food industry within ten years.

We need to strike a balance between what is paid to individuals and what they produce in return. None of us wants to see the butter mountains or beef mountains of the past, but we want a reasonable level of production to be maintained. If we allow production to diminish, we must accept the consequence of job losses. If we are to produce, we must be able to compete with our fellow Europeans.

That so much of our young stock is exported live for fattening in other countries and sold within the EU is terrible. This is a loss to the economy because we are not able to command the final price commanded by the locals. This phenomenal situation has an effect. As the Minister is aware, the decrease in livestock numbers will lead to job losses.

The dairy industry has been able to deal with the situation the best. Most dairy co-operatives are growing rather than retracting. It is important that they be encouraged because they have diversified into various dairy products that are consumer-friendly and are accepted by consumers as being of a high quality. In many cases, the benefit of Irish food over food from elsewhere in Europe is removed because many of our producers and processors are forced to sell their food without the Irish brand attached. If they used the brand, they would meet objections within certain EU countries on the basis that their food comes from outside these countries. In France the situation is almost impossible for Irish companies which produce a superior product, especially of beef or meat, because in many cases supermarkets will not label the product as Irish but rather as of EU origin. On the opposite side Kerrygold butter commands a premium price in many parts of Europe. Labelling is to be introduced. If a product is to be labelled as European, it will branded and carry such a logo. In the United Kingdom the red tractor symbol is used for all home produced products and can only be used on products produced in England, Scotland and Wales. These are the issues that lead to problems in production. We must opt for "Brand Ireland" as proposed and gain acceptance for this across Europe. If we are to have national branding, let us give those who want to buy national products the opportunity to buy them, but everybody should have the right to brand and sell their product within the European Union.

We could all speak further on this issue. All I will say is we want consensus on the direction we should take in the overall renegotiation of the CAP. We do not want to see anyone coming out with negative proposals which might have an effect across the board. We need to get people to realise that food security and quality and food production methods must all be taken into consideration in that renegotiation.