Francis O'Brien (Fianna Fail)

I welcome the Minister for Agriculture, Fisheries and Food and I agree with the previous speaker as regards the good job he has been doing so far in the negotiations.

The outcome of the coming negotiations on the Common Agricultural Policy after 2013 will have far-reaching effects for Irish farmers, agriculture and the overall economy. The Irish economy is more dependent on a successful outcome to these talks than any of the other 27 countries in the EU. The recent report, Food Harvest 2020, has clearly set out a vision of how Irish agriculture can play a significant role in the recovery of the national economy. It envisages that by 2020 the agri-food and fisheries sector will have increased the value of output from farming and fisheries by €1.5 billion, value added output by €3 billion and increased exports by a total value of €12 billion or 42% compared to the 2007-09 period. The Minister, Deputy Brendan Smith, has set up an implementation committee and given a commitment to provide the necessary provisions for the implementation of the Food Harvest 2020 report.

The existing CAP model has successfully maintained a production base on Irish farms and helped maintain the family farm structure here. The traditional family farm structure, with a strong work ethos and a good production base, will enable Irish farming to achieve the goals set out in the Food Harvest 2020 report. It is essential to the future welfare of this State that agriculture is supported with a strong CAP policy at EU level. I was pleased to hear the Commissioner for Agriculture and Rural Development, Dacian Ciolos, on his recent visit here confirm that he was committed to maintaining a strong CAP for the whole of the EU and would fight to secure a strong budget for the CAP.

The EU CAP budget must be maintained and the current Irish national envelope protected vigorously to ensure it is maintained in the new CAP post-2013. The reduction in farm gate prices plus the increased costs of production have resulted in a decrease in production due to reduced profitability in the mainland based farming sector and the EU is now no longer self-sufficient in beef or sheep meat. Farm subsidies under the CAP are essential as a guarantee of food security and as income support for the maintenance of the family farm structure as a way of maintaining rural communities.

Recent events such as the volcanic eruptions and the reduction in the Russian wheat harvest due to drought have shown the importance of the EU having a secure supply of food, produced to the highest standards for all of its citizens. The EU has to be careful that it does not become dependent on imports for its food supply, thereby risking a crisis in that regard. The CAP is essential towards maintaining production of high quality food that has full traceability and safety and is produced to the highest animal welfare standards.

The protection of the environment has been a key element of the CAP in the recent past. This has successfully ensured that through schemes such as REPS, where farmers are rewarded for adopting practices to protect and enhance the environment, our countryside and rural communities are pleasant places to visit or live in. It is important that this policy is maintained and that CAP supports the policies that enhance the environment while maintaining production capacity not only in the bigger regions but in all rural areas. Such a policy will ensure that Ireland, with its extensive grass-based farming enterprise, will be competitive on EU and world markets. In that way EU consumers will be assured of secure, safe and fully traceable food that meets the highest environmental and animal welfare standards.

In the revised CAP policy there must be supports to encourage those grass-based enterprises, which by their nature have low levels of profitability and benefits in particular the environment, in disadvantaged regions. While I welcome the supports the Government has given to the suckler cow and sheep sectors, it is important that mechanisms should be established in CAP post-2013 to give additional supports to these sectors. The dairy sector has been highlighted in Food Harvest 2020 because of its potential for significant growth after the abolition of the milk quota in 2015. The commitment set a 50% growth increase in milk by 2020 as a realistic and achievable target. This would increase output value at the farm gate by €700 annually. In the run-up to the abolition of the milk quota in 2015, there should be more flexibility at EU level.

Significant capital investment in stock and buildings is needed on many dairy farms to reach the target increase in milk output. Much of this investment will be undertaken in the lead-up period to the abolition of milk quotas. We should campaign for the gradual dismantling of the milk quota regime during the lead-up period rather than wait for complete dismantling in 2015. This would reduce the risk of superlevies for those who increase production during the lead-up period.

I welcome the opportunity to speak on this important issue in the House. Securing of a strong CAP post-2013 will enhance the profitability of Irish and European agricultural and rural communities. I am confident the Minister, Deputy Brendan Smith, and his team will secure a deal that will benefit Irish agriculture and the economy.