Feargal Quinn (Independent) | Oireachtas source

The Minister is very welcome. I am pleased to see him. I am glad he will take charge of this matter in the next few months. I have every confidence in him. He did a great job during the fisheries negotiations. I am confident that he will do the same during the negotiations on CAP reform.

We need to frame agriculture in terms of our overall economic recovery. I have looked at one or two particular countries. Politicians in New Zealand understand that their country's economic growth depends on innovation and value-added food production. They know that New Zealand must be an international leader in that field. We must get inspiration from New Zealand. I am impressed by what has been done in other countries, particularly New Zealand. While it is fashionable to talk about high-tech industry, our strength lies in agriculture. We seem to be running behind countries like New Zealand in terms of coming up with new food products and promoting research and development in this sector.

It is amazing to consider the benefits of the CAP. Between 1973 and 2008, Irish farmers received almost ¤44 billion under the Common Agricultural Policy. Given the success of some farmers in Ireland and the inequity in CAP - I accept that some farmers rely on these payments - there is a great need for CAP reform.

The inability of farmers around the world, particularly in developing countries, to compete with European farmers who receive such large subsidies presents us with a real moral dilemma. We have to move away from protectionism. We must ensure farmers are business-led when it comes to their own products. New Zealand has been very successful despite the provision of little support through farm subsidies. The effect of the Chinese market has to be acknowledged. Between 2009 and 2011, more than half of gross farm receipts in Norway, Switzerland and Japan came from support policies. The equivalent figure for producers in Australia, Chile and New Zealand was less than 5%. We have to acknowledge that subsidies for farmers and farming are decreasing throughout the world. Irish farmers cannot live in a bubble and assume things will continue on the current basis.

I am glad the Minister is working towards a situation where farmers on lower incomes will earn more. He has stated that he is pushing for CAP reforms which will see the highest earning farmers lose part of their single farm payment. However, lower earners would gain and those in the middle would stay close to the current average payment of ¤275 per hectare. It would be a compromise between the European Commission's wish for flat rate payments per hectare and the more limited redistribution being sought by Ireland.

Ireland will play a vital role in the formulation of the new CAP up to 2020, given that Ireland will hold the Presidency of the European Union for the six months starting in January 2013. This time period will determine what kind of CAP there will be up to 2020. It seems it is likely to be a very different CAP from what Commissioner Ciolos envisages. I support his wish that the new CAP will involve less paperwork and red tape. That is vital for any business, not just for farmers.

I also welcome the drive towards more transparency and welcome the fact the European Commission has just adopted a proposal designed to apply new rules with regard to the publication of information to better inform citizens on the benefits and beneficiaries of European agricultural funds. The new rules require member states to publish the first and last names of beneficiaries, as well as the reasons they obtained the funds. EU member states were already required to publish some data on line by April every year, but pro-transparency groups, like the NGO farmsubsidy.orgfound that many regularly failed to provide comprehensive details on how the money is spent, who receives it and why. Just last May, farmsubsidy.orgranked Luxembourg the least transparent, while others such as Ireland, France, Italy and the Netherlands have created online databases which are extremely hard to navigate. This is far from ideal. There is a real need for a simple website in order that citizens can see clearly how funds are being spent. They will have more confidence in the process if this happens.

There are still massive stories of fraud, both anecdotal and concrete. OLAF, the European Union's anti-fraud office, recovered ¤691 million in stolen funds from the EU budget in 2011, of which ¤524.7 million had been siphoned off from Structural Funds. Approximately ¤113 million was drawn from customs and another ¤34 million from EU agricultural subsidies. The new rules will not apply to small farmers or small land holders, in order to safeguard personal privacy. While I am aware of a European Court of Justice judgment on the matter, if a farmer receives any subsidies, the public has a right to know. We need to publish all of this information.

Agriculture is proving to be one of the country's major success stories at this difficult time. We have so much potential in this area as can be seen from the fact that numbers attending agricultural colleges are increasing and when we consider that we supply baby formula worldwide. However, we need more investment in new agricultural techniques and to consider areas like food research. Can we attract more foreign direct investment to make Ireland a centre of excellence in food research to complement our world-class produce? Consider, for example, that Swiss food giant Nestlé employs 5,000 people directly on research and development and has 28 research centres across the world. I am involved with the Institute of Food and Health at UCD which is doing marvellous work. I suggest we should establish similar centres, like the Swiss have done, or attract them here with incentives. Surely we should not be outsourcing our agriculture industry, given the raw material we have here.

Why are our universities not doing more? I am very impressed by what is taking place in the Institute of Food and Health in UCD, but we could do more. For example, Massey University in New Zealand now has more than 400 agrifood researchers, 2,000 hectares of farmland and a history of innovation. The university aims to focus on forming strategic partnerships around the world and on expanding its agrifood business opportunities. We are not doing enough on this here and could do a lot more.

The reform of the CAP is vital for us, especially in areas like the dairy sector. The Minister will not get much sleep in the next while, but I encourage him to continue his work for reform. In 2015, the European milk quota system will be abolished, which will allow the sector to grow further. It is amazing to consider that Ireland is the No. 1 exporter of baby formula in the world. One in seven children in the world now drink products manufactured in Ireland. I hope the Government's work in this area will help to ensure the continued growth of the agrifood sector in the context of the growing demand from regions such as Asia.

We must listen to the customer and adapt our agricultural produce to that demand. The New Zealand dairy company, Fonterra, makes products specifically for the Chinese market. Are companies in Ireland trying this approach? If not, we should do something to encourage it. As dairy consumption goes through the roof, Fonterra is establishing farms in China. Our dairy products are the best in the world, but we seem to be lagging far behind in exploring these emerging markets. Fonterrais the largest dairy company in the world. If we had a joined-up dairy sector, we would be able to compete with it. We already have some success stories in that regard. However, we must do more.

We must really consider how developing countries can help Ireland. China's Vice-Premier visited Spain last year and said that if each of the 1,300 million Chinese people consumed a bottle of olive oil or enjoyed a few glasses of wine, all of Spain's annual production would probably not be sufficient to meet the demand. This is a real reminder of the opportunities and of what could be done. The fact we have a good relationship with China since Mr. Li was here and since the Minister went to China last year, where I gather he established a strong relationship, means the door is open for us to be able to do even better.

I congratulate the Minister on what he has done and wish him every success in the CAP negotiations. We have put the authority in the right hands in giving it to him.