Ms Mairead McGuinness, MEP:

I thank the Cathaoirleach for the welcome and the invitation to come before the House this afternoon. We were called to speak to the Seanad in 2005 so I am not quite a novice but perhaps the L plates are still there. In my presentation I propose to deal with those areas in which I specialise. A very positive aspect of the European Parliament is that it gives members an opportunity to work on committees in areas in which they have specialist knowledge. The areas on which I work and which I examine are agriculture, rural development, environment, food safety and public health.

The title of my paper is Food for Thought - Ireland and the EU 40 years on. In recent weeks and months we have had much food for thought and perhaps we will debate this later. I certainly want to allude to it in my presentation. If I have time I will mention the medical devices directive because I have been appointed the shadow rapporteur for the EPP group on this important legislation which has huge implications for improving patient safety and the industry. As Ireland has a large medical devices industry, the Seanad will be interested.

The EU has gone through many difficult phases, perhaps none more so than the current one, and the House has debated many of the issues. Despite all of the negativity about the EU and whether it had the ability to pull itself back from the brink, we have managed to calm the situation. I ask people to reflect back to a year ago when there was a huge sense of unease, uncertainty and fear in the population and in politics generally about the ongoing crisis. In as far as we have stabilised the situation, we have calmed the mindset in the European Union, notwithstanding people are still unemployed, including far too many young people. There are also debt burdens and a dimming of the sense of hope we are trying to restore. Things can and will get better, not because we want them to or because we are willing them to improve but because we are taking action to make things better.

Europe works slowly and in a complex way and markets and media have quite the opposite demands. There is therefore a mismatch between the expectations of what Europe should be doing and the pace at which the European Union can work because of its institutional organisation and the need to engage. Those in politics need to understand there is a tendency to give a knee-jerk response and get a reaction in the public space, but sometimes we need to be more reflective and hold back on responses to situations because our initial reaction is not always the best or the most long-lasting. I compliment Herman Van Rompuy, who as President of the Council is always worth listening to for the very reason that he does not give a headline. He gives depth and commentary which will stand the test of time. This is a good mark of the man given the job he does.

I am glad to say that those who predicted the demise of the European Union, and certainly the demise of the single currency, are less vocal today. We went through a time in the Parliament when it was extremely tense and difficult with unusual fighting matches across the Chamber.

That has certainly eased somewhat, although the difficulties have not gone away and more needs to be done.

I will deal with the farming and food industries now. I am conscious of time, so I may abbreviate my remarks but will leave my script for Members to consult. When one looks at Irish agriculture one must take into account how it has evolved in the last 40 years of EU membership. In 1973, agriculture accounted for 18% of GDP while today it is around 2%. The agri-food sector accounted for 40% of our exports while today it is around 7%. It is, however, much more important than that figure suggests because there is a low import content and there is also less repatriation of profits. It is an important sector and I think this House recognises that.

In 1973, the farm workforce was approximately 263,000 or 25% of the total workforce. Today it is significantly less at around 85,000 people or 5% of the workforce. It is enlightening to look back at the evolution of the policy. We joined the EEC and farmers welcomed it because it gave them guaranteed higher prices for their produce than they has been getting before membership.

In 1957, the objectives of the Common Agricultural Policy spoke about things that we are still trying to achieve, such as increasing agricultural productivity by promoting technical progress, ensuring the rational development of agricultural production, optimum use of resources, ensuring a fair standard of living for the agricultural community, stabilising markets, assuring availability of supplies, and ensuring that supplies reach consumers at reasonable prices. Those objectives were set out in 1957 and they are still as relevant today as they were when first drafted.

Farmers responded to those guaranteed higher prices in the 1970s: milk production increased and so did beef and grain. Those with memories, however, will recall that things went too far and in 1984 we had milk quotas. We also had other restrictions because the European agricultural budget situation was going out of control.

In 1992, we had the MacSharry reforms which were a significant departure - moving away from price and market supports to a lower price regime and the introduction of direct payments by way of area aid and livestock payments. We also had Agenda 2000 and the mid-term review of 2003. I mention the latter, in particular, because it was hugely significant. It heralded the introduction of the current single farm payment system. It introduced a concept of cross-compliance which links the payments farmers receive to meeting environmental, food safety, animal and plant health, animal welfare standards, and a requirement to keep land in good agricultural and environmental condition.

It also saw the introduction of the rural development policy being strengthened to give farmers assistance with environmental and quality assurance schemes, and animal welfare standards. Ireland opted for full decoupling of payments. On 1 January 2005, therefore, there was no longer a requirement to have an animal to get a payment. There was resistance to it initially but the system came in. Farmers did have to meet these statutory management requirements and, indeed, there were many inspections around this issue. However, full decoupling came and farmers have learned to live with it.

In 2008, we had the health check which confirmed that milk quotas would be abolished in 2015. Given that they have been in place since the early 1980s, it is a significant policy departure and it also deepened the decoupling process for other member states that have not gone the way we had.

We are now in a current round of reforms and last week the European Parliament's agriculture committee exercised its first major vote under co-decision on agriculture policy. We managed to distill some 8,000 amendments to around 25 or 30, so it was a major piece of work. More importantly, we managed to get support for the compromise amendments.

For the first time, the European Parliament has the same power as the Council on agriculture policy and has therefore brought more openness and democracy to the process. However, it has also brought a layer of complexity which requires MEPs to table amendments and then try to reach compromises within and between groups. While the experience so far has not been easy - I was one of the lead negotiators - it can work.

We delivered a vote last week, which will go before the full plenary of Parliament in March.

Allied with the vote we will take in March on our position on Common Agricultural Policy, CAP, reform - I will refer to some of the details shortly - we hopefully also will vote on the European Union's budget for the period from 2014 to 2020. This is hugely significant because without figures, we will not be able to sign off on the actual detail of the reforms. As Members are aware, there was an attempt to agree the figures late last year between the Heads of State and Government. Unfortunately, that failed and will meet again in early February. The fact the meeting has been called is a positive sign. My optimistic side would consider the possibility that the Heads of State and Government can agree figures that are reasonable. While Members are aware there is an attempt to cut ¤75 billion from the Commission's proposal, it might be possible to reach some sort of compromise on that. Thereafter, it would be a question of whether the Parliament could be persuaded that this was an adequate budget, because Members should remember the Parliament can reject or accept a budget but cannot amend it. However, it is an interesting political dynamic, in that I believe the Parliament will look twice the figures and it cannot be taken for granted that it would simply assent to whatever was on the table. In the event that the Parliament does agree and the vote on the budget goes through and if we can vote through our agriculture compromises in plenary session - I think some difficult areas will arise in the plenary vote - thereafter we will be free to open discussions with the Council. As with all deals, it will be that the Commission, the Council and the members of our negotiating team, of which I will be one, will sit down and will try to thrash out an agreement at an overarching level for the European Union that maintains a Common Agricultural Policy and that fits and gives flexibility to member states which have different issues.

I regret there has been very little debate about the new aspects of the policy but perhaps this House could take up some of these points. The idea is framed that we want a greener and fairer Common Agricultural Policy and one concept that is talked about is to use public money for public goods. To put it at its simplest, the view is that in agriculture, farmers sell their produce but do not receive sufficient reward from the marketplace to value in the public goods dimension, that is, their welfare standards, environmental contributions and management of the landscape. Consequently, the thrust of policy is to suggest that increasingly, money will be available to support farmers dedicated towards the delivery of public goods. In my contributions, I always have stated that food also is a public good and one cannot divorce one from the other and therefore, a link must be kept. However, the proposal is that 30% of direct payments to farmers would be directly linked to delivering more environmental measures such as crop diversification, permanent pasture and provision of ecological focus areas. Those Members who are familiar with farming would regard those as being the bit in the field one did not farm because it was left for nature. However, under these proposals we would be obliged to plan some of these back into the system. I acknowledge there is a great deal of controversy around this proposal. Some of these issues, particularly the 30% issue, will be decided by the Heads of State and Government because it is part of the multiannual financial framework, MFF, discussion. As Members are aware, there are member states within the Council, that seek to cut the payments and there are others which seek to have agriculture contribute more in respect of both greening and climate actions. Consequently, there is quite a big push in that direction. I spoke at the Oxford farming conference earlier this month and made the point that I understood the focus on the payments because in 2011, which was a relatively good year, more than 73% of farm incomes came from the single farm payment. Consequently, Members can discern the reason this is so important to farmers who are out in the fields - indeed, one could not be out in the fields today because it is so wet, which will have an impact on farm incomes - and who rely so much on this payment. However, a deeper debate is needed on the direction of the policy. While we have tried to do this in the European Parliament, national parliaments and Members of this House could help us in that regard.

I mentioned the reliance on the single farm payment. This is something about which I have a concern because we regard agriculture as being the backbone of our recovery and it can and will be that. Moreover, we have a good reputation for food. However, that industry is being built on a sector that is heavily reliant on a Common Agricultural Policy.

That is why we are fighting hard on the budget side and on the orientation of the policy. We must not do anything to suddenly pull the rug from under farmers. We must ensure those who are producing continue to receive support to do that, particularly where we have increased market volatility. If we look at dairy produce or any of the other commodity areas, we see greater market volatility, which is very difficult for farmers to deal with on a daily basis.

Some of the income points revealed by Teagasc for last year are worth looking at. Average farm income was down 12%. Year on year, farmers can suffer swings in their incomes. In the good year of 2011, an average family farm income was ¤24,462. I know dairy farmers' incomes are higher but many of our farmers are in dry stock and suckling so average incomes in agriculture are low. The same story exists across the rest of the European Union. In general, farm incomes are about 50% of the average of the rest of the population. The line we should push is that we eat on the back of low income farming.

That brings me to another part of the debate at European Union level and within member states. If there is less support for farming through the public purse and a drive for budgetary austerity in the European Union, what is happening to the food market? I have been involved in an initiative on this in the European Parliament, and since 2010, the Commission has been investigating the food supply chain. The fact the Commission set up a round table of all the stakeholders and major players, such as distributors, manufacturers and retailers, meant that something was wrong. The Commission now accepts there is a problem in the food supply chain, that it does not function as it should and needs greater scrutiny. That is the case in my opinion. To some extent we had a crisis in the banking sector because people thought the banks were regulated and everything was fine. It was only after the crisis that we realised the sector was poorly regulated and needed further scrutiny. The food chain is much more vulnerable. Food is essential for us all and good food is particularly important for our children.

We have a situation, however, where there are a large number of producers, smaller numbers along the supply chain and then a major concentration of power at the retail end. Shoppers have very little idea when they buy a product of where it comes from, although that is a separate issue, and what the price was along the line. There is a greater need for transparency along the food supply chain.

There is also some difficult and sharp practice in the chain. It is interesting that the Commission, with the stakeholders, drew up a list of areas that were wrong and needed to be corrected. As a result of that process, an agreement for a voluntary code of practice has been drawn up. It is a gentleman's agreement, although that makes me smile because there must be gentlemen at the table for such an agreement. Let us be clear, however, about what it means. I was at the last meeting of the stakeholder forum and it was interesting that all those involved in the process want a voluntary agreement because there is a threat of legislation at EU level on the relationships along the supply chain. It is recognised that such legislation would be extraordinarily difficult but the threat exists. Later this week, the Commission will adopt a Green Paper on unfair trading practices in the entire retail supply chain. I would prefer it to deal with food separately but it has decided to look at all of the supply chain.

It is interesting that the only groups that would not sign up to the voluntary code were the farming organisations, which wanted a legislative process. I bring this to the attention of the House because there has been discussion in all member states about the imbalance of power. In the United Kingdom, an adjudicator has been appointed and she has the power to investigate practices in the supply chain and it will be possible to complain anonymously. Britain is not the only member state where this is happening. I have dealt with other member states where this is being done because of the concentration of power.

Producers constantly argue that they receive very little of the price we pay for food, which is not to say that food prices should rise. We need to recognise, however, the way in which food prices are determined if we are to decide whether the process is fair and equitable. Senators should be interested in this issue and I believe they are.

A question arises in this regard for those who are interested in competition law. When we have moments to spare, I and some other Members of the European Parliament discuss whether competition law, as it currently applies, works to the betterment of food consumers or whether it should be examined more forensically. If the objective of competition law is simply to deliver cheap food, what are the consequences of this approach further back in the food chain? We saw the consequences of this approach in a recent case which indicated that it may not be such a good idea.

I want to move to the issue that has dominated the conversation of those who are involved in the food and agriculture sector, namely, the finding of horse DNA in burgers. I am aware that the matter was widely discussed and debated in the House. I compliment the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, on obtaining and, with the Food Safety Authority of Ireland, FSAI, forensically revealing the details of the case. Ireland has led the way on this issue. For example, the FSAI is the only food safety authority in Europe that uses DNA testing for authenticity. We have shown great leadership on this issue and have been very open with the relevant information. The issue of authenticity of food is much higher up on the agenda as a result of the work done in this country.

Many Senators will understand the traceability systems we have in place. For example, farmers here participate in a process involving birth certificates, ear tags and registrations. There is a sense, therefore, that people felt let down by the circumstances of the most recent case involving horse DNA in burgers. We have also grown more aware of the complexity of the food supply chain. I am tempted to try to quote Professor Patrick Wall, who is a rock of sense on these issues. He observed that food manufacturers must trust carefully all of their suppliers and if they are unable to fully trust their suppliers, they should not use their products.

I wrote to the Commission on this issue and I have no doubt from the response I received this morning that the recent case involved a breach of EU labelling laws. If a non-beef product is in a beef burger, this should be stated on the label. This is extremely important, especially as regards other animal species. Animal species and the preparations used must be stated on all minced beef products. If horsemeat or another ingredient is in minced beef, this should be identified on the label.

The relevant legislation is being strengthened. From December 2014, a regulation on the provision of food information to consumers will require, in the case of meat products or meat preparations containing added protein, including hydrolysed proteins of different animal origin, that the name of the food will bear an indication of the presence of such proteins and their origin. Accordingly, a beef burger containing horse protein would have to be designated under the name "beef burger with horse protein".

While the idea of labelling is crucial, a label will stick on anything and anything can be put on a label.