Wednesday, 12 February 2003
Fischler Proposals for Agriculture: Motion.
That Seanad Éireann recognises the huge importance of the Fischler proposals for Ireland, notes with approval the stated intention of the Minister for Agriculture and Food to defend Ireland's position vis-à-vis these proposals and requests him to lay out these proposals and his responses to them to the Seanad.
I wish to extend our congratulations to the Minister, Deputy Joe Walsh, on receiving the Grand Cross of the Order of Merit in Agriculture, Fisheries and Food from the King of Spain, Juan Carlos I. The agriculture order of merit was created by royal decree on 3 December 1905. The award is a grand cross and only four people from outside Spain have received it, which is the reason I mention it this evening. It was presented to the director general of the UN Food and Agriculture Organisation in 1996, to the German Minister for Agriculture, Food and Forestry in 1993 and to the French Minister for Agriculture in 2001. I also congratulate the Minister on having been presented a few months ago with the Legion of Honour from the French Government. It was signed by the President of France.
That is recognition by two other member states of the quality of our Minister. I hope he will be appreciated in this country, but people sometimes do not get the recognition they deserve in their own homeland. Member states of the EU have accorded recognition to the Minister's unique qualities and we congratulate him on that.
I must express a degree of disappointment that Fine Gael has proposed an amendment to the motion, although it was to be expected. That is the party's prerogative. Social partnership is a must for farmers, who have been involved in it since its inception in 1987. No partnership pillar has benefited more from participation in that process than farming. It gives the farming bodies a unique opportunity to participate in a meaningful way in the democratic process. They have a formal partnership mechanism through which they can express their views and negotiate an agreed plan for the next two years. To withdraw from this process would be nothing short of folly on the part of the farm organisations.
There are two serious questions that farm leaders must address in the context of their participation in the social partnership agreement now on offer. First, is it in the best interests of their membership to reject the opportunity to participate in the formulation and implementation of policies which affect not only farmers but the general economy? Second, through what other forum will they have an opportunity to defend their rights and interests and protect the benefits they receive under the CAP and other wide-ranging international agreements under the auspices of the World Trade Organisation?
I wish to remind farmers of some fundamental developments in Irish farming since 1987. At that time farmers depended solely on the goodwill of meat factory owners for a reasonable income. It was not satisfactory that the incomes of livestock farmers should be dictated by a small group of meat factory owners. In some cases that is still happening. However, at least direct payments are paid directly to the farmers.
The Fine Gael record in looking after farmers' interests has always been abysmal, never more so than under the coalition Government of 1982-7. Not alone did that Government double the national debt and raise interest, income tax and inflation rates to their highest levels ever, it did nothing for the agriculture sector which was being strangled by these high interest and inflation rates. Fine Gael could never be accused of any economic innovation or of negotiating a good deal for Irish farmers in Brussels or anywhere else.
Contrast that with the imaginative and progressive Fianna Fáil approach. Two of the innovators of the new national partnership process in 1987 turned their minds to the long overdue reform of the CAP in 1989. The then Commissioner, Mr. Ray MacSharry, and the Minister, Deputy Joe Walsh, negotiated and put the most fundamental reform of the CAP in place. These negotiations were in the face of stern opposition from intensive farmer groups across the EU. The CAP reforms came into effect in 1992. They involved transferring payments away from the meat companies and paying price supports directly to farmers. The system was designed to reward the extensive type of farming systems practised in Ireland and was less favourable to the intensive systems practised in some member states.
At the time certain interests in farming organisations vehemently opposed these reforms. They have learnt their lesson and are now among the staunchest defenders of the direct payments system. While they ponder whether to join the current social partnership process, I ask them seriously to reflect on where their best interests lie. The choice is theirs. One way or another this Government is going to continue the economic development and expansion of the economy. The Minister will maintain and, indeed, improve his impeccable record of looking after farmers and defending their interests. I ask farm leaders to remember that when the Commission tried to dismantle the 1992 CAP reforms in the Agenda 2000 negotiations the Minister, Deputy Joe Walsh, was again on hand to defend our farmers' interests and negotiated enhanced payments for them. The package of measures he negotiated brought direct payment rates to record levels. As a result, Irish farmers are today paid in excess of €1.6 billion annually through the Department by way of income supports. This is an important and increasing element of farmers' annual income.
I will remind farm leaders and Fine Gael what this Minister and the Government have done for farmers in recent times. First, I will outline the Minister's main achievements. He mobilised the resources of the State to fight the foot and mouth disease threat, which could have devastated Irish agriculture and the economy. He put into immediate effect the cattle destruction market support schemes, involving the use of substantial Exchequer resources, to support the beef sector and producer prices during the BSE crisis. These schemes cost in excess of €400 million. He adopted a hands on approach to re-opening markets for agricultural produce, involving the full deployment of political, diplomatic and technical resources.
The Minister developed and implemented, at considerable expense to the taxpayer, traceability systems for cattle, sheep and pigs to provide state of the art food safety guarantees for consumers of Irish products and provide a marketing edge in increasingly competitive markets. He put in place one of the most efficient systems in the EU for payment of direct income payments to farmers, with the vast bulk of cheques now issuing on the first day allowed under EU regulations. No other member state administration matches this level of service.
The Minister negotiated, against all the odds, what has been universally acknowledged as a most favourable outcome for Irish farmers in the Agenda 2000 CAP reform. He copperfastened the Agenda 2000 gains in the recent Brussels summit decision on the future financing of the CAP, securing direct payments to 2013. He successfully defended export refunds in the WTO negotiations at Doha, is providing €2.8 billion in public expenditure to support the agriculture sector in 2003, of which €1.6 billion will be paid directly to farmers, and he has continued to allocate substantial Exchequer resources to control animal diseases in the national herd.
In order to address the difficulties faced by farmers arising from the bad weather, the Minister obtained EU agreement on a number of occasions to strengthen significantly market supports for dairy products; refunds for skimmed milk powder increased on six occasions and casein aid increased by a total of 80%. He secured EU agreement to allow the use of set-aside land for grazing and fodder and negotiated the lifting of the Russian county ban on beef exports, which was a huge international vote of confidence in the way Ireland handles BSE. The Minister further obtained EU agreement to allow an increase of up to 30% in beef export refunds. He took many other measures in the past year to ensure that Irish farming, despite a difficult year, would continue to survive, expand and thrive.
I assure the Minister of our full support of his staunch defence of the direct support arrangements in the current mid-term review negotiations. However, a cause of concern is that recent data indicate that 82% of farmers receiving direct payments get 43% of the payments, averaging €3,300 per farmer, while the remaining 18% received 57% of the total, averaging €20,000 per farmer. The top 10% of farmers took an average of €27,200 per farmer. Anything that can be done by way of front-loading these payments in favour of smaller farmers would be most welcome.
Farm leaders would be best employed sitting down with the Minister to devise strategies to meet the robust challenges ahead. The most meaningful way to show a united front to Commissioner Fischler is as committed participants in a new partnership programme. We have the most successful Minister for Agriculture and Food ever to negotiate at EU level on behalf of farmers. Let us give him our staunchest support in the major challenges he now faces – the mid-term review of the CAP and the WTO negotiations. We have a great Minister – nobody knows better the ropes of Europe or the WTO negotiations.
I put it to all Members of the House that, across party lines, we should support the Minister in the interests of a thriving Irish agriculture sector. If we do that, we will have done a good evening's work. I trust that the Minister will take our hope and the hopes of Irish agriculture on his shoulders. God speed him.
I second the motion.
Senators will be aware that the Irish economy is heavily reliant on our indigenous food industry. That our food industry is dependent on markets abroad is even more startlingly evident. We are self-sufficient in all of the major commodities. For example, we are over 1,000% self-sufficient in beef and almost 1,000% in butter. We must be able to market our produce abroad, particularly into an enlarged Europe, if we are to have sustainable agriculture on this island. This is a real challenge that cannot be met by the Government alone but must be confronted by all sectors of the agriculture industry at every level.
For its part, the Government has put in place a comprehensive strategy for the development of agriculture and the food industry over the coming decade. The core aim of this strategy is to ensure that the industry contributes, to the maximum extent possible, to continued economic and social development for our people, especially the farmers – our primary producers. The Government's aim is to assist the industry in its efforts to improve competitiveness and innovative capability and enable it to compete successfully in an increasingly competitive and fast-moving environment.
We must remain focused on the serious challenges posed by the current CAP reform proposals and the WTO negotiations. The Minister for Agriculture and Food put Ireland's initial position on CAP reform in clear terms to Commissioner Fischler last week. He has a proven track record in achieving the best possible outcome for Ireland in such negotiations. Most important of all, we must not forget that we are now facing into the most fundamental review of the CAP to date. This is a major challenge which has the capacity to change the whole face of Irish farming. The Commission proposals for the mid-term review of the Agenda 2000 agreement are formulated with a view to meeting the threat in the WTO as well as the increasingly vocal requirements of consumers for safer food and a better physical environment.
Our farm leaders must now focus on the threat to the entire framework within which farmers will produce and sell their products over the next ten to 20 years. They must row in behind us and the Minister in the defence of existing CAP support arrangements. For good reasons farmers in many countries, including EU member states, are protected to varying degrees from the full rigours of the marketplace and the basic economic laws of supply and demand. In the face of this, countries with little or no such support for their farmers consider that farmers in countries with higher levels of support are trading with unfair advantages on world markets. They are seeking, in the current WTO negotiations, to eliminate what they consider to be these unfair advantages. The supports provided by the European Union for their farmers are the prime target and European and Irish agriculture has to prepare a robust defence of the CAP in those negotiations.
The threats in the WTO and to the Commission's proposals are serious challenges. They transcend any arguments or dissatisfaction that the farm organisations may have with the social partnership talks. Farm leaders would be best employed sitting down with us and the Minister to devise strategies to meet the robust challenges ahead. The most meaningful way of showing a united front to Commissioner Fischler is as a committed participant in a new partnership programme.
Direct payments are the major part of most smaller farmers' income. The system of modulation proposed by the European Commission would reduce the direct payment to these farmers who may only receive over €5,000 in payments. Modulation could not be justified in these circumstances. Providing funding for rural development at the expense of farm incomes, which have always been the mainstay of rural economies, is a contradiction.
Modulation would have a different effect on different farming sectors. Sectors that do not depend as heavily on direct payment would not suffer the same adverse effects as beef and sheep markets. The effects of modulation would be disproportionate in Ireland and I am glad the Minister made this clear to the Council of Ministers.
It is clear that Irish agriculture is facing immense changes and challenges over the next few years. The Government can be relied upon to remain totally committed to agriculture and to sustain its major role in this economy, notwithstanding the changed scenario which we are likely to face in the years ahead. Despite all the problems, I am optimistic for the future of Irish agriculture. We have some of the best farmers in the world. We produce quality stock and food in a unique natural environment. We continue to export 90% of all of our agricultural produce into a growing world population.
The Government will continue to support agriculture, our most important indigenous industry, and with the necessary EU supports will continue to sustain the dedicated farmers of Ireland. On behalf of the House, we wish to extend our best wishes to the Minister in his negotiations at a crucial time for this country.
I move amendment No. 1:
To delete all words after "That" and substitute the following:
"Seanad Éireann condemns the Government for its failure to recognise the difficulties in Agriculture and Food and calls on it to take some measures to re-establish confidence in the sector."
Ba mhaith liom fáilte a chur roimh an Aire go dtí an Seanad arís.
The Minister for Agriculture and Food's colleagues have attempted to deflect attention away from the crisis that is facing agriculture at present, a crisis that is totally of the Government's making. Farming, whether on a full-time or part-time basis, must not be allowed to become a countryside maintenance activity, as appears to be happening under the Fischler proposals. Farming must continue to be a rewarded profession that will give a viable way of life to our many farming families.
Ireland's position must be defended with vigour, determination, courage and, above all, hunger for success – qualities and traits the Minister has, I am afraid, been lacking for some time. Perhaps he has spent too long in the Department of Agriculture and Food. The evidence points to the fact that farmers and farm leaders have lost confidence in the Minister. It points to the fact that the Minister no longer has clout at the Cabinet table. He is, in fact, perceived by many as being the "yes Minister" to the Minister for Finance, Deputy McCreevy.
The Minister has seen agriculture being plunged into the depths of despair, but he is sitting back and doing nothing about it. The Government's sustained and vindictive attack on the farming community has forced farm families from every part of Ireland to take to the road, converge here in Dublin and plead for help and their very survival. Something like this has not happened since the Minister's party's former disgraced leader, the then Minister for Agriculture, left the IFA sitting in the rain on O'Connell Bridge some decades ago.
Farm incomes are falling dramatically and the Government's response is to impose extra taxation on farmers, increase the levies, and introduce massive cutbacks and production restrictions. At the same time, up to €620 million is being left behind in Europe under the REP scheme and other schemes because the co-funding necessary to draw upon those funds is not being provided. It defies logic that, to date, the Government has not seen the sound economic sense in what is being proposed. The REPS budget provides €2 billion for farms. To this day, €130 million of that has not been drawn down. This is money that was set aside specifically for Irish farmers in REPS. Between now and 2006, if the current position continues to obtain, a massive €500 million will be lost to farmers.
In addition, €120 million for essential on-farm investment is not being delivered to farmers at a crucial time when they want to invest in their farms and protect our environment. What is happening to the new, simplified REPS plan that the Minister promised in 2002 and that was to be implemented in January 2003? Nothing has happened and there has been no explanation.
The Minister's efforts in Europe represent economic lunacy and send the wrong signals to the Commission and the European Union as we enter crucial talks on the Fischler proposals. What about beef premiums? Due to the fact that 2002 was a base year under Fischler calculations, farmers maximised their long-term future under those proposals by applying for special beef premiums up to the end of December. What has happened as a result? We are way over our quota and these farmers are being penalised by 16% to 20% of their income at a time when they can ill afford it. This is not the fault of the Commission or the EU, but of the Minister. In the Luxembourg talks, the Minister gave away those quota rights.
The Government has also given the two-finger sign – the Harvey Smith sign, in case people do not understand what I mean – to farmers in the Finance Bill 2003 by confirming the abolition of roll-over tax and the imposition of capital gains tax on land bought under compulsory purchase orders. At the same time, exemptions were granted to others. This land is being confiscated from farmers. They are not willing sellers and, in many instances, it will destroy their farm enterprise. I call upon the Minister to intervene. If the Minister of State, Deputy Parlon, wants to be the Judas in this situation, let the Minister be the hero for once and stand by the farmers and honour the agreement that was hammered out with them. Farmers are visibly insulted that these budgetary impositions still stand and, for the first time in years, we are seeing real alienation among the farming community as a consequence of the policies of this Government.
The attack the Minister has initiated upon the farming sector goes on and on. I will list the various instances of it: the doubling of disease levies, with the Minister taking €20 a head off the animals; cutbacks in education and the closure of agricultural colleges; the threat to alternative farm enterprises, such as organic farming, through the proposed closure of the college at Athenry; and the veterinary medicines Bill, if implemented, will double the cost to farmers, take €40 million out of their pockets and reduce veterinary usage.
Teagasc cutbacks mean that only one post out of three is being filled. REPS fees are going up by 15.5% and advisory fees by 8%. Why is it necessary for the Government to endorse policies that depress farm prices? The consumer still has to pay excessive prices and, in many instances, is being ripped off. A farmer gets approximately 30% of the retail price for food, leaving a massive 70% for producers and retailers. Members should not take my word for it, they should read last week's Irish Farmers Journal. The average price received for an animal is €595. For the meat of the same animal, Tesco gets €1,550, Superquinn gets €1,600, Dunnes Stores get €1,400 and butchers get €1,302.
Farmers' interests are not being protected. Beef is flooding in from South America without traceability, without being labelled and without any safety checks. Is it any wonder that farmers have lost confidence in this Government? The situation is grave and agriculture is on its knees. Young people are walking away from the land.
If the Minister cannot look after farmers' interests at the Cabinet table, then there is little prospect of him being able to protect their interests in Europe. I call on colleagues to support this amendment because a vote of confidence in the Government and the Minister at this particular time would be as obscene an act as when de Valera, in 1945, went to the German Ambassador to offer his sympathies on the death of Hitler.
I second the amendment.
The Fischler proposals for reviewing the CAP have added a great deal to the uncertainty about the future of farming in Ireland and I am dismayed by the lack of effort by the Government to maintain a fair minimum price for farm produce, despite guarantees under Agenda 2000 which were to remain in place until 2006.
Farmers feel that they cannot trust either the commissioner or the Minister for Agriculture and Food, who has continued to allow the flight from the land, which has caused a drop in farming income in every single sector. This was made evident by the huge demonstration seen in this city less than a month ago. Farmers from the four corners of Ireland came here at a very busy time of the year to protest at the Minister's inability to serve them. These people, despite the demands made upon them by their work, made the effort to come to this city to protest. I am disappointed that the Minister has failed to recognise that protest to date.
Farmers have seen a major increase in the cost of production and are feeling the impact of the Minister's decision to double the disease levy and introduce several other levies. They have also seen a rise in veterinary costs. I know who the Minister is supporting in this regard. Farmers cannot plan their farm business in such an environment and it sends a totally negative signal to young people entering farming today. There are very few of those. This was evident in what Senator Coonan said in regard to the closure of agricultural colleges throughout the country due to the Minister's failure to support them. Young people will not put up with what their fathers and mothers had to put up with. People are working long hours and putting in a huge amount of effort for very little return because the Minister has neglected this sector of the community. He has failed to show any clout at the Cabinet table when making a case on behalf of farmers.
The Minister must reject the Fischler proposals on the mid-term CAP review which are detrimental to the future of Irish agriculture. The losses from the proposed cuts will severely damage the farming way of life. The Minister is weak and allowing the Commissioner to railroad his proposals through. This is the message coming from the farm organisations which are very disappointed with the Minister's response to the proposals.
The attack on the Irish beef industry will pave the way for beef imports from the USA, South America and Australia by pushing farmers here out of beef production. National beef output from the suckler herd will be cut by one third which will result in the loss of several hundred million euro to the economy, including the loss of CAP direct payments to farmers. There will be further substantial losses in the sheep industry while support prices will be cut in the dairy and grain sectors. We will see a serious drop in farmers' income if the Minister does not act on their behalf.
The European Union currently imports 500 million tonnes of beef which will double under the Fischler proposals under which the big winners are the multinational traders who will control food prices around the world. The Minister must face down the proposals in the interests of the economy and farmers.
The Government must respond to the farming crisis. Big producers who produce 500 or 600 cattle annually – up to 2,000 in some cases – are being subsidised. They get several euro per head more from the meat plants than small farmers, a matter which the Minister has not investigated. Some of the barons, the Brosnan's and Goodman's, have the Minister where he is today.
If the Minister will not act on behalf of farmers, it is time for him to step aside and allow someone who will give farmers a fair deal take his position. He has flushed farmers down the Swannee. Scriptwriters from the Department wrote the speeches for his doormats, Senators Callanan and Scanlon. They are wrong and will speak from both sides of their mouths when they return to their constituencies.
Farmers are impoverished. I plead with the Minister to be honourable and meet the decent people who represent the farming community. He should bring Commissioner Fischler to places like Longford, Roscommon and the west in general and show him the plight of farmers, some of whom are almost starving because he has not properly represented them.
The Minister must face down the Fischler proposals and give the farming community a better way of life which farmers deserve as they have been the backbone of the economy for many years. While I know there have been problems, I plead with the Minister to do something for them.
I welcome the Minister. We have had two very colourful contributions in the last 16 or 18 minutes but neither had a single concrete proposal for the Minister. Those of us of a certain age remember attending the Litany of the Saints which continued for a considerable time. The Opposition has offered the litany of the damned tonight.
The Minister has shown his capacity, not just to defend Irish agriculture but also to enhance its prospects in successive international fora, including the Commission and the last round of the GATT talks. He has my full confidence that he will do the same in the next round of Fischler proposals and at the next WTO talks. There is nobody in either House better qualified to do this job.
The amendment reads: "That Seanad Éireann condemns the Government for its failure to recognise the difficulties in agriculture and food and calls on it to take some measures to re-establish confidence in the sector". The Minister recognises the difficulties in agriculture and food. If Fine Gael cannot come up with something more concrete than "some measures", I wonder what, if any, agricultural thinking is going on within the party.
We must accept that the Fischler proposals will have profound effects on this country, not just farmers – all of Ireland plc is at risk from them. The Minister has expressed his opposition at the Council of Ministers.
The FAPRI projections for the future indicate a reduction of 12% in beef output by 2009 – three times the European average. They indicate a 30% reduction in the number of suckler cows and a 12% drop in the number of breeding ewes. I might be a simplistic farm economist but if these reductions in the numbers of suckler cows and breeding ewes take place, the figure for the reduction in beef output seems conservative. This assumes no change in the multilateral trading framework but we know that will happen.
The train is on the tracks and moving in a certain direction. The Minister's task is to bring it to the station to which we want to go. There will be more imports from third countries, reductions in tariffs and export subsidies. How will we make European and Irish agriculture more competitive on the international stage in order to serve the consumer in the way he or she deserves while maintaining the maximum number on the land? This can be done. While the CAP has been good to Ireland, we must acknowledge that there has been a haemorrhage from farming, even with the price supports in place.
I am trying to be constructive in pointing to a direction in which we can go in the talks. The trick will be to ensure we keep people in rural areas. It is not good enough for Commissioner Fischler to say this can be done through rural development initiatives. While welcome, if there are no farmers farming in the areas in which the initiatives were taken, the system will fail. We must also realise that the fabric of the countryside, environment and social infrastructure is dependent on our rural population. If the European Union recognises anything, it should recognise the importance of people living in rural areas in terms of its immense social value, value in terms of law and order and in terms of everything else we believe to be important. If it does not recognise this and is prepared to put its money where its mouth is, I am fearful for the future of European society.
There is a major opportunity for the national food industry in this area. If we get to the point where the environmental restrictions are such that they make it difficult for farmers engaged in intensive agriculture to farm, it will present an immense opportunity for us to give consumers the type of food they are increasingly demanding at the prices they are prepared to pay for such high quality food. That is the area on which we must concentrate. There is a major job to be done by agricultural research. In this context, I was disappointed that there was such a cut in funding for such research in the Estimates as there are areas we can exploit to our advantage, a point on which I suspect Senator Quinn is more qualified to elaborate.
Under the modulation proposals, once farmers receive payments exceeding €5,000 they will begin to be penalised. If they receive payments exceeding €50,000, they will be quite heavily penalised. Half of farmers will not be affected by the €5,000 limit, a low limit which is not sustainable. It is not enough to allow people to live with dignity in rural areas and a measure that will have to be examined, a point I know the Minister will successfully argue.
I am not and never have been opposed to area aid based payments and return to the key point of the importance of allowing people to live in rural areas. One of the difficulties regarding some of the payments we received during the years was that the people whom they were designed to help went to the markets and gave them away. There was a benefit to Ireland in the moneys received but individuals who needed them most frequently gave some of them away. The decoupling proposals are related to area based payments and I do not have a difficulty with them provided the objective of keeping people in rural areas is achieved.
With regard to prices, we are still suffering from an intervention mentality. Intervention was greatly important because it gave prices a base, otherwise the position would have been catastrophic. Farmers still believe they must produce for a market that will clear for them at a price and that they do not have to give the consumer what he or she requires. If we are to learn anything from international markets, it must be that it is consumers who will decide and that it is up to the Irish farm industry to provide for them. There are many examples within the processing industry of people who do this well, and they need to be supported.
I have some sympathy with the view that the increase in disease levies was more than it should have been. I am not saying this to the Minister for Agriculture and Food but to the Minister for Finance who comes from my county.
It is legitimate to ask people to pay for a service if they get it. One of the great scandals, frequently talked about here, is the way disease controls have been operated during the years. There are many vested interests at play. I applaud those who took them on.
The question of research needs to be attended to. It is as if the State did not contribute anything. However, it has contributed, at significant cost, to compensation payments in respect of the rendering industry and problems arising from BSE and foot and mouth disease for which the Minister was successful in securing money. With regard to BSE, we must examine the situation where a whole herd is depopulated where one BSE reactor is found and the fact that this is done in circumstances where some of the animals might not even have to be tested because they are not of an age that they would require to be tested.
It is always a joy to listen to Senator Dardis. He uses the words "realism" and "opportunity", words I like. They are much better than "Seanad Éireann congratulates" or "Seanad Éireann condemns". I will repeat myself inasmuch as I will make points that the Minister has heard previously because I want to speak out against, what I call, "the ostrich tendency", the tendency to bury our national head whenever the question of the CAP arises.
There has been a conspiracy of silence about the CAP dating back to the 1970s. For 30 years we have resisted all attempts to bring it into line with the realities of the modern, market-driven world. The only time I heard this referred to was by Senator Dardis tonight. Even in 2003 we continue to cod ourselves with the delusion that this is a sensible policy. We even try to persuade ourselves that it will continue indefinitely. Colleagues who know me well do not have to be told that I am proud to be Irish and a European and that I am well known around the world as a champion of Irish food. I use the opportunity to do this whenever I can.
I cringe whenever I hear of a new refusal either here or at European level to face up to the reality in regard to the CAP. As long as we leave it unreformed, we are trying to live in the past. In its current form it is hugely wasteful and highly inefficient, even in reaching the objectives set for it. It penalises the majority of Europeans at the expense of a small minority. Even worse, it penalises the peoples of the developing world by distorting the marketplace in order that they cannot sell their agricultural goods.
Successive Governments have taken the wrong attitude towards this cancer in the European project which we did not invent – it was in place when we joined the EEC in 1973. Instead of recognising it for the uneconomic, unfair, untimely and unsustainable monster it was, we fell on it as though it was manna from heaven. As a predominantly agricultural country, we would have had immense moral authority if we had chosen instead to lead the way out of the quagmire that our partners had created for themselves before we joined. Unlike Britain which clearly has vested interests in the matter, no one would have questioned our bona fides if we had put up our hand and told the truth which has been staring us in the face for the past 30 years – the policy cannot survive as a permanent part of a united Europe.
Instead of planning for life after the CAP, we took the other route, which was to stick our heads in the sand and pretend it could be dragged on forever and that the good times would continue. This debate has proceeded in that vein. That is the reason it is important a dissenting voice is heard. We have persisted with this doomed policy at enormous cost. In absolute terms, agricultural policy swallows up the lion's share of the EU budget year in, year out. For an entity with the aspirations of the European Union to spend three quarters of its entire annual budget on farm supports shows a peculiar sense of priorities, although that is not the nub of my objection to the policy.
I believe in supporting farms and farmers, in developing the food industry in Ireland and throughout Europe, in helping people to preserve the rural way of life and especially to find new ways beyond agriculture of developing the economic potential of the areas in which they live. I am the first to admit that doing this will cost the broad mass of citizens an arm and a leg. I will not admit, however, that the Common Agricultural Policy as it stands is the right way to do it.
Two categories of people are short-changed by the CAP, of which one is customers. Senator Coonan referred to prices and I will not rise to his bait. Customers comprise the broad mass of almost 500 million people the European Union will soon embrace. They must pay twice for the CAP. The smaller part is the taxes that fund the European Union budget; the larger, paying higher food prices. Every time they buy food, they pay too much, more than they need to and more than they should. The prices they pay are not determined by the market laws of supply and demand. They are artificially determined by the need to use the market to deliver a certain level of support to farmers throughout the European Union, soon to be wider. Instead of supporting farmers directly, which is defensible and with which I would not have a problem, we support them through an inappropriate price support system. It is obvious to independent economists that this benefits no one, neither customers who buy the food nor farmers. Despite what it may have done previously, the CAP fails to provide a proper living for most European farmers.
Falling incomes have driven increasing numbers off the land, something to which Senator Bannon referred. The CAP has encouraged large-scale, increasingly intensive farming that produces commodities of dubious quality. Some 80% of EU subsidies go to 20% of farmers. In other words, they go to large farmers, as Senator Bannon said. The CAP encourages wasteful over-production of food. It is a peculiar irony that a system designed to make Europe self-sufficient in food is characterised more than anything else by the fact that it produces too much food.
This is where the other mass of people short-changed by the CAP comes in, namely, those in the developing world. The negative effect for them of the CAP and the European trade policy that springs from it is much greater than for Europeans. On the one hand, we keep their produce out of our market, by and large, while on the other, we undermine prices for them elsewhere in the world by flooding markets with our surpluses and selling them at uneconomic prices. Meanwhile, we beat our breasts about the need to help the developing world as long as that help is delivered in the most suitable way, usually in the form of cash or loans. We give to them with one hand while, with the other, prevent them from trading with the only commodities they have, namely, the goods they produce. If we traded fairly, we could keep all our trade and the developing world would still be better off.
This is not only bad economics; it is a morally rotten way to behave, especially for this country with its traditions and values. As long as we persist in behaving in this manner, we cannot hope as Europeans to gain the influence we set out and would like to have in the rest of the world. The developing world sees the two great powerhouses of wealth, the United States and Europe, lined up against it. Both undermine it by distorting food prices and subsidising food producers. Of the two, Europe is by far the worst sinner. It is something about which we should think long and hard, especially in the current climate regarding Iraq in which America is not the favoured nation.
Surely it should be for Ireland to lead the way out of this policy that is both economically and morally bankrupt. No one would ever question our regard for farmers, agriculture and the rural way of life if we were to say it was time we turned our back on the 20th century and found a new way for agriculture that was right for the 21st century. I believe people would listen. If we made such statements, we would be proud of what we would do, whereas we cannot be proud of what we do at present. I do not give answers. I merely say we should not keep our heads buried in the sand and believe this can continue.
I welcome the opportunity of contributing to this debate in the Seanad. It is important that agriculture is debated regularly in both Houses of the Oireachtas. This is a good opportunity to debate a number of proposals that will come before the European Union and will be debated internationally in the World Trade Organisation round talks which could have serious and detrimental effects on Irish agriculture.
Detailed proposals of the mid-term review of the Common Agricultural Policy were announced on 22 January. Outline proposals had been published in July 2002 and the more detailed proposals followed a period of consultation with the Council of Ministers and the European Parliament and a considerable amount of public debate. I outlined my position in the Council when the detailed proposals were discussed on 27 January. The proposals are being examined at official level and at working groups and committees in Europe. They will also be discussed in the Council in coming months. We are at the early stages of this debate. We will not get down to negotiations for a number of months. It is important we have this opportunity for a discussion. The Greek Presidency has indicated its intention to reach decisions on the proposals at the June meeting of the Council but whether these intentions can be realised will depend on progress in the negotiations in the coming months.
The European Commission's detailed proposals contain four main elements: the decoupling of direct payments from production, the modulation and degression of direct payments, enhanced rural development measures and sectoral proposals, the most important from our point of view being milk and cereals. The Commission also published a considerable body of analysis on the impact of its proposals which had not been available when the outline proposals were published.
I will deal with decoupling first because this changes the nature of the way farming and agriculture have been supported up to now. The Commission proposes to replace most existing direct payments with a single annual cheque in the post. The amount of each farmer's payment would be calculated by reference to the average annual amount he or she received in the years 2000, 2001 and 2002, updated to take account of increases in the rates of payment agreed under Agenda 2000. The payment would be conditional on the farmer respecting food safety, environmental, animal health and welfare and occupational safety standards. This is, in fact, compulsory cross-compliance. To avoid the abandonment of land with resultant environmental problems, recipients of direct payments will also be obliged to maintain their land in good agricultural condition.
Last year before the outline proposals were published, I asked the economic evaluators, FAPRI Ireland, to carry out a study of the effects of decoupling. There has been criticism in some quarters that the FAPRI study is not comprehensive in that it did not take account of other developments, for example, the World Trade Organisation talks or other aspects of the mid-term review. Any such criticism is unfounded and demonstrates a lack of understanding of the process in which we are engaged. If the FAPRI study had included the effects of those factors, we would not know the effects on agriculture of decoupling alone, something which we must know because we have to take a position on it in the Council of Ministers. The FAPRI report was very clear about the factors covered and the assumptions made. Those factors did not take into account the WTO or other aspects of the mid-term review, just decoupling alone. We need to know the effects of the other developments also. I asked FAPRI, as soon as the decoupling exercise was complete, to extend the study to include the other mid-term review proposals and developments in the WTO. I expect the results of this additional study will be ready in about two months.
Regarding the WTO, the current round of negotiations is crucially important. The outcome will determine the framework within which we can support agriculture in the European Union and will trade for many years to come. At present, the aim is to conclude agreement on modalities – that is, the broad rules – for the liberalisation of trade by the end of March. In an effort to influence this aspect of the negotiations, the EU Commission submitted proposals to the WTO secretariat at the end of January. The EU paper was agreed after Ireland and France had requested that it be discussed by the Council of Ministers and after assurances, which we had sought about the level of protection for sensitive products, specifically beef and butter, were given.
Today, the chairman of the WTO's committee on agriculture in Geneva circulated a first draft of a modalities paper. The proposals contained in this paper are totally unrealistic. The paper departs from the terms of the Doha ministerial declaration under which the negotiations are taking place and, furthermore, it does not reflect the balance of views put forward by the WTO member countries in the preparatory phase of the negotiations. I expect the Commission to adhere to the mandate for the negotiations that was agreed by the Council of Ministers.
The findings of the FAPRI analysis of decoupling were, in summary, that by 2010 beef production would fall by 12% in Ireland and by 6% in the EU as a whole, cattle prices would rise by 8% in Ireland and by 6% in the EU as a whole, lamb production would fall by 12% in Ireland and by 8% in the EU as a whole, lamb prices would rise by 21% in Ireland and by 19% in the EU as a whole, farm incomes would rise by 11% at the end of the period and agricultural greenhouse gas emissions would fall by 13% in Ireland. All of these changes were by reference to a baseline, which assumed no policy change. However, because there will be policy change, I have asked FAPRI to take the WTO round and other changes into account in its further studies.
One of the notable findings by FAPRI is that, in the beef and sheepmeat sectors, Ireland would be disproportionately affected. I brought these results, and their disproportionate effect on the Irish economy and on rural communities here, to the notice of the Council of Ministers on 27 January. I also made it clear that the FAPRI study, like each of the six studies carried out on the Commission's behalf, did not take account of the impact of further liberalisation of trade resulting from the WTO negotiations, which would be likely to affect the results of decoupling for the worse.
The Commission is proposing to introduce a system of modulation and degressivity over the period 2006 to 2012. Farmers receiving less than €5,000 in direct payments would not be affected. That proposed threshold would be far too low. In my response I stated clearly it was unrealistic for any farmer receiving €5,000 in direct payments to be exposed to reductions. Farmers in receipt of between €5,000 and €50,000 a year in direct payments would have their direct payments in excess of €5,000 reduced by 12.5% and farmers receiving over €50,000 a year would have their payments in excess of €50,000 reduced by 19% by 2012. That would be a gradual reduction up to the 2012. This money would then be used for other purposes. The first 6% of these reductions would be transferred to rural development, through various Leader programmes and the remainder would be used to meet future EU financing needs.
At the Council on 27 January, I pointed out that modulation is inequitable in that its impact on different sectors varies, depending on the extent to which direct payments feature in the different support regimes. Those sectors where direct payments do not apply are not affected at all, whereas beef and sheepmeat, which are heavily dependent on direct payments, will be affected most severely. I also drew attention to the complete inadequacy of the €5,000 exemption threshold, a level which would catch farmers on quite low incomes. Direct payments are an absolutely essential element of farm incomes, amounting to €1.6 billion per annum and account for 69% of Irish farm incomes. Any reduction in these payments would impinge directly and significantly on farmers' incomes.
The Commission has also developed its ideas for enhancing the range of rural development measures that may receive support. There will be three new sets of measures. There will be support for farmers who participate in recognised schemes to improve food quality. Aid will be provided to help farmers meet standards prescribed in EU law for the environment, public health, animal and plant health, animal welfare and occupational safety, and to farmers availing of farm advisory services for the first time. There will be assistance for farmers who undertake to improve, over at least a five year period, the welfare of their farm animals in a manner going beyond usual good animal husbandry practice.
The Commission has put forward proposals for a range of sectors, namely cereals, milk, protein crops, durum wheat, starch potatoes, dried fodder, etc. I will outline the stance, which I took at the Council in relation to the sectors involved of most interest to Ireland. The Commission is proposing a 5% reduction in intervention prices for cereals and the abolition of the system of monthly increments, together with an increase in direct payments. Market conditions over most of the past two years or so indicate a convergence of EU and world prices for wheat and barley. I told the Council that, in these circumstances, it is difficult to justify a further cut in intervention prices, particularly bearing in mind the budgetary cost of the resultant increase in direct payments.
The Commission is proposing a range of measures for milk including the bringing forward of the Agenda 2000 reforms by one year to 2004-05, the introduction of two further annual cuts of 5% in intervention prices starting in 2007-08 and restrictions on the purchase of butter into intervention to 30,000 tonnes, with increases in the dairy cow premium and two additional quota increases of 1% per annum. The total intervention price reduction of 25% would be differentiated as between butter and skimmed milk powder with a 35% decrease for butter and a 17.5% decrease for skimmed milk powder. The milk quota regime would be extended to 2014-15.
Decisions on any such reforms should be considered closer to that date when we will have a better view of the market conditions then prevailing and, crucially, of the outcome of the WTO round. The Agenda 2000 agreement provided for a substantial reform of the sector and we should allow that reform to be absorbed before proceeding further.
I have made my position on these proposals clear. I told the Council that significant fundamental reform was not necessary and significant reform would put pressure on the EU budget. The timing of such reform in the absence of further progress in the WTO round of negotiations was questionable strategically. Why should Europe make amendments and proposals without having a view of the WTO round? This would be tantamount to making concessions before receiving a response. The usual response to that in any argument is to pocket the concessions and start from a new threshold. The specific proposals were not – and are not – in accordance with stated EU policy objectives in relation to the European model of agriculture.
We hear much from Commissioner Fischler about multifunctional agriculture. I do not see how it is possible to have multifunctional agriculture by reducing farmers' direct payments on a level as low as €5,000 per annum. Most of all, the proposals would impact disproportionately on Ireland. My objective in the negotiations is to preserve the benefits to Irish agriculture and to rural communities achieved under the Agenda 2000 and I intend to do that.
We do not, nor did we ever, have many votes at the Council of Ministers. We have three votes out of 87. Nonetheless over the years in various reforms, particularly ones that have taken place since the early 1990s, we have wrung substantial concessions from the various negotiations. We have teamed up with other like-minded countries and got a decent outcome. I am confident we can do so again on this occasion.
Before people go into a debate, it is a pity they do not do some more research on the realities of life.
Senator Coonan referred to money in Europe. I assure this House, as I assured the Dáil, that every euro available from Brussels has been and will be drawn down. To suggest otherwise is a complete fallacy and an example of the bad mouthing and talking down of the agricultural industry which we hear morning, noon and night.
Not a single euro available from Brussels will be left. This applies to all schemes, including REPS, the early retirement scheme and the young farmer installation aid scheme. Last week, a Deputy stated in the other House that the young farmer installation aid scheme had been reduced by 75%. This is untrue as more money is available under all the on-farm investment schemes this year than in the previous year and more money is available for the REP scheme this year than was spent on it last year.
Some €2.8 billion was expended last year in support of agriculture and the same amount will be spent this year. There are a number of subheadings related to research and other areas where some cutbacks were required, which is regrettable. However, scare-mongering, allusions to bankruptcy and younger farmers having low morale—
I turn to a matter raised by Senator Quinn, who spoke at some length about support for farming and agriculture, which he described as misguided. That is not the case. Farming, agriculture and good quality food production is supported throughout the world. The United States of America, the great entrepreneur, supports this sector to a greater extent than any other country. I have official figures from international research which show that in the European Union agriculture is supported to the tune of $276 per capita, whereas the equivalent figure in the United States is $338 per capita. The US also introduced a farm Bill last year which considerably enhanced support for agriculture. I make no apology for supporting farming and agriculture.
Senator Quinn also stated that 75% of the European Union budget is spent in support of agriculture. This is also incorrect. Some cursory research before entering the House would have clarified the matter for the Senator. The fact is that 1.5% of GDP in the European Union is spent in supporting agriculture and farming, which amounts to some €41 billion. This is done for good reason and to good effect in supporting multi-functional agriculture and ordinary farming.
Senator Quinn claimed the European Union uses agricultural support to dump products and whinged about the plight of developing countries which, he said, has been caused by the big, bad European Union. The EU is the largest importer of agricultural goods in the world and makes specific allocation for the least developed countries. For example, the EU is the world's largest importer of farm products from developing countries, from which it imports as much as the United States, Japan, Canada, Australia and New Zealand combined. The European Union absorbs some 85% of Africa's agricultural exports and 45% of Latin America's agricultural exports and is the largest importer of agricultural products from the poorest countries.
I express my appreciation to the proposer and seconder of the motion. It is important that both Houses have a calm, deliberate and informed debate on the critical policy issues confronting Irish agriculture in both the European Union and the World Trade Organisation. Following last week's debate in the Dáil, I spoke to a member of the main farming organisation who told me that while he accepted the importance of the debate, it proved depressing due to the dearth of progressive proposals from the Fine Gael Party. The same has been the case in this House.
I express my appreciation to all Senators for their contributions in this debate, which I expect to continue for six to 12 months as part of the mid-term review. It may also spill over into the Irish Presidency, which begins on 1 January next and will last for six months. The world trade talks will probably also spill over into our presidency, giving us considerable opportunity to continue the debate. I would be glad to return to the House to benefit from the views of Senators.
I accept your ruling. Senator Callanan's contribution would have been noted by others if they were present in the House.
The Common Agricultural Policy was established in the 1960s, before Ireland's entry into the European Economic Community in 1973, to secure Europe's food supply and stabilise prices to the benefit of both producers and consumers. In the 1950s food was scarce and expensive and choice and quality were extremely poor. The Common Agricultural Policy encouraged a constant supply of home produced food by providing farm price supports. In this way the instability in world market food prices was avoided through a combination of food import tariffs, export refunds and market management.
Since the foundation of the EEC European agriculture has been subject to political intervention and financial supports which have proved very beneficial to both food producers and consumers alike. Consumers benefit through cheaper food prices and by being assured of quality food produced with the highest food safety and traceability standards. The first CAP reform in 1992, coupled with the inclusion of agriculture for the first time in the General Agreement on Tariffs and Trade, forced a major change in European farm support systems.
On prices and incomes, in a recent review of the differential between the money farmers receive and the price consumers pay for beef it is clear there is a major difference between what the farmer is paid for an animal and the value of the meat to the supermarket. It appears from the calculations that the supermarkets, in particular, are doing very well in their profit take in that farmers only get 38% of the retail price. This means that 62% of the value is mopped up somewhere along the way by others. Even allowing for the cost of slaughter, overheads, distribution, storage and packaging, it is a huge gap. The losers appear to be farmers and consumers. The middlemen in this case, in particular the supermarkets, appear to be the net beneficiaries of the production system.
A similar exercise by others recently showed equivalent gaps between production of milk, lamb, beef and salmon and the price paid by the consumer for that produce. For the sake of farmers and consumers this problem has to be investigated and resolved. We have to ensure there is a fair and equitable difference between what the consumer pays and the farmer is paid.
During the years bureaucracy has led to more red tape, for very good reasons in some cases, but it exacerbates the problems some in the sector have in terms of filling out forms and the number of forms to be sent here, there and everywhere. The amount of bureaucracy makes farmers that little bit more pessimistic and it is necessary to ensure payments that are justified are delivered promptly. It is an incredible waste of resources and an enormous demand on the time of the farmer to have to submit a plethora of forms and responses to claim his or her entitlements. There have been many cases of heavy-handed bureaucracy where simple errors or oversights have resulted in fines or penalties being imposed. This exacerbates the difficulties experienced in this regard. That heavy-handed approach has to stop. Commissioner Fischler argues that his proposals would end the bureaucracy to which I refer but that remains to be seen. I fear that one system of red tape will be replaced by another. There is a need for adjustments but it is a matter of how these can be implemented without damaging the nature and quality of farming and farm life.
Subsidies must remain an integral part of Irish farming. It would be impossible to implement environmental policies or sustain marginalised farms without them. It is not fair to withdraw them in one short, sharp blow as proposed by Commissioner Fischler. Subsidies are vitally important to a select number who must maintain some form of valuable income on the land. Transitional payments must be in place to safeguard the current generation of farmers while allowing the transition to a new generation who will have to take on board the new styles and standards that are almost inevitable in farming.
The Minister said there were record numbers of young people in farming. I know otherwise. I spoke recently to a graduate of a course in an agricultural college. Out of a total of 28 graduates who received diplomas, only four or five intended to actively pursue careers in farming. There have been many incentives in the private sector in recent years. One of the major benefits of the Celtic tiger was a phenomenal rate of growth in terms of jobs expansion and expansion in employment in general. This has led to younger farmers being attracted to industries where they can work under more humane conditions. They can work from 9 a.m. to 5 p.m. or do a number of 12 hour shifts and leave the workplace. It would not be correct to state, therefore, that there are a record number of young people on the land. There might be record numbers doing courses in the colleges which will allow them have a more professional and expert command of the farm being handed down to them but it does not necessarily mean that they will pursue careers in farming.
We also need to concentrate on smaller farmers. The vast majority of European subsidies go to larger farmers but what number go to smaller farmers? While figures have been bandied about in this debate, the scales are not balanced in favour of the smaller operator. By and large, they are balanced in favour of the large operator. We need to encourage systems whereby younger farmers can work off the land to subsidise their incomes in order to promote living on the land and ensure young people will find it lucrative to remain in farming, even if they have off-farm income.
The challenge now facing the Minister is to protect agriculture while setting the scene for gradual change that will give a new look to farming without damaging the quality of life or the acceptable level of income for farmers. It is most important that we deploy huge resources into research, development and education in farming and that these principles are not sacrificed.
While there has been much comment about the Fischler proposals, we have to fire a warning shot in that regard. There has to be thorough research into the kernel of what Commissioner Fischler proposes to do. The cuts in the budget and Book of Estimates were a slap in the face for some and it is up to the Government to ensure budgetary allocations are not drastically reduced because there is little point in talking about younger people staying on the land or people staying in agriculture and making it a viable profession if the State coffers do not reflect these values and policies.
We are all on a learning curve in relation to Standing Orders and convention and it was not my intention to inhibit the Senator's contribution in any way. I merely wanted to point out the convention as has been pointed out to me when I sit in the Chamber and which will be pointed out to me by the Chair whenever I transgress. It was not a reprimand in any sense. I merely wanted to point out the particular convention.
I welcome the Minister of State, Deputy Aylward. I denounce the Fischler proposals and commend the Minister, Deputy Joe Walsh, for the courageous stance he took last week at the meeting of farm Ministers. He joined the grouping known as The Friends of Farming in the Council to formally reject the Commissioner's package. The group, led by France, has the backing of at least five other states, including Ireland, Spain and Portugal.
The Fischler reforms are unnecessary and not in accordance with stated EU policy objectives in respect of the European model of agriculture. They are entirely contradictory, ill-timed and will cost the Union money it does not have. I see no reason for the EU to embark on any significant reform at this time, still less to undertake the most fundamental reform since the CAP was established. These proposals will damage many Irish farming families. I am very concerned about their implications for farmers and their families in Monaghan, as they have been through a lot in recent years with the foot and mouth disease problem and other crises. The implementation of these proposals could prove to be the death knell for large areas of rural Monaghan. I see no course of action other than rejection of the proposals.
The cuts will impact more severely on Ireland than on any other member state. The proposals to cut direct payments to farmers receiving over €5,000 per annum cannot be justified. We should be sure we know where we are going with decoupling before we consider getting involved in this. I was interested to read last week that Mr. Pat O'Rourke, President of the ICMSA, said he was convinced that if imposed, the Fischler proposals would undermine farm incomes by 45%.
Irish farming has changed over the past 20 years, largely in response to forces outside the farm unit. The current annual exodus from farming runs at 3,000 people per year. We need to promote farming. These proposals are not in accordance with stated EU policy objectives in relation to the European model of agriculture and will cost money we do not have. We have no option but to object to the proposals. I wish the Minister and his team all the best in negotiations with his foreign counterparts when he tries to achieve the best possible deal for Irish agriculture.
I support Senator Coonan's amendment, despite the fact that it was criticised as lacking in substance by Senator Dardis. I remind Senator Dardis of the second line of the Government motion, which states the House "notes with approval the stated intention of the Minister". Every farmer in Ireland realises what those stated intentions are regarding agriculture. They represent inaction and the total demise of the industry.
I welcome the Minister of State, Deputy Aylward, and regret the departure of the Minister, Deputy Joe Walsh. I was going to endorse Senator Callanan's congratulations to the Minister on being recognised in Europe for his contribution to agriculture. Apart from the personal recognition of the Minister, this is shown by the fact that the Minister has toed the European line and followed the European agenda slavishly. The result is the crisis in agriculture today.
He is the longest serving Minister for Agriculture in the history of the State, but I never thought I would see the day when a Minister for Agriculture would say in the Oireachtas that in order to avoid the abandonment of land, with resultant environmental problems, recipients of direct payments will also be obliged to maintain their land in good agricultural condition. What message does that give to young people who intend to continue in the traditions of their parents in agriculture? It is one of the most appalling statements ever made and anyone responsible for such a statement at a time of crisis in agriculture must consider his position in the context of his commitment to agriculture.
Senator Dardis threw out a challenge earlier, saying everything we said was negative and that we were putting our heads in the sand. That challenge was taken up by the Minister. I throw out a challenge to the Minister for Agriculture and Food to take a leaf from the book of his colleague, the Minister for Education and Science. That Minister knows there is a crisis in education and he has initiated a review and restructuring of every section in his Department. We hope that review has a positive result and I ask the Minister for Agriculture and Food to undertake the same review in his Department.
Whatever is necessary should be done in order to get positive thinking back into agriculture. This Government has been in power for 12 of the past 15 years but when has it ever come forward with an example of forward thinking for agriculture? It has come up with nothing of the sort and instead we have had responses to crisis after crisis and ad hockery. The result is that farmers are totally disillusioned. That is why a tractor cavalcade from every corner of the country came through Dublin, as Senator Coonan said. Farmers abandoned their homes to impress upon the Government the need to respond in a positive way.
What did we get? The budget saw a doubling of the levy and a withdrawal of the promised arrangement. That was done by a former leader of the Irish Farmers Association, who said he was going to revoke the roll-over regarding compulsory purchase. Today we see that farmers are to be penalised a further €18 to €20 in order to dispose of offal in meat factories.
If the Minister for Agriculture and Food thinks there is nothing wrong in agriculture today, where are we going? Can he not see the need to reintroduce some confidence at a time of crisis?
I welcome the Minister of State, Deputy Treacy. He can see in east Galway that Teagasc, because of cutbacks of €15 million, has had to close Mellowes Agricultural College, even though it was teaching organic farming as an alternative method of farming.
The reality is that Teagasc has had to reduce its budget by €15 million. Two out of every three future appointments to Teagasc have been frozen. This is the only advisory service in the State and that is what the Minister has imposed on it. The Minister denied that €150 million was returned as unspent under the REP scheme because of the failure of farmers to get involved. They are leaving the scheme.
The Minister will be remembered positively because foot and mouth disease was kept out of the State. The Department, the agricultural agencies and, in particular, the hard work of the farming community won the day for him.
The lobby that ensured in May that the Minister was restored to the Department of Agriculture and Food did a disservice of monumental proportions to agriculture. We need a change, we need new thinking and we need a forward plan for agriculture. This Government, and the Minister in particular, has provided nothing of the kind in the last 12 years. Does the Minister ever aspire to introducing change? I hope so. The Department of Agriculture and Food must be changed. It should be moved from Dublin to rural Ireland and there it will see the policies that have failed.
Will the Minister verify that the forestry premia and grants under partnership contracts will be revoked? If that is the case, what will be the consequences? I want to see change and I want to hear the Minister respond.WP leading adjustment
Three Senators are offering. I am simply pointing out the reality of the situation. I will now call Senator Dooley. I would be grateful if Members would adhere to their time allocation in light of the fact that time is at a premium and other speakers want to contribute. The Chair cannot do any more than that.
I welcome the Minister to the House. I thank the Ministers of State, Deputies Aylward and Treacy, for the work they have done this evening. I commend them and the Department for the excellent work they have done in facing the crises that have befallen the agricultural sector in recent years. None of us has any doubts about the extent to which the whole sector has been affected by many vagaries recently.
As a result of the self-assured, decisive manner in which the Department and the Minister have come through these crises, I have the utmost confidence in his ability to shepherd the agricultural industry through the latest challenge it faces, the proposals by Commissioner Fischler. It is a difficult job for the Minister and Department and it would be good to see cohesion in the sector and across the political divide. I will not speak for the agriculture sector but I expected a greater level of co-operation tonight than the political in-fighting and mud-slinging at Ministers over what they have and have not done.
The debate would have shown the country and the European Union that Ireland stands firmly behind one of the most competent Ministers on the European stage as he negotiates on our behalf. The future of Irish agriculture depends on the negotiating skills of the three Ministers who have been with us tonight. It would have been nice to see support across the House but, as Senator Dardis said, this redundant amendment was tabled as a purely political exercise.
I remind Senator Burke of 1987, a watershed in the economy of the State. It saw the end of a Fine Gael-led Government that more than doubled the national debt to €26 billion in four years in office.
I will encourage the Opposition as best I can because it is having a difficult time and it would be nice to see it come up with some relevant proposals for the future of the agricultural sector. If shock tactics are required, perhaps I will be responsible for the resurgence of Fine Gael.
The Minister's determination to oppose the proposals is well founded. Commissioner Fischler's draft proposals have not changed to any great extent. Since then not only our Government but a number of other member states have lobbied the Commissioner, presenting strong cases for change. Examining the final proposals, however, it is obvious that many of the draft proposals have not been taken into account. The devil in the detail will only be worked out by virtue of the negotiating skills of our Ministers.
The idea that we should simply introduce decoupling, a major concern for all of us, is ludicrous. By basing the single payment to farmers on the 2000-02 level, many farmers will find themselves in very difficult circumstances, particularly those in transition farming. I spoke to some farmers from County Clare today who were concerned that, having changed from dairy farming to suckler cow production, they are between enterprises, without having reached the required production levels in the new area. The detail has not yet been thrashed out and consideration must be given to the plight of farmers in transition from one area to another.
Independent reports suggest that the national beef herd will drop by some 30% if these proposals come into operation, particularly if decoupling is put in place. I believe the Commissioner's argument is that this shortfall in output will, in some way, be offset by a price increase associated with an increase in demand.
My concern is not only with the juggling of prices and the implications of the WTO talks. There are concerns in that regard tonight, with the chairman of the modalities committee of the WTO, Mr. Harbison, throwing a spanner in the works and being at odds with many EU member states. My concern is on a wider basis in relation to the whole production sector, in which there are very many jobs involved. No doubt, Senator O'Toole will have a view in relation to the trade union dimension and the number of jobs involved. We must be very careful that, in trying to assist farmers as we all wish to do, we do not throw the baby out with the bath water, as it were. We must also be concerned about the many people working in the agricultural processing sector.
Unfortunately, in the time available, I cannot deal with other issues I would like to cover. I wish the Minister of State and his colleagues well in the EU negotiations at this difficult time. I support the motion.
I welcome the Minister of State to the House. This has been as bad a debate on agriculture as I have heard in my time in this House – and that refers to both sides of the House. I hope the IFA president, John Dillon, has been listening to the debate. If he has any sense, he will rush back into the partnership talks while he still has a chance of getting some level of support.
Yes, against Fianna Fáil. There was a similar situation earlier tonight when Senator O'Brien had a go at his party colleague, the Minister for Agriculture and Food. I also defended the then Minister, Ivan Yates, against Fine Gael in this House.
It has been a consistent issue for me that farmers were never told the truth by the leadership of Irish society. It was as clear as could be from 1990 onwards that, by the end of the 1990s, farmers would be paid the world price for beef but nobody had the courage to tell them, apart from a few of us who knew relatively little about it. The same position now applies in relation to the WTO, which will have a serious impact on farming in future. Somebody should get down to outlining the implications of that to farmers.
The Fischler proposals are not acceptable but, on the other hand, can anybody convince me that we can continue with a situation where direct payments are not decoupled from production? They will be decoupled and there is one very good reason for that – we have trained a whole generation of farmers to be unproductive, being paid more for producing less.
Incidentally, it is farmers who have briefed me on the situation. They have been paid for putting land into set-aside and various schemes over the last ten years. In every way, they have done things in the opposite way to every previous generation of farmers. Formerly, the more farmers produced, the more they were paid. We have moved away from that situation and we must get back to it. Our farming community also needs to be told that profit is the difference between buying price and selling price. It is not about the final price, but rather the difference between the two prices.
In terms of where we are going, there are things which need to be done and said honestly. The decision in the last budget on the roll-over tax on farmers is grossly unfair. It does not make any sense. No honest, fair-minded person could agree with it. If people have their land taken from them and then have to replace it, it is unfair that they should lose out on the transaction in terms of taxation. They should not be taxed on the purchase of land to replace land which was compulsorily acquired from them. We should say that is wrong and ensure that some commitment is made by the Government to change it.
In relation to the animal disease levies, it is utterly unfair to impose an extra €10 million on farmers at this time. The Government should sit down with farming representatives, examine the situation, work through it and give some commitments. Other speakers referred to the rural environment protection scheme, REPS. If some 70,000 farmers are to join that scheme, the Department of Agriculture and Food will have to convince them to do so. That will necessitate a review of the situation whereby, since 1995, the rate of REPS payment has not increased by one cent. Irrespective of who was in Government since then, the scheme is still operating on the basis of an annual payment per farm of around €5,500. Farmers need to be encouraged to join the scheme. If farmer participation in the scheme reached the 70,000 figure to which I have referred, we would have solved three-quarters of the problem in relation to the EU nitrates directive. The farm waste management proposals should also be presented in a manner which is attractive and supportive to the farming community.
I fully agree with the concept of special areas of conservation, SACs, as any reasonable person must. However, in defining the areas, consideration must also be given to the farmers who are trying to make a living in those areas. They need to have fair levels of compensation. It would help enormously if those issues were addressed and an effort made to deliver on them. There are cost issues involved and we have to deal with them. I am not sure what is the best approach but it is very clear that those issues are currently impacting on farmers.
In relation to the issues arising from the foot and mouth disease crisis with regard to accurate measurement of the sheep population, farmers will have to agree to an objective method of measurement. It need not necessarily be the method currently favoured by the Department of Agriculture and Food – there are other ways of doing it and those alternatives should be explored.
The inclusion of commonage in the determination of farm size may meet European demands, but it has a serious impact on stocking rates per acre for the purposes of various agricultural payments. That matter should be reviewed with a view to softening the blow. There are many other issues to which I would like to refer, if time permitted, and I wish they could be addressed one by one, with Members having an opportunity to express their views. It is not a matter of one Government being better than another. I believe all Ministers for Agriculture with whom I have dealt have been fully committed to their work. I consider that the former Deputy Ivan Yates did a superb job during his term as Minister. The current Minister, Deputy Joe Walsh, is doing as good a job as he can. We should get our act together on both sides of the House, define the issues and put pressure on Government to deliver on them.
As was said earlier, I do have an agenda. I believe that if the farming community and pillar are outside a national agreement, they will be the big losers and that will simply reinforce the split between urban and rural areas, something which I deprecate and oppose. There is a great deal of work to be done in this area. We should gear ourselves towards doing it properly, identifying objectives, making progress and reaching conclusions. We should show our support for the farming community in a practical and honest way.
I agree very much with Senator O'Toole's comments on the importance of the farming community being in social partnership. It concerns not just the particular matters that might be written into the programme but also the ongoing dialogue on problems arising in farming.
I disagree with the Senator's statement about productivity and production. I believe the agricultural statistics show that that has been well maintained. He is correct in saying that the REPS is an excellent scheme and is one of the keys to the future of farming.
We are fortunate in having an excellent Minister for Agriculture and Food and an excellent negotiating team who are, literally, veterans of European negotiations. I was with them in Berlin where they emerged with a fantastic result. Irish Ministers for Agriculture and Food have a high standing with the farming community and with Government, unlike certain other European countries where Governments have little regard for farming or have ideas that are rather destructive.
Farmers involved in the recent "tractorcade" represented a rather elite division. They did not correspond to the image of the half-starving farmers which was presented here. There are some drawbacks to macho politics. It is important to be in there and to be involved. The health of the economy is vital to farming. Few of the budget measures will have any serious impact on overall farm income, however inconvenient or distasteful they may be.
The CAP is a fundamental part of the whole construction of the European Union. It costs very little in overall terms of GNP. It is vital as a security.
My reservation about decoupling is that over time it will de-legitimise support for the CAP. There will be people who will abuse the ease and facility of the system and the media will get in and use it to discredit support for farming. It is dangerous and that is well recognised. I thank Senator Callanan for sharing his time.
On far less controversial issues we have extended the time allowed for debate in this House. I have to believe that there is a decision to suppress debate on this issue because we have extended time previously. There are people here who want to speak and apparently we have decided not to extend the debate.