Bernard Durkan (Kildare North, Fine Gael)
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Question 61: To ask the Minister for Agriculture and Food the extent to which the current farm support payments system is in line with her original predictions when agreement was reached in Brussels; and if she will make a statement on the matter. [2000/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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The agreement on the mid-term review of Agenda 2000 reached at the Council of Agriculture Ministers on 26 June 2003 was balanced and it addressed Ireland's principal objectives. Among these objectives was the preservation of the financial benefits achieved under the Agenda 2000 agreement and the establishment of a policy framework that will allow farmers and the agri-sector the flexibility to adapt to evolving consumer and market demands and international circumstances. The financial envelope provided for each member state represented the average value of livestock and arable aid premia paid in the member state during the three-year reference period, 2000-2002, calculated at 2002 rates of payment. I am particularly pleased that the 2002 rate of payment is being used to calculate the single payment as this was the highest rate payable under the Agenda 2000 agreement.

The result of the negotiations represented a very satisfactory outcome for Ireland, with the achievement of significant improvements to the original proposals, namely: the proposed price reduction for milk was reduced from 10% to 4% and the level of compensation was increased from 56% — the Agenda 2000 level — to 80% for the additional intervention price reduction of 4%; the proposed price reduction for arable crops was withdrawn; the proposed automatic degression of up to 13% in direct payments was withdrawn and replaced by arrangements for financial discipline which will be brought into play only if needed; the proposed level of modulation was reduced from 6% to 5% and Ireland will retain 80% of modulated funds; and the proposed requirements for cross-compliance were scaled down from 36 to 18 regulations. I am sure the Deputy will appreciate that significant improvements were achieved in the final agreement.