Damien English (Meath, Fine Gael)
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Question 84: To ask the Minister for Agriculture and Food the discussions she has had with the EU Commission to index-link the single farm payment; if she intends to make the payment in two instalments; and if she will make a statement on the matter. [6781/05]

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 Agricultural Ministers on 26 June 2003 provided a financial envelope to each member state. This envelope represents the average value of livestock and arable aid premia paid in the member state during the three-year reference period 2000-02 calculated at 2002 rates of payment. The outcome of the agreement, which will reshape the Common Agriculture Policy and secure its future in making it more relevant to modern society and more defensible in a WTO context, was a balanced one which 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.

Index linking of the single payment scheme was not an element of the Commission's proposals. There was, however, a proposal to provide for a reduction of up to 13% in the single payment, known as degression, to meet future financing needs. I believe one of the major achievements in the negotiations was the removal of this proposal. The removal of this particular provision meant a saving of some €420 million for Ireland over the lifetime of the agreement. The compromise agreed was to allow the Council to review, from 2007 onwards, the financial situation annually if budget deficits arise.