Dáil Éireann - Volume 420 - 27 May, 1992

Private Members' Business. - Common Agricultural Policy Reform: Statements (Resumed).

Mr. Connor: Before we adjourned I was making a point about the role of agriculture in the economy. It was alluded to earlier in the speech of my colleague, Deputy Bradford. It is amazing that any Irish Government would accept a deal that is so adverse to the economy, leaving aside entirely the agricultural economy. I made the point in the House before, that in the eighties agriculture contributed almost one-third of all economic gowth. It was a very difficult decade for agriculture, but nevertheless one third of the 20 per cent of real growth which we achieved in the decade came from agriculture. It is extraordinary that the Government are accepting a deal that will, in the opinion of all the experts, freeze out agriculture from contributing to real growth in the economy in the next decade.

This country depends for much of its economic activity and for wealth and job creation on agriculture and agri-related industries. I do not have the figures to hand on the volume of exports or the volume of jobs it generates. We are at a cross-roads in the development of this country in that we never had a greater need to create employment. We need to use every possible resource we have and we should shackle or fetter no resource whatsoever, and yet we find that by making this deal the Government are shackling the very resource which is at the very heart of economic activity- agriculture. We are ensuring that in perpetuity or a least for a decade it will make no contribution towards growth or job creation. That is an extraordinary situation.

In the Maastricht Treaty all community policies are to move towards achieving cohesion, including the Common Agricultural Policy. By accepting this deal we are anti-cohesion. We need a vibrant, growing, unrestricted agricultural economy in order to participate in the drive for cohesion. I wonder if the Minister understands the real meaning of cohesion.

An Ceann Comhairle: Would the Deputy please bring his speech to a close?

Mr. Connor: I regret that the environment, social and economic role of the Irish farmer has been betrayed by this deal which has been concluded. The Minister was very ebullient in his remarks about how good this agreement would be for Ireland. However, I believe it is a very bad agreement, not just for farmers but for the country as a whole.

Mr. Noonan (Limerick West): I should like to give three minutes of my time to Deputy Michael Kitt.

An Ceann Comhairle: Is that agreed? Agreed.

Mr. Noonan (Limerick West): When contrasted with the original proposal, the recent adjustment in the Common Agricultural Policy must be accepted as an achievement in view of the considerable difficulties facing that policy. The latest decision made by the Council of Ministers removes the very real threat to the fundamental principles of the Common Agricultural Policy. The fact that these principles are to be maintained is very much in Ireland's interests. The impact of their removal would be unthinkable. [883] It is important that we now take whatever positive steps are necessary to adapt to the changes without delay. The key words must be “efficiency” and “co-ordination” in all sectors — on the farm, at the processing centre and in the marketplace. We will only be successful in gaining export markets if we supply a premium product on time. This calls for far more effective co-ordination of effort between all sectors than exists at present. Price stability is the only sound basis for sustainable growth. While this is particularly true in the case of agriculture one must ask at what price, at what quantity and at what margin over costs?

If Irish agriculture is to exploit fully the advantages of economic and monetary union, it must improve its competitive position, especially in continental markets. If we are to do this we must have an efficient production and processing system for raw material, an unassailable high quality food product and a marketing capability. The agriculture and food sector accounts for more than 40 per cent of net foreign earnings. As we all know, 70 per cent of our agricultural output is exported. The capacity to find markets at the best possible prices lies at the very heart of the future well-being of Irish farming and all who depend on it.

Milk producers faced with reduced quotas must be helped by an extensive advisory system. This system should be operated in conjunction with the co-operatives. It is as much in the interests of the co-operatives as farmers that co-operatives are supplied with milk of the desired quality which will give producers an attractive price. There is no point in wasteful duplication. I welcome the Minister's recent statement that he is examining the future role and future plans of Teagasc, a subject to which I adverted some time ago. It is almost ridiculous to have to say that a significant improvement in the export marketing of all products is now essential. This point must be repeated again and again. Here again there is a crying need for integration of effort. One has only to look at the multiplicity of public and private agencies [884] involved in exporting beef to understand what I am saying.

The beef industry is so vital to the national economy that no risk should be taken which might be detrimental to it. The success of this industry in meeting the new circumstances depends heavily on organisational efficiency and co-ordination. Therefore, I ask the Minister for Agriculture and Food to urgently review the proposals put forwad by the main bodies involved to meet the new challenge. I am not asking for another report — we have enough of those; rather I am seeking a meeting of minds.

The reforms have now been agreed. The Minister and his officials have done an excellent job. I shudder to think what the alternatives would be. These reforms are now part and parcel of the Common Agricultural Policy. The time for talking about what might have been is long past. We all have a role to play in making these reforms work.

Mr. M. Kitt: I thank Deputy Noonan for sharing his time with me. I should like to congratulate the Minister for Agriculture and Food, his officials and Commissioner MacSharry on the Common Agricultural Policy reforms. I welcome his remarks about the need for Irish agriculture to adopt a market-led approach. We all know that there is a market of 340 million people in Europe and that the German market, in particular, is very profitable from the point of view of our beef industry. Unfortunately, many German buyers cannot get sufficient Irish meat and meat products because our market price cannot compete with the intervention support system. I hope the trend to which the Minister referred, of putting half of our total beef production into intervention, will be reversed so that we can supply those markets and end the uncertainty which has existed, particularly for the last 15 months.

I welcome the Minister's statement that premia and grants will be paid during the year in which they are due. I should say that not alone has there been a problem with the payment of premia but the application forms are too complicated. I [885] hope the Minister will now simplify the application forms so that mistakes can be rectified at an early date. This would ensure that people who make genuine mistakes and errors will not be penalised as they have been in the past.

The Minister has been very successful in regard to milk quotas. He has ensured that there will be no reduction in quotas this year. Of course, this means that there will be price reductions in dairy products. I would not like small milk producers to suffer through a loss of premia. If this happened many small farmers in the dairying sector would give up producing milk altogether. This would be a severe blow to farmers in the west who have been very badly hit over the past two years.

I agree with Deputies who said that farmers' incomes have fallen and that there is poverty on many farms in the west. I have called on the Government on numerous occasions in this House to introduce a family income supplement for smallholders similar to the family income supplement for the PAYE sector. This system which has worked very well for the PAYE sector must be applied to smallholders if we want to maintain the maximum number of farm families in rural Ireland.

I know this is a social welfare matter but it is also a matter which the Government should address urgently. I referred previously to the assessment of smallholders for unemployment assistance. The Commission has been quoted as saying that farmers should produce more food and also protect the environment. If this is so, then surely farmers should not be penalised for increased production. I was glad to hear that the Minister for Social Welfare is looking at this matter.

The Minister has also been successful in the discussions in regard to the sheep sector. Indeed, he may have been too successful in this respect. As somebody who represents small farmers, I fail to see why farmers in disadvantaged areas with over 500 or 1,000 sheep should get a half premium. I look forward to the benefits for [886] the consumer in this package, to the proposals to help farmers, and, particularly, to end the uncertainty for small producers. I know that the Minister and the Government are committed to doing that.

Mr. Connaughton: As my time is very limited I am going to omit the Euro speak and the jargon which has been used today and throughout the country, particularly in the past 12 months. The future of a number of farmers will be affected by this package. I would like to know who will get compensation or what sector of Irish agriculture will do well as a result. Will the Minister give me that information as I cannot see who will benefit?

The Common Agricultural Policy reform package will not help small farmers, despite the claim that all farmers' birthdays will come together when the new compensation rates are paid. There are many unanswered questions about the price of cattle, sheep and milk under the new regime, and I do not think any Member can answer them. For example, there was a nosedive in the last three or four days in the price of sheep, with factory prices now less than 80p per pound, a reduction on last year's price of between £12 and £15 per lamb. That cannot be denied. I am told by the industry that it is very likely that the price will drop to between 70p and 75p per lb. The Minister, and the Commissioner, have said that farmers will get a maximum of £28 per ewe under the ewe premium scheme. When one considers that the ewe premium was previously £21 and that lamb prices are falling, the compensation for sheep farmers is inadequate. Do we believe that lambs are likely to make 90p, £1 or £1.20 per lb. in a year's time? Present trading patterns are not taken into account in terms of the ewe premium.

Similarly, there is bad news in the package for small dairy farmers. Farmers with a small quota are trapped. Maybe that was always the case with nothing but pious platitudes being paid, but there was a chance that farmers would get an increase quota. However, that is not [887] possible now. The 2 per cent quota will be reduced. I agree with the Minister that it will not be reduced this year but there will be a reduction of 1 per cent next year and 1 per cent the year after, which will not make a great difference to farmers with a big quota. The price of milk will be reduced by between 5p and 7p per gallon in the next year or two, and that will greatly affect the small farmers. I cannot see how this new package is going to help that category of farmers. The fact that only £66 per cow is allowed for the first 40 dairy cows is a major blow to farmers. A great injustice has been done to small dairy farmers, and that should be spelled out here.

Beef cow grants have been substantially increased. In 1991 the total beef cow grant was £138. After consultations with people involved in Irish agriculture, it appears that under the 1993 proposals farmers in disadvantaged areas will receive £207, with an additional £26 for farmers whose stocking rate is below 1.4 livestock units per hectare. That is a reasonable increase. However, we learned with dismay that no grant will be paid in respect of heifers which make up 50 per cent of the total cattle population. I cannot understand the logic behind that. Some years ago farmers received a slaughter premium for heifers. There are thousands of farmers in that business. I know that some heifers are used as breeding stock but what will be the position for farmers who sell heifers to factories and butchers?

I understand that the beef cow quota will be related to the 1992 quota. There are many unanswered questions in this regard. I welcome the slaughter premium of £52, which has been sought for years. There are also seasonality factors involved. I would like to know whether any thought has been given to the fact that a farmer who has cattle for sale in January of a particular year will not sell to a factory in the month of December if he thinks he will lose £52 by doing so. Has any thought been given to the continuity of supply? Much work has to go [888] into this. Otherwise farmers will end up worse off.

Over the years I was involved in the store cattle trade. From experience I believe that if we decide not to put our product into intervention, as the Minister outlined, difficulties will arise. I believe the price paid for store cattle at our marts will not compare with the compensatory amounts that have been offered. I hope I am wrong but the signs are that that will be so.

The Minister may argue that the present compensation is sufficient, but I believe that changes are necessary. I cannot understand why in the beef cow scheme, there is no upper limit on the premia paid to farmers. For example, a farmer with 500 cows would receive the same amount as a farmer with seven cows. We know why there is no upper limit, because the big boys put in the boot when they got the chance — I am not referring to the big boys in Ireland but on the Continent. No effort has been made to help the people in poorer areas who did not produce surplus products. Everyone talks about marketing now and that is the way it has to be. Can anyone seriously tell me that we will have to double the amount, in volume terms, of products we already sell via the straight marketing system outside of intervention, quickly enough to ensure that there is not a huge price drop? It is because of our inability to do that I forecast that the people who are selling store cattle and sheep are in for a great shock. I sincerely hope that my words do not come true, but the small farmers of Ireland have been let down.

Minister of State at the Department of Agriculture and Food (Mr. Hyland): I am glad to have the opportunity to make my brief contribution to this very important debate. The reform of the Common Agricultural Policy is indeed a matter which has dominated the minds of individual farmers and the agricultural industry and generally over the past 15 months. Never before in the history of Irish farming, was there a greater dependence on the ability of our negotiators to secure a good deal [889] for Ireland. As everybody in this House is aware, the talks have been long and difficult but the outcome has been as successful as it possibly could be for our country. There never was and never will be a time when national negotiators succeed in getting everything they aspire to achieve for their countries. International negotiations are about compromise and securing the best deal possible for individual member states.

Since reaching agreement on the reform of the Common Agricultural Policy, much has been said and written particularly in relation to the outcome for Ireland. The comments and the analysis have varied depending on their source and on their motivation. It can, however, be said that the vast majority of impartial and independent commentators have acknowledged that Ireland succeeded in getting a good deal. For this we owe a debt of gratitude to our Minister for Agriculture, Deputy Joe Walsh and his negotiating team. We also owe a debt of gratitude to Commissioner Ray MacSharry. I said in this House on many occasions in the past that at the end of the day Ray MacSharry, as the European Commissioner with responsibility for European agriculture, in conjunction with our Minister for Agriculture, Deputy Joe Walsh and his negotiating team, would deliver to Ireland the best deal that possibly could be delivered in relation to Irish farming and to Irish agriculture.

The outcome is also an indication of the extent to which the Community is willing to respond to the needs of smaller and weaker economies such as Ireland, which have a unique dependence on agriculture and the food industry. We all know that in relation to the many debates which took place in this House over the years, we made the case as strongly as we could, that the European Community should recognise the needs of the smaller more dependent economies, particularly those dependent on agriculture. Many people had doubts as to whether the Community would give that kind of recognition to agriculture. It is, and should be a source of encouragement and [890] inspiration to all of us as we move into a further phase of European solidarity that in these negotiations, our Minister and Commissioner Ray MacSharry, delivered to this country the best deal that could be got. Admittedly we would all like to see a situation in which there would be no restriction on agricultural production, where individual farmers could continue to exercise their professional skills in relation to the production of crops and livestock husbandry but the reality is that Common Agricultural Policy reform was necessary particularly, as far as economies such as Ireland is concerned. It was necessary because there was a gross over-production of food, mainly by the stronger European agricultural economies, which was having a serious and detrimental effect on our farming industry, particularly on the small farmers.

Deputy Connaughton made a case, as he often does in this House, in relation to the dependence of small farmers on some kind of income support and so forth. Nobody knows better than Deputy Connaughton, that if we did not have the reform package which has just been negotiated by our Minister and his negotiating team, there would be no future for the small family farm units. If we did not have the protection provided by the direct income support, which has been negotiated, as distinct from the market support which has bedevilled the industry over the last number of years there would be no hope for the small family farm units of this country.

There has been much talk of “envelope” farming, in other words, direct payments or a combination of payments from Brussels and national Governments in terms of the direct income support to farmers. Everybody in this House knows, as it is a matter of debate here day after day, week after week, and will be a matter which will be raised at Question Time tomorrow, that Irish farmers depend on direct income support. Irish beef and cattle producers in particular, have been totally dependent on European and national cheques because for many farmers over the last number of [891] years the element of profitability in the livestock enterprise has very often been the amount of a cheque which they were receiving from the European Community. I challenge the people on the far side of the House to say what is wrong with negotiating, as we have now done on behalf of Irish farmers, a trebling income support. The figures are clearly stated and they have been negotiated.

Mr. Connaughton: What price will they get for a bullock?

Mr. Hyland: What price would they get for a bullock in an open, free market situation anyway? I understand the point Deputy Connaughton is making in relation to the decline in the price of sheep at present but that is a marketing situation, where Irish farmers have to go out into the market and sell their products. The ability to sell our product on the European market very often depends on the ability of our exporting industry. It is wrong to say that the decline in sheep prices has anything to do with what we are talking about here in terms of Common Agricultural Policy reform.

Mr. Connaughton: It is a foretaste of what is to come.

Mr. Hyland: I did not interrupt the Deputy. The prices which will be available for any of our products will inevitably vary in terms of market conditions prevailing at the time. What would the position be for the farmers if we had not negotiated positive, definite income support in relation to all these enterprises? I would have to say that the fate and future of many of our smaller farmers would be very bleak.

We should not, through statements in this House, undermine the confidence of our farmers in the future development of the agricultural industry. I am not making a political point, even though Members on the opposite side of the House would accuse me of it. I would have to repeat that the people who have carried out [892] an independent, objective analysis of the negotiations which have taken place and the outcome of these negotiations, have been very forthcoming in expressing the view that they have been extremely successful as far as the agricultural industry is concerned.

I support the outcome of the negotiations on behalf of our farmers. I realise Deputy Connaughton is very sincere when he talks about the future development of Irish agriculture but it is not a time to make statements which will undermine further the confidence of our farmers, rather it is time, as some speakers have already said in the House, to encourage our farmers to settle down in view of the price negotiations which have been concluded and to plan for the future development of the industry. I hope that is what all of us in this House, and outside of it, will do in the weeks and months ahead.

Mr. Moynihan: The Minister has described the recent Common Agricultural Policy agreement as a super agreement, but those agriculturalists at the coal face have other views. It will take some time to define clearly who is right and who is wrong in their assessment.

Like Deputy Connaughton, I am very deeply concerned with the small dairying people who are the backbone of rural Ireland. The recent NESC report states that the principal objectives of the Common Agricultural Policy are to support the prices received by farmers and thereby support their income, to promote economic growth and employment, including a healthy balance of payments, to ensure food security and to preserve rural society. Anybody conversant with the facts will recognise that during the period in which the Common Agricultural Policy has operated rural society has been diminishing. There are parishes in south Kerry where in 1991 there were merely two births. That is a danger signal for the whole community in relation to schools, churches, voluntary and sporting organisations. The reason is obvious. The cutbacks in milk quotas in the past five [893] years have devastated the standard of living of people who are dependent on the cow, the milk and the creamery.

The Minister will acknowledge that small farmers with quotas of less than 10,000 gallons had anticipated a redistricution of quotas. On reading this agreement they will find that there is not to be a reduction in quotas this year but there will be reductions in the three following years. That will give no confidence to that important category in our society. There wil be a loss of productive output in the co-ops, resulting in a loss of jobs. It is absurd to say that the commitment to the preservation of rural society has been lived up to by the Minister, the Commissioner and the negotiatiors.

We have been calling for years for a proper agricultural plan. We should be capable of having our people operating independent agricultural units in secure employment. When we joined the EC we were told that in respect of beef and butter we would have a market of 260 million people, but that market did not develop for us. The only thing that sustained our beef and dairy industry was intevention. Now that is being cut off. Would we fare better in the free-for-all open market? The adequacy of compensation can only be measured by comparing what we were guaranteed under intervention and what the free trade market will return for butter or beef. We cannot guess at this stage. To cite any figure as being a tremendous boost to Irish agriculture could be very shortsighted.

Three weeks ago I asked the Minister the total cost of vegetable imports in 1991. I was astonished to see the figure of £32 million. Taking account of our fertile ground, our climate and the traditional expertise of our people in producing potatoes and vegetables, this is an absolute scandal. Let no one assume that those involved in agriculture have lost the expertise. There is a lamentable lack in presentation and marketing of our produce. I asked in a second question if the Minister would investigate the possibility of sending a smal number of young farmers to the Netherlands or some other [894] area where they would get expert tuition in marketing and presentation. That would be a good investment which would enable people to operate small farms successfully.

Another worrying feature is the transfer of good agricultural land to forestry. Since the twenties we have had a forestry policy for lands at a higher altitude, of which there are plenty. Now the Department of Energy offer a higher grant incentive for the afforestation of good, fenced-in agricultural land. This is a tragedy for rural Ireland. We will be replacing people with trees. This is the time to stop it. There is nothing in this agreement indicating a positive policy to restore life to rural Ireland by assisting the small farmer to diversify, encouraging co-operation with the co-ops and eliminating the expenditure of £32 million annually on vegetable imports. We should be in a position to export vegetables.

The Minister replied to my suggestion about sending farmers for training in the Netherlands that I should consult Teagasc in this regard. What use is there in going to Teagasc when they have not the necessary funding to maintain an advisory service to farmers? There is need for a plan. Compensation is a sensitive issue and can change depending on budgetqary conditions. We must have a plan to secure the future of our farmers.

Mr. Jacob: I congratulate the Minister for Agriculture and Food, Deputy Walsh and express my wholehearted appreciation for his excellent negotiating skill which have achieved such a positive out come for Ireland on this issue. The farmers of Ireland, the agricultural industry, the food industry and all those involved on the periphery and, indeed the Irish economy as a whole owe the Minister a great debt of gratitude. The doubts, indecision and the sheer fear that have prevailed over the past 1 months are at the end. How wrong those prophets and preachers of door and gloom have been proven. All the succeeded in doing by their negative approach was to create unnecessary [895] worries for the farming community over a long period.

I thank God for the positive approach of the Minister and the Agricultural Commissioner, Mr. MacSharry. Nobody has a greater appreciation of what is required as far as Irish agriculture is concerned than the Commissioner. Indeed, it is his publicly stated ambition to return to his native shores and to resume his active interest in farming. I have said on many occasions in the past, and I am more than pleased at this time to be proven right, that Commissioner MacSharry would do all that was necessary to ensure a positive outcome to Common Agricultural Policy reform as far as this country was concerned.

In the short period of time available to me I would like to refer to a few salient points. From a national point of view the beef sector is, perhaps, the most urgent aspect that had to be addressed. Cattle price support mechanisms needed to be put in place. This is being done. Phased reductions in the intervention price for cattle will obtain. In referring to intervention, a Cheann Comhairle, I noted a remark from your good self this afternoon, while the Minister was speaking, when you chastised some Deputies who were interrupting. In admonishing them your words were “intervention is most unwelcome”. Your comments, a Cheann Comhairle, were, of course, in a totally different context, but how accurately they described the motion we are debating here tonight. It is universally agreed and accepted that the practice of producing food and storing it in vast quantities, as we have been doing, is ludicrous and that it simply had to come to an end. Intervention served a vital purpose as far as Ireland was concerned but it has now outgrown it usefulness. Compensation to farmers will be phased in pro rata and will be paid directly to them via increases in premia.

With regard to milk, it is comforting to realise that the national quota level will be preserved for the current year and that some long awaited innovations in this area are in train.

[896] Sheep form a very important part of the agricultural economy of my own county of Wicklow where a number of sheep farmers have been concerned about the future. Much of this anxiety was brought about by negative thinkers, negative talkers and negative writers. Sheep farmers were extremely worried about how the sheep quota would be introduced and on what it would be based. The fact that Ireland can retain its quota at 1991 figures will be a welcome relief to these people. I eagerly await the finer details as to the actual operation of the quota system. In this regard, I am comforted by an undertaking which the Minister gave me some time ago when I was tormenting him on this subject. He assured me that all and everything he would do, and aspire to do, would be in the interests of the traditional Irish sheep farmer. I fully accept that and I am confident he will deliver.

It is very important to note that the Irish consumer will benefit from a reduction in food prices but it is even more important to ensure that this actually becomes a reality. Far too often in the past reductions in prices at farm level failed to percolate through and to be reflected in reductions as far as the consumer was concerned. That seemingly intangible being, the middle man, or the middle men, always seemed to grab whatever was going by way of price reductions. It is vitally important that this is not permitted on this occasion. Proper control and vigilance must be applied. The mechanisms exist; it merely remains to ensure that they are set in motion.

However, in our gratitude and, perhaps, in our euphoria at the outcome of these negotiations we should not be carried away, we should not assume that Irish farmers are now on to a good thing, that all their troubles are over and that they will be laughing all the way to the bank, because that would be a total fallacy. To bring one back to reality one has only to look at this week's prices for lamb. Indeed, projections for the immediate future in that regard indicate a further deterioration in prices is on the cards. We should remind ourselves that [897] any compensation to be paid to farmers is totally meritorious and is geared to make up for the reduction in the output price.

I was very pleased to hear the Minister's statement today regarding the payment of headage premia. This is a matter on which I have spoken in this House and in other fora over the years and particularly in more recent times. It is atrocious that farmers must wait for almost unlimited periods before they receive those payments which are their just rights. No business in the world, and farming today has to be carried out in a business-like way, could possibly survive in these conditions. Farmers must budget the same as those in any other business have to budget. They must know when cash flow will obtain and when moneys are forthcoming. They must be able to count on and depend on payments arriving on time. I have no doubt that that will be adhered to and that these farmers can and will get their just deserts in terms of payments that are forthcoming and get them in good time. The Minister mentioned also the proposed early retirement scheme for farmers and that this would be funded substantially at 75 per cent. This will facilitate and expedite transfers to young farmers. We have been talking about this for a long time. A great deal of lip service has been paid to it, making very small improvements with regard to young farmers taking over. This is a major step in that direction.

An Ceann Comhairle: I hesitate to interrupt the Deputy, but I would ask him if he would please bring his speech to a close now?

Mr. Jacob: I will finish by saying thanks be to God and thanks be to Minister Walsh, that the era of scare-mongering is now over as far as the reform of the Common Agricultural Policy is concerned and that Irish farmers can now at least get on with their farming business. Those involved in the marketing side can get on with the major [898] job which they have to do and the Irish consumer can avail of the benefits.

Mr. Hogan: I seek the agreement of the House to share my time with Deputy Boylan.

An Ceann Comhairle: Is that agreed? Agreed.

Mr. Hogan: This Common Agricultural Policy reform package should have been about measures to reduce surplus production and at the same time make European agriculture more competitive. The results are clear. Minister Walsh and Commissioner Ray MacSharry colluded with the other EC ministers to wreck commercial farming in Ireland and pay people to do nothing. This philosophy is not surprising from two individuals who would not recognise a farmer who still has to depend on the weather and a hand to mouth existence through various headage payments.

What Minister Walsh has agreed to is a policy that will mean that Irish and European farmers will produce less, export less and import more. Effectively, we are conceding thousands of jobs to other countries outside the European Community. In addition, Europe is showing a zealousness for reform that borders on lunacy in the absence of any conclusion on the GATT negotiations. We have put the cart before the horse.

Commissioner MacSharry referred on many occasions to the fact that 80 per cent of the Common Agricultural Policy benefits were going to 20 per cent of the farmers and that he was going to change this policy radically. Let us analyse the outcome in the light of this statement. The larger dairy farmers will be able to withstand the cold winds of quota cuts and reduction in price due to the reduction in butter prices, but what does the future hold for the 20,000 gallon dairy producers? They will suffer a 7p drop in the price of their milk and a 2 per cent cut in their quota. These farmers will soon find themselves in extreme financial difficulty and with very little hope for the future. They may ask what can they do [899] instead of dairying other than put up with the situation in view of the difficulties in getting into alternative enterprises due to the quota regimes.

In the beef sector the larger producers will benefit more substantially than the smaller producers from the increased compensation. However, there is always the threat of a beef price collapse due to the changes in the intervention safety net regime, from 80 per cent to 65 per cent of the guide price. We have not shown our capacity to find lucrative markets for beef in the past and the changes in the export refunds will not open up the Middle East markets in this regard. Common Agricultural Policy reform proposals will now ensure that instead of subsidising surplus cereal production we will be subsidising all cereal production in Europe which means that the larger producers of plants in Germany will gain rather than the relatively small grain growers in Ireland.

In all the main agricultural areas there is nothing to show that a policy where 80 per cent of the benefits go to 20 per cent of the farmers will change, and thus Commissioner MacSharry has failed in this objective.

Many speakers on the Fianna Fáil side of the House have said that food prices will fall as a result of these reforms. It is totally dishonest of any Government Minister to suggest that food prices will fall quickly in response to the recent agreement in Brussels in view of the fact that agricultural product prices have been falling continuously for the past four years while food prices have actually increased over the same period. The result will be larger margins of profitability for the processing and retail sector with the Government merely acting as spectators in allowing this anti-consumer practice to continue unabated. When I suggested to the Minister for Industry and Commerce recently that the Office of Consumer Affairs and Fair Trade could do more in terms of inspection and enforcement to ensure that the price of food falls following this package, I was told by the Minister that there was [900] sufficient staff in the Office of Consumer Affairs and Fair Trade to deal adequately with consumer legislation and that he did not intend introducing any surplus staff from the custom and excise area on completion of the internal market into the office of consumer affairs.

The only effective way in which consumers can benefit from any fall in food prices over a five-year period is by the setting up of regional consumer offices with inspectors to monitor retail and processing outlets thus ensuring that food prices will genuinely fall as a result of these measures. The history in this regard has been a very poor one.

During the course of this debate on Common Agricultural Policy reform, Fianna Fáil speakers have been telling us that it could have been worse. What the Minister is saying in this House is like telling a Kilkenny supporter whose team has been beaten by Cork that it could have been worse. There are only two conclusions one could come to. One is that one was defeated. The other is that the margin of defeat could have been much worse. The lack of any alternative strategy is clear evidence of the absence of any fresh thinking on the part of the Government in these negotiations.

Unfortunately, I must submit that the commercial Irish farmer has suffered severely as a result of these changes and future generations of young farmers who are trying to get greater viability from their holdings and to find ways of gaining additional farm income will find it exceedingly difficult to gain access to the agricultural sector and achieve further agricultural viability. I regret that this Government do not look positively on the contribution of agriculture to economic development; they do not have any regard for the commercial farmer but are merely willing to pay people to stay at home and do nothing.

Mr. Boylan: In the brief time at my disposal let me first register my strongest protest at the short time allowed by the Government for discussion on this major topic in this House. It is they who are responsible because they organise the [901] business of this House. A full day at least should have been given to one of the most radical and important changes to take place in the agricultural industry in this country from the foundation of the State. I met the Minister for Agriculture on his return from these negotiations and I congratulated him. My congratulations were based on independent reports from people who tried to analyse what the Minister had achieved. On reading the Minister's presentation here this afternoon, I must change my mind. It is a sellout of our small farmers. That does not surprise me. Indeed, I was beginning to wonder if there had been a change of heart.

The Minister is a well meaning man. I know him personally and I know what his intentions for farmers are, but I am afraid the Government are not supporting him. The present Fianna FáilProgressive Democrats Administration have thrown their hat at rural Ireland. They are closing down rural Ireland, and this is a further step in that direction. Closure of rural post offices is now on the cards. The county roads are in total disrepair. This problem started in my own county and is now a nationwide one. The small farmers are an annoyance to this urban-based Government who want to get them out of the way.

In going into these talks, no groundwork had been done. The Taoiseach who, when he was elected, was heralded as a rural Taoiseach, the saviour of rural Ireland, did not go to meet the heads of state to lay the groundwork for Minister Walsh. He never left his desk in his grand new mansion in Dublin. He seems to be carried away with its grandeur. That will not last, and when we go to the polls shortly he will get the message that there is more to be done than sitting in grand seats in Government Buildings. The Minister stated clearly that the build-up of substantial stocks of goods in intervention was contributed to very substantially by this country. That was a damned lie. It was outrageous to concede that going into negotiation. We did not contribute to the stocks in any significant [902] manner. It was the large big multi-purpose——

An Leas-Cheann Comhairle: Even without the strengthening epithet the word lie is not——

Mr. Boylan: I will withdraw the word “lie”. It is untrue, and the farmers that I am speaking for here tonight will understand what I am saying. That should not have been conceded because it is the big farmers, with their large combines, in Europe who are responsible for creating the food mountains that have now caused the problem. Furthermore, it was outrageous to state that the small farmers of counties Cavan and Monaghan and the west contributed to the problem. The Taoiseach had obviously not done his homework.

There is a number of items to which I take exception. The Minister in his speech stated that the forthcoming changes in premia arrangements will not affect producers traditionally entitled to headage payments. That is like a red rag to a bull to people outside the severely handicapped areas. In that regard the Tánaiste, the former Minister for Health and Deputy Leonard, who spoke on this matter today, did nothing to ensure that counties Cavan and Monaghan, and other regions, would be included. What is the point in saying to farmers outside the severely handicapped areas that they will get their headage payments? How will they since they have not been included?

As regards the suckler cow premium, this will be confined to those animals in respect of which premia were paid in 1991 and 1992. How will small farmers be able to increase their suckler cow herds if that is so? Was any regard had for farmers whose herds have been hit by disease, such as TB? Given that they may now have only three or four head of cattle how will they be able to build up their stock if they are to be tied to their numbers of 1991-92? They have not been told that they should try to develop their farms, make progress and that their quotas will be based on their figures for [903] 1994, 1995 and 1996 to give them a chance. No, they want to keep it a secret and are limiting it to a year when people found themselves in trouble. Likewise there are many cases where because his parents are in poor health a son has returned to the farm where the stock numbers have been depleted. Will he have any opportunity to build up his stock? Is he to be tied to the numbers on the farm when it was run by his parents or an aged uncle?

An Leas-Cheann Comhairle: All that must wait for the dawning of a new day; tá an t-am istigh.

Mr. Boylan: Many farmers will face many a dark day. I regret I have been so negative but we must be truthful and point to the facts.

Mr. O'Toole: I concur with previous speakers from this side of the House. I regret, however, that Deputies on the other side of the House did not congratulate the Minister, Deputy Walsh, on his achievement in regard to the Common Agricultural Policy agreement which we are now discussing. It was a team effort; the Minister of State, Deputy Liam Hyland, Minister of State, Deputy John Browne, together with their departmental officials, went to Europe to negotiate on our behalf and have come back with what I regard as an excellent package for this country. Indeed, I never had any doubts about the Common Agricultural Policy reform package because I felt we had a friend in court in Commissioner MacSharry. No Irish Commissioner would be worth his salt if he could not produce a final document that would be of benefit to the Irish people. Commissioner MacSharry held two portfolios here, that of Minister for Agriculture and, later, Minister for Finance. Who was in a better position to know what was required by the Irish people than Commissioner MacSharry? He had to give the impression that it was being reformed for the benefit of the EC. He did this but we did very well as a result. [904] It is very easy to be critical but, in this instance, we have got a wondeful package.

One of my aims has always been to try to ensure that farmers retain cattle between November, when they are taken off grass, and January. Unless they are offered an incentive there is no way that they will retain cattle until the spring and fatten them between January and April. The increase in the premium from £35 to a maximum of £237 should ensure that beef will be available throughout the year. That was a great achievement.

I also compliment Commissioner MacSharry on securing an increase in the suckler cow premium, from £52 to a maximum of £150. For the first time, these premiums will be paid direct to the farmer. Again, that should be appreciated.

Some Deputies referred to the intervention system which was considered to be a safety valve. This system was to be availed of only when we could not sell our produce at a proper price. However, most sellers of dead meat placed their product into intervention immediately. Therefore, it was not a good practice to pay so much for it. For this reason the intervention system had a detrimental effect.

An Leas-Cheann Comhairle: I am sorry to interrupt the Deputy, but am I to understand that he is sharing his time?

Mr. O'Toole: I should have mentioned that I wish to share my time with Deputy Clohessy.

An Leas-Cheann Comhairle: The Deputy should commence throwing the retro-rockets then because he does not have much time left.

Mr. O'Toole: We should market our beef and lamb abroad. The reason we have not done this up to now is that fresh meat exporters did not want us to do so. If we market our beef and lamb we will be able to compete in the European market as we have the best produce available.

[905] Mr. Clohessy: I wish to congratulate the Minister for Agriculture and Food, and the Commissioner, for the good message. While the package may not be as good as we might have expected nonetheless it is very welcome. After 18 months of intense discussions and negotiations in Brussels, the reform measures agreed last week for the Common Agricultural Policy between the Farm Commissioner, Mr. MacSharry, and the Council of Farm Ministers represents the beginning of a revolution in the Community's farm policy.

Happily, from an Irish perspective, some of the more alarming features of the original proposals from the Commission have been modified, and while there are still major concerns and question marks surrounding the latest proposals, nevertheless they do, on balance, represent a real opportunity for growth in both Irish agriculture and the Irish agri-business sector.

The overall emphasis of the Common Agricultural Policy reform measures could be summarised as follows: a significant cut in the overall volume of intervention; cuts of up to 29 per cent in the Community's intervention and support prices; and compensation for farmers in the form of direct income aids through headage payments and other premia.

Everyone has come to realise that the intervention system simply could not go on as before, with farmers and agri-business producing dairy products, beef and cereals to be dumped into intervention stocks, which in turn required huge subsidies from the Community to try to sell these goods on to the wider world market where prices were so much lower.

The slimming down of the whole intervention system therefore offers opportunities and challenges for Irish farmers and Irish agri-business. For a long time we bemoaned the fact that the intervention price was better than the price in the open market. In those circumstances it was entirely understandable that Irish co-operatives and meat factories would use the intervention system when it gave [906] them a better return than the marketplace.

For many years we have heard talk about the need for Irish agriculture to become more market-led. That opportunity now arises. I believe that Irish food products will have an opportunity to exploit the new Community market conditions. Of course this will require a major investment in marketing. But we have the produce — beef, sheep-meat and dairy products — produced in natural conditions, not factory farms, in a country with a reputation for being pollution-free.

In this environmental and health conscious era, when more and more consumers want natural food products, free from additives and so forth, Irish food manufacturers and exporters are afforded enormous opportunity. When we bear in mind the removal of all remaining trading barriers, this country from January 1 next — provided the Maastricht Referendum is adopted by the Twelve member states — the possibilities for growing our food exports become very obvious.

Of course there is legitimate concern among farmers and farm organisations to ensure that the various compensatory supports in the form of headage payments and new cattle premium payments will continue well into the future. I realise that Commissioner MacSharry has given such an assurance. But I can understand farmers' unease at least until the conclusion of the GATT talks.

It is absolutely essential that the European Community, as a whole, does not make any concessions on last week's Common Agricultural Policy reform measures in the GATT talks.

Whereas there has been some dispute about the real value of the compensation worked out last week in Brussels and the extent to which they will offset the reductions in intervention prices, I am reassured to note that farm economist, Brendan Kearney, has estimated that the overall agreement reached last week should mean an additional £67 million to our agricultural sector. Provided the compensation mechanisms are maintained [907] well into the future, the new Common Agricultural Policy can offer new hope to our farmers, Irish co-ops and meat factories. I hope that these opportunities will be exploited to the full.

Mr. Sheehan: Reading through the lengthy statement of the Minister for Agriculture and Food in the House this evening, one would be led to believe that our Minister for Agriculture and Food pulled off a major coup in Brussels last week. I can assure the House that the proof of the pudding is in the eating. When the package has been digested and analysed I predict we will see the real facts unfold.

The Minister went to great pains to expound this paper package for the betterment of our farming community. But, no matter what picture he paints, the stark facts remain that thousands of our farmers have been forced off the land under the Common Agricultural Policy. What steps has the Minister or Commissioner MacSharry taken to preserve that policy? What special benefits are in the package to retain our small farmers on their holdings, particularly those along our western seaboard from Malin Head to Mizen Head?

The special slaughter premium of £52.75 on all male animals slaughtered between 1 January and 30 April will benefit only a few big operators and will be cold comfort to the average small farmer. It will butter no bread for them. Will the Minister say why beef heifers are excluded from this special slaughter premium payment? If the Minister were served a steak in any restaurant tonight could he say whether it was a maiden heifer steak or a bully beef steak?

Mr. Deasy: Would he have to pay for it?

Mr. Sheehan: Beef production in Ireland amounted to 38 per cent of the national farm production in 1991——

Mr. M. Brennan: How are the Deputy's teeth?

[908] Mr. Sheehan: ——and was worth £1,154 million to our economy. If the 15 per cent drop in intervention prices takes place it will mean that beef farmers' incomes will fall by some £173 million. Taking that into consideration and the Minister's statement that all the proposed direct payments will be increased by £200 million, we find a net gain to the farmers concerned of only £27 million. Indeed there is no guarantee that, at the end of the day, that £27 million will ever reach farmers' pockets.

Would the Minister say what the prospects are for sheep producers under this package and would he also explain why, as it appears, they were ignored completely in his deliberations? If the price of mutton and lamb falls in sympathy with the proposed reduction in beef——

Mr. Carey: They are gone already.

Mr. Sheehan: ——why did the Minister not include the proviso that premium payments on sheep would be increased to compensate for any reduction in the price of mutton and lamb? Is the Minister completely ignoring the plight of the sheep farmer?

It is clear that seasonality in beef slaughterings in this country stems from the seasonal pattern of calf births in the dairy herd, the principal source of raw material for the beef herd. I can assure the Minister that this calving pattern will not change dramatically in the foreseeable future. The exacerbation of the beef seasonality problem in recent years can be blamed to a large extent on the huge growth in calf prices in the wake of the scarcity induced by the dairy quota. There is also the possibility that competition among winter fatteners may result very quickly in the special slaughter premium being capitalised into the price of the bought-in animal, thus having no lasting impact on the problems of seasonality.

In the dairy sector I predict the price cut will cost milk producers over £25 million. The combination of the reduction in feed prices and the abolition of the coresponsibility levy may well result in a [909] net benefit of only £10 million to milk producers, most of which will be gobbled up by the big producer with further quota cuts looming on the horizon, with no exemption for small producers of under 30,000 gallons. The future looks extremely bleak for farmers with small quotas.

The Minister did not mention that the package will create a huge amount of difficulty for our agricultural industry. Any long term agricultural policy within the EC must continue to recognise the fundamental role of the family farm as the basic unit of production, the backbone of rural society.

There is no doubt that Irish farmers are at a serious disadvantage vis-à-vis their European counterparts. For instance, Holland, whose land surface is as big as Munster only, has a milk quota double the size of ours and a pig production over 60 times greater than ours. Will the Minister say what steps were taken at EC level to curb the output of factory farming on the Continent? Can he tell me of any factory farm unit closing down on the Continent? Can he tell me the number of small farmers being forced off the land by the continuation of this policy adopted by the EC Commission?

Mr. Connor: Answer that.

Mr. Sheehan: The facts are that the Minister for Agriculture and Food — who is a very respected man and who works very hard on his portfolio — entered the negotiations in Brussels muzzled by the incompetent action of our EC Farm Commissioner, Ray MacSharry who threw in the towel at the GATT talks at Dromoland Castle last year when he played “Yankee Doodle Dandy” to his guests from across the ocean——

Mr. M. Brennan: The Deputy is playing “Yankee Doodle Dandy” now.

Mr. Deasy: When Commissioner MacSharry returns Deputy Brennan will be gone.

Mr. Sheehan: ——and agreed to a 30 [910] per cent reduction in EC agricultural output. Was that the correct attitude to adopt to the agricultural tycoon from across the ocean? Yes, a 30 per cent reduction in factory farming might be desirable but a reduction of that amount in family farm output is disastrous. By his actions he has consigned rural Ireland to annihilation. Does Commissioner MacSharry intend to turn rural Ireland into a wildlife nature reserve? Does the Minister realise that our greatest asset is our youth? Let me ask the Minister, Deputy Walsh, what incentives are in the package he has brought before the House to keep our youthful population in their native land? A letter in the post will not keep the youth in Ireland. Farmers are still due grants — even headage payments — from 1990. Will the Minister give an assurance that farmers whose lands have been recently reclassified as in designated disadvantaged areas will be paid their headage payments this year? It is cold comfort for these farmers to hear about a doubling of headage payments and increasing beef premia if they are not to be paid to every farmer throughout the country.

Rural Ireland is being reduced to a wilderness. Schools, churches, banks and the shops are closing. Indeed, another 800 post offices are due to close. What is the solution to this? There is very little in this voluminous White Paper which the Minister presented to us this evening to maintain the status quo for these people.

An Leas-Cheann Comhairle: I have to tell the Deputy that the time is coming to a close.

Mr. Sheehan: I did not hear any of the Fianna Fáil Deputies complimenting Deputy O'Kennedy on the way he conducted the negotiations for two years, or, indeed, the former Minister for Agriculture and Food, Deputy Woods who held that post for three months. I hope that all the Fianna Fáil Deputies present tonight will be around next winter and Christmas when the bottom falls out of beef prices and no intervention will be [911] available. What will happen when the EC is flooded with cheap, illegal Eastern European beef and there will be no market for our Irish beef product? We must bring some kind of sanity into the Community to ensure that Irish farmers are put back on the pedestal where they should have been for the past two decades.

An Leas-Cheann Comhairle: I understand that Deputy Foxe and Deputy Michael Brennan are sharing approximately ten minutes between them and that the Minister is conceding a minute or two of his time.

Mr. Foxe: At the outset, I would like to thank Fianna Fáil for giving me a few moments to voice my opinion on this very important topic, namely, the terms of the revised Common Agricultural Policy. I must confess that the terms we read about today are much better than anticipated 18 months ago. Needless to say, we are very seldom satisfied with everything we get but we must be satisfied with this in so far as it exceeds our expectations of 18 months ago. The Minister for Agriculture and Food, Deputy Walsh, must be complimented on his efforts in bringing home the bacon on this occasion. However, there is no point in sitting back and complimenting ourselves on what we have achieved, when we bear in mind that so much has to be done in the future.

Let us look critically at what has been achieved. A new and very desirable beef premium totalling £158, an increase from £35, has been negotiated. That will be paid twice in the lifetime of an animal at 12 months and at 22 months. There is also a slaughter premium of £52.75p which will be payable for animals slaughtered between 1 January and 30 June. That is also very desirable. We had always advocated that any incentives that come to agriculture should be anti-cyclical in order to get away from the cyclical pattern which we have in our dairying and beef industries. However, not all animals will be eligible for that [912] slaughter premium because if that were so we would have transferred the glut from the autumn to the spring period. As in the region of 80 per cent of our total slaughterings take place between mid-October through November and December, it would be fair to assume that 50 per cent of that, namely, 40 per cent of the total kill will be slaughtered in the spring months, thereby entitling them to the slaughter premium of £52.75. When I mention that figure I am bearing in mind that people may be computing the size of the cheque the farmer will receive at the end of the year. I heard somebody say on the radio that farmers would receive cheques to the value of £20,000 per annum. Some farmers will receive that amount but most certainly not all.

There are in the region of 217,000 farmers in this country. To be eligible for the maximum grant a farmer will need to send 90 cattle for slaughter in the year. In my estimation that would mean he would need at least 130 acres of land. Only 8 per cent of our farmers own in excess of 125 acres of land, so those benefiting from the maximum premium will number no more than 8 per cent of all farmers. In the region of 133,000 farmers have fewer than 75 acres of land — a typical farm is 55 to 60 acres. If a man was devoting all his land to cattle and beef production I estimate he would have approximately 40 animals for slaughter in the year. When you compute the size of the cheque for 40 animals I reckon he would get £7,300 per annum, a sizeable figure, indeed, and one that cannot and should not be scoffed at but not £20,000 per annum. Just in case anybody thinks the man receiving a cheque in the post for that amount is on to a bonanza, he should bear in mind what was said today during the debate; “the price of lamb today is relatively low”. That Member must have been joking when he said the price of lamb is relatively low; the price of lamb today is scandalously low. This time last year the price of lamb was £1.20 per pound. Today it is 82p per pound and unfortunately the indications are that that price will go even lower. So it is quite obvious that any man getting a cheque in [913] the post would certainly need what is in it if he is to live at all.

Mr. Deasy: If he ever gets it.

Mr. Foxe: Let us hope the postal strike will be over by then. I am sure that would be the only reason he would not get it. Some people voiced rather pessimistic views on our ability to market our produce. I do not share those views. We did not market our produce on the open market in the past, instead we took the easy option of intervention, but just because we took the easy option in the past does not mean that we had not the ability to find a market. We have the personnel, they have the skill and we have the products for them to market. I have every confidence in their ability to do this.

We need to increase investments in research in markets and at university level to identify new products. The people working in the research branch of Teagasc are among the best in the world. Research is also being carried out in the agriculture faculty in UCD. Unfortunately, these departments have been starved of cash for the past few years. This means we are unable to put new products on the market for our European customers. Even though people have been pessimistic about the state of our agricultural industry, I believe that farming has a bright future.

An Leas-Cheann Comhairle: I understand the Minister has agreed to give Deputy Brennan some of his time.

Mr. M. Brennan: I thank Deputy Foxe for sharing of his time with me. I congratulate the Minister for Agriculture and Food on the excellent Common Agricultural Policy package he has negotiated. These reforms will be very important for Irish farmers, particularly those living in the west. As we all know, we have been over-producing beef for the past number of years. The IFA and ICMSA leaders were very worried about the Common Agricultural Policy reforms. However, I believe they are [914] very happy with the outcome of the negotiations; they realise these reforms will be of benefit to rural Ireland. I should also like to congratulate Commissioner MacSharry, as a former constituency colleague of mine.

Mr. Deasy: He will be back to haunt the Deputy.

Mr. M. Brennan: He did an excellent job both as Minister for Agriculture and Minister for Finance and he has done an excellent job in Europe. Last Sunday on the radio, the Minister for Agriculture and Food, Deputy Walsh, paid tribute to Commissioner MacSharry.

Recently I visited Bulgaria, a country which was under Communist rule for a number of years and which is very interested in joining the EC. The only market this country has for its agricultural products is in Europe. The Common Agricultural Policy package we have agreed is very important. Agriculture is a very important way of life in rural Ireland and if farmers cannot put their meat into intervention they should be compensated.

Earlier a Deputy said that the issue of the factory farm had not been addressed. This issue was tackled very well in Europe by Commissioner MacSharry.

Mr. Sheehan: When he threw in the towel——

Mr. M. Brennan: It is time the Deputy threw in the towel because he is talking rubbish.

Mr. Sheehan: He threw in the towel and sold farmers down the drain.

Mr. M. Brennan: If the Deputy represented the people on the western sea-board——

Mr. Sheehan: It will be turned into a wildlife habitat.

Mr. M. Brennan: The farmers in the west are very happy with this package. We want to ensure our farmers produce [915] the best products, without the use of hormones or angel dust. If we can achieve that we will be able to sell our product anywhere in the world. It is important to remember that we have the right climate and a clean environment.

Minister for Agriculture and Food (Mr. Walsh): I thank the Deputies who contributed to the debate on the reform of the Common Agricultural Policy. I will confine my remarks to answering as fully as I can the legitimate concerns and doubts expressed by some Deputies.

A number of Deputies queried the decision regarding intervention. Some Deputies went so far as to say that intervention would no longer be available for beef and that we would have to dump our products within a few years. That is inaccurate. Intervention will remain at 750,000 tonnes for next year and will fall over five years to 350,000 tonnes. In addition, the safety net mechanism will be maintained throughout the period as a back-up measure to normal intervention. Any product sold into intervention under the safety net mechanism will not contribute towards the normal intervention ceiling. In other words, there will be a gradual reduction in intervention for beef. The limit of 350,000 tonnes is in excess of what the Council of Ministers agreed only three years before the BSE scare and the Gulf War. Therefore, there will be considerable intervention available. I was glad to hear Deputy Deasy, and others, say that our meat plants and factories should sell the beef they process to consumers and not put it into cold stores to be disposed of and dumped subsequently at an enormous cost to both consumers and producers.

With regard to the milk sector, there is no restriction on access to intervention contained in the Common Agricultural Policy reform. With regard to GATT, negotiations will have to take place because the GATT round is still in existence and will probably only be finalised in serious negotiation next year. There is no question of side-stepping GATT. I am satisfied that the Community will be able [916] to hold its own in any forthcoming negotiations on GATT and that the compensatory arrangements will not be affected in the GATT round. Last week's agreement will considerably strengthen our negotiating position in relation to GATT.

I wish to acknowledge the points made by Deputy Deasy in relation to the need for improvements in research and development. Such improvements are necessary and I accept totally the points made by the Deputy in this regard. The future of the agriculture and food industries depends on our ability to be as good as our competitors.

Deputy Ferris, and others, raised the question of the benefits to consumers. As far as I can recall, no spokesperson for the Department of Agriculture and Food highlighted this point to any great extent, but I know a number of independent economists have put figures on it. I do not go shopping very often but I occasionally visit Schull, Ballydehob, Bantry, Dunmanway——

Mr. Bradford: And Goleen.

Mr. Walsh: There is an excellent supermarket in Goleen——

Mr. Bradford: There is a very good small shop there also.

Mr. Walsh: Absolutely, and it provides a very friendly service. I am anxious to ensure that the benefits due to consumers will be reflected in cheaper prices for their shopping baskets every week. I am meeting my colleague the Minister of State, Deputy O'Rourke on Friday to put in place a system which will ensure cheaper prices for the consumers, farmers as well as urban dwellers. What is involved here is a reorientation of support, not the elimination of support and I am very pleased about that. The reality is that we have gained substantial benefit from our membership of the European Community, particularly in agriculture. The bulk of that support was directed towards intervention, storage and disposal. There is now reorientation with [917] regard to farmers and producers which should facilitate a better industry. It will be more beneficial to employment, particularly in the case of seasonal jobs in factories which opened for intervention kill at the later end of the year. It will also ensure more permanent jobs. Sometimes what we are pushed to do, we do extremely well, and I hope that will be so in this case.

In relation to accompanying measures which affect young people, I was very pleased to hear Matt O'Keeffe, president of Macra na Feirme, who represent young farmers, welcome these measures. A 75 per cent funded early retirement scheme will be available and this will enable younger farmers to take over the land. I know that in the past early retirement schemes did not work. That is why we went to so much trouble to ensure that various benefits would be built into this scheme. I will conclude by thanking the Deputies who made an extremely constructive contribution to this debate throughout the day.