A. INTRODUCTION
1.The Joint Committee has examined the Commission Document -
Proposal for a Council Regulation (EEC) on the common organisation of the market in cereals [COM (86) 30 final].
The proposal is designed to achieve a better balance on the cereals market and a tighter control over production.
2.This Report was prepared on behalf of the Joint Committee by Deputy Joe Walsh in his capacity as Chairman of the Sub-Committee on Agricultural and Fisheries Matters. The Joint Committee wishes to record its appreciation of Deputy Walsh’s work. In the course of the preparation of this Report the Sub-Committee considered written and oral submissions from the Department of Agriculture, An Chomhairle Oiliuna Talmhaiochta (ACOT), and an Foras Taluntais. The Committee also considered written and oral submissions from the IFA, Macra na Feirme, ICOS, an oral submission from the Irish Flour Millers’ Association and a written submission from the Flake Oatmeal Millers’ Association.
The Joint Committee wishes to express its appreciation to all these bodies for their assistance in the preparation of this Report.
B. CONSIDERATION OF THE COMMISSION DOCUMENT ON
THE COMMON ORGANISATION OF THE MARKET IN
CEREALS (COM (86) 30 FINAL)
3.The Commission states that the proposal arises from the increasing imbalance between supply and demand, Community production of cereals having risen at a faster rate than Community consumption plus world market requirements.
The proposals are part of the Commission’s continuing efforts to improve the operation of the Common Agricultural Policy as outlined in their document entitled “Perspectives for the Common Agricultural Policy”. (1)
4.The principal elements of the Commission’s proposals are:
-price restraint
-coresponsibility levy
-quality standards
-access to intervention.
Price Restraint
5.A 3% co-responsibility levy, together with price cuts of over 10% as a result of the changes in quality standards for feed grain, and an intervention price for bread wheat fixed at the same level as that applying to feed wheat, barley, maize and sorghum in 1985/86, are proposed.
Co-Responsibility Levy
6.The purpose of the levy is to develop Community outlets and also to give producers an indication of the nature of the market situation. The levy amounts to 3% on all grain marketed, including inter-farm sales and grain delivered by producers for processing and returned to the producer.
The small scale producer can apply for a refund of the levy on the first 25 tonnes of production.
Quality Standards
Feed Wheat
7.Access to intervention is to be confined to wheat of not over 14%
moisture content (as opposed to 15% in previous years), 6% sprouted grains (8%) and 72 hectolitre weight (68 hectolitre).
Wheat not passing all bread-making tests will automatically attract a 5% penalty. Deductions for hectolitre weights ranging from 0.5 to 2% will apply.
Bonuses for low moisture content will begin at 13.5%, as opposed to 15% in previous years.
Barley
Access to intervention will be confined to barley of not more than 14% moisture (previously 15%), 6% sprouted grains (8%)
and 63 hectolitre weight (63). Deductions for hectolitre weights ranging from 1.5 to 9% will apply.
Bonuses for low moisture content will begin at 13.5%
(previously 15.5%).
Intervention
8.Intervention will operate from 1 December to 30 April.
Offerors for intervention can withdraw offers provisionally accepted.
C. EEC FARM PRICE PACKAGE 1986/87 IN RELATION TO CEREALS
The EEC Farm Price Package was agreed by the Council of Ministers in Luxembourg on 25 April, 1986 and the following emerged in relation to the cereals sector:-
Co-Responsibility Levy
9.As from the 1986/1987 marketing year a 3% co-responsibility levy will be applied to producers in the cereals sector.
The Commission has stated that it will ensure that the levy system does not create any distortion with competing products.
The Commission will discuss with the industry how the proceeds of the levy are to be used. The Council, acting on a proposal from the Commission, will fix the amount of the levy each year. The levy may not exceed the amount necessary to finance Community cereal production as defined in the Commission proposal.
The co-responsibility levy will be collected at the time of:
-first processing;
-intervention buying;
-export in the form of seed.
It will be passed on to the producer.
Implementing rules, and in particular rules for exempting imported cereals which are processed or re-exported, will be adopted by the Commission in accordance with the Management Committee procedure.
In the case of small cereals producers, a system of direct aid will be introduced, the total amount of which may not exceed a sum equal to the co-responsibility levy collected on up to 25 tonnes of their deliveries.
The arrangements are introduced for a period of five marketing years. After the second of those years the Commission will submit a report to the Council on the operation of the system.
Quality
10.The Commission intends fixing the maximum moisture content on intervention within the 14% to 15% bracket. For the 1986/1987 marketing year it will authorise a maximum rate of 15% for a Member State at its request. From the 1987/
1988 marketing year it will be reduced to 14% but the Commission will authorise a 15% maximum rate only on the basis of a Member State’s request, justified by unfavourable weather conditions;
Wheat: The Commission quality standards proposals have been maintained but with some amendments. The Council approved a special 2% premium on the intervention price for high quality bread making wheat. This will have to meet the following criteria: a protein content of 14%, a Zeleny index of 35 and a Hagberg falling number of 240.
The original proposals which will will now be implemented are:-
Common wheat which does not satisfy the bread-making criteria laid down for the standard quality for intervention will be subject to additional reductions.
(1)minus 5% of the intervention price if it does not pass the machineability test;
(2)minus 5% of the intervention price if the Hagberg falling number is less than 220 seconds;
(3)minus 5% of the intervention price if the Zeleny index is less than 20;
there will be the following reductions if the protein is less than 11.5%: 11.5 down to 11.0, 1% reduction;
11.0 down to 10.5, 2% reduction; 10.5 down to 10.0, 3% reduction; 10.0 down to 9.5, 4% reduction;
less than 9.5, 5% reduction.
These reductions will not be combined. The highest appropriate reduction is applied. However, the reductions already stated under the present scheme regarding physical characteristics will apply simultaneously.
Concerning the specific weight for common wheat, the present system of reductions (2% price reduction for a specific weight of 68kg/hl) will be amended in line with the change in standard quality (76kg/hl instead of 75 kg/hl) and the minimum quality (72kg/hl instead of 68 kg/hl). The new scale of reduction would be as follows, making an overall 7% price discount possible for feed wheat of low specific weight: 76-75kg/hl, 0.5% reduction; 75-74kg/hl, 1.0%
reduction; 74-73kg/hl, 1.5% reduction; 73-72kg/hl, 2.0% reduction.
Barley: The intervention price will be reduced to the same level as the intervention price for feed wheat, at 5% below the intervention price for breadmaking wheat.
The original barley quality standard proposals have been dropped and the 1985/86 standard of 64kg specific weight will be retained, with a 1% price discount for 63kg.
The new moisture content band of 14-15% also applies.
Intervention: This will commence throughout the Community
(with harmonised periods of payment) from 1 October and end on 30 April, as opposed to 1 December in the Commission proposals. Intervention will, however, be available in September, but with payment delayed (probably for 120 days, compared with a delay of 90 days in the rest of the intervention period). The cereals marketing year will commence on July 1 instead of August 1 and the monthly increments to threshold, target and intervention prices start on August 1 instead of September 1, but will be reduced by 4.7% in line with the original Commission proposals.
D. VIEWS OF THE INTERESTED BODIES
Written and oral submissions were received from the IFA, ACOT and Macra na Feirme before the Cereal Price Package was agreed.
IFA
11.The IFA in their submission argued that the total effect of co-responsibility, increased quality standards and limitation of intervention would reduce prices to growers by almost 15%.
In effect, according to the IFA, the Commission is attempting to achieve the following objectives:-
(a)Reduce budgetary expenditure.
(b)Reduce grain production using the price instrument (disguised as quality standards).
(c)Reduce the overall level of support prices in the EEC for livestock and livestock products.
The implications of (a) and (b) are very serious for Irish cereal growers. However, the implications of (c) are potentially disastrous for the competitiveness of the Irish livestock and milk industry. This will be because of the change in price relationship between grass based products and cereal based products.
Intervention
12.The IFA states that the absence of intervention from August to October will be discriminatory to Irish growers as they are dependant on market support being available at harvest time because on-farm facilities such as storage are not available in Ireland.
Quality Standards
13.The IFA considers that the proposals on quality standards are only an artificial means of price reduction. The standards proposed bear no relation to standards operating in the trade either for milling wheat or feed grains.
The machinability test is seen by the IFA as unacceptable as is the standard of bushel weight for barley. The direct cost of the moisture standard of 14% will be passed on to the cereal grower due to extra drying costs and extra weight loss.
14.The IFA rejects the concept of co-responsibility as proposed by the Commission. Its only purpose is to use co-responsibility to replace existing EAGGF expenditure on the cereals market. The IFA proposes that the Commission objective of budgetary and supply control should be achieved using the quota instrument rather than the price instrument. But the IFA states that such a strategy is dependent on the EEC maintaining Community preference and taking effective action on the problem of cereal substitutes.
ACOT
15.ACOT states that the major objective of the Commission is to significantly reduce required budgetary support for cereal production and disposal.
The proposals set out to achieve this objective in one of two ways:
(i)Restricting prices to reduce the price gap between the Community and world levels and exacting a levy from growers as a contribution towards export costs or the development of alternative uses,
or
(ii)Establishing a combination of very high quality standards together with restrictive prices with a view to achieving a significant reduction in cereal production, mainly by squeezing out marginal growers/production areas.
16.In relation to the proposals ACOT feels that consideration should be given to the following points:-
(i)Ireland and Northern Ireland are both net importers of grain and grain substitutes.
(ii)The Irish climate is less suited to quality grain production than the major grain growing areas of the Community.
(iii)The Irish farm structure denies the opportunity for growers to achieve the ‘economies of scale’ available elsewhere in the Community.
17.ACOT states that the 1986 price is to be fixed at the level set for wheat/barley in August, 1985. This price will now apply to bread-making wheat, not to feed grain as was the case in 1985. All grain not of bread-making quality will suffer a 5% price penalty. Considering the present pattern of production in Ireland only 2.5% (approximately 25,000 acres or 60,000 tonnes) of the total cereal acreage has the potential to achieve bread-making quality. The balance of production would therefore, according to An Comhairle, be subject to a minimum 5% price penalty. Spring barley, which constitutes 55% of all cereal acreage, is particularly vulnerable to further reduction in margins.
Co-Responsibility Levy
18.ACOT points out that, in relation to the exemption from the co-responsibility levy, of producers below 25 tonnes, only 16% of all cereals are grown in lots of less than 5 hectares (12.5 acres) thus having total production below 25 tonnes.
Also the difficulties of recording inter-farm grain sales and movements through unofficial channels are likely to be considerable. The levy tends to penalise our larger and more efficient producers on whom the future of the home based industry is increasingly dependent.
Intervention
19.ACOT feels that the major consideration in relation to intervention is the likely effect on the open market during the harvest period (July to September). If delayed intervention has a destablishing effect, Irish growers will be particularly vulnerable due to very limited on-farm storage/handling facilities as only 10-15% of growers in Ireland have such facilities.
Quality Standards
20.ACOT states that wheat of ‘bread-making’ quality has been substituted for common feed grain as a standard for intervention pricing. Specific quality standards have been defined for bread-making wheat.
In addition, new standards are set out for all intervention grain under the following headings:-
-moisture content
-specific weight
-sprouted grain.
Wheat of bread-making quality must pass 3 tests - Dough Machinability; Protein Quality (Zeleny Index 20);
Hagberg Falling No. 220. Failure of any one of these three tests renders grain ineligible for bread making standard price. Protein content is also considered with deductions (up to 5%) for levels below 11.5% (dry matter basis). The standards for moisture, specific weight sprouting and other existing physical characteristics will also apply.
21.The concept of using bread-making wheat as an intervention price standard is at variance with the demands and outlets existing on the home market. In practice, 75% of our cereal production must be channelled to animal feed. The total home market for quality grains (e.g. milling wheat, malting barley) amounts to about 500,000 tonnes. Climate limitations make a major switch to ‘high quality’
grains less attractive in Ireland than elsewhere.
The net standard for moisture at 14% (reduced from 15.5%)
will impose additional drying costs and equates to approximately 1.5% price reduction compared to 1985.
Penalties for Irish grain under the increased specific weight standards will vary widely from year to year.
In 1985/86 all grain offered would have been penalised, while in 1984/85 about 25% would have incurred a penalty.
22.The intervention price in an ‘average’ year could be reduced by 10% below the 1985 level. In the event of the open market price retaining it’s general relationship to intervention price, this would have the effect of making grain production economically unsustainable on 25 to 40% of our present cereal area. This raises the question of alternative enterprises. The choices are limited and generally unattractive.
23.The proposals are less favourable to Ireland than to the major EEC producers - the UK and France. Our marginal situation with regard to farm structure and soil/climatic conditions renders us more vulnerable to further tightening of margins and marked emphasis on high quality grain.
A quota system based on acreage and/or tonnage might prove more beneficial provided a satisfactory base production was established.
Macra na Feirme
24.Macra na Feirme believes that tackling any problem in relation to cereals should be focussed on controlling imports of cheap feed-stuffs into the Community. Community preference should be observed, 65% of the 16M tonnes of soya bean imported annually could be produced in the Community and production of this quantity would absorb 4-5 million hectares.
25.Macra feels that co-responsibility levies should be allocated on producers in excess of 200 tonnes with increasing scaled levy liability at various producer quantity thresholds. They state that it is the larger producers that are causing the problem of overproduction and that it is socially unacceptable to be subsidising the 5000 tonne producers at the same unit rate as the 100 tonne producer. Macra na Feirme believes that monies from the levy should be channelled into research and development of alternative uses for cereals.
26.Macra na Feirme feels, that in relation to quality standards, Irish climatic conditions make it impossible to produce cereals to the standards now required by the Commission.
Macra also feels that there are no major benefits in producing such quality produce.
27.While the IFA and ACOT favour a quota system, as opposed to co-responsibility, Macra na Feirme has pointed out that the quota system could exclude new entrants to farming.
28.Macra states that Irish cereal production in 1985 amounted to £140m, 6% of agricultural output, and that it is of great importance that the continued viability of the cereal farmer who derives the most of his income (70%+) from cereal production is maintained.
Flake Oatmeal Millers’ Association
29.Over the past 15 years, the Flake Oatmeal Millers’
Association has been encouraging the growth of oats in Ireland. They state that they have paid substantial bonuses to get them grown and have held seminars with the aid of the Department of Agriculture, ACOT and An Foras Taluntais to disseminate knowledge on the growing of oats and also have encouraged the use of new varieties to help the farmers to produce heavier and higher quality crops of oats.
30.Against this background, the Association feels very perturbed to see the inclusion of oats in the list of cereals which will be subject to a co-responsibility levy. The co-responsibility levy, the Association believes, should be charged to those farmers responsible for the costs to the Community, and that the oats grower should not have to pay a levy when he is not in the intervention system.
31.The Flake Oatmeal Millers’ Association has campaigned strongly for the growing of oats over the past few years and, whereas, the milling industry has to import 70% of its requirements in the early 1970s, it is now completely self-sufficient.
The Association feels that the oats grower should not be penalised, nor should he have to pay for the problems of the wheat and barley grower.
ICOS
32.ICOS states that the decision to introduce new quality standards for the 1986/87 period at a time when farmers have their cereal crops sown shows little regard for the forward planning which farmers must undertake if they are to attempt to comply with such drastically changed standards. Farmers cannot change their cereal varieties in mid season.
33.ICOS feels that the cheaper feed materials which will arise as a result of these decisions will affect the Irish livestock sector more than continental systems.
The cheaper cereals will help continental dairy systems which are based on intensive feeding while Irish production is grass based. Livestock systems for pig and poultry production will have lower raw material costs and improve their competitiveness against beef which is a grass based production system. ICOS also made the point in their submission that farmers who have invested in machinery for cereal operations will have financial problems when their margins are cut by the amounts resulting from this years cereal prices decisions.
Effect of Council Decision on Co-operatives
34.ICOS states that many co-operatives have invested heavily in grain handling systems, drying facilities and storage. This investment has been undertaken in the expectation of cereal acreage remaining at or near its present level. The EEC Council decision will result in a smaller cereal acreage and the investment in facilities which has been made will take longer to repay because of reduced throughput over coming years.
Quality Standards
35.No Irish wheat will qualify as bread-making quality because of the standards imposed for machinability and Hagberg falling number tests.
The moisture standard of 14%-15% for 1986/87 and 14% for 1987/88 will mean that co-operatives will have to spend more time drying grain in order that it qualify for intervention. This may cause some holdup at intake during harvest.
Intervention
36.ICOS feels that the limitation of intervention to the period 1 October to 30 April followed by a 90 day payment delay
(intervention will be allowed during September but will be followed by 120 day intervention delay) will reduce the price to farmers by the amount of interest on the outstanding money. In addition, it will impose a cash flow pressure on co-operatives and will give a misleading figure for borrowings in their balance sheets on 31 December. The intervention payment delay does not affect all countries equally because of differing interest rates.
37.It is the view of ICOS that these decisions will have very serious effects on cereal growing in Ireland and that the only way that cereal growing will continue on a significant scale in Ireland will be:-
-If input costs can be cut (nitrogen prices, fuel prices, interest rates and taxes on machinery)
then farmers will be able to continue in production.
-If every effort is made to advise and assist farmers in ways of achieving the required quality standards from the native cereals.
The principle of Community preference has been ignored in the decisions reached and we should press for a reduction in the cereal substitutes.
Irish Flour Millers’ Association
38.The Irish Flour Millers’ Association states that as producers they welcome any steps which might lead to the improvement of the overall quality of the milling wheat crop. But they point out that the machineability test is not a standard used by the Irish Flour Milling Industry and will exclude from intervention wheats which they consider very-suitable for breadmaking flour and the production of which they wish to encourage. The Zealeny Test is also a standard not used by the industry and the Association believes that facilities for such a test are not available in this country.
39.The Association further states that the co-responsibility levy is of concern to the industry due to the lack of information on how and where it is to be collected. The Association considers that it should be collected at the first point of sale, as laid down in the draft regulations.
There is a view that the levy shoudl be collected at the processing point and if that is the case the Association feels that the Revenue Commissioners should accept drying as an integral part of processing. Grain is usually traded ex farm at 20% moisture, plus or minus, depending on weather conditions and certainly very little would come off the farm at 14/15% if at all. The Association feels that to ensure fair play for the Irish grain producer, an E.E.C. formula for the calculation of drying loss, plus invisible loss, would be required in order to avoid confusion at the time of deduction of the levy.
The Association believes that considerable extra work will arise in the collection of the levy and that the question arises as to who will recompense those acting as tax collectors.
40.An Foras Taluntais
The European Commission policy proposals for cereals in February 1986 contained complex changes in the technical and administrative arrangements for market support as well as a co-responsibility levy for producers.
An Foras states that if the proposals had been implemented in full cereal prices could be reduced by 12 to 15 per cent for wheat and 14 to 17 per cent for barley. Subsequently the Council of Agricultural Ministers reached broad agreement on modifications to the Commissions proposals. The main adjustments were the dropping of the hectolitre weight proposals for barley and substituting a price cut of five per cent. There were adjustments to the availability of intervention support bringing it forward to October instead of December 1st. Adjustments were agreed in relation to moisture standards for intervention. These adjustments would have the effect of reducing the size of the price cuts. There was a green currency adjustment of 1.5 per cent resulting in a price increase of a similar amount. Although all the details for implementing the package have not yet emerged the likely net consequence of the agreement is for a fall of 7-9 per cent for feed grains which constitute the bulk of Irish grain.
41.An Foras points out that Ireland is a net importer of significant quantities of cereals and animal feedstuffs.
The agreement could, at recent levels of trade, result in an overall reduction approaching IR£8 million in Ireland’s import bill. For the Irish cereal grower the loss in revenue could be upwards of IR£13 million but Irish livestock producers would gain assuming the drop in cereal prices would work its way into native and imported cereal type products. Both the Commission’s proposals and the agreement would result in a transfer of resources between cereal producers and livestock producers within most Member States but there would also be substantial transfer of resources between Member States.
42.An Foras states that there are currently 40,000 to 50,000 cereal farms in Ireland. An estimated 25,000 to 30,000 of these sold grain in 1984 the latest year for which estimates are available. The proposed policies for cereals will vary in their impact on these growers depending on the level of sales and the enterprise mix on the cereal growing farms and the extent to which they will be eligible to recover the co-responsibility levy deductions by virtue of being deemed to be “small producers”.
The adverse impact of the policies would be greatest for those specialising in cereals who would have no opportunity to recoup their losses through lower animal feed costs but would also have less flexibility in switching to livestock production.
43.An Foras points out that the clear objective of current EEC policy is to reduce prices to the extent that the perceived surplus production will be eliminated, mainly, by making some current production uneconomic. This type of policy has introduced considerable uncertainty into Irish cereal growing because it is not clear to what extent prices will have to be reduced to achieve the desired objective. While reducing the margins from all types of cereals the greatest pressure will be on spring barley. Assuming the EEC agreement for this year does bring about a pro rata producer price drop it has been estimated that upwards of one third of the barley crop is incapable of generating sufficient gross margin to cover the overheads of the producing farms. Our major cereal crop, spring barley will be getting prices and producing margins considerably lower than the level in 1983 and 1984, a period which saw a considerable decline in acreage of the crop.
44.The policies will put further pressure on growers to get out of spring barley. One of the consequences of this pressure on margins will be to encourage further movement to winter cereals and alternative crops. However, in view of the slow growth in these crops in Ireland compared with other countries, and the limitations to expansion in these crops in the last two years, not all of the spring barley under threat will find an immediate haven in winter cereal production. Some of the spring barley is locked into the farming system.
The other alternative is to replace the lower paying spring barley with a grassland enterprise. The evidence shows that cattle and sheep would be a more profitable use of resources than spring barley on up to 200,000 acres of land currently in spring barley production. Many cereal growers are also livestock producers, so to some extent this transition out of spring barley and into livestock would be possible where capital was readily available. However studies carried out by AFT show that where all the money for investment in cattle has to be borrowed the development may not be financially feasible.
45.An Foras believes that if the implementation of the current grain policies over time cause a major movement out of cereals this will have implications for both the industries which supply inputs to cereal producers and for the firms dependent on native grain. The greatest impact would be in the crop chemicals, machinery and seed supply industries.
E. VIEWS OF THE JOINT COMMITTEE
46.The European Commission has, since the publication of its
“Green Paper” on the future of the Common Agricultural Policy - Perspectives for the Common Agricultural Policy,(1)
made it clear that it intended taking steps to correct the present situation regarding agricultural surpluses.
The Commission has in recent times received the backing of the European Parliament for their proposals in this regard. The Farm Price Package agreed by the Council of Ministers in Luxembourg on 25 April, 1986 reflects the Commission’s stand and nowhere is this policy more clearly reflected than in the proposals agreed for the cereal sector. The Commission’s original proposals in relation to the common organisation of the market in cereals(2)
were to a great extent accepted in their entirety.
47.The Joint Committee believes that the combination of a co-responsibility levy, higher quality standards, and delayed intervention has dealt a severe blow to cereal production in Ireland and to the profit margins of those farmers and those with commercial interests in cereal production.
To add to these difficulties the green pound devaluation in respect of cereals was only 1.5% as opposed to an adjustment of 3% for livestock products.
48.The Joint Committee understands that there are 50,000 cereal producers in Ireland. While 70% of these are small producers who will be exempt from the co-responsibility levy, this only represents 16%
of total cereal production in Ireland. The Joint Committee is of the opinion that the objectives which the co-responsibility levy is seeking to achieve could be more beneficially met by a quota system based on acreage and/or tonnage.
49.As Irish climatic conditions do not, on the whole, favour cereal production the Council decision militates against our low quality grain and our opportunities for the production of high quality grain are limited. The Joint Committee believes that the quality standards set are a thinly disguised price restraint instrument, as they represent no great benefit to production. Our partners in the Community can readily switch to alternative crops, e.g. oilseed, peas and beans but, because of our climatic conditions, these alternatives are not viable here and those that are, e.g. milk production are now closed.
50.The Joint Committee feels that any delay in intervention would have a detrimental effect on Irish cereal growers who are dependent on market support being available at harvest time. There is little or no on-farm facilities in Ireland such as storage and drying. The Joint Committee urges the development of these facilities together with the development of processing and marketing in order that our cereals can be marketed within the Community at a price level better than the return from intervention.
F. CONCLUSION
51.The Joint Committee in its Reports on the Perspectives of the CAP(1) and the Milk Cessation Scheme(2) acknowledged that the CAP was the cornerstone of European integration but expressed concern at the extent to which regional disparities had widened. The present position of the cereal sector within the Community seems to lend further credence to this argument. While on the one hand the Commission is continually stressing the importance of the family farm unit in practice its proposals are somewhat contrary to this principle. The Joint Committee accepts that the Community resources must be allocated in the most effective manner possible but feels that it is unacceptable that small cereal producers as we have in Ireland should be expected to suffer the burden of cutbacks and price restraint to the same extent as the very large producers in other parts of the Community.
52.The Joint Committee accepts that there is a problem of surplus production in the Community at present but that, in relation to cereal production, this surplus is largely as a result of cereal and cereal substitute imports in the region of 18 million tonnes about which neither the Commission nor the Council of Ministers have taken any action.
This fact is borne out by the statistics given by the Minister for Agriculture in reply to a Parliamentary Question on 20 May 1986 (See Appendix).
If Member States are making sacrifices to halt surplus production the Joint Committee feels that the same restraint should be placed on third countries exporting cereals and cereal substitutes to the Community.
The Joint Committee believes that the principle of Community preference, one of the basic principles of the CAP is not being adhered to and the problem of cereal substitutes is being ignored.
53.The Joint Committee feels that one of the greatest dangers facing the production of cereals in Ireland is that the Government of the larger Member States will compensate their producers by means of national aids. It is doubted that Ireland could afford such remedial action. The Joint Committee urges the Government to consider this matter most carefully in future negotiations on agriculture.
In no other Member State is agriculture a more important part of GNP, and our position as a competitor in the market place must not be eroded by those countries who can afford the Community’s cutbacks in agriculture by means of national aids.
The Joint Committee hopes an early debate will take place in the Dail and Seanad on this issue so that the elected representatives of the farming community and the consumer can record their views.
Gerard Collins T.D.
Chairman of the Joint Committee.
4 June. 1986.
(1) COM (85) 333 final.
(1) COM (85) 333 final
(2) COM (86) 30 final
(1) Report dated 5 February, 1986.
(2) Report dated 26 February, 1986
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