We fully agree with the need to have a medium-term strategy for agriculture and the food industry. However, we cannot concede at this stage before the WTO negotiations even start that dramatic price cuts are inevitable. And even if some price cuts were to be conceded by the EU sometime in the future, we must retain the principle that there should be full compensation through increased CAP direct payments.

The implication of saying that only 20,000 full-time commercial farmers will survive in ten years time, compared to over 40,000 today, is that we are accepting major price cuts for farm products, and little or no compensation. We cannot accept that approach. If Farm Organisations were to accept this figure we would be sending a message to the Government that they should "throw in the towel" in the WTO and Enlargement negotiations.

The 20,000 figure seems to result from a central assumption in the report that a farmer would need at least 70,000 gallons of milk, or its equivalent in other enterprises, to be viable. (Of the 20,000, 13,000 would be in dairying, 4,000 in cattle, 1,000 in sheep and 2,000 in tillage).

If farmers are forced into this size of enterprise - about 60 dairy cows or over 100 suckler cows - this involves a lot of work, a lot of management and a lot of capital, just to earn an ordinary income for one family. Many such farmers would have to buy or lease more land at high prices and service the debt from low incomes. In practical terms and in financial terms major expansion at farm level is now very difficult.

Also the assumption is that many farmers now full-time will get an off-farm job. But the majority of farmers are over 45 years and may not have the skills to take up jobs.

As well as the WTO, the report refers to Eastern Enlargement as the other major external pressure on Irish agriculture. We should not be conceding that Irish agriculture should suffer because of Enlargement. It is the job of the Government to convince the other 14 Member States that Enlargement cannot happen without a larger EU budget to pay for it.

The great majority of the detailed recommendations set out in the report make sense, and we recognise that change will continue in the future as it has in the past. We will comment later on a number of individual recommendations where we have some reservations, as well as on the key question of who is responsible for implementing particular recommendations. But our major concern is that the central conclusion of the report, which projects a halving of the number of full-time farms, is based on a "do-nothing" policy by the Government. We should remember that political pressure resulted in major improvements during both the CAP reform I and CAP reform II negotiations, and also during the last GATT negotiations.

Nobody knows at this stage what the future holds - for example we saw in Seattle that an early agreement on a WTO trade round is not inevitable. Our view is that the forecasts for the number of full-time and part-time farmers should be dropped from any future conclusions based on this report, i.e. the Implementation Plan to be prepared by Government. Indeed one of the objectives of the Implementation Plan should be to set out policies and actions which would ensure that the number of viable full-time farmers would be higher than otherwise would be the case in the absence of the Plan. We should examine the detailed recommendations and see how they could be implemented where there is broad agreement.

Comments on Chapters and Detailed Recommendations

(The following comments relate only to points where IFA has concerns or is in disagreement with the report recommendations)

15.1: Food Safety. Regarding the proposed National Food Safety Plan, research shows that the highest risk to food safety is at the processing and food service levels, and not at primary production level. IFA’s view is that the Food Safety Plan must reflect this.

In general the cost to farmers of meeting safety and assurance requirements must be kept as low as possible to maintain competitiveness.

15.2: Quality. The reference to "cattle standards" should read cattle carcass classification standards ( which relates mainly to meat yield ).

On sub-point 6 the first issue to be pursued should be:

• operate a price structure which properly encourages and rewards quality production.

In relation to the recommendation to build a quality incentive into DP’s, this could best be done through the national envelope.

16.1: Marketing. The fundamental point must be added that the most direct responsibility for marketing is with owners of the product, i.e. the food companies, both private and coop. They must make the necessary investments. The roles of both Bord Bia and Enterprise Ireland are essentially supportive.

16.3: Partnerships in the Food Chain. IFA’s view is that to achieve the commercial market targets for both beef and sheep, the integrated production group approach must be pursued, based on full partnership between producers, processors and retailers.

Partnership also requires strong support from the State services, Teagasc, Bord Bia, and Enterprise Ireland.

16.4: Rationalising Primary Processing. The key issue for IFA is the implementation of the Task Force report. We want to see an Implementation Plan with clear links between public investment, rationalisation and a commercial market strategy. The Beef Processing Industry must take responsibility for their sector.

16.5: With reference to "a strong and well resourced marketing effort led by Bord Bia", IFA’s view is that as Bord Bia is not the owner of the product its actual role is primarily promotion, in support of the processor’s marketing efforts.

Third sub-point: IFA’s interpretation is that the Irish beef processing industry must substantially reduce the price gap with the EU, which has been about 20%.

The crucial role of the live export trade in terms of competition and market outlets must be recognised and supported. Access to markets, both in terms of transport facilities and in terms of free internal EU trade, are key priorities.

16.6: Dairy sector. (fourth sub-point). In relation to year-round supply of milk for high-value niche products, IFA’s view is that if the products are found that will pay the premium for year-round supply then farmers will respond.

In general, very little is said about the need to reduce costs in the dairy processing sector, e.g. by more efficient use of capacity and rationalisation of transport.

17: Developing Competitive Full and Part-Time Farming

The introductory comments have set out IFA’s position on the target numbers for full-time and part-time farmers. The actual numbers by 2010 will reflect both the success or failure of Government and EU to defend the CAP, and also the choices of individual farm families. Also of course there is the option of a full-time farmer having an off-farm income earned by a spouse.

17.2: Land Mobility and Earlier Transfer. Improving land mobility is essential if any significant improvement in scale is to be achieved. Currently land sales are extremely low, and land prices have risen substantially and are our of reach of most farmers. The option of paying the DA money in the form of a retirement pension has attractions in this context, and the issues are to be further investigated by a working group which, we understand, will include the Farm Organisations.

17.3: Improving Scale in Dairy Farming. With reference to the 70,000 gallons viability threshold suggested, IFA’s overall view was set out in the introduction. The reality is that over 80% of producers are under 55,000 gallons and this signal could in fact discourage these farmers. A much better approach to improving the structure of milk production would be a more gradual approach, based on the current quota restructuring policy, including a review of the upper thresholds over time.

In addition, it must be remembered that in the Agenda 2000 decisions the milk quota system is to continue to 2008 (although there is to be a review in 2003). In the quota situation the level of rationalisation envisaged in the report could not be achieved, even if was desirable. That level of rationalisation would probably undermine milk production in the weaker regions i.e. the West and Border regions. IFA favours an approach where milk prices are maintained at economic levels by retaining quotas at EU level, and that quota coming available through normal retirement and cessation is focused towards smaller and medium-sized producers.

17.3: fourth and fifth sub-points. These seem somewhat in conflict with each other. The main measure to assist smaller dairy producers is preferential access to quota, which obviously would be impossible in fully open market for quota.

17.4: Farm Investment . It is agreed in the new NDP that young farmers (under 35) will be given priority in terms of higher investment grant rates in the Farm Waste Management and Dairy Hygiene schemes.

17.6: Equal access to schemes is provided for in the National Plan details submitted to Brussels.

18.1: In relation to the reference to "total household income" only the income of the farmer and spouse should be taken into consideration in assessing viable household income. Otherwise comparisons between farm and non-farm households would be misleading as farm households tend to be larger, have more "at work" and have more elderly people than the average for all households in the state.

Also, any changes in data collection by the CSO should not result in the data on income from farming only being suppressed or relegated.

18.3: In relation to NAPS, there needs to be more specific targets in relation to Rural Poverty.

18.3: Disadvantaged Area Payments. If the DA scheme were being devised today it is likely that an income limit/prosperity clause would be included. However in the current scheme, as individual payments have a ceiling of £4,000 or lower depending on the type of livestock, nobody is receiving a large amount of money under the scheme.

The practical situation is that the Farm Organisations and the DAFRD have recently reviewed the scheme in the context of the EU decision that the payments must be area-based from 2001. We have agreed a system which avoids any major winners or losers and this has been submitted to Brussels. We hope that this will be acceptable to the Commission, but if it is rejected the payments would have to be made on an enterprise basis. In that situation there would be significant losers and these would be mainly full-time low-income cattle and sheep farmers. In that scenario the prosperity clause issue would have to be revisited. (It is estimated that an income limit of £25,000 (farmer plus spouse) would yield a saving of £10m - £15m in the context of scheme budget of £120m).

19.2: The recommendations on ICT relate mainly to the food sector and there is little reference to the role of ICT in farming or by farm family members working from home.

20.1: In relation to the support services of the DAFRD, the importance of direct payments to farm income must be stated, and the recommendations must include a commitment on the delivery of payment deadlines.

20.3: It is not really within the power of Bord Bia to "ensure implementation" of the marketing plan; the industry has to take responsibility for this.

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