Agreement on agriculture will cost economy €1.2bn, IFA

There has been angry reaction to the World Trade Organisation (WTO) deal on agriculture, which will see export subsidies phased out from 2013.

The main call coming from food processors and producers yesterday was for new policies to prevent huge losses of jobs and exports.

The Irish Farmers' Association (IFA), which claims Ireland will lose €1.2 billion because of the deal and up to 50,000 jobs, called for the immediate establishment of a high-level working party to co-ordinate the handling of the vital technical negotiations with the WTO, which have to be completed by April, 2006.

However, the Irish Exporters' Association said that "gains will outweigh losses in long term".

"Overall, Ireland's export trade and general welfare will increase as a result of the further trade liberalisation stimulated by the Hong Kong agreement, with particularly strong gains for Ireland's services exporters," according to John Whelan, the association's chief executive.

The WTO talks and the emerging agreement must be taken together to determine the long-term impact on Ireland's welfare and Irish exports, he said.

The reductions in agricultural tariffs, domestic support and export subsidies must be balanced against reductions in manufacturing tariffs, barriers to service trade and improvements in trade facilitation, said Mr Whelan.

But IFA president John Dillon said: "Irish farmers have paid a heavy price. It is a case of all losses and not a single gain. One of the lowest-income sectors in Ireland has been forced to bear the full cost of the deal.

"The deal will destroy one-third of Irish farm output that will mean a loss of €1.2 billion to the country.

"Farm incomes will fall by 35 per cent, with a knock-on loss of €800 million to the rural economy."

Meat Industry Ireland (MII), which represents the €1 billion beef processing industry, expressed "deep concern" at the ending of export subsidies, but said the EU was already implementing these.

"In the last six months, the EU Commission has cut beef export refunds by almost 30 per cent, equivalent to approximately 30 cent/kg on the carcass. Unless there is some reversal of these cuts in the immediate future, Irish beef will remain uncompetitive on international markets," said Cormac Health of MII.

"Our ability to maintain important trade channels to markets in Russia and north Africa has already been compromised by recent refund cuts," he said.

"What is now vital is that Minister for Agriculture Mary Coughlan ensures that the commission operates the export refund regime in a manner that facilitates exports over the phase-out period. Beef export refunds must be set at a meaningful level," he said.

Denis Naughten, Fine Gael's spokesman on agriculture, said the agreement would put tens of thousands of Irish farmers out of business and would see substantial volumes of food imports coming into the EU from outside the union. Dr Mary Upton, Labour's agriculture spokeswoman, said the Government must develop and implement long-term policies which would ensure the survival of Ireland's rural and farming communities.

"What has now, in effect, been created, is a situation whereby 2013 has become a pivotal and transforming year for Irish agriculture. In that year, both the export subsidies and the current Common Agricultural Policy [ CAP] round will conclude," she said.

Martin Ferris, Sinn Féin's agriculture spokesman, said there was no evidence the WTO deal would boost the livelihoods of farmers in developing countries, but it would put EU and Irish farmers under pressure with the undermining of the CAP.