As a young civil servant in the Department of Finance’s economics team in the 1970s and early 1980s, I learned on the job about a wide range of policy challenges. A significant amount of my time was spent on the agricultural sector, so the Farmers Journal was a must read.
This focus on agriculture reflected the sector’s importance for the Irish economy. In the early 1970s, agriculture accounted for 18 per cent of Irish national income, falling to about 10 per cent by the early 1980s.
Today, if the Common Agricultural Policy payments are excluded, it is down to 1 per cent.
Among farm enterprises, beef today contributes very little to national income. Meat processing is also a pretty small sector. Even with exceptional beef prices today, most of the income of the largely part-time cattle farmers comes from EU payments. Thus, what happens to the EU payments matters much more to farmers than the price of cattle.
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In 1983, the EU was proposing a super-levy on milk production. For the department, I estimated that the likely economic effects of the proposal would be to reduce national income by 1.5 per cent, a very serious hit.
When the Cabinet economic subcommittee met to consider the issue, unusually, as a junior official, I was asked to attend. However, I was told I was to say nothing and that more senior people would handle any queries.
The meeting began with the taoiseach, Garret FitzGerald (my father), very critical of the department’s failure to provide the numbers needed to make Ireland’s case in Brussels. Immediately, my boss indicated that, despite my vow of silence, I was to provide the necessary numbers to the meeting.
The taoiseach had not spotted me among the large attendance, and was clearly taken aback by the fact that I was responsible. He was, of course, mollified when I could give him all the detail he wanted on how damaging the EU proposal was for Irish farming.
Having got the necessary data, the meeting went on to discuss how the Irish team could help ensure that France got what it needed on Mediterranean products, as that would be the key to Ireland gaining relief from the EU proposal. It was fascinating to listen to the discussion of how best to persuade our EU partners to modify the proposed levy.
It was very clear to even a junior official like myself, that understanding our partners’ needs and developing alliances with fellow members of the EU was essential to protect Ireland’s own interests.
Forty years on, the EU operates in the same way. That is why the decision to vote against Mercosur earlier this month was so unwise. We irritated the friends we will badly need when it comes to discussions on the next EU budget.
The Government had ascertained before the meeting that its vote against was irrelevant, so countries for whom Mercosur is vital may be more forgiving. However, the EU Commission, which is developing proposals for the next EU budget, is likely to be less understanding.
Objectively, paying €1.5 billion to farmers in one of the richest countries in the EU looks like bad value for EU money. With massive pressure to reallocate the EU funds next time around to security-related needs, and to supporting industries of vital strategic importance to the wider EU, it is going to be very difficult to ringfence funding for Irish farmers.
Ireland will need all the friends that can be rustled up if Irish farm interests are to be protected. As a result, the decision by the farm lobby to go all-out for a No vote is likely to prove exceptionally damaging for Irish agriculture.
Listening to what the Mercosur protesters in Athlone had to say, it is clear that the Irish authorities have done an exceptionally bad job of explaining the facts, or of countering the many unfounded assertions made about the deal. Fake news was rampant.
Some protesters thought that the dairy industry was affected – there are no implications for dairy. On meat, the reality is that the EU exports more beef today than it would import under Mercosur, so that already EU beef prices are influenced by external markets.
Allowing in a few more sides of beef from South America will not affect things. In response to Irish concerns, the EU Commission had prepared a compensatory package in the unlikely event of any losses.
Irish farming has expended all its ammunition on a non-existent war, and it will have nothing to fight the real battle about future EU resources.
