NEWS: Decision to phase out farming subsidies reached after 17 hours of negotiation in Luxembourg, write Denis Staunton and Seán MacConnell from Luxembourg.
The agricultural agreement, hailed as a new era for European farming has been severely criticised by the main Irish farm organisations.
But on his return from Luxembourg yesterday, the Minister for Agriculture urged farmers to consider the document carefully before passing judgment on it. "This is a road map for the future of farming here and in Europe and should bring an end to farming subsidies," Mr Walsh said.
Farmers' organisations have condemned the changes, however, and warned they will lead to a fall in farm incomes and job losses throughout the food industry.
The EU Agriculture Commissioner, Dr Franz Fischler, said Europe had said goodbye to the old system of subsidies that encouraged overproduction and distorted world trade.
"European agricultural policy will change fundamentally. In future, our products will be more competitive and our agricultural policy will be greener, more trade-friendly and more consumer-orientated," he said.
The Minister said the agreement secured the CAP into the future and represented a good outcome for Irish farmers."All in all, I am satisfied that we got a good deal," he said.
The IFA said the 19 per cent cut in butter supports would drive many farmers out of business.
However, Mr Walsh said this was not the case, and the increase in compensation he negotiated would ensure the survival of dairy farming, which now had a secure future.
The agreement came at 9 a.m. yesterday after a 17-hour negotiating session in Luxembourg. At the heart of the reform is a decoupling of subsidies from production, allowing farmers to receive a direct payment from the EU regardless of how much they produce.
The Commission wanted originally to decouple all subsidies from production but agreed in the face of resistance from some member-states to introduce an element of flexibility.
"Farmers will have an option. If they opt for full decoupling, they will get a cheque in the post once a year. They can then engage in any farming enterprise they want," Mr Walsh said.
Dr Fischler is confident that, as time goes on, most farmers will decide that opting for full decoupling is in their best interests and will allow them to pursue more market-orientated activities.
"I don't think it will be long before farmers' organisations will be calling for more decoupling because they won't want to go through all this paperwork," he said.
The breakthrough in negotiations came after the Commission agreed to a French demand to drop plans to cut intervention prices for cereals. In the end, only Portugal voted against the deal in protest at lower milk quotas for the Azores islands.
Among the motivation for reforming the CAP, which accounts for almost half of the EU's annual budget, was the impact of the old subsidy system on World Trade Organisation negotiations that will resume in the Mexican city of Cancún in September.
Dr Fischler said yesterday's deal allowed the EU to go on the offensive in Cancún and to demand concessions from trading partners in return.
"Now others must make a move - for example our American friends who, unlike the EU, have over recent years revived their old system of support and massively increased their trade-distorting agricultural subsidies. Not practising what you preach is not acceptable," he said.
Dr Fischler dismissed complaints from Irish dairy farmers that a new limit on the amount of butter that can be put into intervention will damage their livelihoods. He said Mr Walsh had won substantial concessions for dairy farmers and suggested the Irish industry could flourish if it diversifies.
"The Irish might consider that there are other dairy products they can sell besides butter. We cannot take the management decisions for the Irish dairy industry. They will have to do that themselves," he said.
The EU Consumer Affairs Commissioner, Mr David Byrne, welcomed the reform.