European Union agriculture ministers were last night poised to approve the most far-reaching reform of the Common Agricultural Policy since its inception after the European Commission agreed to a key demand from France.
The ministers were meeting late into the night in Luxembourg to discuss the latest proposal from the Agriculture Commissioner, Dr Franz Fischler. Dr Fischler has abandoned plans to cut intervention prices for cereals, a key area of concern to the French, who derailed the negotiations last week.
The French agriculture minister, Mr Herve Gaymard, is understood to have told Dr Fischler during the meeting that the formula on cereals was in line with what France wanted.
The Minister for Agriculture, Mr Walsh, said that the mood among the ministers had improved substantially and predicted that a deal would be reached today. "I think the atmosphere is the main thing that has changed, it's much more positive. The body language is a lot better and particularly between France and the Commission. I think the Commission are making tentative moves to bridge the gap between the concerns of member-states and what they have on the table. On the balance of advantage and as a modest punter, I'd say we will have a deal tomorrow," he said.
Dr Fischler also gave ground on an area of key concern to Ireland, raising the limit on butter for intervention from 30,000 tonnes a year to 50,000 tonnes and increasing compensation for dairy farmers. The Commissioner agreed that farmers in Ireland could receive a slaughter premium but it was unclear last night if the premium would apply in all EU countries.
Mr Walsh welcomed the moves as a step in the right direction but indicated that he hoped for more concessions as the night progressed. Farming organisations said that Mr Walsh would have to extract many more concessions from Dr Fischler if the deal is not to leave farmers, particularly in the dairy sector, worse off. Mr John Dillon, president of the IFA said that the deal as it stood last night would cut dairy farmers' incomes by 30 per cent.
"It's not good at all. From a dairy farmer's point of view, it's a reduction in income and that cannot be good, particularly when they are already on their knees," he said.
Mr Dillon expressed concern that the slaughter premium would only be an advantage if it applied throughout the EU and could actually disadvantage Irish producers if it was limited to the Republic. "We believe a slaughter premium has to be across the whole EU. Otherwise you'll have problems caused by smuggling or imports from other countries," he said.
Mr Pat O'Rourke, president of the Irish Creamery Milk Suppliers Association, said a 50,000 tonne limit on butter intervention could spell disaster for Irish producers, given that 45,000 tonnes of Irish butter went into intervention last year alone.
"If this goes through it is meltdown for dairy farmers, indeed for the dairy industry," he said.
For the Irish Co-operative Organisation Society, Mr Donal Cashman expressed concern that less intervention could push prices lower but he acknowledged that Mr Walsh had made some progress since last week.
"It's a movement from where we were last week but I would expect the Minister to push for another bit on the journey," he said.
Mr Walsh said the reforms would give Ireland options and flexibility in how to decouple subsidies from production but said they would reshape agriculture in Europe over the next 10 years.