BUDGETARY pressures, the enlargement of the European Union and the impact of GATT will put pressure on the level of EU support for Irish farmers, the Minister for Agriculture warned.
Mr Yates was opening a wide ranging series of statements on agriculture.
Mr Joe O'Toole (Ind) described the discussion as "a cosy cartel of people looking out from inside the industry while jobs are being lost and the industry is being undermined". More than 300,000 live cattle were exported each year at the cost of some 3,000 jobs in the meat processing industry.
He also believed the agricultural sector was "not holding up its end as partners in the Programme for Competitiveness and Work".
However, Mr Jim Townsend (Lab) said the last time the export of live cattle was stopped, the meat processing factories had dropped their prices and Irish farmers had suffered considerably.
In his opening speech, the Minister said despite his support, there will be an inexorable trend towards world market prices and more limited direct supports. "This creates formidable challenges for farmers in maximising income from inside the farm gate. A major offensive must be undertaken on cost control and on quality production systems across all farming enterprises.
"The scope for improvement on the vast majority of farms is still considerable. I am worried that the cost advantages which we had in some enterprises, notably dairying and sheep, have been eroded in recent years. Unless urgent attention is now given to cost control, the international competitiveness of Irish agriculture will be seriously damaged in the medium and longer term."
Last year was an excellent one for farmers, the Minister said. Incomes rose by 5.8 per cent. With inflation running at 2.5 per cent this was a significant increase with farm income over £2 billion for the first time.
"It is very significant that of this £2 billion, £766 million was in the form of direct subsidy payments. These payments now account for almost 40 per cent of, total farm incomes. However, when the impact of the range of export subsidies on live cattle, beef and dairy products is added in, well over 50 per cent of total net farm income is coming in the form of subsidies".
Mr Rory Kiely (FF) said the lack of coherence from the Government in the broader areas of foreign policy, such as extension of the EU, if not tackled, would have a serious impact on the State's ability to articulate a cogent response on CAP reform.
"The internal structures of the EU are also up for reform. At the moment agriculture spending is ring fenced until 1999. That is a matter of inter governmental agreement. In an evolving union in which the parliament has increased power, that sort of commitment may be impossible to achieve. The potential consequences for Irish agriculture are extremely serious".
He demanded the Government articulate its "definitive" position on the crucial structural issues. "We must avoid a scenario whereby, because of a lack of planning by this Minister, the government of the day in 1999 will be running around like ducks in a thunderstorm trying to make amends for this Minister and the Government's inactivity".
Fianna Fail was determined to pursue CAP reform. It was the single most important economic issue Ireland will face in the next decade and "a shambles of historic proportions is looming under this country's management".
Mr Kiely said he would not mind paying the levies to help eradicate TB and brucellosis in cattle "if they kept it outside my own farm gate". But as a farmer who had his own pedigree herd reduced by disease, he believed the compensation scheme available was inadequate.
Mr Michael D'Arcy (FG) praised the Minister for his handling of a portfolio which, he said, presented considerable challenges. He appealed for the base market to be widened so that Ireland is not so dependent on France for Irish exports.
The German market was "wide open", he said.
Mr O'Toole said the export of live cattle was also undermining the policy of the Department of Agriculture and the Minister.
He believed the Minister should tell farmers they were being misled by their so called advisers, and that what was happening was in their interest.
"There is a serious difficulty if someone running a beef process[ing industry in Tralee has to bid for cattle against someone who wants to sell them on the hoof to Cairo. The export subsidy on these live animals is costing jobs in Ireland. It is also having a negative internal impact as there are now fewer big players in the Irish beef processing industry.
"Do farmers not realise that they are pawns in a game and they are misled into believing that the export subsidy is in their interests? Five to seven years ago they were similarly misled into believing that the intervention policy was in their long term interests. It is now clear that this was a mistake.
"The decision taken last year by the European Union to include Turkey in the area for which export subsidy is payable has made matters worse. Increasing numbers of cattle are being exported. How can we build up a national herd or develop a policy?"
If it was true that this was happening as a result of EU policy, which had its roots in attempting to get Ireland out of "the intervention bind", it was vital the industry be reassessed.
The statements were adjourned until Wednesday.