Sir, - IFA welcomes the general thrust of your editorial on the EU "Agenda 2000" (The Irish Times, October 23rd). However, in the first paragraph the view was expressed that IFA had raised exaggerated fears in the past, and that IFA's "dire warnings about the impact of the MacSharry CAP reform programme have not come to pass".
In this regard, the following points should be noted:
First, the MacSharry CAP reform proposals were substantially driven by the international pressure on the EU to concede significant cuts in its agricultural supports in the GATT negotiations which were running in parallel with CAP reform. While the initial cuts to CAP supports required by the GATT Uruguayround agreement could be contained without major disruption, the door is now open for further cuts in the next trade round which will have a much more severe impact. Negotiations on the next world trade round are scheduled to commence in 1999 and the EU is committed, as part of the last GATT agreement, to continue the process of further reducing protection and support for agriculture.
Second, MacSharry price cuts (i.e. a 15 per cent cut in beef price supports, and a 30 per cent cut in cereals price supports), were partially offset in this country by the 10 per cent devaluation of the £IR in 1993.
Third, the actual CAP reform decisions of the Council of Ministers were considerably less severe than the original proposals from Commissioner MacSharry. Significant "damage limitation" was achieved by the farm lobby in the 15 member states, including IFA, during the negotiations on the MacSharry proposals.
The "big picture" is that the process of eroding the original CAP commenced with the MacSharry reform of 1992. This process is to be continued under the Santer package. The major difference next time around is that the budget resources available to offset the effects of price cuts are much more constrained, particularly as no additional resources are being provided to finance EU enlargement to the east. - Yours, etc.,
Chief Economist, The Irish Farmers' Association, Bluebell, Dublin 12.