Category Archives: Ireland & the EEC (EU)

Ireland joins the EEC (EU)

Ireland, Britain and Denmark are Permitted to Join the EEC(E.U.)

From Mansholt to the The Rural Environment Protection Scheme (REPS)

The UK’s policy since 1947 did not recognise social need nor environmental hardship.criteria. Payments were paid on the basis of output and thus, the larger the farm the greater the amount of payments that were received. The social vulnerability of ‘uneconomic’ British hill farmers was recognised by giving them special help to keep them in business. The Hill Farming act of 1946 allowed ‘headage payments’ to be made to sheep and cattle farmers in designated hill areas – essentially a per capita subsidy on costs of production.  However, Newby in books states “It is difficult to avoid the conclusion that small farmers, whether in the uplands or the lowlands, have been an embarrassment for post war policy makers. In general agricultural policy has, whatever the rhetoric, attempted to remove as many small farmers as quickly as possible and further promote the tendency towards the increasing concentration of production. This objective lay at the heart of the difficulty which British agricultural policy found in adapting to the Common Agricultural Policy (CAP) after entry into the European Economic Community in 1973”.

The Common Agricultural Policy (CAP) was specifically designed both to keep small farmer in production and to be used as a tool of general socioeconomic development in rural areas.  France and Germany economies, the main players in the original EEC were very suited. France mainly an agricultural economy was a very important market for German machinery, electrical goods, while Germany was an excellent market for French agricultural goods. Furthermore, the basis of support was switched from general taxation to (via deficiency payments) to consumer prices (via direct market intervention). This in according to Newby’s was guaranteed to re-politicize agricultural policy and drag the debate on farm support back …………….into the full glare of the public arena. As far the British farmer was concerned, entry into the EEC proved, in the short term, almost embarrassingly beneficial in most sectors of production.  “The longer-term consequence, however, has been to re-open once more the festering resentment of consumers towards food producers which had been a historically familiar feature at all times when food prices have risen sharply. Thus the abandonment of a ‘cheap food’ policy has produced a public debate reminiscent of that which existed throughout the nineteenth century – only now farmers are politically still less dominant and numerically verging on the insignificant …………………..State intervention in agriculture, in promoting a highly capitalized farming industry, unwittingly or otherwise promoted the interest of agribusiness companies in British agriculture. Successive governments, in supporting the farmer, have also supported large sections of the engineering industry, through farmer purchases of farm machinery, the chemical industry (fertilisers, pesticides, etc) and food processors, packagers and distributors. In turn, agribusiness companies have become major agents of social and economic change in rural Britain since the Second World War………………… Particularly important elements in the relationship between farmer and agribusiness companies are the provision of credit facilities and the advice on the purchase of new capital equipment, for in-order to participate in contract farming for agribusiness  clients, farmers must frequently purchase highly specialised (and expensive) equipment on which they might otherwise be reluctant to risk their investment. Where mutually beneficial commercial arrangements end, and the reduction of the farmer’s begins, has often been difficult to discern……………………. Smaller farmers, who rarely participate in such contractual arrangements, have found themselves further marginalised, while the larger farmers have found their enterprises gradually transformed by relentless ‘industrial’ logic of corporate agribusiness are encouraged to become more specialised in order to make the optimum use of their specialised technology and skills. ……………….The implications of these changes are widespread and have been given less attention than they deserve……………….It is not clear to what extent have been able to retain the full benefits of their own increasing cost efficiency. Many farmers have certainly believed that agribusiness domination of food production has done little to alleviate their own ‘cost-price squeeze’. If anything, it has further exacerbated the ‘treadmill effect’, whereby cost-efficiency is linked to technological innovation, which demands the generation of resources made possible only by further cost efficiency and further technological innovation”.

The 1968 Mansholt Plan of the EEC was adopted in 1972, shortly before Ireland’s entry. It was designed to bring about substantial fall in the numbers employed in farming, while ensuring that those remaining would be capable of earning comparable incomes to workers in industry and services. Landholding would be consolidated to create larger farms, with special aid provided for farmers who were regarded as capable of becoming commercially viable. When the Mansholt Plan was drafted, most of the EEC had enjoyed full employment. The European Commission was keen to encourage workers to move from agriculture into sectors of the economy that were experiencing labour shortages. It was obvious that Ireland was not a member when the plan was drafted, because there was little immediate prospect that industry could provide jobs for any substantial number of agricultural workers, and proposals for deliberate reduction in the farming population would have been unacceptable. The Farm Modernisation Scheme was introduced in 1974 and was much more acceptable to the farming organizations and people. Farmers were divided into three categories:


  • Development Farms, where the income per labour unit was below that of non-farm workers, but was capable of being increased; development farmers were required to draw up a six-year development plan with assistance of an agricultural adviser and to keep detailed accounts;
  • Commercial Farms, where income per labour unit was already above the average for non-farm workers;
  • Others – a category that included those with low income that were not capable of being increased.


All three could apply for grant assistance for land improvement, farm buildings, capital equipment, horticultural projects, and keeping accounts, although the rate of assistance varied between all three categories. Development farmers could also claim grants towards the cost of purchasing additional animals, provided they had drawn up a livestock development plan. The EEC met the cost of assisting development farmers, the cost of providing grants for commercial and ‘other’ farmers was met by the Irish government.  By 1982, over 115,000 farmers were participating in the scheme: 4,643 farmers were classified as commercial, 26,745 as development farmers, but the overwhelming majority of 84,000 were classified as other.

In 1975 the EEC introduced the Disadvantaged Area Scheme. It could have been regarded as ‘a U-turn’ by the then Fine Gael-Labour coalition government, since it offered incomes for non-viable farmers to remain on the land, whereas the original intention of the Mansholt Plan had been to encourage them to leave farming. The ‘U-turn’ was prompted by opposition to the original plan, and by the rising level of unemployment throughout the Community; by 1975 it was no longer desirable to encourage a mass exodus from farming. The introduction of the Disadvantaged Areas Scheme removed one of the major criticisms directed against the EEC farm policy – the absence of a regional dimension. The criticism was particularly pertinent in Ireland, where a pilot areas programme had been in operation in western counties since the 1960s’. In 1981 a special Western Development Programme was introduced for full time farmers, who were ineligible for the Farm Retirement Scheme and failed to qualify for development status.

In 1984 quota restrictions on EEC milk output were introduced in response to the problem of surpluses and their budgetary consequences. The operation of the scheme has had wide-ranging effects on agricultural patterns and markets and on linked activities. One of the features of it was a guaranteed price for milk producers throughout the EEC. This ultimately had it as its consequence a supply of milk and milk products throughout the EEC which was hugely in excess of the demand, resulting in massive costs to the community and severe downward pressure on milk prices. Attempts to deal with the problem in other ways having proved abortive, the scheme adopted in 1984 provided for a ceiling on milk production in each of the member States and the allocation to individual producers of a ceiling on their annual production. This was affected by the imposition of what was described as a “super levy” on any producer who exceeded the ceiling which would render uneconomic the production of any milk in excess of the relevant figure. This was done by the allocation of what were called “reference quantities” to the individual producers which became known as “quotas” and it will be seen that it was an essential part of the scheme that the total of the quotas in any member State, including Ireland, should not exceed the quota allocated by the EEC to the member State in question. The scheme was originally intended to run for five years up to the 31st March 1989, but was in fact successively extended up to the 31st March 1993. A new, but substantially similar, system was then adopted which expired on 31st March 2000. For Ireland it was a huge disappointment, once again we were being halted in our main farming enterprise. One of our main reasons for joining the EEC (expansion of our dairy industry) was under quota.

In 1985 the Farm Modernisation Scheme was replaced by a more flexible Farm Improvement Programme, where any low-income farmer who agreed to draft a development plan and to keep simplified accounts would qualify for investment aids. Installation Aid, Green Certs, followed. While the number of people farming with less than 30 acres (12 Hecatres) was more than halved between 1971 and 1986, most of the land was either let on a one year basis (con acre) or leased for a longer period. But our experience did not differ that much from other EU countries – the smaller operator tended to hold on to his property. A 1989 report by the National Economic And social council (NESC) identified three reasons for the absence of significant changes in ownership and control of farmland:


  1. The inadequate level of EEC funding for structural programmes, particularly when this was compared with the amount that was spent on price and market support;
  2. EU price and market support schemes, which may have exacerbated structural problems because large farmers benefited to a disproportionate extent;
  3. The absence of a national socio-structural policy, especially coherent land policy.


The 1987 Programme for National Recovery, which was drawn up. It followed lengthy discussions between government, farming organisations, industry and trade unions. It set out a strategy for transforming the Irish economy.  The EEC was conscious of the contrast between the booming US economy and the stagnant European economies, and it proposed the creation of a Single European Market by 1992, replicating trans–continental economy of the United States. This involved removing a range of non-tariff barriers to trade and competition within the community.  A significant number of countries who were party to the Uruguay Round of trade talks demanded that the EEC open up trade in agricultural produce.  They demanded that the EEC cease selling surplus agricultural produce on world markets at highly-subsidised prices. In 1988 the EC agreed to freeze its price support at 1984 level, and to reduce it in the long term. It also agreed to reduce barriers against imports of food from non-member countries. In 1999, negotiations on further reform of world trade in agriculture commenced under the World Trade Organisation (WTO), the successor organization to the GATT.

However, before all that, massive reforms of the CAP had been put in train. In 1992 Joe Walsh Minister for Agriculture told the Dail that there was an agreement regarding CAP reform, amongst the Council Members for Agriculture under Ray McSharry. The reforms involved a partial shift of the EU farm aid from market support to direct payments, or premia that would be targeted at farmers in greatest need. Prices were modified to favour smaller producers and disadvantaged regions. The 80 per cent payments to 20 per cent of farmers, was to be reversed. The quantity of beef, mutton, cereals oil seed qualifying for price support was capped, and the support price for cereals, beef and milk were reduced. Suckler premia, new male beef premia, and premia for extensive beef farming were brought in. Set aside (leaving land idle), land diverted to forestry, and a more generous scheme for farmer retirement were put in place. The Rural Environment Protection Scheme (REPS) was introduced in 1994. REPS offered farmers a fixed annual payment per hectare for five years, in return for a commitment to adopt environmentally –friendly farming practices.

By 1998 direct payments to farmers accounted for 56 per cent of aggregate farm income. By the following year 90 per cent of all payments were made within a specified time. The objectives of the Rural Environment Scheme were to promote:

  • Ways of using agricultural land which are compatible with the protection and improvement of the environment, biodiversity, the landscape and its features, climate change, natural resources, water quality, the soil and genetic diversity;
  • Environmentally-favourable farming systems;
  • The conservation of high nature-value farmed environments which are under threat;
  • To protect against abandonment;
  • To sustain the social fabric in rural communities;
  • To contribute to positive environmental management of farmed NATURA 2000 sites.

Plans were required to be drawn up by a REPS planner (An Agricultural Graduate), signed by the farmer and lodged in the local Department of Agriculture Office.

The Reps scheme finished in 2014.


The Lead up to Joining the EEC

Between 1961 and 1971 the number employed in Ireland’s agriculture and forestry fell by more than one quarter, and the pattern in other european countries indicated that this process would probaly continue. Although the EEC would reduce Ireland’s dependence on the UK market, and it promised substantially higher prices for farm produce, it would not resolve the long-term problems of structural adjustment and declining workforce in Irish farming. In December 1968 the EEC published the Mansholt Plan, which set out the long term programme for structural reform. The plan anticipated that 5 million people throughout the EEC would leave farming during the 1970s. EEC membership therefore presented a major challenge to the Department of Agriculture and to Irish farming, not least the need to bring about transformation of Irish agriculture that would be acceptable to Irish farmers and the wider community. In the early 1960s Britain and the EEC accounted for two-thirds of the world import of dairy products; three-quaters of world meat imports; one-third of sugar imports; and half of the world’s commercial imports of wheat. The Department of Agriculture believed that the best option for Ireland was to attach itself to ‘one of the price supported blocks’ – EEC or Britain; in order to achieve this, Ireland should be prepared to reduce tarriffs on manufactured goods in return for market concessions for agricultural produce. On the 21 January 1963, within days of de Gaulle’s veto on Britain’s membership, the committee of secretaries recommended that Ireland should explore the prospect of securing an Anglo Irish trade agreement.

Ireland had already failed to secure this type of agreement in 1959/60 and the prospects of an agreement on this occasion appeared even less promising. Bilateral trade talks between Denmark and Britain on the 13th March of 1963, removed the 15s per cwt duty that it had on its butter on account of it being a member of the European Free Trade Association(EFTA). This was a shock to Sean Lemass(Taoiseach) and Frank Aiken(Minister of External Affairs), who had a pre-arranged meeting five days later for special treatment of Irish Butter and Meat. Britain claimed that although it gave equal adavantage to Denmark, that the position would be controlled by quotas. Nagle of the Dept of Agricultural noted sometime  afterwards, that Ireland’s agricultural exports had deteriorated considerably, while Britain retained all its existing advantages in the Irish market. Denmark ended up getting quite a good quota for its butter. Later in the year Britain removed all import duties on butter irrespective of the country of origin. However, after three years negotiations an Anglo-Irish Free Trade Area agreement was signed between the two countries. Charles Haughey the then Minister for Agriculture adressed the Dail on 5 January 1966 and noted that prior to the agreement Ireland was in:

….. a very vulnerable position in respect of one of our most important

forms of economic activity – our agricultural exports …. the truth of

the matter is that during the past decade or so our Irish agricultural

production has been carried on under the shade of disorganised and

uncertain export markets.

.  The agreement according to Professor  Daly, was a triumph for Irish persistence over Britsih indifference. In Ireland the agreement was widely condemmed, ending Irish economic independence. Liam Cosgrave of Fine Gael, described it as an unbalanced agreement: ‘in return for limited and doubtful agricultuural gains virtually the entire Irish market for manufactured goods would be exposed to high powered competition from British Industry’.

In May 1966 Charles Haughey commissioned a study on introducing a ‘two tier milk price’. Lieutenant General M.J. Costello; E.A. Atwood, an economist attached to the Agricultural Research Institute; A.J. O’Reilly, the managring director of An Bord Bainne; Paddy O’Keeffe editor of the Irish Farmers Journal and J.J. Scully the Department officer in charge of western development, who were appointed to it reported back: ‘that the disadvantages of a two-tier milk price outweighed the advantages. If the governmeent wished to provide special assistance to small farmers, they recommended that it should be done through a bonus incentive scheme for low-income farmers who drew up a farm development plan. This plan would apply to all farm enterprises. To qualify, a dairy farmer would have to produce a plan showing that he/she was in a position to raise his output to at least 7000 gallons of quality milk’. A small farm incentive bonus scheme was introduced two years later based on the ideas that the commission put forward. However, a two-tier milk price was also introduced in the same year – giving suppliers of up to 7,000 gallons an extra one penny per gallon. This was one of the main aims of the Irish Creamery Milk Suppliers Association (ICMSA), whereas the IFA(NFA) were totally opposed to it 

By the late 60s’ the UK and the US were main countries for export of beef and Continental Europe exports had almost disappeared.  In April 1968 the Agricultural Adjustment Unit at the University of Newcastle-on-Tyne organised a conference on ‘Irish Agriculture in a Changing World’. In a postscript to a book of the same name, which contained the conference papers, the editors, I.F. Baillie and Dr. Seamus Sheehy remarked:

As speaker succeeded speaker a sense of gloom and pessimism seemed to settle over the conference. While inevitability of change and the need for readjustment were accepted, there was a feeling of helplessness. Ireland appeared to be trapped by remorseless economic and social pressures from within and without, and little hope was seen of changing the direction of existing policies or of influencing the formulation of new policies’.

By 1970 Britain was on the economic war path once more – bending to pressure from Denmark, New Zealnd and their own farmers. Again after lengthy arguments with the Irish Government, they announced that they were introducing a variable import levies on imports of cattle, beef, mutton, lamb and milk products other than butter and cheese which were already controlled by quota; even though it was pointed out to them that ‘the deficit in the Irish trade balance with Britain had been increasing for several years, which suggested that Britain had been the main beneficiary from the 1965 trade agreement’. Obviously, the principle of self-sufficiency laid-down in the Agriculture Act 1947, was still the guiding principle for the United Kingdom government. The Act continued to give tremendous protection to its own farmers increased production, while getting non British countries support a cheap food policy for its citizens. By 1970 Irish government price subsidies of dairy products had increased to £30.5 million from £4.7 million in 1960/1.

Between 1960 and 1968 family farm income rose by 52 per cent, the number of family farms fell by 17 per cent. The Annual Report of the Minister of Agriculture and Fisheries in 1973/74 remarked that:

Over the past decade agricultural production had tended to become more specialised, both at the industry level with the growing concentration on cattle and milk and at individual farm enterprise. This is part of the general move towards a commercial system of agricultural production. It is evident that the development of more intensive farm enterprises will proceed further in the coming years.

Until Ireland joined the EEC in January 1973, agricultural policy was formulated exclusively by the government on the advice of the Minsister of Agriculture and his Department. Of course policy decisions had to take account conditions in the major markets, particularly the United Kingdom. Farm organisations also gained extra influence over agricultural policy since the previous decade.