by Gary Murphy
There is no utopia
By early 1960 the Irish farming community was very much alive to the benefits of participation in an EEC Common Agricultural Policy (CAP). In July of that year, the NFA issued a statement in which it requested the Government consider becoming a partner in the EEC. This move was provoked by its disappointment at the failure to improve the position of Irish farming during the review of the Anglo-Irish trade agreement of April 1960. The secretaries of Finance and Agriculture at the time have conceded that this agreement was somewhat of a disappointment, though both insist that it was the best that could have been achieved in the circumstances.110The NFA, most certainly, did not take the same view. Not only did it urge consideration of the EEC option, it also suggested that Ireland should join before Britain, and pursue its application whether Britain was admitted or not. The NFA considered that the historic trading link with Britain had been weakened, and that its advantage to Irish farmers had been eroded. CAP offered guaranteed high prices, access to an expanded consumer market and new trading opportunities. The NFA also suggested that Irish industry would be no worse off inside the EEC than it would be in the European Free Trade Area, and would certainly be better off in some trading bloc than persisting with isolationism.111In essence, what the farming lobby was interested in was the maintenance of its own income without consideration of other aspects of economic policy. There were two serious flaws in the NFA’s argument. The first was central to the question of when and on what terms Ireland would join the EEC. Ireland’s accession to the EEC would almost certainly be followed immediately by the abrogation of the Anglo-Irish trade agreements and the consequential elimination of the preferences, both industrial and agricultural, that Ireland enjoyed in the British market. The acquisition of any corresponding preferences in the EEC would only be achieved gradually over a transitional period that might be as long as ten years; thus, the intervening period would be fraught with difficulty, particularly for Irish industry. Secondly, there was the certainty that if Ireland joined the Common Market and raised a common external tariff against Britain, industrial exports to Britain would be penalised in a way that could not easily be compensated for through increased exports to the EEC.
For its part, the NFA could only see two possible disadvantages to joining the EEC: primarily, there was the traditional and close trading relations between Ireland and Britain. The failure of the Anglo-Irish trade agreement to offer due recognition to Irish agriculture, despite Ireland’s almost complete dependence on this sector of the economy, made this special relationship redundant in the eyes of the NFA. Secondly, there was the problem that joining the EEC could mean that British industrial supremacy – valued at about £100 million a year in the Irish market – might be replaced by the EEC but with no greater benefit for the Irish economy.112The NFA, however, believed that returns from agriculture and other exports to EEC countries would increase substantially both in volume and in value; thus, entry into the EEC would offset any setbacks incurred by the loss of the British market. The farming lobby was strong throughout Europe at the time, and the NFA was emulating its European counterparts in advocating entry into the EEC as a means of harmonising access to the European market for all farmers.113
In response to the NFA statement, the Department of Agriculture warned the Government that there were disadvantages – which were more serious than the NFA had intimated – as well as advantages to joining the EEC. Among advantages for Irish farmers was the price-support mechanism offered by the EEC to protect farm prices from world competition, as well as the general principle that farm incomes would be maintained at specified levels. This would benefit Irish farmers as their price levels were lower than those prevailing within the Community. In specific areas, Irish farmers could hope to benefit from price adjustments elsewhere; Irish dairy produce might be competitive price-wise, but this would have to be considered in the context of surplus production within the EEC. In contrast to these advantages, the department suggested that Irish beef would be placed at a disadvantage in the British market, and that the British might not continue the favourable payments agreed for Irish cattle. In addition, continental markets were unlikely to absorb the surplus beef from Ireland. Entry into the EEC would also affect policy-making, as the bilateral aspects of the relationship with Britain would end, to be substituted by an expanded EEC within which the Irish Government would be much weaker. There were also social problems to consider, as there was every likelihood that the migration of labour from agriculture would continue, if not accelerate, under the EEC. The department concluded on a rather pessimistic note:
In the absence of a large and growing home market, what is necessary from the farmer’s point of view is to become associated with an industrial economy strong enough to give agricultural incomes the necessary degree of support and stability. It seems unrealistic to suppose that this can be achieved in the absence of some special economic understanding with Britain, whatever solution may ultimately be found for the Six-Seven problem.114
The Department of Agriculture was not, however, content to leave things as they stood, and was favourable towards entry as long as Britain entered as well. While the Government refused to be drawn on the question of its position if Britain did not secure membership, it is clear that the farming organisations were of the opinion that Ireland should nevertheless continue with its application. The department most certainly did not take such a view; it felt that the arguments advanced by the NFA for joining the EEC could be repeated with equal validity when advocating a similar arrangement with Britain. It was this appraisal of the economic situation that led the department in April 1959 to put forward the proposal for closer relations with Britain that were designed to tie Irish agriculture to British-supported prices over a wider front. The NFA, guided by similar considerations, was opting for integration with the EEC. In the view of the NFA, it had so far proved impracticable to get from Britain the kind of arrangement that Irish agriculture needed. For the department, it was appropriate in the circumstances that it should look to the country that took 80 per cent of Irish exports for such an arrangement.115
Fundamentally, the NFA agreed with the department’s view that what agriculture required was to become associated with an industrial economy strong enough to give agricultural incomes the necessary degree of support and stability. The essential difference between the two bodies – the NFA and the Department of Agriculture – was the economy each wished to be associated with. Once again, the department displayed a cautious nature, declaring:
There are few grounds for hoping that any worthwhile expansion of our agriculture can take place on the basis of compromise solutions between the six and seven which would not provide for a large degree of incorporation of our agriculture in the support arrangements of Britain or the Common Market. Tariff quotas or marginal increases in trade at world prices, even if they could be obtained, might be helpful but would not alter the fundamental situation of our agriculture.116
The NFA, however, was much more insistent that the Common Market was the place to be. Greene told an Institute of Public Administration conference on higher administration studies in late 1961 that:
One is left with the impression that without becoming a partner in a larger, viable economic unit, that will seek to cater for agriculture in its wider community, there is little to be optimistic about for our agriculture over the next ten years. At all costs we must avoid the Common Market being used and becoming a fashion as the cure-all for our agricultural ills; there is no utopia for agriculture in the Common Market. All that can be said is that the Common Market will provide us with a greater opportunity … I think I would be right in saying that without the advent of the Common Market, the prospect facing Irish agriculture over the next ten years is pretty hopeless.117
A crucial meeting had been held the previous year in the Taoiseach’s office between the Departments of Agriculture, Industry and Commerce and the Taoiseach, and the NFA, which was represented by Greene a
nd Louis Smith. The primary aim of this encounter was to formulate a coherent position on the issue of the EEC satisfactory to both sides. The meeting resulted in deadlock. For the NFA, Greene felt that the ideal position for Ireland would be some sort of close agricultural association with Britain that would ensure that a worthwhile market was provided for all that was produced. This was clearly a utopian dream, and not realisable. The 1960 trade agreement with Britain did not bring any substantive change in agricultural relations, and Britain seemed committed to a cheap-food policy with high price-supports for its farmers. As far as the NFA was concerned, there was therefore no future in Ireland selling its agricultural surplus to Britain at a low price, and it was clear that the Irish Government could not afford the level of agricultural price support maintained in Britain. To the NFA, the situation was clear-cut:
Agricultural incomes in Ireland were falling, costs were rising, and a number of farmers including big ones were selling out. By contrast agricultural output in Northern Ireland had increased very substantially … As Britain had refused to give us a reasonable agricultural deal we would be better off in the EEC where we could participate in all the benefits of the CAP which was based on the idea of equalising incomes of farmers with those of other sectors. Furthermore this would give us a strong bargaining position in relation to Britain.118
When questioned by the Taoiseach as to the seriousness of this proposal, Greene replied that it was a very serious and well-thought-out proposition around which the farming lobby was united. Lemass, on the other hand, spelled out the problems that EEC membership without the accession of Britain would have for the country. He proclaimed that he saw no reason why greater agricultural efficiency should not be developed in the country, and that while reasonable prices were important, they were not the only factor for improving the economic position of farmers. For Lemass, whether Ireland joined the EEC in the near future or not, increased farmer efficiency and productivity would have to be forthcoming from the farming community. Paddy Smith pointed out that the Government had not ‘cried halt’ to increases in production, and it had not said the limit of subsidisation had been reached. The NFA, however, was still to be convinced.119
For the Government, the economic argument for joining the EEC was paramount. As T.K. Whitaker put it:
We have applied for membership of the EEC because it would be economic disaster for us to be outside of the community if Britain is in it. We cannot afford to have our advantageous position in the British market turned into one of exclusion by a tariff wall, particularly as our chief competitors would be inside the wall.120
While the NFA disagreed with the Government over the reason for applying, it was pleased when the Government decided to press ahead with its application in July 1961.
El Dorado
At this stage, the key economic focus for the Irish Government remained agriculture, despite some recent commitments to industrial development. This point was made both internationally and at home. The Government’s formal application paper in January 1962 proclaimed that ‘for Ireland agriculture will always be of major importance. We are naturally anxious that through membership of the European Economic Community, Ireland should be able to look forward to a balanced development of agriculture and industry.’121Lemass had also made this point over a year earlier when he told the Dáil:
It is important to have it fully appreciated that the Government have never treated, and do not now treat, the interests of manufacturing industry as the predominant consideration in their approach to the question of association with either of the European trading groups, or in their trading policy generally, in the sense of having failed to attach due importance to agricultural interests.122
While industry was constantly discussed at official level, the main objective of government policy in the early 1960s was to obtain favourable membership of the EEC and to secure, if possible, continuing access to the British market for agricultural exports. This was made explicit in Lemass’ statement to the Council of Ministers of the EEC in January 1962:
Because of the close inter-relationship of the economy of Ireland and that of the United Kingdom, and the vital interest of Ireland in agricultural trade, the Irish Government would wish to have the discussions for the admission of Ireland to the Community completed at the same time as those for the United Kingdom.123
For the NFA, entry into the EEC would, it believed, alleviate the discrepancies between industrial and agricultural incomes in Ireland, and ensure a rise in living standards both in rural and urban Ireland. To Rickard Deasy, who had become the second president of the NFA in January 1962, the balancing of incomes between agriculture and industry in the early 1960s had become a matter of ‘dominant urgency’.124He claimed that it was irrational to ignore, as the Government was doing, the fact that:
The prosperity of the nearly 40 per cent of our population who are engaged in agriculture is a major factor in determining the buoyancy of the home market for all our products both industrial and agricultural. It is absurd to pretend – against a background of falling prices for almost all agricultural products, round after round of wage increases and shorter working hours awarded to other sections – that this does not inevitably worsen the relative position of our greatest industry – farming.125
He calculated that it would take a Government subsidy of £83 million to restore agriculture to its 1953 relationship with other sectors of the Irish economic community. The agricultural lobby was worried by the eighth round of wage increases, which had been concluded in December 1961 by the Government, ICTU and the FUE. A campaign orchestrated by Deasy saw telegrams flood into the Department of Finance demanding that farmers’ incomes be increased in line with other sections of the wider Irish community.126In essence, the NFA feared that agricultural incomes would fall further behind the rest of the community, and complained to the Government that every other class in the community was getting some improvement in income except the farmers. Furthermore, the farming community felt that the trade union movement had usurped its position in negotiating a further round of wage increases with the Government before it had an opportunity to advance a claim for greater state subsidisation. Moreover, the NFA was deeply suspicious of the urban Lemass, who had spent all his political life in Industry and Commerce, and who it regarded as no friend of the agricultural community.
The NFA’s demand for a subsidy of £83 million gave rise to indignation in parts of the civil service. A Department of Finance memorandum argued:
It might even be said that the NFA claim goes beyond the socialistic doctrine ‘from each according to his ability, to each according to his needs’ and is based on a false notion of what is morally justifiable to transfer from one section of the community to another.127
The Central Statistics Office maintained that ‘the Irish farmer is no worse off as compared with non-farm income than Belgian farmers and a lot better off than United States farmers’,128while the Department of Agriculture made it clear that ‘the NFA analysis of the situation is very faulty indeed, and that their requests are most extravagant’.129The Department of External Affairs was worried that if the Government assumed it had an obligation to ensure that the level of income of the different sections of the community must be more or less equal, it would involve ‘transforming our economy into something approaching a totalitarian system where the state is all-powerful and the individual secondary’. At an economic level, External Affairs was critical of the NFA for postulating that the EEC represented:
… as it were, an El Dorado and that the farming community here is entitled to claim all the advantages which any member of the Community may at present give to its farmers. This is quite a serious matter and unless the NFA quickly realise the fact that they must face keen and probably ruthless competition within the Community, their members are likely to suffer grave consequences.130
Lemass, in response, accepted that developments adverse to farmers had taken place. He argued at a meeting with the NFA in
March 1962, however, that some of these could be countered by increased productivity. He did offer the farmers something of an olive branch by stating that the Government would review the provisions made for the farming community in light of the overall financial situation. This would ascertain whether productivity could be increased, and whether its direction could, with advantage, be changed. The NFA claimed in reply that its call for the subsidy was formulated at the time of the electricians’ strike in September 1961 in the hope that its demand would be seen as a restraining influence on other sectors contemplating claims for higher incomes. This, however, was not the case, and the NFA – while sticking to its figure of £83 million – accepted that indiscriminate price support was not a practicable position.131
At this meeting, the NFA also raised the subject of relations with the Department of Agriculture. The NFA told Lemass bluntly that it deplored the unsatisfactory relations that existed between the two parties, and felt keenly that this should be remedied. As the NFA visualised it, the department and the NFA ought to pull together in harness, and the individual farmer should be convinced that the department was doing its best for him even though he might not be satisfied with the result at any particular time.132Lemass, however, was staunchly protective of the Department of Agriculture, and said that any suggestion that the department was not pulling its full weight in the interest of the agricultural sector was entirely without foundation. The Irish Press put the case for the Government:
To be sure the Government can always be counted on to give the farmers’ case a sympathetic hearing but then they have to think of the health of the economy as a whole. But for the protection given to agriculture in the home market, the cost of living would be considerably lower. In farming as in everything else, we must aim at greater productivity. Protection has served the Irish farmer a very valuable home market but for any real increase in agricultural productivity the farmers must look beyond their own shores.133