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Dáil Éireann debate -
Wednesday, 26 May 2010

Vol. 710 No. 2

Other Questions (Resumed)

Common Agricultural Policy

Niall Blaney

Question:

34 Deputy Niall Blaney asked the Minister for Agriculture; Fisheries and Food his views on whether decoupled direct payments remain the best way of underpinning the incomes of small family farms; and if he will make a statement on the matter. [21856/10]

At a recent special debate in the Seanad on the future of the CAP post-2013, I set out some of my views on the need to ensure security of food supply and to maintain family farming in Europe. It must be borne in mind that negotiations on the future on the CAP post-2013 are taking place against the background of an EU budget review and a new EU financial perspective for the period 2014 to 2020. Ireland will play a central and very active role in these negotiations and will be stressing the importance of a strong and properly resourced CAP in the future. The major issue at present is the amount of funding that will be available for the CAP after 2013, which in turn will put pressure on the share of the EU budget going to agriculture and the share going to Irish agriculture.

With regard to the single farm payment system, I do not see any compelling reason to change from the current historic model for determining single payments. The historical model has a distinct advantage in linking the payment with the level of farming activity, albeit farming activity in 2000 to 2002. I have made my views on the benefits of the historic model clear at meetings of the Council of Ministers and in bilateral discussions with other member states and the Commission. However, Ireland is in a small minority of member states who take this view while I am prepared to look at alternatives, particularly if other countries move from the historic camp. There is a need, however, to find a basis that is acceptable and fair to all member states and one which meets our objectives of improved competitiveness and sustainability.

I consider that maintaining a strong decoupled direct payments system is fundamental to maintaining and stabilising farm incomes, especially at times of increased market volatility. Direct payments remain the best way of underpinning the incomes of small family farms, while allowing them respond to market opportunities. However, there is also a need to retain the capacity and flexibility to react promptly and effectively to market instability and price volatility and therefore to maintain some level of market supports.

The core purpose of rural development policy is to support farmers in developing their productive capacity while securing the environment and ensuring the well-being of the wider rural society. The continuation of a two-pillar system includes the recently revised rural development programme which focuses on competitiveness in the form of targeted investments and sustainability in the form of an agri-environment scheme with benefits for all.

I thank the Minister for his reply. What timeframe does he envisage for the current CAP negotiations? I ask him to outline Ireland's role in those discussions. What are the main issues in these negotiations?

With regard to timing, the Commission is expected to issue a formal communication later this year. Prior to the formation of the new Commission, it was expected during the time of Commissioner Mariann Fischer Boel that the communication would issue in the middle of this year. However, the Commission was delayed in being established by a number of months. It was expected to take office in the middle of November but it took office on 15 February, therefore, the timeline has been delayed by a few months. Therefore, we are talking about having a formal communication from the Commission later this year. The formal legal text will follow in mid-2011. Based on previous negotiations, we can be certain that those communications will not be issued in advance of the expected deadlines. They generally run much later.

With regard to the discussions to date, the last four EU Presidencies have held policy debates on the future of the Common Agricultural Policy. France had a general discussion in September 2008 on policy orientation. The Czech Republic focused on the single payment issues, while Sweden dealt with rural development. Meanwhile, Spain — the current holders of the Presidency, up to the end of June — dealt with market management.

Ireland has been active in all the negotiations. In mid-December 2009, we were one of the leading members in putting together a group of 22 member states who signed a declaration in Paris. At that time, we outlined our determination to ensure that the CAP would be adequately resourced. In the meantime, I have had several bilateral discussions with other agriculture Ministers. There will be an important official meeting to discuss those issues in my Department tomorrow, featuring the most senior civil servants from five member states.

The Minister will be aware that 90,000 farmers in Ireland receive a payment of €10,000 or less. For example, last year, the average beef income was approximately €13,000. Therefore, about 75% of income is coming from the single farm payment.

The Deputy is supposed to be asking the question, not answering it.

In that context, has the Minister given any thought to establishing a minimum payment? The Commissioner's view is that the historical model is unsustainable, which suggests that we at least need to tweak, modify or change the current model in some way. Does the Minister support the principle of a minimum payment to retain as many farmers as possible on the land? What is his view on that?

I share the view that we should be supporting active farmers. Whatever about drawing a minimum, I know where I would draw a maximum line. I am not going to say where, however.

The Minister cannot tease us like that.

I said we would have discussions in regard to models that we have done, so we will let the Deputy in on some of the thinking. However, there are always calls to public representatives' offices when the figures are published, which include some people with very large payments. I believe there should be a cut-off point and it should be directed more towards active farmers. There is a good case to be made for orienting it towards the lower-income farmer.

Earlier, the Minister referred to the consultation process and said that the Commission will publish documentation. Can Members of this House be provided with an insight into the views of the Irish permanent representation in Brussels? In that way we could be made aware of how the process is progressing.

There is absolutely no problem with that. The Irish permanent representation in Brussels will be echoing our views. On both ministerial and official level, the Department has ongoing contacts, including dialogue and briefings, with MEPs of all parties on a weekly basis. In addition, there is interaction between our MEPs and our permanent representatives in Brussels. I understand that our officials provide useful material to all MEPs concerning debates in the European Parliament. That material is readily available.

Does the Minister accept that without the single payment area aid, farmers in constituencies such as ours would have little income, if any? This is an extremely serious issue. The Minister said he has met other EU Ministers for agriculture, but will he make every effort to form a group to guarantee the single premium, rather than some other funding that would not be as beneficial to Irish farmers?

As I said earlier in response to Deputy Blaney's question, Ireland was one of the very active members in putting this particular group together, along with France, Germany and Austria. Last December, we got 22 of the 27 member states to sign up to the need for proper CAP resources. Within that group of 22 not everyone shares the same view on the direct payments system, but we are working on this with a number of countries. I mentioned earlier that an official meeting is taking place tomorrow, in which I will be participating. Apart from Council of Ministers meetings, I have had numerous bilateral meetings with other Ministers. Such meetings will continue in June, as well as in July when the Dáil is in recess.

The Minister will not get all of it.

Neither will the Deputy, but he should.

Single Farm Payment Scheme

Pat Rabbitte

Question:

35 Deputy Pat Rabbitte asked the Minister for Agriculture; Fisheries and Food when he will introduce the new dairy hygiene, sheep fencing and water harvesting grant aid funded from unused single farm payment funds; and if he will make a statement on the matter. [21991/10]

As part of proposals on the use of unspent single payment scheme and modulation funds and the European economic recovery programme, I announced in 2009 that, subject to the receipt of EU Commission approval, I intended to introduce support for a number of specific categories of farmer, which would be focused on supporting productive investment.

The measures include a scheme for dairy farmers to make the necessary investment to adjust to expanding dairy opportunities and promote the operation of cost-effective commercial operations; aid for sheep fencing and handling facilities to assist sheep farmers in reducing labour input in a vulnerable sector; aid for farmers for water harvesting and conservation equipment, which will reduce water costs on farms; animal welfare grants for pig producers to assist in the conversion to loose housing for sows, and for poultry producers to assist in the conversion to enriched cages, free-range or barn systems.

EU Commission approval for the above-mentioned schemes has recently been received and, due to the relatively short timeframes for completion of the investment works concerned, my priority is to introduce the sow welfare and poultry welfare schemes first. Arrangements will then be made to introduce the three remaining schemes.

Discussions are ongoing with the relevant farming organisations in regard to the terms and conditions of the schemes concerned. These should be completed in the near future and I hope to be in a position to make an announcement regarding the sow welfare and poultry welfare schemes at that stage, which will be very shortly.

I did not ask about the sows or the poultry, although I am glad to hear there is something in the offing on those points. What is the exact timeframe for the Minister to conclude schemes for dairy hygiene, sheep fencing and water harvesting? On what date will those schemes come into effect?

I introduced the other two schemes because they are the ones with the nearest deadline, which must have their systems changed. That is why I am prioritising those two particular schemes. I hope to launch them before mid-June. We have been involved in discussions with the relevant representative groups and farming organisations to ensure that the technical details of these schemes are as suitable as possible for individual farmers in the pig and poultry sectors. I do not have a date for the commencement of the other measures. There are financial implications, so next year's Estimates will determine how soon we will be in a position to roll out the other three schemes.

I welcome the fact that the Minister mentioned both the pig and poultry sectors. However, there is a further problem with these sectors that must be dealt with, which is the availability of finance from banking institutions. Some extremely good pig and poultry producers are finding it very difficult to obtain the necessary matching funds to ensure that they can progress.

I am not sure if that question is within the Minister's purview, but he is perfectly entitled to answer it.

For the information of the House — and I have mentioned this privately to Deputy Crawford — within the last two weeks I met with the chief agricultural advisers of all the main banks, as well as their support staff. I outlined the position regarding the roll-out of these schemes, particular for poultry and pigs. I asked that the relevant credit be put in place to ensure that people who need to upgrade their systems to remain in business will be able to do so. Funding should be put in place to allow them to do that. I think they accepted the point that it is a worthwhile investment and that a good financial package is coming from our point of view as well. I have asked them to give fair and urgent consideration to ensuring that farmers can avail of those two schemes.

Forestry Sector

Frank Feighan

Question:

36 Deputy Frank Feighan asked the Minister for Agriculture; Fisheries and Food if he will comment on the management of forestry thinning in the private forest sector; and if he will make a statement on the matter. [22045/10]

My Department actively encourages forest owners to thin their crops. Thinning improves the quality of final crop trees and can provide a source of intermediate income for forest owners.

In recent years my Department, in conjunction with COFORD, has funded a number of projects to encourage thinning in the private forestry sector and to develop markets for the small diameter timber produced by thinning, particularly to the renewable energy sector where there is an increasing demand for energy wood in the form of small diameter logs from thinning operations. This demand has stimulated increased management and timber output from private forests.

My Department has also provided start-up funding to a number of forest owner-producer groups to encourage private forest owners to work collectively in the management of their forests and marketing of forest products, with a particular emphasis on thinning operations. In addition, the forest road scheme operated by my Department provides grant aid for the construction of forest roads which will facilitate the extraction of timber from thinnings in private forests in a cost-effective manner. The scheme is now open and applications are currently being processed.

I thank the Minister of State for his reply. The management of forestry thinnings in the private forestry sector received a big set-back in the budget this year when there was an 8% reduction in forestry premia.

The Deputy should ask a question.

The funding was guaranteed to be untouched for 20 years yet the guarantee fell by the wayside.

Does the Deputy have a question?

The Minister of State referred to the construction of roads to accommodate the thinning of private forests. How soon will the grants be available for the construction of those roads? It is of paramount importance as well that we restore the confidence of the people who got involved in the private forestry sector and that we alleviate the problems that have occurred.

I acknowledge the point the Deputy made in the first instance. We accept there was a cut in that regard. The forest road scheme is now open for grant applications and they are currently being processed. I do not have a date for when the processing of applications will be completed. As the Deputy is aware, there is an increased opportunity for those involved in the forestry sector to use their thinnings for the biomass and other markets such as SmartPly and Medite. Opportunities exist and we hope people will take the opportunity to put in roads and follow through with thinning their forests.

There is a need for joined-up thinking. The Minister of State referred to Medite. If he is not aware yet of concern he will be in the next few days following the announcement by the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, about the tariff payable on energy generated from biomass. Coillte is concerned that the thinnings, and for want of a better term the tops and tails of the forestry product, which is now winding its way to Medite may well be redirected into bio-mass, in particular as a replacement fuel in peat burning stations. That has real consequences for the long-term viability of the plant in Clonmel. The law of unintended consequences applies in this case. I urge the Minister of State to be aware of that and to consult with Coillte. It was important that the Minister, Deputy Ryan, made the announcement as we needed an incentive in that regard but this was an unintended consequence and the Department should be aware of the need to address it.

I am aware of it. I spoke as recently as last night to SmartPly. I got the opportunity to visit the plant last week as it is down the road in New Ross in my neighbourhood.

There is a positive and a negative in this instance. It is a good news story for farmers in that it will put a floor on the price of pulp wood, however, there are difficulties in other respects. In my role as Minister of State with responsibility for forestry I am concerned about the possibility of virgin fibre being used. We want trees to go through their full life rather than for forests to be cut down and burnt, which would mean the end of the trees. We would prefer to see trees go through the sawmill process and the timber being used for other products which means add-on value through the process. This is an issue that is of concern to me in the forestry sector. I will keep a close eye on matters. I intend to speak to the Minister, Deputy Ryan, on the matter. I am fully aware of it and I have had a long discussion about it with my Department this morning.

Can the Minister of State give any indication of when the 8% reduction in the forestry premia will be restored?

No, I cannot. That is a matter for the Department of Finance. I am aware of the issue. I was lobbied on it by people in my constituency following the budget last year. It caused a lot of difficulty for some people who had committed to the forestry scheme.

In the past 40 years forestry in this country has increased from 1% cover to 10% cover. People were very forward thinking in the 1970s and 1980s when they planted many of the existing forests. I am aware of the difficulty the decision caused to some individuals who were reliant on their income in that regard. I will raise the matter with the Minister for Finance but I cannot give any indication of when it is likely to happen.

Written Answers follow Adjournment Debate.

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