I thank the Chairman for giving me the opportunity to address the committee. I would like to refer to the Department’s appropriation account for 2018, and chapter 10 of the report on the accounts of the public service 2018 on forestry grants.
I will begin with the appropriation account. The Department’s gross Estimate for 2018 was €1.586 billion. This included a carry-over of capital savings of €23.8 million from 2017. In all, this represented an overall increase of €97 million over the corresponding figure for 2017. The gross outturn was €1.546 billion, an increase of €158 million over 2017. The Department received a technical Supplementary Estimate to further address emerging priorities. This provided extra funding which was almost entirely offset by additional appropriations-in-aid and also facilitated the transfer of funds within the Vote. I will refer to this in my later remarks.
The Department also receives appropriations-in-aid which are unusually prominent in 2018 in the overall financial outcome. These principally comprise EU receipts in respect of rural development, seafood development and animal disease programmes. In 2018, these receipts amounted to €471.8 million, some €160 million more than the estimate of €312 million. The difference was substantially because of the timing of two large payments from the EU in respect of its co-funding of rural development programme schemes. One of these, amounting to approximately €82 million, was expected in December 2017 but was not received until January 2018. A second receipt, expected in January 2019, was received in December 2018.
Turning back to expenditure, the Department’s Vote is divided into four programmes, each representing a key policy priority. Programme A relates to the food safety, animal health and welfare and plant health programmes that underpin our agrifood sector. These include disease eradication programmes such as those relating to tuberculosis, TB, or transmissable spongiform encephalopathies, TSEs, testing for residues in food products, on-farm controls, plant protection controls and other such headings. Programme expenditure under this heading, excluding staff and administration costs, amounted to just under €87 million in 2018. There was a minimal saving of €200,000 compared with the budgeted amount. I will comment on staff costs here because such costs constitute almost half of the expenditure on this programme and this programme accounts for more than half of the Department’s total payroll. This reflects the very strong investment in the skills, expertise and commitment of our staff who are the foundation of our food safety regime upon which our agrifood sector is so dependent.
Programme B covers our major farm support schemes other than the basic payment scheme, which is entirely EU funded. By and large, these schemes are intended to encourage sustainable agricultural practices and most of them, other than the forestry programme, receive co-funding from the EU under the rural development programme. The final allocation for these schemes in 2018, following a Supplementary Estimate, came to just over €849 million. This included an additional €23 million to agri-environmental schemes and €7 million for fodder schemes operated within the "other schemes" subhead provided through the Supplementary Estimate.
As members will recall, a range of severe weather conditions impacted severely on grass growth and feed supply and increased input costs for many livestock producers. To help alleviate this situation, the standard 75% advance payment on certain EU co-funded schemes was increased to 85% and special national funded schemes were put in place to help boost the supply of fodder. In 2018, almost 50,000 people participated in our GLAS scheme, more than 24,000 participated in the beef data and genomics scheme, and the sheep welfare and knowledge transfer schemes were launched. Other co-funded schemes included the areas of natural constraint scheme, the targeted agricultural modernisation scheme, TAMS, farm investment scheme and the organics scheme. The forestry programme alone among these schemes is 100% nationally funded.
The eventual outturn for this programme was €823 million. This was more than €97 million greater than the previous year and reflects the mature stage we have reached in the rural development programme which has helped to allow us make a large portion of scheme year payments within the same the calendar year.
On the capital side, the TAMS investment scheme saw a much improved drawdown, with €66.8 million expended, which is double the 2017 figure and reflected good levels of investment in on farm facilities, despite the difficult year for many producers. Unfortunately, expenditure on the forestry programme was lower than hoped in 2018 and this remains a continuing but critically important challenge. I will comment further in my remarks on the specific chapter on forestry grants in the report on the accounts of the public service 2018. The capital carry-over into 2019 from 2018 was largely drawn from the forestry savings in 2018.
Programme C, policy and strategy, includes expenditure on research and training on a number of food support schemes, as well as grants to some of our State agencies. It also included a number additional measures designed to help build resilience in the sector confronted by Brexit. The largest of these was the Brexit response loan scheme where a €25 million contribution was made to a scheme jointly established by the Department of Agriculture, Food and the Marine and the Department of Business, Enterprise and Innovation, in conjunction with the Strategic Banking Corporation of Ireland.
The Supplementary Estimate was also availed of to transfer relatively small savings which emerged in various parts of the Vote to respond to a specific request from the World Food Programme for the earliest possible release of the first element of funding under our 2019-21 strategic partnership agreement. This resulted in payments of €19 million to the World Food Programme in 2018. Overall, the programme C outturn of €370 million was €5 million less than the voted allocation.
Programme D relates to the seafood sector. Expenditure under the programme part of this heading in 2018 amounted to €118 million, 11% ahead of 2017, and included some €24.6 million in the upgrading and development of fisheries harbours. Approximately 88% of fish landed in Ireland are landed into the six centres owned by the Department. Programme D also includes €8 million under the seafood development programme, and grants-in-aid to the Marine Institute, Bord Iascaigh Mhara, BIM, and the Sea-Fisheries Protection Authority, SFPA. This programme also funded expenditure of almost €10 million on the substantive completion of work on the remediation of the east tip project on Haulbowline Island.
As has been mentioned already, the Comptroller and Auditor General recently concluded an examination of forestry grants, the results of which have formed the basis of a chapter in the report on the accounts of the public service for 2018. The examination focused on the background to the forestry programme and its objectives, the outturn and activity of the programme, forestry grants in place and their administration. The value for money aspects of the forestry programme are particularly important given that it is entirely Exchequer funded. The report made two main recommendations and my responses to those recommendations are included in the chapter. In summary, I fully agree with both recommendations which relate to cost-benefit analysis, forestry targets and the impacts of changes to grant rates. I very much welcome this analysis by the Comptroller and Auditor General and found it to be an extremely useful exercise in reviewing our practices and procedures on the payments of forestry grants. The programme also raises broader policy questions which will be considered in the design of the next forestry programme.
The mid-term review of the current forestry programme, which took place in 2018, introduced several changes, including increased grant and premium rates, with the highest increases reserved for broadleaf categories. This has already resulted in an increase in the proportion of broadleaves planted, which reached 27% in the year following the changes, compared with 21% in 2017.
A cost-benefit analysis will be undertaken as part of the development of the new forestry programme 2021-27, which is in line with the public spending code. Preparation for the new programme is commencing and is dependent on the EU timeline for finalising the CAP regulations and the new state aid rules. All aspects of the current programme will be reviewed as part of the development of the new programme. The overall aim of the programme is to increase the national afforestation rate, which is currently 11%, well below the EU average of 43%. The climate action plan 2019 outlined the ambitious target of planting 8,000 ha of new afforestation each year. The new programme, in tandem with the next Common Agricultural Policy, CAP, strategic plan for Ireland, will be focused on how to deliver on the goals of the climate action plan in particular.
I thank the Chairman and the members of the committee for their attention and welcome any follow-up questions.