Last night I referred to the payment which would be made between now and the end of 1985 to farmers, especially those in disadvantaged areas. Some 20,000 flockowners in the 1985 sheep headage scheme in the disadvantaged areas are now being paid £10 million at the rate of £9.50 per ewe. They could get another £7 million if the EC fixes the amount of the 30 per cent advance of the 1985 ewe premium in time. However, that is a matter for the EC to decide and we are pushing it for a decision. Over 50,000 applicants in the cattle headage and beef cow schemes in the disadvantaged areas will be paid a total of about £21 million. Forty one thousand applicants will be paid £7 million in premium grants under the 1985 suckler cow scheme and this payment is being made five months earlier than normal. Thirty six thousand applicants will be paid some £5 million in 1985 calf premium grants. A great deal of credit is due to the field staff of my Department who speeded up inspections of these animals and they have been working hard since August in this regard. Last year, in the period between August and the end of the year, we paid a total of £33 million in headage grants and other support schemes; this year we will be paying out about £50 million to the same group of farmers. Priority will be given, where possible, to farmers in areas which were severely affected by the weather.
Because of budgetary constraints I cannot raise the headage payments to the maximum level permitted by the EC of 101 ECUs, that is £75.75 on each livestock unit in the 1985 scheme, which would cost an extra £49 million before recoupment of 50 per cent from the EC. Even after recoupment a year later the extra cost would still be very substantial at £24,500,000. The national plan provides for an increase in the rate of payment on beef cows in 1986 from £32 to £70. This substantial increase will benefit some 45,000 beef cow farmers in the disadvantaged areas and put almost £11 million extra into those areas in a full year.
I am not in a position to make grants available in the new and reclassified disadvantaged areas in respect of the 1985 headage schemes as it would cost £7 million in the current year and no provision was made for this in the Estimate. As to the proposal for reassessment of means under the smallholders' unemployment assistance scheme, I wish to point out that in June the Minister of State at the Department of Social Welfare announced revised arrangements for dealing with claims for unemployment assistance for smallholders in western areas. Under these arrangements a smallholder who wishes to have his means reviewed will, on application, have his means investigated by a social welfare officer.
Regarding the suggestion that loans should be provided through the European Investment Bank at low fixed interest rates, the position is that the European Investment Bank provide long term fixed interest loans for capital investment purposes. In the past, such loans obtained from the EIB were lent to farmers by the ACC for periods of approximately ten years. The interest applying to these loans was in the region of 14 per cent and any similar facility which might be arranged at present would probably be at a rate in the region of 12 per cent to 13 per cent. The European Investment Bank are not in the market for supplying short term loans, that is loans of less then seven years, and therefore the suggestion put forward does not really relate to the problems confronting farmers at present.
I support Deputy Noonan's suggestion that the ACC and the banks should take full account of the hardship experienced by farmers following the bad weather and should help them to overcome their present difficulties. Farmers who, as a result of these adverse weather conditions, find difficulty in meeting repayments on working capital loans should not feel that short term problems will lead to any punitive action by the lending institutions. The Government have responded very generously to the difficult situation by agreeing to provide assistance for farmers in difficulty to purchase winter feed. Government assistance will be in the form of a feed voucher scheme over the whole country which will enable farmers who have a serious shortage of winter feed to buy feeding stuffs. This scheme will be based on £14 million from the Exchequer and 125,000 tonnes of intervention grain at 75 per cent of the intervention price from the EC. The overall level of aid is substantial given the current difficult budgetary situation here and in the European Community.
In deciding on the form of assistance to be made available, my main concern was to ensure that farmers were given the type of assistance they needed and that the assistance was directed at farmers in greatest need. Since the main problem facing farmers is a shortage of winter feed for their livestock, it seems reasonable that the assistance should be in the form of feed vouchers to enable them to purchase winter feed. These vouchers, which will be available all over the country, can be used by farmers against purchases of compound feeds. The vouchers will consist of two parts, a cash element representing the Exchequer contribution and a credit conferring an entitlement to intervention grain at 75 per cent of the intervention price at the time the grain is removed from store.
I should like to emphasise two points here. First, about 75 per cent of the voucher will be in the form of cash which can be used against winter feed and I am satisfied that the full value of this part of the voucher will be passed on to the farmers. The second point is that individual farmers will not be expected to present the grain element of the voucher to my Department in exchange for intervention grain. The intention is that farmers will negotiate a value for this part of the voucher with their local grain merchant on the basis of the prevailing market and intervention prices. The merchant will make feed available to the farmer to this value as well as to the value of the cash element. The merchants will submit the vouchers to my Department in exchange for cash and cheap intervention grain. Alternatively, merchants may pass on the vouchers to larger merchants or feed compounders.
My guiding principle is to ensure that assistance is given to the farmers who need it most. The scheme is confined to farmers who are mainly dependent on farming, whose off-farm income combined with that of their spouse does not exceed £6,400 per annum, those who do not have more than 60 livestock units and those who have less than 75 per cent of winter feed requirements for their livestock. I cannot tell exactly what the rate will be until the applications come in but we estimate that although over 70,000 farmers will submit applications between 50,000 and 70,000 farmers will be eligible.
There have been suggestions that the Government response to the fodder problem should be in the form of increased headage payments in the disadvantaged areas without any regard to the fodder situation of the recipients. With the rather limited Exchequer resources available, it is necessary for us to adopt a selective scheme aimed at genuine hardship cases. Giving increased headage payments in the disadvantage areas without regard to the actual fodder needs of the farmers concerned would mean aid for some farmers who may have no fodder problems at all. Also the fodder problem is not confined to disadvantaged areas and a blanket scheme like that would result in a situation where farmers in other parts of the country could not be assisted. Such farmers would be justifiably aggrieved that other farmers who did not have any problem got assistance from the Government and the inequity must be obvious to everybody. Neither do I think it fair to ask taxpayers to fund such a scheme.
Deputy Noonan said last night that I had refused to go along with a scheme put forward by one of the farming organisations in the past couple of weeks. I did not refuse, I have the matter under review and we do not have any insuperable problems with the EC in this regard. There was a belief that we might be ruled out of order if we brought in the scheme for one year only. We can overcome that problem and we are keeping the matter under review with regard to budgetary constraints and the Estimates which are at present being drawn up. As I said, I will examine the matter.
