Dáil Éireann debate -
Thursday, 4 Jun 1987

Vol. 373 No. 3

Estimates for Public Services, 1987. - Vote 37: Agriculture and Food (Revised Estimate).

Minister for Agriculture and Food (Mr. O'Kennedy)

I move:

That a sum not exceeding £181,971,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1987, for the salaries and expenses of the Office of the Minister for Agriculture and Food, including certain services administered by that Office, and of the Irish Land Commission, and for payment of certain subsidies and sundry grants-in-aid.

I am very privileged to have the opportunity as the first Minister for Agriculture and Food to introduce my Estimate. It will be very clear from what I have to say on this Estimate that I am speaking with that new and overall responsibility as Minister for Agriculture and Food because the linkage between the primary producer, the processor and the consumer is a matter of vital importance and will be a priority for me in my responsibilities in this Department.

Because of the time constraint I will not be in a position to deal with all aspects of the Agriculture and Food Estimate in detail. However, I will endeavour to concentrate on the main issues as I see them.

In framing the budget earlier this year the Government took into account the difficulties which the agricultural sector have experienced as a result of restrictive CAP reform measures, the effect of two years' bad weather and the general economic situation in the agricultural sector. At the same time, it was necessary to balance the needs of the agricultural sector against the needs of other sectors in our economy.

The problems which have troubled the agricultural sector over recent years have not gone away. In particular, the level of price support which has been forthcoming from the European Community has been eroded by decisions taken in Brussels. There is, however, a bright side. The price-cost squeeze, which has strangled profitability in the recent past, no longer acts as a further disincentive to farm development.

While it is too early to make any firm forecasts of farm output and incomes for the current year, all the indications are that there will be a reversal of the downward trend of the past two years when the volume of gross agricultural output fell by 1.6 per cent and 2.2 per cent in 1985 and 1986 respectively and total family farm income declined by 9.7 per cent and 5.5 per cent. Reasonable weather during the coming months should lead to a recovery of crop output which was severely affected by the poor weather of the past two years. While the output of livestock and livestock products may be somewhat below last year's level, we can expect to see a significant fall in the volume of farm inputs, particularly feed-ingstuffs, and this will help to boost the net output from agriculture. The most recent Central Bank report confirms the trend showing an expected improvement of some 8 per cent in farm incomes in 1987. This would represent a really worthwhile growth in real terms and will help towards offsetting some of the losses of the past few years.

While much of my time since taking office has been devoted to the annual cycle of price-related negotiations at EC level, progress is also being made on the domestic front. The functions of the old Department of Agriculture have been expanded to include the food industry and the Department has been re-named the Department of Agriculture and Food. Certain functions in relation to food which were previously the responsibility of the Department of Industry and Commerce have been transferred to my Department. A new office of the food industry has been established to deal with all aspects of the food sector and a Minister of State has been given specific responsibility for this. Thus, the Government are giving practical recognition to the strategic importance of the industry, and the main emphasis in the future will be on encouraging a greater orientation on the part of those involved in the food industry towards the needs of the market place. In effect, the Government will promote an integrated approach from the consumer right back to producer level so that the industry can provide high quality products at the right price as demanded by the market.

The achievement of the full potential of the food industry will pose a demanding challenge and will entail a new dynamic approach towards product development, presentation and market exploitation. Experience has shown that given the right commitment and product, our industry can meet this challenge. Indeed some notable successes on export markets have already been achieved in the face of strong international competition. The Government, through the State bodies, intend to provide every assistance through market research grants and other incentives so that companies with the right approach will be facilitated in developing long term market oriented strategies. Through the IDA firms will be encouraged to invest more in R and D to promote product development. In addition the AFT will be devoting more of their resources to food processing and will work more closely with the food industry in their research programme. The establishment of a food research centre, amalgamating the food research facilities of AFT and IIRS, is being actively pursued.

Another area where the food industry is receiving encouragement is through participation in joint ventures and licensing arrangements. Such arrangements provide significant opportunities for firms to avail themselves of advanced technology and market access without incurring the financial burden which otherwise might be required.

The Government's approach is not based on exhortation alone. As the House will know, this year's Finance Bill proposes, for the food industry exclusively, a sharpening of the incentive package the IDA can offer. My Department, in conjunction with IDA, will ensure that the leverage provided by these enhanced incentive terms will be maximised to the full. When considering companies for grant aid, the IDA and other State agencies will be placing particular emphasis on the upgrading of quality and hygiene standards. The IIRS are now engaged in the introduction of a quality control programme specifically designed for the food industry.

There has been considerable criticism of the failure of the industry to meet requirements in relation to quality and hygiene in the past. In view of this situation my Department have undertaken the preparation of up-to-date legislation on slaughtering and the dairy industry so that our food industry will be in a position to satisfy the demands of international export markets with quality products. This legislation will shortly be introduced to the House and is an indication of the Government's commitment to ensure that our food industry will continue to benefit the economy through increasing the output of high quality value-added products for the consumer market.

The food processing industry needs to develop a new focus on opportunities. This calls for a marketing based approach. The home market is small by international standards and does not provide sufficient scope for modern efficient production. We must, therefore, place special emphasis on the requirements and demands of the international market place. Marketing for Irish companies must be a matter of identifying customer needs, seeking out new trends, tastes and behaviour patterns, studying the competition more closely and finding potentially profitable gaps in the market.

Through CTT the Government are encouraging companies to orientate themselves increasingly towards strategic marketing. CTT are working with companies to identify the products required by the market and then helping them to develop products which satisfy it. This approach is of immediate and pressing importance for the industry in the light of the current changes in CAP market arrangements. We must get away from our over-dependence on commodity exports in the past and concentrate on value-added products for the consumer market, exploiting to the full the opportunities for establishing Ireland as a source of high quality goods produced to the highest standards and under the best environmental conditions.

The importance of the agriculture and food sector for the economy is best illustrated by a few key facts. Exports of agriculture and food products in 1986 amounted to £2,200 million which is 23 per cent of total exports of all products. These figures, however, do not fully illustrate the importance of agriculture and the food processing sector because, unlike the bulk of our exports of industrial goods, our food exports are largely based on indigenous raw materials, which means that the real contribution to our balance of payments is correspondingly greater. In addition, some £900 million was received by the Department of Agriculture from FEOGA in 1986. When account is taken of all these factors the contribution by the food industry to our foreign currency earnings is very substantial. Gross output of the food industry in 1986 amounted to £5,000 million or 34 per cent of total manufacturing output in Ireland. As a major employer the food processing sector employs approximately some 37,000 or 20 per cent of those engaged in manufacturing industry. All these factors highlight the particular role which the food industry plays in the development of our economy.

As Deputies are aware, a working party on agriculture has been set up in the context of the Government's forthcoming programme for economic recovery. This consists of representatives of the main farming organisations and of Government Departments. I am sure the working party will be putting forward valuable ideas on the way in which agriculture should develop in the years ahead, though the general macro-economic situation will have to play a major role in the ultimate decisions by the Government in the final programme for growth and economic recovery. This was the central part of the discussions which the Taoiseach, the Minister for Finance and myself had with the farm organisations a few weeks ago. The working group have already commenced their task and a follow-up meeting between the farm leaders and the Taoiseach and Ministers will take place in due course.

A major problem facing producers is the current level of interest rates and the costs of servicing farm borrowings. Government policies have already had a major impact on interest rates and the further containment of Exchequer expenditure which we are seeking will result in a steady reduction in the level of interest rates. However, even with the present fall in interest rates, they are still a deterrent to new investment, and are particularly discouraging the expansion of the national beef cow herd. I am particularly concerned about this. I have had discussions with one of the main banking groups in regard to a possible scheme of low fixed-interest loans to keep up cow numbers. Some helpful and constructive ideas have emerged and I hope to broaden the discussions very shortly to embrace all the interests concerned. In the overall situation the Government are, of course, working towards achieving more favourable interest rates, maintaining the low level of inflation and boosting confidence and hence investment in the economy, generally. This will benefit the agricultural sector no less than other sectors of the economy and will serve to provide a stable and healthy environment in which all can prosper.

The EC proposals on prices for agricultural products and on related measures for 1987-88 were presented in February and have already been discussed by the Council of Agriculture Ministers on four occasions, the most recent in Brussels last week. They will again be discussed at the Council's next meeting in Luxembourg from 15 June onwards.

As Deputies are aware, production levels of many agricultural products substantially exceed consumption and export outlets. The Council of Ministers took decisions in December and early March to modify support policies in the beef and dairy sectors to take account of the Community surpluses and budgetary problems in these sectors. The prices and other proposals for 1987-88 represent a continuation of the changes in the CAP undertaken last year. It is worth noting that since 1973 agricultural production in the Community has increased by 20 per cent while FEOGA guarantee expenditure has increased by almost 80 per cent in real terms. However, not all of this increased support has reached producers in the form of improved incomes. This is because an increasing proportion of FEOGA expenditure goes to facilitate the disposal of surpluses and in the management of intervention stocks. This expenditure, of course, benefits producers but in an indirect manner.

The Commission's proposals involve price reductions or the maintenance of existing prices for products of interest to Irish producers together with modifications in the other support arrangements which would also have a negative impact on prices. These proposals were not acceptable to me and I rejected them. The compromise proposals put forward by the Belgian Presidency at last week's meeting contained some improvements for Irish producers and were a small step in the right direction. However, they did not go far enough and in the forthcoming negotiations I will continue to seek additional improvements for Irish producers — in particular through maximum dismantlement of our existing negative MCAs, adjustments to the agrimonetary system to assist our food industry and more favourable treatment for our cereals' producers.

In the negotiations to date. I have emphasised the serious implications for Irish producers arising from the decisions already taken before I joined the Council. It is important that any further changes should be gradual and should avoid disproportionately penalising sections of particular importance to our development. The Commission are determined to "reform" the CAP but my case is that a "reformed" CAP must take account of our particular needs, by continuing to play a vital role in maintaining farmers' income levels and helping to maintain a strong agricultural sector in our economy.

The price negotiations this year have been especially difficult and it is by no means certain that solutions to all elements of the prices package will emerge during the next round of negotiations. I assure the House that I have made the Commission and my colleagues in the Council fully aware of my requirements. I would hope that agreement on most of the outstanding issues can be reached during the coming month. An important milestone in international trading relations was achieved with the launching of a new trade round of negotiations by GATT Contracting Parties in September 1986 in Uruguay. Ireland, along with other member states, welcomed this event as the aim is to encourage the expansion of world trade and thus help to promote world economic recovery and growth. The objective is to have negotiations on all subjects completed in four years.

While action is needed to rectify the international supply/demand imbalance in important commodities, we have to be careful about any proposals which emerge in relation to agricultural trade. Work to date in this area has been characterised by pressure on the Community from a group led by the US and Australia to eliminate export refunds and pressure to produce quick results. This was very much in evidence at the recent OECD Ministerial meeting in Paris which I attended.

I should now like to refer to the main products, starting with milk. Included under Subhead M4 is a sum of £20.9 million to cover intervention arrangements for butter and skim powder which indicates the high cost of providing this support. In the public mind intervention is associated with the accumulation of large stocks of unwanted agricultural produce. That is an over-simplistic impression. Intervention has been a vital support for our agricultural sector and its availability, especially during the serious imbalance in the milk sector in recent years, has prevented a serious drop in farmers' incomes and avoided severe loss for our economy. Without it we would have been forced to sell off products on badly over-supplied export markets at very low prices. However, it is really intended as a safety-net in times of genuine over-supply; it was never envisaged as a permanent market in itself. Indeed, because of the operation of the milk quota system, there are already some signs of a return to market buoyancy. We do not expect to have any intake of skim powder into intervention in Ireland this year. Our existing stocks are quite low — only about 3,500 tonnes — and the market outlook for the remainder of the year is quite good. Bord Bainne have been very successful in securing export contracts for skim powder for this year and I confidently hope for further success in this area.

The situation as regards butter is somewhat less satisfactory because of the larger accumulated stocks and as many of the markets in oil producing countries which were significant during the 1970's and early 1980's have contracted. At the same time there are some bright spots. Butter production throughout the Community generally will decline during 1987 by as much as 15 per cent. It is expected that butter production in Ireland will also decline but this is not unwelcome. In fact, we need to reduce our dependence on butter to a greater degree than most other member states and to diversify into a wider range of products which will not be so vulnerable to changes in EC regulations. It is clear that our milk sector is coming into a period of significant change. It is also clear that difficult decisions and choices faced the industry in the immediate term. Greater emphasis will have to be placed on the demands and requirements of the market and processors will have to be more firmly tuned into changing consumer tastes. The impact of the reduction in quotas generally throughout the Community will throw up new openings. We must be able to react and capitalise on these opportunities.

On the domestic front I would draw the attention of Deputies to the new regulations which I made recently to facilitate milk quota transfers. There are a number of other issues which the milk industry will have to confront as a matter of urgency. There will have to be greater co-operation and co-ordination between the various interests. That is a more fundamental question and it cannot be done overnight. These other issues are matters which can be tackled immediately and I do not consider that greater co-operation in any way diminishes the individuality or independence of individual co-operatives. The dilemma facing the industry is that the longer it waits the more intractable the problem will become.

The cattle and beef sector fared reasonably well last year. Cattle slaugh-terings at export plants reached almost 1.5 million head, an increase of some 1.4 per cent on 1985. This spring cattle prices have been particularly good.

The beef intervention support has been weakened following the Council decisins of last December and for the future there must be greater reliance on sales on the commercial market. We will, of course, continue to have the benefit of the various EC supports but we must gear ourselves more and more to meeting the demands of the consumer. We are, in fact, already seeing growth and changes in our beef industry. The volume of beef exports was up significantly last year and the proportion of live cattle in total cattle and beef exports declined sharply. Particularly welcome was an increase of 20 per cent in exports of processed beef products and 50 per cent in vac-pac beef. These are remarkable increases by any standards and I look forward to further increases this year.

A grant-in-aid amounting to £965,000 is provided for CBF. While this figure shows a small reduction on the amount provided in 1986, it reflects, in the difficult budgetary situation in which we find ourselves, a recognition by the Government of the importance of CBF's role. Developments at Community level over the past few years are tending to increase the importance of this role. The reductions in milk quotas and the recent new arrangements for beef are expected to result in a decline in the Community beef surplus and this should, in time, create its own opportunities for us. But the opportunities will have to be identified and grasped — hence the importance I attach to the CBF role.

Mr. J. O'Keeffe

Is that shared by your colleagues? That is the primary consideration.

Mr. O'Kennedy

It is the importance which I attached to the CBF role which the Minister will have noted and that is the primary consideration. Of course, CBF's effectiveness is determined to a considerable extent by the quality of the product which they have to market. Their publicity material emphasises the naturalness of Irish beef and sheepmeat production, but it is vital that the product matches the image which we are trying to create for it. My Department provide a comprehensive service to the meat industry by means of a permanent veterinary and technical presence at all meat exporting plants and through the provision of the laboratory facilities which enable us to certify to the satisfaction of importing countries that our meat is produced under the most hygienic of practices and conditions and is free from harmful residues. The cost of these services is recouped in part through the levying of veterinary inspection fees. These fees are expected to yield over £7 million in 1987 and are brought to account under subhead N27. This figure also includes about £1 million in respect of arrears of pig fees which we expect to recover this year.

As regards sheep, it is heartening to see the continuing expansion in the national flock. This is also a major challenge. All the extra lambs must be exported, and export markets are increasingly discerning and insisting on lean, well-conformed lamb. The message to farmers is clear: rely on good quality stock and sell lambs as they become ready for the market. The benefits of secure access to continental markets must not be undermined by poor marketing.

Persistence on quality is the sure way forward. Under the auspices of my Department, all interests in the sheep sector are being asked to agree on a code of practice aimed at tightening quality standards at all stages from farmer to market. The continuing expansion of lamb output lends added urgency to the need for such a code. I am sure the co-operation of all interests will be readily forthcoming.

In the forthcoming EEC review of the sheepmeat regime, I will be pressing for an overall reduction in import quantities while, at the same time, seeking harmonisation of Community support systems with the aim of creating a single market for lamb. This would enhance the opportunities for increased returns for Irish exporters. The outcome of this review is important for us since it will establish the framework for the future.

Although slow in starting, there is now clear evidence that the much needed rationalisation of pig slaughterhouses is beginning to get under way. It is vital for the sake of the pigmeat industry that there be no let-up in completing the programme, since this is one of the areas clearly identified as capable of conferring substantial cost economies to the pigmeat sector. A number of sizeable investments have been announced over the past few months by me and there are some more in the pipeline. All will benefit from the increase in the rate of FEOGA contribution which, coming on top of the IDA grant, can provide a grant-aid level of up to 75 per cent for approved investments in this sector. While the FEOGA budget has been no more immune to cutbacks than the budgets in member States, it is heartening to be able to say that a specific sum has been provided for pigmeat investments and this will be ample for the needs of the sector. The Government in the coming months will be considering the best way to advance the promotion of pigmeat and I hope to be able to announce our plans on this fairly shortly. Whatever about promotional arrangements for the industry, in the last analysis it will rest upon firms themselves to improve their market performance to maintain export markets, explore new opportunities and withstand growing import competition. As one means of bringing about quality improvements, we will be introducing the new EEC lean meat grading arrangements at pig plants later this year.

There is one note of concern. That is the decline in pig numbers. This, I suppose, was bound to happen with the uncertainty in the industry over the past two years. We must now set about reversing the decline. The best way of doing this is to be able to demonstrate to producers that all problems in this sector are being tackled with the aim of improving market returns and giving producers the degree of confidence they need, but producers themselves must also seek ways to improve their efficiency. In short, there is no room for complacency in any section of the industry.

The area under grain crops in 1986 was about 382,000 hectares which was less than in 1985. The EC Commission's original farm price proposals for the 1987-88 marketing year included a price cut of 2.6 per cent for feed grains, the elimination of monthly increments and a severe limitation on access to intervention. These proposals were not acceptable to Council which is now discussing a set of compromise proposals which do not include any reduction in the intervention price. The centrepiece of the new proposals is an intervention system triggered if the average Community price falls below the intervention price, with monthly increments applicable from November and the buying-in price set at 93 per cent of the intervention price. In the negotiations at Council I will be striving to ensure that intervention at a reasonable price level will be available in Ireland at harvest time when it is needed most.

I might refer here to the slow rate of applications by small cereal producers for refund of the co-responsibility levy. In their own interests producers should send in their applications without further delay.

This year marks a change around in the fortunes of Siúicre Éireann. The interim unaudited accounts for the six months ended 31 March 1987 show net profits of £5.4 million compared with £1.2 million in the corresponding period last year. It is expected that the final accounts will show a significant return to profitability this year. I am arranging to have discussions shortly with the board to review their entire range of activities.

An amount of £8.05 million has been provided for the farm improvement programme and the farm modernisation scheme. This also covers the scheme of installation aid for young farmers. Unfortunately, in view of the time constraint I have not time to go into these but the record which I will place before the House will be there for Deputies to consider.

I am looking, too, at ways to make the programme more effective. For instance, with the reduced opportunities in some of the more traditional farm enterprises, I am examining the whole range of what may loosely be termed alternative farming enterprises to see which of them could be expected to give a reasonable profit to the farmer and which could fit into the Irish farming scene. The enterprises that seem most promising at this stage are farm guesthouse tourism, deer farming and sport horses. As I have said, we are looking at each of these enterprises in detail with a view to bringing forward proposals at an appropriate time.

The western drainage scheme, which provided for field drainage of 150,000 hectares in the west, terminated at the end of 1986 on expiry of the relevant EC regulation. I am hopeful the Commission will agree to my request to extend this scheme in view of the unfavourable weather conditions last year and I am very confident they will. Similarly, I hope we can extend the application of the western development programme.

As Deputies will be aware, the EC Commission have recently made proposals to the Council of Ministers on the subject of direct income aids for farmers. Discussions on the matter are still at an early stage and it is too soon to forecast what the outcome will be. However, the renationalisation of agricultural policies cannot be supported by us and we must, therefore, be vigilant in our approach to the income aids proposals to ensure that the FEOGA guarantee transfers are not replaced by part contributions from our Exchequer. The sheep and cattle headage schemes are also being maintained and I hope these will be of immense benefit to the areas most directly concerned. What I want to say about the classification and reclassification of disadvantaged areas is all contained in the text of my speech and I have put it on public record in an address which I gave to the IFA recently.

I want to return to the advisory services which have become much more effective now with the implementation of the client enterprise system based on the district unit. The Government are convinced it is entirely reasonable that ACOT should secure an appropriate contribution from the industry towards the cost of their professional and advisory services which rebound to the financial benefit of so many farmers. Legislation to do this has been passed by the Dáil and is now in the Seanad.

ACOT continue to give priority to agricultural training and their target of bringing 80 per cent of all new entrants into the Certificate in Farming is well on the way to achieving it. I was pleased to announce recently that the European Commission have approved ACOT's scheme of vocational training. The scheme incorporates ACOT's courses including the Green Certificate, and FEOGA assistance will be of considerable help to enable ACOT to maintain a high level of service.

On the question of getting the maximum benefit from agricultural advice, education and research, the Government are conscious of the need for close co-ordination of and co-operation between ACOT and AFT to ensure a cost effective and efficient service to the industry. The liaison between the bodies at board level has recently been strengthened by the appointment of a chairman common to both organisations. I will be considering further rationalisation measures. A common board was appointed, and I think this course will have certain advantages in helping to achieve better use of the substantial resources provided by the two bodies. I will be considering this carefully.

It is abundantly clear that family inheritance and tradition no longer are sufficient qualifications for managing profitable farm enterprises in this highly competitive era. I am determined to ensure that all the resources available to me through An Foras Talúntais and ACOT advisory and educational services are brought to bear on this scene to ensure that our young farmers, who will be the guarantors of the future, will have available to them knowledge, advice and technical ability thereby guaranteeing the future of this very important sector.

Because of the importance of this huge sector I want to repeat that I regret it has not been possible for me to read into the record all that is contained in the text I have prepared, not within the space of half an hour. Might I just ask the House to take it as if it were on the record of the House. I would ask Deputies to feel free to comment on each aspect as though I had actually delivered the entire text.

Mr. Durkan

A Cheann Comhairle, could it be printed in the Offical Report?

An Ceann Comhairle

No, only the spoken word is recorded in this House.

Mr. O'Kennedy

Deputies can feel free to comment on what is in it.

Mr. J. O'Keeffe

Like the Minister, I am somewhat concerned at the lack of time for a full debate on this most important subject. Indeed, in relation to the written word, I have been flicking through the balance of the Minister's speech and I find that page 24 is missing. It would be helpful if we could be furnished with a complete copy. Apart from anything I have to say in this debate I want to study the matter in greater detail in time to come.

I have to say that for Fianna Fáil in agriculture the honeymoon is over. After three months in office it is clear that the utterly irresponsible promises given, when in opposition, involving expenditure of over £200 million have been forgotten. It is clear that a cosmetic change in Agriculture House has been the substitute for real action in coping with the problems of our agricultural industry. Already it is clear that a hunger for publicity and media hype was the main motivating force and hallmark of the administration rather than an ability to manage the problems of the industry or a real willingness to tackle those problems. Perhaps the less said about the irresponsible promises the better at this stage. However, it is fair to raise the question as to whether the leopard can or will change its spots. Opposition irresponsibility is not a good starting point from which to launch and establish an effective and responsible administration.

Of cosmetic change we have had plenty. First, the promised creation of a new Department of Agriculture and Food has been achieved by simply adding "and Food" to the existing notepaper. Then we had the Office of Food established but without any budget. The next step was the establishment of An Bord Glas in as hasty and ill-conceived a manner as is imaginable. While I do not want to be overly critical at this stage surely it is fair comment to suggest that this type of newspaper headline management is no substitute for the detailed preparation necessary to bring about substantive changes of this kind.

Mention of newspaper headlines serves to recall press conferences and announcements about some of the matters mentioned by the Minister. For instance, there was the reference to the FEOGA package for pig processing; if I recollect correctly the figure involved was £50 million. There was another one in relation to the development of support for processing in the dairy sector where the figure involved was £143 million. It would have served to present a clearer, more honest picture had the Minister mentioned that these had been negotiated by the prevous administration. Perhaps it was an oversight. Presumably, when the Minister is making announcements about legislation providing for veterinary control and hygiene at animal slaughtering premises or national dairying legislation he will not be guilty of the same oversight. I note that he referred in the course of his remarks to proposals in that regard. I do not see that the Minister had anything to say by way of highlighting the fact that these matters were under discussion and in preparation for the last couple of years, that the heads of Bills in these areas had been prepared and circulated by the previous administration. I would encourage the Minister to finish off the job. At the same time it would hardly be honest or correct to suggest that the very detailed work involved in the preparation of these measures was the product of 10 weeks of ministerial office by the present incumbent.

Essentially this administration will be judged on what they do rather than on what they say, on what they achieve rather than on any artificial headlines. The first major test in this regard will be the outcome of the EC price negotiations. In this regard the Minister has set his own targets. I do not intend to comment on those negotiations in detail at this stage. The Minister, while abroad, represents the country and I want to see him secure the best possible deal in these negotiations. He will be judged on whether he achieves his own targets. But we will want to see him secure and achieve the targets he has set out in the various areas — the full devaluation of the green £ and complete dismantlement of the existing negative MCAs. We want to see the maintenance and protection of beef intervention. We will want to see relief for the besieged cereals sector. We will want to see encouragement, rather than curtailment, of support for the sheepmen. We want to see a ray of hope for all those in dairying in these days of production quotas. These are some of the targets the Minister has mentioned. I support him in his efforts to achieve them. Perhaps I could add one other aspect which I raised in a Parliamentary Question to the Minister recently. Unfortunately the Minister was in Brussels when the question was raised. It is my opinion that the Minister should use the final negotiating procedure to secure the formal approval of the application for reclassification of disadvantaged areas submitted to the Commission by the Fine Gael Government. I will not say any more on the issue of the price negotiations at this stage. I will wait until they have been completed. If at that stage, the Minister achieves his own targets — some of which I have highlighted — I will be the first to say: well done. If, on the other hand, he is unable to emulate the negotiating successes of his predecessor I will have plenty to say.

Now that the honeymoon is over, in the months ahead I will not be opposing merely for the sake of opposition. That precedent established by Fianna Fáil in office has nothing to commend it. I believe it would only be a millstone around our necks when we return to power, perhaps sooner rather than later, as I believe it to be a millstone around the necks of the present Government. I will be quite prepared to come up with constructive proposals and policies when these are developed. But I do reserve the right to critical comment when justified.

I should like to focus on one area of major concern needing to be strongly highlighted. That is the seemingly total disregard of the position of young farmers by the present Government. We have had a combination of measures which would support that thesis. We have had the refusal to extend the stamp duty exemption. I am sure the Minister is aware of how effective that exemption was in the past in encouraging the earlier transfer of land. There is no need for me to highlight the importance to this country of attempting to continue the trend which was so much accelerated by the imaginative introduction of that proposal by Fine Gael.

However, that is not the only factor that concerns me in relation to the position of young farmers. I am very concerned about the abolition of the installation aid. This was introduced early in 1986 and was dropped by the present administration immediately they came to power. The amount involved was not very substantial but was of major significance in the many transfers of land. A sum of £5,000 was available as the first installation to farmers under 35 who had the right educational qualifications. It also has to be borne in mind that it attracted 50 per cent EC subvention.

I am not one who suggests that huge sums of money should be spent without giving some indication as to where those moneys should be found but we are not talking about huge sums of money in this case; we are talking about £500,000. In the context of the Government finances and of the Department of Agriculture Vote that sum is not a significant one. If the Minister was committed to finding this money by way of reallocation or of savings in other areas, it could be done. I strongly urge the Minister to actively pursue the possibility of, at the very minimum, reintroducing the installation aid in relation to young farmers.

I mentioned the question of stamp duty and there was also the question of the installation aid. Now we have a 40 per cent reduction in the budget of the farm apprenticeship board, a third prong, as it were, in the stick to beat the young farmer. While I appreciate the overall problems in relation to the finances, a combination of these three measures focusing on the young farmer indicates there has not been any great degree of thinking as to their overall effect on young farmers. Time does not permit me to deal with this matter in greater detail at this stage. I will leave it with the exhortation to the Minister to do whatever is possible to have the scheme reintroduced at the earliest possible date.

We talked about money and I understand the Minister's problems in this regard. If you put it in the context of the decision to abolish the land tax — more can be said about that on the Finance Bill——

Mr. Farrelly

There is no Bill before the House to abolish land tax. It might be included in the 1988 budget.

Mr. Durkan

It was a firm promise.

Mr. J. O'Keeffe

We are not quite sure what negotiations and discussions took place but we will get to the bottom of it in due course. According to the Minister for Finance's Budget Statement this will cost the Exchequer £9 million and all for the sake of the small number of farmers who wanted to get rid of the land tax. In the light of what happened in that case, I ask the Minister to reconsider the installation aid and other aspects. I do not intend to voice my views on that issue in greater detail at this stage. I will reserve them for the Finance Bill. It is obvious the decision to abolish the land tax was a lunatic decision and will be totally unacceptable to most farmers. It is not a question of the consideration of the tax itself. It cannot be considered on its own. It has to be considered in the context of the alternative which is a full accounts system. The full message will reach this Government when the forms are sent to the farmers and when they realise what the full alternative means. It will mean that a path will be worn to the accountants' offices and the money which would have been paid to the Exchequer will be paid to the accountants instead, and more along with it. That will be the result of that decision.

I cannot have total sympathy for a Government which plead inability to pay in relation to any proposals I put forward. In the short time available to me it is not possible to respond in full to the Minister's speech. I hope we will have an opportunity of debating this matter in the next session, which debate will perhaps be more open-ended. It is not possible at this stage for me to put on record some of the earlier ideas which I had in relation to the development of agricultural policy or to respond to the many points raised in the Minister's speech. The various aspirations mentioned in his speech are ones that I can support. I want to see the various developments to which he aspires achieved.

One sentence in the Minister's speech stands out. He said the Government's approach is not based on exhortation alone. That sentence stands out in that it highlights what we have had from this Government to date, lots of exhortation but nothing else. I encourage the Minister, in the months ahead, to give us less of the exhortation and more detailed planning and constructive input into the development of the agricultural and food industry. He should give us the details of how this is being done. We all know about the aspirations and the exhortation — now we want action.

Mr. McCoy

I welcome the Minister's statement but, like the previous speaker, I have not had time to examine it. It describes generally the progress the Minister has made to date since he assumed office. Having no previous experience of this House, I took it that we were here to debate the Estimate. I examined it and I feel there are a number of points in relation to it, as it is laid out, that should be discussed and highlighted. The net Estimate payable by the Exchequer to the Department of Agriculture is £181 million for this year. The net contribution out of that £181 million in direct aid to agriculture is about £63 million which is £4 million less than the wages, salaries and travelling expenses of that Department.

Having examined the Estimate I must agree that agriculture is a great industry for Ireland and for those who are employed in food processing. It is a great employment creator everywhere except on the land. There is £63 million directly payable to agriculture this year as against £67 million towards salaries and travelling expenses. I cannot understand why we could not find the £14 million which was necessary to pay our contribution this year for the reclassification of sheep areas that are less severely disadvantaged into more severely disadvantaged areas, a cost which would have been a once-off transaction because £7 million would be recoupable next year. When we extract a net figure to be paid by the Exchequer this year for education, research and advisory services we find that the figure all the fighting was about, that all the soul searching was about, for agricultural scholarships is less than 1 per cent of the figure allocated — and much of it is recoupable under subhead B.12. Are we serious when we consider agriculture and talk about investment and training? I do not believe we are when we look at what is facing a farmer's son in terms of educational choice. In any other field, be it AnCO, the regional technical colleges, the National Manpower schemes or even CERT courses, there is a net benefit of about £1,250 per annum to the student whereas with an agricultural course there is a minimum cost of £750 for the course alone. The difference is £2,000 and I need not tell the House which courses these young people will be pushed into by their parents. The statement that these scholarships will be given to people whose parents have an income under £10,000 this year will not create any budgetary problems for the people running these courses because nobody will be able to take them when they compare the agricultural courses with what is available in other areas. This is the kind of service we are providing for agriculture.

Let us look at the levies. The income from farmer contributions this year towards the cost of disease eradication is up by £5 million to £19.4 million. There is an explicit and implicit guarantee that there will be a full round of testing this year for such a massive and ongoing contribution. However, I doubt if it will happen because the Minister for Finance intends to withhold 35 per cent of the £13.4 million fees to be paid to the veterinary surgeons who carry out the testing. This will represent, in any one year a £4.7 million withholding tax. How can a service be provided if one-third of the fee is being held back? There appears to be a mix up between turnover and gross profit, and until this is clear in our minds, the full round of disease testing will not come to fruition. This scheme is being financed at farmer level but it will not be financed at Department level.

Speaking about levies in general, when we take the increase in the levies this year and look at the cutback on VAT refunds, we see that for milk alone it comes to about 4.6 pence per gallon. If you add the levies and the .7 per cent loss in terms of VAT refunds, that is about a 5.5 per cent tax on turnover and a 20 per cent income tax on gross profits, and that is without taking any personal allowances into account. It is about time farmers woke up to this direct tax because the general perception is that they are paying no tax. Enough inroads are made into the price the farmer is receiving as against the EC guide price without killing the golden goose entirely.

I turn again to our commitment to agriculture. The value of our agricultural exports is £2,500 million which contributes to one-third of Ireland's net exports, and we must take into account the low import content of the agricultural industry. Compare what is available to young farmers with what is available to those starting their own business: the Minister for Industry and Commerce said every assistance is to be given to young entrepreneurs with no red tape to hold them back. I ask the Minister if young farmers are to be excluded entirely from this elusive species of young entrepreneurs because even the few incentives which were available have been withdrawn. I refer to the farm installation scheme and the stamp duty exemptions.

Fifty per cent of the money for the farm installation scheme came from the EC and had a gross Exchequer cost of £2,800 per applicant. I put it to the Minister that the installation grants which were productive, are peanuts in comparison with the number and value of the house improvement grants. The linking of ACOT training courses to installation aid for young farmers and stamp duty exemptions, and the subsequent withdrawal of these schemes, the only worthwhile and low cost incentives to young farmers, will certainly ensure that ACOT will not run out of money for training programmes this year because there will be very few people to train.

I personally deplore these measures and propose that they be reconsidered where appropriate. The scrapping of the stamp duty exemption makes it virtually impossible for farmers to transfer their farms to their sons. If we are talking about farm restructuring, surely the removal of this concession is crazy; it will be a negative tax gain for the Minister for Finance because such transfers will not now take place.

This year's proposal to recoup the estimated loss of revenue caused by the scrapping of the land tax and reducing the rate of refundable VAT to all farmers discriminates against those who have been in the tax net and settled their agreed assessment with the Revenue Commissioners. These people are arbitrally been made to pay £500 to £1,000 each on average, notwithstanding the fact that they have discharged their agreed liability with the Revenue Commissioners. The general area of VAT refunds and levy increases has left the average small farmer with a 5 per cent turnover tax, irrespective of whether he has a taxable income.

I will turn now to the interest subsidy schemes. Under subhead F.2, Payment Under Exchange Rate Guarantees on Agricultural Loans, there is a reduction of 32 per cent. Under subhead F.3, Interest Subsidy Schemes for nonDevelopment Farmers, there is a cut of 98 per cent and under subhead F.4, Interest Subsidy for Farmers in Severe Financial Difficulties, there is a reduction of 77 per cent. On the one hand we are throwing money and schemes at one section of the business spectrum and on the other withdrawing them from those needing help most.

There is a reduction in the level of grants under the farm improvements scheme. They are so low now that the Minister should scrap them altogether and take the moneys allocated for them and their administration costs and put them into an exchange rate guarantee for agricultural loans and low interest loans for farm development and let farmers get on with their job instead of being bogged down with bureaucracy and red tape. If agriculture is to be market driven, let there be the necessary incentives in cheap development money. Why do we have to have all this hand holding, molly coddling and guiding? There is precious little of it when a farmer gets into difficulties. I contend that farmers know what they want, cheap development money. They know how to carry out the development work and are willing to do it if they get the proper incentive.

The reality is brought home when one considers the western package scheme. Of the 25,000 farmers earmarked for aid under that package since 1981 only 1,250, or 5 per cent, have succeeded in getting any aid. The scheme is now half way through its course and of the £50 million budgeted for development work only £1.79 million has been paid out to date. Farmers in the west have suffered as a result. We cannot call that progress. The cost of administering the package must be colossal.

Small farmers living in disadvantaged areas must produce three sets of accounts, for taxation, for farm improvement aid and for social welfare assistance. We are all aware that because the average income in the west is so low most farmers there are entitled to social welfare assistance. There is room for rationalisation there. Sanity should prevail and one set of accounts should be accepted for all purposes. It should not be necessary to produce three sets of accounts for an enterprise that is finding it difficult to break even.

I should like to congratulate the Minister and the Minister of State, Deputy Joe Walsh, on the progress made in regard to the food industry. Many difficulties have to be surmounted and I do not think the general public appreciate what is involved. We have heard a lot of talk about alternative farm enterprises but if farmers embark on them they will have a lot of headaches and will be short of money. I do not think they will come to anything. All alternative farm enterprises should be carefully vetted. Provision should be made in the Estimate to assist in the production and marketing of such alternative farm enterprises. Any money invested at farm level should attract the same benefits as money invested by entrepreneurs engaged in further processing outside the farm gate. I am referring in particular to capital relief. In start-up years, and subsequent years, capital relief can be written off when the person who has invested in it sees fit to do so. Farmers are discriminated against in that they can only write off 30 per cent of their capital investment in any one year.

I do not think we should run away with the idea that we will be able to solve the problem in regard to imports overnight. However, we should be doing a few simple things. The glut of dairy products in the EC is brought about by the importation of dumped surplus by-products from America and the Middle East. After producers go through the costly subvention system in the EC they have to fight for their place on the market against cheap yellow fat imports. We could do a lot at home in regard to the regulating of the primary products before we get carried away about the secondary products for which we have a very limited market.

I should like to refer the Minister to the position in regard to the grain industry. Is the Minister aware that we import £150 million worth of feed stuffs annually? It makes good sense to use the feed produced at home. Ireland has a reputation in Europe of being ecologically pure and I wonder why we have to produce our feed on imported raw materials that do not enjoy that status. Why must we put some of our produce into intervention and force our farmers to look elsewhere to earn a livelihood? Farmers could be gainfully employed producing wholesome food on their land. We are importing too many substitutes, particularly products that we are trying to sell in Europe as home grown. If we are not careful we will go down the same road as the factory farms on the Continent which are the root cause of all our troubles.

Mr. Stagg

I welcome the opportunity to contribute to the debate on the Estimate for what I, and my party, consider to be the country's most important industry. In view of its importance it was with considerable disappointment, though not surprise, that I studied the Estimate figures in detail. At a glance the figures show that the industry though sited in Ireland is controlled from Brussels where the strings are pulled. The first subhead I should like to comment on is "Salaries and Wages" which shows a very moderate increase in wages for staff. That reflects a reduction in staff numbers as well as a drop in real earnings for the remainder of the staff. It is important not to underestimate that reduction both in terms of the implications for the export of young people who would otherwise flock to the industry and the added disincentive which low wages offer to talented individuals who must now find outlets for their talents in private enterprise. That double loss to the industry is immeasurable.

In referring to the more direct impact on the agricultural industry as a whole, I wish to comment on the Estimate as it affects education, research and advisory services. In those areas the Government have dealt a body blow to the industry.

A major tourist attraction, the Botanic Gardens, has been allocated an increase of 1 per cent which is not in line with inflation and hardly gives a vote of confidence to the staff and advisers of this beautiful scenic attraction. The miserable increase says a lot about Fianna Fáil's real commitment to tourism for the capital city. Similarly, An Foras Talúntais only get a 3 per cent increase for general purposes and no increase at all for capital purposes. The irony of this cut to An Foras Taluntais can be measured by the words of the Fianna Fáil spokesperson on Agriculture during the debate on the 1986 Estimates. Deputy Noonan, who is now the Minister for Defence, said on that occasion:

In order for the milk industry to get away from intervention production we must broaden the product range. I agree this is important. Here again the Minister and the Government have cut back their contribution to An Foras Talúntais who should be the body to research and develop new products. The very base of this industry is being cut away.

That quotation is taken from column 731 of the Official Report of 19 June 1986. Will the Minister explain to the House the reversal in judgment? I am sure there is general agreement that the Fianna Fáil statement of 1986 makes a laughing stock of the finance now being provided to An Foras Talúntais. Is it fair to assume that if Deputy Noonan had been appointed to the Department of Agriculture, having been Opposition spokesman for that area, he would be presenting a different Estimate to the House?

Furthermore, Deputies will need no reminder that a Bill was passed which imposes charges for ACOT services which has put an intolerable burden on disadvantaged farmers and which will serve to ensure that agriculture here will develop even more rapidly along a two-tier system, one of the many two-tier areas in existence. Poor farmers will be left with non-viable and badly serviced farms and the rich farmers who can afford to pay for the services will forge ahead. I have already publicly condemned these charges and it is relevant to reiterate it here in the context of the Estimate debate lest we forget there are already cuts which were well established within a week of the Government taking office.

The spin-off of the cuts to ACOT will have far reaching effects on the industry as a whole. ACOT now have a deficit of over £2 million and have had to impose a cut of £140,000 on the Farm Apprenticeship Board. This means a reduction in the number of apprentices in the industry which is a disgrace. This training scheme was the only one to offer youngsters from non-farming backgrounds an opportunity to train for a career in agriculture. With the cutbacks a few hundred places will go every year, thus leaving a vacuum and cutting off a valuable opportunity for younger people to pick up some of the most gifted skills from the older and master farmers. Cuts in education, training and advisory services cannot be made up next year or the following year and the repercussions of such cuts last for years and hold back vital research and development in the industry. We cannot afford these cuts, it is false economy and a blow to an industry which is already decades behind European farmers.

At this point I should like to make some comments on the overall make-up of the Estimate for Agriculture. There is not one indication that the Minister has defined a priority for the industry. There are cuts in research and education, a run down of piecemeal disease eradication and farm modernisation schemes, schemes to increase the national herd and so on. There is nothing to indicate a change in attitude to the industry or indeed a glimmer of hope that the Minister has a national plan for agriculture.

Agriculture is the backbone of industry in Ireland, every Deputy in the House will remember that lesson learned from primary school teachers. At this stage we should ask ourselves what is the industry, what is its produce, who benefits, where is the cheap, fresh food and the jobs? It is time the Minister for Agriculture and Food came into the House and produced a plan for the industry, an industry which should be the backbone of this fledgling and struggling economy.

A speech about EC subsidies, grants, aid and incentives is not an Irish plan for an Irish industry; it is an ad hoc response to the European economy. Ireland will produce what it is told to produce by a group of Ministers in Brussels. If they want beef we will produce beef; if they decide that there is an over-production of dairy goods they will introduce a quota; if there is a shortage of lamb, Ireland must go for sheep. Likewise, if Europe is deficient in timber, Irish farmers will be given incentives to grow trees. This pattern of going for beef or lamb very clearly smacks of the agri-economy of the 1850s. There is no planning, just an ad hoc response to market forces.

Tragically, this is the way agriculture has developed over the past ten years. We have had no increase in agricultural jobs. Over the last four year period, in response to a question I asked, the Minister informed me that there was a reduction of 25,000 jobs in the agricultural area. We have had no great increase in the production of cheap, fresh food for the home economy or for the industrial workforce around our cities. We have been limping along, propping up an industry which has become a burden on the economy rather than the backbone. A quick profile of the agricultural industry shows that 12 million acres are utilised for agricultural purposes; 60 per cent of farms have disadvantaged area status; 11 million acres are used for pasture; one million acres are used for tillage of which 70 per cent is used for cereal growing. There are 264,000 agricultural holdings and 67 per cent of these are less than 50 acres in size; 4.7 million acres are held by farmers over 55 years of age which represents approximately 35 per cent of agricultural area which can be utilised; 16 per cent of the workforce are employed directly in agriculture. This, in a nutshell, is Irish farming, an agricultural industry which is increasingly handicapped by the constitutional position on land ownership, an ageing farming community, a large designation under disadvantaged status and, to all intents and purposes, a closed industry. This is why it is not producing the large quantities of fresh fruit and vegetables required and why there are so few jobs in and around the industry. We need a radical transformation now. With 16 per cent of the workforce in agriculture and 19 per cent on the dole, we are in the midst of a crisis and the Minister will have to address this now instead of engaging in a series of cuts to reduce the industry to a miserable appendage of the European fruit bowl.

The Labour Party have a clear and concise policy on agriculture. We view it as a viable industry. We believe it should be developed to provide for as many families as possible on the land and to create downstream jobs in the horticultural and food processing industries. This policy requires a courageous approach to the industry and we need to take a radical look at land ownership. Over 90 per cent of agricultural land in Ireland is owner occupied with the remainder largely operated on the conacre system. As I mentioned already, a substantial number of holdings are held by older farmers who, for a number of reasons, are unable to work the land or do not have access to new technologies or equipment to produce from the land. There can be no doubt that these farms are not producing anything like their potential yields and will not do so until they are placed in the hands of younger and better qualified farmers who have the incentive to generate greater income for their families.

Since land in Ireland passes to new management through transfer of ownership, the age at which management control passes is normally advanced. Thus the problem is continued and is unlikely to change over the next decade unless the Government tackle the whole thorny question of land ownership. I am not suggesting the Government should forcibly take the land from families who have worked it solidly for years, but the question of rigid ownership needs to be addressed. Large ranches should be taken over and redistributed in economic, family size units.

There are a number of ways of opening the land up to younger people. One is by a levy or tax on non-productive land which would provide the incentive to lease land which is not being worked by the owner. Another way would be to initiate a serious and generous retirement plan for ageing farmers. This latter scheme has never been seriously adopted and the necessary assurances were never provided for farmers interested in it. Farming is a particularly difficult way of life and many elderly farmers would gladly lease the land to the State or to younger farmers if they could be guaranteed a comfortable retirement and be assured of a reasonable income. With this approach, the State would have to ensure that there is a body of skilled farmers to take up areas of the industry and to work the land in the interests of all the people. This Estimate shows no investment in education of young people to take over viable farms in future. The reverse is the case, with serious and damaging no funding and cutbacks in the minimal existing agricultural educational programme.

Part time farming is also a problem for agriculture. With such a huge concentration of farms designated as disadvantaged, many farm families rely on an industrial wage alongside a small agricultural income. This has led to a Catch-22 situation where the farm is not developed or extended and yet the small industrial income pushes the family out of any entitlement to major EC grants or schemes. The net effect is that thousands of acres are producing at less than their potential yield while owners work in local factories or with Bord na Móna to subsidise the family income. Part time farmers are also denied access to new information and skills because their workday is divided and they are unable to avail of valuable agricultural services. With over one-quarter of the country's agricultural land absorbed by part time farmers, the enormity of the problem cannot be under-estimated.

The Labour Party's position on charges or taxes on land is equally clear. Ownership of land must impose obligations as well as conferring advantages and benefits to the owner. Land is a scarce resource and its productive use for agriculture is central to our economy. It is, therefore, incumbent on the Government to ensure that this source of wealth creation is used to yield the maximum benefit to society as a whole. We simply cannot afford to see large tracts of land left to lie idle or under-used.

The removal of charges on land makes it possible for large farmers to hold on to the land without feeling any obligation to use it productively or to pass it on to somebody who will use it productively. The removal of the land tax and the abolition of the farm classification office were the most regressive moves of this Government. It is the responsibility of the Minister in responding to this debate to indicate what he intends to do to ensure that the land, our basic natural resource, is not left in the preserve of the few and is not left idle. Indeed, individual farmers and deputations from farm organisations have to come to see me as the Labour Party spokesman on agriculture and indicated to me that they were strongly in favour of a land tax. These deputations included not alone members of the Irish Creamery Milk Suppliers Association but also groups within the IFA who said they support a land tax system. They represent farmers in what is accepted as the most productive area of farming — the 50 to 70 acre categories. The land tax was one of the more positive proposals which came from the previous Government. The people who came to see me pointed out that the tax payable by farmers this year under the present systems will be exceeded by the amounts they will have to pay to accountants to prove their liability.

In summing up on this point I would like to refer to a statement made by the then Fianna Fáil spokesman on agriculture, Deputy Noonan, while speaking on the 1986 Estimate. He said that as part of a strategy Fianna Fáil would charge An Foras Talúntais and ACOT to provide as accurate an analysis as could be reasonably turned out with regard to the situation of farmers in different parts of the country. He said that this analysis would take account of farm size, land quality, the main enterprise, the status of the owner, of the family and so forth and would include consideration of what way development aid could best be used to improve efficiency in output. He went on to say that such information would be of great help in putting the national development plan into action.

The farm classification office could have provided this information if it had not been abolished by the Government and Fianna Fáil in office could have implemented at least that part of their policy. I would like to remind the Minister that this work was done effectively and efficiently by the farm classification office. Perhaps he would indicate whether the information is still available and when he proposes to move on the national development plan which was mentioned.

I wish to refer briefly but positively to the new and developing area of organic farming which was referred to by the previous speaker. This is not only a method of producing wholesome and chemical and drug free food, it also enhances and protects our environment from the abuse of such substances and, most importantly, it has proved to be an economically viable form of farming. There is a growing market at home and abroad for such organically produced products.

Standards are now being set for such products and I would stress the importance of setting standards at the highest possible level which our organic producers can reach thereby excluding those who simply wish to muscle in on the developing market I have referred to, in Europe in particular. I would ask the Minister to respond as positively as possible to that point.

In summing up what I have to say, the Minister's statement could easily have been delivered by his counterpart in Fine Gael. If there had been no change of Government they could have switched scripts and delivered them in the House. They probably would have done so. I believe the statement he has made will lead to no change in Irish agricultural practice. Small farmers——

An Leas-Cheann Comhairle

The Deputy has three minutes left.

Mr. O'Kennedy

I note the Deputy is reading that comment from a prepared script.

Mr. Stagg

No, I prepared it myself.

Mr. O'Kennedy

You prepared it before you heard what I had to say?

Mr. Stagg

No, I prepared it here in the House.

Mr. Yates

You typed in the House?

Mr. Stagg

Having listened to the Minister and read the part of the speech which he did not deliver I prepared this part of my contribution. In my opinion, small farmers will continue to suffer and be driven off the land as they have been driven off under similar policies for some time and employment directly in farming and in spin off industries will continue to decline under the policies enunciated by the Minister. Large farmers will continue to prosper in their near tax free havens. This will be the result of the Minister's policy which is unchanged from that of his predecessor.

The unbelievable scandal of food mountains being stored at enormous expense will continue while many of our own people go without and while, in other parts of the world, thousands die of starvation. The Minister's unchanged policies will ensure that this is so.

Minister of State at the Department of Agriculture and Food (Mr. J. Walsh)

The Government in their programme for national recovery identified the food industry as a key sector for growth. It was recognised that there was a need to amalgamate and co-ordinate the activities of the various State agencies to achieve maximum potential and the best use of public moneys in providing for the needs of a modern developing food sector. A criticism often made of the State's handling of the food industry is that it lacks a single focus as a result of the multiplicity of State agencies and Government Departments which are involved in servicing the industry.

The new departmental arrangements can now be looked on as a one-stop shop so far as the Government are concerned. This is an important development and will facilitate the adoption of a more integrated approach to the entire agricultural and food sector. This sector has tremendous potential for development. It has been evident for some time that there is a need to get away from traditional commodity trading but, unfortunately, I have to report that progress has been slow. It is, to say the least, unsatisfactory that the dairy industry still converts such a large volume of milk into bulk commodity products for which there is a difficulty in finding markets.

Similarly, in the beef sector there is still a large concentration on carcase beef, although I have to compliment those excellent people in the industry who have encouraged a shift away from live exports to the more developed products, such as vacuum packed beef. Last year vacuum packed beef products accounted for over £100 million of the value of all beef products exported. We have to get away from the traditional reliance on producing and manufacturing products just because we have the technology and know how to manufacture them. Up to now we could sell into intervention but we will now have to look for new products to develop and in particular we will have to develop products which will have an increased shelf life and an enhanced value. As we have a relatively small home market we need to develop products which have a longer shelf life and we must be able to get these products on the shelves of supermarkets on the Continent and around the world. These products should be as fresh as possible and ready to eat.

There is an additional difficulty in Ireland in that our production is seasonal. Increasingly in the future we will have to find ways of extending the shelf life, in fresh form, in particular, of both milk and beef. The most efficient way to produce milk is from grass and farmers will need to be compensated very generously to produce milk during the winter months when they have to rely on concentrated feeding which is very expensive. It would be cheaper to use modern technology and to store products in a fresh form than to force farmers to produce products during the more difficult months of the year.

It is also clear from the changing CAP market arrangements that we will have to move in the direction of producing consumer products and that market research will have to be carried out. The first stage for companies involved in the food sector is for them to identify the needs of the consumer and then to supply those needs. It is important that our food processors recognise that this is a highly competitive business. Because of the nature of the international food business competition is intense. In many foreign markets, the crowding of product areas necessitates a careful selection in target marketing.

For this reason State aid will be directed towards companies with strategic marketing plans. There are significant opportunities in these markets for quality products from our beef, lamb and pigmeat sectors, in particular.

I would identify two main goals which should be aimed at by our food processors: (1) the creation of much more value added products in the beef, pigmeat and dairy sectors; (ii) the development of niches in both domestic and export markets. I would not write off the domestic market as some people tend to. The reality is that out of the total importation of agricultural products in the region of £1,000 million there should be a target area there for substitution of at least £175 million to £200 million and by any standards that is a considerable niche of the market and should not be under-estimated.

For the development of the food industry we would have to establish a greater awareness of quality control so that produce being marketed is what the consumer wants and what the market place demands. In this area of quality we will have to have excellence as the target and a change of attitude and culture inculcated in the industry where only pristine conditions at all levels of the industry will be adequate. The presentday consumer is more conscious than ever before of the quality and naturalness of food and, in particular, in the area of residues of any kind, or preservatives. The modernday consumer is particularly health conscious and in Ireland we have the advantage of an ideal geographical location. We have an extremely good image in Continental Europe and around the world. We should use that to the best advantage in having Ireland as a good food producing island and the individual products enhanced all along the production and marketing chain.

The home market is a relatively small market, although it should not be under-estimated, but for the high volume uptake of products we must look at the European Community with its 320 million people. It is there that a tremendous opportunity exists for the development of the food industry. That will not be done easily and it will require considerable commitment from the companies involved. As I mentioned earlier, the Government will, through the aegis of various State agencies, be giving every encouragement to firms to improve their marketing performance and to increase their product development.

Continuity of supply and the excellence of the service and continuity of service will be key elements in food marketing. We must be determined to ensure that everything will be done to have these elements form the basis of the marketing strategy of the food industry. The various State agencies involved in the food industry have been directed to stress the necessity for quality in their dealings with companies seeking assistance. In addition the Institute for Industrial Research and Standards are currently examining the possibility of adapting an internationally recognised quality management system for the food industry.

Management effort to achieve quality which show its result in the market place and failure to ensure quality will have disastrous effects on firms in particular and on the economy in general, because if there is one small problem with a particular food product in some supermarket in any part of the world, it reflects badly on the whole food industry and the whole economy. It is incumbent on firms, companies and processors to be extremely vigilant in their adherence to quality and hygiene generally.

In the area of marketing, firms in the food industry will be given every assistance by the Industry Development Authority. They will be encouraged to invest more in research and development to promote product development. I must say at this point that the uptake of grants in the research and development area is disappointing. There are very attractive grants available to firms in the food industry for introducing research and development — grants of up to 50 per cent are available towards the cost of research and development of new products and manufacturing processes. These grants cover development work carried out either in-house or by outside consultants.

A specialist IDA service provides assistance in identifying new product opportunities arising from supplying other companies needs or from imports. In addition, grants of up to 50 per cent of direct in-company costs such as salaries, travel costs and expenses are available up to a maximum of £15,000, to assist companies to undertake studies necessary to identify new markets and products. For firms which wish to establish their own in-house research and development facility the IDA provide grants towards the capital costs involved, subject to a maximum of £150,000.

The food industry has been reluctant to commit its resources to product development with the result that State research and development facilities are not fully utilised by the industry. Some firms are unwilling, for one reason or other — I think confidentiality is probably one of them — but in 1986 only 46 research and development grants were awarded to firms in the food industry. This represents only 7 per cent of all research and development grants approved by the IDA.

I should like to encourage the industry to take up more of that finance and use the very valuable assistance of the State agencies available in the area of product and process development. We are not talking about totally new products. We are talking about modifying existing products and bringing about small changes to tailor-make products suited to the modern day consumer. Unless we do that and recognise that trends are changing, then there is no real future for the processing and marketing end of the industry. It will be the job of the agriculture and food area to encourage and assist in every way the food industry to go along this road.

I should like to mention in this regard the establishment of a national food research centre which will amalgamate the food research facilities of An Foras Talúntais and the Institute of Industrial Research and Standards which are being actively pursued at present. I would see that centre as providing the necessary dynamic for the food industry and having the commercial orientation and commercial activity very relevant and contemporary to the requirements of the industry. State agencies must have regard to commercial life and in research and development in the food area personnel and agencies will have to take this particular orientation more and more in the future.

Another area where product development could be promoted is in the area of joint ventures and licensing arrangements. Such arrangements provide significant opportunities for firms to avail themselves of advance technology and market access without incurring the financial burden which otherwise would be involved. We have a number of examples of this type of arrangement in the Irish food industry which have worked out very well for co-ops and firms in the industry where, with joint ventures and licence arrangements, products which are new to Ireland but developed elsewhere around the world are introduced here, marketed and sold, not alone enhancing the industry but improving the balance sheet of various firms involved in that part of the industry.

An Ceann Comhairle

I intervene to advise the Minister of State that five minutes now remain.

Mr. J. Walsh

We want to see more activity involved in relation to this area of licensing arrangements because we have an industry, in particular, the dairy industry where even our largest co-ops are relatively small compared with those of our competitors. We do not have the capital resources required for entirely new product development. The principal guiding State assistance to the industry in the future will be the encouragement of the production of quality products for which there is an identified consumer demand and to encourage the industry to become more involved in research and development facilities and to seek joint ventures with established overseas firms.

The Institute for Industrial Research and Standards and An Foras Talúntais will play an important role in product development and technical expertise. It will be necessary for companies to build up their marketing strengths and An Córas Tráchtála, CBF and other State agencies will provide valuable assistance in this area.

State measures are now geared towards providing a suitable environment conducive to growth. This policy takes cognisance of the fact that the marketplace must take priority at all times and determine the type of product which should be produced. I am confident the measures now being put in place by the Government will bring about positive returns and lead to the full potential of the sector being realised.

Mr. Durkan

I agree with many of the sentiments expressed by the Minister and the Minister of State. I hope that they are not just expressions and platitudes and that there is a follow-up to them. I know that the Minister and his Ministers of State are serious and conscientious about the need to do the things they have set out to do. There is a certain platitudinal nature about many of the things they said because all of us have said many of those things in this House. Both the Minister, Deputy O'Kennedy and Minister Walsh will remember saying much the same thing when they were sitting on this side of the House. When I was sitting on the other side of the House I said the same things, as did other members of my party.

The seriousness with which we set about doing the things that need to be done in relation to agriculture and in particular the food processing industry will be determined by our ability to take the industry by the scruff of the neck, spend money where it needs to be spent and knock heads together where they need to be knocked together in order to spearhead a campaign that will set Ireland on a plateau hitherto unknown in the food processing area. It might be better to rename the Programme for National Recovery, the Programme for National Discovery. In that way it might be possible to discover how it is proposed to do the things we all agree need to be done. Then we could get down to the brass tacks of deciding what is possible and what is merely a grand idea to debate at a particular time in front of a receptive audience.

I wish to refer to the food processing industry and the obvious scope for development in that area. I know that the Minister of State, Deputy Walsh, has a special responsibility in this area. I wish him every success. I agree with many of the points made by the Minister that there has been an over-reliance on intervention for dairy products. I know the Minister's intention is to get away from that over-reliance. I am quite sure we will all support him so that we can generate an enthusiasm for other downstream products and diversify into other areas where there are markets growing at present.

The Minister rightly said that markets should be consumer-driven. Many markets have not yet appeared. These markets can be created and cultivated by virtue of good marketing techniques. One has only to think back a few short years when items such as garlic cheeses and other relatively recent innovations in the dairy sector were unknown in this country. These items were available on the European and world markets. I remember being told by people in the business that there were no markets in Ireland for such products yet foreign producers were able to bring in those products and create markets where they had not existed. This has to be taken very seriously into account by the industry and the Minister.

Diversification has gained some considerable scope and popularity in recent times. This is natural since many areas are over-supplied and there are mountains of certain types of food. There is a need for diversification in agricultural production generally. Whenever a huge campaign for diversification into other areas was mounted in the past, somehow, somehwere, something went wrong. A couple of years later gluts appeared in particular areas. Farmers can tell of the different advice they were given over the years in relation to various products. Having gone into those areas lock, stock and barrel many farmers found themselves afloat with no way of being anchored. That is one of the problems that existed in the past. I hope we can learn from those unfortunate experiences so that we can ensure that where diversification takes place it is not with such an abandonment as to create another problem. I ask the Minister to seriously consider the mistakes that were made in the past, mistakes created by previous Governments and perhaps all of us in this House.

Other speakers referred to the fact that this country is in a unique position from the point of view of food production in the sense that we have a relatively pollution-free environment. We have the ability to produce products which are to a considerable extent devoid of the pollutants which affect the environments of many of our competitors. We had to capitalise on our pollution-free environment and to market our products on that basis. However, there is no point marketing products on that basis if those products do not live up to those standards. Ireland is an island. We are relatively remote from Central Europe but we still have access to the European and world markets. We should capitalise to a far greater extent on our slight remoteness by producing the products the world and European markets go for. If we can do this and nothing else we will have achieved something great. It is up to us to capitalise on our products, our pollution-free environment and the huge markets that are available. It is up to us, the Minister and his Department to find the ways and means of developing those markets.

The Minister referred to the slow uptake of R & D grants through the IDA. I am aware of that slow uptake. I ask the Minister to carry out a survey among the people who have made applications for feasibility grants to find out from them why they did not proceed with these grants. I believe that some remarkable discoveries could be made in that area. I respectfully suggest the Minister might do that. I would be very interested in the results and I am sure the Minister would find the results equally interesting. It is something that has been brought to my attention and to the Minister's attention on numerous occasions and something needs to be done about it along those lines.

The Minister also referred to the shelf life of food. This is becoming increasingly important. The shelf life of food is increasing and bringing benefits to the producers and to the food processing sector as a whole. Today's consumer is looking for food products that are free of additives and preservatives. Considerable concern has been expressed in the UK at the level of additives and preservatives in many foods, so much so that a brochure has been produced to educate the UK consumer to be able to readily identify the additives and preservatives which are common in food products at the moment. As we know, most of those preservatives are indicated by way of a letter and we are aware of the reservations in medical quarters about E-type additives. The food processing industry should gear itself to deal with a more educated consumer. There will be increasing resistance to preservatives and additives of that nature in food. The resistance will be far greater over the next few years than it is at present because it is only now that the consumer is becoming aware of their existence.

The use of sprays and fungicides in the growing of vegetables is another area where the consumer is becoming more aware. Those who have a knowledge of sprays and fungicides will readily recognise that 25 or 30 years ago a minimum amount of sprays and fungicides were used in comparison to what is used today. The strength of the sprays and fungicides used today has been increased dramatically because through constant use they become ineffective. Anybody with a knowledge of agriculture will recall that one famous weedkiller used in the early sixties had a dramatic effect on the control of weeds but after five or six years it was ineffective. It has now been superseded by sprays many times more powerful and more expensive and still these sprays do not have the same dramatic effect on weeds and pests. We must work in these two areas if we are to have a consumer driven, market led, food processing industry and if we are to capitalise on import substitution. If we achieve success in those areas we will have done agriculture and the industry generally a great favour not only in this country but in Europe as well.

In relation to marketing, presentation and labelling, we have all stated in this House on numerous occasions the importance of good, clean production, presentation and marketing. The Minister's predecessor, Deputy Paddy Hegarty, made considerable progress in relation to the grading and labelling of potatoes in particular. It has worked reasonably well but it is still not 100 per cent effective. It is still possible to buy potatoes which are not labelled and which if they are graded are poorly graded and it is still possible to buy anywhere in the country, imported potatoes which are not labelled. It is sad this state of affairs exists given the commitment to the industry and it is very damaging to the industry that it should continue. I would ask the Minister to take it upon himself to bring about the elimination of unmarked products in this area. Our own producers will readily state they want grading facilities and labelled products to protect the industry.

In County Kildare, in co-operation with the IFA, local co-operatives have done tremendous work in producing potatoes and other vegetables which are well packed, well presented and which are all labelled. There cannot be a question of a difficulty arising afterwards as to the owner of the product and that has done tremendous good for the industry in relation to improving standards. There will be an even greater improvement in standards if more emphasis is placed on that area. I am not speaking off the top of my head but from the experience of constituents in my area.

Another area to which the Minister should devote time is education and training for the food processing industry. Peculiarly with the exception of one or two colleges, RTCs and the NIHE in Limerick, there has been little emphasis on marketing in the food processing industry. I mean no disrespect to the Ministers opposite, but until recently the position of the chief executive of large dairy co-ops was the preserve of a degree holder in dairy science.

Mr. J. Walsh

What is wrong with that?

Mr. Durkan

Nothing, but it is amazing that such great emphasis was not placed on a marketing degree. It is only recently that it is becoming popular to recognise the attributes of a holder of a marketing degree in these areas and since then there has been a considerable improvement. It would be of tremendous benefit to the industry if regional colleges were to specialise in training, with emphasis on marketing, for the food processing industry and if those colleges located in predominantly agricultural areas so that the industry could benefit greatly.

The time left is not sufficient to deal with the subject, but I will say a brief word in relation to farm tax which has also been mentioned by other speakers. I know that both the Progressive Democrats and Fianna Fáil campaigned vigorously against the farm tax and probably the Fianna Fáil Party, now in Government, felt a need to deliver on that promise. It is one of the very few promises they kept. It would be very interesting if they were to consult directly with farm families right across the board and find out exactly what they think. Probably they would find the majority in the acreage range from 100 acres downward would be well and truly in favour of retention of the farm tax. Those farmers — and all farmers — will pay at least as much, if not more, under the revised system. Also, the State, through the Revenue Commissioners, is burdened further with having to go into the various liabilities most of which are minimal, and the cost there must be in the region of £15 milion or £20 million. If the Minister has another look at that he might find that promise was not as important to keep as some of the others which, unfortunately, his colleagues have not kept.

The last point I want to make concerns a policy of irradiation for the killing off of bacteria in food processing. It has become a very popular method of ensuring a longer shelf life. This is causing some concern in medical circles in this country, in the UK and in Europe. It could have a great impact on our food processing industry if we could say that we could produce food in a pollution-free environment, free of additives or preservatives and free of bacteria at the same time. That would be the biggest boost our industry could get and I see no reason why we should not capitalise on that at this time.

Minister of State at the Department of Agriculture and Food (Mr. Kirk)

I would like to make a few comments about the horticultural industry.

Before we joined the European Community in 1973 growers here were encouraged to produce those crops which it was felt were best suited to conditions in Ireland. At that time we could protect and help the industry by, for example, imposing quantitative restrictions at certain times of the year on imports of the more important products such as tomatoes and apples. In the transition period from 1973 to 1977 the quantitative restrictions had to be removed and customs duties were phased out. In the intervening period, therefore, we have been subject to the full rules and regulations of the European Community. In addition, many horticultural crops were and are in overproduction in the EC and we were subject to sophisticated competition which we were not fully equipped to face. One must also mention the energy crisis of the seventies which had a profound effect on all sectors of the economy including, of course, the horticultural industry. Like others this sector also came under pressure due to the general recession. As a result of all these things combined, our small developing industry was exposed to the massive onslaught of foreign imports and our fragmentation and lack of cohesiveness led to a shrinking industry with very serious problems in some sectors.

It was against this background that the Government's Programme for National Recovery highlighted the importance of horticulture in the economy and undertook to implement a plan for its recovery. The build up of imports is a matter of major national concern and decisive action is needed to arrest and reverse the decline in Irish horticulture.

A key element of the Government's strategy was the establishment of an Bord Glas. As Deputies know, the establishment of such a board requires legislation. Because of the need to examine existing structures, arrange consultation with interested parties, the various pressures on the Government's parliamentary programme and so on, the legislative process takes time. The Government felt, however, that the matter was so urgent that a non-statutory board along the lines set out in the policy document should be established immediately on an interim basis so that no time would be lost in getting the necessary work under way.

It is my intention that work on the preparation of the legislation will be given priority within the office of horticulture which has been established in the Department of Agriculture anf Food. The services of this office will, of course, be also available to the interim board to help in every posible way. The terms of reference of the interim board are, broadly speaking, to promote the development of the horticultural industry so as to increase output, replace imports, promote exports and help generate employment. These terms are sufficiently broad to give them maximum flexibility in their work. The board will, obviously, be free to determine their own procedures and will wish to consider the best transitional arrangements to facilitate the attainment of the objectives which have been set for the statutory Bord Glas. I feel it is important that progress should be made quickly on the problems facing the industry.

The quantity of fruit and vegetables being handled by the Irish supermarkets at present is very significant and makes up a very high proportion of Irish sales. Both the quantity and range of produce on offer have increased and quality has improved enormously in recent times. The consumer of today is discerning, alert and educated and no longer tolerates a badly presented or poor quality product. The consumer also wants access to the widest possible range of products. It is, therefore, axiomatic that Irish produce, to earn its place on the shelf, must be of the highest quality and match the import lines in terms of price, presentation and continuity of supply. These are the facts and we ignore them at our peril. There are encouraging signs that some grower organisations are working satisfactorily with the multiples. Their requirements can and are, being met. However, few Irish growers on their own can guarantee continuity of supply and, consequently, producer groups are essential if the Irish grower is to compete effectively with imports. There have been positive moves in this direction in recent years but progress has been too slow. As a priority, I have suggested that An Bord Glas should examine ways and means of speeding up this process.

The broad objectives for the board have been set out but the objectives for horticultural development will not be achieved without some imaginative thinking, hard work and a positive commitment on the part of all interests within the sector.

At this point I would like to refer to what I feel is unfair and unfounded criticism about An Bord Glas. I find it hard to understand why some commentators have decried the fact that the Government moved so quickly to set up the board. It is very simple; the Government wanted to lose no time in getting the work of recovery under way and I cannot see, therefore, why speedy action in a vital area like this should be a cause for complaint. If the Government had dithered on this issue that also would, presumably, have been deplored. It appears that you cannot win in this type of situation.

I should also mention that those people invited to serve on the board were asked to do so because of their intrinsic merits and the wealth of knowledge and experience which they have in their particular spheres. They were selected for their proven track record and I am confident we have the best team for the job. At the same time, I am under no illusions about the magnitude of the task facing us in the horticulture sector. The board have an important role to play at a critical stage in the history of the industry and I am confident they will do it effectively. I do not pretend that there are any simple or instant solutions or that the board are the answer to all the problems and difficulties facing the industry, but I see them as the catalyst and the focal point for the future development of horticulture.

We all have a common objective — the consolidation of the existing industry and its positive development ahead, despite the formidable odds. We can, and will, move forward.

Mr. Farrelly

In regard to this Estimate and the budget, I believe this was the first time ever before a budget that a deal was done with the Minister for Agriculture and Food, the Minister for Finance and the main farming organisations. I am sorry to say that that proposed deal, which has been implemented, is to the detriment of the young farming community. As a number of speakers have said, the Government of the day campaigned during the past two and a half years for the abolition of land tax. On the basis of the land tax being abolished the Minister for Finance had the main farming organisations agree to its replacement by a 0.7 per cent reduction on VAT refunds. That was one method of taxation proposed.

There was also the abolition of installation aid for young farmers and a reduction in grants available to young farmers wishing to develop their farms. There were hundreds of them who availed of the stamp duty exemption on the transfer of land over the past two or three years, which provision was introduced by the previous Government. I believe its abolition has had a detrimental effect on the farming community. There is now being imposed a direct tax of 0.7 per cent by way of VAT on progressive farmers most of whom are experiencing financial difficulty, the majority of whom are being asked to pay a substantial additional amount than would have been the case had the land tax not been abolished. Indeed to date no Bill has been circulated in order that land tax may be taken off the Statute Book. I can foresee in the 1988 budget another U-turn by way of reintroduction of that land tax. It is my belief that the majority of farmers would prefer that land tax rather than having to pay two accountants substantial amounts of money. I am sure the Minister of State present, like all other rural Deputies, is inundated by small farmers experiencing financial difficulties, trying to produce books for accountants whom they have to pay perhaps £300 or £400 a year to certify that they never had a taxable income from the introduction of tax on farmers. Had sense prevailed modifications could have been effected in respect of hardship cases.

Following that there was the abolition of installation aid. Yet before its abolition — as was said in the Macra na Feirme Report — there had been 1,313 applicants. As a backbencher I spent some time trying to persuade our Government to introduce a scheme of young farmer establishment aid. It was introduced last year. I cannot understand why any Government would abolish such a scheme when it had been funded to the extent of 50 per cent from Europe. It is my opinion that, within a short time, we will see a decline in the numbers of farmers attending educational courses conducted by ACOT throughout the country over the last three or four years.

It is true that the total percentage of land in the possession of farmers under 35 years of age is 16 per cent only, 4,500 applicants qualifying for the stamp duty exemption. Installation aid was meant to be a replacement of that stamp duty exemption. Surely if the Minister and his Government are committed to agriculture they will find £0.5 million within the Department to ensure a continuance of that provision. I have at present on my files the names of 26 people who will lose out on that provision, and a large number of other constituents who will not be eligible because of the time limit imposed. For the sake of the expenditure of something in the region of £0.5 million it is nothing short of penny pinching.

The Minister will be aware of the application to the EC for the inclusion of the less severely handicapped areas and the wholly disadvantaged areas in the reclassification of such areas. I am disappointed that this has not been put on the agenda for the price negotiations. If one looks at the experiences of other countries in such negotiations, it will be seen that last year Germany had at least half of its total land classified as fully disadvantaged. I accept that money was not provided in our Estimates for 1987 but a Supplementary Estimate should have been introduced to benefit those in the less-well-off regions of the country. There have been many small farmers in the northern part of my county who were affected enormously by the bad weather of the past two years, all of whom needed extra cash to help them repay the massive debts incurred in endeavouring to feed their stock.

I was interested to hear the Minister of State talk about the IIRS, An Foras Talúntais, CTT and the part they will play in the development of new products. It is my belief that all of these agencies should be amalgamated, with one officer dealing with applicants as they seek help. In the past few days I have been in contact with a family who have produced a product called Organic Gold fertiliser. Although they have their product ready for sale it is only now they have been made aware of the feasibility study undertaken by the IDA which has taken 18 months to complete. We must endeavour to cut out all of the red tape in these areas. What happens at present is that an applicant approaches the IDA, is given approval, then goes to CTT who will not grant aid without prior IDA approval. The same applies in the case of the NDC; they will not help unless something has been approved by the IDA. The red tape must be eliminated if people are prepared to put their money where their mouths are, and are prepared to produce something that can be sold on the market other than normal farm produce.

The Minister of State dealt with criticism of the formation of an Bord Glas. There are people on the board who are doing excellent work and are very successful in their own businesses. Will those people be prepared to introduce proposals to produce products in Ireland that will cost a little more and which will affect the overall profits in their own companies? I would like to see the board involved making the progress the Minister hopes it will make. I do not think there are people in Ireland whom we can put on a board and who will sacrifice profits in their own companies in order to develop other areas and that is why I am concerned about the membership of the board.

Mr. O'Kennedy

Is the Deputy suggesting that representatives of these boards should not have any other commercial involvement?

Mr. Farrelly

I am questioning whether people will have a commitment to develop a product that will in effect subsidise something on which they are making a bigger profit. For instance, potato importers continue to import potatoes at times of the year when there are adequate supplies available from our own growers. That is what I am concerned about. We saw the consequences of what happened in Dundalk because of situations such as that. I hope that will not happen again.

Another matter that has been brought to my notice is in connection with the legislation we introduced in regard to the use of hormones. In the past year we introduced legislation second to none in so far as the legal use of hormones is concerned. I am told that there are partners of ours in Europe who are deliberately using hormones to the same extent as we used them before their use was made illegal. I would like the Minister to take up that point with his counterparts in Brussels. If hormones are being used in Europe our farmers should not be at a disadvantage nor under any pressure in that respect. In other words, there should be a status quo so far as such matters are concerned. The Minister should take steps to remedy the position.

The Deasy beef deal on premiums has been a resounding success and will mean £30 million to the Irish economy. I would like the Minister to tell us if that is the correct figure because it was thought when that deal was made last October that it would only mean £15 million to the Irish economy. I would like the Minister to clarify that position because it is a very important point.

Cuts have been made in the allocation to ACOT committees throughout the country. I was chairman of an ACOT committee in Meath for a number of years. When ACOT were established in 1979-80 the Government transferred buildings to them. I did not agree with that move. We were charged rent for the times we held our meetings in the ACOT offices and we were also charged for staff time. I ask the Minister to investigate this matter. The number of meetings of ACOT committees have been reduced to about six a year. I do not disagree with that but I would like to ask the Minister if it is right that the ratepayers of the county I represent should have to pay rent for buildings for which they provided the money in the first place. I ask the Minister to consider repealing the legislation in this regard in the near future because it is very unfair.

I wish to refer, too, to the reduction in grants for farm development. There is no incentive for young farmers in particular to develop farming. In so far as the development of farming in the future is concerned we should abolish the grants and perhaps transfer the people who deal with this area to other areas. We should give loans to those young farmers at reduced interest rates, say 7 or 8 per cent, over a period of five or seven years. That would cut out the enormous cost involved in the number of times premises have to be inspected. The farmer could then develop his farm and survive without any serious problem unlike the position at present where grants, which are not very substantial anyway, are being reduced by 10 per cent. We should take a radical approach in regard to the overall position of grants. We should give a subsidy in the form of reduced interest rates to younger farmers because the majority of farmers today are young and have completed the ACOT courses. This would be the constructive way forward in so far as young farmers are concerned.

I am deeply disappointed with the numbers of young farmers who have been left out in the cold for the sake of penny-pinching on behalf of the Government to the extent of £500,000. These farmers would have been, and were, eligible under the ACOT scheme for the installation aid. I ask the Minister to reconsider that matter and to reintroduce that aid because the young farmers of Ireland are depending on it. If the Minister and the Government have any commitment to agriculture they will do so immediately.

Mr. Sheehan

This debate relates to one of our most important industries. Agriculture, as we all know, is our major industry. It accounted for £2,500 million in export earnings in 1986. This figure represents a quarter of the total national exports in that year. As everybody knows, the climatic conditions in 1986 were anything but encouraging for our Irish farmers. Yet they had that wonderful export record. We should be very thankful to them for putting us in that position.

Agriculture and the food processing industry account for approximately 210,000 jobs. This must make a great impact on the workforce. If it was put on the pedestal it should have been put on the past two decades, agriculture would now be producing far in excess of what it has been producing. Instead of employing 210,000 people in agriculture and in the food processing industry, there would be almost 500,000 people employed. For decades this important industry was starved of funds and of its rightful share of the national cake which was needed to streamline it. If our farmers had got this backing they could now compete and beat their Europern counterparts, but alas successive Governments have failed to give agriculture the recognition it deserves. As I said, our major industry is being starved of the necessary finance to enable it to take its place in Europe.

Ireland has a great image in the EC countries as a food producer. It is seen as a clean, unpolluted, green island, sprinkled with Atlantic mists and kept safe from the recent radioactive fallout by the prevailing westerly winds which we enjoy, thank God. Our climate makes us an ideal country for food production. We should capitalise on this God given gift and increase food production to the limit. Our aim should be quality and competitiveness. It is shocking to realise that each year we import fruit and vegetables at a value of approximately £40 million, which we could produce ourselves.

The Taoiseach has set up a new Department of Food and An Bord Glas. In his wisdom he picked two representatives to be Ministers of State with responsibilities for both Departments but it is amazing to realise that he did not provide one penny for these new Departments. How can these junior Ministers get the new Departments off the ground when they are muzzled for the want of finance? This is a whitewashing exercise. It is a haphazard, half-hearted approach to the real problems on the agricultural front. Creating Departments and establishing boards is not the solution to the problem. The solution lies in providing proper finance for these boards and Departments to make sure they play their part in developing this very valuable industry, that they will give the guidance and attention this industry deserves and ensure that added impetus is given to the agricultural industry to help it achieve its target and continue to expand and play a vital role as it has done in the past.

What encouragement can our farmers get from the type of policy which has been followed in the past few months with two Departments being set up but no money being provided? Anybody who knows anything about agriculture would be critical of that. Throughout the country this move is regarded as a practical joke. It has been said that a Department with no money is like a pub with no beer. If we are to tackle our agricultural problems we must have the tenacity and courage to face up to them, but the Minister for Agriculture does not have the tenacity and courage to ensure that proper funding is provided for those Departments which are muzzled for the lack of finance.

Our farming industry has been starved for want of funds by the hairshirt policies of the present Fianna Fáil Administration. It is clear that ACOT offices throughout the country do not have sufficient funds to carry out their programme of education and assistance to the farming community. What encouragement can our farmers get from a Government which axe young farmers' installation grants. Will that negative policy create a spirit of expansion in our agricultural industry? Far from it. Our young farmers and the agricultural industry in general have been plunged into an air of gloom and doom. It is of vital importance that we make sure agriculture gets its rightful share of finance. As I said last year we imported more than £40 million worth of fruit and vegetables which could be grown here had our farmers been given proper advice and assistance.

In south-west Cork, a major plant — the Fastnet Vegetable Co-Op — was closed down by a Fianna Fáil Government because of a lack of expertise and advice. That factory would be in production today, not alone producing food for the home market but contributing to our valuable export trade as well, if it had been given proper advice and assistance. This business foundered because it was engaged in the dehydration of food and food products instead of getting involved in deep frozen products. The demand by the Irish and continental housewives for dehydrated products was long gone before the departmental advisers had given the co-operative the advice to get involved in this area. Why did the Department not take steps to ensure that the factory was put on a sound footing by switching to frozen food products? It is amazing to think that none of the advisers in the Department could produce a plan that would save that factory. Did they not consider redesigning the machinery? That would not have cost a large amount of money but it would have saved the factory and, consequently, would have given valuable employment in a depressed area of my constituency. The factory has been closed and the briars and nettles are thriving in it. That is unfortunate when one considers it was second to none as far as capacity and output were concerned.

The climate in Ireland is ideal for the growing of vegetables. Everybody is aware that this is the Emerald Isle, an ideal place for the growing of agricultural products. It is surprising that we are only skimming the surface as far as producing vegetables is concerned. There should have been a greater concentration on growing vegetables in west Cork and south Kerry to keep that factory going. I appeal to the Minister of State, Deputy Kirk, as the person in charge of An Bord Glas to pursue this matter and to have the factory reopened as soon as possible. It is hard to visualise that happening because of the shortage of money in the Department. I appeal to him to reopen the Fastnet food processing factory in Skibbereen without delay.

In the course of his contribution the Minister dealt with sheep production. If he is genuine about expanding that valuable industry he should not be dragging his heels on getting approval for a suitable dye to identify sheep and lambs that are presented for sale at the spring and autumn fairs. Is the Minister aware that hundreds of thousands of sheep presented at those fairs and at marts do not have any certificate to prove they have been dipped since they were born. That is not the proper approach in an industry that has tremendous potential. Why is it that the Minister has not given approval for a national double-dipping programme? Is the Minister aware that double-dipping is compulsory in Northern Ireland and Great Britain? I cannot understand why the Department have refused to listen to demands by sheep dipping committees to make the second dipping compulsory.

The Minister may say that any good farmer would have his sheep dipped twice each year but he must be aware that all farmers do not comply with the law. Undipped sheep and lambs are presented for sale and that is doing untold harm to the industry. It is essential, if we are to preserve a valuable industry, that we insist on disease free mutton and lamb being offered for sale at home and abroad. We cannot hope to do that until the Minister insists on a second compulsory dipping for at least three years. It is important that we do everything possible to get rid of sheep scab. We eliminated warble fly in our cow herds by compulsory treatment of those animals. I should like to ask the Minister why he, and his Department, refused to send a representative to a meeting of the sheep dipping committees of Cork, Kerry, Waterford and south Tipperary. It is unfortunate that I do not have the time to deal with such topics as mountain lambs and the division of commonages.

An Leas-Cheann Comhairle

The Deputy has two minutes left.

Mr. Sheehan

I thought I had seven minutes left.

An Leas-Cheann Comhairle

I am anxious to keep the Deputy happy at all times and I should like to point out to him that the record shows that he began his contribution at 7.29 p.m. On that basis he has two minutes left.

Mr. Sheehan

The demand for pigmeat continues to grow in the EC, the USA and Japan but our industry is in decline and if the present trend continues we will be fighting for the survival of that sector. There is no doubt we will lose our export market. Is the Minister aware that Irish bacon makes about £150 per tonne less on the UK market than bacon imported from Denmark? That is equivalent to £9 per pig less for our Irish farmers. Irish bacon exports to the UK amount to 11,000 tonnes annually but I reckon that because of bad marketing we lose in the region of £1.6 billion in export orders. that is a shocking indictment of the Department.

Irish farmers receive the lowest prices in the EC for their products. Bad marketing is mainly responsible for that. It is estimated that the total cost to Irish agriculture of poor marketing of food products is in the region of £150 million per year. That surely must be the last straw. It is sad to note that ACOT committees throughout the country do not have any money to pay travelling and subsistence allowances to their members. It is now an honorary job for an elected public representative who has to use his own car, time and money to attend meetings without being recompensed in any way. This is what happened under a Government from whom we heard so much before the election about getting agriculture off its knees but they have completely demoralised the farming industry. I call on the Minister to use his influence in the Cabinet to extract every pound possible for the farming industry to ensure that farmers get a rightful share of the national cake because, if not, the industry will be even more deprived.

Mr. T. Fitzpatrick

I intervene to make a brief contribution on behalf of the farming community in Cavan-Monaghan. I do not have to tell the Minister or his advisers that my constituency is heavily dependent on agriculture for a livelihood. Indeed, Cavan-Monaghan is unique in that it is one of the greatest food producing and food processing constituencies in the country.

Mr. O'Kennedy

We would challenge you on that in Tipperary.

Mr. T. Fitzpatrick

The farmers in County Tipperary have a much easier time than those in Cavan and Monaghan who have to work very hard. Many farmers in County Tipperary can sit back and watch their animals grow fat. A big part of the economy of Cavan-Monaghan is built around milk production. Some of the best co-operatives are there although they have had their difficulties. However, those who have had such difficulties have weathered the storm and I am glad to say that the co-operatives in both counties seem to be doing well.

Pigs are produced on a very large scale, particularly in County Cavan. There must be more pigs produced there than in any other country. Monaghan is unique in its own way because it specialises in poultry, chickens and ducks. Monaghan ducks are exported all over the world. Mushrooms were also introduced to the county some years ago and are doing well. It follows from what I said that these two counties depend on the production of food and its processing for a livelihood and to provide employment.

This constituency is under heavy attack from Northern Ireland as many goods are much cheaper there and over the years the media highlighted the fact that many people from the constituency went across the Border to shop. I approve of the step taken by the Government to at least discourage people from this part of the island crossing the Border to shop on an intensive scale. However, it has not solved the problem for Clones, Monaghan, Ballyconnell, Belturbet, Swan-linbar, Blacklion, Dowra, Castleblaney and other towns along the Border in my constituency. It has been a help and I hope it will stand up to any challenge it may have to meet from the European Community or the European Court.

No hindrance should be placed on the food producing and processing operations in Cavan-Monaghan. Certain monopolies are seeking to invade the milk industry in Monaghan and to prevent Monaghan Creamery from carrying on legitimate sales in other parts of the country. At the same time, large co-operatives from outside the county seem to be free to sell milk all over County Monaghan while Monaghan Creamery, which have been disposing of about 12 per cent of their milk intake to other areas — I do not want to be too precise for certain reasons — have been prevented from selling about 12 per cent of their input to other parts of the country, which is unfair. The feeling in the constituency is that the Minister and his Department seem to be on the side of agencies which are preventing the creamery in Monaghan from legitimate trading. I have reason to believe the Minister knows what I am talking about and I want him to take certain steps quickly to rectify the situation.

This is a small country. I heard the Minister for Health saying there were too many health boards and I could spend all night agreeing with that. There are also probably too many milk boards and the Minister should get rid of some of them. I understand this is under consideration in Brussels at present and that certain inquiries will have to be made. When big bodies start to make inquiries, things do not happen too quickly. Those inquiries should be completed and on end put to this monopoly. This is far too small a country to have a monopoly operating within it.

The Minister spoke about his native county of Tipperary. If someone clamped down on the fattening of cattle there and told the farmers that they could only sell their cattle in certain areas or to certain co-ops there would be a rebellion, and rightly so. Why should the people of Cavan and Monaghan be told they can only sell their milk within a certain area? It is outrageous for counties that have a tradition in food production and processing to be told they can only sell their milk within a certain area.

I do not believe in spending all night saying what could be said in a few minutes but I want to point out to the Minister that the Dublin District Milk Board is preventing——

Mr. O'Kennedy

I was wondering when you were going to mention them.

Mr. Fitzpatrick

——the Town of Monaghan Creamery from supplying 1 per cent — and I had to get on the telephone about this — of the Dublin market. By doing so they have deprived them of the opportunity of disposing of 12 per cent of the milk intake of the creamery. I am told that two of the largest co-ops who are very closely connected to the Dublin District Milk Board are flooding Monaghan with milk. That is not fair. Farmers in Monaghan have enough to contend with from the unfair competition from across the Border without being attacked from Dublin at the same time. I ask the Minister to look into this matter and to do what he can to put an end to this monopoly and to ensure that the Town of Monaghan Creamery is allowed to sell its milk in Dublin if it can find a market. Perhaps the end result will be that the people of Dublin will get better value for their money.

We cannot afford to lose much time as the Dublin District Milk Board are adopting what might be called bully boy tactics to prevent the Town of Monaghan Creamery from entering the Dublin market. I know the Minister has got the message. I was not long on my feet until he knew what I wanted to talk about. I was approached very early this morning about this matter and I was asked to raise it in this House if I got an opportunity to do so. I am now taking that opportunity. I hope the Minister who is well got in Brussels will ensure that this ring is broken and that this board which is now employing full time professionals to beat down comparatively small undertakings, such as Monaghan, will be told that they cannot do so and that they will have to compete on the open market just like everybody else.

Minister for Agriculture and Food (Mr. O'Kennedy)

First of all, I would like to thank all the Deputies who contributed to this debate. Now that I have a little more time than I anticipated at my disposal — I understand the order permits me to continue until 9 p.m. — I may have the opportunity of replying at reasonable length to the many points which have been made. At the same time, Deputies should understand I will not be able to reply to all of the points which were made at this stage but I want to assure them that what they said will not only be noted but will be very carefully examined in the context of the developing policies in the Department of Agriculture and Food.

Let me start on that point. Out of habit almost every Deputy in the course of his contribution today referred to the Department of Agriculture. One does not have to look further than the notice on the television monitor which refers to this debate as a debate on the Estimates for the Department of Agriculture and which notes it is now An tAire Talmhaíochta, the Minister for Agriculture, who is replying to the debate. I would like to point out that these are the Estimates for the Department of Agriculture and Food and that it is the Minister for Agriculture and Food who is replying. We all need to join in a common effort to constantly convey that the Department is now called the Department of Agriculture and Food and that it is the Minister for Agriculture and Food who has responsibility in this area.

As I stressed during the course of my opening address, but obviously not too many were present to listen to it and not too many got the message, agriculture and food are inter-linked and I said I was the first Minister for Agriculture and Food to address this House. It would help, in the context of what we are trying to achieve, if we keep in mind that overall role and responsibility. Let me point out that there is no department of food and there is no department of horticulture but that there are Ministers of State who have special and very significant responsibility for those areas in my Department. There is a good reason for that. We want to demonstrate that this is part of an integrated approach in the new Ministry of Agriculture and Food and that one of the main priorities of the Government is to promote added value in the food sector based on that primary resource. That is a matter of the most fundamental importance. I hope Deputies will not refer to a department of food or a department of horticulture when they speak about new Departments. What we have done, to answer a second point of criticism which was made——

Mr. J. O'Keeffe

Quoting the Fianna Fáil manifesto——

Mr. O'Kennedy

I am quoting what is being done.

Mr. J. O'Keeffe

It referred to the creation of a new Department.

Mr. O'Kennedy

I am going to come back to what is being done.

Mr. J. O'Keeffe

I suppose we can ignore that part of the manifesto along with the rest of it.

Mr. O'Kennedy

The most experienced personnel in the Department have been given special responsibility in the food and horticultural sections of the Department of Agriculture and Food while at the same time not divorcing themselves from some essential linked responsibilities in the Department. That is a measure of the integrated way in which we are approaching the issue. I hope there will be no further confusion, with people talking about new Departments. That is not the case.

Mr. J. O'Keeffe

We will totally forget about the Fianna Fáil manifesto.

Mr. O'Kennedy

I would like to make one other general comment in regard to some of the other misapprehensions which have arisen which is best illustrated by reference to a comment made by Deputy Sheehan. It is characteristic of much else that was said. Deputy Sheehan criticised me very roundly and strongly, but not in any pernicious or bitter sense, for not providing enough money in a range of areas and accused me of depriving the county committees of agriculture of even the necessary resources to cover their expenses for travelling to the various committee meetings. He dwelt at some length and with some degree of emotion on that. This illustrates the confusion which exists. The amounts allocated by me and this Government in the last budget are precisely the same as the amounts provided by his Government in the budget they had proposed to adopt had they remained in office. If Deputy Sheehan has complaints to make, will he refer to my predecessor or to the previous Minister for Finance who were members of the Government who actually put out those allocations?

Mr. J. O'Keeffe

Deputy Sheehan is very fair. He complained to us as well.

Mr. O'Kennedy

He did not seem to be complaining about the previous Government on this occasion. He has in his own constituency a spokesman for this area and I hope they can work it out between them. Let them not refer the complaints to me when they know exactly who were responsible. Within the short time available to us — and this is a very important point — we made it clear that we would not be in a position to do anything other than examine the Estimates of the outgoing administration with a view to ensuring that not one penny was wasted in that spending. We never suggested in those weeks after we came into Government that we were going to add extra expenditure. I want to make it quite clear that I indicated on behalf of the Government, as Minister for Agriculture and Food, that I would be reducing the Estimates already provided by the Government where I thought that was feasible and appropriate in the interests of the overall economic targets of this Government. That is a major priority for me in the interest of the farming community about whom we are talking here. I want to put that in the context of some of the criticisms made in relation to reducing grants by 5 per cent or 10 per cent under farm modernisation programmes or even the abolition, after a certain stage, of the farm installation aid programme. I have met the young men of Macra na Feirme personally at their annual meeting and told them it was necessary for me to do this in the overall interests of reducing and controlling public expenditure but also in the particular interests of the primary producers of this country, the farming sector. If there is one other sector in this community that stands to benefit more from the control of public expenditure I do not know what that sector is. I am speaking now particularly of the senior farm organisations, the ICA and the ICMSA when I say that if there was one sector that constantly called on the Government to control current public expenditure it was those orgainsations. In fairness to them, now that we have done that, and even in areas that affected agriculture and food to some extent, they have not done other than support us in that move.

Mr. J. O'Keeffe

They said otherwise when they met me.

Mr. O'Kennedy

They recognise that this is inevitable and that we must be consistent. Now that this programme is giving rise to reducing interest rates — understandably farmers always complained about high interst rates; they were the crucifixion of the farming sector — they know it is vitally important on every front but above all else in the interest of farming, that we hold to that programme. For that reason if Deputies opposite are complaining that we have been very specifically targeting on priority areas where we can see even some scope for reductions, we are doing it in the overall responsibility which I have as Minister in a Government determined to bring about a better economic climate, particularly for the farming sector. It is vitally important that we recognise this, as the farm organisations do themselves, as a central element of Government policy.

One or two interesting things were said in the course of this debate. I think Deputy O'Keeffe mentioned, but certainly some of his colleagues did, that they even thought it worthwhile to terminate some grants and use the money saved either by way of administration or of spending on those grants or both, to subsidise guaranteed low level interest rates for the farming sector. I am very much disposed to anything that can bring about low interest rates for the farming sector, particularly. As a Tipperary man, the same as a Clare man or a Cork man, I know what the problem has been in the last couple of years. I want to ensure that that will not continue one day longer for the farmers of Ireland. That suggestion is interesting enough in its own way and may be worthy of some consideration. It is certainly not one I would dismiss without giving some thought to. Though there were many important points in my rather rushed introductory statement, I put particular stress on discussions that I have already initiated with one major banking institution, in particular, with a view to bringing about, especially in the interests of building up the national herd, a scheme of low interest stable rates to maintain and develop that herd. I went on to say that I hoped very shortly to broaden the scope of those discussions to extend to all financial institutions and other interested groups, such as meat factories, who would benefit greatly from this. In the interests of a good agri-food sector everyone involved would be prepared to contribute to that success. As I say, watch this space.

Mr. J. O'Keeffe

The Minister is tantalising us. If something is cooking, he might as well put it on the table.

Mr. O'Kennedy

There is a certain amount of time and preparation before the tasty bit is eventually cooked. There is no guarantee that this will lead to the conclusion we want but certainly we are having the discussions. This demonstrates the importance I attach to low stable interest rates for the farming sector. More than any other sector they stand to benefit from what this Government, and I in particular as Minister, are doing in this direction.

Deputy Stagg criticised me almost all of the way but he seemed to be referring much more to what my colleague, the Minister for Defence, had said when spokesman for Agriculture in Opposition. He concentrated almost exclusively on that area.

Mr. J. O'Keeffe

Is the Minister doing a Pontius Pilate on that? I would not blame him.

Mr. O'Kennedy

I am not. That Minister is a man for whom I have the highest regard. If I had the same practical knowledge and experience of agriculture as the current Minister for Defence, I would be even better endowed for this job.

Mr. J. O'Keeffe

The Minister should read a collection of his speeches in Opposition. They would turn the hairs on his head.

Mr. O'Kennedy

Deputy Stagg did not make any reference whatsoever to anything I said in the course of introducing this legislation. He called on me — even though he had not listened to what I had said — to spend extra money in every direction. One of the complaints he had ran contrary to the complaints other Deputies had. He very strongly criticised me for reducing the amount of money available for administrative costs for pay and pensions. He said this was a measure of the approach of the Government, to reduce the level of salary thus attacking the PAYE sector, while other Deputies asked why I was spending so much money on administration. I deduce from those two complaints that somewhere in between I am steering a central course which guarantees we are doing the right thing. It guarantees also that this Government will be around for a long time. The Deputies on the benches over there are very much divided as to how they would approach this matter.

Mr. J. O'Keeffe

I would not bet too much money on that.

Mr. O'Kennedy

There is very little consensus over there. Some Deputies are saying we should spend less on administration and salaries and others are criticising us for not spending enough.

I would be the last person in any way to take from the contribution made by my predecessor — in this instance, Deputy Deasy, the former Minister for Agriculture. I am not going to attempt to take from any contribution made by him. He had a job to do and he set about doing it; I have a job to do and I have set about doing it. It is not my role to commend Deputy Deasy and it will not be my role now to criticise him. That is a chapter that is over.

Mrs. Taylor-Quinn

You are inclined to comment?

Mr. O'Kennedy

That is a chapter that is over. I want to say to Deputy O'Keeffe that of course there is no stage at which discussions on any issue, for example, beef premiums or anything else, are concluded to coincide with a new Government taking office or an old Government going out of office. Deputy Deasy advanced the negotiations in relation to the beef premium to a very considerable extent. I do not deny that. I am saying that when I assumed responsibility I expedited the negotiations to a conclusion. That is all. I cannot say what would have happened if Deputy Deasy had remained Minister for Agriculture; I can only guesstimate what might have happened. I know what happened when I took office. During my very early days as Minister I inquired from each section in my Department the topics that were under discussion particularly in the Commission of the European Communities and I pursued every matter as vigorously and as constantly as I could. These included restoring grants to the dairy sector which had been lifted and grants to the pigmeat sector which I announced soon after taking office. I acknowledge that if I had started these negotiations they would not have been concluded for six months. I did my job expeditiously and that is all I am saying.

Mr. J. O'Keeffe

You put the package in the envelope.

Mr. O'Kennedy

I do not want to take from what my predecessor did. During the course of my discussions at Commission level and at the Council of Ministers I will do everything possible to expedite the application of all funds to the benefit of agriculture and the agri-food sector. From now on the remnants of what my predecessor may have done will not be as visible or as traceable. I do not say this as a criticism of what he did but obviously as time elapses the proposals we will be launching, as distinct from those put forward by my predecessor, will be under consideration.

I want to refer to some other matters that arose during the course of this debate. I am glad they were mentioned because it enables me to deal with some points which, because of time constraints, I did not have the opportunity of covering in my speech. Some of those points raised were of crucial importance. I made reference in my speech to ACOT and An Foras Talúntais. I want to refer to some of the points made by Deputies.

It is abundantly clear that our farming techniques and methods have to be drastically changed. I want the young men of Ireland, the young farmers, male and female——

Mrs. Taylor-Quinn

Young women.

Mr. O'Kennedy

The word "farmer" is a collective term and it does not distinguish between male and female.

Mrs. Taylor-Quinn

You said "men".

Mr. O'Kennedy

That is different. I want young farmers to have the best training background in the exploitation of this natural resource. The criteria for successful management in the farming sector are the same as in any other; education, training, planning and quality control are as essential to the farming entrepreneur as to any other. The farming entrepreneur manages an enterprise the same as anybody else. I am determined in these changing and dynamic conditions in Europe and worldwide to equip our farm managers with the same techniques and facilities as their Dutch or Danish counterparts. During the course of his contribution Deputy Fitzpatrick referred to the position of the Danish farmers in the agri-food sector. I want farmers, whether they are in Cavan or Monaghan, to be as well and better equipped as farmers in other countries. We have a lot of catching up to do, but that is one target. We must instil confidence based on ability and launch Irish agriculture, horticulture and agri-food in a new drive for sustained and profitable export outlets.

The disease eradication programme is of vital importance to a disease-free country such as Ireland. A few Deputies referred to this programme. The allocation of £30 million for the eradication of disease is an indication of the Government's intention to press ahead with the task of TB eradication in particular. The contributions of farmers and taxpayers to the scheme are very substantial and they can be assured all items of expenditure are subjected to critical scrutiny. I am glad to say we are now at the point where less than 50 herds are affected by brucellosis. I am confident that by this time next year we shall see a further significant reduction in disease levels in that area. However, there can be no complacency in dealing with brucellosis. This is evidenced by the odd severe outbreak of disease that causes serious losses to farmers. My Department will continue to provide expert individual attention to the herd owners concerned and will pursue all breakdowns promptly and vigorously.

We are all very concerned that there are over 3,000 herds locked up because of TB. It is impossible at this stage to make firm predictions about how much progress can be made in the current round. I hope that some of the suggestions or warnings — I will not call them threats because I do not see them in that light — that are coming from the veterinary profession will not be proceeded with. Everyone will lose — not least the veterinary profession, the agricultural industry and the economy — if there is any degree of such action on the TB eradication scheme. This is not an issue between my Department and the veterinary professions: it is directed elsewhere. I hope it is not going to be proceeded with as a consequence of their attitude to a certain tax proposed this year.

This year's programme is a very carefully balanced one. It needs to go ahead in the interests of everybody. It is balanced so as to allow us to comprehensively monitor herds and to continue special programmes in high risk areas. We are already getting very encouraging results in traditionally bad areas such as Longford and south west Cork. I am sure Deputy O'Keeffe must be encouraged by this. We are lookimg forward to a continued improvement in relation to TB in those locations. There is too much at stake to set it back at this stage.

On a number of occasions I indicated my openness to ways of improving the TB eradication scheme. Preliminary discussions have already taken place on my direction, between my officials and farming organisations on their suggestion for establishing an executive agency to administer the scheme, with herd owners arranging the annual monitor testing of their herds in return for the withdrawal of disease levies. These discussions have been useful not least in bringing about the realisation that the TB eradication scheme involves much more than an annual test by herd owners. They have also been useful in showing that the financial arrangements for the change proposed would involve a net loss of at least £10 million annually to the Exchequer. I am not saying that we cannot put more effective arrangements in place but we should not under estimate the task of eradication or embark on arrangements the consequences of which have not been fully thought out. In the present difficult budgetary situation there can be no question of an increased burden on the Exchequer. Nobody will support that and I will not propose an increased burden on the taxpayer to fund a scheme that has already swallowed a lot of money without achieving the effect we want.

Any reversal in the eradication process that could call into question our disease status would have very serious consequences because we have at least a status that is recognised and accepted abroad. While we are impatient to achieve complete eradication, what we have achieved is considerable and important for our exports. I do not have an attachment to the status quo but I have a duty to insist on arrangements that will safeguard the essential interests of the farming community and the Exchequer. Subject to this I am ready and anxious to give the most favourable consideration possible to any proposed changes that will bring about complete eradication.

Before I came over to this debate I had a very successful meeting with all of the interest groups involved in the half breed horse industry in the context of the agreement between the previous Government and ourselves that we could not provide more money than what was provided in the Estimates for Bord na gCapall and effectively that meant winding down the operations of Bord na gCapall and trying to put a new structure in place. I sent them away happy.

Mr. J. O'Keeffe

Who will keep the register?

Mr. O'Kennedy

That is an issue that we will not solve immediately but for the time being the Deputy can be assured they are happy that the register is in safe keeping in the Department of Agriculture and Food. I do not suggest that that is anything more than an interim arrangement. We have much work to do and it will be done quickly. Temporary arrangements have been made by my Department to ensure the continuing maintenance of the register and of the register of approved stallions. These arrangements also include the provision of facilities for the issuing of passports and the registration of the 1987 crop of foals.

ACOT, on my instruction, are taking over responsibility for the supervision and certification of examinations for the Irish diploma and certificate in equestrian science. In addition steps have been taken to provide for the holding of examinations for the final year farrier apprentices and the lease stallion scheme operated by the board will also be taken over by the Department for the time being. In that connection, on the thoroughbred side a report of the Commission of Inquiry was published last year. Following the publication, the views of the bodies concerned with the breeding and racing industry was sought. Examination of these is now more or less finished and I will shortly submit to the Government proposals on the future arrangements for the industry.

That reminds me to reply to a point touched upon by Deputy O'Keeffe. I hope it will be clear that this is a Government of action and that we will take decisions quickly. There is no evidence of any legislation of any consequence introduced by my predecessor in the course of four years. I will introduce a lot of important and necessary legislation, for instance the Slaughterhouse Bill, legislation in the dairy sector and many other Bills.

Mr. J. O'Keeffe

The heads of those Bills were circulated by the last Government.

Mr. O'Kennedy

Deputy O'Keeffe seems to have a complaint.

Mr. J. O'Keeffe

I have no complaint.

Mr. O'Kennedy

The Deputy will have to agree that legislation was not introduced in the space of four years.

Mr. J. O'Keeffe

I have already seen the heads of those Bills so the Minister should not pretend he is doing all the work himself.

Mr. O'Kennedy

We will not go into that as I am not in the business of knocking my predecessor who may have had problems with the Government. All I know is that I am introducing the legislation.

An important element relates to land structures which was referred to by some Deputy. I am examining that but I would ask Deputies not to forget that since I came into office I spent more than half the man days in the job in the European Community. That takes a lot of commitment and it sometimes ends up with their being only one day a week at the desk, when one takes into account Government meetings as well. We are committed to a land authority. My examination in that area is far advanced but I cannot give details of the outcome as yet. We will not delay on that matter.

A point was made about ACOT scholarships. I indicated to ACOT that although I had to further reduce the allocation to them, I am pleased that they could respond to my suggestion made through my officials, one of whom ably represents me on the board of ACOT, that the last area they should touch even in the face of severe cutbacks were the scholarship schemes that were operated. It demonstrates that priorities can be protected no matter how tight things are.

Deputy Fitzpatrick is understandably concerned about issues in his own constituency, an area which has a great tradition in agri-food. I hope I will be able to demonstrate my support for that area. I wondered whether Deputy Fitzpatrick or I had the gift of telepathy because I anticipated that this might arise and he seemed to anticipate that I would anticipate it. He may have known that another Deputy in the constituency would make nothing of it. My colleague, Deputy Jimmy Leonard, has been in contact with me today, as has now Deputy Fitzpatrick in the House, on the question of liquid milk distribution. Deputy Fitzpatrick has raised an important issue but he of all people as an established lawyer and a man who has graced the Chair of this House for a long time will know better than most about the sub judice rule and he will be aware that certain proceedings are under way in our courts at the moment between the parties concerned, that injunction proceedings are under way and a certain stay is involved. He will understand that I can make no comment while that is so.

That said, let me assure Deputy Fitzpatrick that it is a delicate matter of very significant importance. I acknowledge the points he made in presenting it. I assure him that I am free to say that I have been in contact with my Department who have been with the EC Commission about it and I hope that shortly a solution will emerge that will be acceptable to all parties involved. Perhaps the conditions which brought about the regulations — I must be careful here — under which the dairy district boards operate are different from what they were when they were first introduced. I assure Deputy Fitzpatrick that at Commission level we are in active contact, and whenever I am free to take up the matter here when the court proceedings are disposed of I will do so.

I have acknowledged frankly the expenditure disciplines — because that is what they are — as a central element of this Government's policy. No sector in the economy will benefit more from that, due to the falling interest rates, than agriculture. The agriculture and food sector are both crucial to the whole thrust of the whole economy as everyone agrees. If we have a healthy agriculture and food sector in the economy — my obligation is to ensure that — then we will have a healthy economy. As some Deputy said, we must get out there and compete with the best, and that is what I propose to do as far as I can.

In conclusion let me say that that is why the Government agree with me totally and that is why the reductions for my Department on the current expenditure side are very much less pro rata than those which applied in any other Department. We all know and acknowledge the painful decisions which we had to take in Government. In other Departments you can see them every day. The decisions which I had to take as Minister for Agriculture and Food were probably less painful than some of those that my colleagues with whom I share collective responsibility had to take. Therefore, if I had in that sense less skin off my knuckles than my colleagues I claim no special credit. Maybe I argued a good case at Cabinet, but it is more a reflection of the fact that the Government attach priority to this area and I am privileged to have responsibility as Minister for Agriculture and Food in that Government and I hope we will see toradh ár saorthair sár i bhfad. Táimid ag obair to han-dian ar fad agus tá mé cinnte go mbeidh toradh ar saorthair againn.

Mr. J. O'Keeffe

Do the best you can while you are there.

Vote put and agreed to.