Vol. 403 No. 10
1 Mr. Connaughton asked the Minister for Agriculture and Food if he will give consideration to modulating headage payments in order to provide smaller producers with higher premia; if he will outline his views on the principle of this proposal; and if he will make a statement on the matter.
4 Mr. Connaughton asked the Minister for Agriculture and Food his attention has been drawn to the fact that there is insufficient finance provided by his Department to fund headage payments in 1991 to a level of payment which would compensate farmers for the reduction in market price supports for the various sectors in agriculture; if he will outline total Exchequer funding to Irish agriculture for the years 1987, 1988, 1989; and the reason there was less Exchequer funding required to fund headage payments in the severely handicapped areas in 1990 when compared to the Estimate for 1990.
I propose to take Questions Nos. 1 and 4 together.
The intention is that for 1991 headage payments will be made at existing rates in all the disadvantaged areas, including those which will be designated for the first time and those which will be reclassified as a result of the submission at present with the EC. I am pressing for an early decision on that submission so that farmers in the new and reclassified areas can benefit under the 1991 schemes. This would mean that there would be some 18,000 new beneficiaries, as well as 11,000 current beneficiaries, who would receive increased payments.
The Vote for Agriculture and Food for 1990 provided £67 million for headage payments, but as the Deputy will be aware the Dáil recently approved a Supplementary Estimate of £9.3 million for this purpose, thus enabling payments to that amount, which would normally not be made till next year, to be made in the current year. This, in turn, reduced the requirement for 1991 by a similar amount.
As at present structured, the headage schemes are biased in favour of the smaller producer, since payments are modulated on the basis of the number of livestock units held. I am, however, considering proposals for a restructuring of the payments and I will bear in mind the point made by the Deputy in that regard. I may say that these proposals, together with the extension and reclassification of areas and the abolition of the off-farm income limit which took effect this year, will result in an increase in the cost of the headage schemes from £60 million in 1989 to around £100 million in 1992. This will provide a major stimulus to agriculture in the disadvantaged areas. Gross expenditure under the Vote for Agriculture and Food in 1987, 1988 and 1989 was £355 million, £329 million and £312 million, respectively. The figure for 1990 is expected to be £364 million. FEOGA (Guarantee) payments in each of the years in question amounted in 1987 — £909 million, in 1988 — £1,040 million and in 1989 — £886 million.
I would ask the Minister to enlighten the House on how it is possible to extend to such a degree the disadvantaged areas while the Estimate for 1991 shows a reduction of almost £3 million in Exchequer spending? What Exchequer funding is to be made available by the Irish Government for the headage scheme in 1991? Is it the case, as most farmers believe, that the Department of Agriculture and Food or the Department of Finance are substituting newly found EC funds for Exchequer funds due to the new rate of recoupment?
I indicated that one of the reasons the amount in the 1991 Estimate is less than normal is that payments of £10 million were brought forward. If payments are brought forward into 1990 which otherwise would be paid in 1991, clearly the 1991 Estimate will be that much less. As to how that can be reconciled, I cannot see what the Deputy's difficulty is. The net cost to the Exchequer in 1989 was £20.6 million, in 1990 it was £41.3 million and in 1991 and 1992 it will be even more.
Is the Minister telling the 30,000 farmers who are already in severely handicapped areas that because he negotiated a new recoupment level of 65 per cent, as opposed to 50 per cent, they will get higher headage payments in 1991? Will the Minister give a straight answer?
I have already given a straight answer. There will not be increased headage payments in 1991. That was in my original reply.
The Minister is using EC funds to substitute for Exchequer funds.
The increase in payments will apply in 1992.
