Dáil Éireann debate -
Tuesday, 4 Feb 1997

Vol. 474 No. 3

Adjournment Debate. - BSE and Devaluation Compensation.

Mr. J. Walsh

Thank you for allowing me to raise this matter and I thank the Minister of State for coming to the House to reply.

There is a serious problem in farming and beef farming in particular as everybody knows. Last year we lost a number of markets and supports for markets mainly due to BSE. There has been a substantial drop in income for beef farmers. There was a protest in Dublin today because if something is not done soon, some beef farmers will go out of business. Will the Minister for Agriculture, Food and Forestry pay the due entitlement of farmers; the compensation resulting from two green pound devaluations, one before Christmas and the other two weeks ago?

That compensation is worth about £50 million to farmers. It is £25 million from the EU, a figure we are entitled to match from the Exchequer as other EU countries such as Germany have done. There is also a payment of £30 million in BSE compensation due to farmers that has not been paid. Farmers are convinced this £80 million is being held cynically and will be given out before the election as a "lucky bag". It is due and badly needed now. I call on the Government, the Minister and the Minister of State who is here to tell us why this has not been paid.

Mr. Deenihan

I congratulate Deputy Joe Walsh on his recent appointment and wish him a long and productive term as Opposition spokesman on agriculture.

The Irish agricultural conversion rate or green rate was revalued on 8 November 1996 and 11 January 1997. The revaluations amounted in total to 6.187 per cent.

Under the agri-monetary rules, aid is payable to producers to compensate them for loss of income resulting from revaluations of the agricultural conversion rate. In this case compensation will be payable to Irish producers in respect of approximately 4.5 percentage points of the revaluation. Aid is not payable for the remainder of the revaluation as under the rules this has to be set off against recent previous devaluations. The amount of EU compensation has not yet been determined but it is estimated that it will be in excess of £40 million.

A specific Council regulation is required to provide for compensation following a revaluation. Such regulations were made in the case of a number of member states which had revaluation during 1995. The EU Commission will therefore have to make a specific proposal to the Council in Ireland's case. My Department has been in touch with the Commission and it is understood the proposal will be presented to the Council around the middle of this month. The earliest practicable time that it could be considered by the Council of Ministers, therefore, would be the meetings of 17 and 18 March. I hope the Council will be able to deal with the matter quickly.

Following approval of the compensation measures by the Council, we will have to submit to the Commission details of the national implementing measures for allocation of the aid to producers for sanction. My Department is in the process of consulting the farming organisations on how the compensation should be allocated.

As regards BSE compensation, final decisions have not yet been made on the distribution of the BSE compensation package which was adopted by the Agriculture Council last December and on which detailed rules were adopted in January. The amount of aid in this case is £30 million. My Department is currently examining this issue in conjunction with the distribution of the agri-monetary aid to which I referred earlier and the Minister hopes to be in a position to make a decision very soon.

I assure the House there has been no undue delay in this matter and I will endeavour to have both amounts of compensation paid as soon as practicable and in the manner most beneficial to producers.

The Dáil adjourned at 9 p.m. until 10.30 a.m. on Wednesday, 5 February 1997.