I move:
That a supplementary sum not exceeding £63,187,000 be granted to defray the charge which will come in course of payment in the year ending 31 December 1997 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 grants, subsidies and sundry grants-in-aid and for the payment of certain grants under cash-limited schemes.
This has been a difficult year for farming and the funds proposed in the Supplementary Estimate will be used to support farm incomes and protect public and animal health. Following fairly detailed negotiations, the European Commission has given approval to a national system of agrimonetary compensation and a sum of £24.5 million is proposed under subhead J.6 for this purpose. This will be financed entirely by the Exchequer.
This aid will be payable to producers who suffered losses arising from the November 1996 and January 1997 green pound revaluations and is broken down as follows: £15 million for the beef sector, £6.4 million for the dairy sector, up to £1.6 million for the cereals sector and £0.30 million for the sugar beet sector. I need not remind Deputies of the difficulty experienced by cereal producers this year and the problems with the harvest. The balance of £1.2 million will be used to relieve some exceptional cases of hardship for cereal and other crop growers. The details will depend on the results of assessments under way and an appropriate transfer will be made from the agrimonetary subhead to the usual subhead for such measures, subhead J.2.
In the structural area my aim has been to support existing commitments to on-farm investment. Since 1994 the number of farmers completing work under the various farm investment schemes has been high. This has been helped by attractive rates of grant, relative stability in farm prices and low interest rates.
This year the level of completion has been maintained. As part of the mid-term review of Structural Funds, an additional £28 million was allocated to farm investment schemes, which is available over the remaining years — 1998 and 1999 — of the current round of Structural Funds. In view of the significant level of ongoing investment by farmers, I am proposing an exceptional allocation of £15 million, which will be funded entirely from the Exchequer, to ensure that payment is made for all works completed in accordance with specification. In addition to assisting the farming sector, these works protect the environment.
I also propose to bring forward £9 million in headage payments under subhead M.4 which were initially to be paid next year. This has, of course, had the effect of depressing the allocation set out in the recently published 1998 Abridged Estimates for my Department.
Expenditure on disease control and eradication is an important area for my Department and I propose allocating £19 million to measures to combat brucellosis and BSE and for the disposal of meat and bonemeal produced prior to the introduction of even more stringent controls earlier this year.
The issue of brucellosis has become one of major concern over the last year, not least the deteriorating disease position and the implications that this may have for trading purposes. Although we continue to have brucellosis black-spots, only four counties — Donegal, Leitrim, Louth and Carlow — have been brucellosis-free this year. It is, therefore, fair to say that brucellosis is a nationwide problem which demands concerted and urgent national action. This is especially true when one considers the consequences for our export trade in agricultural products.
The substantial increases in expenditure in 1997 on compensation payments to farmers under the disease eradication schemes is directly attributable to the dramatic increase in the brucellosis incidence since 1996. The deteriorating position has been given major consideration by my Department and over the summer months was the subject of detailed discussions with the farming and veterinary bodies at the Animal Health Forum. A number of interim measures have been put in place to address the problem. These include milk ring testing on a monthly as opposed to the previous quarterly basis; the implementation of an intensive contiguous blood testing regime, coupled with detailed epidemiological investigations by departmental veterinary inspectors; the maintenance of a rigorous depopulation programme incorporating the early removal of reactors and an awareness and education programme. It will also shortly be a legal requirement for all eligible animals sold through marts and from farm to farm to have been blood tested within the preceding 12 months. The brucellosis compensation regime has been revamped. In an effort to afford herd owners the opportunity to confidently buy pre-movement tested stock, the ICOS and their marts are running special catalogued blood tested sales. The position will continue to be closely monitored. If there is further deterioration I may have no alternative but to introduce further measures, including the tightening up of the pre-movement test requirement.
The financial effects of the increase in BSE cases in Ireland which took place during the latter part of 1996 are also reflected in the shortfall of more than £5 million in the 1997 allocation for general disease control and eradication. My Department arranged during the year for the disposal of stocks of meat and bonemeal which had built up from the existing scheme of depopulation and destruction of herds in which a case of BSE occurred. The costs of this disposal are also reflected in the Supplementary Estimate of £8 million. As the operation will take place close to the year end, I have also made a contingency provision in the 1998 Estimates for this purpose.
A sum of £500,000 is provided in the Supplementary Estimate for the provision of a ferry service. I am very pleased that service is working well and is well supported by the farming community. I take this opportunity to ask the general agriculture industry, particularly the co-operatives, to support the ferry service. Taxpayers' money was used to put initial seed capital into the project to get the service off the ground. Given the size of the agriculture industry, it would be a shame if the service was not well supported.
Receipts from veterinary inspection fees show a significant decrease against the Estimate because of a slow down in the level of live cattle exports. The estimated savings of £0.5 million under subhead J.4 arise from start-up which has taken longer than anticipated and reflects claim amounts requested to date from local authorities to grant assist them in implementing the Control of Horses Act, 1996. The implementation of this Act is extremely important, as was highlighted recently. As well as implementing the control measures in the Act, the Department has supported a specific project in Cherry Orchard which will be helpful to that community. It is a positive measure which will be operated in tandem with the control measures.
In marketing and processing, the £400,000 proposed for subhead M.12 arises because FEOGA marketing and processing awards are made by regulation in ecu. Some exchange losses are unavoidable over time arising from currency fluctuations between dates of payment to beneficiaries and receipt of funds from the Commission. The amount being provided this year is in respect of projects approved in the 1990-3 period, which are now completed.
Teagasc has substantial bank borrowings accumulated over a number of years, currently in the order of £3 million. The organisation is experiencing serious difficulties in attempting to balance its budget for 1997. Since these difficulties emerged earlier this year, my Department has been maintaining strong pressure on the organisation to achieve a balanced budget, but despite remedial action the indications at this stage are that a deficit will result. Teagasc will also have significant difficulties in balancing its budget next year. In addition, Teagasc has significant ongoing capital investment commitments in the research and advisory area which add to the financial pressure on the organisation.
Teagasc has identified major capital investment needs in the training area. As a research and training organisation, Teagasc needs to consider modern systems of communication and of giving the best possible advice and education, particularly to younger farmers. There is a network of Teagasc centres and agricultural colleges throughout the country. It behoves Teagasc, as the national training and advisory body, to ensure modern informatics and telematics are used to the greatest possible extent to give the most up to date international information to our intelligent and ambitious farmers who will have to work in an internationally competitive environment in the future.
An additional provision of £4 million is proposed under the losses subhead, L.2. The 1997 Estimates included a standard amount of £500,000. The total losses are made up of disallowances of £2.4 million on the clearance of the guarantee accounts for 1993, a residual £0.8 million in respect of beef stock losses in the 1992 clearance and £2.4 million disallowed in respect of late payment of premia. While it is encouraging to note the penalties are not on the scale of past beef fines and that Ireland's performance has improved in absolute and relative terms, from the point of view of the taxpayer no penalties are acceptable. Great efforts have been made and continue to be made to improve the protection of Union moneys managed by my Department.
Since l996 the annual FEOGA account forwarded to the European Commission has been independently audited and a high level review group is in place to ensure all audit recommendations are implemented. Yesterday on national radio I was delighted to hear a member of the EU Court of Auditors — a former Member of this House — commend named members of the Department of Agriculture and Food for their extraordinary competence in this area.
A net supplementary of £3.289 million is being sought under my Department's l997 administrative budget. This increase relates primarily to increased costs in overtime, travel, post and telephones, legal claims, accommodation and payments to temporary veterinary inspectors. The increase in overtime, travel and payments to temporary veterinary inspectors is due in the main to increased activity at export meat plants. There has been an increase of 12 per cent in slaughtering for cattle and beef compared to this time last year. For EU accounts accreditation purposes we are required to rotate our staff at meat plants. This, with the deployment of staff for BSE control purposes at the Border to prevent the illegal importation of cattle and beef products from Northern Ireland, has led to increased costs for staff overtime and travel.
The increase in post and telephone costs has resulted from the increase in the number of schemes, such as area aid and beef premiums, which has led to additional payments to farmers. There has been increased usage of mobile telephones and fax machines. I do not know how people managed without mobile telephones until now. Deputy Sheehan and I must operate without them in the peninsular areas of west Cork.
