Dáil Éireann debate -
Thursday, 27 Nov 1997

Vol. 483 No. 5

Agenda 2000 Proposals: Statements (Resumed).

Mr. M. Kitt

I had been speaking about the circumstances of hill sheep farmers, and mentioned our meeting with the Irish Farmers Association last week. One of the very positive proposals then advanced was for an extensification premium for flock owners who qualified on the basis of the stocking rate requirement of less than 1.4 per hectare. I hope this will be addressed in the course of future negotiations and proposals at European level. It proposed an increase in the rural world premium to £10 per ewe, an increased headage payment targeted specifically at hill sheep flock owners, and also proposed the abolition of the 7 per cent stabiliser mechanism worth £44.70 per ewe in additional ewe premium. It had a very good case which it articulated very well to us and I hope it will be acted on by the Government.

The Minister of State set out very clearly the Santer proposals, detailing clearly the net effect of the Agenda 2000 proposals on Irish agriculture. He said:

. I believe that the net effect of the proposals on prices and on premia could be a loss of the order of £125 million a year.

and went on to say:

. it does not include any estimate of the effect of changes in Ireland's receipts under the structural heading where the Commission's proposals, at this stage, are even less developed than their market proposals.

Since Structural Funds have been very important and of enormous benefit to us, I am most concerned about this. Recent departmental replies given to all queries on Structural Funds are to the effect that much of those moneys has already been used up on tourism projects and on other projects concerned with arts, heritage and the Gaeltacht. I want individual Ministers to follow up the matter of Structural funding, ascertaining how farmers in rural areas can be compensated so that, consequent on these proposed changes, no loss will accrue to them.

The incomes of farmers in rural areas will have to be protected and I hope the Minister spells out the way permanent compensation could be made for any price reductions. Any system of compensation will have to be fair and equitable. As a major beef exporter, Ireland depends to a large degree on income from that sector and we are sensitive, therefore, to any changes in EU arrangements.

I hope young farmers, particularly those in the dairy sector, will have an opportunity to avail of quotas. I had a number of meetings with members of Macra na Feirme who stressed the need for access to quotas across the board but particularly in the dairy sector. The current negotiations on access to the market by other countries are a cause of concern to young farmers.

Mr. Raymond Keane of the European Commission Representation in Ireland, stated in a presentation that the conclusion the Commission came to with regard to new entries to the European Union was that five eastern European countries were the best prepared, even though they had some way to go in economic terms. Those countries were Poland, Hungary, the Czech Republic, Estonia and Slovenia. The Commission proposes to open negotiations with these five countries, in addition to Cyprus which was always favoured for access to the EU. I hope that when these negotiations take place, we will have a vibrant European Union.

On the question of funding, the Commission has taken the view that the next financial agreement should cover a seven year period from 2000 to 2006. In that context it is important that the whole question of Structural Funds and Objective One status is examined. If Objective One status is being considered for western and Border regions, it would present a major opportunity to obtain additional funding for severely disadvantaged areas. It is important that the Commission is considering Objective One status, maintaining the overall funding and putting in place a transition arrangement for western and Border regions. The strategy should be to build on the MacSharry reforms in key market areas, particularly in regard to rural structural development policy, and to take account of the environmental dimension.

On the question of rural development policy, many of the difficulties we face as a result of rural depopulation and transport problems could be overcome by examining some of the schemes already in existence. I commend the Minister of State, Deputy Davern, for the small but important changes he made in the Leader programmes. He informed us that community groups, for example, will have to provide only 30 per cent funding rather than the 50 per cent they had to provide in the past. That is a welcome announcement.

In relation to tourism projects, more projects have applied for funding than there is money available. I note that the grant aid will be increased from 20 per cent to 30 per cent. Recognition of own labour as private matching funds will now be included in private projects. These are important issues which will assist the developments currently being made in the Leader programme and I commend the Minister and the Minister of State for negotiating these proposals.

I am glad that matters have improved following the problems experienced in relation to delays in payments of headage and other grants. I welcome the fact that the Minister has more staff at his disposal to deal with this issue which I hope will ensure that these grants will be paid in the coming weeks. I hope also that concerns about future headage payments will be allayed by the Minister giving an assurance that this direct payment will continue.

Mr. D'Arcy

I wish to share my time with Deputies Neville, Browne and Timmins.

An Leas-Cheann Comhairle

I am sure that is in order.

Mr. D'Arcy

I welcome the debate on the Santer proposals and other related matters but it is unfortunate that those of us in the Fine Gael Party do not have sufficient time to make our points.

The Treaty of Rome came into effect in l972 and we all have a clear recollection of the promised benefits it would bring to Irish agriculture. We were told it would bring a free market of 350 million people as far as agricultural produce was concerned, and that we would never again face the difficulty of being unable to obtain a market for our produce at a reasonable price. We were also told that this market would expand into Third World countries which would be beneficial and would compensate to some degree for the closure of industries such as Ford and Dunlop in Cork and numerous other industries as a result of decisions made by multinationals. The closure of these industries resulted in enormous job losses in the respective areas.

If one examines what actually happened, however, even over the past ten years, the general performance as far as Europe is concerned was disappointing. I refer in particular to the GATT arrangements and the CAP agreement.

The general threat to the future of Ireland's farm families is not the Santer proposals contained in Agenda 2000 but the anti-farmer attitude of the Minister for Finance, Deputy McCreevy, and the way in which the Taoiseach has virtually surrendered Ireland's negotiating position. The Government is pitiful in its inability or unwillingness to recognise that the consistent core of our economy is the earnings of farmers which derive from the production of their farms. It will be a long time before the Celtic tiger can match an Irish cow in its ability to protect the long-term interests of the Irish nation.

The Celtic tiger exists because of the output of farms and the EU Structural and Cohesion Funds this attracts. The Taoiseach, the Tánaiste and the Minister for Finance seem intent on diminishing the role of farmers in the agricultural sector as a whole and inculcating in the minds of people the false image of a tiger economy built on computer chips.

I make these remarks in view of the fact that the latest information available is a cut of £35 million from the Book of Estimates. The announcement last August that installation aid would be discontinued to young farmers is regrettable. What message does that send to farmers who cannot get people to take over their farms? This is happening not only in Wexford but in the constituency of the Minister of State. I spent the day in that constituency yesterday and I met numerous farmers who told me the difficulties they face as a result of this decision.

We have been told by the Minister and other Ministers that this aid will be reinstated in the budget. I hope that is the case but the fact that he contemplated removing it for a short period is an indication that there is a serious problem in regard to confidence in agriculture.

I wish to deal with the manner in which the Department of Agriculture and Food disallows cases and stops premium payments for a period of one year, or in some case two years. This matter involves the issue of apportionality. The penalty imposed is illegal because it breaks the requirements of apportionality. It is indisputable that a farmer who makes an innocent mistake or a technical error with no fraudulent intent is not guilty of dishonest conduct. The imposition on such a farmer of one of the more severe penalties of stopping the payment of premiums for a two year period is out of proportion to the mistake.

The Minister inherited this position, but it prevailed before his party left office on the previous occasion. I accuse his officials of disallowing the payment of premiums where every "i" is not dotted and every "t" crossed on an application. Numerous cases have been brought to court, but I understand the Department has not won any of them. I represent those involved in the agricultural industry and I ask the Minister to take this matter in hand. I do not know how he will do that, but people cannot afford the expense of going to court and awaiting the outcome of their cases. I have taken this matter up with the Minister's officials. I am sure that most Deputies and Senators know of two or three constituents who are affected by the decision to refuse premium payments. I brought three such cases to the Ombudsman, but he turned them down. He is a civil servant and if everything does not comply with the regulations he will reject a case.

I wish to draw the Minister's notice to a case brought by the NFU in England against the British Government and the EU. The NFU won its case and the NFU president, Sir David Nash, said that the judgment was a victory for common sense and the 120 farm businesses affected were harshly and unfairly victimised for genuine errors in making claims under a system that is notoriously complicated and at times confusing. The Minister will agree that farmers would need a computer to complete their applications. Simple mistakes are made in applications by people who are well equipped, but most farmers are not equipped with computers. They must keep records of the age of cattle, the amount of area aid must be mapped out on a yearly basis and if they make the smallest mistake the Minister's officials are very quick to disallow the claim. I will ask our spokesperson, Deputy Coveney, to appeal to the Minister to ensure this matter is immediately addressed. Dozens of farmers from my county have made representations to me on this matter.

I tabled a question on this matter to the Minister on 12 November to which he replied:

The information requested for the years in question in respect of the headage and premia schemes is not readily available. However, I am arranging to have the details sent to the Deputy within the next two weeks.

I have not received that information and I need it to compile data to enable our spokesperson to do something about this matter. This position is unacceptable. Small errors may be made in the completion of applications by 3,000, 4,000 or 5,000 people.

I know of a case of a father and two sons whose payments involving £17,000 were suspended for two years. I raised that case with the Department before the Minister came to office and I have raised it with him since he became Minister, but I have not got a satisfactory reply. He must deal with this case. This matter was raised with him three years ago and his response was reasonable to an extent, but he will have to be more forthcoming in his response to this and other cases. I would like the Minister to answer the question I tabled concerning the number of cases involved. The case taken by the NFU resolved a similar problem in England.

Mr. Neville

I welcome the opportunity to contribute to this debate. It is an understatement to say that rural Ireland is under threat and has been for some time. Regrettably, the contribution from the State to an industry that has been the lifeblood of the nation has been reduced substantially. There is no doubt that the Celtic tiger is an urban beast and does not in any way relate to rural Ireland. A survey reveals the frightening speed with which people are moving from rural areas of west Limerick to cities.

The removal of the installation aid scheme, following the commitment made by Deputy Walsh prior to his party's going into Government, is shameful. The Minister indicated to young farmers that their future does not lie in farming and they are responding to his comments by not taking up farming courses. Deputies who represent rural areas know there is a good deal of unrest among young farmers. We have had constant contact from members of Macra na Feirme, young farmers who are considering taking up farming and farmers who undertook certificate courses on the understanding that they would be eligible for the installation aid scheme, but that scheme has been withdrawn. The Minister should re-examine that decision.

The proposed £34 million reduction in headage payments in next week's budget is unacceptable. Deputy Walsh's pre-election commitment that there would be no tampering with the headage mechanism up to the end of the current round of Structural Funds was written in sand. Headage and other EU payments are an inherent part of farmers' incomes. The reduction in and capping of headage payments will have a serious effect on farmers' incomes.

I note the Minister intends to reduce administration costs by £7 million. I would like him to examine the position in the Limerick office at St. Munchin's House where the small number of people involved in administration is causing extreme difficulty for the staff and farmers in that area. There is a six months' delay in dealing with an installation aid or farm retirement application. Farmers do not understand why when money is available they have to wait so long for what should be a reasonable service.

The Minister will be aware that there is a serious problem of brucellosis in County Limerick. I do not understand why when farmers are facing a crisis, especially in my area which there has been an outbreak of brucellosis, the Minister intends to cut the contribution to the eradication of TB and brucellosis. The Minister comes from Cork and he must be aware of the outbreak of brucellosis in Limerick, north Cork and parts of Tipperary. His senior officials are extremely concerned about that outbreak. I am disappointed and concerned that the Minister is not prepared to respond to that problem.

I understand it is the Minister's view that live exports to Egypt are not the way forward, that they will have an adverse effect on the country's ability to achieve a 35 per cent steer kill out of season and that it is no longer a viable export market. I understand the Minister made that statement to members of Macra na Feirme in Kildare. Is that the Minister's view or was he just masquerading before the public when he said he would reopen live trade with the Egyptian market?

Mr. Browne

(Carlow-Kilkenny): Members could talk on this topic for half and hour without difficulty. I am glad the Minister is present because he was not here for the beginning of this debate. His place was taken by the Charles Mitchell of Fianna Fáil, the Minister of State, Deputy Davern, who read the Minister's speech beautifully. I wish to draw the Minister's attention to two points in that speech. The Minister of State said that agriculture should be developed in a way that fully protects the incomes of farmers and the viability of rural communities.

The Minister also said that other measures are required to enable farmers and rural dwellers enhance their incomes and enable them to remain in rural areas. How does abolishing installation aid fall into the category of preserving rural Ireland? Young people need encouragement to stay on farms because, despite all the rubbish written by people who know nothing about farming, it is a tough life. When education facilities are available and they can qualify for other jobs, young people are happy to leave the land. How can the Minister justify making the statements to which I referred when he abolished installation aid after he promised he would not do so?

Goldsmith wrote a poem round the time this House was built in which he worried about rural Ireland. Many people will know the following lines:

Ill fares the land, to hast'ning ills a prey Where wealth accumulates, and men decay;

He was worried 250 years ago about the decline of rural Ireland and the rich getting richer with large farmers turning into ranchers and small farmers disappearing. We need rural life and the Minister must restore installation aid in the budget. However, I hope it is not restored in a way which will suit only a small number of people who submitted applications. This aid should be continued because young people need to be encouraged. It is insulting to them to abolish it.

Pollution control grants must be restored. Everybody is against farmers. As soon as there is an accident on a farm, the experts arrive to tell the farmer what he should have done. The pollution of rivers cannot be defended but a high standard is expected and pollution control measures are expensive. At a time when the economy appears to be booming, we should help those who want to protect the environment.

There was a reference to mountain sheep. It has been suggested that if sheep count when it comes to extensification of the low lands, mountain sheep should also be included. Many farmers want such a move.

The delay in headage payments is unbelievable. I am not aware of any other group which would put up with the irregularity of payments that farmers endure. A strike was threatened last weekend over a wage agreement. It is unbelievable that farmers can make arrangements with banks but are left high and dry because the Department cannot digitise the maps. Deputies are told every effort is being made to deal with the matter and that payments will be issued soon. However, that is of little value to farmers who are under pressure in terms of living costs and meeting arrangements made with banks which, despite their profits, are often extremely tough on them. It is unbelievable in this age of computerisation that the Department cannot live up to the charter introduced by the Minister's excellent predecessor, Deputy Yates, that payments would be made regularly.

The Minister must improve because people are beginning to think he made statements when he was in Opposition that he did not think out properly. He must do something during his term of office. For example, he should guarantee farmers that they will receive payments by certain dates. Members would not wait more than a few days for their salary. I am sure that also applies in the world of journalism. People would not wait week after week for payments which never arrive. This delay insults farmers and it is time the issue was tackled. In this age of modern computer equipment it should be possible to arrange payments regularly. I agree with Deputy D'Arcy's point about petty mistakes being treated as criminal acts. That type of behaviour is outrageous. I will share the remainder of my time with Deputy Timmins.

Mr. Timmins

In my recent dealings with farmers and farming groups one main theme, while not overtly mentioned, has become obvious. This is the fear of the unknown and for their way of life. They worry that their children may not be able to seek a livelihood from the land which they hold so dear. Hidden behind the demands for increased ewe premia, prompt headage payments, the restoration of installation aid and tillage weather losses is the great concern that Deputies and the public do not understand their plight.

This way of life, which was once extolled as an authentic base on which the country securely rested, is no longer considered viable in this new age. As society becomes more prosperous we tend to forget some basic fundamentals of which the role of agriculture is one. The two basic needs in society are food and clothing and both of these come from agriculture. Too many people, including some Members, have uttered what they consider populist sound bites without examining the basis for their statements and the effect they can have on sections of society.

Agriculture is a simple process involving the production of food. Three important structures have emerged to support this food supply system. The first is intervention by the State to develop a modern production system, supporting farm prices to reward increased farm output and guaranteeing a market for this produce, thereby reducing the risks inherent in farm investment. Second, with the increasing capital needs of modern agriculture, including the rising cost of purchasing farm land, the State and banking institutions must have in place a financial and tax system tailored to the needs of farmers. Third, farmers now produce for a global market and, accordingly, international trade must be facilitated. How has the Minister performed in these areas?

In his pre-election position paper in May 1997, the Minister stated in relation to cereals that provision would be made for exceptional hardship cases. He said we had had our worst harvest for many years and the IFA estimated the loss at £38 million. The Minister said he would provide £1.2 million. However, I understand the Minister announced yesterday that to qualify for aid farmers must not have more than £16,000 off farm income, a milk quota of 25 gallons, 50 hectares of forage area, a 1000 tonnes sugar beet quota or a pig unit of more than 100 breeding sows. On the surface it appears it would be easier for a camel to go through the eye of a needle than for a farmer to receive compensation for lost cereals under this package.

The Minister also said in his pre-election paper that to ensure the future of young farmers, the installation aid scheme for them, which was then under threat, would be maintained and improved. However, the Minister suspended the scheme in August. If he is to maintain any credibility, it must be restored in the forthcoming budget.

While I appreciate that the Santer proposals and Agenda 2000 do not deal directly with sheep, it is disappointing that the Minister of State, Deputy Davern, did not refer to sheep in his speech earlier. Action is needed immediately to address the problems of hill sheep farms where because of lower lamb output, weaker light lamb prices have dropped from a high of 130p a pound on the Mediterranean market in mid summer to 92p a pound this week. There has also been a sharp cutback in ewe premia. Sheep farmers have suffered a substantial reduction in their incomes.

The Minister said that cattle export markets would be reopened. However, it now appears that he is wondering whether we should export to Egypt. It is unacceptable for the Minister to try to lay the blame for the delay in headage payments at the feet of an administrative company. The Minister's goal should be twofold in the negotiations in the months ahead. The first is to provide equitable remuneration for those employed in agriculture and second to contribute to the social stability of rural areas by implementing policies which will reduce the instability of farm incomes and maintain rural population densities.

Fianna Fáil prides itself on being the guardian of the small farmer. On St. Patrick's Day 1943, Eamon de Valera said: "A land whose countryside will be bright with cosy homesteads, whose fields and villages would be joyous with sounds of industry." The Minister and his party appear to have long since abandoned this ideal. While I am loath to criticise anybody, part of the reason the Minister is in office today is the position paper he produced before the election. Many of the matters mentioned in it have not been implemented and many of its commitments cannot be met. Several months ago the Minister was prepared to swim to Egypt. Every time I turned on a television before the election the Shandon bells were behind him. Those bells are beginning to ring in the farming community because it realises it has been sold a pup. Perhaps the bells are starting to toll for the Minister.

Minister for Agriculture and Food (Mr. Walsh)

I thank all those who contributed to this important debate on the Agenda 2000 Santer proposals. They are extremely important and the outcome of the negotiations will affect farming incomes for the next decade and put Irish agriculture industry on a footing that will ensure it can participate in growing European and world food markets.

The Santer proposals were discussed at recent Council of Agriculture Ministers' meetings in Brussels and we were informed that detailed proposals would be publicised early in the new year. It is expected the debate will continue throughout next year. I recently established consultancy groups representing all sectors of the industry to make sure that during the negotiations the best advice is available to me to ensure the best possible outcome to allow agriculture to develop. Good deals were negotiated in the past on the Common Agricultural Policy and its reform programmes and a similar deal will be made in these negotiations.

A number of Deputies highlighted various problems, the primary one being the question of payments from the EU. I do not know if it is in the interest of the industry to put the record straight again on payments because, on the one hand, farmers are accused of whingeing by some spokespeople every time payments are mentioned and, on the other, auditors from the EU express the view that certain overpayments have been made. The agriculture industry has been in receipt of substantial and significant payments since Ireland joined the EU.

This year £680 million issued in direct payments to farmers under headage and premia schemes and before the end of the year close to £1,000 million will be paid in support of farmers generally. That is their entitlement as a result of the deal negotiated for them. I was the negotiator for the last reform of the CAP and support such payments.

Mr. Browne

(Carlow-Kilkenny): They have difficulty receiving them.

Mr. Walsh

For example, over the past six weeks £280 million issued in direct payments to farmers. Hardly any week goes by without between £10 and £15 million being paid out. Eighty per cent of sheep headage payments have been made, 83 per cent of special beef premiums, 76 per cent of suckler cow premiums and 99 per cent of arable aid payments. Political points have been scored and we have reached back to Goldsmith and the late Éamon de Valera to support our case. If one must score a political point, the current situation is better than this time last year under my predecessor. Only 79 per cent of sheep headage payments had been made.

In regard to arable aid, a number of grain farmers had a tough year and some lost their incomes. I said I would seek to be as helpful as possible within various constraints by making arable aid payments as quickly as possible. The earliest possible date was 16 October and within one week 94 per cent had been paid out and that figure now stands at 99 per cent. Virtually all of the money was paid out in a matter of hours which was not the case last year. The Department's information officer was on a radio programme yesterday and he correctly pointed out the current position. There are two sides to every story.

The amounts of money available under various schemes was raised by a number of Deputies. I refer to headage payments. When I came into office there was a shortfall of £9 million for them and I negotiated their inclusion in the Supplementary Estimate which was presented to the House last week. It totalled £64 million which covered other schemes for which there was also a shortfall. It meant bringing forward some of the £9 million from next year's figures and consequently they now look more difficult with a shortfall of £30 million. Whereas if the money had not been brought forward the shortfall would have been about £11 million. I am in constant negotiation with the Department of Finance on next week's budget. I cannot pre-empt what it will contain but I hope this matter will be addressed. The situation resulted from front loading where for a six year programme too much was paid out in the earlier years which left a shortfall in the later years. We await the outcome of the budget on that matter.

The installation aid scheme for younger farmers was raised. In October 1996 my predecessor signalled there was an inadequate amount of money to cover this which was still the case when I assumed office. It was not possible to make an announcement before the election and there was no option but to suspend the scheme when not enough money was available. There are a number of applications in the pipeline which would cost approximately £6 million. We are also negotiating with the Department of Finance on this.

Deputy Coveney queried the position regarding brucellosis in next year's Estimates. The provision for 1997 was increased in the recent Supplementary Estimate. I am concerned about the deteriorating situation and will announce additional tightening up of that scheme because Ireland's status in terms of animal disease is extremely important since we export between 85 and 90 per cent of our produce. It is important to have the highest possible disease free status and I am pleased this month four cases of BSE in herds were reported compared with 18 this time last year. That is welcome news and I hope that decline continues because it is important for us to ensure we eliminate the problem.

Live exports were raised by a number of Members. They are important and there was a great deal of talk about them prior to my appointment as Minister but within weeks of my appointment I secured Government funding to have a ferry provided between Cork and the continent which carries a substantial number of live cattle.

I welcome the fact that the first load of live cattle, almost 2,000, went to the Lebanon last week. I hope that will continue. I and officials of the Department of Agriculture visited Egypt on quite a number of occasions and I have sent detailed proposals to my counterpart in Cairo in relation to a trial shipment of live cattle to Egypt. The Egyptians had raised certain questions about Irish cattle, in particular about our incidence of BSE. I assured the Egyptian Minister that the incidence of BSE in Ireland was negligible and that we could give an assurance that beef from Ireland would come from BSE free herds. It was pointed out to me that 30,000 tonnes of beef was imported by Egypt last year. This year it will reach 60,000 tonnes, a doubling of the 1996 amount, equivalent to about 200,000 head of cattle. We made the case that we wished to have live exports resumed. An arrangement was made whereby we would have specified risk material removed from live animals in an Egyptian plant. That plant has now been identified. Irish engineers and veterinary officials have visited it and all the conditions have been met, but it is a matter for the Egyptians to give the nod and say that they will accept our cattle.

Mr. Browne

(Carlow-Kilkenny): That was always the way, even when the Minister was in Opposition.

Mr. Walsh

They are the buyers. We have done everything possible to convince them.

A number of other issues were raised. Deputy D'Arcy raised the question of innocent errors. The principle of penalties fitting the crime should prevail. My predecessor set up an appeals unit. I do not know how well it is working but, in the context of the matter being raised here, I will have an urgent look at it to see if it can be operated more effectively. Obviously if applicants under any of the programmes make an innocent error they should not be penalised.

The permanency of direct payments was referred to by a number of Deputies. I assure everybody it is my intention to ensure that the continuity and permanency of direct aid will be accepted at EU level. That it will be a central objective of my negotiating position.

The question of organic farming was raised. I will outline the schemes relating to organic farming. In regard to ewe premia, when the price of sheep is high the ewe premium goes down and when prices are low the premium goes up. That is the system that has been in existence for some considerable time. In relation to harvest damage, I attended a function in the Red Cow Inn where a statement was made, known as the Red Cow declaration, to the effect that a sum of money would be paid to Irish farmers in relation to agri-monetary compensation. That was in the spring. Despite the summer election, the £24.5 million was not paid, although electorally it would have been important to pay out this money. However, there was no authority to make this announcement because EU approval is needed before this money can be paid out. I eventually obtained EU approval for compensation for the losses involved.

I appreciate the time and effort and the cogent arguments for a better deal for Irish agriculture. I will continue to work for a better deal. I found most helpful the genuine contributions made in this debate on the current activities of the Department and the negotiations under Agenda 2000 and I will take them into account.