The position is that a new area based compensatory allowance scheme is to be introduced with effect from 2001. As provided for in the Programme for Prosperity and Fairness, a task force representative of my Department and the main farming bodies was established to formulate proposals for a new scheme. The task force met on a number of occasions and having considered a range of options the group recommended a scheme which would involve a payment per hectare linked to the type of livestock on the holding. The proposals envisaged a one hectare payment for each livestock unit. I announced details of the proposed scheme on 29 May last. I also announced a £120 million increase in the overall allocation of money for disadvantaged area payments for the period 2001-06. In the case of farmers with mountain breeding ewes it was envisaged that a payment of £113.33 per hectare for each livestock unit subject to a maximum of 30 hectares would apply. This was the equivalent of £17 per ewe – one ewe represents 0.15 livestock units – up to a maximum of 200 ewes.
At a recent meeting with officials of my Department the European Commission expressed dissatisfaction with aspects of the scheme being proposed mainly on the grounds that it did not represent a clear shift from headage related payments to area related payments. That each livestock unit would attract one hectare payment was seen as continuing the link to production. The task now is to devise a scheme which is best suited to our requirements and which meets with Commission approval. My officials are in continuing contact with the Commission with a view to devising an alternative proposal. Further consultation is also taking place with the farming bodies with a view to formulating such a scheme.