The position is that under the disadvantaged areas' compensatory allowance scheme agreed in July and since approved by the European Commission, some £360 million in additional funding has been committed over the period 2001-06. This will increase the total value of the schemes to £1.08 billion over the period concerned. It is estimated that the number of farmers qualifying for payment under the new area based scheme will rise from 90,000 currently to 109,000 in 2001. Total expenditure in 2001 will increase by some £60 million to £180 million. Some 81,000 farmers stand to gain under the new arrangements while about 28,000 will incur some losses. I have however negotiated a compensation package with the European Commission for losers under which 90% of losses will be made good in 2001, 80% in 2002 and 50% in 2003. Under these arrangements the average loss in 2001 will be about £32 rising to £64 in 2002.
I am also committed to reviewing the scheme in 2003. At the time the new scheme was agreed in July last, the Irish Farmers Association, in particular acknowledged that the package was a balanced one backed by increased resources which is designed as far as possible at securing the incomes of vulnerable sectors including drystock farmers and both mountain and lowland sheep producers in these areas.
They also acknowledged that the new package meets the commitment in the Programme for Prosperity and Fairness that the incomes of farmers dependent on disadvantaged area payments will be protected. The reality is that moving from an animal based payment system to an area based payment system based solely on the disadvantaged status of the land involves "winners" and "losers". The scheme model outlined by the Deputy would involve substantial extra funding over and above that already provided under the agreed scheme. The cost of such a scheme would escalate to double the existing cost of £120 million per annum. A scheme costing some £240 million per annum would continue to result in ‘winners' and ‘losers'.
