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 scheme to £1.080 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 negotiated a compensation package with the European Commission for losers under which 90 per cent of losses will be made good in 2001, 80 per cent in 2002 and 50 per cent in 2003. Under these arrangements the average loss in 2001 will be about £32 rising to £64 in 2002.
I am committed to reviewing the scheme with a view to finding an equitable long-term solution to the problem of losers.
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 to secure the incomes of vulnerable sectors, including drystock farmers and both mountain and lowland sheep producers in these areas. It also acknowledged that the new package meets the commitment in the Programme for Prosperity and Fairness, PPF, 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 cost approximately £240 million per annum.
