Vol. 533 No. 1
25 Mr. Connaughton asked the Minister for the Marine and Natural Resources the number of farmers who will be retrospectively paid top-up forestry premia; the total cost to the Exchequer in this regard; and when farmers will receive payment. [8388/01]
Forestry incentives consist of afforestation grants and premium payments for loss of income. The afforestation grants are paid in two instalments in years one and four and cover the capital cost of setting up a forestry plantation. The same rates apply to farmers and non-farmers. Loss of income premiums are payable to farmers over 20 years. A lower level of premium, payable over 15 years, is paid to non-farmers. The level of premiums is determined largely by the species planted.
The planting targets are set out in the strategic plan for the development of the forestry sector in Ireland, published in July 1996. The plan envisaged a planting target of 25,000 hectares per annum up to end of 2000 and 20,000 hectares per annum thereafter. Following discussions with the European Commission, I was pleased to announce in March last significant increases, averaging 30%, in the rates of annual forest premium for those planting from 1 October 1999. In the case of farmers planting broad leaf trees – oak and beech – in severely handicapped areas, for example, the annual premium increased from £265 to £373 per hectare. For farmers planting 20% diverse conifers, the premium increased from £210 to £308 per hectare.
The application of the increased incentives in respect of planting for pre-October 1999 was an essential element of the case submitted to the European Commission in August 1999. From the beginning the Commission had indicated that this aspect would be problematic. It was unwilling at that time to co-fund similar increases for those who planted in earlier years. I and my Department made a further detailed submission to the Commission in April 2000 in support of such increases and I vigorously pursued this case at a number of meetings with the Commission in the latter half of last year.
Additional informationThe question of applying the increase to those who had planted in the period 1993-2000 was the subject of protracted discussions at all levels with the Commission. Various arguments were advanced by the Commission in addition to legal factors, for example, the precedent on other agricultural schemes and budgetary considerations. In spite of cogent arguments, regrettably, the Commission remained steadfast in its refusal to co-fund the increases.
Application of the 30% increase to pre-1999 planting would give a much needed boost in terms of confidence for the sector, in meeting the targets in our afforestation programme and in delivering on the forestry elements of the national climate change strategy. It is for that reason that I am now considering possible funding from the Exchequer, at an estimated annual cost at present of £3.4 million, for those who planted prior to 1 October 1999. The number of landowners involved, mainly farmers, is approximately 12,000. In view of the State aids aspect, any decision to have the cost borne by the Exchequer would require Commission agreement. As I indicated to the House on 8 February in reply to Deputy Connaughton, I hope to be in a position to announce a decision during the current planting season.
I do not wish to be discourteous to the Minister of State, but he answered everything I did not ask.
I will answer the Deputy.
Will the Minister of State indicate the number of farmers who should be retrospectively paid for the top-up? How much will it cost? Has a Cabinet decision been taken to pay these people? We have skirted around this issue for three or four months.
I accept the frankness of the Deputy's question and, as always, I will be as direct as I can in my reply. Approximately 12,000 people have planted. Some £3.4 million per annum is involved. That will apply from 1999. I have argued my position in Brussels on a number of occasions. We will not get the extra money from the Commission on the basis that it maintains the farmers signed an agreement for a certain level of premium grant. Consequently, it will not agree to anything further.
I discussed the position with the Minister and the officials in my Department and made a case to the Department of Finance. The Government has not made a decision, but I hope we will not have to wait another three or four months for one. A response is imminent. I do not like saying that because I may have given a similar indication on the last occasion. I am sorry if I did because, more than anyone else, I would like a positive response.
The case has been made to the Department. I understand it will be on the Minister's desk within a week. I hope the result will be the one we all seek. If we get the positive answer from the Department of Finance we must then get agreement from the EU Commission because it could regard it as a State aid.
I thank the Minister. I have no reason to doubt his bona fides but I have heard what he has said three times already. It appears that, even in the media, there is an acceptance by many farmers that the Government has taken a decision. I emphasise, as has the Minister of State, that a decision has not been taken and until such time as the Cabinet makes a decision they will be as far away from receiving the money as they were a year ago. I hope we do not have to await the onslaught of a general election before it is announced. I believe the Minister of State accepts the farmers should be paid. May we take it a decision will be made in broad daylight? Many people believe the Minister of State has the agreement of the Government which he does not.
It is not easy to get extra money in the present circumstances.
The Government is awash with it.
The Minister would know about that. Look at what he got in his time.
I assure the Deputy it has nothing to do with an election. I would like the farmers to receive it now so they could have it well digested before the election in April 2002. The Department of Finance is looking at this very seriously. However, no decision has been taken by the Government as yet.
