Dáil Éireann debate -
Tuesday, 10 Dec 2002

Vol. 559 No. 1

Estimates for Public Services, 2002: Leave to Introduce.

Minister for Agriculture and Food (Mr. Walsh)

I move:

"That leave be given by the Dáil to introduce the following Supplementary Estimate for the service of the year ending on the 31st day of December, 2002: – Vote 31 – Agriculture and Food (Supplementary Estimate).”

I wish to present for the approval of the House a Supplementary Estimate of €15 million for the Department of Agriculture and Food. Actual gross expenditure and appropriations-in-aid for the Department for 2002 are below the Estimates but were, until last week, projected to balance out within the original net Estimate. The shortfall which has now emerged relates to the final balancing payment of €34.2 million, due from the EU in respect of 1994-99 round of Structural Funds. It had been anticipated that this payment would be received before the end of this year. However, it has now been confirmed by the European Commission that this will not be possible.

My Department has examined options to try to minimise the effect of this on the Vote. While offsetting measures to compensate for part of the shortfall had been identified it has not proven possible to make up the full €34.2 million. In the circumstances, to avoid an excess Vote, I propose to introduce a Supplementary Estimate of €15 million.

The Supplementary Estimate is due to an expected shortfall in the receipts rather than an increase in expenditure in my Department. In fact, gross expenditure by my Department in 2002 is expected to be €65 million lower than the Revised Book of Estimates, although there will be increased expenditure under a number of subheads, in particular, A1, C3, J1 and L2. The increased expenditure on subhead A1 results from additional travel and overtime costs resulting from the outbreak of foot and mouth disease in 2001 and also additional BSE sampling. With regard to subhead C3, the original Estimate of €136 million has proven to be insufficient and in additional expenditure has been incurred in compensation for BSE herd depopulation, BSE testing and the scrapie eradication programme. The latter scheme is now expected to cost €12 million this year. The original Estimate only provided a €1.6 million for subhead J1, which covers legal fees expenses, but additional expenditure has been incurred as a result of the settlement of a number of court cases.

This additional expenditure is more than counter-balanced by lower than estimated spending on some of the subheads, most notably subhead L1 which covers market intervention, subhead L4, which covers REPS, L5 which covers the early retirement scheme and M2, the on-farm investment schemes. The savings on L1 reflect the significant improvement in the beef market this year compared to 2001, largely because of a strong recovery in consumer confidence in beef arising from the various safeguards for consumers which were introduced at EU level following the BSE crisis of 200 and 2001. In particular, very little beef was sold into the special purchase scheme which was co-funded by the EU and the national Exchequer, or indeed into intervention.

With regard to subheads L4, L5 and M2, applications for these schemes have been lower than expected with a result that expenditure on these measures is likely to fall short of earlier projections. Nevertheless, the level of REPS applications continues to compare favourably with any corresponding period during the first REPS scheme from 1994-99. Notwithstanding this, I have made some administrative changes to the scheme to address the complexity of the application procedures and these changes, which will come into effect in January 2003, will make the application process easier for farmers and producers. Lower expenditure on these schemes, which are co-financed by the EU, has resulted in lower receipts from the EU. Some, but not all, of this has been offset by additional drawdowns in other areas such as compensatory allowances and from the veterinary fund.

Despite these variations in expenditure and receipts, my Department had expected until last week to bring in net expenditure within the provision on the Book of Estimates. However, within the past week my Department has been made aware by the Commission that the final payment for the OPARDF and food programme under the 1994-99 round of the Structural Funds, amounting to €34.2, will not be paid before the end of the year. Ireland is not alone in this situation and I believe that most of the programmes from the other member states have not yet been closed. We are not faced with a refusal to pay the outstanding sum, merely a delay in payment until the internal Commission procedures have been completed.

My Department has examined various options to minimise the effect on the outturn of the non-receipt of the outstanding €34 million. On the expenditure side, for example, I indicated earlier that I expect savings on intervention, REPS, the early retirement scheme and the NDP on-farm investment schemes.

Turning to the table in section two (II) of the Supplementary Estimate it can be seen that overall it shows above-Estimate expenditure on subheads A1, C3, J1 and L2 totalling €58.284 million, appropriations-in-aid which are below Estimates, totalling €80.121 million and below-Estimate expenditure on subheads L1, L4, L5 and M2 totalling €123.405 million.

The net effect of this is that we are €15 million short of what is required this year. I again stress that this would not have arisen if we had, as expected, received the final EU co-funding for the 1994-99 round of Structural Funds. The need for this Supplementary Estimate stems from non-receipt of these EU funds. The adoption of a Supplementary Estimate is the most appropriate way to deal with the situation.

Mr. Timmins

Fine Gael will support this amendment, but there are some issues on which we will seek clarification during Question Time. It is appropriate to have this Estimate because it gives us an opportunity to point out that preliminary figures published by the CSO indicate that farm incomes will decrease by 8.5% this year. We all talk about benchmarking and inflation but what profession would accept a decrease of 8.5% in its income? There has been a rise in direct payments this year of €237 million. However, the decrease is due to the decrease in the price of commodities. Grain is down by 13%, milk by 8%, sheep by 16% and pigs by 12%. Beef has stayed constant but is coming from a very low base. Direct payments make up 68% of farm incomes this year. The Minister made an address last year on CAP reform but I do not know what the Government is doing for the future of agriculture. From a survey carried out it seems that 40% of members of Teagasc feel that incomes will not rise, 20% or 30% say they will stay the same and only 9% believe they will increase. I do not know what hope or future the Minister can give farming.

The Estimates have been very poor for agriculture and have been followed by a very poor budget. In the budget debate the Taoiseach did not mention agriculture. This reflected the non-commitment of the Government to the agricultural community. In the budget there is one very important issue in relation to roll-over relief. I am surprised the Minister of State at the Department of Finance, Deputy Parlon, allowed this through. Perhaps he did not know about it, or does not know about it today. I have to admire Fianna Fáil for putting this over on him. Has he no clout? He is getting the blame for this being buried, on the basis that he drew up the programme with the NRA with respect to disposal of land to try to make things easy for it, and roll-over relief is then abolished under his nose. He was out on the plinth welcoming the budget and saying it is a good budget. In fairness to him, I will give him the benefit of the doubt and assume he did not know what was in it or did not understand it. However, I hope on Committee Stage the Minister will do something to get an exemption for farmers because he must realise the importance of roll-over relief.

Stock relief was not mentioned in the budget. I do not know whether it was omitted inadvertently, or whether it will be put in as a sweetener. It is not something major but it should be included. We will bring forward a proposal to extend it from December of this year for another three-year period. A great opportunity was missed by not putting some tax incentives in place to encourage leasing of land. As the Minister is well aware, one of the difficulties in agriculture is structural, relating to the availability of land. There is no incentive at the moment for people to give their under-utilised land to farmers who want to expand, even though it would not ultimately cost the Exchequer any money.

Doubling of the disease eradication levy is a bone of contention within the farming community. Perhaps during Question Time the Minister will outline whether that must come before the House before being passed.

The Minister has been involved in the beef summit in recent days, a good tactical ploy to take the heat off himself. Unfortunately, he is a few months too late, as most of the cattle have been sold for this year. Following the McKinsey report we had the report of the Beef Task Force which was published in June 1999. It recommends rationalisation of the beef industry, talks about waste management and the disposal of specified risk material, and advocates an agreement on a greater degree of price transparency. This is particularly important given that it is reported in the media today that "Prime Time" intends to broadcast a programme tonight which may indicate that there was a price cartel with regard to the milk industry. There is anecdotal evidence to that effect, and farming organisations have always claimed that it may be the case in regard to other agricultural products. What is most amazing is the reference to a three-month time frame for the implementation of the task force recommendations. I do not know whether that is a typographical error. Perhaps the Minister would tell me whether there was a three-month time frame for the implementation of the recommendations of the June 1999 task force which was chaired by the current Secretary General of the Department who, I assume, was Secretary General at the time.

With respect to the Estimates, it is extraordinary that the EU has not come up with the €34.5 million and that we must now draw down €15 million from the Department of Finance. I note the savings on market intervention, REPS, early retirement, the national development plan, all areas that are vitally important to the sustainability of agriculture. If and when this €34 million is allocated, the Minister should put it into a scheme for young farmers and not let the Minister, Deputy McCreevy, take it back from him.

Dr. Upton

I welcome the proposed increase in the Estimates of €15 million. However, it is unfortunate that the €34 million has not been delivered on time. In his Budget Statement or in a press release, the Minister pointed out that there is a certain comfort zone in the EU funding and that there are issues in the budget that are not addressed concerning EU funds, and this kind of shortfall at this time of the year is most unfortunate. However, we will support the increase in the Estimates of €15 million and look on the positive side.

There was nothing but bad news for farming in the Estimates and in the budget. The recent reduction in the allocation is further bad news. The cuts in agriculture for the coming year are also considered to be disproportionate to cuts in other Departments.

The past two years have been very difficult for farming. There were certain events over which nobody had any control. Foot and mouth disease was one of those, along with the bad weather during the summer which made farming extremely difficult. We must also be mindful of the low baseline spending in those two years. We must ensure that it does not become the norm and that the slow-down in on-farm investment arising from that does not continue because the reference points have remained static in the past and the unusual conditions were not taken into account.

In regard to the on-farm investment measures of the first three years of the national development plan, there has been substantial under-spending. It is critical that under-spending should be rescheduled for the remaining four years. On-farm schemes for waste management, dairy hygiene, and young farmers' installation aid must be protected. We must also take account of the coming on stream of the EU Nitrates Directive which must be implemented. It will be expensive, but we will suffer if we do not implement it and account must be taken of that. It is very important that environmental issues be addressed.

I cannot entirely agree with the Minister's view that a relatively positive outlook for control of animal disease should lead to expenditure reductions in the coming year, but it is an issue I will raise again. I am every bit as anxious as the Minister to see the end of the curse of BSE here. However, recent comments that the trends are positive cannot be sustained, given the trend data. I will raise that issue again in another forum.

It is also of some concern to me, relative to the 2003 Estimates, that testing in the meat factories will be reduced. Given a report in one of today's newspapers about the detection of SRM in some of our meat exports to the UK it is a matter of some concern that the inspectorate is maintained and sustained and that we move forward in that direction rather than cutting back. Opening and extending our markets abroad is of crucial importance. We will do that only with best practice and that can be delivered only by improving the quality of our products. That is an issue I have spoken on many times with the Minister and I will come back to it.

I am also concerned about the projections in the budget for Teagasc being cut in the coming year, which implies that the research area is likely to suffer. The outcome is that, on the basis of the principle of last in first out, young people, those who are perhaps on contract, are likely to be the people who will suffer. What I see as a result of that is the beginning of another brain drain. Those people have been very highly educated, and the probability is that they are the people who will be forced to emigrate if those kinds of cuts take place.

I will comment on something Deputy Timmins said, which is of some interest today. Historically farmers have been at risk from the Competition Authority, or that is how it has been seen, if they combined to enhance their bargaining power. It is ironic that the large industrial and commercial enterprises seem to be immune until such time as "Prime Time" has got its hands on the data with a view to getting to grips with a spot of what appears to be price fixing by some of these industries. Farmers seem to be more at risk from the Competition Authority. I suppose the bottom line now is that if farming as a full time profession is to be protected, there must be an assurance of an acceptable income in line with the general incomes in the economy, and there must also be scope for reinvestment and development. The cuts already identified are more severe than in many other Departments and any additional cuts now will drive farmers over the margins and out of business completely.

Mr. Sargent

Be mhaith liom my chuid ama a roinnt leis na Teachtaí Martin Ferris agus James Breen.

On behalf of the Green Party, I welcome this Estimate of €15 million while at the same time regretting that we are at this point considering the shortfall of €34.3 due from the European Union in respect of the 1994-99 round of Structural Funds. It is important that we do not lose out in terms of EU funding, but also that we do not let slip the progress that is needed in terms of the rural environmental protection scheme, area aid, early retirement and the other aspects that are to be covered by the Estimate. I understand that the Commission has made queries about the levels of inspection and it is important that we learn the lessons in that regard. We should have learned a long time ago that there is no such thing as a free lunch when it comes to the European Union, as the regulations and standards we have to meet do not allow for a suspicion of corners being cut. If there is doubt on the part of the European Commission, there is a risk that funding will not be made available. I hope that such doubts can be quickly dispelled and that there will not be further difficulty.

Mr. Ferris

Like the other Deputies who have spoken, I welcome the €15 million being provided in this Supplementary Estimate, even if it is less than what was expected. The Department will have to introduce further such measures to compensate for the deficiencies which have become apparent as a consequence of the cuts in most areas under the Department's responsibility. The drastic effects of funding cuts for the coming year have already been pointed out and this Supplementary Estimate will not compensate for them. It will not address the crisis in farming, which is clear when one considers that there has been a decline of 8.5% in farm incomes. It will not aid the modernisation of farms or the transfer of farms to young, skilled farmers and it will not compensate for the negative effects of the cuts outlined in the Estimates.

It is to be hoped that the Department will increase the funding available for certain programmes. This may be forced on the Government by public pressure and the effects of the crisis in farming communities. The State should not attempt to direct such an important aspect of its economic life in the manner it is following at present. There have been detrimental effects in isolated and rural communities, particularly in the west and south-west. I hope that moneys will be found to compensate for the reductions I have mentioned.

Mr. J. Breen

I would like to compliment the Minister on the great work he did last year when foot and mouth disease was kept out of Ireland. I am afraid that he seems to have forgotten about small farmers this year, however. I am a small farmer and I know that farm incomes have decreased dramatically. In the west of Ireland, people who cannot afford to farm their land are planting it. If land reclamation grants were made available, small farmers would be helped to bring their land to a higher standard of productivity. A combination of a lack of Government funding and the low incomes experienced in the farming sector means that farmers cannot afford to improve their lands in such a manner. It may not be in the brief of the Minister, Deputy Walsh, but I am concerned about persons who decide to plant their land to gain money. If the land all around a farmer is planted, he or she may be told that he or she cannot plant his or her land due to a high level of alkalinity. Where is the sense in penalising one particular farmer, if the surrounding land that was planted was similarly unsuitable? Will the Minister consider a compensation scheme for farmers who are not allowed to plant their land?

Similarly, I ask him to assess the possibility of a land reclamation grant scheme. All sorts of grant payments can be received from the EU, but there is no grant similar to that I received from the Department some years ago when I could not afford to drain or reclaim my land. It was an encouragement and an incentive for small farmers. If the Minister does not take action in relation to these matters, the flight from the land will continue. There will be nothing but ranchers in this country and small farmers like me will be gone. I appeal to the Minister to consider the reintroduction of land reclamation grants for small farmers in the west of Ireland. I emphasise that such grants are very important.

An Leas-Cheann Comhairle

We will take questions for 20 minutes.

Mr. N. O'Keeffe

I welcome the €15 million being allocated in this Supplementary Estimate, but there is a greater shortfall at a time when farming is going through one of the greatest crises in the history of the State. In addition to the doubling in the disease levy, we have seen problems with milk prices this year. The income of a farmer producing 40,000 gallons of milk, or 182,000 litres, will decrease by about €10,200. The Central Statistics Office has said that the price of milk has dropped by 10.1%. It is a serious situation. I appeal to the Minister, Deputy Walsh, who comes from the west of County Cork – there is very intensive farming in east Cork and marginal farming in west Cork – to address these problems. Deputies should not doubt that the agriculture industry cannot survive if the difficulties continue.

There are many issues at stake. The Department has addressed many animal diseases, but what about Johne's disease and BVD, which are related to the importation of animals into Ireland? As farmers, we have to cope with a substantial share of imports, beyond that which is fair. No levies are paid on beef coming here to compete with Irish beef in supermarkets and on butchers' shelves. I am not opposed to imports, but I believe we are getting more than our fair share and I ask that action be taken. I will have no hesitation in naming those who are importing if I have to do so, as some of them are involved in big business. Two major farms, with a total area of 600 acres, were leased by Teagasc in my area last year at a time when agriculture is contracting and Teagasc is expanding in the commercial area of farming. It is not in order and should be examined and addressed. We are taking €17 million from the other activities of Teagasc, even though farmers need more and more help in the advisory area, rather than in the research area.

We do not get as many opportunities to speak about agriculture and certain other issues in the House as we did in the past. Many debates are now restricted, including the budget debate. As a member of Fianna Fáil, a Government party that has always stood by the farming community and that has developed farming to its present state, I can inform the House that a great disillusionment and despondency is developing in rural Ireland. People are running from the land. Deputy James Breen spoke about ranchers in his part of the country, but ranchers do not even want farm land as farming is a serious business. I appeal to the Minister to recognise that farmers cannot take a twofold increase in the milk disease levy, as well as the new BSE levy. I have discussed this serious issue, but I am disappointed with the Deputies opposite who seem to be out of touch.

Mr. Hayes

I do not want to make a lengthy speech, but to make a few short points. I agree with Deputy Ned O'Keeffe that it seems that nobody is interested in agriculture anymore. Young people have no interest in farming as it is too hard a way of life. The Minister will agree that farm incomes are poor. Since 1997, the number of young people entering the farming profession each year has decreased by 60%.

Mr. Durkan

It is a serious record.

Mr. Hayes

It is a significant and amazing decrease and Deputy O'Keeffe was right to raise it. Can I ask the Minister to assure the House that the need to introduce this Supplementary Estimate does not result from the actions of his Department? Do the problems lie at European Union level? The Minister received major publicity in recent weeks as a result of his participation in round table discussions. Can the Minister provide an assurance that the farmers will benefit and not the beef barons or the owners of the meat factories, who have been making huge profits over the last number of years? If this round table discussion is to achieve anything the Minister must make sure that the beef producers, who are running from the land, will actually benefit from them.

Despite what Deputy O'Keeffe said, Teagasc has a huge role to play in agriculture and it should not be undermined. Reports in today's newspapers state there is a shortage of funding. Can the Minister give us an assurance that Teagasc will be put on a sound financial footing to take us into the years ahead? If the advisory body supporting the whole agricultural industry is not on a sound footing it cannot do its research. A change has taken place in farming.

Dr. Upton

The Minster said in his statement that numbers of applications for the rural environmental protection scheme had been lower than expected but compared favourably with the corresponding period of 1994-99. The predictions for 2002 were obviously much higher. From what the Minister said, I assume that much of this relates to the bureaucracy and red tape involved. Will some of this be taken out of the system to make life easier for those who want to apply for and avail of the scheme?

Mr. Sargent

When the money comes through from the EU can it be used, as Deputy Timmins asked earlier, for farm schemes, particularly to support younger farmers? Was this issue raised with Commissioner Fischler when he was here, and what was the outcome, or has it developed in the meantime? Is the Minister mindful of the need for land acquisition for capital projects to be paid for in land swaps rather than CPOs? Capital gains measures are eating away at the money available for the purchase of replacement land. Can he address this matter, which is putting farmers out of business?

Mr. J. Breen

When does the Minister expect the live export of cattle to resume? If it will not resume, what will the outcome be for the farming community and the cattle trade? Will decoupling be introduced in 2003?

Mr. Ferris

The cuts in the afforestation sector will have detrimental effects on a considerable part of the Minister's own county as well as mine. Is there any way these proposed cuts can be pulled back in order to promote this industry, which employs many people both directly and indirectly? Is there any mechanism for breaking the grip of cartels on the beef industry, which is of detrimental effect to the producer?

Mr. Timmins

Will the Minister agree that when he was in Opposition and his leader requested Government time for a debate on agriculture, the then Taoiseach, Deputy John Bruton, allowed time for the debate? I agree with Deputy Ned O'Keeffe that not enough time is given to agriculture and I ask him to use his influence with the Minister and his special relationship with the Taoiseach to obtain Government time for a debate on agriculture. The beef barons and cattle rustlers are dictating agricultural policy. Hundreds of thousands of small farmers, as well as people like Deputy Breen, are suffering because they are being manipulated and bled dry by the industry. Does the Minister agree that although we have a concentration of economic power, the producer's margins are decreasing all the time and he is being trampled into the ground?

Does the Minister believe we are getting value for money with our TB eradication scheme? We have spent hundreds of millions on these schemes. I do not have to hand the exact number of reactors, but it does not seem to be slowing down. It is an industry in itself and I am worried that it is self-perpetuating. What are the Minister's views? I also want to know our current policy on scrapie. Back when money was falling out of the sky we were putting down flocks of sheep at every turn. One was found in the Curragh and the whole thing came to a standstill. Where do we stand? Appropriations-in-aid receipts are down by €80 million. Is there any glaring reason for this? I do not know whether the Minister has signed an order on intramammaries but if he has not I ask him to hold off until we can discuss the matter in committee.

I ask Deputy O'Keeffe to use his influence and his special Corkonian relationship with the Minister and the Taoiseach to get Government time so that he can articulate his point of view. He should concentrate his firepower on the Minister and the Government and not attack the Opposition.

Mr. Ring

I think he wants to join us. He is the ringleader.

Minister for Agriculture and Food (Mr. Walsh)

I thank the Members who contributed to this very brief debate. We will have a more extended debate tomorrow in the committee and I will be very glad of the opportunity to discuss more fully the general Vote on agriculture. We will also have further questions on agriculture before we go into recess.

In relation to the shortfall, the Department made its application for funding on 20 August and has pursued it at the very highest level since then. The Commission, however, works relatively slowly, making sure that everything is absolutely perfect. It will pay, but not before the end of this financial year. That is why we needed this short-term, technical Supplementary Estimate to tide us over. We did not want to leave people unpaid coming up to the end of the year.

Deputy Timmins mentioned that this year was difficult for farming. It has been, in terms of the market and returns for various farming enterprises, and the weather has been dreadful also. The CSO's figures say that incomes were down by 8.5% and in some cases they are probably down by more. I have the greatest sympathy for farmers, who have shown tremendous resilience over the years. Despite the fact that they now have better technology on farms, this has been a bad year by any standards. There is a substantial amount of support for farming – total expenditure in support of farming is estimated at €2.8 billion for the coming year. As Deputy Upton said, a big part of that comes from Europe – about €1.6 billion.

The subject of disease levies is on the agenda for our meeting tomorrow and we can go into it more deeply then. Deputy Timmins raised a whole range of matters, including the efficacy of the TB eradication programme. We have white country status internationally and can trade in over 60 countries because there is confidence in our system. A monitoring committee was established in 1999, following the report of the task force on beef, to ensure a number of matters were attended to. As a result, prices from individual factories for individual grades are published every week in the newspapers.

The meeting I attended yesterday focused on the markets and sought to ensure the 400,000 tonnes we export go to the upper end of the mar ket. While this year we will double our exports of beef to Britain, 75% of it will go to the lower end of the market with only 25% appearing on supermarket shelves. We want more at the higher end.

Commissioner Fischler proposed decoupling which must be negotiated over the next year. We have asked for a study of its impact. One study already undertaken suggests that livestock value would decrease by 35% causing a negative knock-on effect in the processing industry. This must be taken into account. Some farmers, however, would welcome decoupling. They would get support and area based payments and not have to fatten livestock at a loss. We must remember the overall industry.

I will be in discussions with the Minister for Finance as to how best we can spend the money for young farmers next year.

Mr. Sargent

I wish the Minister luck.

Mr. Walsh

There is much interest in and expertise on scrapie and BSE in the House. The full facts of scrapie are not known yet, but as new information becomes available, we will examine and be influenced by it. Deputy Upton mentioned BSE in which the trends are still positive. From September 2001 to November 2002 the number of cases decreased by one third while the age profile went in the right direction. There was an isolated case in County Limerick two weeks ago about which the media became hysterical. We have since had some minor difficulties in some of our markets, but they still have confidence in our system. In 2002 less than 2% of cases were in cattle less than six years of age at times of diagnosis compared with 16% in 2001 and 40% in 2000.

Dr. Upton

That is irrelevant.

Mr. Walsh

For the period August to November the number of cases was down by one third.

Deputy Ned O'Keeffe expressed concern about Johne's disease, BVD and the lack of disease levies on imports. There are imports. We are part of the Single Market and trade worldwide, exporting 500,000 tonnes of beef and importing only 12,000 tonnes. We cannot expect to trade externally without any import trade. I can assure consumers, however, that food coming into Ireland is of the highest standard.

Deputy Hayes mentioned the need for more young people to enter agriculture. For those interested, there is young farmer installation aid and the farm retirement scheme. In spite of the criticism of cutbacks in the budget, we extended stamp duty of 9% for a further three years, a major encouragement for young people to enter agriculture. Despite negative talk about people running from the land, there has been an increase in the number entering agricultural college this year for the first time in a long time. It is not the Department's fault that the money has not yet been paid. Teagasc does a good job. It is essential for the support of the industry with the advice it provides and research and development it conducts.

Deputy Ferris expressed concern about afforestation, a worthwhile enterprise in the long-term. I am pleased to see that we are processing more of the product in Ireland. I can remember seeing the raw material being exported from the quays in Cork and Dublin to Scandinavia for processing. It is a pity we do not do more processing for paper and other products.

We have increased compensatory headage payments for small farmers to over €200 million per annum, helping farmers in the west. There have also been increases in the farm assist scheme. Those who are on a small income should make more use of the farm assist scheme, operated by the Minister for Social and Family Affairs.

Deputy Upton mentioned REPS and the EU nitrates directive, which must be implemented. Further reductions in bureaucracy and red tape and greater participation in REPS are vital. Concerns about capital gains tax are a matter for the Department of Finance. Its regulations must be complied with.

Deputy Ferris raised the issue of a possible cartel in the beef industry. Three other wise men looked into the matter for some time and produced a report which, although it makes interesting reading, did not agree with the perception that there is a cartel in the industry.

While live exports have increased to 120,000 head per year, they will not increase to the levels of over 400,000 head per annum experienced two years ago because of diseases in live animals and animal welfare considerations. There are concerns in Europe about the length of journey live animals have to undertake. For competitive reasons, however, it is an important outlet.

An Leas-Cheann Comhairle

As it is now 6.43 p.m., I am required to put the following question in accordance with an order of the Dáil of this day: "That the Supplementary Estimate, Vote 31, Agriculture and Food, for the service of the year ending 31 December 2002 be agreed to."

Question put and agreed to.