Denis Naughten
Question:108 Mr. Naughten asked the Minister for Agriculture and Food the steps she is taking to address the burden of cross-compliance; and if she will make a statement on the matter. [33026/06]
Priority Questions.
Direct Payment Schemes.
Cross-compliance involves two key elements, namely, a requirement for farmers to comply with 18 statutory management requirements set down in EU legislation on the environment, food safety, animal health and welfare and plant health, and a requirement to maintain farms in good agricultural and environmental conditions. If an applicant is found to be non-compliant, sanctions provided for in the governing EU regulations will be applied to the applicant's single payment.
The rate of on-farm inspections required for cross-compliance is 1% of those farmers to whom the statutory management requirements or good agricultural and environmental conditions apply. However, at least 5% of producers must be inspected under the bovine animal identification and registration requirements, as this level is prescribed under the relevant regulations.
Guides to cross-compliance were issued to all farmers by my Department in early 2005 and August 2006. They detailed the cross-compliance requirements under the various EU regulations and gave information on inspection controls on farms. Wide-ranging consultation with the farm bodies has taken place and procedures are clearly set out in the charter of rights for farmers.
My Department has adopted a weighting system within the cross-compliance inspection regime whereby due account must be taken of infringements of the requirements that are inadvertent and minor in nature, do not result from the negligence of the farmer and are capable of occurring in practical farming situations. In such circumstances, a certain level of tolerance is applied while the farmer is notified of the infringement.
In implementing the single payment scheme, my Department's policy is to minimise the number of inspection visits and move towards a situation where, in most cases, all eligibility and cross-compliance checks will be carried out during a single farm visit. My Department is committed to ensuring the maximum level of integration of inspections across all areas, including inspections under the disadvantaged areas scheme. On this basis, my Department estimates that more than 8,000 farmers will be inspected annually under the single payment scheme, representing more than a 50% reduction in the number of inspections compared to the old coupled regime.
My Department is in regular contact with the EU Commission concerning the need for further simplification with particular reference to advance notice of inspections and tolerances. The initiative recently launched by the Commission on simplification of the Common Agricultural Policy provides the opportunity for a fresh look at cross-compliance and other single payment scheme issues. I will certainly press for this.
When we made the decision to decouple the single farm payment, the then Minister, Deputy Walsh, stated that it would allow farmers the freedom to farm. The reality is that there is more bureaucracy in farming now than ever before.
The current Minister stated that in practical terms, farmers would be given up to 48 hours notice, but the reality on the ground is that farmers undergo on-the-spot inspections without any notification. In light of the fact that the majority of penalties relate to paperwork and the majority of farmers are part-time, is it not irresponsible of the Department not to give farmers notice to ensure that they have the documentation in place?
Some 95% of all cross-compliance failures are due to problems with the computerised monitoring and movement system, CMMS. What can the Department do to rectify this? It is one matter for farmers to fail purely for agricultural reasons — I accept the conditions laid down in that respect — but it is another matter for them to fail due to the current level of bureaucracy. What will the Minister do to address this issue?
It is important to state that a comparative analysis of the decoupled and the coupled payment schemes shows that in 2004 there were 18,000 inspections and in 2006 there will be eight. That is a significant reduction in inspections.
On the basis of an appreciation, Deputy Naughten is correct in stating that there are more part-time farmers, which of itself can impose difficulties, and I appreciate and fully recognise that problem. That is why I have been pursuing vociferously over recent years the need for simplification, an issue which was discussed with the Commissioner on a recent visit here and on which I am putting forward a number of proposals to her. However, I and members of my Department have spent an inordinate amount of time considering a farmers' charter and what are called yellow card penalty points.
If one wants to make a comparison of the penalties, for example, in 2005 and this year the cost of penalties here amounted to €337,000 and only two farms were out of context when it came to good farming practice, whereas in Northern Ireland the cost of penalties was £3.5 million. Let us look at it realistically. One is comparing the Six Counties in Northern Ireland with the rest here. Comparative analysis shows there have been considerable changes. Equally, in the context of the yellow card or the system in place, we are taking into account some simple issues which can arise in normal farming practice.
There is not more bureaucracy. There are issues, for example with the CMMS, but most particularly the issue refers to the loss of tags and I included a tolerance within the scheme. I know Deputy Crawford agrees with me.
I agree it is outrageous.
There are issues in that regard coming from our part of the country on the movement of animals about which we must be careful to ensure there are no disease issues. We had grave concerns, as Deputy Crawford will be aware, about disease issues in County Fermanagh, for example, which would have significant implications for us in the Border counties.
What I am saying is the rate of inspection is 1%. There has been a considerable reduction in the number of inspections. There is 48-hour notice for inspection of particular parts of cross-compliance — there is on-the-spot inspection for others — on the basis that the money being provided under the single farm payment is European and Irish, but I will still continue to pursue the idea, which is appropriate on the basis of decoupling, of longer-term notice to farmers. Moreover, the tolerances exist and we will review them.
The European Commission, which has come here to inspect us, is not particularly enamoured with the methodology we use, but I am certainly on the side of the farmer when it comes to small, simple processes that can cause difficulties. There are tolerances and, as I indicated to the farming organisations, they are constantly reviewed.
We must move to the next question.
I expected a reaction on the other side of the House——
We will give the Minister our reaction.
——but it is not permitted.
We are way over time.
Food Safety Standards.
Mary Upton
Question:109 Dr. Upton asked the Minister for Agriculture and Food her views on the fact that the Brazilian laboratories tasked with ensuring Brazilian beef for export is free from banned hormones and illegal levels of pharmaceutical residues do not appear, according to recent evidence given to the Joint Committee on Agriculture and Food by an EU official, to be capable of fulfilling this role; the impact such incapacity has on the acceptability of guarantees by the Brazilian Government provided to the European Commission that its standards are at least equivalent to those in operation for EU food producers; her views on whether it is time to ban the importation of Brazilian beef into the EU; and if she will make a statement on the matter. [33030/06]
I have been in regular contact with Commissioner Kyprianou on the issue of Brazilian beef and he has assured me that the Commission will not hesitate to take the appropriate protection measures if a product, imported from a third country or produced in the domestic market, represents a risk to the health of EU consumers, livestock or plants. Indeed, the Commission official who attended the joint Oireachtas committee recently gave the same assurance to the committee.
An EU Food and Veterinary Office, FVO, inspection to evaluate animal health and public health control systems, traceability and certification procedures in place in Brazil was carried out in September of last year. In December the FVO completed the second mission that year to evaluate the control of residues and contaminants in live animals and animal products, including controls on veterinary medical products in that country. The FVO recently published its findings following a period of consultation with the Brazilians.
The reports comment on the structure, organisation and tasks of the Brazilian competent authorities and listed a number of recommendations to the authorities to address deficiencies recorded in the course of the audits. The Commission has confirmed to my Department that action plans to implement the various recommendations have been received. Brazil provided information on residue monitoring in June 2006 and a corrective action plan was received from the Brazilian authorities in August. Following assessment the Commission deemed acceptable the measures on beef, horse meat and aquaculture. They had already taken action against Brazil because of its poor performance on residue levels in certain products and some products have been withdrawn from Brazil's residue plan for export to the EU, including eggs and egg products, milk and milk products, pig meat, ovine and caprine meat and honey.
With regard to laboratories, I understand the Joint Committee on Agriculture and Food was assured by the Commission that there is no risk from legally imported beef from Brazil and that further plans for upgrading equipment and technical training methods are accurate and realistic. The Commission official also indicated that a further FVO inspection on residues in Brazil is being planned to take place in the first quarter of 2007 to verify the implementation of the corrective measures, and they have also scheduled another animal and public health mission to Brazil for the early part of next year.
I will continue to take every opportunity to remind the Commission of the importance of having the same standards, particularly on exporting countries, including Brazil, and my Department and I will continue to closely monitor the position.
I thank the Minister for the answer to my question. The basis of my question was the laboratories. All evidence available on the FVO reports, the most recent one of which is from 2005, would suggest that the laboratories are anything but competent or proficient in terms of what they are delivering. That underpins every result that comes out of those laboratories. They are not accredited. There is no proficiency testing. Basically, they are not up to speed. I ask the Minister what credibility we can give to results we get from those laboratories?
There has been much debate on imports from Brazil. There is a serious issue for us if we accept test results that come from laboratories which are not proficient and up to standard. For instance, one of the reports stated that the method was not fit for the purpose of confirmation for one of the tests that was carried out. The tests, while they are being done, are fine and I am sure they get a result. In that particular instance the method was not suitable for the tests that were carried out, which therefore negated all the value of the testing done. Will the Minister comment on that and on the proficiency of the laboratories?
I read with interest the debate that took place between all the members of the committee with DG SANCO, and Commissioner Kyprianou has put in place a number of initiatives that will be evaluated in January. I took the opportunity to express concerns with Commissioner Kyprianou, both in speaking with him at Council and in forwarding to him all sorts of documentation and press articles, to which he adverted in the consultations that took place. If one was to take this at face value, one would still have concerns, but I must take into consideration the competent authority, which is the FVO, the assurances being given, a review in January and that I have been advised, in discussions with the Commissioner, that he personally will travel to Brazil on the basis of concerns expressed.
Ireland is the only member state that has expressed concerns formally to the Commissioner on this issue. This is surprising, especially when many member states are consumer orientated. I will continue to press vociferously, and will be vehement in pursuing guarantees that have been given by the Brazilian authorities. The DG answered the committee on the basis of concerns raised by the committee, but Deputy Upton is correct that we must ensure that what was agreed in August last will be forthcoming.
My concern hinges on the fact that it is the FVO report that has given us this information and the FVO officials are the ones who are highly critical of the laboratory facilities and of the standards applied. Mr. Medelin, at his recent visit to the committee, stated: "I am advised by my experts that the Brazilian scheme is realistic and on the right track." It is nice to hear that it is on the right track, but we have debated this issue for as long as I can remember. It seems that the FVO officials go in and do the best job they can. Their reports are good. When they returned, two years later or whenever, hardly any of the recommendations they made previously were put in place and they were equally critical. It certainly raises concerns about the assurances we are getting from the Brazilian authorities.
It is on that basis that I will continue to express concerns. Deputy Upton probably read a retort by the Brazilian authorities to something I said during the summer on this issue. Equivalence and equity are the two English words which one is citing. Assurances are given by the competent authority, be it the Commission or the FVO, on the safety of meat. I will continue to raise this issue, as will all my ministerial colleagues, in further discussions with the Commissioner.
Energy Policy.
Trevor Sargent
Question:110 Mr. Sargent asked the Minister for Agriculture and Food if her Department has carried out an analysis of the impact of high energy prices on farmers and the food industry; the steps she plans to take to ensure that these business people have a secure and affordable supply of energy in the future; and if she will make a statement on the matter. [33032/06]
The cost of fuel and energy, driven by international oil prices, is an issue for all parts of the economy, including farmers and the food industry, and is the subject of regular analysis by, among others, the Competitiveness Council in its annual reports. Such studies underline the need to use inputs in an efficient manner and to maintain and, where possible, improve productivity. The Central Statistics Office analyses changes in agricultural inputs and issues the agricultural input price index on a monthly basis. The costs of all agricultural inputs as measured by this index increased by 4.5% in the 12 months to September 2006, the latest figure available. Two of the major factors in this annual increase of 4.5% were the increases of 9.2% in the cost of motor fuels and 4.4% in the cost of electricity. However, international oil prices have eased in recent weeks and this has impacted on fuel prices for farmers and others.
The Government recently issued a Green Paper outlining its policy options on achieving its three objectives of security of energy supply, environmental sustainability and economic competitiveness. The Green Paper puts forward energy policy options for the next decade and beyond designed to meet the needs of consumers and business to support and sustain our economic growth. A 20% increase in energy efficiency by 2020 is a key target of the Green Paper. My Department contributed to the Green Paper and supports its aim to develop an energy policy framework to 2020. We particularly welcome the commitment to prepare a national bioenergy action plan by end 2006. The agriculture and forestry sectors have an important contribution to make in this area and I am working closely with ministerial colleagues, as part of the ministerial task force, to oversee preparation of this action plan. This will ensure a cohesive approach to the development of this sector across Departments, State agencies and relevant stakeholders.
While the Minister of State is relieved energy prices have reduced a little, I hope he is not taking that as a trend because, unfortunately, that will not continue. The overall pattern is an increase in energy prices.
Has the Minister of State evaluated, for example, the comments of Cadburys, a major player in the dairy industry, which cited energy costs as a central factor in the decision to close plants and cut jobs in Coolock and Tallaght, County Dublin, and Rathmore, County Kerry? Does that point to the need for the Department to contribute more directly in the formulation of energy policy in, for example, encouraging farmers to become more involved in microgeneration, net metering to harness wind and anaerobic digestion projects? There were worries about contamination regarding anaerobic digestion but I hope those have passed. Have the impediments to the development of anaerobic digestion been removed entirely?
The Department of Enterprise, Trade and Employment published a report on the food and beverage sector, which stated it accounted for 8% of exports. Is the Department of Agriculture and Food contributing to such reports to ensure energy costs are a significant factor in seeking alternatives to the high energy system developed by the State to improve energy efficiency and the availability of renewables? Will the Department have to push for a later target than 2020 because we must look beyond fossil fuel dependency? The farming sector offers huge potential to meet the energy needs of the State, if embraced wholeheartedly.
In the Agri-Vision 2015 report published earlier this year by my Department, we emphasised the factors that have to be taken into consideration in the development of the food industry and they include the increasing cost of oil, the volatility of oil supply and the need to reduce emissions. Over the past 18 months, the Minister for Agriculture and Food and I have met different people involved in the food industry and they have, understandably, repeatedly raised the cost of energy issue with us.
My constituency, which I share with Deputy Crawford, has embraced wind energy generation. Deputy Sargent will recall visiting my parish between Bawnboy and Ballyconnell in August 2001 for the opening of a wind farm. In the meantime, significant development has taken place in my own county in this area. The Minister is a member of the Cabinet task force, which has placed a major emphasis on the need to generate alternative energy sources. The Green Paper is ambitious and practical and it lays out a framework to reduce our dependence on current energy sources. At the same time, we will ensure incentives on both the supply and demand sides. The Government has invited submissions on the Green Paper and it is proposed that the national bioenergy strategy and the White Paper on energy policy will be published by the end of the year. The Government has asked individual organisations to submit their proposals on the Green Paper. A five-year excise relief programme, valued at €200 million, is under way. A capital grant aid programme for bioenergy development will be introduced while a bioheat grants programme provides grants for commercial scale wood biomass boilers. We also envisage the establishment of the single electricity market in 2007 and the completion of the North-South gas interconnector project by 2011.
On the recent visit by the Commissioner for Agriculture and Rural Development, Mariann Fischer Boel, to Ireland, both the Minister and I raised the need to give greater incentives to farmers who want to diversify into the cultivation of energy crops. We are providing capital grant assistance towards harvesting equipment as well. There is a need for further incentives both on the supply and demand sides and we want to encourage more farmers to go into this form of crop production. I attended a meeting organised by Teagasc on the Leader programme in my own county a few weeks ago. I initiated the meeting, which was attended by 250 farmers who expressed an interest in this new form of farming. There is widespread interest but we must ensure we capitalise on it while, at the same time, ensuring the incentives are sufficient to generate business in this new form of farming.
I am glad the Minister of State and the Department is conscious because that is a good start.
I did not say that.
The Minister of State said it is very important that we are conscious of the issues overall.
I said that in visiting all food companies over the past two years, even before energy became a key issue in recent months, we were conscious of the substantial burden on industry due to energy costs.
I welcome the Minister of State's reply.
The Deputy should not minimise the word "conscious".
It is reassuring though. Will the Department recommend net metering to the Department of Communications, Marine and Natural Resources? For example, farmers in Australia, who have benefited from net metering, can get into wind harvesting more readily because it is not as big a deal, cost wise, to get connected to the grid as it is in Ireland. Anaerobic digestion projects received a setback because of BSE and other scares. Have all the impediments to such projects been lifted?
When introducing the farm waste management scheme, we made funding available for anaerobic digestion projects. We have asked farmers' organisations and businesses to come up with proposals. Substantial grant assistance is available to help people develop viable projects. The other matter can be considered in the context of the publication of the Green Paper and is a matter for the Department of Communications, Marine and Natural Resources in the first instance. The Deputy's query can be fed into the general discussion following the publication of the Green Paper.
What of the farmers in Australia?
We do not have time to go to Australia. We will be busy for a while.
I am not suggesting that. The Minister should lift the telephone.
Milk Quota.
Seymour Crawford
Question:111 Mr. Crawford asked the Minister for Agriculture and Food the position regarding her plans to deal with milk quota; if she is committed to it in the long term; the advice she would offer to a young farmer regarding investing in milk quota and related housing and milking facilities; and if she will make a statement on the matter. [33029/06]
As the Deputy will be aware, the current milk quota arrangements were extended until the end of the 2014-15 milk quota year as part of the 2003 Luxembourg agreement on the reform of the Common Agricultural Policy. A review will take place in 2008 and any proposals submitted by the European Commission will be considered by the Council of Ministers at that time. Should the Commission come forward with further proposals in the milk sector, I will participate fully in the Council to ensure that the best interests of the Irish dairy sector are protected.
At national level, my focus is on the need to secure greater levels of efficiency at both producer and processor level in the face of considerable future challenges on international dairy markets. I recently announced the establishment of a new milk quota trading scheme to supersede the current milk quota restructuring scheme. The new system will continue to operate in each co-op area, thus maintaining the principle of regional preference or ring-fencing within current pools. It will have two elements, a priority pool and a market pool, the latter to run as an exchange.
The priority pool will be available to farmers whose leases had expired and were not renewed, successors and young farmers. The surplus available in the priority category pool will be allocated to producers with less than 350,000 litres. Some 30% of the total quota offered for sale will be allocated through the priority pool at a maximum price of 12 cent per litre, while the remaining 70% will be transacted through the exchange, delivering a market price. I have already announced 24 November as the closing date for applications by buyers and sellers to participate in the trading system and I will announce the date of the exchange when all valid transactions have been entered.
The new system, which was agreed following extensive consultation with the farm organisations and ICOS, will release larger quantities of quota to active and committed dairy farmers through the combined operation of a market exchange and a maximum price priority pool. The operation of the system will be reviewed after the first exchange and a second exchange will follow in spring of next year.
These arrangements will allow milk producers the opportunity to bid for the amount of quota required to meet the development needs of their farm enterprise at a price that will generate a commercial rate of return. Given the different levels of efficiency at farm level, such decisions are best made by individual farmers.
I thank the Minister for that long answer but it does not change the fact the milk quota situation is a total mess. One only has to think back to what happened last spring when the Minister announced the previous restructuring scheme on a Friday and the following day announced a new scheme whereby quota would be sold through marts, auctioneers and so on. Immediately, the Irish Farmers’ Journal printed an article stating that milk quota would be €4 per gallon.
How does the Minister intend to organise ring-fencing? Is she suggesting milk should stay in counties like Cavan and Monaghan? How can this be achieved? How does the Minister reconcile the statement she made in Finland, namely, that quota is finished and is no longer an issue, with the reference in today's Irish Farmers’ Journal to the quota rebels who want to bypass all schemes? This is closely linked to the issue of ring-fencing.
The Minister did not answer my key question. How can the House give an assurance to young farmers that it is worth their while to invest in and extend milk quota if we tell them there is no future in milk, the price of milk is collapsing and they will have to bid for it against all others in the open market? The Minister should clarify the position because it is very difficult for young farmers given that milk was quoted at €4 per gallon on a previous occasion but today's newspaper suggests it will be 50 cent a gallon. Where is the future for young farmers?
The future for young farmers will be on this side of the House because the negativity expressed by the Opposition in farming circles has been such that it would depress anybody.
Given the priority afforded to the milk industry in this country from a production and manufacturing perspective, I decided, against the background of the world trade talks and the fact Chile is now our competitor, that we needed a system whereby we could be competitive at an international level. On that basis, I decided we needed to change the quota scheme — contrary to opinion, the Minister is occasionally entitled to make a policy decision, as is the Government. I did not determine the price and will not do so. What is written in the newspapers is not necessarily a reflection of the truth.
We know that.
The Deputy can take it any way he wants but I did not suggest milk would be €4 or €5 a gallon. What I thought appropriate in the context of the exchange was that, first, the fundamentals of ring-fencing would not move, a policy with which the Deputy will agree, given the importance of the dairy sector in the Cavan-Monaghan area, as well as my area. Second, one of the frustrations expressed by young farmers was that they could not get access to quota. Third, they wanted to make sure they could afford to buy it, which is why I have a priority pool — 30% of the quota at 12 cent — for young farmers. Fourth, I introduced a substantial €100 million investment in the manufacturing sector, making an overall total investment of €500 million. This sector must be competitive, new and different to allow it to drive and move forward.
I did not say "yes" or "no", or agree or otherwise, while in Finland, although I am delighted the Deputy reads about what I say when I go abroad.
We watch the Minister very closely.
I indicated that all of these decisions must be made against the background of what the Commissioner gave as her personal view when she came to Ireland three weeks ago, namely, that the future of quotas was perhaps untenable. Therefore, we, including farmers, must make decisions on the basis of that background — in other words, that we do not have, as the Deputy stated, quota rebels. This is why I have structures to allow that not to happen. That is unfair and we are not ready for that type of open-ended market system. However, we need access to quota and we will have to upscale and support farmers if they are to be competitive and survive.
My personal view is that as one of the most efficient milk dairy farming countries in the European Union, we have great opportunities. When one compares the price of quota in this country, at 12 cent, to the price of €2.50 in the Netherlands, it is clear other colleagues will have greater difficulties. The single farm payment is in place to compensate for income loss.
The situation with ring-fencing is clear. It is obvious a farmer in Cavan or Monaghan supplying Glanbia can sell milk to Waterford or anywhere else.
Through the co-op.
Ring-fencing by no means safeguards the poor areas. Second, why did the Minister change the structures of the new support package so that there is a limit to the amount of money a group can spend on the new restructuring of dairies? For example, in the northern part of the country, there was a hope to move towards cheese units or otherwise. To introduce a change midway through the system complicates the situation dramatically.
First, €25 million is a sizeable investment. Sometimes people are misquoted in the Irish Farmers’ Journal——
We can read.
——and there will be a retort by one of my co-op representatives that this person was misrepresented.
Were they taken to heel?
No, this person was misrepresented. Second, a number of those who are pontificating never put a red cent into the industry in the past 20 years. Third, my scheme is specific to Annex 1 and a small part of Annex 2. We are driving the policy initiative in providing the funding and Enterprise Ireland is delivering the project. In the case of Annex 2 products, Enterprise Ireland still has considerable resources available to it to engage in joint ventures and support packages for producers of cheese, flavoured milks or yoghurts or for producers of other such products.
There is an issue concerning the case to which Deputy Crawford referred. The Minister of State and I met representatives of that company and the issues involved are being ironed out on behalf of the company.
Afforestation Programme.
Trevor Sargent
Question:112 Mr. Sargent asked the Minister for Agriculture and Food the forestry planting rates for the past 15 years; if these are meeting existing targets; the reason for the fall-off in planting in recent years; her plans to ensure that the Government’s existing target is met and exceeded; and if she will make a statement on the matter. [33298/06]
Since 1991 some 228,159 hectares of new forestry have been planted, representing an average planting rate of 15,000 hectares a year. The current planting target of 20,000 hectares per annum, including public planting of 5,000 hectares per annum, was set in 1996.
Public planting ceased almost completely in the late 1990s, because of a Court of Justice ruling which found that Coillte Teoranta was ineligible for afforestation supports. In more recent years, a combination of high land prices, competing land-use options and uncertainty about future agricultural scenarios has led to a reluctance on the part of many farmers to commit their land to forestry.
In terms of incentives, the current forestry grant and premium package, including advice from Teagasc, is without doubt the most attractive that has ever been available. Farmers and landowners can avail of an establishment grant of 100% of costs, a tax-free premium of up to €500 per hectare per annum for 20 years at present and, under the single payment scheme, they can plant up to 50% of their eligible claimed area without losing any entitlements.
Under the new rural development plan 2007-13, we intend to bring forward a new forestry programme. The detail of the new rural development plan and its forestry component has yet to be finalised but it will be made available for public consultation shortly.
Earlier this year our Department embarked on a joint initiative with the Irish Forestry Industry Chain, IFIC, under the heading "Forests for a Bright Future" to highlight the multifunctional benefits of forestry and to stimulate uptake in the afforestation programme. This promotional campaign is expected to run for at least 18 months and is promoting the advantages of forestry, particularly to farmers, with a view to increasing the rate of new planting.
I welcome the Minister of State's reply. I wish to tie this question in with the previous question, as there is a considerable energy issue related to forestry as well as the other aspects the Minister mentioned. The Minister of State advised me in July that forestry premiums were under review. Notwithstanding what she indicated in her reply in this respect, and I can understand the reason she would paint as positive a picture as possible, given that forestry premiums have not risen in the past six years, is it intended to increase those premiums? A 40% increase is what is perceived would be a fair increase. I will meet representatives of the IFA tomorrow, as no doubt will other Members, to discuss the pre-budget submissions. Therefore, it would be useful to know if the Minister of State is thinking of introducing such an increase. As she said, land prices are increasing and many issues need to be dealt with separately in that context, the Kenny report being only one of them. Does the Minister of State intend to increase premiums in light of those other increases in costs, which make it difficult for many farmers to engage in forestry production?
The Minister of State referred to introducing a new forestry programme. Will she assure us she will not simply reduce the target of 20,000 hectares per annum, given that it is not being reached and call that level the new target, or will she be a little more ambitious and recognise that forestry needs to play a more central role in this country for all sorts of reasons?
While there has been much discussion on monopolies, Balcas in Fermanagh is the only company supplying wood pellets. In the interests of ensuring competition, is there not a need to develop the forestry industry to ensure there is more than one supplier of wood pellets, which is an increasingly important fuel source?
The European Commission contracted the Department of Agriculture and Food last February to warn of a possible legal action against Ireland due to neglect of environmental aspects of forestry policy. Has the European Commission contacted the Department since concerning the issue and, if so, what was the Department's reply?
We would like to see increases in grants and premiums. We have already announced an increase in the plantation grant which increased by 9% in 2005 and we received approval from the Department of Finance this year to increase the plantation grant by a further 14.7%. We submitted that proposal to the EU Commission for approval and are awaiting a final decision on it. A proposed increase in premium is currently being closely examined by the Department of Finance and such a proposal is part of the partnership talks.
Deputy Sargent was correct in saying it is important to be positive about the planting targets and to seek to have an increased planting target. One of the main items on our agenda is to encourage more farmers to engage in planting. That public planting by Coillte ceased as a result of the EU decision in the late 1990s has impacted on our planting targets. Nevertheless, there is an attractive package in forestry for farmers, as I outlined, be it the planting grants or the tax free premium over 20 years.
The Deputy was also correct in pointing to the energy aspect of forestry. The development of the production of wood chips and wood pellets, including the availability of SEI grants from the Department of Communications, Marine and Natural Resources, is important in encouraging people to switch over to using wood chip or wood pellets. Such development is also important to the forestry industry because following a tax-free premium over 20 years, farmers can gain additional income from thinnings from year 20 to year 40. Therefore, the more wood chip and wood pellet outlets we have, the better for the forestry industry. Such a development would provide a continual income from forestry for farmers engaged in it, in terms of tax-free premiums over 20 years and an income derived from the sale of forestry thinnings over the next 20 years. Under the single farm payment farmers can plant up to 50% of their land. Measures such as this are important and farmers can eventually gain further income from the sale of the timber. Farmers who have engaged in forestry production have spoken to me about the increased value in their assets. If farmers are elderly when they engage in forestry production, they know they are passing on a valuable asset to the next generation.
We also have an afforestation promotion campaign throughout the country through which we get the message across to farmers about the important energy aspect of forestry and about increasing the area planted. These two aspects are important and we will continue to promote them.
The European Commission made a serious complaint to the Government. What was the Department's reply to the Commission on our forestry policy?
Discussions with the European Commission on that matter are ongoing.
That concludes Priority Questions.