Joan Burton
Question:6 Deputy Joan Burton asked the Minister for Agriculture, Fisheries and Food the cost of delivering the agricultural environment options scheme in 2010; and if he will make a statement on the matter. [40645/10]
Other Questions
Agri-Environment Options Scheme
The agri-environment options scheme was launched in March this year with a closing date for applications of 17 May 2010. In all, 9,236 applications were received by the closing date. The processing of applications is well advanced at this stage and letters of approval for participation in the scheme have issued to almost 6,000 applicants or almost two-thirds of all applicants. The process is continuing and my objective is to ensure that the examination of all remaining applications is completed as quickly as possible with a view to early decisions on entry into the scheme. My Department will be in contact with the applicants concerned in the near future.
Based on the numbers of applications processed to date, the Department estimates that the average payment to participating farmers will be almost €4,000 per annum and that the total full year cost of commitments under the scheme will be in excess of €34 million. The EU regulations governing area-based schemes provide that payments issue in two instalments. The first instalment of 75% may be paid once all administrative checks on all applications, as well as cross-checks against areas declared on single payment scheme applications, have been completed. Once the approval process has been completed, my Department will direct its attention to issuing first instalment payments as soon as possible. The balancing payment of 25% can issue once all on-the-spot inspections for the year have taken place.
Scheme delivery in 2010 involves the examination, recording and processing to approval stage of a large number of applications and including the cost of developing an IT system for the ongoing and future implementation of the scheme. An accurate estimate of the cost of delivering the scheme will be difficult to compile due to the numbers of staff involved who are also engaged on other work. In any event, an estimate cannot be completed until all valid applications, including on-farm inspections, have been processed to payment stage. My intention, at all times, is to implement schemes as efficiently as possible.
The Minister mentioned that the average payment per person will be €4,000 per annum, which is below the €5,000 maximum. To what does he attribute this figure?
What is the up to date position regarding those who are leaving REPS 3? Will they be accommodated under the AEOS next year?
The average payment of €4,000 is based on the number of applications processed to date. Approximately two thirds have been processed and, therefore, the payment may vary. People had a menu of options for participation in the scheme. Some people opted to participate under different measures and it was up to the individual to decide which measures he or she wished to participate in. The initial take-up for a scheme is usually not good and people are not as good at maximising the opportunities provided by a new scheme. When people become more familiar with the scheme, they will have the opportunity to draw down the maximum payment. With regard to those who will exit REPS 3 between now and 17 May 2011, in the budget last year the Minister for Finance gave us permission to launch the new agri-environment options scheme, with a budget of €50 million per annum over five years, with a maximum participation of 10,000 farmers. We had in excess of 9,200 applications and it will be possible to accommodate all who meet the criteria of the scheme. Those who might wish to join the scheme in the future will be a matter for the Estimates and the budgetary process, as is usual.
Speaking of the Estimates, is the Minister confident he can secure the €50 million next year, or more, depending on the demand for the scheme?
Those who have entered the scheme are in it for five years so funding is ring-fenced for them. No Department's Estimate is finalised yet. I do not know what allocation the Department will have, it is an issue that is up for consideration.
A sum of €34 million, with an average of €4,000, would anticipate a figure of 8,500 farmers qualifying of the 9,200 applicants. It leaves no more than €16 million for the rest of the five year period or is that €16 million for more people to come into the scheme during the five years?
Last year, provision was made in the budget by the Minister for Finance for the new agri-environment options scheme that was to be launched in early 2010. It was decided that provision would be made to allow 10,000 people to participate at a maximum payment of €5,000, a provision of €50,000 per year. Once a person joins the scheme, he is guaranteed access to it for five years. It is a commitment of €250 million in fact for those entrants of 17 May 2010. Other people who may wish to join the scheme will have to await the outcome of the Estimates process.
Tax Code
Dan Neville
Question:7 Deputy Dan Neville asked the Minister for Agriculture, Fisheries and Food if he has made representations to the Department of Finance with regard to the retention of tax relief on farm transfers and stocking for expansion and development; and if he will make a statement on the matter. [40603/10]
It is long-standing Government policy to encourage young people to become farmers and substantial tax exemptions apply where young farmers acquire land by way of gift, inheritance or purchase, for the purpose of farming. Some of these are linked to training requirements to encourage expansion and development of a working farm. The tax reliefs include measures across various types of taxation, including income tax, capital acquisitions tax, capital gains tax and stamp duties.
I am regularly in contact with the Minister for Finance on a range of taxation matters of importance to farming, fisheries, forestry and the food industry, including those related to farm transfers and stock relief. Taxation policy is a matter for the Minister for Finance and any decision on these, and all other, tax issues is a matter for the budget.
On stock relief for expansion, the Food Harvest 2020 report envisages 50% growth in dairying. If people expand at that level and are not allowed to claim stock relief, they will end up with a paper profit that attracts a tax on money they have not made. It is essential to facilitate that growth that stock relief is continued.
The return on investment in farming vis-à-vis the value of land bears no relation to the reality. If we apply the norms to it, money will be tied up to pay tax and this will stifle expansion. The Government’s own report recognises this a growth area.
I am aware of the importance of stock relief. When I meet farmers, particularly young farmers or those intending to hand a farm on to a younger family member, the importance of the scheme is often mentioned. This relief has been extended several times in the past and it is a matter for the Minister for Finance and the discussions that are ongoing on the budget.
I met the IFA and other farm organisations on the forthcoming Estimates and each organisation also met the Minister for Finance this week. I am sure they put forward their proposals on taxation when they had the opportunity.
We have all been lobbied by the IFA this week and this is one of the issues that has arisen. If we take the Deputy's point about the Food Harvest 2020 report, would the Minister acknowledge that one criticism of the document, which we support, is that if we are to achieve those targets, particularly in the dairy sector, there must be a major restructuring in the use of land and stock? To incentivise new blood into the sector, the reliefs must be continued and extended. Does the Minister agree with that point?
The points are well made by the Deputy, particularly on the importance of the Food Harvest 2020 report, which was drawn up by the stakeholders and endorsed by Government. The high level implementation group that I chair includes an Assistant Secretary General from the Department of Finance and the Department of Finance was also involved in the drafting of the report. My own colleagues in Fianna Fáil have outlined the importance of these issues at party meetings. The importance and value of these taxation measures to individual farmers has been conveyed to the Minister for Finance, as happens at this time every year.
The Ministers says taxation is a matter for the Minister for Finance but the Minister for Finance should listen to the Minister for Agriculture, Fisheries and Food. The Minister must show his commitment to the family farm, the cornerstone of farming in Ireland, bearing in mind we have already discussed the opportunities for food production for an increasing population. Will the Minister assure us the family farm will not be forced out of existence by tax impositions currently being considered? The farming community want a definite and absolute commitment that will not happen.
I do not know what commentary Deputy Coonan is referring to but the Government is well aware of the importance of the family farm to this country, and will continue to be mindful of that. That is how we will continue to support the sector.
Food Harvest 2020
Johnny Brady
Question:8 Deputy Johnny Brady asked the Minister for Agriculture, Fisheries and Food the priorities he has identified for the Food Harvest 2020 implementation group; and if he will make a statement on the matter. [40758/10]
Food Harvest 2020, the blueprint for the development of the agrifood and fisheries sector for the next decade, was presented to Government in July this year. In my view, achieving its ambitious targets will require a concerted, co-ordinated and flexible contribution from all the key players: primary producers, industry, Departments and State agencies.
I have established and am chairing the high level implementation committee. The committee consists of all the key actors on the State sector and its function is to direct and take whatever actions are necessary to successfully implement Food Harvest 2020. As necessary, it will also act as a clearing house to steer any wider issues affecting the sector's development.
The committee held its inaugural meeting on 16 September and agreed that the following areas should be progressed: the development of the dairy sector; ensuring a credible sustainable agenda, including Brand Ireland; improving competitiveness and promoting effective business models; prioritising and advancing innovation, research and entrepreneurship; and the profitability of the beef sector. The next meeting of the HLIC is scheduled for 10 November and will progress a number of these issues.
Critical commercial decisions are required on production trends, product mix, and processing capacity for the dairy sector. The dairy expansion activation group was established on 15 October to further this objective. I have asked this group, consisting of farmers, processors and Teagasc, to submit to the committee by end November an initial road map which will highlight the key milestones from the production and processing perspectives, identify obstacles to implementation and how these should be overcome.
Within the overall framework of a joined-up State effort on implementation of Food Harvest 2020, State body chief executive officers and senior Department officials are being assigned responsibility for progressing actions and are taking lead roles for those cross-cutting issues which require collaboration. The important role of research and innovation in pursuing these goals was demonstrated by the recent €10 million call for research proposals under the three public good programmes. These focused on the smart, green growth objectives of Food Harvest 2020.
The €100 million competitiveness fund for the food industry, which Enterprise Ireland operates on behalf of the Department, continues to focus on improving competitiveness and costs. In particular, the lean initiative will be important in helping to achieve the 20% improvement in competitiveness recommended by Food Harvest 2020. This successful programme is being rolled out to further companies in the sector.
The innovation voucher initiative is being used by smaller food companies to move their business onto the next level and to add value to their product. Bord Bia's marketing initiatives such as Marketplace 2010 are delivering results. Its vantage services, as well as the work of its marketing fellows, have benefited many companies. These services and schemes are being extended.
While the above illustrates some of the actions taken to date, I will continue to lead and prioritise the implementation of this important national policy document across the full range of its 200 recommendations.
I thank the Minister for his comprehensive report. I particularly welcome the recommendation from the 2020 committee to create an umbrella brand of Irish food and drink. The report sets out several key steps to progress the development of a Brand Ireland which will deliver a coherent, unified message to all sectors of the agrifood industry. Is the Minister convinced the agrifood sector will deliver real returns and be at the forefront of the country's economic recovery?
I thank the Deputy for his apt question. I believe this sector can contribute enormously to an economic recovery based on export-led growth. The increase in food exports this year was heartening. At all the agrifood fora I recently attended, I noted how positive the various agencies and companies were to the programme.
At the first meeting of the high-level implementation group, the chief executive of Bord Bia was able to report on the work his agency had already undertaken in establishing a "Brand Ireland". If we think about the success of Kerry Gold in the dairy market, the same brand success is needed for the whole food sector. Not only do we want to get the message out that Ireland produces high quality, safe and nutritional food, but that it is also done in a sustainable manner.
All parties welcome the Food Harvest 2020 report. Will the Minister acknowledge, however, that the implementation body's membership is not wide enough? Will he agree he should have included representatives from this side of the House as we represent a significant proportion of the population? Will the Minister guarantee the €641 million allocated to the agrifood research and development programme will be maintained to achieve this policy?
There may be some lack of detail in the information made available to the public regarding the implementation of the Food Harvest 2020 report. On the day it was launched, I stated I would chair the high-level implementation group. I also said there would not be a rigid system of having one implementation group as different issues will arise in different sectors and there may be different projects we may want to progress.
I have already established a dairy activation group, chaired by Dr. Seán Brady, and comprising farming representatives from different parts of the country such as Kerry, Waterford, south Mayo, Teagasc and various milk processors. I have given the group until the end of the month to produce an initial roadmap. I have spoken to various groups in the food sector who have made suggestions regarding other areas that need to be progressed. We will have other working groups——
Will the Minister discipline himself a little as there are several other Members offering?
——to progress particular ideas. The implementation process will not be over-rigid.
The Irish Farmers’ Journal pointed out Turkey is a potential market for beef exports but its authorities want clarification on our BSE status. Recently at the Irish Co-Operative Organisation Society conference, the chief executive of the Irish Dairy Board identified costs of €850 million to develop the dairy industry, of which €250 million would develop routes to market infrastructure and marketing investment. While we have embassies around the world as well as Enterprise Ireland and Bord Bia, we do not have a coherent marketing plan for the dairy sector. Will these existing facilities and agencies be used? The industry will have to pay for and play its part in this regard but the State must also assist in developing routes to market, as there will be no point in increasing output by 50% if we still only get the same level of income.
We use our embassies for maintaining and opening up dialogue with existing and potential agrifood markets. When we succeeded in re-opening the Chinese market for Irish pork products, I complimented the staff in our Beijing embassy. We also use the support available to us from Bord Bia, Enterprise Ireland and other statutory agencies.
There are different views on the costs of a 50% increase in milk production. Teagasc is still examining certain aspects of it such as lengthening the dairy season which would in turn ease the demand for additional capacity. There is no point in having top-class processing facilities that are idle for a considerable part of the year.
There are still several Deputies who want to come in on this but we are well over time already. Perhaps the Minister will discipline himself?
There has to be greater collaboration between all parties in the industry. I recently met with all the dairy processors regarding the issues and opportunities facing the industry.
I thank the Minister for his reply. I call on Deputy Coonan.
I always like to co-operate with the Leas-Cheann Comhairle.
That is true.
Notwithstanding that he continues to interrupt me. The kernel of this development of the agrifood sector is that the farmer gets a sustainable income from it. Have food exports increased in volume, value or both?
They have increased both in volume and value. At all times, we are working to get access to new markets and expanding access in existing markets. Bord Bia, the Department and the veterinary service do an exceptionally good job in this regard.
I thank the Minister. I want to call on Deputies Sherlock and Johnny Brady for a final supplementary.
In the past 12 months a considerable number of new markets have been opened.
I welcome the Minister's commitment to flexibility in the implementation process. However, the Labour Party believes it needs to be widened. Will the Minister consider engaging with parties on this side of the House to achieve this?
The Common Agricultural Policy can continue to play a vital role in ensuring the supply of high-quality and safe food for our consumers and supporting sustainable production systems in rural communities. What will be the impact on job creation from the implementation of this policy?
There would be a significant growth in jobs with the successful implementation of this policy, along with the post-2013 CAP reforms. With regard to Deputy Sherlock's point, the mechanisms I have put in place to implement this strategy are flexible. They are meant to address the issues that arise. When we deal with a particular issue and hopefully resolve it, we can proceed to deal with the next issue. I will bring in the relevant stakeholders to participate in those discussions. I will be glad to engage with all Members of the Oireachtas through the committee process. I think all Members of the House support the aims of this broad strategy, which we want to progress.
Organic Food Production
Máire Hoctor
Question:9 Deputy Máire Hoctor asked the Minister for Agriculture, Fisheries and Food his views on the way Food Harvest 2020 can contribute to the development of the Irish organic and horticulture sectors; and if he will make a statement on the matter. [40774/10]
The term smart green growth sums up so much of what we wish to do with Food Harvest 2020. The policy document makes a number of specific recommendations for the horticulture sector. These recommendations are focused on the industry improving competitiveness, adapting new and greener technologies, and the State agencies fostering product and production innovation, including the production of non-traditional fruit and vegetables. This approach will also support growers coming together in producer organisations to facilitate greater bargaining power and the promotion of the health benefits of the consumption of fruit and vegetables.
The implementation of these recommendations, therefore, should lead to a more innovative and competitive horticulture industry, which should in turn be able to command a greater element of the retail price. It should also be an industry which is supplying into an expanding overall market and where Irish production is challenging and displacing imported product.
In so far as the organic sector is concerned, the key focus of Food Harvest 2020 is to show how the industry can capitalise on the expanding market opportunities. Opportunity abounds in the domestic organic retail market which is currently worth €94 million. Apart from the domestic market opportunities, major export opportunities for Irish organic produce are to be found in the major European markets.
The implementation of the food harvest recommendations, therefore, should enable the Irish organic sector to grow and prosper sustainably through the delivery of high-quality, safe and naturally based produce.
I am aware of the increased promotion, production and consumption of organic food across the country, which is to be welcomed. Has the Minister of State's Department carried out any audit on the area of land concerned or the number of organic producers across the country? Surely this must have expanded in line with the expansion of production and consumption.
We have and it is a good news story. The land area under organic production has been increasing steadily since 2003. At the end of December 2009, there were 1,548 organic operators in Ireland with some 49,165 hectares of land under organic production methods. The programme for Government target is to have 5% of agricultural land under organic production by 2020. That is a high target but we have seen significant growth. More importantly, it is worth examining the value of the Irish organic retail market, which has grown fairly dramatically over the last seven or eight years. It was worth €38 million in 2003, and is now worth more than three times that figure. It was worth €124 million in 2009. That is a good news story.
What are the future prospects for organic farming? Is the Minister of State confident that the targets of Food Harvest 2020 can still be met, even in the current economic downturn?
There are challenges, particularly within the Irish market. We are in the middle of a difficult recession and people are looking very carefully at what they buy. However, there are significant opportunities not just in Ireland, but also abroad. In Germany, the figures for organic consumption increased dramatically over the last two years. If we look across the water to the UK and Germany there are huge opportunities there. There has been a dip within the State over the last year or 18 months, but I remain confident that there is increasing consumer interest in organic products. There is much more discussion about where products originate and I think there is a strong future for the organic sector not just abroad, but also in the Irish market.
The Minister of State is very strong on targets and opportunities, but he is weak on specifics. He was part of a Government which removed the farm retirement scheme and installation aid for young farmers.
And brought it back.
Young farmers are the cornerstone of future agricultural production. They are the raw material we need. Will the Minister of State outline any specific incentives or measures he proposes to introduce that will help in the area of organic food production and horticulture?
The Deputy is trying to pretend that we are not assisting, but we are giving huge support.
I am not pretending anything. There is no pretence with me; I say it straight out.
Regarding the early retirement scheme this year we are putting €40 million into providing for those who wish to retire. Some €4.5 million is being allocated to installation aid. That is real money, right here, right now. It is not just that, however. We are providing financial support with supplementary measures under the earlier REP schemes. We have had the organic farming scheme since 2007 along with the capital grant schemes. We also have the organic farming action plan, as well as national organic week, the national organic conference, organic awards and the demonstration farm programme.
Two weeks ago, I attended the Terre Madre conference in Italy where Bord Bia was represented. Some 80 delegates from Ireland attended to see what was going on there, as well as ascertaining markets for Irish produce.
That is a big help for farmers who cannot make a living here.
I was very impressed by the presence of Bord Bia there to promote fish, beef, lamb and dairy products. We had seven Irish cheeses represented at that conference together with other products, including a new Irish sea salt. Bord Bia is doing amazing work in spreading the message that there are strong export markets out there. In addition, here at home there are a number of schemes that are assisting those involved in horticulture and organic farming.
The Minister of State should be specific.
Grocery Sector
Grocery Sector
Andrew Doyle
Question:10 Deputy Andrew Doyle asked the Minister for Agriculture, Fisheries and Food if he has held recent discussions with the Minister for Enterprise, Trade and Innovation with regard to the development of a code of conduct for the grocery sector; the progress that has been made in this regard; and if he will make a statement on the matter. [40613/10]
The renewed programme for Government contains a commitment to "implement a code of practice for doing business in the grocery goods sector to develop a fair trading relationship between retailers and their suppliers" and "to review progress of the code and, if necessary, to put in place a mandatory code".
The Government will give effect to this commitment by including a provision in the legislation, currently being prepared by the Minister for Enterprise, Trade and Innovation, Deputy Batt O'Keeffe, to merge the National Consumer Agency and the Competition Authority, which will allow for the introduction of a statutory code of conduct in the grocery goods sector. The Minister expects to publish this legislation early in 2011.
In the interim period, until the legislation is enacted, the opportunity is being taken to explore with stakeholders the possibilities of agreeing a voluntary code. To this end, the Minister appointed Mr. John Travers to facilitate discussions with stakeholders on drawing up of a voluntary code. Mr. Travers is currently engaging with the relevant stakeholders on the development of a voluntary code. It is expected that Mr. Travers will report back to the Minister on his efforts in the coming weeks. My Department and the Department for Enterprise, Trade and Innovation will continue to consult closely on this issue.
The Minister, Deputy Batt O'Keeffe, expects to produce legislation on a statutory code early in 2011. This is the beginning of November, so do we expect Mr. Travers to make a report on a voluntary code of practice by the end of the month? This process was started in August 2009 by the then Minister, Deputy Mary Coughlan. Some 15 months later, however, nothing has been achieved. We have no agreement or indicators from the players. A leaked document from Retail Intelligence showed that this is the treasure island for our major international multiple, whose profit margin in this country is greater than anywhere else. We have seen in today's newspapers that the price of beef is higher in Brazil than it is here. Yet the price to our producers is down, while the price for consumers is higher than everywhere else. Something is wrong, therefore, and the sooner we grasp this nettle the better.
The Deputy should put a question.
The joint committee's proposals on CAP reform identified the European dimension of the CAP as a key issue. It is worse here, however, because the margin of profit that being hoovered up by the multiples is unacceptable.
With regard to the last part of Deputy Doyle's question, I welcome the fact that this issue has been highlighted in the all-party Oireachtas committee's paper on the Common Agricultural Policy post-2013. I have raised this issue in Europe from the point of view that even if we attain best practice in this country, it is important that similar practices operate in the other member states of the European Union. We export 85% of the food we produce. I am pleased the European Commission has agreed to establish a high-level group on the competitiveness of the agrifood sector. The Vice President of the Commission has asked me to participate in this working group and I am pleased to do so. I am also pleased the issue is being addressed at this level in the European Commission because it denotes the importance of the issue there.
I agree with Deputy Doyle. There is a real issue with retail margins on products and it is a matter of concern to the public. Increasingly, retail power is in the hands of a few large supermarket chains. In the meetings I have held with the multiples since I became the Minister for Agriculture, Fisheries and Food, I have highlighted the concerns of the consumer and the industry. In each meeting I have outlined to them that the individual farmer has invested heavily in farm facilities, as has the Government. In addition, the Government and the taxpayer have invested vast resources in putting in place a robust and vigorous system of traceability. Our food is produced to an exceptionally high standard and this has come through investment by individual producers, the Government and processors. All those involved require an adequate return for the significant investments they have made to provide a system that produces top-quality food.
I fail to see how our membership of the European Union has a bearing on this question. Will the Minister provide some direction as to when a statutory code of conduct will be put in place? When will this happen? We seek a specific time and date. Will the Minister not acknowledge there is a certain irony in the fact that the Minister of State sitting beside him, Deputy Cuffe, has referred to Terra Madre and the Slow Food movement, which comprises small organic producers who seek to find an export market? Meanwhile, in this country, the Government is capitulating to the Tescos and Asdas of this world which seek to gain a foothold here. Will the Minister confirm that he will do everything in his power to ensure that the retail planning guidelines will not be moved or shifted in any way to facilitate the "Tescoification" of the Irish grocery sector and to ensure that we can protect the primary producers to whom the Minister of State, Deputy Cuffe, referred such that we retain a good mix and not do not sell ourselves out to the large multiples?
Let us not forget the small retailers either.
We are not capitulating to any of the multiples.
With all due respect, a Leas-Cheann Comhairle——
Allow the Minister to reply to the question.
The Government should put its money where its mouth is.
Please allow the Minister to reply.
I am unsure whether Asda has a presence in our jurisdiction.
The Minister is well aware that it is knocking on the door. If he is not aware of this, he should be.
I am unsure of this is because the large multiples do not confide in me. Deputy Sherlock queried my reference to the European Union. Deputy Doyle adverted to the fact that this issue is referred to in the document on CAP reform to which Deputy has contributed. This is important from a European point of view as well because we must seek the best system to provide for fair practices and equity in the food chain and in every market in which we sell our product. That is important for our sector as well.
In my earlier reply I remarked that the Minister for Enterprise, Trade and Innovation, Deputy Batt O'Keeffe, intends to introduce legislation to merge the National Consumer Agency and the Competition Authority. This will allow for a statutory code of conduct in the grocery goods sector. The Minister, Deputy O'Keeffe, expects to publish the legislation early in 2011. That is as specific as I can be with regard to the legislative programme of another Department.
A final supplementary question from Deputy Doyle.
This means only the merging of the National Consumer Agency and the Competition Authority will allow for the introduction of a statutory code. To finish on a note of co-operation, we published a food (fair trade and information) Bill in August 2009, the day before the Minister at the time, Deputy Coughlan, announced a consultation process. I will gladly hand the Bill over to the Minister for him to take on the matter. He may rewrite it as Government policy if he so wishes. It is there for the Minister.
I thank Deputy Doyle. A vast amount of work has been undertaken in the Department of Enterprise, Trade and Innovation on this issue. The Minister, Deputy O'Keeffe, has outlined that he intends to bring forward the appropriate legislative measures early in 2011.
Does that apply to both organisations?
I referred to this in an earlier reply.
Is this concerning the merger?
The proposed merger will allow for the introduction of a statutory code of conduct in the grocery goods sector. The Minister, Deputy O'Keeffe, expects to publish this legislation early in 2011.
It is the Minister referring to a statutory code?
It will allow for a statutory code.
Written Answers follow Adjournment Debate.