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Dáil Éireann debate -
Tuesday, 6 Nov 2012

Vol. 781 No. 1

Priority Questions

Disadvantaged Areas Scheme Applications

Éamon Ó Cuív


87. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine the number of farmers that were written to in relation to stocking density on their farms under the disadvantaged area scheme; the number of farmers that sought a derogation; the number of these applications that have been decided to date; the number in which a decision was made that a derogation has been granted and the number refused; the number of those refused who have appealed this decision; the number of those who have appealed who have had their appeal decided; the number of appeals that were successful and the number refused, with the figures broken down in each case between the less severely handicapped lowland and coastal areas, the more severely handicapped lowland and the mountain type grazing areas respectively; and if he will make a statement on the matter. [48449/12]

My Department issued letters to 10,165 applicants under the 2011 disadvantaged areas scheme whose stocking density in 2011 was less than 0.3 livestock units per hectare, lu/ha. These letters informed farmers of their right to seek a derogation from the requirement of the 2012 disadvantaged areas scheme if they considered that they did not achieve a stocking density of 0.3 lu/ha or more in 2011 for reasons outside their control.

Grounds for the derogation include, among others, any of the following situations: a restriction on the stocking levels on the holding due to adherence to an agri-environment plan such as the rural environment protection scheme, REPS, the agri-environment options schemes, AEOS, or a National Parks and Wildlife Service, NPWS, plan; farming marginal land where the level of stock that can be maintained is restricted; illness or death in the family; an outbreak of animal disease in the herd; and the applicant is a new entrant to farming.

A copy of the application form was issued to all farmers written to by my Department in order to assist those applicants who wished to apply for a derogation. A tabular statement provides a breakdown of the applicants involved by the category of disadvantaged land declared, as requested by the Deputy.

Category of Disadvantaged land

Number of applicants written to

Mountain Type Grazing


More Severely Disadvantaged land


Less Severely Disadvantaged land


Combination of more than one category of Disadvantaged land




To date, my Department has examined the applications from almost 7,400 of the 9,300 applications received for derogation. A tabular statement provides details of the decision made in each case broken down by category. The Deputy has the figures before him.

Category of Disadvantaged land

Number of applications accepted

Number of applications rejected

Number of applications where additional information sought

Mountain Type Grazing




More Severely Disadvantaged land




Less Severely Disadvantaged land




Combination of more than one Category of Disadvantaged land








Additional information not given on the floor of the House

To ensure that those applicants whose applications were not accepted by my Department were afforded an opportunity to appeal the decision, I established a disadvantaged areas scheme appeals committee comprising appeals officers from the agricultural appeals office and an independent chairman, Mr. Padraig Gibbons, to examine all appeals. To date, my Department has received almost 1,000 appeals and the appeals committee will shortly commence its review of all appeals. I assure the Deputy that these appeals will be dealt with as quickly as possible.

My Department is also continuing to process the remaining 1,900 applications for a derogation and applicants will be informed of the decision made in their cases as soon as their applications are processed or if more information or documentation is needed before a determination can be made on the case.

Would the Minister agree from the figures he has given that this has, as one would have expected, impacted disproportionately on hill areas where a stocking density of 1.5, or 0.3 as required last year, is in many cases not achievable or not even allowed by the Department? Would he agree, therefore, that this retrospective decision was fundamentally unfair?

I would not. In terms of the number of farmers seeking derogation and in the context of the number who applied, there is certainly a high number in mountain-type grazing areas. However, if one looks at the number of applications, one will note 3,497 were accepted in mountain-type grazing areas and only 639 were rejected, so we are taking on board the realities that in mountain-type grazing situations, there is often good reason stocking rates need to be lower and we have granted people a derogation in those instances. It is true to say that more farmers have been affected by the change in criteria in mountainous areas but we have been far more generous in granting the derogation for those areas.

The Minister said he was generous in granting derogations.

It is not a question of generosity, it is a question of-----

Three people came to see me. Two of them were over 70 years of age and one was over 80 and all of them had medical problems. The over 80 year old has very serious medical problems, details of which were provided with the application for derogation. The derogation was refused and there is now an appeal. He said he seems to have been penalised for having been born on, and inheriting, a hill farm. He said he has also been penalised for being old and ill. Surely the disadvantaged payment is just that - a payment to compensate for farming on poor land.

Will the Minister justify why this decision, which has a disproportionate impact on those living on the hills and mountains, was made? I could go on and give examples of refusals of active farmers who had REPS plans, which limited the amount of stock. One cannot be at the ceiling on a hill farm because if one goes over the ceiling, the Department penalises one for overstocking and takes all the grants away. In the case of farmers farming to an AEOS plan or a REPS plan, what tolerance is there under the ceiling so they still qualify for the DAS and the AEOS? What is the tolerance, because there does not appear to be one?

There is a tolerance and that has been made clear to farmers. If one is required to have a low stocking rate, because of an environmental plan which one is required to adopt, whether a common framework plan, an AEOS plan, a REPS plan or otherwise, that takes precedence over the new criteria we set out last year for qualification. There is no lower limit on that. Whatever the commonage framework plan requires a farmer to abide by, in terms of stocking density, that takes precedence and it is taken into account in the derogation.

My understanding is that all of the farmers who were written to and who qualify for a derogation automatically, because they were in a commonage framework programme which required them to have a very low stocking rate, were dealt with quickly because there was no issue with them. If there are particular cases where farmers have been treated unfairly and do not qualify for the derogation under the qualification criteria, we have an appeals system which is independently chaired by somebody from the Deputy's part of the country. I expect that appeals system to be fair and to ensure the kind of case he outlined can be taken into account.

Common Agricultural Policy Reform

Michael Colreavy


88. Deputy Michael Colreavy asked the Minister for Agriculture, Food and the Marine his views on whether a flat rate payment under the reformed common agricultural policy would benefit most Irish farmers. [48738/12]

The modelling carried out by my Department has shown that a flat rate system, whereby a flat rate would be applied throughout the country without breaking the country up into different regions, would result in 74,000 farmers gaining under the single farm payment while 56,000 farmers would lose. That is if we were to adopt the Commission's proposal and to designate Ireland as one big region in which one gives every farmer the same payment, which is the average payment of €270 per hectare. I believe that is very unlikely to happen. Even under the Commission's proposal, the Commissioner would be expecting countries such as Ireland to break their country up into different regions and to apply flat rate payments per region.

People are having a go at me because of the position I have taken on behalf of Ireland in disagreeing with the Commission's proposal. There is an idea that if we adopted the Commission's proposal, every farmer in the country would get €270 per hectare. That is not an accurate reflection of reality.

Single farm payment should not be treated purely as an income support measure or some type of welfare support measure. It was never intended to be that. Single farm payment is about supporting sustainable food production on farmland across Europe. It is a recognition payment for farmers who must abide by all manner of rules, regulations, directives, animal husbandry constraints and so forth which other parts of the world do not apply with the same rigour as they are applied in the EU. The roles of pillar 1 and pillar 2 are very different. The decision I have made in terms of how I have positioned Ireland in the negotiations is not about the number of gainers or losers, but about the best interests of agriculture as a whole over the next seven years to ensure we remain productive and competitive and keep people in the business.

I am not making an attack on the Minister with regard to this. Our questions are designed to probe whether we are seeking the best outcome for this country. There are a number of other things we must protect. We must protect the number of small family farms in this country. There is a great deal of spin about this at present. There is substantial support in the west and north west for greater movement and a fairer distribution of payments within that. Most small farmers would favour a more rapid move towards a fairer system than is contained in the Minister's proposals. In 2011, 2,047 farmers on payments of €50,000 and more received more in total than the 52,000 farmers who received a single farm payment of €5,000. There is a patent imbalance there.

Does the Deputy have a question?

We argue that there should be a limit on the amount of money a person can receive. The Commission is talking about a limit of €300,000, which would not affect this country, but that should be a great deal lower. Many of the recipients of payments of €100,000 and more are not farmers at all but businesses.

There is a contradiction in the claims that somehow capping payments for a small number of large recipients would encourage them to cut down on production while increasing the payment for those at the lower end would apparently have the same effect.

I must call the Minister.

I agree with a number of the Deputy's comments. On the distribution, the approach I have been advocating proposes the redistribution of approximately €80 million over the next round of CAP from people who have done well out of the pillar 1 distribution and farmers who have not done so well.

The higher the payment, the more one loses. At the high end we are losing more than 20%. Farmers with lower payments may gain hundreds of percentage points. The position Ireland has advocated is unlikely to be the final compromise. The debate will carry on for six to eight months before we get it right.

I agree with the Deputy in respect of capping, and the Sinn Féin proposal for a cap of €100,000, which I heard Deputy Martin Ferris raise, is a good one. The current Commission proposal is for capping to begin at payments over €150,000 and to cease after €300,000. The idea that farmers are getting payments of over €150,000 in the single farm payment, regardless of the size of the farm, is not defensible. I do not disagree with the point of view expressed by Deputy Colreavy. Ireland is strongly supporting the Commission proposal in respect of capping. Powerful countries strongly oppose the idea and it is worth noting that only six farmers in Ireland will be affected by the capping proposals. That is why in discussions we have focused on areas that affect tens of thousands of farmers.

What steps will the Minister take in his negotiations? There is a major fear that pillar 2 payments will be the first to be reduced or eliminated in the event of the CAP budget being reduced. What steps will the Minister and his officials take to ensure we are not disadvantaged by the overall allocation between pillar 1 and pillar 2, particularly the latter?

I am very concerned about the overall allocation for pillar 2 payments. We have a clear outline of what the Commission is proposing in respect of redistribution of pillar 1 payments between countries. Ireland was a significant contributor to designing the model, which is called approximation. With regard to pillar 2, it is very unclear and people are talking about using objective criteria and historical application of pillar 2 moneys. I made the case very strongly that the idea that Ireland would lose on both pillars is something we cannot support. Unfortunately, when Heads of State meet towards the end of the month to agree the multi-annual financial framework, the seven-year budget for the EU, and the amount of money allocated for CAP for pillar 1 and pillar 2, many of the key decisions on the amount of money countries can access will be taken by Heads of State. That is why I will be going to Brussels with the Taoiseach for the negotiations. Even though most of the talk has been about pillar 1 because we have more detail about the proposals, for much of the country pillar 2 is just as important, if not more important, than pillar 1. When we calculate how farmers have done per hectare in different counties, we find many of the calculations take into account solely pillar 1 moneys, single farm payments. When we add pillar 2 moneys to the calculation, we find the figures are very different.

Agriculture Schemes Expenditure

Tom Fleming


89. Deputy Tom Fleming asked the Minister for Agriculture, Food and the Marine his views on the way that the various farm schemes will be funded in 2013 in view of the challenges (details supplied) facing many farmers. [48448/12]

The budget allocations for 2013 will be considered in the context of the gross expenditure ceilings allocated to all Departments for the period 2012 to 2014 under the Government’s medium-term expenditure framework. The Government’s decision on expenditure ceilings was taken in order to strike a balance between needs and priorities in all Departments on a multi-annual basis, to meet the requirements of the overall fiscal commitments, which are firmly focused on returning the public finances to a sustainable path and to reduce the general Government deficit by the end of 2015. Budget 2013 will be framed in this framework.

The preparations for the 2013 Estimate are currently under way and all budget lines in my Department’s Vote are being examined critically as part of that process.

Under the expenditure ceilings, the funding allocation for my Department has been reduced by €114 million in 2013 compared with this year. Very difficult choices will have to be made again in order to remain within the reduced allocation.

The detail of the Deputy's question which refers to the difficulties farmers have faced this year is very much in my mind as we make these difficult choices, in order to protect farm schemes and farm income as well as we can. We had a constructive discussion with the Joint Committee on Agriculture, Food and the Marine on the difficult decisions relating to the budget and how we might be able to make savings in as fair a way as possible and continue to support farmers who are in financial difficulty because of a summer of appalling weather. I will continue to engage with the joint committee to that effect.

The future of Irish agriculture and the maintenance of the family farm is at a crossroads. This year has been challenging, with disastrous weather conditions, soaring costs of feed, fertiliser, fuel and energy and falling prices. At certain times this year cattle prices fell dramatically.

It is imperative that the forthcoming budget does not compound these difficulties, with agriculture again taking the brunt of the cuts. In the 2012 budget, cuts of 17% were imposed on farm schemes. These were hugely disproportionate compared to cuts of 3% or 4% across all Departments.

I am disappointed to hear that the Department's allocation has been cut by €114. Between now and the finalising of the budget, the Minister may be able to go back to the table in that regard. I know he is working against all the odds and pulling against the tide. He is addressing matters as well as he can. He has brought forward the payment of the single farm payment and has endeavoured to maximise the amount of money available from a small fund. Nevertheless, I ask him to do his very best.

Within budgetary constraints, we have tried to respond as proactively as we can to what has been a disastrous summer. We did that with regard to slurry spreading dates. We reduced the closed period for most of the country by six weeks. We pushed back the deadline by a month and pulled the end date back by two weeks also. We have also relaxed the green cover requirements for people who have not been able to till fields. We brought forward a 50% advance of the single farm payment by six weeks. This has happened in the past but nevertheless it does not happen by itself. Disadvantaged area payments, and so on, are well ahead of schedule. I am conscious of the difficult environment in which many farmers are operating this year.

The reduction of €114 million in funding allocation should be no surprise to anyone. The figures for expenditure ceilings that apply to different Departments were published the year before last and last year, and will be published again this year. I can only do one of two things. I can argue to increase the ceiling on the amount of money available to me for capital or current expenditure, where I consider there is a structural problem in the ceilings agreed. If I do that some other Department will have to lose money. Alternatively, within the savings I have to make I can be as clever as I can to ensure that we protect farm incomes above all else. We are doing that, primarily by trying to find ways to save money within the Department. I remind colleagues that in the last three years, my Department has reduced the cost of running itself by €70 million. We reduced staff numbers by 900 and the number of regional offices was reduced from 58 to 17. We are trying to target ourselves, first and foremost, to make savings, but we will not make €114 million of savings within the Department alone.

This will be the most demanding winter ever faced by farmers, particularly on the western seaboard, where we are bearing the brunt of Atlantic weather conditions. We have a significantly high amount of rainfall in Kerry. There are thousands of tonnes of fodder being brought down from the eastern seaboard, particularly from Wicklow. The Minister can imagine what it will be like in January or even next month for some of those farmers. We must re-examine the situation to reduce the possible negative impact.

Figures were published in the agricultural supplement of the Irish Independent today for per hectare payments for the single farm payment. The figure for Kerry was €178 per hectare, while for Cork, where the land is excellent, especially in the east of the county, the figure was €313 per hectare. There are huge variations between the west and the east coasts. The south-eastern counties got up to €340 per hectare while the figures per hectare for Donegal and Leitrim were €166 and €168. I support the call by Deputy Colreavy. We must have some balance and give the same opportunity to maintain small family farms to all farmers.

I understand those points. I was in Kerry a couple of days ago to speak to more than 300 farmers in Listowel to outline our approach to both pillars of the CAP. We had a constructive meeting.

I know Kerry and parts of west Cork were hit hardest by rainfall over the summer. Farm schemes are more important in years like this when they help to get farmers through difficulties caused by circumstances outside their control, like the weather. It is important, however, to balance what the Deputy said about single farm payments with pillar 2 payments. The vast majority of farmers in Kerry receive a disadvantaged area payment while the majority in Cork do not, under pillar 2. There are various ways to support farmers in terms of income supports. People must look at the full picture instead of drawing conclusions only from the single farm payment.

Having said that, there is still a major difference in the single farm payment between and even within counties. Some of the best farms in the country and some of the most challenging farming conditions exist in Kerry. That is why we propose to redistribute money under the single farm payment, but how far do we go? Do we bring everyone to an average in the one go or do we move everyone towards an average payment with a significant level of redistribution? My concern is that if we do it too quickly or extensively, we will put some very productive farmers out of business and that is not in anyone's interest because we must keep herd numbers up to retain employment in the agricultural sector in factories, marts and dairy processing plants. We must look at the broader picture and not just the money that will be given out into farmers' hands.

Common Agricultural Policy Negotiations

Éamon Ó Cuív


90. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine if he will confirm that all decisions on Pillar 1 and 2 of the common agricultural policy will be made at the same time; when the details of the proposed Pillar 2 proposals are due to be published; and if he will make a statement on the matter. [48450/12]

I am glad this question was asked because there has not been enough discussion of Pillar 2 and related decisions.

The likelihood is that there will be some element of sequencing in the CAP reform negotiations and not all decisions will be taken at the same time, although political agreement on a deal will most likely cover all of the key elements both for Pillar 1 and for Pillar 2.

As the Deputy will be aware, there are two separate and parallel negotiating processes in play on this dossier.

Certain elements of CAP reform, largely related to funding, are being dealt with as part of the negotiations on the multiannual financial framework for the EU budget. These elements will be decided by Heads of State and Government, and a special meeting of the European Council has been convened for 22 and 23 November for this purpose. That meeting may in fact go on for three or four days. The European Parliament must give its consent to any agreement reached.
In parallel, the European Agriculture and Fisheries Council will take the decisions on the other policy elements of CAP reform in full co-decision with the European Parliament. The Council is now scheduled to meet on 28 and 29 November and the intention of the Cyprus Presidency is to seek what is known as a “partial general approach” on all the CAP reform regulations at that meeting, in other words, the position of the Council to prepare for the discussions with Parliament.
The Commission published its proposals for Pillar 2 of the Common Agricultural Policy in October of last year as part of a package of seven legislative proposals for reform of the CAP after 2013. While I can provide the Deputy with further information on these should he wish, I suspect his main concern relates to the amount of funding available for Pillar 2 and the distribution of that funding. The Commission proposal is to provide €90.9 billion in funding for rural development over the seven year period from 2014 to 2020, and this forms part of the multi-annual financial framework, MFF, negotiations that will be up for decision by Heads of State and Government later this month. The draft regulation on rural development proposes that these funds will be distributed between member states on the basis of objective criteria and past performance. The Commission has yet to publish concrete proposals on distribution or to provide full details of the criteria and weightings it is planning to use.
Additional information not given on the floor of the House
I have been pressing the Commission for some time to come forward with concrete proposals for distribution of Pillar 2 funds. I believe it is unrealistic to expect member states to sign up to proposals for the allocation of Pillar 1 funds without knowing the Commission’s intentions on the second pillar. I have serious concerns that the envisaged use of a combination of past performance and objective criteria to determine distribution of Pillar 2 funds will reduce our allocation. I believe an objective criteria approach cannot provide a solution that will address the concerns of all member states and should be abandoned. Allocation of Pillar 2 funds should be based on past performance only, as measured over the entire 2007 to 2013 rural development programming period. Any adjustment beyond that should use the same methodology as the Commission has proposed for Pillar 1.
I am also pressing for Pillar 1 and pillar 2 funds to be considered together, and for the pragmatic approach being employed for direct payments to be used for rural development as well. The latter would be consistent with the complementary nature of the two pillars within one Common Agricultural Policy. In addition, no member state with below average Pillar 2 payments per hectare should lose in any redistribution, and no member state should lose under both pillars. As Ireland receives lower than average payments per hectare for direct payment and rural development funds combined, I see no justification for any reduction.

I am sure the Minister would agree that the so-called objective criteria can be somewhat less than objective depending on how they are written. I am sure he does not accept that and will be trying to get these so-called objective criteria written in such a way that they will favour Ireland. Does the Minister accept that Pillar 2 payments are of greater importance proportionately to areas of less fertile land? Can he confirm there will be a disadvantaged area scheme and a rural environment protection scheme under Pillar 2? Will there be a mandatory minimum this time that must be used for Leader-type actions? In other words, the Leader-type actions will be taken out of this Pillar 2 fund. On the previous occasion, a mandatory amount was required to be devoted to that type of non-farm activity. Can the Minister confirm if that will be the case this time and indicate what level is proposed?

Can the Minister give an absolute assurance to the House that in the event of Ireland being in the Presidency of the European Union when the final decisions are made on the CAP, no decision will be made on anything, in particular on Pillar 1, until the decisions are made simultaneously? I do not mean they would all be put through on the nod on the final day, but real decision-making should not take place on Pillar 1 until we are absolutely clear on what is in Pillar 2. Can the Minister confirm whether the Government will be able to provide the co-funding for the payments that will be provided by the European Union so that we can be assured of 100% drawdown of European money?

On the last question, I can assure the Deputy that it is my full intention that we are not leaving any money behind in Brussels, as farmers would say. Ireland has been one of the better countries in the EU at ensuring that has been and is the case, under previous governments and this one. There is one matter on which I cannot give the Deputy an assurance because it is a decision for Heads of State and Government, although I will be influencing the Irish position. The Heads of State and Government will decide the budget for Pillar 1 and Pillar 2 within the overall budget. The Heads of State and Government will also decide how that is distributed between member states. The build-up to the meeting of the Heads of State and Government will be very important for CAP and the overall budget we will get. That will not be a decision for Ministers for Agriculture.

Our task, with the European Parliament, will be to decide the mechanisms for spending that money following decision on the matter by the Heads of State and Government.

I am working with the Taoiseach to ensure Ireland gets fair treatment in relation to Pillar 2. I suspect that one of the reasons for the uncertainty and ambiguity around the amount of money to be allocated under Pillar 2 is that this issue will be one of the negotiating tools of the overall multi-annual financial framework discussions. It should not be forgotten that the Common Agricultural Policy represents only 38% of the EU budget and that the Cohesion Fund and research and innovation fund are also big pots of money.

During the political negotiations on the allocation of the overall budget, which will take place in a few weeks time, I will try to ensure Pillar 2 funding is not used as a bargaining chip to try to get agreement on other allocations, including Cohesion Funds, and to ensure Ireland does not lose out in this regard. We are working hard to ensure this will be the case.

On the disadvantaged areas scheme, I envisage there will be a future DAS, although eligibility and qualification for same may change somewhat. As regards a rural environment protection scheme, we will have to wait and see what money is available in that area. A minimum amount of money will be required for Leader-type schemes.

The Minister used the phrase "to try to ensure" in his reply, which gives enough wriggle room to turn a jumbo jet. Perhaps he will clarify whether it is the intention of the Minister for Public Expenditure and Reform to ensure he will succeed in his attempts to get the level of funding necessary to match the European funding?

It is the Taoiseach, rather than the Minister for Agriculture, Food and the Marine, who leads those negotiations.

I am speaking about Irish Exchequer funding to match European funding.

The Taoiseach also leads those discussions. As such, he can ensure the Minister for Agriculture, Food and the Marine gets the money. Rather than telling us he intends to try and all the rest of it, perhaps the Minister will say whether it is the position of the Minister for Public Expenditure and Reform that he will match the European funding provided, regardless of the amount involved.

I accept what the Minister had to say in regard to the multi-annual financial framework. What I asked, however, was whether the Minister can assure the House that if Ireland is in the chair at the time of the negotiations on the multi-annual financial framework, the decisions in regard to Pillar 1 and Pillar 2 will be made at the same time. In other words, there should be no conclusion of the negotiations on Pillar 1 until such time as the situation in relation to Pillar 2 has been clarified.

I am not sure whether the Deputy is seeking clarification around the amount of money we can spend or on how we can spend it. I cannot give any assurances on behalf of the Minister for Public Expenditure and Reform. He can speak for himself. My job is to ensure Ireland gets sufficient money and full drawdown under EU schemes.

Is there not Cabinet policy on the matter?

I intend to ensure we do so through the budgets which we will put together over the next few years.

On the matter of overall agreement on CAP and ensuring agreement on Pillar 1 and Pillar 2 is reached at the same time, I assume what the Deputy is seeking is that we do not have half-agreement on CAP in terms of agreement on Pillar 1 allocations only. It is the intention of the Irish Presidency to finalise the entire CAP package, pillars 1 and 2.

Will that occur at the same time?

Yes. We need to work on achieving a conclusion during Ireland's Presidency, which will not be easy in terms of the amount of time available to us. We intend getting final agreement on pillars 1 and 2 at the same time, which it is hoped will be around May of next year.

Was a minimum amount sought for non-farm Pillar 2?

What is the percentage?

I think it is between 5% and 10%. I will forward the correct figure to the Deputy.

Common Agricultural Policy Reform

Michael Colreavy


91. Deputy Michael Colreavy asked the Minister for Agriculture, Food and the Marine the likely outcome of the common agricultural policy reform on Pillar 2 payments to farmers in disadvantaged areas. [48739/12]

The future system of payments to farmers in disadvantaged areas forms part of the wider negotiations on the reform of the common agricultural policy. As negotiations are still in progress, it is not possible to say with certainty what the outcome will be.

Under the Commission’s proposal less favoured areas, LFAs, which are known as disadvantaged areas in Ireland, will become known as areas facing natural or specific constraints, or ANCs. As I mentioned to Deputy Ó Cuív earlier, designation of the ANCs is proposed to be determined by eight soil and climatic criteria. These are grouped under four headings, namely, climate, climate and soil together, soil and terrain. They include low temperature, dryness, excess soil moisture, limited soil drainage, unfavourable texture and stoniness, shallow rooting depth, poor chemical properties and slope.

The Commission proposals are quite controversial and have not had an easy passage through the Council and the preparatory groups. This dossier precedes by some years the CAP reform proposals. Following criticisms from the Court of Auditors, the Commission made a proposal in 2005 for the use of common objective criteria for designating less favoured areas but the proposal was rejected by the Council. It was decided at that time to maintain the previous system and the Commission was mandated to review the scheme with a view to presenting a proposal for the future designation of LFAs. This review was under discussion in the Council for some time prior to the presentation of the CAP reform package and was incorporated into the package.

This is a very important issue for Ireland as the total area designated as disadvantaged is almost 75% of Ireland’s total land area. From an economic perspective the less favoured areas scheme is particularly significant, contributing to the support of in excess of 100,000 Irish farm families, whose ability to farm is restricted by the physical environment, in particular the impact of the prevailing wet and cold climatic conditions in Ireland.

Additional information not given on the floor of the House

At EU level, in overall terms I consider the Commission’s proposals of using bio-physical criteria to be laudable but I believe there is a need to broaden the scope of the proposed criteria and to give member states more flexibility in designating areas. My Department has conducted extensive analysis of the impact of using the eight criteria. The results show that while there is no major shift in the total area designated in Ireland, there is a considerable change within the totality, with areas not previously designated now included and other designated areas excluded. In some cases the designation is very difficult to justify. I am reluctant to provide the Deputy with details of the areas that might be affected because I am very conscious this is a protracted negotiation and at this point in time we are very far from a conclusion. I assure the Deputy, however, that I will seek additional flexibility in the designation process and in the timeline for the implementation of any changes to ensure there are no abrupt or significant alterations to the conditions of the current scheme.

It is clear to me that considerable further work will have to be done before we can agree a satisfactory outcome on this dossier. The intention is to complete this work within the timetable for CAP reform. As the incoming Presidency, Ireland will do its utmost to facilitate a successful outcome.

I wish to raise several points which were not covered by the Minister's reply. The perception exists that these schemes are not properly targeted, or at least there is a lack of clarity with regard to what precisely is being targeted. As I understand it, there is also a risk that the newer member states will place a big demand on Pillar 2 because they will be heavily dependent on these payments. Therefore, it is all the more necessary to protect Ireland's Pillar 2 allocation.

With regard to disadvantaged areas, I find it increasingly difficult to answer people who ask me what exactly are disadvantaged areas, and what exactly Europe and the Irish Government are trying to do. People farm land where, whether for environmental reasons or because of the nature of the land, it is not possible to have good stocking densities. People receive letters because they have fewer than 0.3 units per hectare and they ask me what is meant by disadvantaged status. What supports should be made available to those in this situation? Given the dissatisfaction with the new environmental programme are there any plans to introduce a broader scheme such as REPS? The Minister will agree that what we need to do is preserve family farming, and many people in the west and north-west are working land which is difficult to work and where high productivity is difficult.

The Commission wants to answer the Deputy's question on what is disadvantaged and what is not. Instead of taking the approach used in the past, whereby the criteria were very general and a line was drawn splitting the country, biophysical criteria will be used and measured in a scientific way to qualify for a disadvantaged area payment. These criteria include soil type, moisture, temperature, depth and stoniness. In principle, we agree with this approach. The problem is in its practical implementation, which will not be easy because all of the 130,000 farms which could potentially qualify must be measured, which is very difficult to do.

This has been kicked into the Common Agricultural Policy reform process, although it was an issue under discussion before that process began. It will be very divisive because many countries such as Ireland have many farms in disadvantaged areas or less favoured areas. They want to retain the classification system because payments can be drawn down for those farms. Therefore, this is a very difficult political issue. If we do not address it, we will have to start breaking up parishes by separating farmers with disadvantaged land from those without it. We need to find a compromise that is both practical and workable and which will have the maximum number of farmers in Ireland receiving payments for having to farm in disadvantaged areas.