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Dáil Éireann debate -
Tuesday, 12 Feb 2013

Vol. 792 No. 1

Other Questions

Common Agricultural Policy Reform

Billy Kelleher


120. Deputy Billy Kelleher asked the Minister for Agriculture, Food and the Marine if he is still pursuing his proposals on internal convergence in relation to common agricultural policy reform; the support he has for these proposals in the Council of Ministers, the EU Commission and the EU Parliament; and if he will make a statement on the matter. [6982/13]

I expect Deputy Kelleher and Deputy Ó Cuív, who is present to deal with the question, might have differing views on this issue, but perhaps that is not the case.

I can confirm that I am actively pursuing the question of internal convergence in the CAP reform negotiations. Indeed, it is probably my key concern in the overall CAP reform process. Under a national flat rate system, as proposed by the Commission, the impact on farmers would be significant in that approximately 76,000 farmers would gain an average of 86% on their current payments, while around 57,000 would lose an average of 33% on their payments. These are average percentages and some of the gains and losses would be far higher than this. In my view, this would have undesirable consequences at a time when Ireland is trying to encourage sustainable intensification in the agri-food sector as we strive to achieve the objectives of the Food Harvest 2020 strategy. Accordingly, I have been pressing for the maximum possible flexibility to be given to member states to design payment models that suit their own farming conditions. The approximation approach, under which all payments could gradually move towards, but not fully to, an average payment, is one alternative I believe should be considered in this regard. The Commission's pragmatic proposal for redistribution between member states is, in effect, an approximation model and provides a useful precedent. Modelling in my Department suggests that the application of this system to the distribution of funds among farmers in Ireland would lead to much smaller gains and losses to individual farmers than a flat rate system.

I have been very active in seeking allies for this position and I have been making significant progress, particularly with a group of member states with somewhat similar concerns to Ireland, including Spain, Portugal, Italy, Denmark, Luxembourg and, indeed, France and Belgium.

A number of other member states that are pressing for the adoption of a slightly different approach are also sympathetic. They include Austria, Slovenia and Hungary. In the past month the agriculture committee of the European Parliament has come on board by including an approximation model in its text. I am in regular contact with the Commission and other member states and confident that following our efforts, there is recognition of the difficulties the original Commission proposal poses for some member states such as Ireland. I hope to be in a position in the coming weeks to table a compromise solution that will be acceptable to all member states and that will try to strike a balance between the Commission proposal and the approximation proposal I have advocated. I know the Deputy has concerns in this area also and we have tried to take on board some of them.

The Minister has stated about 70,000 farmers will gain 86% on their payment. On average, what will this amount to in cash terms? I could gain an increase of 100% if a payment of €1 was increased to €2. Will the Minister also tell me what the average loss of 33% will mean in cash terms? When one receives these figures, it will make it much clearer because percentages can be very deceptive.

The historic payment is based on activity levels in 2000-01 or 2002. Does the Minister accept that there are farmers who receive very high single payments and are only engaged to the minimum extent? They claim the payment but are not producing a great quantity. Does the Minister also accept that there are a large number of farmers who receive high single payments who are renting the land and not actively farming? Does he favour capping payments at a figure of €50,000? What is his attitude to front-loading?

What we have proposed as an alternative to the Commission proposal would essentially mean the higher one's payments, the more one would lose, while the lower one's payments, the more one would gain in the redistribution, which would be fair. Farmers with very high payments would lose one quarter of their payments, while those with very low payments would probably see their payments quadruple in some cases. I cannot give the Deputy exact figures, but they vary considerably, depending on the current level of payment.

I am the first to concede that there is a need for significant redistribution. There are plenty of farmers who have been given a raw deal in respect of the reference years and the building of entitlements over a period of time and they need and will receive a significant increase in their payments. The farmers with stacked payments who have built very large entitlements must pay for this. If we were to move on the lines the Commission has proposed which would involve pushing everybody into an average payment of about €270 per hectare over a relatively short period of time, some farmers would receive 30% of what they are currently receiving, while others would receive massive increases for doing very little.

This is an important point. We are trying to introduce a fair model to redistribute a significant amount of money and, at the same time, not to put many active farmers who have been relying on medium to high payments out of business. It is important to say we will not achieve the proposal I have sold around the country at public meetings.

It will not be possible to achieve that. We will achieve a compromise between that and the Commission's proposals. That is how compromise works. It was important for me to take a strong position to limit the amount of money being redistributed so that we could agree a compromise position acceptable to everyone. That is what we are working to achieve. On the question of capping, I will not commit myself to any particular figure. It was agreed by the Heads of State last week in the multi-annual financial framework, MFF, discussions that countries would be allowed to introduce a voluntary cap. We do not yet know whether we will be able to set that cap at whatever rate we wish it to be set. We will not know the answer until the end of June.

Does the Minister favour having the ability to set the cap in Ireland and that every other country could do the same in order to suit each country's own particular circumstances? The Minister talks blithely about inactive farmers doing very little. In my view, the truth is that farmers who have low payments often have low payments because they happen to have been born in an area of poor land. It is not because they are inactive or are not productive. They are producing according to the ability of the land. Has the Minister matched the activity of farmers today - which he knows from the nitrates certificates given annually to every farmer - with single payments?

Yes. I will answer that question in a moment.

Will the Minister provide that information to me? It would be very useful to have this information, that the Minister can prove that the farmers in receipt of high payments are highly active as of 2012. Irrespective of what new reference year is put in place for the new CAP, under the Minister's approximation method will the payment be relative to the entitlements they achieved in the years 2000, 2001 and 2002, the entitlements they achieved for this round of CAP?

I will allow Deputy Ferris to ask a brief question as we are nearly out of time.

I have a question about the Minister's position regarding the Commissioner's proposals. He has referred to compromise being necessary. Will that compromise include a link to productivity?

The problem is that under the World Trade Organisation rules, payments cannot be linked directly to productivity. I would like to be able to do so. Coupling is one way of doing it. The single farm payment cannot be linked directly to productivity which is the reason we have been relying on an historical link to productivity. Teagasc figures in 2010 demonstrate a correlation between farmers with the highest stocking rate and those in receipt of the highest payments. That does not necessarily mean that outliers do not exist who are in receipt of high payments. I will try to get those figures for the Deputy.

We are in the middle of a process to review the Common Agricultural Policy which has been in train for four years. We are now at the end game in efforts to hone in and focus on compromises. I would welcome input from the Opposition to the process. If the Deputy is proposing something entirely new which has not been debated and which is not part of the European Parliament or Council discussions, it is unlikely that a radically different arrangement could be achieved at this stage. I have had a brief discussion with the Commission. I do not believe that countries will be told they can set a cap at whatever level they wish. In my view the Sinn Féin proposal to cap payments at €100,000 was a pretty good proposal. However, whether we will be able see that through and have the flexibility to do so in the final agreement, remains to be seen. That is why I am slow to commit myself to any cap figure at the moment because I may not be able to deliver on it subsequently. I am the chairman but there are 27 countries and also the European Parliament which has very strong views.

The Commission wants to try to retain the Common Market approach. I am not sure how the idea that Ireland would be able to set a cap of €50,000, that Germany would have no cap at all and that this would not have an impact on competitiveness in the two countries in the context of how they produce food would fly. We are involved in a process and it would be helpful to consider where the proposals stand and from where the compromises on the part of the Parliament are coming. If these can be improved upon from an Irish perspective, then I would certainly like to obtain the Deputy's views on the matter.

Agriculture Schemes Expenditure

John McGuinness


121. Deputy John McGuinness asked the Minister for Agriculture, Food and the Marine the allocation under each targeted agricultural modernisation scheme measure in 2013; and if he will make a statement on the matter. [6987/13]

European Commission approval for the introduction of a number of targeted agricultural modernisation schemes, TAMS, intended to support productive investment in the agricultural sector was received in March 2010. Priority was given to the bioenergy, poultry welfare and sow welfare schemes which were launched by my Department during the first half of 2010. The sheep fencing and mobile handling equipment scheme opened for applications on 1 November 2010, while the dairy equipment and rainwater harvesting schemes were introduced in March 2011. With the exception of the poultry welfare scheme, all of the TAMS will remain open for applications this year. However, I expect that some residual payments will occur under the poultry welfare scheme in 2013.

The 2013 financial allocations for each of the TAMS are as follows: bioenergy, €1 million; dairy equipment, €8.55 million; poultry welfare, €1 million; rainwater harvesting; €100,000; sheep fencing and handling, €500,000; and sow welfare, €9.95 million. The total amount allocated will be €21.1 million. The allocation in the Department’s Vote for 2013 of this €21.1 million for TAMS compares to actual expenditure of €15.6 million in 2012. Expenditure under the sow welfare scheme is likely to be significant this year because, under the terms of the EU approval governing the scheme, all work must be completed by farmers by the end of September. Under the other TAMS, farmers generally have two years to complete the investment works concerned. As a result, it is not always possible to determine the calendar year in which the expenditure will arise. It also means that the level of expenditure lags significantly behind the actual amount committed under each scheme at any particular time.

What was the allocation for the TAMS in 2012? The Minister stated that the level of expenditure was €15 million, but what was the outturn? I presume he was implying that the €9 million relating to the sow welfare scheme would be taken up. Is he of the view that the remainder of the overall allocation will be taken up in full?

The allocation for last year was approximately €20 million. In terms of the total allocation for the scheme and the actual expenditure that has been committed so far, the following figures apply: dairy equipment, €45 million; poultry welfare, €16 million; sow welfare, €13 million; sheep fencing and handling, €8 million; rainwater harvesting, €8 million; and bioenergy, €20 million. The total amount is €110 million. Subsequently, we transferred some of the money from the rainwater harvesting scheme to the dairy sector. We also transferred money to the sow welfare scheme in order to try to encourage compliance. We were under some pressure to achieve the latter. That was the correct decision to take at the end of last year.

The figures relating to the amount of money committed to date are: dairy equipment, €34.1 million; poultry welfare, €11.9 million; sow welfare, €13.6 million - this is above the €13 million originally allocated and I have just explained the reasons for it; sheep fencing and handling, only €3 million of €8 million allocated; rainwater harvesting, €300,000 of the €8 million allocated; and bioenergy, €1.37 million of the €20 million allocated. We are reallocating as appropriate. Obviously, however, we want to draw down as much of the funding as possible because it is co-funding that is at issue here.

We are all aware that there has been extremely wet weather during the past two to three years. Does the Minister have plans to reintroduce the farm drainage scheme, which was previously in place 20 years ago?

We do not have plans to introduce a farm drainage scheme, but one may be possible under the new rural development scheme that will be developed under the new Common Agricultural Policy. There is a good deal of lobbying among member states that have the opposite problem to Ireland in that they do not get enough rain. In the Mediterranean belt interests in the south of France, Spain, certain parts of Portugal, Cyprus and Italy are all lobbying hard to be allowed to spend more money on irrigation systems under the rural development scheme because they need water. We have had the opposite problem in recent years. We will determine the level of flexibility under the new rural development scheme to put schemes in place to do the work about which the Deputy is talking, but I do not want to promise too much at this stage. Under the current rural development scheme, there is nothing specific for drainage schemes.

Agriculture Schemes Payments

Dara Calleary


122. Deputy Dara Calleary asked the Minister for Agriculture, Food and the Marine the reason he targeted the budget cuts at low income drystock farmers in sucklers and sheep, through the abolition of the suckler cow welfare scheme and the imposition of a 22% cut in the grassland sheep scheme; and if he will make a statement on the matter. [6961/13]

I do not accept the Deputy’s contention that I have targeted low income drystock farmers in budget 2013. The reality is that in a situation where the schemes concerned were approaching the end of their projected periods of operation and in a challenging budgetary environment, I secured continued significant additional support targeted at these sectors, which will build on the progress achieved in the earlier schemes.

The suckler cow welfare scheme was intended to be a five year scheme for beef animals born in herds owned by eligible participants during the period, which commenced on 1 January 2008 and ended on 31 December 2012, and delivered in excess of €150 million to those participating. I have made funding of €10 million available in 2013 to continue to make aid payments on calves born in the latter half of 2012 to ensure residual obligations under the scheme are paid in full. In addition, I have allocated another €10 million in 2013, financed from unspent single farm payment funds, for a new support programme for suckler beef farmers to participate in a new beef data programme. This programme will assist farmers in improving the genetic quality of Irish cattle and maintain the data flow into the Irish Cattle Breeding Federation to build further knowledge and more rapid progress in breeding and, ultimately, profitability for farmers.

By way of further support to the beef sector, I announced that the beef technology adoption programme, or beef discussion groups, would be retained in 2013. This programme is built on the lessons of the dairy efficiency programme and provides a €5 million financial stimulus to encourage, through the medium of professionally facilitated discussion groups and a task-oriented approach, the adoption of a more focused commercial approach to beef farming.

In total, therefore, I have made provision for the payment of aid amounting to €25 million to the beef sector in 2013 which speaks for itself in terms of the Government’s commitment to the sector. I remind the Deputy that last year we only spent €27 million.

Additional information not given on the floor of the House

Turning to the grassland sheep scheme, this scheme, as originally implemented, was to run for three years, 2010, 2011 and 2012, with an annual budget of €18 million. However, as the Deputy will be aware, I was in a position to secure funding which allowed the scheme to continue for a fourth year, notwithstanding the continued adverse budgetary conditions, albeit with adjusted funding of €14 million.

Direct aid payments are important, but it is time for the sheep sector to adapt and develop its enterprises in line with other sectors. In that regard, I have decided to make funding of €3 million available for a new sheep technology adoption programme, which concept has proved very successful in the dairy and beef sectors, with a maximum payment of €1,000 per participant. It is important that sheep farmers take action to increase and maximise their income from their enterprises. This can be achieved by improving breeding, animal health-welfare and grazing regimes. The dairy sector has demonstrated that the discussion group concept can achieve such improvements.

Notwithstanding the financial adjustment made to the overall funding for the grassland sheep scheme, hill sheep farmers who join a sheep discussion group will find that the aid they will receive in 2013 will increase by almost €590.

When the Minister found these unspent funds, he might explain the reason he did not use them to continue the existing suckler cow welfare scheme for bigger herds, with perhaps some limitations. He might also explain the difference between the suckler cow welfare scheme and the beef data programme? How will they differ from each other from the farmer's point of view?

There is a simple answer to that question - there was not enough available. We had been using unspent funds for the dairy discussion groups, on which we were spending approximately €6 million a year. I have taken this money from the dairy sector because it now has proof that such discussion groups work. The approximately 7,000 dairy farmers involved in discussion groups can see the benefits which we have measured. Many of them have improved their margins in the past three years by 3%, 4% and 5% as a result of running a better business. We decided that we would take the money and add to the €6 million some money from the sheep grassland scheme to provide a decent sum of money, €10 million, for a data transfer scheme in respect of the suckler herd. This makes a good deal of sense.

We used other money in the mainstream budget to introduce a €3 million sheep-discussion-group model to compensate for my taking of €4 million from the unspent money, that is, the €17 million that was being provided for a sheep grassland scheme. That made sense on many levels. However, we are putting almost as much money into sheep and suckler farming this year as we did last year although we have changed the way in which the schemes work somewhat. We are asking sheep farmers to buy into a discussion-group model.

With regard to unspent funds, there is but a limited amount that we can spend. We are trying to use it as effectively as possible to support the sector. Since I became Minister, I have said suckler farming is a considerably important part of the mix. At present, half our beef comes from that sector. Over the next five or ten years, as dairy farming grows in Ireland, we will not want to allow the beef sector to become a by-product of the dairy sector. We want the opposite, in fact, because all our top-quality beef comes from the suckler herd. This is why I will continue to try to support the suckler sector, be it through a new CAP reform process or in very tight budgetary times, such as those we are experiencing. This is why I found €10 million for a new scheme although the suckler cow welfare scheme had come to an end.

There is not a big ask for farmers. All we are asking them to do in order to avail of the money available - the €10 million under the data transfer scheme - is simply what they have already been doing under the suckler welfare scheme, that is, provide data on the fertility and health of their animals. The focus has been on breeding information because all the experts tell me this is most valuable. We are asking farmers to do an awful lot less and are continuing to give them a reasonable amount of money to do so.

The Minister is agreeing that the scheme was very good, encouraged best practice in farming and brought about significant improvements. While he says there is €10 million available, he must admit the funding is not nearly as attractive as it was. Sadly, it is the smaller farmer who is actually getting hit. The smaller farmer is forever wary of the fact that the IFA probably speaks more for the bigger farmer. Smaller farmers probably feel they are getting a raw deal. Does the Minister not agree?

I am glad the Deputy asked that question. We actually prioritise in favour of the small farmer in the new beef data transfer scheme we are introducing. We have said that farmers who enter the scheme will receive a payment of €20 per cow for the first 20 in their herd. It is the bigger farmers, who may have from 40 to 80 cattle, for example, who are losing out. They would have been getting strong financial support under the suckler cow welfare scheme. We deliberately prioritised the smaller farmers.

We are asking the smaller farmers to do a lot less now than they were asked to do before. What is actually happening is the opposite to what the Deputy is suggesting. We are spending €10 million, carried over from last year, on calves that were born in the second half of last year. The new €10 million scheme is targeting the first 20 cows. The average size of a suckler herd is 15 cows. The average herd size in the suckler cow welfare scheme is 18. Therefore, anyone with a herd of average size, or lower, will not lose out dramatically at all.