On behalf of the joint committee I welcome Mr. Jim Flanagan, the director of Teagasc and his colleagues, Mr. Tom Kirley, Mr. Donal Carey and Dr. Seamus Crosse. Before asking Mr. Flanagan to commence his presentation, I draw the attention of representatives to the fact that while members of this committee have absolute privilege the same privilege does not apply to them. Members are reminded of the long-standing parliamentary practice to the effect they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable. I call on Mr. Flanagan to make his presentation.
Teagasc: Presentation.
Mr. Jim Flanagan
We are very pleased to attend this meeting of the Oireachtas Joint Committee on Agriculture and Food and to present some matters concerning Teagasc. Teagasc is the agriculture and food development authority. It is responsible for the provision of integrated research, advisory and training services for the agriculture and food industry and rural communities. Its mission statement is to provide the innovation and technology transfer necessary for the sustainable development of agriculture, the food processing industry and rural communities through integrated research, advisory and education and training programmes.
The key objectives of Teagasc are directed to achieving the following goals: research and advisory services geared to competitive farming, rural viability, environmental protection and food innovation; nationally accredited agriculture and food industry education and training programmes with progression to third level; an agri-food biotechnology capability, especially in animal reproduction, disease resistance, grass breeding and food safety; and the provision of economic analysis on the impact of EU and world food policy changes on the agri-food sector and rural areas.
Teagasc operates from nine major research centres, four regional advisory and training offices, 11 agricultural and horticultural colleges and 96 county and local advisory and training centres, a total of about 120 locations around the country. In 2002, Teagasc employed a total of 1,641 staff, including permanent and contract staff. This comprised 792 professional staff, 262 technical staff, 263 administrative-clerical staff and 324 farm-domestic staff. The organisation's total income in 2002 was almost €152 million, which comprised €125 million in State funding, €2 million in EU income, €23 million in operational income, which included fees for services and receipts from farming activity, and €2 million in donations, grants and voluntary levies with the voluntary levies contributed by the farming sector accounting for a major proportion of the €2 million.
The position in 2003 is that following a significant cut in Teagasc's State funding, the organisation was facing a deficit of about €15 million in its current budget in 2003 on a "business as usual" basis. That means that if we were to continue in 2003 providing the same level of services and activities as in 2002, we would be €15 million short. On top of this, the capital budget went from €14.5 million in 2002 to €6 million in 2003. Our five year rolling plan envisaged a capital allocation in 2003 similar to what we received in 2002 but that did not transpire. This major cutback has been the subject of intensive examination by the Teagasc authority since the beginning of the year.
A number of measures are being implemented. They include a reduction in overtime payments, reduced travel and subsistence spending, reduced spending on staff training and lower operational costs at all research advisory training centres and colleges. In addition, the authority has instructed that only one in three vacancies arising among our permanent staff complement should be filled. A significant number of employment contracts which have expired in recent months have not been renewed. However, because staff costs account for such a large proportion of Teagasc expenditure - over 70% - the above measures would not bridge the gap between income and expenditure and additional measures had to be taken. Therefore, the Teagasc authority was forced to examine the sale of assets and consolidate its resources in fewer centres. In the absence of such measures, a number of priority research, advisory and training services provided by Teagasc would have come under serious threat.
At its meetings in February and March the Teagasc authority made a number of decisions as follows: to sell its head office in Dublin and relocate staff to the organisation's national tillage research centre at Oak Park, Carlow - staff in the rural economy research centre, located at the headquarters office, are to be relocated to the Teagasc centre in Athenry, County Galway; to dispose of the Clonroche research centre in Wexford and transfer the research activity on soft fruit to other larger research facilities - the Teagasc facility at Lullymore, County Kildare is also to be sold; to sell the organisation's dairy farm at Ballinamore, County Leitrim, and close the sheep research unit at Knockbeg, County Carlow - through a wider use of monitor farms the services provided by these centres will be maintained; to instruct management to investigate the possibility of selling land surplus to requirements at Kinsealy research centre in Dublin - the core horticultural research and training facility at Kinsealy will be retained; to reaffirm its commitment to the development of organic farming demonstration and research units at Mellows College, Athenry - vocational training for young people undertaken at, or planned for, Athenry will be transferred to the nearby Mountbellew College while the authority is committed to developing the Athenry campus into an important adult training facility in organic farming and a wide range of rural enterprise areas; to relocate staff and services from ten advisory offices, owned by Teagasc, to nearby major research centres, colleges or advisory centres.
The offices identified for closure are Bailieborough, County Cavan; Loughrea, County Galway; Manorhamilton, County Leitrim; Boyle, County Roscomnmon; Tullow, County Carlow; Cork city; Corduff, County Dublin; Mullinavat, County Kilkenny; Gorey, County Wexford, and Wicklow town. Teagasc management has also been instructed by the authority to identify some smaller offices leased by Teagasc which should be considered for closure. The authority has stressed that, following the closures, Teagasc will still have a network of over 70 advisory and training centres nationwide, as well as nine major research centres and 11 colleges. With proper researching and the adoption of modern technology and methodologies for information transferral, it is confident that the priority research, advisory and training services for the agriculture and food industry will be secured.
That is our opening statement. We are prepared to answer any questions members of the committee may have.
I thank you, Mr. Flanagan, and your colleagues for appearing before the committee. I also thank Mr. Carey for affording us the opportunity to visit Grange in January. Members of the committee found it a very worthwhile day. I stated then that I thought we would return to attend the opening of the new Teagasc headquarters but, unfortunately, that did not happen. We are very disappointed that it did not because it was located close to Dublin from which people could have commuted to work, as they do to the veterinary office in Grange.
Some 12 or 13 members have indicated that they wish to speak. I will call the spokespersons for Fine Gael and the Labour Party, to whom perhaps you will respond first. I will then call other members of the committee. Is that agreed? Agreed.
I thank Mr. Flanagan for his presentation and also the other representatives of Teagasc for attending the meeting today. In the submission Mr. Flanagan outlined Teagasc's four key objectives. How has the cutback in funding of €12 million this year impacted on the achievement of those goals? Has it had any impact on them?
It was mentioned that one of the objectives was to carry out an economic analysis of EU proposals. While I am familiar with the report published on decoupling, can Mr. Flanagan indicate whether there are any studies of the impact of the Fischler proposals on agriculture in Ireland and the industry at large? Would he care to share any preliminary findings with us?
The figure of €2 million for donations, grants and voluntary levies was mentioned. Will Mr. Flanagan elaborate on this? If benevolent members of the agricultural community are donating money to Teagasc, it would be nice to know about it.
It was mentioned that only one in three vacancies in permanent staff would be filled. Does Mr. Flanagan have any idea of how many staff he may lose in the current year and how that would impact on Teagasc? What will be the approximate staff turnover and for how long will this policy be implemented? Will it be until X staff are lost, or has any cut-off point been identified?
With regard to the specific closures, I appreciate it was probably a difficult task to come up with the various centres mentioned. What policy or other criteria were used when centres were examined for possible closure? I see, for example, that the soft fruit research centre at Clonroche is to be relocated but where will the staff go from there? Will they be split up or move to another centre?
The dairy farm at Ballinamore and the sheep research centre at Knockbeg were both mentioned. Mr. Flanagan seemed to give the impression that he was quite happy to operate with the monitor farms but will they be adequate to carry out satisfactorily the same jobs done previously in Ballinamore and Knockbeg?
The closure of the Teagasc office in Cork city will disenfranchise many farmers. In my constituency the office has been closed in Wicklow town. I assume that Tinahealy will be the nearest centre but it leaves a large segment of farmers with no Teagasc office in their locality. How many small offices are Teagasc considering closing down? What criteria will be used to identify them and when can we expect an announcement about the closures?
In the final paragraph of the submission Mr. Flanagan states that with proper resourcing he is confident that priority research, advisory and training services for the agriculture and food industry will be secured. What exactly is meant by "proper resourcing"? Are we talking about current resources or is increased funding being sought? Have the cutbacks suffered by Teagasc restricted it in achieving its goals? If so, what can be done to address this? If not, how come the cutbacks were not made within the organisation itself in recent years?
I welcome Mr. Flanagan and his colleagues and I thank him for his presentation. I have been a great admirer of much of the work of Teagasc over the years and I have had many dealings with its members at various levels. I am concerned about cuts in budgets and the implications of these in terms of the good work being done in respect of food and agriculture and the impact on staff and recruitment.
I know the board made the decision on the sale of Teagasc assets, but who initiated the plan? Was it the board, the Government or Teagasc management? Six months of the current funding year have elapsed and there is already a deficit. Will that become progressively larger in the second half of the year and will it have an impact on cash flow?
Are there plans for further cutbacks? Am I correct in saying capital assets are being used to finance current expenditure? Will there be a cutback in a particular area of research or in the advisory service, given that cutbacks have to be made? I think Deputy Timmins referred to this also. If there is a research programme in dairying, food research or beef, for instance, how will the cutbacks pertaining thereto be made, what will they target and how will decisions be arrived at?
It is clear from what Mr. Flanagan said about the decisions that many of the staff of Teagasc may have to relocate. Will he provide further details on how this will be addressed? Will there be redundancies? If so, how will they be decided upon? Will the staff who become redundant have a choice in the matter or will they be selected according to age?
The future of the contract staff is of considerable concern. They are very vulnerable in many ways because their contracts have a fixed term. Has Mr. Flanagan considered the implications of this? I am also concerned about recently recruited younger staff. Are we at risk of having another brain drain? I presume considerable effort was put into the training and recruitment of young staff. Will they be most likely to feel the pinch in the first instance?
Does Mr. Flanagan have any views on the possible integration of Bord Bia and Bord Glas and, as was proposed recently, although not very seriously, the co-ordination of those organisations with Teagasc?
Mr. Flanagan
I will try to answer the questions. Deputy Timmins asked about economic analysis of the EU proposals. The FAPRI Ireland unit carried out an analysis of the initial Fischler proposal on decoupling. It involved making certain assumptions because there were some uncertainties in that proposal. The latest proposal, in which the conditions are far more definite, is now being examined by the unit. We have not yet received initial results of this examination. Maybe my colleague Seamus Crosse will confirm that when I have concluded.
The sum of €2 million that was mentioned derived largely from levies the farming community voluntarily made available to Teagasc, the main one being a dairy levy. Additionally, the grain and pig people provide some small levies which are spent on priority research projects agreed with the farming community.
The decision of the Teagasc authority to fill only one in three of the permanent posts arising will mean that approximately 40 to 50 posts, which would normally be filled if we had business as usual, will not be filled this year. This means fewer services can be provided. For example, some of the posts in the advisory service that become vacant when people retire will not be filled, thus diminishing Teagasc's ability to provide a service to farming clients. However, the number of farmers is declining continuously, by 2% every year. Therefore, the reduced number of staff might be balanced by the reduced number of farmers, so the net result might not be too drastic.
The Deputy mentioned the closure of some centres, such as those in Clonroche, Ballinamore and Knockbeg. The view of Teagasc management and the Teagasc authority is that the research carried out in those centres could be carried out in an equally successful way on monitor farms, particularly if more resources were made available for measuring variables on these farms. That is our intention. Teagasc is confident that the research service to farmers provided in those centres can be delivered successfully on the monitor farms, which can be set up in the same areas and reflect real farming in those areas.
The Deputy suggested that the closure of offices means that the convenience to farmers will not be as good as it was in the past. The amount of money we are being given this year means that we must attempt to provide advisory services from fewer offices. The Teagasc authority must live within its budget. It must produce a plan for the year within the budget provided and cannot produce a deficit budget. It feels it cannot do so if it has to maintain the existing number of offices. The offices picked for closure were those that were near other centres in the hope that the effect on existing staff and clients would be minimal. We accept there will be some effect but we hope it will be as small as possible.
Deputy Upton asked who initiated the proposals. There is no answer to that. The director of Teagasc must make proposals to the board as part of his job specification, particularly when it asks for them. The Teagasc authority looks for factual information: it wants the facts, which its members will judge for themselves. They also ask management for its advice at times. They then consider the facts and the advice and make up their own minds. In this case, it will be a combination of the Teagasc authority obtaining facts which they consider themselves, obtaining advice when they ask for it and making a decision. The timing during the year is important. It is important that if decisions are delayed until late in the year, savings will not be affected; also, what we do in the second half of the year will have to be more drastic than if we made decisions earlier in the year.
The proposal at the moment is that €5 million of the €15 million deficit, if I may call it that, should be absorbed in reduced expenditure in Teagasc. That means less overtime paid to staff, which means less work done, and a reduction in travel and subsistence expenditure, which means the advisers will travel less to farms, for example, instead doing more work on the telephone. The closure of centres in the second half of the year will represent some savings. All that will hopefully yield a saving of about €5 million, leaving a deficit of €10 million. The only way the authority could see of bridging that gap this year was to apply the sale of capital assets towards current expenditure. This requires the approval of the Departments of Agriculture and Food and Finance. The Teagasc authority has sought that approval but has not yet received it. If approval is received, the changes - or cuts, if one wants to call them that - announced today will be sufficient to balance the budget this year. If we do not get approval for the conversion of capital to current expenditure as requested, the authority will have to go back and reconsider how it is to live within its budget. I will not be able to answer the Deputy's question until we get an answer from the Departments.
The implications for staff are real. We have tried to make decisions that minimise the effect on staff. Generally, staff will be offered an alternative job in the most convenient Teagasc location in which a job is available. Again, we have asked for approval for a targeted voluntary early retirement scheme, which would be offered to those people affected by the decisions Teagasc has made who could not easily be accommodated elsewhere. That scheme would definitely be voluntary. If people see a voluntary early retirement scheme as an attractive option and they are being affected by some of these changes, we hope they will consider this option. However, we need approval from the Departments to offer that and we have sought such approval.
What discussions, if any, have taken place with staff on relocation, voluntary redundancy and so on?
Mr. Flanagan
In the locations in which staff are being affected, we have started a process of discussion. People from our personnel department are going around the centres meeting the staff and discussing options for the future. We cannot be definite about the options at the moment because the proposals are still subject to approval, but we have started a process of initial discussions with staff, asking them their views on how we can best accommodate them, given the decision that is likely to be confirmed. That has happened in a number but not all locations.
The contract staff in Teagasc are largely working on projects that are fully funded by outside agencies or by the farming community. The Department of Finance has imposed an embargo on Teagasc's filling any contract post until such time as Teagasc produces a plan that is agreed for dealing with the budget in 2003. At the moment, there are a number of contract posts that Teagasc has not filled because we are not allowed to do so.
Does that have any implications in terms of programmes that are up and running? Does it mean programmes will grind to a halt?
Mr. Flanagan
It has very serious implications at the moment and is causing severe difficulties. For example, we have several EU fifth framework projects, awarded to Teagasc as part of European partnerships, that are now six months late in getting any work done because the filling of necessary posts had not been approved. We are very close to having to renounce some of those projects because we cannot deliver on them. We have a blanket embargo on filling such posts that we do not seem to be able to have removed.
Young staff and the brain drain.
Mr. Flanagan
Yes, there are a number of people in these contract posts who, at the end of their working period, will not be offered permanent employment by Teagasc. We do not necessarily see that as a brain drain because these staff are normally well trained and highly motivated and can contribute in other areas of the economy. A number of them are well trained for jobs in industry or other sectors. Some of them would like permanent jobs in Teagasc but the organisation does not have the positions to offer them. Lastly, we have no particular view of the Bord Bia-Bord Glas amalgamation, as it is outside our remit.
Dr. Seamus Crosse
Deputy Timmins mentioned the FAPRI-Ireland study. As the director said, an initial study was done, but now that we have more information available the team is returning to do a more detailed analysis. They hope to have results available by late April or early May.
I suggest that we take all 14 speakers together, because many of the questions will be the same. Is that agreed? Agreed.
Having regard to the number of speakers, I will be brief. I thank Mr. Flanagan for his brief overview of the financial situation that confronts Teagasc. It is obvious from the attendance at the meeting that this is something that concerns members.
Will Mr. Flanagan elaborate on the financial management of the organisation in recent years? Has it experienced significant cost overruns on capital projects? Has the organisation found in recent times that there have been major unforeseen costs?
Will Mr. Flanagan comment on the competition at local level that exists between the Teagasc farm advisory service and the cohort of private consultants that has emerged recently? There is hardly a town where a private agricultural adviser is not available to farmers. What are the implications of that for Teagasc?
It is understandable and perhaps might have happened previously that the worth of valuable properties such as Sandymount would be realised and not many of us would have a major argument with that. What is Teagasc's estimated income from the sale and when does the organisation expect to vacate the premises?
I note that it is considered that Teagasc will close some rented properties. It is suggested that a rented property in Cahir might be closed and the service transferred to Clonmel. The saving on rent is about €3,000. I suspect that such a closure could result in many additional costs, such as the relocation of staff and so on. Will Mr. Flanagan comment on that?
In terms of the multiplicity of activities in which Teagasc is involved, how many dairy herds and milk quotas does it own or does it lease quotas? Can Mr. Flanagan justify the numbers of herds and quotas the organisation owns?
On a parish pump issue, the report alludes to the sale of Lullymore in County Kildare, not one of the more valuable properties in the ownership of Teagasc, I suspect. There is a significant local aspect to it in that there is an interpretative centre, known as Peatland World, in the Lullymore facility. It has been developed through the use of a local community employment scheme. If the sale of that property goes ahead, how does Teagasc intend to recognise the involvement of the local community and FÁS in developing on the site the local visitor centre known as Peatland World?
I welcome Mr. Flanagan and his colleagues. Deputy Ó Fearghaíl has asked some of the questions I had thought about.
Will the money spent on the colleges and the numbers of students enrolled be cut back? What will be the policy regarding young farmers in future, especially in the context of the colleges in the west, namely, Athenry and Mountbellew? Some money has been spent on upgrading the college in Athenry. Has that been well spent?
Many small offices will be closed to save rent. Given the money that will be spent on relocating staff or giving them travel expenses, will it be feasible to close these small offices? I note one will close in Ballyhaunis in my constituency. That will save €2,500 a year. What will it cost to transfer the staff from Ballyhaunis to Claremorris or will they be located permanently in Claremorris?
I also welcome the officials from Teagasc. Looking through their presentation, the front page states under "Resources" that there are 96 local advisory and training centres. The final page states that, after ten have been closed, there will be a little over 70. Where have the rest gone?
On the issue of research, Teagasc agreed under the nitrates directive to zoning the country as one area. What research and scientific evidence did the organisation have to come to that conclusion?
I presume that Teagasc will sell the ten premises it is closing. What income does the organisation expect to get from this? Is it intended to use this to subsidise for what is being lost in Government fees?
I welcome Mr. Flanagan and the other members of Teagasc to the meeting. How much land does the organisation lease at the moment and what does it cost along with the cost of the milk quotas that are leased? I ask that because it is wrong that Teagasc should lease land and quota when it is selling what it owns.
On the estimated sale value of the headquarters, can Mr. Flanagan guarantee that there will be no attempt to lease back any of that premises and that the officials attached to it will be moved to other departmental offices or accommodation outside Sandymount?
Has Teagasc considered the division of the advice and research sections because the advice section is a major income earner for the organisation? How close is the advice section to being self-financing in comparison with the research section? How much does the research section need in subvention?
Mr. Flanagan mentioned redundancies and more or less gave a guarantee that no one would be made redundant but would be given the option. If there is to be a redundancy package, at what areas of staff will it be targeted? Will it be targeted at research or advisory staff or what Mr. Flanagan termed farm domestic staff? What is the ratio of farmers to each adviser? What is the average number of farmers serviced by each adviser?
A commitment was given three years ago that a research facility would be located in Ballinamore. Can Dr. Crosse tell us what facilities have been located there? It is the only research station in a disadvantaged area where grass production is only 65% of that in Moorepark. Do the witnesses honestly believe the position in Moorepark can be compared with that in Ballinamore and the northern half of the country where grass growth is six to eight weeks later than it is in Cork and the grazing season is about a month to six weeks shorter at the other end? Why was the research facility promised to Ballinamore three years ago not located there? I admit that the milking parlour and the offices were upgraded, but that is all that has been done. The rest has been left.
What is the mentality of renting offices in County Leitrim when Teagasc has vacant office space in Ballinamore? Has the organisation examined the use of that while still renting?
What annual income in rent does the Manorhamilton office generate for Teagasc? I believe it is approximately €9,000 for an office the organisation proposes to close. What will be the cost of extra travel if Teagasc decides to base the service for north Leitrim in Sligo or Carrick-on-Shannon? These costs have to be taken into consideration.
Also, how many of the facilities Teagasc proposes to close have been visited by the director of Teagasc prior to the board decision or on whose recommendation were the cuts proposed? Did you visit Ballinamore and the others? I understand that Ballinamore has not been visited by Mr. Flanagan since he became director and it is an indictment of Teagasc and its leadership to decide to close a station like that without looking at the work it does. That is out of character with what is required of a director; I am not talking about the director personally, as I am referring also to the other Teagasc directors. How many of them have looked at the facilities? I understand that only one member of the board has visited Ballinamore.
If that is the kind of blind decision-making by members of a semi-State board it calls into question their suitability as members of that board, with all due respect, and their commitment to the operation of Teagasc.
I welcome Mr. Flanagan and the delegation and I compliment Teagasc on its development of educational programmes in recent years. I am pleased those agricultural programmes are now nationally accredited and that there are links between Teagasc and the institutes of technology. I compliment Teagasc on its work at Ballyhaise and its major investment there. Mr. Carey has taken particular interest in that development and he has been very positive in providing facilities for it as well as developing links with Dundalk IT.
I am very disappointed with the proposed closure of the Bailieboro office. First, the building is owned by Teagasc and part of it is rented to the North-Eastern Health Board, with income of €12,000 per year. The cost of having Teagasc staff at the office is minimal and I am disappointed extra travel expenses will be incurred by transferring those staff to Ballyhaise, 20 miles away. Some farmers from the catchment area east of Bailiborough will have to travel over 30 miles to that office. That decision should be revisited as I would be very disappointed if that property was sold. The IFA in Cavan made a detailed submission to Teagasc regarding the closure. There are 100 farmers using the office and six discussion groups. I know the substantive submission may not have reached Mr. Flanagan but I will forward a copy and hope he examines it. I hope Teagasc will see the merit in the case.
I fully support Deputy Ellis regarding the Ballinamore research farm. It is located in the parish next to mine and it has carried out valuable research on soil and dairying which is relevant to the drumlin area. The drumlin soil in Cavan, Leitrim, Monaghan and Sligo is not free draining and there is a shorter year for letting cattle outdoors, with additional husbandry costs. The soil in Fermanagh and Tyrone is much the same. Have there been any links between Teagasc and its Northern counterparts? There must be potential work for Ballinamore in research for the counties just south and north of the Border. In recent years both British and Irish Governments, and the EU, have provided substantial funds to regenerate the Border economy. Some of that funding went to projects with little or no benefit and I am disappointed with where some of the funding from the EU Peace programme and other initiatives has gone. Has Teagasc sought or secured funding from any such programmes to carry out research benefiting farmers north and south of the Border? There is potential for significant funding and if it has not done so in the past Teagasc should seek to secure funding in this way that will contribute meaningfully to an area where farming is difficult.
I welcome the delegation and I thank Mr. Flanagan for his presentation. We spent a very informative day in Grange and I am glad to see Mr. Carey present. Great work is being done there.
A lot of questions have been asked and I would not be as familiar with local situations as some of my colleagues. I do not see any cutbacks in Waterford but from the days of the winter farm school to the green certificate Teagasc has made a tremendous contribution to agricultural education, which now continues with the links to the institutes of technology. However, maybe what is happening now reflects the massive changes taking place in farming. We had experts at another committee this morning talking about the Fischler proposals, though we do not know if those proposals will be accepted. I had not thought of how that would affect Teagasc but obviously it does.
"Damage" might be the wrong word compared to "competition" but what have the various farm consultancies done to Teagasc, which always looked after the smaller farmer? The situation is changing rapidly and will change even more rapidly if the Fischler proposals come in. I would be sorry to hear of staff vacancies but that is the situation given the massive changes in farming.
I wish to be associated with the remarks of other Deputies about the presentation.
The delegation referred to the sale of capital assets in order to balance the books due to a shortfall of €10 million. That depends on getting the go-ahead from the Department of Agriculture and Food. That being the case, what happens next year? If one assumes budgetary constraints will be the same next year, then a service available to the farming community and rural areas in general, which has already been hit hard, will suffer further erosion at a time when it is very necessary. That would have a detrimental effect but probably reflects how rural Ireland is viewed by decision-makers.
Regarding the modernisation and greater efficiency of the agricultural sector, this is a time of crisis, with possible radical reform of the CAP coming up. Does it not undermine the ability of the body responsible for training and research to come up with strategies to cope with the implications of these changes?
Deputy Blaney referred to the nitrates problem. I understand the recommendation from Teagasc to the Department is that the directive should apply to each of the 26 counties. I cannot understand how a blanket decision can be made on nitrate vulnerable zones in relation to an entire geographical area as opposed to designated areas. While I can understand how the quality of land and so on would determine a decision, a general decision in this regard is open to question.
While Teagasc has done much good work, given my farming background and the levy on farmers for the service being provided in some instances, farmers seldom, if ever, see a Teagasc representative. Is there accountability within the organisation for the service provided?
Let me ask another question about the guidelines and methods to determine the efficiency of Teagasc representatives in their respective areas. Like in any organisation, there are excellent people and those who do not pull their weight. Is there any methodology to determine efficiency within the organisation?
I concur with the remarks made about the cross-Border benefits, particularly training and research and access funding. This was a healthy contribution, which should not be lost.
In general, I welcome Mr. Flanagan's presentation. If the budgetary constraints continue into next year, it will lead to the fatal demise of the organisation.
Mr. Flanagan
I will attempt to answer some of the questions and my colleagues will answer others. Deputy Ó Fearghaíl asked about financial management. Teagasc has a fairly standard set of financial management procedures which are largely dictated for State agencies. Cost overruns on capital have been very small. Teagasc has delivered most of its capital projects fairly well within budget and on time. We do not have a major problem in that regard.
The Deputy also asked about unforeseen costs. Last year Teagasc ran a deficit of approximately €3 million. Generally the deficit is quite small. It was €3 million last year, mainly for two reasons. First, Teagasc has approval from the Department to operate the REPS planning service on the basis that it will seek full cost recovery. To get this, we must increase charges to reflect the rate of inflation during 2002. Despite the fact that we requested approval to increase charges in December 2001, we did not get it during 2002 from the Department. Therefore, we were approximately €1 million short. That was outside our control because there was a political decision not to approve the increase in 2002.
The second reason for the deficit was that the imposition of VAT on services generally had impacted negatively in that since Teagasc began charging for items, they were regarded as services liable for VAT. Revenue informed us that much of our income was subject to VAT and that, even though we did not explicitly charge VAT, we would have to pay an implied VAT amount. That resulted in our handing over approximately €2 million more of our income last year than we had anticipated at the beginning of the year. These were two unforeseen costs which led to the deficit last year.
Other Deputies asked about the effect on Teagasc of the development of consultants in the private sector. Teagasc is happy to have private sector consultants. In the REPS market approximately 40% of plans are carried out by Teagasc REPS planners while the remaining 60% are carried out by private planners. It is up to the farmers concerned whether they ask Teagasc or a private planner to carry out their REPS planning. Market forces mean that Teagasc has approximately 40% of the market.
On technology and business advice, Teagasc has clients concentrated among smaller farmers. Commercial consultants have some of the business, particularly among larger commercial farmers. It is a farmer's choice whether to become a client of a consultancy, Teagasc or be a client at all. If a farmer chooses not to pay Teagasc a fee, he or she does not have to. It is a voluntary choice on the part of farmers. If Teagasc does not provide good advice or services, farmers respond by not paying fees. That is their choice.
On the value of Sandymount Avenue, Teagasc had it valued. It sees it as a commercially sensitive valuation. I would not be doing Teagasc a service if I gave that valuation because we must sell it.
On the value of Sandymount Avenue, I take it that it will be sold by public auction. The estimate will not be the final figure, it will be whatever is bid at public auction. Therefore, Mr. Flanagan is entitled to give us the estimated value. If half the country knows the value, he might as well tell the rest of us.
Mr. Flanagan
The problem is that a member of the board mentioned the figure on radio, which is floating around the country. That is not the valuation Teagasc received on the building. It is a figure which is floating without a basis. It is difficult for me to place in the public domain a valuation given in confidence to Teagasc.
There are other ways of getting it under the Freedom of Information Act.
There are other ways of getting it.
There is a duty on public officials who appear before the committee to give us whatever information is in their possession. It is not sensitive information. It is not a contract which has been drawn up. The property is to be sold, either by public tender or public auction. There is no other way it can be sold. If Mr. Flanagan has an estimate, he should say, roughly, what it is.
I do not think it would do any harm, Mr. Flanagan, to give an indication of the valuation. I do not think it would affect the sale.
A guide price would do.
Mr. Flanagan
Teagasc asked a professional firm to give us its best estimate of what the office would get if it were put on the public market with no conditions associated with it. We were told the estimated value was €9 million. I am saying this under protest.
Continue.
Mr. Flanagan
This is not the figure in the public domain.
We were asked about dairy herds. Depending on how one counts them, Teagasc milks cows in 13 places. There are four or five herds in the Moorepark complex. One might argue whether that is one herd or four or five. I do not have figures for our quota or the amount of land we have rented and owned. Perhaps I could defer to Séamus Crosse to give some idea.
Dr. Crosse
About half of the land we use for dairy research is rented. Some is rented from dairy co-operatives such as the Tipperary Co-operative, Dairygold and Glanbia.
How much is rented from private individuals?
Dr. Crosse
About 250,000 gallons.
How many acres of land?
In fairness, Deputy, there are seven other members who wish to ask questions.
Dr. Crosse
About 300 acres of land are rented from private individuals. Most is rented from dairy co-operatives where we have a working partnership.
On a point of order, Chairman, we asked to know the cost of the rented land. It was one of the questions I put as well as the question of the cost of rented quota. Members are entitled to have answers.
I am sure Mr. Flanagan will give us that information.
Will supplementary questions be accepted?
Yes, if we have time.
We are being given no information.
We can sit until 9 o'clock or 10 o'clock.
Other members must be given a chance. Perhaps Mr. Flanagan will reply to those questions.
Mr. Flanagan
I do not have with me the details of the cost of land or quota. I did not anticipate such detailed questions.
Perhaps you will forward them to the committee.
Mr. Flanagan
We can.
There were comments about Lullymore, a reasonably valuable site and property. A museum, Peat World, has been developed on the site which Teagasc has been running. For a number of years Teagasc has been in consultation with the county council and some local interests about their involvement in the centre. We have not done anything with it because we hoped there would be proposals from the local interests but they have not materialised. We have gone back to them, including the county council, and are prepared to discuss or consider any definite proposals they are prepared to make to us as to the centre's future. Teagasc will dispose of it in some way. We will not continue to provide a service in that location but are prepared to be flexible regarding the way it might be run if local interests or the county council make a reasonable proposal. Such a proposal has not yet been put on the table but we are open to discussing the matter with anyone who wants to discuss it with us.
Deputy Carty asked about the colleges. In its revised programme Teagasc has prioritised the provision of vocational training and training for the rural community, including farmers and non-farmers. We are committed to providing whatever training is required. We will try to meet any demand for training that is made from the rural sectors. That will be a priority over other programmes if cuts have to be made. Teagasc is strongly committed to the training part of its remit, probably the one to which it is most strongly committed.
There were a number of comments about small offices. People seem to know more than I do as to what offices might be closed. The Teagasc authority considered some of the smaller offices, the rationale for which is not merely the saving of a small amount on rent. Teagasc is committed to having all its offices fully connected with computer and Internet services and being provided with modern IT facilities. It is quite expensive to include a small office in an IT network. If one has 120 locations, one has a large number of locations to connect to an IT network. Our modernisation costs in an information technology age would be much reduced if we did not have a number of small offices. Some offices were considered by the Teagasc authority at its last meeting but management was asked to go back and take account of various comments and views and come forward with a more definitive list of such offices. Some people have obviously been told about some of the offices mentioned at the last meeting as possibilities for closure. I do not know how many such offices might be agreed for closure at a future meeting of the Teagasc authority. However, given the discussion at the last meeting, I assume the number will be somewhere between ten and 20. That is the range of offices discussed as possibilities. Some members mentioned specific offices which might have been mentioned but there has been no decision as yet on any small office. Some have been discussed and are likely to be closed.
Can I take it then that the office in Bailieborough will not be closed?
Mr. Flanagan
That would not be a small office.
That is even better again. It will be a big office, which I am glad to hear. In its press release Teagasc indicated several offices. Perhaps Mr. Flanagan will enlighten us.
Mr. Flanagan
The Teagasc authority has made definite decisions on ten offices. There are some additional small rented offices that I mentioned in my statement and which the Teagasc authority asked management to consider. Members, in their comments, mentioned some of them and I am replying to their comments. The offices in Ballyhaunis and Cahir were mentioned. They are not definite decisions but may be confirmed at a future meeting.
Let me seek clarity. Is Mr. Flanagan saying decisions remain to be taken regarding the closure of between ten and 20 offices not mentioned in the briefing note?
Mr. Flanagan
The briefing note mentions that Teagasc management has been asked by the authority to consider which of the smaller offices might be closed. This is mentioned as a future decision. The exact list of offices is not mentioned and the authority has not decided on them yet. Management did get some guidance from the authority in a discussion at the last authority meeting. The Teagasc authority sought information on all the offices we had and there was some discussion at the meeting on the merits or otherwise of closing some offices. We have some guidance from the authority and we have been asked to take that on board and to come forward with a list at a future meeting, which has yet to happen.
A few people asked about the nitrates directive. Teagasc was asked to participate in a working group on the possible options open to Ireland in complying with the nitrates directive. As part of that Teagasc was asked for an opinion about whether a whole country approach or a limited nitrate vulnerable zone approach would be in Ireland's best interests. Teagasc considered the matter within that committee and expressed the view that the whole country approach was a better option but that committee includes people from the Department of the Environment and Local Government, farming organisations and the EPA. The Teagasc input was one of many and that position will be taken after all the views have been considered. It would not therefore be correct to imply that Teagasc in any way decided the matter. We gave an opinion when asked. There were many other opinions in the mix as well.
On what did Teagasc base its opinion? Was it scientific?
Mr. Flanagan
It was scientific to the degree that scientific knowledge was available. In its opinion Teagasc said there was not a large volume of scientific information on which an opinion could be based but taking account of whatever knowledge it had, in terms of the number of farmers that might be affected under each option, the likelihood of different levels of nitrogen being applied and how that might affect water quality in the future, there was a marginal opinion that the whole country approach best served the needs of the farming community. It was not a very strong opinion. As there is a very wide debate on the matter there is no clear answer but Ireland had to come up with a proposal and the whole country approach seems to be the one that is agreed as the best of two broad options.
Were the farming organisations consulted?
I ask the Deputy to please return with a supplementary later if we have time.
This is very important.
I know this is important but other people want to contribute.
This directive will affect the entire farming community.
We know that but the Deputy will get an opportunity to come back with a supplementary. There are seven other members who have not yet had an opportunity to speak.
Mr. Flanagan
Someone asked about the ten advisory offices the authority has decided should be closed. We think this will realise a capital value in the range of €3 million to €4 million.
On advice versus research, as an income earner depends on the REP service that Teagasc provides we get full cost recovery or would get it if the full charge we propose was approved. At present we do not get full cost recovery because of the charge problem. The intention is to get full cost recovery. Some of the advisory services we provide are for smaller farmers and in the viability service we get no cost recovery but that is essentially funded under the NDP as public goods. We charge for the business and technology service which recovers 35% of the cost. All the food research is funded by agents external to Teagasc. We get funding from the EU under the framework programme, from the Food Industrial Research Measure operated by the Department of Agriculture and Food which is funded competitively across the universities and any institution capable of doing food research. Teagasc considers that to be externally funded. Enterprise Ireland funds food projects and the food companies themselves commission some research so in the food area almost all the research is externally funded. If one takes that approach then the degree of external funding in advice and research might be quite comparable taken across all areas.
In agricultural research we get external funding from the levies but that covers a relatively small amount of the cost and most of the agricultural production research is funded from the grant-in-aid. The environmental research done in Johnstown Castle, and some in Kinsealy, is funded by other departments. We get substantial funding from the EPA and the Department of Environment and Local Government for environment related research so it comes from a variety of funding sources. Research is substantially externally funded and the advisory service to REPS is also funded by charges to farmers. I would not see a very significant difference in the two areas over all.
There was a question about VER. The plan would be to target the VER on people. It will not be targeted in any particular grades or in any particular areas. It will be targeted to solve the personal problems people might have where Teagasc has made a decision to change the location of a service. It is oriented to people and problems rather than to a programme or particular research area.
There were questions about the research we are doing in Ballinamore and again I might defer to Séamus Crosse. People have reacted to an article in the farming press. Three members of the Teagasc authority have told me they have been in Ballinamore recently, not just one as was insinuated, and there may be more. It was said——
That is only since the board meeting.
Mr. Flanagan
It was before the board meeting. Three members of the authority have assured me that they were in Ballinamore recently before the board meeting. It was said that I was never in Ballinamore and strictly speaking that is not true. I have been on the farm in Ballinamore twice in my lifetime - I have a good memory and I remember it very well. I am not blaming anyone in that regard. I rely on my staff. Séamus Crosse, head of agricultural research, has been in Ballinamore and I relied on his advice as to the position there. I did not and do not now consider it necessary for me to visit every place that the Teagasc authority might decide to close. I do not see this as a necessary requirement before I implement a decision of the authority or advise on it. Teagasc has many staff who visit all of these places. Collectively, management is well aware of all of the locations, which is sufficient.
Dr. Crosse
We have upgraded the facilities available in Ballinamore in recent years. We upgraded the milking parlour and the roadways and introduced a herd of Montbéliarde cows because they were shown to do quite well in research carried out in Moorepark.
The difficulty with budgets is that one has to make choices. We accept that the reason we have farms around the country is to consider differences in climate and soil types. In recent times we have been upgrading our facilities at the agricultural college, Ballyhaise, where we have an excellent facility. It is now proposed that we use the dairy herd for research purposes. The programme in place at Ballinamore can be incorporated into that at Ballyhaise where we have more facilities and resources. We can conduct better research in the Ballyhaise environment. I do not see it as a loss but as a gain that we will be able to use the facilities at Ballyhaise, to where we can move the herd and continue the work with more resources. There is also drumlin type land. We have our soils——
With respect, Chairman, I understand you wish to allow everybody to speak but may we put our supplementary questions now to save us coming back on issues?
I want to allow everybody to ask questions. The problem is that we have to be out of here by a certain time.
Dr. Crosse
We now have a comprehensive programme set up in Ballyhaise. It is also a great advantage that the students will have the chance to see what is going on, as will young people in the area.
What we have tended to do in recent times is use our focal farms. We have joint programmes with the advisory service, co-operatives and dairies in various areas. We also have this in various counties in the north-east. We will pick up differences in various parishes and surrounding areas. We cannot have a research farm in every parish. We have to pick the key areas in the country and believe, on balance, the facilities in Ballyhaise give us the best opportunity to address the issues in the northern counties.
Mr. Flanagan
There was another question about the ratio of farmers to advisers and also of how we measure the efficiency of advisers. Mr. Carey will deal with these questions.
There is a range in the numbers, depending on the area involved, but we work on an average of over 100 paid up contract clients per adviser. In large-scale farming areas the number would be around 100 while in some of the smaller farming areas there are advisers with up to 160 clients. The average number is over 100 paid up clients.
On the monitoring of farmers, we have a management structure with a chief agricultural officer in each county. Each adviser has a clear financial target to achieve. He or she also has a clear number of clients and meets his or her CAO on a regular basis. We have a programme management development system in place and are putting a more formal one in place where each adviser will be assessed on a regular basis. Performance is measured in terms of farm walks, number of monitored farms and number of activities. The CAO attends a farm walks demonstration clinic or seminar. Important feedback is also received from clients and others.
I acknowledge that, like all public and private service organisations, we have in Teagasc staff working well above and beyond the call of duty, staff working at an average level and a minority who work below the accepted level who are being attended to in terms of inservice training, mentoring and support. That is how we approach the issue. We are not in a position to sanction personnel any more directly than this in a public service organisation. We have put in place a mentoring and inservice training facility for those seen to be weaker in certain areas of work.
Mr. Flanagan
There are two points I have not yet dealt with. One is the suggestion that we should work more closely with the authorities in Northern Ireland. Teagasc has maintained strong links with agricultural research facilities in Northern Ireland. For example, there would be a lot of interaction between the facilities in Hillsborough and Moorepark. However, past suggestions for joint or co-ordinated research projects were never brought to fruition. There seems to be reluctance on the part of our colleagues in Northern Ireland to become involved in such projects.
I am not aware that we made any applications for North-South funds. Generally, such funds were available for more immediate cross-Border problem solving. They were spent more in social areas than in the area of agricultural research. I am not aware that there was a particular opportunity to obtain funding for such research. Dr. Crosse might confirm this.
Dr. Crosse
In the area of the environment there was a joint programme a number of years ago between Johnstown Castle and Queen's University. In the context of work in Ballyhaise, we met people in Hillsborough but never reached the stage where we could get agreement to seek joint funding for such a programme. There is a will in Teagasc to do more collaborative work with our colleagues in Northern Ireland.
Perhaps, Chairman, we should push this in the present more favourable climate.
Dr. Crosse
We would welcome any help we could get.
Mr. Flanagan
The last issue I propose to deal with concerns what will happen next year. We do not know. It all depends on the Exchequer provision for Teagasc. If it reflects this year's provision, we will also have a problem next year. The savings that will accrue from the staff reduction about which we were talking, a modest fee, the scheme we have in place and the filling of only one post in three will possibly allow us to live without capital asset conversion in 2005. They will not allow us to live and maintain the current programme in 2004. This year we will have a deficit, perhaps, of €10 million that may have to be bridged with capital. Next year this figure could be down to €3 million or €4 million and, possibly, zero the year after. Unless we receive additional funding next year, we will have a problem but of smaller magnitude.
I welcome Mr. Flanagan and his fellow directors. I am delighted to have the opportunity to ask a few questions.
It has been mentioned that Teagasc has to live within its budget. It was stated it was €4 million in the red at the end of last year. Mr. Flanagan said it was €3 million and that there was a capital debt of €1 million. How long has Teagasc known about this figure of €3 million? I know Mr. Flanagan only took up his post in May for the second half of the year, after Mr. Downey, but for how long did he know about the figure of €3 million and what steps were taken to make adjustments last year? If that figure is part of this year's cutback, it will make it harder to achieve. Why was something not done about it last year, if possible?
How do the cutbacks in posts break down between the advisory service and the research service? I am a farmer and in all fairness must say I always received great advice from local advisers, whether through field walks or at meetings in Teagasc offices. I also received research advice from time to time, some of which was good and some bad. I started off as a young fool of a farmer and decided to erect a silage pit and outdoor cubicles. It was not long before I had to buy a shed to put over them. Perhaps that was good advice at the time. How has this cutback been divided between the advisory service and the research service? I understand Teagasc has approximately 5,000 acres between owned and rented and more than one million gallons of quota, between rented and owned. Does it make any sense at this stage to be milking such a huge amount of cows and feeding and weighing a huge number of cattle for research? I am all in favour of research but should it be on such a large scale when other countries are cutting back?
I deplore the closure of Teagasc offices in Loughrea and Headford. In Headford the closure will result in the saving of €80 a week and I understand it will cost a lot more to pay travelling expenses to the staff. When the Fischler proposals come in some form or other there will be a lot of explaining to be done to farmers and there will be a need for local offices where advisors will be available to assist farmers.
What is the logic of having one part of an organic farm in Athenry and transporting people 20 miles for the classroom teaching when Mellows College in Athenry has been recently refurbished? Who is paying for their transport between Mountbellew and Athenry?
How much is being paid per year for the monitor farms? I cannot understand if people are paying Teagasc for the REPS plan why it is not making money because private individuals are making a good living out of it. I wonder why we are losing money, in other words, and whether it is being managed competently. I ask you to examine the idea of a research versus advisory service. Speaking as a farmer, I want to keep the advisers. They are the best people for giving advice to farmers. A certain amount of research is needed, I agree, but I doubt if it is required on such a huge scale as is in place at present.
I also welcome Mr. Jim Flanagan from Teagasc and I appreciate the opportunity to question him about his presentation. Mr. Flanagan, said in his presentation that Teagasc was forced to examine the sale of assets to fund current expenditure. What bothers me is that it is not part of any strategic or business plan and it has nothing to do with providing adequate services to farmers. Teagasc was simply forced to do it as a direct consequence of a cut in its budget.
Regarding the closure of the Ballinamore research centre, we have been given an answer and I wish to ask Séamus Crosse about it. How was it decided to close Ballinamore rather than some of the other research centres? I have a letter from Seamus Crosse to the Ballinamore Business Association dated 26 March 2002, exactly one year ago today. It was in response to what was happening in Ballinamore. It states that the research base at Ballinamore will form an integral part of the overall regional research programme of Teagasc and that the information from Ballinamore will form part of a larger database from research farms in different parts of the country. One year ago Teagasc stated that the research centre in Ballinamore was to form an integral part of the overall regional research programme but that is not the case now.
In an earlier response today you said the research at Ballyhaise would probably make up for a great deal of what would not now happen at Ballinamore. Yet if one examines the 2002 figures for grass growth as published in the Irish Farmers’ Journal the Ballinamore figure was 9.5 tonnes per hectare whereas in Ballyhaise, which is not that far away in distance but differs hugely in terms of climatic and soil conditions, the grass growth was 14 tonnes per hectare which is almost as high as Moorepark. To suggest that research at Ballyhaise would in some way make up for research that cannot or will not now be carried out at Ballinamore does not add up.
The research at Ballinamore will not only benefit areas such as Leitrim and Roscommon but also areas like west Cavan, Westmeath, Longford and even areas of late frost in west Kildare and east Offaly. It is my understanding - I am open to correction - that the research conducted in Ballinamore on grass growth can be applied elsewhere but similar grass growth research done in Moorepark, for example, cannot be applied in Ballinamore, so they are not interchangeable.
It was stated in the presentation that one of the objectives is for the research to be geared to competitive farming and rural viability on a national basis. It is my information - I am open to correction - that over the last three years there have been some major capital investments amounting to approximately €25 million. Most of the money has been spent south and east of a line from Dublin to Athenry, with the exception of about €250,000 given to Ballyhaise and perhaps one or two other small investments. The closure in Ballinamore represents official attitudes to extremely disadvantaged areas rather than anything to do with costs. At the end of the day, what will the sale of the farm in Ballinamore realise for Teagasc? It will not make any real difference to the Teagasc budget.
Monitor farms were mentioned, which I contend do not replace research farms. It is very difficult at any time to get accurate records from farmers. Only hard-nosed scientific research will achieve real results.
I wish to comment on the closure of the centre at Manorhamilton. The centre was completely funded by the EU and has cost Teagasc nothing. They have a rental income from the offices in Manorhamilton which they are now proposing to sell. I ask the director to confirm whether they will have to rent elsewhere. These premises cost nothing and were acquired in hard times and are now being sold off in the good times; yet the farmers in north Leitrim are being told they will have to rely on advice from Sligo.
The director made an interesting point when he said there will be a cut in travelling expenses and expenditure. I am not sure how that will work out. He spoke about advice being given to farmers by telephone. Does that mean farmers in my area of north Leitrim will have to contact an office in Sligo by telephone rather than advisers travelling out to see them?
I have two final comments. Is it correct that up to €26.5 million per year from its annual budget is paid by Teagasc in pension contributions? That would account for a sizeable part of the budget. While I understand that pension contributions must be made, is there any other mechanism for paying these contributions? It would be very difficult for any business to operate under such circumstances. According to the presentation it is estimated that the sale of Teagasc offices in Dublin might net €9 million. If prices rise higher and they sell for €12 million, will Teagasc rescind its decision to close some of the offices mentioned here? The difference between the two amounts would be €3 million.
I welcome the Teagasc officials. They stated that 40% of the REPS market is now held by Teagasc. Teagasc farm consultants have been involved in the farm retirement schemes. What percentage of farm retirement applications have been completed by Teagasc applicants?
Teagasc stated that it has 13 dairy herds and almost one million gallons of milk. There must be considerable overtime particularly at weekends from Friday evening to Monday morning to maintain these dairy herds. What is the cost of the overtime for that? Teagasc and its predecessor ACOT have provided a massive service to rural areas and particularly to small developing farmers over the years. As the farming sector will go through a ferocious change bearing in mind some of the Fischler proposals and the dairy report that came out last week, Teagasc must be at the forefront in advising farmers. If it does not do so, private industry will take over from where Teagasc left off.
It was previously mentioned there has been some capital expenditure on one of the agricultural colleges which is now vacant and students are being bussed to other agricultural colleges. Can the board of Teagasc justify this? I hope to be able to get some genuine answers from the directors to those few questions.
I will try to keep my questions concise. Bearing in mind the estimated deficit of €15 million for this year, it is important that someone brings a dose of reality into this discussion. This deficit was due to cutbacks in the Teagasc budget. Can the delegation confirm that the closures referred to in this briefing document would not have been necessary if the cutbacks in the Teagasc budget had not been implemented in the Estimates and at budget time? It is a bit rich to hear so many Government Deputies make critical comments about Teagasc when they were not so critical during the Estimates.
I am concerned, as is Deputy Harkin, that this does not seem to be part of an overall strategy for Teagasc. I get the impression there is an element of almost panic selling because of a need to balance the books for 2003. I know the Farranlea Road site very well as I am on Cork County Council, which uses the same car park. As a student I was there on work experience for a short time. Why would Teagasc close the headquarters for its advisory service in Cork and Munster when no other offices are being closed in Munster? When only choosing to close one advisory centre in Munster, why choose to close the centre point? I would have seen this office as the lynchpin for the advisory services in Cork which is the premier agricultural county from an output point of view.
This document states quite clearly that staff and services will be relocated to nearby centres. What does "nearby" mean? What will be the average and furthest distances staff will have to be relocated? For example, north Leitrim has been discussed in previous debates. Where does Teagasc propose to relocate the 14 members of staff from the Cork city office? Is Teagasc satisfied that farmers in east Cork and west of the city who are served by the Cork city offices will be adequately serviced? From where will that service be provided?
Teagasc has made it clear it is seeking permission from the Department of Agriculture and Food and from the Department of Finance to convert capital funds into current funds to pay for current expenditure this year. I presume Teagasc is confident it will get sanction to do that. It seems extraordinary that a decision to close ten offices would be taken before getting that approval. Having made the decision to close ten offices, what happens if that approval is not received? Although unfortunately that seems to be a formality, I would like some clarity on the issue.
I would like more detail on what will happen next year. It is crazy economics to sell assets to pay off current expenditure when Teagasc does not know how much money will be allocated in the Teagasc budget next year. If it gets the same budget next year as this year, what are the likely consequences for asset sales in 2004? Will it continue to target advisory centres or will the next target be colleges, etc.? It is crucial that farmers and people involved in agriculture can have some confidence in Teagasc as a service that exists to support them. I and other Deputies have real concerns that because of the lack of priority given to its funding, Teagasc is at the start of a slippery slope.
I wish to ask about the valuation of the premises Teagasc seeks to close and sell. Teagasc says the ten advisory offices it is closing and may sell could net between €3 million and €4 million. That seems like a very small figure when I consider the size of the building in Cork city alone. Is it the case that any purchaser of the Cork city premises will need planning permission from Cork County Council to access the site? Will that not have an effect on the sale price of the building? What is the legal position concerning accessing that site? I understand leeway is required from Cork County Council in order to access the site in the first place, which may hamper the sale value of the building.
I congratulate Mr. Flanagan on his appointment as chairman of Teagasc and I wish him well in his new role. It is a big change from where he was. It is clear that Teagasc is zooming in on advisory services as the weakest link in the chain and is making cutbacks there. No sector in the organisation should suffer more than any other. Can Teagasc senior management show me that it will meet the needs of all farmers in the future?
There are two classes of farmers, competitive farmers - usually larger farmers - and uncompetitive farmers, of whom we should take more care. Farmers are very worried about their futures and as the Chairman is well aware viability is an issue. An alarming number of farmers have gone out of milk production in the past two weeks and have made an application showing an intention to sell cows because of the economics of dairy production. I am aware of five herds in my area with about 150 dairy cattle moving out.
Teagasc has three areas of responsibility, namely advisory, training and research. Its funding is probably back at the 1997 Estimate level based on the cutback this year. There is no guarantee, irrespective of what Government does, that it will be possible to maintain next year's Estimate at the same level as this year's. I would not bet on that because the situation will become increasingly difficult given the threat of interest rates rising and other factors. There is a tough road ahead.
As a politician, I am obliged to defend the public. The decision by the Teagasc board to get into the commercial business of leasing two farms was the most ridiculous ever taken. One of the farms is owned by Dairygold and was leased recently while the other was leased two years ago. Those farms have long-term leases. With regard to Deputy Coveney's comment, I welcomed the closure of the Cork office because I thought it was a case of decentralisation. However, I now understand that 600 farmers are being disenfranchised. The board members who allowed the leasing of those two farms are not competent and should not be members of the board. Teagasc is a research, training and advisory organisation. I understand that one of those farms could have lost £250,000 in one particular year.
Teagasc has 500 acres of land but large scale farming is not justified in the context of research and training purposes. Teagasc has a milk quota of 1 million gallons, close to my home area, and 500,000 gallons in five agricultural colleges around the country, which makes a total of 1.5 million gallons, including Johnstown Castle. The organisation has 1,000 dairy cows - I realise the colleges need milk for training farmers - an extra 400,000 gallons of milk leased and roughly 700 acres leased.
In the interests of providing an adequate advisory service to maintain farming in rural areas, I ask that those leases be revisited by Teagasc. There is nothing to stop this from happening as they are long-term leases. Nobody could look into a crystal ball two years ago and foresee where milk prices and land rent values would be today. I am genuinely concerned about this as are my neighbours. Why is it so necessary to have so much milk and land?
Much is heard about the Prospectus report on the dairy industry and the shifting of milk from the west to the south, and I note that Deputy Harkin has a passion for the west. I do not believe in that report. Copies of the Prospectus report are scarcer than corncrakes and I cannot get my hands on one.
I am concerned about the scaling down of the advisory function. To take away the advisory service is to put the cart before the horse. The suggestion that there will be less visits is also a concern. Farmers need advice and Teagasc advice has been sought after since its foundation. I can remember famous names from my area, such as Dr. Spain who Mr. Flanagan may have heard of, who provided an excellent service. There were great people involved and the advisory service has driven Irish agriculture forward. Research is of little value without an advisory service. I am not so much concerned with the closure of offices but I do not want farm visits curtailed. Such visits are necessary.
The work done by the advisory function in regard to maximising the effect of EU schemes on farm income is not getting enough recognition. Many farmers, though perfectly literate in terms of IQ, are illiterate in terms of what is available to them and how to maximise their return from such schemes. The director of Teagasc should seriously consider its role as an advisory service and in regard to training and research. I am not concerned with the cutting back of training but research must be curtailed. It is wrong to carry out research at a time when there is over-production and problems in agricultural development.
I ask the director to consider the leases. Taxpayers' money should not be lost as a result of a most ridiculous decision. The board that approved those leases should be sacked.
Mr. Flanagan
Deputy Callanan asked when Teagasc became aware it might have a deficit, which was quite late in the year. During the year, Teagasc was in negotiation with the VAT people and was hopeful that it could avoid having to pay significant extra VAT. Towards the end of the year, it became clear that we would have to pay. There were strong hopes that the fee increase for REPS, which caused the other part of the deficit, might be approved during the past year. However, the year end came and it had not been approved. Again, it was quite late in the year before we had to accept that we would not get that increase.
It is traditional that there would be a Supplementary Estimate to take care of deficits. The VAT issue was outside the control of Teagasc, in a sense, and was simply transferring money from one agency of State to another, which would normally be part of a Supplementary Estimate. When the Government decided that there would be no Supplementary Estimates in any cases, the means by which such deficits would normally be taken care of vanished and Teagasc was left with a problem. That deficit comes off the top of the provision for this year and is a significant contributor to our deficit of €15 million in regard to dealing with this year's needs.
It is true that the Government provides for the pensions of public employees, including those of Teagasc, out of current provisions. Teagasc must pay its pensioners at the end of each month in the same way it pays its current staff. Teagasc sends cheques to almost 1,000 pensioners each month out of current income. That is how the Government has chosen to provide for pensions and we have no option but to implement that.
Mr. Carey might deal with the costs of monitor farms.
There are no costs associated with monitor farms. Irish farmers have always been 100% co-operative with us and they do a great service for their colleagues in providing their facilities. Teagasc records information at these farms on a goodwill basis and such farmers are prepared to open their farms to their neighbours. There is no cost and the farmer is not compensated for his or her contribution. Farmers would get additional advice and services for which we would not charge. We have a high presence on such farms so it could be said that the farmer gets some benefit in kind. Other than that, they are not an additional cost to the organisation.
Mr. Flanagan
It was asked why Ballinamore was picked. The Teagasc authority asked for information on all the dairy farms on which it operated. The authority got information on those and, in its wisdom, decided to close Ballinamore first. However, it also instructed Teagasc management to carry out further analysis of all the dairy farms and to advise on cost and their contribution to solving the problems of farming. Teagasc management is planning to present a comprehensive report on all of its dairy farms and their contribution.
Further farms may be closed or amalgamated depending on what the authority does when it gets the report. However, Teagasc is providing a detailed evaluation of all the dairy units in regard to what research has been carried out, what contribution each is making, costs and many other issues. The suggestion by Deputy Ned O'Keeffe that this area needs to be radically reconsidered is already being acted on.
What is that?
Mr. Flanagan
The Deputy suggested that Teagasc's dairy units, as well as those that are leased, should be radically examined. The Teagasc authority has asked that such an examination be conducted and management is preparing a presentation in that regard for a future meeting.
A member asked what will happen if more than €9 million is received from the sale of Teagasc's headquarters. I am not in a position to answer as the authority will have to decide how to use the money that is received. There will be several options. The Department of Finance may well decide to take it for other purposes - it could be rolled into next year to help solve next year's deficit problem or it could be used for other purposes. I am not in a position to speculate on the possibility of additional funding being obtained.
Similarly, I was asked about the value of, as well as the problems in, the Cork office. I am not aware of any conditions or wayleaves related to that office. The matter will have to be dealt with when the process of selling the office commences. I have not read the file and I am not familiar with all the potential problems.
What is the value of the closure of the Cork office? How much money will Teagasc save by closing it?
The Deputy should allow Mr. Flanagan to finish. He can ask a brief supplementary question later. Many other members, including party spokespersons, wish to speak.
Mr. Flanagan
A question was asked about the percentage of farm retirement plans prepared by Teagasc. Perhaps my colleague, Mr. Carey, will be able to deal with this matter.
I do not know the percentage involved. It is not economical for Teagasc, in view of the fees it charges for this time consuming work, to become deeply involved in it. We have not pursued our involvement in it because the fees would not pay for the use of an adviser's time. The advisers are under pressure with other work. Teagasc has a relatively low market share because it has not tried to increase it. We would have to charge considerably higher fees if we were to try to become involved in this area. We do not see it as a priority because it is being provided by the private sector and solicitors.
Mr. Flanagan
Members asked what Teagasc would have done if its budget had not been reduced this year. Teagasc published a strategy document in spring 2002 and a five-year rolling plan was submitted to the Department in June of that year. The plans envisaged that Teagasc would not become any bigger or smaller, in effect. It was intended that Teagasc would continue at about the same level and would provide the same range of services. Some adjustments were made - Teagasc planned to become more involved in basic science, research and biotechnology, in line with the thrust of Government and EU policy. By and large, however, the strategy and the rolling plan envisaged that the organisation would maintain its current size. If the budget cuts had not been made, there would have been business as usual in Teagasc.
Teagasc believed that its permanent staff complement, which had been agreed with the Department of Finance, was fixed and would not be allowed to shift. The Government has decided to reduce the number of public servants by 5,000 and Teagasc has been asked to outline how it intends to contribute in that regard. It has also been asked to explain the effects of a reduction in staff on its programme. Any such reduction would serve as an indicator of where we would be going in the future.
Deputy Ned O'Keeffe asked which is the priority among Teagasc's advice, research and training functions. Teagasc has decided, essentially, that training is the most important of the three, as its remit obliges it to provide for the training of future generations of farmers in rural communities. It is more strongly committed to maintaining the training function than the other two. Teagasc believes that the sale of certain premises and reductions in expenditure are balanced across its advice and research functions - advisory centres have been closed, just as research centres have been closed. Equally, reductions in the filling of posts are balanced in the two areas. The management of Teagasc, as well as the authority, holds the view that advice and research have shared fairly equally in the total reductions that are planned. Training is the least affected of the three functions.
What about the two classes of farmers?
Mr. Flanagan has not finished, Deputy.
I asked about competitive and uncompetitive farmers.
Deputy, please.
Mr. Flanagan
Teagasc's advisory service has extended two programmes. The fee charged for the technology and business service, which is geared towards larger farmers, is higher and covers about one third of the cost. The opportunities in farming programme is provided for free and is funded, essentially, as a public good under the national development plan. Teagasc seeks to maintain its services in both areas, as it considers itself to have a remit to do so.
I was asked about what will happen in the future. Teagasc wishes to maintain its existing level of services to meet the needs of farmers, but it depends on the funding it receives from the Exchequer and other sources. Its job is to provide services within the resources made available to it. The Oireachtas determines the public funds that are made available and Teagasc tries to do the best it can within that framework. We try to receive as much income as possible from charges to farmers, within the ability of farmers to pay, in so far as that can be judged.
I will allow members to ask brief supplementary questions.
There has been a great deal of speculation in the press recently in relation to the future of organic farming. I welcome Teagasc's commitment, in its presentation to this committee, to the future of organic farming at Mellows College. I agree with my colleagues who argued that it does not make sense that people should be transported by bus to deliver training courses 20 miles away. While I support Deputy Coveney's comments in relation to planning for the future, I am also sympathetic to Teagasc's position. It is extremely difficult to manage an organisation like Teagasc. Staff will have great concerns, however, if they do not receive a commitment for at least two or three years. It is a difficult matter. It is not good that we should have to choose between Teagasc's advice, research and training functions, as all three are critical for the future of agriculture. It would be bad practice to exclude or eliminate one of the three, particularly in light of the inevitable developments as a result of Fischler and CAP reform.
I would like to ask two or three supplementary questions. I apologise to the Chair for being awkward. Will Teagasc's office in Sandymount be sold as a vacated property or will Teagasc try to lease back some of it after it has been sold? How many years were involved in the VAT problem that has been uncovered? It is obvious from what Mr. Flanagan said that the problem had a major effect on the finances of Teagasc. How much had to be paid in VAT? Are employee pension contributions being used as ongoing cash flow or are they being put into an investment fund? Teagasc has a €20 million pensions bill per annum and we accept that paying it must be given the same priority as payment of staff.
The Manorhamilton office produces between €9,000 and €10,000 per year. What will be the cost of providing the service in that area in the context of the extra travel that would have to be undertaken by a person coming from Sligo? In view of the fact that the office gains more than would a mortgage for the value added to the premises, should it not be maintained while the organisation moves from the rented properties it maintains? Bailieborough was referred to as being in similar circumstances.
It is difficult to get information from Mr. Flanagan. He referred to the nitrates directive and the scientific research at his disposal. Mr. Flanagan's colleagues in Donegal met with the local authority and told us that Teagasc had no scientific evidence and that no scientific evidence was sought in Donegal. The county chemist has information from the Environmental Protection Agency to the effect that the only nitrates problems were in southern and eastern regions of the country. The BMW region has no problem of any kind. Mr. Flanagan's officials told us that Teagasc made its decision without recourse to scientific evidence.
I find it difficult to understand why so much emphasis is put on training. There are very few trainees at present and Teagasc's role should be more advisory. Provision of advice was one of the main reasons the body was established.
I appreciate that Mr. Flanagan cannot have all the information we seek at his fingertips today. What is the valuation of the Cork office? It must be that before deciding to close an office it is valued. Are we not trying to come up with approximately €15 million? That is the hole in the budget as a result of cutbacks. If an organisation is strategically attempting to raise capital of that sort, it will value all of its assets before deciding which ones to sell. Can the committee have more detail on the valuation of the ten advisory offices? Which are highly valued and which are not? We must ensure that if we must suffer the pain of having to sell, we get the maximum return.
Why was the decision taken to close the Cork city office, which is the headquarters of the advisory service in County Cork? Why were not some of the other smaller offices closed? Is it estimated that the building which housed the office has the highest value or are there other reasons? I find it extraordinary that the details of possible complications in the sale of the office are not known given that the sale has been announced. The 14 staff have been informed that it will go ahead.
Mr. Flanagan has stated that the Department of Agriculture and Food has asked him to contribute to the cutting of 5,000 public service jobs. That is an unfortunate request and it imposes difficult decisions on Mr. Flanagan. How many staff does he envisage will have to lose their jobs in Teagasc?
I am not satisfied with the answer I received from Mr. Flanagan about research advice. He seems to be saying that if the public service is to be cut, it will be cut fairly equally in three areas with an emphasis on training. Advice will become more important for farmers in the weeks ahead in the context of the Fischler proposals, modularisation and decoupling. I would like to see greater emphasis on advice. There is a view that advising farmers is a waste of time, but it is far from correct. Deputy Harkin and I agree that the Prospectus report on the milk industry appears to propose taking milk production from the west to the south. In the next instance it will be taken from the south to the Skelligs. That does not satisfy me. Viability is important and industry is important, but the west is as important as the south.
When will Teagasc supply me with the report on dairy farms? How long will the viability and cost effectiveness study take? A few years ago, Teagasc withdrew from linkages of crops and dairying. There has obviously been another change of direction because mention has been made that studies are being undertaken in conjunction with dairy co-operatives. Farms were sold when Teagasc initially withdrew.
I mentioned monitor farms, but I did not speak about their cost. I cannot see how they can replace proper research facilities as was suggested in the Teagasc press statement. I asked why the Ballinamore research centre was closed, but I was simply told that the Teagasc authority decided to do so in its wisdom. While that may be the case, the answer leaves me none the wiser. According to Séamus Crosse's letter, the centre was an integral part of research a year ago. Perhaps a year is a long time in research, but I cannot understand how the centre has become unnecessary. Is the action part of a wider plan to withdraw from research in the west? Mr. Flanagan mentioned that the Oireachtas provides Teagasc with funding and that his hands are, to some extent, tied. I agree with that, but Teagasc has the same obligations to farmers in the west and disadvantaged areas as it has to farmers elsewhere. The Ballinamore research centre cannot be replicated elsewhere and it was vital to keeping farms in the west viable. Closing it is not treating farmers there as the equals of those elsewhere. If the recent report referred to by Deputy Ned O'Keeffe is implemented, the west will lose a great deal of its milk quota. The decision to close Ballinamore will copperfasten that trend.
Of the €25 million in capital investment made over the last few years, very little has been spent north of the line between Dublin and Athenry. Is that part of a bigger picture? I asked about the €9 million which the sale of offices will generate. Teagasc has factored the sum into its calculations. The closures are not part of a strategic plan, they are a response to a shortfall in current expenditure. If €12 million is generated, Teagasc would have €3 million extra to play around with. In that context would the authority consider rescinding some of its decisions?
I thank Mr. Flanagan for his answers regarding the overrun since last year which has made things that bit harder this year in the context of cutbacks. I asked about the logic of having the classroom aspect of the organic farming facility at Athenry in Mountbellew, which is 20 miles away. Can that be explained? What is Teagasc's intention with regard to Mellows College, Athenry?
I thank the Chairman for letting me speak at this late stage and I apologise for being late for the meeting. Some of those in Teagasc will be aware of my views on cutbacks in Cavan. I wish to be associated with comments regarding the research centre in Ballinamore. While I am aware some capital has been expended on the college in Ballyhaise, the logic of closing and selling off an office in Bailieborough is beyond me. The office in question is leased out in part to the North-Eastern Health Board and provides a service to farmers and young students in the whole east Cavan region. Some 260 students benefited from the facility last year. I cannot understand the logic of removing a service to the Kingscourt, Shercock and Bailieborough areas and compelling instructors and advisers to travel from Ballyhaise when its cost to Teagasc in terms of overheads is minimal, if anything, given the income it receives from the health board.
Many of the older farmers who travel to the centre by tractor or in older cars will not make the longer journey if the service is removed. I ask that the decision be reconsidered. While I fully appreciate the dire position in which the organisation has been placed by the Government's decision to cut 13.5% from its budget at a time when the Minister was promoting its services to farmers and calling on them to sell their animals to Bord Bia whose budget he also cut, it is vital common sense and logic prevail.
Numerous Members of the House have brought to my attention an apparent decision by Teagasc to instruct its staff not to give information to public representatives. I would be very disappointed if this were true. Public representatives have been elected to serve the people. If Teagasc headquarters, Mr. Flanagan or anybody else has issued such an instruction, it is a disgrace. Will Mr. Flanagan guarantee the committee this is not the case?
Mr. Flanagan
I will deal with the last comment first. I am not aware that staff in Teagasc have been instructed not to give information to public representatives. Although they are required not to disclose confidential information, there is no general ban on them giving information to public representatives.
I think the Chairman may be referring to a different matter, namely, a clear instruction, agreed in the staff scheme not to become involved in public lobbying of public representatives. This has been agreed with trade unions and is a long-standing provision of the Teagasc staff scheme. Staff have never been told not to disclose information to public representatives, provided they are entitled to receive it. They may not, however, initiate a lobbying process.
Members of the House, rather than Teagasc staff, raised the matter with me.
I have outlined the clear position.
Mr. Flanagan
Questions were asked about owning and leasing. The economic argument is that there is no significant difference between owning and leasing. Economists would argue that there are circumstances in which one chooses to own assets and others in which one chooses to lease them. In economic terms, one is broadly the same as the other. We do not make a major distinction between the benefits of owning or leasing a property. The decision to convert a leased property to ownership would be based on economic considerations. In times when one needs capital income, one may be tempted to sell an asset and pay rent instead. In cash rich times, one may decide to buy an asset and avoid paying rent. It depends on the circumstances in which one finds oneself.
In reaching its decision on which offices it would sell the Teagasc authority set four criteria when examining the issue. These were the proximity of the office in question to other Teagasc facilities, its strategic importance, its size and its potential contribution as an asset. The Cork office, for example, was found to make a significant contribution to the immediate asset value in that it is considered to be worth in the region of €1 million. It is also surrounded by Teagasc facilities with a further 16 or 17 offices in the county. Despite the county's considerable size, it is, nevertheless, well endowed with Teagasc offices in contrast, for example, to County Longford which has one Teagasc office located in Longford town and where there has been no significant demand for additional offices.
The reason is that Longford town is in the centre of the county.
Mr. Flanagan
County Cork has 16 or 17 offices.
Where is the nearest office to Cork city?
Mr. Flanagan
Cork is surrounded by offices. There are offices in Bandon, Macroom, Mallow, Fermoy and Midleton all of which are within a radius of less than 20 miles. Midleton is around 15 miles from Cork city.
Given that some 25% of the country's agriculture is located in County Cork, is the decision to close the Cork city office justified?
Please allow Mr. Flanagan to continue.
Is the decision justified?
I ask the Deputy to show respect for the Chair.
Mr. Flanagan
I was making the factual statement that County Cork is well endowed withTeagasc offices, even when one considers its contribution to the agricultural economy.
Can one apply the same reasoning to football?
We will talk about football on another day.
Mr. Flanagan
The second criteria is that the Cork city office is relatively close to a number of other offices in surrounding towns within a 20 mile radius. The new headquarters will probably be in Moorepark. Teagasc wants to integrate the advisory service much more closely with its research facility. We are advised that locating our headquarters on the same site as our research activities would help integration. The plan is to redistribute the staff in Cork to four or five surrounding offices, including those I mentioned.
There was also an element of decentralisation in the decision to close the Cork city office in that it is located in a large city. Teagasc has been advised by various people that it should not have its headquarters in a large city such as Dublin and in fairness to the staff of 100 or thereabouts in our head office in Dublin, it is they who have been most disconcerted by the decision to move the head office. They will be most affected on a personal level because they do not want to move out of the city.
Strategically, there was no great advantage in having an office in the middle of the city and, therefore, it was decided it was preferable to have advisers employed in surrounding offices where they would be closer to their work. On most of the criteria, the Cork office emerged as a candidate for closure. Though rumours abounded in the press, Teagasc never intended to close Mellows College or the organic unit. The rumours were out before the board had made its considerations in full. The board had decided that it would consider carefully the future of Mellows College as a college, and that generated many rumours that had no basis in fact. Teagasc never intended to close the organic units it had set up in the college and it had always meant to develop and maintain them as such.
There were 15 or 16 agricultural colleges, which was far too many. The number of remaining colleges, 11 in total, is still considered too many in terms of meeting the need for residential accommodation. It was decided two years ago by the Teagasc authority to close Mellows College as a residential college, largely because Mountbellew, a few miles down the road, met the needs of County Galway. It was not justified to have two colleges with residential accommodation, two matrons etc. If there is a need for a course requiring residential accommodation, it will be given in Mountbellew, which will have the necessary teachers. There will be no duplication of roles in two places so close together. That is the only new decision.
The new headquarters of the rural economy division from the head office in Dublin will be in the Athenry campus. It will be the centre of the Teagasc advisory service in Galway. Among a significant body of advisers, there will be supporting specialist advisers. The organic farm will serve as a farm for advice, training and demonstration.
Courses for adults or short courses for students can and will be given in Athenry. If there is demand for a full-year certificate course in organic farming for young students, we will not maintain a staff of several people to allow them live on the Athenry campus. They will have to take such a course in Mellows College down the road. Most aspects of such a course involve classroom teaching. If the students have to spend a day per week, for example, on the organic unit in Athenry, we will transport them the 15 or 20 miles to the college. That is common practice.
Currently the certificate and diploma courses given jointly with the ITs involve students spending some time in the ITs and some in the agricultural colleges, where they receive practical training. The transportation of students doing certificate or diploma courses is now the norm in all the colleges. There is no guarantee that there will be demand for a course in organic farming in Mountbellew. It will happen if sufficient students want it but we are not convinced that this is the case. The transportation of students in likely to be very minor and there is no justification for having a large number of under-employed staff waiting for students in Athenry.
What about Bailieborough?
Mr. Flanagan
I think we dealt with Bailieborough earlier. The view of Teagasc is that the main centre for the advisory service, training and some applied research should be Ballyhaise, where we will have critical mass. There will be a second centre in Ballyjamesduff. Given the resources we have, this meets the needs for County Cavan.
I asked some questions and I did not receive an answer to any of them. The first required a comment on the fact that the vast proportion of the capital investment of over €25 million went south of a line from Dublin to Athenry in recent years. I asked for a comment on the fact that monitor farms cannot replace proper research centres. I asked if Ballinamore was part of a bigger picture, thus implying that it might as well be closed as anywhere else. IfTeagasc obtains more for its Dublin office than it expects, will that allow it rescind some of the decisions it has taken?
None of the supplementary questions I put has been answered.
Mr. Flanagan
The Teagasc authority did not say explicitly why it picked Ballinamore and therefore I cannot tell Deputy Harkin what it had in mind. It stated that research in Ballinamore was very much of an applied nature, as was that being carried out in Knockbeg, which is to be closed. It is the kind of research that could, in the view of Teagasc authority and management, be carried out satisfactorily on monitor farms. The Deputy obviously disagrees, but that is the opinion of the Teagasc authority and management.
The investment of €25 million, received some years ago from the Government, was divided fairly equally among the existing Teagasc centres. A significant amount of it was spent in Ballyhaise and we plan to spend €1.2 million there this year as part of a long-term plan to upgrade its facilities. A significant amount was spent on Athenry and the organic farm was developed among other things.
The other research facility was in Ballinamore, which is not part of the grand plan. Ballinamore farm is small and has about 35 dairy cows. It was felt that the research carried out there could be carried out better on monitor farms.
There is no future in that business anyway because of its size.
Mr. Flanagan
What was Deputy Harkin's other question?
If Teagasc was to receive €3 million more than the €9 million expected for the sale of its office in Dublin——
Mr. Flanagan
I thought I answered that. If we get the extra money it will be in the system. I could only speculate as to how it might be used.
It could be used to rescind some of the decisions taken.
Mr. Flanagan
It could be used for many purposes, including changing decisions, assuming the decisions have not been implemented by the time the extra money enters the system.
Is Teagasc selling the Sandymount office with vacant possession?
Mr. Flanagan
The decision of the Teagasc authority is to sell the Sandymount Avenue office without incumbency and to seek to lease it back, for a year or two, if the buyer is willing to do so.
Forget it, it is the biggest sham we have seen yet. This is something that has to be taken up. I put this question almost three hours ago at the start of this meeting and it was not answered. I appreciate the Chairman allowing me to ask a supplementary question. It is ridiculous that an organisation like Teagasc should be selling a property and leasing it. There is much talk about decentralisation and it is time Teagasc was decentralised to an area where its work lies. This will have to be taken up in another forum. It cannot be tolerated politically.
Mr. Flanagan
Did the Deputy have any other questions?
Yes, I asked about the inheritance with regard to VAT and what caused the problem. There is also the question of employees' pension contributions. Are these being used for daily expenses or being put into a pension fund? If these are not being put into a pension fund it will mean that Teagasc is in a sinking fund.
Mr. Flanagan
The State system for funding pensions comes from current income. When Teagasc was established 11 years ago, discussions started on a pension scheme for the organisation and they are continuing. Teagasc is still operating an ad hoc pension scheme, largely because the Government has not decided the type of scheme it wants for a body like this. Pensions are paid from current income and no fund is being created. The notional contribution to pensions from a person's salary goes towards paying current pensions as part of the annual current income process.
The extra VAT we paid last year as part of an interim settlement amounted to €1.8 million.
From what did this arise?
Mr. Flanagan
The EU has insisted that services are liable for VAT. There was a long discussion about what Teagasc services were subject to VAT. While Teagasc argued that a number of its functions could not be called services and therefore were not liable for VAT, the Revenue Commissioners argued against this.
It won, as always.
Mr. Flanagan
Revenue made its decision and Teagasc made a VAT payment.
Dr. Crosse
In reply to Deputy O'Keeffe, land and quotas are needed to carry out the type of research programme Teagasc is engaged in, namely, programmes geared to the problems of farms. At the last open day, which Deputy O'Keeffe opened, up to 10,000 visits were made to examine aspects of the programme. The research and advisory teams need to work together. The main thing is getting the message out to farms. At the last open day but one, up to 4,000 farmers attended. Farmers are interested in information and this will be more important in the future with the problems they will face.
I can assure Dr. Crosse I will not open the next open day. Taking the average number of cows in the country, the Teagasc number is over the top. While I do not want to get into an argument, it does not make practical sense for the organisation to have those levels if 200 cows will be the maximum number in future. I heard an expert on the radio make the point that Ireland does not suit large volumes of cows as it does not have suitable land such as that in New Zealand, Argentina and other countries.
Dr. Crosse
Our job is to conduct research that answers questions relevant to farmers. It is cheaper to conduct research in centres rather than having every farmer doing it himself. We cannot be compared to the average size of a dairy farm.
There are 250 cows in a unit. How many cattle are in each herd at Moorepark?
Dr. Crosse
There are typically 20 to 25 cows per experimental unit.
Approximately 125 cows would be needed to run five units.
Dr. Crosse
If one wants to compare five breeds of cows, one will need five sub-herds of cows to compare and measure them.
Dr. Crosse is not talking about five herds of cows with 200 in each. The average dairy unit, as suggested by Teagasc, is 70 cows. That can be run as a farm unit. As Deputy Moynihan has already mentioned, Teagasc is paying massive amounts of overtime at weekends to run units that are anything but operational farm units. Teagasc is running commercial herds at an extent nobody in this country can ever hope to reach, as they could not create a sufficient land bank. It is ridiculous.
I would like——
Please Deputy, you have made at least ten contributions.
I have not, unless the Chairman is counting the interruptions. I talked about 1.5 million gallons of milk and 500,000 million gallons in the colleges plus Johnstown Castle, and more than 1,000 cows. I am questioning the large costs associated with the leasing of land. I do not see any point in it. I do not blame Dr. Crosse as he was not in charge at that time; I blame the wrong decisions on the people that came before him. It was a wrong decision and it should not have happened. If a big farmer, an institutional farmer or a co-op gets into difficulty and wants to get rid of their land, will Moorepark take that as well?
Dr. Crosse
The land is used for the benefit of the agri-industry. We are not commercial farmers and have nothing to gain from it personally. We have publicised it as much as we can and many success stories have stemmed from it over the years.
The only research unit within the Teagasc system is the one at Ballinamore. Dr. Crosse told us that the ideal number of cows to make up a trial unit is 25. While there are 35 cows at the Ballinamore unit, and it meets the guidelines, it is being closed down. It turns everything on its head.
There are only 5 million gallons of milk in this country in comparison to 14 million gallons in New Zealand. We do not need this level of research for this level of milk production.
The committee is disappointed with some of the things it has heard today. We are not happy with recent decisions of the board and believe its recommendations are not in the best interest of farmers. We cannot understand how the organisation was allowed to go into serious deficit last year. The time has come for a general audit of Teagasc at all levels. Whatever decisions have to be taken must be taken in the best interests of agriculture.
I thank Mr. Flanagan and his colleagues for coming here. This was a tremendous meeting, even though I had some difficulties in chairing it due to some of my awkward colleagues. In saying that, I believe everyone spoke with the best interests of agriculture at heart.
Does the Chairman intend to refer it to the Comptroller and Auditor General for a full investigation?
I have no problem with an audit being carried out.
The leases need to be investigated because public property that is owned by the company is about to be sold. I request the Chairman to do that.
We will look at that. In regard to a mid-term review of Agenda 2000 - as the committee members will be aware, we have been asked to consider a fairly large document in the context of EU scrutiny procedures. To progress this further I suggest that we invite officials from the Department of Agriculture and Food to our next meeting to discuss the proposals. Is that agreed? Agreed.
The joint committee adjourned at 6 p.m. sine die.