I welcome Teagasc chairman, Dr. Tom O'Dwyer; Director, Mr. Jim Flanagan and Mr. Jim Beecher, Assistant Secretary at the Department of Agriculture and Food.
Teagasc Services: Presentation.
Mr. Jim Beecher
I am here in my capacity as a Teagasc board member.
Dr. Tom O’Dwyer
We are pleased to be given the opportunity to provide the committee with whatever information we can with regard to Teagasc. We have supplied information to the committee on where Teagasc now stands, and some of its essential elements. I will go quickly through this material.
The committee is aware that Teagasc services are directed towards the following areas of activity: 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 which have been streamlined in recent years, with much progress being made with the institutes of technology; agri-food biotechnology capability, which especially in animal reproduction has taken off well and in which we have made some investment; the provision of economic analyses of the impact of the EU and world food policy changes on the agri-food sector and rural areas, known as the FAPRI programme, with which the committee will be familiar. In the view of Teagasc this programme has been very successful.
Teagasc is currently revising its statement of strategy in the light of recent major developments likely to affect the agriculture and food sectors, including the reform of the Common Agricultural Policy, which is continuing, and the outcome of the World Trade Organisation talks starting later this week.
Teagasc is also engaged in a rationalisation programme to adjust to the reduced budget provisions and to the reducing size of the agriculture and food sectors within the Irish economy generally. Teagasc employs about 1,600 permanent and contract staff. It operates nine main research centres and funds ten agricultural and horticultural colleges, not including An Grianán in County Louth, which has closed because of a lack of numbers this year. It has informed Teagasc that it will not be able to continue with its courses. That is the responsibility of An Grianán, not of Teagasc, though An Grianán is funded via the Teagasc programme.
We have not got the final numbers for the ten colleges for the academic year 2003-2004, but the provisional figures received last week by the Teagasc board indicate that the numbers have held up quite well compared with last year, with just about the same level of applications to the different colleges. There are some changes to student numbers within the different courses, given that some are more accredited and more closely associated than others with the institutes of technology.
The annual budget of Teagasc is of the order of €150 million, some 80% of which comes from public funds and, significantly, 70% of which is spent as staff costs. The rationalisation programme with which we are proceeding this year involves a series of elements, in the first instance the reductions of costs at the various centres. These reductions result from our efforts to maintain the programmes in as effective a way as we can, right across the board, in research, the advisory service and training.
For example, we have tried to reduce the overtime which arises at various centres by about25%, which would result in a saving of about €0.5 million this year - the overall annual overtime costs being about €2 million. We have also tried to reduce the travelling, subsistence and the internal training costs. Those reductions, in the order of 10%, would involve a saving of about €1 million, so between the two initiatives we will save about €1.5 million.
As vacancies arise because of retirement and so on, we fill one post in three. We are relocating head office staff from the premises in Sandymount Avenue, which have now been sold at a very satisfactory and significant price. The final details will not be worked out until about mid-November but the sale has gone through and we are in the process of relocating headquarters staff to Oakpark in Carlow and rural economy sector staff to Athenry. The process has already started and I can informally reveal that seven of the headquarters staff have moved to Oakpark. It will be significantly more by the end of December 2003.
We are also relocating all staff and services from advisory offices owned by Teagasc to nearby research centres, colleges or advisory centres. The offices identified for closure are at: Bailieborough, County Cavan; Loughrea, County Galway; Manorhamilton, County Leitrim; Boyle, County Roscommon; Tullow, County Carlow; Cork City; Corduff, County Dublin; Mullinavan, County Kilkenny; Gorey, County Wexford; and Wicklow Town. We are proceeding with that process on a phased basis. We have sold Corduff in County Dublin, as well as Lullymore in County Kildare and Clonroche in County Wexford. We are in the process of selling Ballinamore in County Leitrim. We continue to examine the situation with the Knockbeg sheep research centre, which we rent rather than own.
The rationalisation programme was decided by the board and approved by the Minister for Agriculture and Food. It is currently being implemented, and phase one is in progress. I have explained to the committee the essential elements of that phase. Following that rationalisation, Teagasc will still have a network of more than 70 advisory services throughout the country, including training centres, nine main research centres and ten colleges, though they are dependent on student numbers in the coming year.
The Teagasc board is confident that, with this kind of programme, we can effectively meet the requirements of the agriculture and food industry and the essential elements of the programme in the areas of research, advisory and training services. Without differentiating between the three, we attach particular importance to maintaining the training programme, especially for new entrants into agriculture. As members are aware, it is terribly important for the certification of agriculture that young farmers be able to gain those certificates. We must be absolutely sure that we can provide those programmes.
We now call on members to make comments.
I would like to thank Dr. O'Dwyer, and the other members of Teagasc, for presenting the information to us and giving us the opportunity to ask questions. One or two points have arisen from the background information to our last meeting with Dr. O'Dwyer and from today's comments. I know that Dr. O'Dwyer sought permission after the last meeting to convert some capital funds to current spending. Has that been agreed or approved? Is it a rolling plan? The conversion from capital to current will take care of short-term, immediate needs, but how does Dr. O'Dwyer envisage moving the business of Teagasc forward? Will the need to sell off more assets arise if there are budgetary deficiencies? On voluntary early retirement, a staff reduction process is obviously being put in place. Have the conditions for those retirement procedures been finalised with the people involved? What will the implications be for them? What essential conditions will apply to them?
Dr. O'Dwyer mentioned three main areas, namely, research, advice and education and training. Owing to the present need to consolidate and reduce staff numbers, can Dr. O'Dwyer envisage any transfer across those disciplines or areas? If so, how will that work? Dr. O'Dwyer mentioned that he sees the priority as training new entrants to agriculture, and we all agree on its importance. However, how will that impact on other areas? I suppose that my views on research are widely known. Nowadays it is very important that there be a very strong research base. Are there any implications for research funding and support for that? I say that against the background of the WTO talks, the CAP reform and so on. All those will clearly impact very significantly on the future of agriculture. On both the research base and an advisory service to take account of that, how does Dr. O'Dwyer see those priorities relative to the importance of training for new entrants?
From a budgetary point of view, are there any prospects for outsourcing various services? Does Dr. O'Dwyer have any plans for engaging more consultants or for any other outsourcing? The issue of contract staff was raised at the last meeting of the committee. It was the younger staff who tended to be on contracts, and they were, therefore, least likely to be re-engaged when the contract finished. What is Dr. O'Dwyer's view on the importance to Teagasc? Might there might be a deficit in young contract staff, who, I suggest, might have bright new ideas, especially in research?
On infrastructural aspects, Dr. O'Dwyer listed several different places which are now being closed. Is that the end, or is there a need for more closures? How does Dr. O'Dwyer see that evolving over time? The short-term approach has dealt with an immediate budgetary deficit, but there must be a longer strategic plan. How does Dr. O'Dwyer see that shaping up? When it comes to the future of Teagasc and Irish agriculture, how does he view investment and development? It currently seems somewhat negative, since cutbacks are being made everywhere. However, there will be a need for investment and development. What kinds of developments will be most significant, and what investments does Dr. O'Dwyer foresee?
The final and key question is: on the longer-term strategy for all those issues which I have raised, how does Dr. O'Dwyer see Teagasc relative to the future of Irish agriculture and its requirements when delivering a product to the Irish farming community, research and the food industry? Is there any possibility of interaction with other agencies? I am thinking in particular of his role in interacting with staff in the Department of Agriculture and Food and whether there will be any exchanges or links between Teagasc staff and the Department. At European level, will there be an exchange of staff, particularly in the research area?
I may have one or two supplementary questions later.
I thank Dr. O'Dwyer for his presentation this morning. Like other committee members, from a previous briefing here I am quite alarmed at the effects of the proposed reductions on rural viability as well as the wider farming community. The role played by Teagasc in advisory, research and training services has been beneficial to agriculture here. At a time when it is most in need of such help, the present cutbacks will affect its development. It is fair to refer to the commendable role Teagasc has played and now what has to be done will have an adverse effect on the development of agriculture. Those of us who come from rural constituencies are well acquainted with what I am saying.
My first question on the advisory and training services capacity, is: what will the overall effects be on the agricultural community and, in particular, on new people entering the farming sector? On the closure of research centres, what effect will this have on the programme previously envisaged by Teagasc? The submission states: "Some smaller advisory offices currently leased by Teagasc are being considered for closure". Members would wish to be informed about the offices contemplated for closure. The phrasing in that statement is somewhat ambiguous. We should like to know precisely which areas are being targeted. Among the offices identified by Teagasc for closure are those in Manorhamilton in Leitrim and Bailieboro in Cavan as well as the research centre in Ballinamore. That region in particular has been hit very hard. I am talking in an all-Ireland context, with areas quite close to the Border - that could be beneficial on any basis - earmarked for closure. I should like to know what the effects of these closures will be on the development of an all-Ireland agricultural strategy.
On the cuts in the last budget and their impact on Teagasc as an organisation, I noted from a previous presentation that part of the funding to maintain the service at an optimum level involved the sale of assets. What happens when there are no more assets to sell or is this a progression that is going to lead to the further erosion of the services Teagasc provides to the farming sector? If assets must be sold to maintain some type of service, because there has not been any provision for increased spending in the budget, it looks as if the current situation will continue. Will Dr. O'Dwyer address this issue also? I would like to thankTeagasc for its presentation.
I would like to welcome the representatives from Teagasc. On the percentage of funding devoted to research, is it considered sufficient to meet the changes in view of the WTO and CAP reforms currently being proposed? If farming is to survive it is research and technology that will keep it vibrant rather than anything else. The question of the sale of assets was mentioned earlier. Is it envisaged that the current sale of assets will be the final round of this initiative or is the threat of closure at Manorhamilton, Boyle, Bailieboro and other centres to be carried out? To sell off assets where in turn accommodation will have to be rented for advisers and others is foolhardy, especially in the case of Manorhamilton, where there is a reasonable rent yield toTeagasc from a portion of the building that is leased to Coillte. The return from this is probably as good as that which could be obtained from the sale of the building because accommodation would have to be rented, in turn, and this would be foolhardy. The position of the Ballinmore centre is worrying in that it means the worst land in Ireland is now being left without a research facility. Is there a possibility of a further review of this before a final decision to dispose of it is taken? In one sense I say this tongue-in-cheek, because I can see what is behind the Teagasc move. I am also conscious, however, that it is seeking to dispose of the worst land that it owns for research purposes. This is not a good signal for farmers who have to deal with poor land quality and climatic problems. Thank God we did not have them this year, but at other times we have had major climatic problems and Ballinamore made a contribution to helping us deal with them.
I would like to ask one other question: how does Teagasc envisage the viability of the farm unit after the WTO and CAP reforms on the acreage needed for grain production, the milk quota necessary for a dairy unit and the suckler or beef unit required to be viable? I am not talking about subsistence earnings; I am talking about a decent family living. This is something that worries us all: what exactly will be the threshold for viability? No one wants to see people involved in subsistence farming. In view of the current proposals I believe the scale may be beyond the reach of many who want to remain on the land full-time. What is Teagasc's opinion on decoupling? Should there be full or partial decoupling? After all, Teagasc is the advisory body when it comes to research and what is a viable unit.
Deputy Ellis referred to many of the matters I had in mind. I will not ask Teagasc any questions about decoupling. I wish to acknowledge the enormous role played by the advisory service through the years in the development of agriculture. I have to say, however, that as the organisation grew changes occurred. Once an organisation concentrates on a client-based service, the smaller man who needs help tends to be left behind. Heretofore, the service was pitched at the farmer who did not attend meetings or who did not seek advice. Teagasc went into the fields and helped and encouraged such farmers; in many instances, successfully. That changed when the emphasis was put on a client-based service. A certain amount of empire building took place within the body we now know as Teagasc.
I have no great problem with many of the proposed changes because this might mean a return to where the service should be. I would, however, express some concern arising from the mid-term review. Many people talk about agriculture loosely and glibly, and talk it down. There is a vital role for the advisory service to put the case, straight and fair, as it ought to be put. Like Deputy Ellis, I would like to know what the new message from Teagasc is. Has the policy to be enunciated throughout the country by way of advice to the farming community been formulated yet? What development role will take place, taking into account Deputy Ellis's point on the various aspects of farming? What will be worthwhile and what will not?
I am a farmer and I believe in farming. Farming is a tough business. It is not a fine-day business. One needs a certain mettle to stay the pace, but some encouragement is also needed, along with advice. It is difficult to know the right path to take. Farmers will stay in farming if the flagposts are put down. I would not be too pessimistic and say it all has to be commercial farming. I accept there is a role for commercial farming. There is also a need to keep rural Ireland alive. That is the role I want to give to Teagasc as a central aim. That organisation must ask itself how it will assist in keeping rural Ireland alive. When I refer to rural Ireland, I mean its people. There is no point keeping rural Ireland alive for birds, furze bushes, and the type of farming that we call "exotic" farming. We want a rural-based population with advice and development placed squarely at the centre. I would like to know what the thinking of Teagasc is from this point on. There is no doubt that we are facing into a changed scene. Farm leaders have let the system down. Other spokespersons have referred to pessimism also.
How does Teagasc see organic farming? Whether we like it or not we are not too far removed from what some people would describe as organic farming in what we produce naturally. Everything is coming off the land and, by and large, our approach to farming has been quite good. We produce a good product, it is afterwards that we get the problems.
I should like to alert Dr. O'Dwyer to something. If we are to survive we need what he terms as specialist advice. For west Cork, which embraces the area west of Cork city, we used to have a tillage specialist but that service has been discontinued and yet we hear talk about filling gaps. There are gaps that should not have been created. There are sticks across gaps that would be better removed. The Teagasc official in Fermoy is expected to service the whole southern region and, even though he is a superman, he cannot physically do that. Tillage being the speciality that it is, the local adviser is needed, the specialist who can examine a crop. There is a huge gap there and it should be tackled.
I apologise for my late arrival. It is not intended as an insult but is rather an indication of the traffic problems in Dublin.
I welcome the Teagasc officials and agree with what has been said by other speakers since I arrived, particularly the references to the service that has been provided to farmers over the years. That service has been vital. Many farmers are now concerned at the imposition of cost restrictions on Teagasc. They fear that this service may not be as freely available, or at the same standard, as would be required by farmers in the future. Some interesting points were raised in the presentation, such as the filling of only one in three vacancies. How is this going to impact on the delivery of advice services locally, which are vitally important to the farmers? I declare an interest, as I am involved in agriculture. Many of the people in my area find it difficult to meet the advisory staff, particularly when a crisis arises. We now find that the advisory staff are like the Garda Síochána in that their time is occupied with office work when they should be out working with the farmers.
How will the cutbacks on staff numbers impact on the training courses that Teagasc have organised for younger farmers? Those courses made a huge contribution to agriculture. The people who will suffer most from this change will be the small farmers and the poorer farmers. As a result of these cutbacks Teagasc will have to increase their charges significantly. Many of the farmers who depend on the advice of the Teagasc officials are on the breadline at present and the charges may be the straw that will finally break their backs.
I note that €150 million is the Teagasc annual budget. A whopping 80% of that budget comes from public funds, 70% of which is spent on staff, which means only 10%, or €12 million to €15 million, is actually spent on agriculture.
Teagasc has a very important role to play and we should support it in every way as it is vital to the future of farming, particularly as farming will be driven by quality production in the future. I thank Dr. O'Dwyer for his presentation and I look forward to his response to the questions raised.
Dr. O’Dwyer
I will reply to some of the questions and my colleagues will reply to others.
I thank the members for their remarks which seem to be quite supportive. Deputy Upton's first two questions, on the sale of assets, are very closely related. We have not yet received approval for the transformation of what we have realised from the sale of assets this year into covering the current deficit for 2003. We are still continuing our negotiations with the Department of Agriculture and Food, but especially with the Department of Finance. Mr. Beecham may wish to say more on that topic. We are looking at all these elements together under the VER, the voluntary early retirement scheme. We have to provide an option to staff. If staff are willing to live with the process of relocation there is an expectation that there will be a voluntary early retirement scheme. That is an essential part of business. We are not in the business of creating redundancies or making life unbearable for staff. There are circumstances where a voluntary early retirement scheme is essential, and this is one. Associated with that is the nature of the voluntary early retirement scheme with some of its elements being important, because usually with this scheme nobody can be replaced. Once a post goes into that system it is lost.
There are some matters that we are still dealing with and we hope these can be finalised in a short time. In that context, on the question of cross-transfer, it is not that we can move people from the advisory service into research or from research into advisory. Mr. Flanagan might like to deal with the question of how the priorities are established between different areas, given that we only fill one post in three. That is the nature of the cross-transfer, rather than a direct transfer.
I agree with Deputy Upton completely that we are moving into a time when research will probably be even more essential than it was in the past. I do not want to get involved in the issue Deputy Ellis raised on the subject of decoupling. It is quite clear that we are going to need a more competitive agriculture in the future. That means that we have to try to resolve the issue of technology and how we can more effectively use the resources on the farm to help us be as competitive as we possibly can. That demands an increased input into research over time. Therefore, we hope we are going through a short-term phase, which is not just for this year. It is quite clear that we are not going to be that much better off next year. We are looking at this year. I am not saying that this is specifically what the board had in mind when we described a phased basis, but some of the decisions we have taken on the realisation of the sale of assets will happen to some extent next year, rather than this year. We are beginning to look at the two years together in that process.
We will know a great deal more, perhaps in a month or two, about the world trade talks and how competitive we need to be in the future. That will determine the people's capacity on decoupling and the reliance directly on the activity on the farm in terms of the marginal impact on people's income. It will mean an increasing investment over time. In the short-term it will mean a tightening of the belt but in the longer term it will require greater investment.
Deputy Ferris asked about the impact the cutbacks are likely to have on the advice and training services. The training service is such that it is indivisible. Some of the colleges are not run by Teagasc. If the training college exists, it exists. If courses have to be provided, they will be provided. There is not much room for manoeuvre. There is more room for manoeuvre within the area of research and especially advisory. The objective of the rationalisation programme on the advisory service, which is very important, is to improve the advisory service, not to reduce it. The advisory service has to provide the service.
Already this year the board has allocated funds, and management is in the process of investing it in information technology. The advisers must have the information technology available to them and must have a back-up service. It will not be possible to provide a back-up service to an office with a single adviser in that accommodation. Effectively a group of people need to work together if broadband, knowledge, and know-how is to be provided to equip the advisers. To keep up to speed with some of the better farmers they need that back-up facility. The rationalisation programme is a rationalisation programme and it does not necessarily mean a reduction in services all over the place. The board and management, so far as they are concerned, would like to believe, to the greatest degree possible, we can maintain all the essential services in the programme. That gets rid of the other element - that we are not selling assets for the sake of it.
We had a lengthy debate on where we needed to keep the resources. Some of the resources had run out of time in terms of their effectiveness. The areas we decided we could sell off, such as Clonroche, Lullymore and Ballinamore, were ineffectual in the provision of services. I spoke to serious people in farming from Ballinamore and they said quite clearly how much Ballinamore has contributed to them and to the actual use of their resources on their farms in the past ten years. It had become ineffectual. Some of the elements from Lullymore will be moved to other places and similarly with Clonroche. That is the way we went about our business. We did not go about our business just by saying we have some assets and we will sell them to generate the funds. We wanted to look across the board to see where we could generate money in the context of a cost-savings this year but at the same time to effectively maintain all the services to the best of our ability. That is particularly the case with the research centres. On the advisory offices, we have made a decision on a number of them. Deputy Ferris spoke about a list but there is another and shorter list. The board has given responsibility for rationalisation of the advisory service to management. There is one office in Cahir, where I live, which is part-time. That is not the kind of service that will be of benefit to farmers in the future. As Deputy Upton said, one has to have the research to support the advisory service. It is difficult to have communication between the advisers and research if an office is staffed part time by a single officer. Rationalisation means much more than just closing offices. Perhaps I can leave my remarks at that and invite my colleagues to respond to the remainder of the questions.
Mr. Jim Flanagan
I will try to fill in a few of the gaps in the answers given by our chairman. Deputy Upton asked about the position of contract staff. Unfortunately, in Teagasc the funding in recent years has been on a contract basis and we have taken on staff for limited duration projects that have been funded. The expectation of some of these staff was that the contract could lead to a permanent post in Teagasc. One of the realities of the funding shortfall and the decision to fill only one post in three is that the expectations of some of the contract staff have been dashed to a degree in that the opportunities for them to get permanent Teagasc jobs is much less now than was the prospect some time ago. Teagasc feels that those who work in the research area on contract gain valuable training and are a resource for the agri-food industry, for the food companies and the research companies. If the hoped for increase in research and development investment by companies generally takes place, these people are a well trained resource that could be used. We accept the contract staff in Teagasc feel aggrieved they cannot get permanent jobs in research in Teagasc.
We were asked about the percentage of funding that goes into research. In the Teagasc budget more than 40% is spent on research, a little less than 40% on the advisory programme and 20% on the training programme. The current policy is that the balance in that mix is about right. Some argue that into the future research will become more important. Others say that continuing advisory services is important. Teagasc is committed to meeting demands in the area of training. Given the reduction in the number of farmers and the importance of the farming sector it is expected the demand for training will probably be less. We are fully committed to meeting any demand. For example, this year, we will try to meet the demand of those who apply for and want to go on a training course in horticulture, agriculture, or some of the areas related to the rural sector. However, it is an area we expect will get smaller over time rather than expand.
A question was asked about organic farming. Teagasc sees a future for organic farming but on a relatively small scale. Organic farming requires extra costs in production and this has to be compensated by the increased cost of products. A small section of the community will pay the extra cost to obtain the organic products. We see a demand for a small amount of organic produce but the size of that sector is difficult to predict. At present it is about 1% and it may grow to 2% or 3%. It will be a slow growth. Teagasc is fully committed to meeting demands for training and advice. We have developed the college in Athenry as an organic demonstration and research centre. We have an organic unit in Johnstown Castle in Wexford, a tillage unit in Oakpark and we have appointed in each county one person in an advisory capacity with particular responsibility to meet any demand for advisory services in organic farming. We are set up to meet existing demands but we believe the sector will continue to be a small part of the total agriculture economy.
Questions were asked about specialist advice. Teagasc has a policy of trying to meet demands for specialist advice. Unfortunately, if only one post in three is being filled, we have to prioritise the ones we fill. Reference was made to the fact that a tillage adviser in west Cork retired recently and that post was not immediately filled in this prioritisation process. In the short-term at least, we are trying to meet the specialist advice in the west Cork area from Moorepark but each time there are posts to be filled, we examine the various demands and it may be that that post will be filled in the future if the current arrangement proves unsatisfactory.
Mr. Beecher, do you wish to contribute?
Mr. Jim Beecher
I did not intend to, Chairman, because I am probably seen here as having a double role in that I am a director of Teagasc but I also work in the Department of Agriculture and Food dealing on the Teagasc Vote and such areas. I will deal with the area of capital to current expenditure as that aspect was side-stepped, so to speak, by the Chairman and by the director of Teagasc. Members might be anxious to get a reply to that question, especially those who are working in Teagasc.
There is a general reluctance within the system - the Department of Agriculture and Food and the Department of Finance - to convert current expenditure to capital expenditure. It goes against everything people strive to do. However, situations always arise where that is necessary and desirable in the interests of the organisation, and certain provisions have to be made for it. From discussions we had with the Department of Finance, however, it appears there is a reluctance to use the proceeds of the sale of an asset directly for current expenditure. The Department is always willing to use it for reinvestment in capital and also for restructuring of an organisation.
There is a strong possibility that it could be used to fund the voluntary early retirement scheme, for example, because that would be regarded as a long-term investment in the organisation and a restructuring. Capital achieved from the sale of offices could be used for the purpose of building new offices or the improvement of existing accommodation. We will have to find other imaginative mechanisms from the Vote to try to deal with other deficits that arise. While voted money may have a capital tag on it, it does not have the same attachment to it for capital purposes as it is not the proceeds of capital, although it is ear-marked for that purpose, and we are negotiating on that basis.
On the voluntary early retirement scheme, originally we submitted a proposal to the Department of Finance that Teagasc submitted to us following discussions. Obtaining sanction for a voluntary retirement scheme is difficult in many circumstances, as the members are aware, because it has severe implications across the public service. Generally, it can be achieved if staff are not being replaced - the whole idea being that we are shedding staff - but in this situation Teagasc is using it as a part of a restructuring process, to facilitate the movement of headquarters or the closing down of offices. If, for example, the headquarters accommodation is being closed and all the staff take voluntary retirement, a problem will arise because some staff will be required to take charge of finance although the director might decide to take on this duty. Some staff will have to be replaced because certain expertise will be missing. It does not make sense, therefore, to say we will have a voluntary retirement scheme and all staff can avail of it. The organisation has to be run.
Despite what people may think, Teagasc is not a top-heavy organisation in the strict sense. If one looks at its headquarters and the way it is managed, it is quite thin for an organisation with a budget of €150 million. Our view, therefore, is that Teagasc needs to retain some staff or, failing that, it needs to be able to recruit staff with the requisite type of expertise and have them available. Originally we intended to retain one in six but having considered the matter further, and following discussions with Teagasc, we decided we would need to retain one in three to ensure we had a proper service after the move. That has delayed matters somewhat and, obviously, it causes a problem when we are holding discussions with the Department of Finance about trying to retain staff. We are negotiating, however, and we are very hopeful that we will find a solution to this matter by the end of this month. The first office is due to be vacated at the end of September, so the matter is becoming fairly urgent at this stage. In the interests of the staff we would need to have the matter sorted out in the next few weeks.
We will now hear some brief supplementary questions.
I thank the representatives for their replies but one key question has not been addressed. Mention was made of the rolling plan for the next two to three years but what we are hearing now is that there will be no good news in the next budget. How do the representatives see next year shaping up? What do they believe are the problems that will arise and what plans do they have specifically to manage the system for next year? Looking beyond that, for ten years, what role do they see for Teagasc in the future of agriculture? I asked a question earlier about integration. Do the representatives see any possibility for the integration of staff locally between, say, the Department of Agriculture and Food and Teagasc or at a European level? Do they envisage the transfer of staff and the bringing in of additional resources or services from that point of view?
In the research area, for example, there are people on framework programmes which are totally European driven. Do the representatives envisage the movement of staff in the research area, not just on a transfer basis but towards a more structured interaction between European organisations similar to Teagasc and at local level? My key question concerns the position five or ten years from now. I accept the representatives cannot answer that specifically but what strategy is envisaged? I realise external influences will be brought to bear on that over which nobody here will have control but what do the representatives see as the future of Teagasc? From what we hear about budget proposals, the next year or two will not be good. Last year we suffered a fairly significant blow. How do the representatives see the position shaping up next year?
What research has been done on what will be considered a viable unit? I ask that question in respect of dairying, suckling and grain. I ask it because some people are in limbo and they have no information about what will be considered a viable farm unit in terms of production size. It is important that if such research has not been done, it should be done immediately so as to provide people with that information which will inform them on whether they should be planning their future in farming or as part-time farmers with off-farm employment. That aspect needs to be clarified. It might be a case of being cruel to be kind but there is no point in a full-time farmer giving ten years of his or her life that they could have given to off-farm employment or other training which would allow them to make a reasonable living. I ask the question not to make life awkward in terms of the outcome of CAP reform or the way the representatives see that developing.
I did not get an answer to part of a question I asked concerning the smaller advisory offices currently being leased. Will the representatives give us an indication of the areas they are speaking about?
I welcome the chairman, the chief executive and the assistant secretary of the Department of Agriculture and Food. What effect will decoupling have on the advisory service in terms of the need for and the availability of production research, which is one of the areas that must be given priority? Total decoupling has been mentioned, which will probably affect the Portlaoise and Castlebar offices and many people in the Department will be in difficulty. The advisers have always been important, especially on the production side and most of those involved in Teagasc are usually advised on the technical side of research, for which there is another name that does not come to mind. As I said at a meeting of this committee four or five months ago, never was the need for production research more important, in spite of what I said about decoupling.
I agree with Mr. Beecher that adjustments must be made in the economy and that we must cut down on our waste. I recognise the role the Department of Finance plays in deciding how resources are spent.
I asked a number of questions at a meeting of the committee last February or March, which have been not been answered. They concerned the leasing of land, whether that is the right direction to be going in the current climate, the cost factor involved and how can leasing be recognised as the right direction to be taking while justifying cuts in other areas, which perhaps were not necessary, and as a result of which people suffered. I do not want to be parochial but I understand that further change has taken place in Moorepark in the past week. It is now planned to go into grain in Ballyderown and part of the dairy sector is to be transferred to Moorepark on the Kilworth side at a great cost. What is happening in the area of grain? Is grain being transferred there for research on trails and will they all be transferred there? May I be briefed on that, as I was asked that question in recent days?
I was a little taken aback to hear Mr. Flanagan indicate that he had not appointed an adviser in the specialist area of grain growing, which is very competitive - even though this year has been a good one - in the west Cork area, and that this area was been serviced from Moorepark. The advisory service is the one that will be attacked mostly. There is little value in spending too much money in research when agriculture is going in a different direction. Advice is important to farmers. Production research is probably a thing of the past as is some of the technical research. All the resources of Teagasc are being spent in that area to the disadvantage of other research. I would like the representatives of Teagasc to elaborate on how that can be justified?
I do not know if the support from Deputy Ned O'Keeffe for the request for what he called west Cork is support for me. I had already raised this issue. It relates to Cork west - let us be clear about that.
I thank the director for the partial response he gave to my question and he might reconsider the matter. It needs to be reconsidered as it is critical. It concerns Cork west, not west Cork; the area from the city westward.
I will not argue about the geography or the technology of it.
It embraces the whole region south of the city and westward into west Cork, which is a large tillage area in respect of which there is a need for specialist advice. I raised this question in response to which I got a partial answer. I thank the director for that and ask that he reconsider the matter. I want the appointment to be seriously reconsidered and made.
He will have to look over the accounts again.
Dr. O’Dwyer
On Deputy Upton's question on the plan, we are beginning to consider 2003 and 2004 together. We do not yet know the budget for 2004 nor anything like it, but we do not expect it will be much of an improvement on 2003. The decisions the board has made, and management are implementing on a phased basis, mean that inevitably some of these elements we have been talking about in 2003 will occur in 2004. Therefore, we might be able to fit the two together in some way. I learned something here from Mr. Beecher. I was very pleased to learn that we are making real progress; he told me that before but he was more specific today. That is an essential part of 2004 because the impact of that will begin to be seen in 2004 rather than in 2003.
On requirements in the future, I wish to point out to Deputy Upton that, as I indicated in my opening remarks, I believe there will be a higher rather than a lower demand for research, advice and training services in the future in spite of the fact that the number of farmers is decreasing.
On the use of technology - I differ a little from Deputy O'Keeffe on this - I do not believe we have completed the work on production research or answered that question. Since I became chairman of Teagasc what has surprised me most has been the level of attendance at the annual dairy conference. Farmers from all over the country attend it and they are not interested in policy or politics but in technology. They want to know about information, which is the role of research and specialist advice. They want to know what information the organisation can provide to facilitate them in improving their income from a technical point of view. If we had all the answers to the questions, we would not need to do that research. That is the direction in which we are going.
Similarly with regard to the advice issue, we are not yet clear about what will be the outcome of CAP reform. I am referring to CAP reform as distinct from the WTO in terms of the cross-compliance obligations that arise and how that will be fitted in vis-à-vis the responsibilities of Teagasc from an advisory point of view and the inspection responsibilities of the Department of Agriculture and Food. There are some elements that need to be clarified. Perhaps I do not fully understand this, but in terms of cross-compliance vis-à-vis environmental issues, we must understand more clearly what is going on in that context. Perhaps Mr. Beecher can enlighten us more on that.
On Deputy Ferris's question, Mr. Flanagan can tell him about the smaller offices that we are examining. We have a list of those around the country. They are not confined to any particular area.
On Deputy O'Keeffe's point, I cannot add anything to what I said about the decoupling issue at this stage. We have to get some further information on how we will be involved in the future.
If decoupling is introduced in its entirety it will change everything.
I ask the Deputy to allow Dr. O'Dwyer to continue. The Deputy can ask a further supplementary question later.
Dr. O’Dwyer
The introduction of decoupling will increase the demand for information. It will increase pressure on agriculture to perform in a competitive way. The extra income or farm premium will be whatever it will be. What a farmer can have an impact on is what he can produce from his own resources. That will mean an increasing demand for information on how to use those resources from a research and advisory point of view.
Farmers may not produce anything.
Dr. O’Dwyer
That is not how people see it. Many people say that farmers will not produce anything but I do not believe that.
With regard to the leasing of land, it must be appreciated that when we leased land for some of the dairy research programme, there was a return on some of that land in that it earned some cash. It is not all a matter of paying for the lease, we get some return on it. Perhaps Mr. Flanagan would like to deal with that matter. On balance, there are some changes and we will be able to tell the Deputy what those are.
Mr. Flanagan
Deputy Upton asked about changes in staff. Under the Act, Teagasc has a remit in the area of providing advisory, training and research services. The Department of Agriculture and Food controls matters. Therefore, the areas of work in that sense are quite different. I do not foresee any integration of the Department staff with Teagasc staff given that the roles are different. Teagasc sees the need for closer collaboration with the third level sector in agriculture and food research and we will have talks to that end. University College Cork, for example, collaborates well with Moorepark and we foresee more collaboration between the Teagasc centres in the Dublin area and University College Dublin or some of the other third level institutions. Where it is of mutual benefit to both institutions, co-operation in the research sector will develop.
In the European context, the sixth framework programme contains a strong intention to develop what is called the European research area. It seeks to bring about co-operation between national programmes in research across the member states. Teagasc is beginning to participate in various discussions as to how this idea of a European research area may be put in place. That could well lead to more integration of Teagasc's programme with similar programmes in other European countries.
A question was asked about Ballyderown. We have been milking cows in different areas in the Moorepark complex and, in an effort to bring about efficiency, it has been decided that the cows on the Ballyderown farm will in future be milked with the main herd. That means there will be only one set of milkers, one set of overtime payments and so forth. That is an efficiency measure. Concurrent with that, the Department of Agriculture and Food asked us to provide facilities on which it could carry out cereal variety trials and we have made a small amount of land, approximately 50 acres, available to the Department to do that. That is the cereal activity that might be seen in the Ballyderown area. Essentially, we are reducing the number of herds we milk by one and facilitating the Department of Agriculture and Food.
From Teagasc's perspective there are two regions in Cork. One is Cork east and we call the other Cork west. A question was asked about smaller advisory offices but the Deputy who asked it is not present. Should I answer it in his absence?
Yes.
Mr. Flanagan
The management of Teagasc has been requested to examine the smaller Teagasc offices that are leased throughout the country. There are a number of these offices in some counties. They are generally offices where there are either no permanent advisers or just one or two permanent advisers. We have such offices in Donegal, Mayo, Galway, Cork, Kerry, Tipperary and Leitrim and we are considering whether it is justified to keep some of them open in the future.
My second supplementary question has not been answered.
Mr. Flanagan has not yet finished.
Mr. Flanagan
A question was asked about what constitutes a viable unit. In the future, with greater freedom to farm, farmers will have to make that decision based on the costs of production. Teagasc has carried out research on production costs and has a good idea of the range of such costs. We can give the farmer a good idea of what his costs should be. On the other hand there are prices and Teagasc, no more than anybody else, cannot determine what future prices will be. Last year, people were assuming the price of cereals would be low and there was great pessimism.
That was due to imports.
Mr. Flanagan
This year the price of cereal has probably increased by 20% or 30%. It is difficult to predict what will be profitable or otherwise. It is reasonably fair to say that the size of a unit which will yield a respectable living will be somewhat larger. All the advice would be that the number of hectares of tillage that will be required will be somewhat larger, likewise the number of suckler cows. However, I doubt that even the greatest experts in Teagasc can predict exactly how large. They could offer a good idea if prices are within a certain range but any answer would be dependent on the price of products, and that is unpredictable.
I will allow a few more supplementary questions.
I am sorry I missed most of the presentation. I am seeking clarification about the offices identified for closure, particularly the offices in Tullow, County Carlow, and Wicklow town. I understood these offices had been given a reprieve. Will they be closed?
How much longer can Teagasc continue with beef research in Grange since it is a huge cost on the organisation with little payback either for the farmer or the research centre? Mr. Flanagan said there was a margin on the land Teagasc has leased but it has a huge quota and a huge number of cows. It had that number of cows and the quota before it leased the land. How can he justify the leasing on that basis? With regard to the change at Ballyderown, there is a capital cost involved as well as current costs. What are the capital costs of the changeover? The current expenditure will remain the same.
I am not worried about the closure of advisory offices. It is similar to the situation with garda stations and the need to have gardaí on the beat. The advisers should be out on the farm as well. Advisory offices do not mean much but the work of advisers and their availability do. How many advisers were operating in the service in 2002 and how many will be operating in 2003? Perhaps it might be easier to give the figures for 2001.
Mr. Flanagan
I do not have the figures for the number of advisers in 2001, 2002 or 2003.
Can they be forwarded?
Mr. Flanagan
I can provide them. Essentially, we have been replacing one in three and the number of advisers has been reduced by a few in each of those two years. I will give the Deputy the exact figures in a written reply, if that is acceptable.
Teagasc had a rationalisation plan which included the closure of the 12 offices listed. The Teagasc authority decided to implement that plan in phases and it is currently implementing phase one. The intention is that all phases of the plan will be implemented, including the closures. No office got a reprieve in absolute terms. Some of them got a reprieve with regard to time in terms of phasing.
Is there a timeframe for implementing that section of it?
Mr. Flanagan
We are assuming that the only condition where a reprieve might be considered in the future would be if we got an increase in budget. If our budget in 2004 was restored to what it was in 2002, or 2001, then there would be the possibility of a reprieve. All indications are that the 2004 budget will reflect the 2003 one more than those of the two previous years. On the assumption that that will be the reality, completion of that rationalisation programme in 2004 will be necessary. At present, if I was to guess, I would see us planning to implement that shortly after we find out details of our budget for 2004.
I asked about research in Grange, capital and current costs, leasing and so on.
Dr. O’Dwyer
I will leave the question on capital and current to Mr. Flanagan.
I do not understand the Deputy's question on Grange. Over the past five or six years, Grange has been extremely successful in convincing farmers and so on. The Chairman comes from that part of the country. We had an open day two years ago and an great number of farmers attended. The whole programme on cash from grass, which is run by the advisory service, was backed up and supported by the work in Grange. The work on the combination between Grange and Dunsany, which was introduced by Mr.Flanagan's predecessor, Dr. Downey, with the people producing grass and animals and doing research there while at the same time doing work on the meat quality in terms of what colour the steak is and how much marble there is in the steak is quite extraordinary.
I would like to ask about the scale of the operation and its cost. Farmers have asked me about it.
The Deputy has no respect forthe Chair; he should allow Dr. O'Dwyer tofinish.
Dr. O’Dwyer
As far as we are concerned, there is absolutely nothing wrong with the scale of the operation. We have an efficient and effective advisory service on the Grange production unit and we have an even more effective advisory group on the meat research unit. The two of those groups are working effectively together. I have visited the two and have seen them work together effectively. As Deputy Ned O'Keeffe will know, we lost 20 acres of land at Grange to the new veterinary unit for which we did not even get a thank you. Other than that, there is nothing wrong with the scale.
Mr. Flanagan
The milking facility for the main herd in Moorepark has recently been upgraded. It is now highly automated in terms of recording and has the facility to milk quite a number of additional cows. I have been assured that any upgrading, or extension, of it will be at very modest cost. I do not have an estimate but I am assured that there may be talk of lengthening the parlour by a modest amount. It has the ability to take a number of additional cows.
How did Teagasc buy the additional quota? Was it because of the leased land? Did Teagasc get a quota with that? Mr. Flanagan said the unit produced more milk and that is an interesting point.
Mr. O’Flanagan
We milk about 100 cows. That incurs the cost of extra milkers and of milking on Saturdays and Sundays. We have the ability to milk those 100 cows as part of the main herd where we only employ one set of milkers. One may have to extend the milking time by a half an hour but we have the ability to milk the cows there. We save one set of milkers and one milking operation by milking all the cows in one place. The ability to milk them in one place has been facilitated by the fact that we have upgraded that parlour, have introduced more automation and we are planning to realise that efficiency.
From where did Teagasc get the additional quota? Mr. Flanagan mentioned that he had more milk.
Mr. O’Flanagan
I did not say more milk. We plan to milk the same number of cows and have the same amount of quota. We are physically changing the place where we milk these 100 cows.
I am delighted Teagasc is upgrading the facility and introducing more modern technology in the milking area.
I thank the three representatives for their presentation and for answering questions asked by members. We talked about Grange and I thank the officials for facilitating this committee's visit there. We were well looked after and the facilities put at our disposal were second to none. Many members did not attend that day but I would advise Deputy Ned O'Keeffe, or anybody else——
I have visited Grange.
I am sure Teagasc would facilitate any member of this committee who would like to visit Grange to see the great work being done there. Again, I thank Teagasc for the great work it has done not only in Grange but across the country down through the years. Changes have and will continue to take place and Teagasc is there to work for the betterment of Irish agriculture. On behalf of the committee, I thank the delegation for their attendance.
I have been in Grange on four occasions.
The joint committee went into private session at 12.27 p.m. and adjourned at 12.31 p.m. until 2.45 p.m. on 17 September 2003.