Farm Retirement Scheme: Presentation.

I welcome the delegation from the Department of Agriculture and Food, Mr. John Fox, Assistant Secretary; Mr. MichaelO'Donovan, principal officer; Mr. Gerry Cassidy, assistant principal and Mr. Dan Gahon, senior inspector, who are present to discuss aspects of the farm retirement scheme. The Department's original submission on the scheme, together with the other submissions from the Farm Retirement Group for Justice and the south Tipperary IFA were recently recirculated.

Before asking Mr. Fox to give his presentation I draw the attention of the delegation to the fact that members of the committee have absolute privilege but this privilege does not apply to witnesses appearing before the committee. Members are reminded of long-standing parliamentary practice to the effect that witnesses 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.

Mr. O'Donovan is ill and unable to be with us today but Mr. Martin Crowley has travelled instead.

At the outset, the Department would like to put on record its sympathy for any farmer who is prevented from following his occupation through illness or disability. The case in question is particularly difficult in that it involves a man with a young family who contracted MS in his early thirties and had to give up farming.

To put things in context, it might be best if I first explained the purpose of the early retirement scheme. As many committee members will be aware, the first scheme was introduced in 1994 as one of four measures that formed part of the MacSharry reform of the Common Agricultural Policy in 1992. Its primary objective was to address the two main structural defects in Irish agriculture, namely, the age profile of farmers and economic viability of farm holdings. By allowing older farmers between the ages of 55 and 66 to retire from farming, it has enabled younger trained farmers to take over farming enterprises. Since its introduction nearly 10,500 farmers have availed of the 1994 scheme, while about 2,000 have entered the scheme introduced in November 2000.

Applications under the 1994 scheme closed in December 1999, while the 2000 scheme will extend until the end of 2006. Both schemes are governed by European regulations and are now funded equally by the European Union and the Irish Exchequer. European regulations lay down the requirements that must be met by applicants in order to be eligible under the scheme. In the current scheme, EC No. 1257/1999 limits eligibility to those aged 55 years or over who have not yet reached the normal retirement age of 66 and who have practised farming for the ten years preceding the transfer of their land. In this case the family ceased farming nearly 15 years ago, and as the farmer involved is not yet 55 he cannot satisfy either of these requirements and is not eligible under the scheme.

While the submission before the committee asks that the Department set aside these two fundamental requirements in his case, this is not within the power of the Department. To do so would run counter to the purpose for which the scheme was introduced and would not be in accordance with the relevant EU regulation. In effect, what the IFA's submission is suggesting would require a change in the regulation to extend the scope of the scheme from being purely a structural reform measure to one that also assists farmers who, because of illness or disability, are forced to retire from farming.

The current scheme allows the Department to exempt applicants from specified conditions that they cannot satisfy for reasons outside their control, including illness or disability. However, such exemptions are only given in cases where the applicant is eligible in all other respects for inclusion in the scheme but for some event that prevents him or her from satisfying specified conditions. Each case is dealt with on its own merits and would include, for example, farmers who had not farmed for the full ten-year period preceding retirement because of illness or disability. However, the Department could not under any circumstances exempt a farmer who had not farmed during any part of the ten years preceding the transfer or lease of his land to the eligible transferee.

As the scheme is co-financed by the European Union it is incumbent on the Department to ensure that this provision is exercised prudently and within reasonable limits. In practice, no farmer would be granted an exemption whose farming was interrupted for more than four of the ten years prior to the transfer or lease under the scheme. We have accommodated 28 farmers whose farming was interrupted for up to four of the ten years before retirement, but that is as far as we can prudently go. Essentially, the early retirement scheme is not a social scheme. Its purpose is to achieve an economic objective by encouraging farmers aged between 55 and 66 years who satisfy the eligibility requirements to retire early and hand over their land to a younger qualified farmer.

Finally, the submission mentions the fact that a son of the farmer in question is interested in taking over the farm but that, for this to be viable it would be necessary for his father to get the early retirement pension and for himself to be eligible for premia payments under the national reserve. The important point is that the son's eligibility to premia entitlements from the national reserve is not dependent on his father receiving the early retirement pension. As a young farmer entering farming for the first time, his eligibility will be examined in the same way as any other young farmer in that position, and the status of the father is irrelevant.

The submission may be referring to the possibility that the early retirement pension would replace the income the family is receiving from lessees for their land. In any event, it does not change the fact that he is not eligible for the pension. Neither does this prevent his son from commencing farming. To repeat my earlier sentiments, the Department is very conscious of the difficult circumstances the family has had to endure and has great sympathy for the family. Regrettably, however, it cannot offer any assistance in the context of the early retirement scheme.

I thank Mr. Fox and his colleagues for their presentation and for giving us the opportunity to put some questions to them. On Mr. Quirke's case, I understand the technicalities. Mr. Fox has set them out according to the Council regulations and so on and he stated the Department's belief that it could not defend to the Commission the acceptance of a case such as Mr. Quirke's. However, Mr. Quirke's case is quite exceptional, and I think everyone would agree that there must be a sympathetic approach to dealing with it. Is it not within the gift of the Department to at least put the case to the Council? The Department is making its decision without referring it to Europe at all. I put it to the officials that there is at least a case to be made for bringing it up at that level. I may come back with some other questions later.

Thank you, Chairman, for affording me the opportunity to put questions to the officials of the Department. My first question is the same as the one just put by Deputy Upton. I understand that the Department may feel bound by the regulations but the case of the Quirke family is a sensitive one and their must be other families in Europe who have experienced this situation. We are not alone in this, and it would be only right to bring this case to the European Council as any decisions on it rest ultimately with that body.

My other questions regard the on-going concerns of retired farmers about the future of assets in the form of quotas and subsidies that are attached to their leased farms. The long-term future of the family silver is bound up in the classification of quotas and subsidies and who will hold on to them in the future leasing of land.

I welcome Mr. Fox and his colleagues. I am not very happy with the findings in this particular case. There is no doubt that it is an exceptional case, but it is not wise to rule out a hearing for this case in Europe at this stage. We must have rules and regulations but there are other farmers in a similar situation to Mr. Quirke, a young man who was struck down with a very serious illness. It is a very clear-cut case and should be taken to Europe for examination and very forcibly put. Consider the situation of a young son now very anxious to take up the farming tradition in that area. Today we bemoan the fact that so many young people are not anxious to farm. That is one plus. This family has suffered enough. Every effort should be made in this case. It should be brought to Europe and fought strongly there. Though the farm retirement scheme is basically a good one, there are many other anomalies in it. We all accept that there must be rules. Many aspects have come to light in the life of the present scheme that need looking at. I ask again that the Department see if there is any possibility that this family can be accommodated. The Department should make the case forcibly in Europe.

I join my colleagues in the welcome extended to the Department officials. I acknowledge that they couched their report in sympathetic terms. We welcome that. Linking this report with the one before it, the Department has noted that 28 farmers were admitted to the scheme, people whose farming was interrupted for up to four of the ten years. Our committee members come from 12 different counties. We recognise that the purpose of the retirement scheme is to facilitate the transfer of land, the mobility of land for whatever purpose, enlargement or delivery to a family member or otherwise, in order to continue the use of the land for farming. Yet this case is an anomaly. We are all agreed that Mr. Quirke could not continue to engage in active farming because of his illness.

There must be other farmers in Mr. Quirke's situation so I will not focus entirely on his case. I will focus on the principle of the case. If we accept that the primary purpose of the farm retirement scheme is the transfer of land for continued use in agriculture, Mr. Quirke's family or those in similar situations have no other choice but to do what he did. Consequently, they fulfilled the prime objective. A son, a family member, wants to return to farming. It is likely that in the similar cases we imagine exist, other families have family members returning to farming. If we cannot meet that prime objective, there is something wrong with the scheme.

The Department officials present today recognise the problem and are sympathetic. They must recognise the need to remove the anomaly and recognise the primacy of a family member returning to farming. In this case it was someone who was a child 15 years ago, now returning to farming. There are other such cases. I do not know of any one in particular, but the Department accepts there are a number of them, and cases involving 28 farmers have come through in four years. The objective of the scheme, and no doubt of the Department officials, is to be helpful. I assume the EU officials have the same objective. A strong case should be made to the EU to see this in the way it is presented here today. The Department officials recognise that. We should also note that a small number of people are in similar situations.

I share the sentiments expressed by my colleagues and I join in the thanks to Mr. Fox and his colleagues for attending and for their presentation. As Senator Callanan said, the report is set out in very sympathetic language. Could we go a little bit beyond sympathetic language and get to the stage where the Department might propose amendments to the scheme, and to the EU regulations? When the last presentation was made to us, we were told that some 79 other farmers were in circumstances identical to those set out to us on that day. It is not a massive number. The overall cost implications are likely to be minimal but the hardship for those affected is enormous. I ask the Department officials to consider that.

There is something else I have learned for the first time. I am grateful that the regulation was annexed to the report that the Department officials gave us because Article 10(2) states that "early retirement support may include measures to provide an income for farm workers". That is quite new to me. I was not aware that such a facility was available. Could the Department officials advise us on how the Department has implemented that provision, and how many farm workers have been able to avail of the facility?

I thank Mr. Fox and his colleagues for attending. I regret I could not be present for the presentation but I now have it in front of me. When all of us heard of this particular case at the last meeting, we empathised with the family, and we will try to do something for them. We are aware of a small number of similar cases.

We have been told that it is outside the remit of the Minister to alter the scheme. Has the Minister, or any of the officials, approached the EU seeking a change in the scheme? Have they put the specifics of the case before the EU? If not, will they do so? We will follow up the cases individually. That is essential. We must find out how much the EU knows about this case or about other such cases.

We have heard clearly the message coming from the members of the joint committee and will give serious consideration to their views. As I pointed out in the presentation, we try to take as flexible and open-ended an approach as possible when dealing with such cases, which must be handled sympathetically. We feel we have pushed the provisions of the regulation to the limit for people who have farmed for at least the most part of the previous ten years before reaching the retirement age. The issue involves accommodating people within an early retirement scheme before they reach the retirement age and where they have not been farming for a very considerable period.

Currently, there is an expenditure review of the early retirement scheme under way. There is provision for such reviews in the context of the strategic management initiative in the Civil Service. This review will probably be completed by the end of March 2004. The review will consider all elements of the scheme: if the objectives are the same as when the scheme was introduced in 1994; how effective it has been in delivering on the objectives and if there are any alternatives to the current arrangement. We are looking at all that. In that process we will also be considering certain recommendations and views that came from the independent evaluation of the CAP rural development plan measures, including the early retirement scheme.

To answer a specific question, the Department of Agriculture and Food has not approached the European Commission on this particular case. It has tried to implement the provisions of the regulation in as flexible a way as possible. In light of the committee's comments we will look seriously at where we go from here as regards this case. An early retirement scheme cannot answer all problems. This is a problem case. The early retirement scheme may not be the avenue to sort it out. We will look closely at the situation in light of what the committee has said.

A couple of other issues were raised. The whole question of farmers' concern, as raised by Deputy Hoctor, about what she termed assets, quotas, subsidies in the context of the outcome of the mid-term review. When we came before the committee on 9 July, we indicated that it was expected the detailed rules of the implementation of the mid-term review outcome would be available in the autumn. They are not available and bilateral discussions are still taking place between member states and the Commission. Officials of the Department of Agriculture and Food were in Brussels yesterday discussing various elements that require to be covered in the detailed rules with the Commission. One of the areas to the forefront in these discussions was the situation as regards implications for the early retirement scheme. At this stage it is expected that the draft detailed rules will be available early in the new year. We will have a clearer view then as to what will or will not be possible in the context of the mid-term review implications for participants in the early retirement scheme.

Deputy O'Flynn mentioned the issue of the farm workers and the relevant provision in the scheme. Some people partake in that part of the scheme. I will ask Mr. Gerry Cassidy, with the Chairman's permission, to give the committee some details on that element.

Off the top of my head, it was 15 in the old scheme and there are three people in the new scheme. The purpose is to provide an income for a worker who has been displaced following the retirement of the farmer and who meets the conditions laid down in the regulation and in the scheme. That is basically as much as may be said about it. The farm worker must stop all farm work, so he or she is out of the loop in terms of farming. However, he or she may take up any occupation. Under the new scheme he or she will get in the region of €3,000 per annum up to the age of 66.

I would like to ask Mr. Fox one or two questions. He said he had not approached the European Commission in this case. Is there any reason why he has not done so, given the circumstances? There are approximately 80 similar cases, in all. He said consideration would be given to the views of the committee members and I should like him to explain that?

First, I must apologise for being late. I was in the Chamber at a meeting. Mr. Fox said the Commission had not been approached on this particular case. Is it his intention to do so, as there is no mechanism to deal with it domestically? He said the early retirement scheme might not be the correct mechanism for dealing with this type of case. How can it be dealt with since people are effectively left in limbo?

In response to Deputy Collins, subsidiarity applies as regards the implementation of various schemes. Issues arise every day as regards the schemes that are operated on my side. We probably have up to 600,000 applications in any year for the various schemes for which I have responsibility. If we had to go to the European Commission for every issue that arose, it would not be able to survive from the volume of queries it would have to deal with. We have an early retirement scheme, the provisions of which have been drawn up by the Department in conformity with the European regulation and are acceptable to the European Commission. We try to operate within the confines and the terms and conditions of those schemes. We have to take certain decisions as regards what constitutes eligibility or whatever. As regards disability we have tried to be as flexible as possible in operating the scheme.

In cases of this nature where people have not reached the minimum age of eligibility and do not satisfy the farming activity requirement during at least a period of the previous ten years, we have taken the view that the scheme does not accommodate those particular situations. The Council regulation governing the scheme, indeed, does not provide for accommodating those types of situation. It is a structural scheme aimed at getting older people out of farming and improving the overall structure, farm size, viability or whatever.

We are currently carrying out an expenditure review of the early retirement scheme. We are also considering certain views that came forward in the AFCon independent evaluation of the CAP rural development plan, which has recently been submitted to the European Commission. In the context of the outcome of the expenditure review and the consideration of the AFCon report, we will consider whether changes need to be made to the current scheme that runs to the end of 2006. Any major changes to the scheme can only be considered in the context of the next round of funding, post 2006. Major changes are not up for grabs in the meantime.

On the particular case we have been talking about, we have heard the strong views of members of the committee who feel the Department should act and perhaps link similar cases to it in its representations to the Commission. I will report to my superiors on this and will make the case that there is a strongly held view within the committee that this is what should be done. Careful consideration will be given to this.

Deputy Ferris asked what the answer is if the early retirement scheme is not. I do not know. The Department of Agriculture and Food has responsibility for certain schemes and elements as regards farming, but it is not the only Department with responsibility in this area. Perhaps there are possibilities within the remits of other Departments. I do not have an answer for the Deputy.

Can the committee take it that Mr. Fox will inform his superiors that there is a strong recommendation? At the last meeting every person in this room spoke in favour not alone of this particular case but 79 or 80 similar cases. May we take it that the Department of Agriculture and Food recommendation will be in line with the views of the committee?

The Deputy can take it that I will be reporting carefully on what the views of the committee are. I do not think I can go any further.

I would like to lend my support to the other members. We have met these groups and looked at individual cases over a number of years. We would all like to see it resolved. We have invited Commissioner Fischler to attend a meeting here during the Irish Presidency of the European Union and members can hopefully raise that issue at that meeting. It is so important. I am sure it would strengthen the case being made by the Minister for Agriculture and Food, Deputy Walsh, and his officials if and when it goes to Europe. If Mr. Fischler agrees to attend, the Clerk to the committee will inform his office of the issues to be raised and supply the relevant information. Is that agreed? Agreed.

Mr. Fox has come across very well, to me at least, with his understanding of the problem. However, there is one issue that we want to highlight in particular. The person who is the subject of this case - I am not specifically referring to this case but it and others like it - has not yet reached the official retirement age, and a family member, who is qualified educationally, wants to return to farming. He has to come to the grips with the farming system and be advised by the Department on what he can produce. Unless he is allowed to do so he and his family, and others like them, will be devoid of income. Up to now they had the letting income, but when the farm passes over and as they reach retirement age, they will have no recourse to income. They will be totally dependent on the family member who is taking over, who perhaps will have to borrow, anyway. It may be that they will be dependent on social welfare, but the scheme should be free enough. I am labouring that point and I think we are winning.

I believe Mr. Fox has taken all the concerns on board. I would like to thank him and his colleagues for attending and responding to the many queries raised here today. He is always welcome at this committee. The joint committee has agreed to draw up a report on the farm retirement scheme. Deputy Wilkinson has formally agreed to draw up the report. Is that agreed? Agreed.

The Clerk to the committee will bring forward proposals on the technical details involved for consideration at the next meeting, having discussed the matter with Deputy Wilkinson. As discussed at the last meeting members should correspond with the Clerk on suggestions for inclusion in the work programme for 2004. We will suspend for three minutes to allow the officials to withdraw before our next meeting immediately after this.

Sitting suspended at 12.14 p.m. and resumed at 12.17 p.m.