Irish Cattle and Sheep Farmers’ Association: Presentation.

On behalf of the committee, I welcome Mr. Malcolm Thompson, president, and his colleagues from the Irish Cattle and Sheep Farmers' Association. I congratulate Mr. Thompson on his appointment, late last year, as president of the association. I wish him many years in the position. A good friend and neighbour of mine in County Meath, Mr. Charlie Reilly, held that position for a number of years. I had a good relationship with Mr. Reilly and I hope that the same relationship will continue between myself, as Chairman of this committee, and Mr. Thompson and his association.

Before asking Mr. Thompson to commence his presentation, I draw to the attention of witnesses the fact that while members of this committee have absolute privilege, the same privilege does not extend to witnesses. Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House, or an official, by name in such a way as to make him or her identifiable.

Mr. Malcolm Thompson

I start by taking the opportunity to thank you, Chairman, and the rest of the joint committee for the kind invitation to address you. As the newly elected president of the ICSA, I am pleased to get this opportunity so early in my tenure. This also applies to my colleagues, many of whom have been newly elected to their posts.

I intend to discuss the ICSA's views on the topic of "agriculture moving into a post-decoupling environment". I hope we can use this opportunity to share with you some of the thoughts and ideas that we have on this important subject. It is significant that we are here at all to discuss the issues relating to a post-decoupling world. The last time ICSA representatives addressed this committee was in January 2003, when the ICSA's focus was on the reasons decoupling was the way forward. At that time, the then ICSA president, Mr. Charlie Reilly, was out on a limb as many members of the joint committee will recall. That meeting was just over a year ago but when we consider the developments since that time, it almost seems to have taken place in a different era.

The ICSA stood alone in arguing that full decoupling was what farming needed and what farmers wanted. A short year ago all other farm organisations pledged that decoupling had to be opposed to the very end, that it would be the ruination of livestock production and that farmers would end up playing golf. Many criticised the ICSA at the time but there were a few exceptions. I acknowledge the fact that a number of members of this committee supported our views and we have not forgotten their contribution.

In the subsequent months, the ICSA was able, through a campaign of lobbying, to build up a much greater wave of support from elected representatives. By early summer last year, the logic and accuracy of the ICSA's position was beginning to be accepted. Teagasc's FAPRI analyses continued to show that decoupling made more sense economically. The first FAPRI report, announced in January, was criticised - wrongly in our view. However, a further report issued in May, which took account of WTO threats, still came up with the conclusion that decoupling was the way forward. As the summer progressed we watched as other farm organisations moderated or completely changed their anti-decoupling views.

The ICSA was represented throughout the CAP reform negotiations in Luxembourg in June, and I was fortunate to be present at the meeting when the deal was finally struck after three weeks of apparent stalemate. The outcome allowed EU Ministers the flexibility to opt for varying levels of decoupling. The ICSA was pleased that the Minister for Agriculture and Food, Deputy Walsh, opted for full decoupling in October, in line with the ICSA's submission made to his Department at the end of August.

My reasons for recalling the synopsis of this recent history is to establish one key point: I am here as the leader of an organisation that has earned its credibility the hard way, against all odds. I am proud to put forward the ICSA's views in the knowledge that committee members know, and the evidence is clear-cut, that the ICSA has earned its right to represent farmers, is in touch with the grassroots, is not an organisation of theory but of practice, is economically literate and, above all, that the ICSA understands Irish agriculture and Irish farmers.

At this time, while our strengths, credibility and economic literacy is clearly evident to farmers, Department negotiators and Members of the Oireachtas, the ICSA should no longer be outside the social partnership and, accordingly, no longer excluded from every committee set up to discuss and evaluate the future of farming. This matter will have to be addressed immediately because the ICSA deserves parity of esteem.

I will now move to the topic of agriculture moving into a post-decoupling environment. We note that other EU member states have made different choices and that is their right, but we are pleased that Ireland has gone for full decoupling, and I believe that the Minister has made the right decision in this regard. We still need to think carefully, however, about what strategy we put in place to ensure the future of farming in this country. The new decoupled environment requires a complete re-think of many of the old practices and ideas. It requires that we get the details of implementation correct and so a new strategy is required.

The ICSA believes that the key components of this strategy must be as follows: 1. getting the single payment details right and optimising its benefit for as many farmers as possible; 2. being innovative with the modulation money with a view to targeting vulnerable sectors; 3. ensuring that the CAP reform is properly recognised at WTO level and fighting the wrong notion that the poverty and misery of the least developed nations is due to the support of the EU model of multifunctional agriculture; 4. stimulating a revolution in the relationship between meat processors, farmers and retailers; 5. market development; 6. creating a level playing pitch in terms of the regulatory environment; 7. minimising costs and maximising efficiencies relating to every facet of farm production; and 8. ensuring that the rural economy is diversified, while being realistic about the limitations of part-time farming as a solution.

This is an arduous challenge and I would not pretend that it will be achieved easily, but the difficulties must not be allowed to prevent us from trying to meet the challenge. First we need to maximise the benefits of the single payment and this means trying to ensure that everybody gets a fair crack of the whip. From an ICSA point of view, the key issues are: young farmers, farm inheritances and transfers, matching land availability to entitlements/stacking, forestry, compulsory purchase orders,force majeure cases, and de-stocking in the western counties.

It is fair to say that, in general, Irish farming is being well served by the efforts of capable key officials in the Department, who are negotiating these details at EU level. Their expertise is acknowledged and their co-operation and efforts are much appreciated by the ICSA.

Having dealt with the immediate issues, the next task will be to use the modulation money effectively. The ICSA is currently debating how best this might be achieved. One of our key concerns is to promote quality breeding in the suckler herd, while securing the livelihoods of suckler farmers. Our suckler committee is proposing a number of uses for the modulation money. This involves improving breeding in the suckler herd. One idea is to support a programme of breeding improvement in conjunction with the Irish Cattle Breeding Federation. In this scheme, farmers who participate in the recording of animal events and have their herds assessed on a visual scoring basis would be given a grant. The second idea is to reward farmers who breed calves that eventually are graded E or U, or R for Angus and Hereford specialist producers, by means of a grant paid to the breeder as identified on the cattle identity card.

We are also concerned about the future of sheep farming and we will be devising schemes to help sheep farmers get some modulation money as well. We are especially concerned to help hill sheep farmers who are a valuable asset to us. It would be appropriate to consider a special extra REPS payment for hill farmers who were de-stocked. I know that REPS has been reviewed recently, but that review took place in a different context and we need to ensure that we maintain farm families in hill areas.

On the World Trade Organisation, the issue is hanging in the balance. Members of the committee will be aware that WTO talks held in Cancún in September failed to reach agreement. I am concerned that EU agriculture has been held up as a sort of whipping boy. The reality is that some development and charity aid groups have been led astray by the multinational business interests who just want to source food raw materials wherever on the planet they find it cheapest to do so. However, if one looks deeply enough at what they are saying, one will realise that nothing short of putting EU farmers out of business would placate them. The EU has already made offers to reduce substantially the level of import tariffs by an average of 36% and export subsidies by 45%. It has de-coupled direct payments, which means that the principal component of EU farm support is non-trade distorting. In practical terms, the EU is already the world's largest importer of agricultural produce, importing €60 billion in 2002, the majority of which came from developing countries. Its "Everything But Arms" initiative means that all produce, except arms, from the 49 least developed countries can come into the EU tariff free.

What I want the members of the committee to understand clearly is that they, as members of the Oireachtas, must defend EU agriculture. They must encourage the Minister for Agriculture and Food to continue to take a strong line, as he has done, on the fact that the EU has made many concessions on agriculture and that there is no more room for manoeuvre.

While it is easy to blame agriculture for Third World problems, the fact is that it is South America, Australia and New Zealand who stand to benefit most from any concessions on beef and lamb. In countries where malnutrition is a major issue, it hardly makes sense to suggest that they can solve their problems by exporting food. This food is badly needed in their own countries. The least developed countries have far greater problems relating to AIDS, debt relief, access to medicines, etc.

We all know of the problems of the past in the relationship between meat processors and farmers. ICSA has always put forward the analysis that the old premium system simply facilitated the exploitation of cattle and sheep producers, but in a post de-coupling era there will be no compulsion on farmers to produce and this is good in our view. It is now high time for retailers and processors alike to realise that if they want beef then the farmer must be paid for it, and paid a price that will ensure profitability in its production.

In this context ICSA has had discussions with a number of players in the processing industry. There are some positive points emerging. First, Europe is no longer 107% self-sufficient in beef, as it had been traditionally. In fact we are now entering a period of a slight shortage of beef in Europe. This means that farmers will be in a somewhat improved position. However, more heartening is the fact that processors are telling the supermarket chains that they will have to pay more for beef if they want to buy it.

ICSA believes that farmers need more security. This requires that in the future meat factories will have to enter into contracts with farmers with guaranteed minimum future prices for beef. In a post de-coupling era, farmers will not tolerate large losses as a result of sudden price slippage. Critically, suckler farmers will not calve cows for peanuts and they simply will not produce high merit beef unless they can be assured of prices similar to those to which they have become accustomed. This means that the days of 90p benchmarks for beef are over.

As for winter finishing, this high cost business will have to be supported by extra price bonuses in the spring, if we are to avoid a return to the seasonal production of beef. While seasonality could be managed in an era of intervention, APS and a high dependence on international markets, it simply will not work if we want to build a secure future on the shelves and tables of Europe. We need continuity of supply to build a presence on EU markets.

Post de-coupling, we need to re-double our efforts on marketing. We have a desperate need to sell our beef and lamb at top price across a variety of EU niche markets. More support should be directed at initiatives taken by Hereford and Angus breeders to sell their beef as a specialist product. I am convinced that we need to squeeze more return from high priced markets such as Italy and Spain. More attention should be paid to Scandinavia and Holland. All of these outlets are critical to ensuring the viability of the suckler farmer.

Above all, we must fight for the right to sell stock to the entire EU as live exports. I want to make one point in this regard. Live shippers opened up many markets, in Spain, in Italy and right across the EU with very few requests for public money, but at present they are hindered by the uncertainties and insecurities of shipping direct to the Continent. It is time to push to allow Irish stock transit the UK en route to the Continent. This would offer many safeguards that would allow the sale of stock to other member states. There is a market for Irish weanlings and we must protect it. Crossing the UK is a much less weather dependent route and need not be a problem in this era of traceability.

In addition, we remain concerned about the EU mindset that tried to abolish staging posts. Fortunately Ireland makes a strong case that staging posts are actually pro-animal welfare and tie in with driver restrictions. We continue to be vigilant against ill thought out pandering to the animal welfare extremists. Nobody is more pro-animal welfare than the suckler farmer. Nobody who gets up in the middle of the night to calve a cow or tend to a sick calf wants to see animals treated badly. One needs to remember that.

Apart from shipping restrictions, we are concerned about many things in the regulatory environment. It is the case that Irish food production, especially at farm gate, is heavily regulated. This is as a result of EU regulation, to which the Irish have taken a particularly rigorous approach. In a post de-coupled environment we need less, not more, red tape. In a post de-coupled environment we need greater streamlining. I accept the need to ensure absolute consumer confidence but I am concerned that the playing pitch is not yet level. For example, we recently met the Department for a briefing on animal medicine controls. This was against a backdrop of tighter EU controls being proposed by Commissioner Byrne.

Broadly there are two points of concern on medicines. First, if antibiotic resistance in humans is a worry, then effective measures must take account of the fact that the consumer is eating products imported from countries which have far less stringent standards. Second, on routine animal treatments such as worm doses Irish farmers are paying far too much and far more than their international counterparts.

There is then the nitrates framework. The focus of debate under the nitrates directive is around the nitrogen application limits. However, for most cattle and sheep farmers the bigger potential problem is minimum storage capacity for animal manure. The implementation of the nitrates directive, as planned, will result in a fall in livestock numbers possibly greater than anything envisaged as a result of the introduction of decoupling.

In order to maintain cattle numbers at current levels, the ICSA estimates that the vast majority of the 65,000 farmers with slatted tanks will need to increase their manure storage capacity by over 20% in order to achieve the 16 to 24-week storage time. Other farmers will have to build new facilities to come into line with the directive. Under the directive, most farmers will also have to erect a separate area to act as a dungsted because farmyard manure and waste cannot be stored on land between 1 October and 16 January. Yet modern efficient farming practice is to move towards extended grazing. This will be all the more important in a decoupled era. In view of the fact that farmers are to be allowed spread slurry from 15 January, there is no need for 20 to 24-week storage. It is inconceivable that farmers who built modern slatted units according to the best advice could now be deemed to have inadequate storage.

All these issues bring me to the next point, namely, that in a decoupled environment farmers must maximise efficiency. How can costs be reduced when new regulations threaten to drive them sky high? Farmers are continually being exhorted to reduce costs. We can only do so much; the rest depends on the decision-makers.

I want to make a few comments about part-time farming. Decoupling offers some farmers the leeway to opt for lower intensity farming, while others may see it as possible to expand with less hassle. Part-time farming has been over-emphasised as a solution to all ills. Many part-time farmers pay a very heavy price, working 77 hours per week. So much for the balance of life and work. What we need to work towards is a viable full-time income for an optimum number of commercial farmers, while ensuring that the smaller, less intensive operators have a good range of employment opportunities within easy commuting distance. Long commuting times are not ideal for anybody, but they are worse again if one is rushing home to start a second day's work. In this regard, I believe that the decentralisation programme is to be welcomed as it offers the possibility of more job opportunities, both directly and as a result of spin-off, throughout Ireland. This will be beneficial to rural development. As a national organisation which has its headquarters in Portlaoise, I know that it can be a success in practical working terms.

I thank Mr. Thompson and compliment him on his long and detailed presentation. People do not usually deliver such long presentations but perhaps the representatives of the ICSA were short-changed on the previous occasion they were here and are making up for that fact today. It was a comprehensive presentation.

I thank Mr. Thompson and his officers for coming before the committee. I congratulate Mr. Thompson and the various section heads on their recent election.

The submission was comprehensive and I will consider it in detail after the meeting. There are many points in it with which I agree because they seem to make sense. However, it always comes back to how we can make farming more viable for the maximum number of people. While we have to have the option for part-time farming, it was a temptation when the economy was going well. However, we must not lose sight of the fact that we must concentrate on full-time commercial farming. We cannot turn farming into a hobby.

I wish to ask a couple of questions in respect of the submission. If our guest do not have the information to hand, I will communicate with them at a later date in respect of it. Mr. Thompson referred to the optimum number of commercial farms. I have raised this matter with a number of farming organisations and Members are tired of hearing me refer to it. We have a dual approach to maximise efficiency and the number of people involved in rural employment and agriculture. One of the difficulties we have had in the past relates to the number of balls we are trying to keep in the air. What should a commercial farmer be? The 2010 document relating to dairying stated that 70,000 gallons would represent viability. A few months later, someone stated that 100,000 gallons was a more likely figure. What would a person who decided to enter farming now need in terms of stock and acreage in order for his enterprise to be viable? I accept that it may not be easy to quantify what is involved.

I share Mr. Thompson's concerns about the nitrates directive. This committee and the Joint Committee on the Environment and Local Government have sought to identify the exact position. Everyone wants to protect the environment and our water supplies. However, we do not want to introduce unnecessary regulations to achieve this. We are trying to establish what is required to protect water supplies without unnecessarily hampering producers. Mr. Thompson stated that there could be a fall in stock numbers. When the decoupling debate took place, one of the issues that arose was that stock numbers could fall. Time will tell whether that is true. How is the nitrates directive impacting on his members?

Mr. Thompson referred to the factories. I understand that there are difficulties with the mechanical grading system that is due to be introduced. Does he have any views on that matter? The Department's inspectors are supposed to be phased out and mechanical grading introduced. However, I understand that it may have run into a logjam. There might be disagreement about costs. Perhaps the factories are seeking that farmers pay a levy in order to cover the costs of the mechanical grading or that the Department should pay.

I welcome the Minister's announcement today that we exported more beef to Europe in 2003 than in any other year. Part of the reason was the way the British market has performed in recent years. This is the kernel of the issue. Mr. Thompson referred to a fair price for the product. Inputs are constantly increasing. Cross-compliance, as can be seen from the nitrates directive, will be the equal of red tape in the future. The difficulty lies in being able to produce something for a fair price. How can politicians or the Government assist in that regard? What we are concerned with is producing quality products. It is difficult for Irish produce to compete with South American or other produce on a purely commodity basis.

Social partnership is an issue we have often raised with the Minister. The ICSA has a large number of members and perhaps it should be involved. Does it have a place at the beef summit established by the Minister some months ago?

I wish Mr. Thompson and his officers the best of luck. It is a difficult job to represent farmers because they can be quite militant. I will not state that the ICSA is isolated but those present have quite a trek to make to Portlaoise. They should decentralise the ICSA to Fanad or somewhere like that.

I welcome Mr. Thompson and congratulate him on his recent appointment. I also welcome his colleagues. He has presented a very detailed and useful document. I hope we can discuss the issues which arise from it later.

Deputy Timmins referred to social partnership. When representatives of another farming organisation spoke to the joint committee recently we asked their view on the suitability of one farming organisation representing all farmers. I would be interested to hear Mr. Thompson's comments on that. That might take him within the fold of the social partnership.

I have been looking at Irish Cattle and Sheep Farmers' Association's website. I compliment the ICSA on the very useful information provided on the website. It includes a comprehensive and easily understood document on the nitrates directive. The association has made very specific recommendations. This is to be welcomed because it sets out the association's objectives and what its members think is important.

I take Mr. Thompson's point regarding the need for and significance of storage. He might elaborate on this. Most of today's debate has centred around amounts and the need for derogation. I understand Mr. Thompson's point about the need for storage, whether or not it is a realistic need and whether or not there are ways around it.

What Mr. Thompson says about part-time farming is important. However, are there not going to be many more part-time farmers? Are there any procedures which could or should be put in place to assist the transition within the decoupling framework? Inevitably, people will have to move towards alternatives. The high risk group will be the small farmers. Mr. Thompson has identified the difficulties they may face in having to work an 80-hour week, which would be impractical and impossible to sustain. Are there other resources or advice to help those farmers who will have to make the transition? The bigger farmers will have more choices. Smaller farmers will have tougher decisions to make. Can they be assisted in making those decisions?

There are two areas which have been in the news in recent times and on which Mr. Thompson has not commented. They are one-off rural housing and hill-walking and access to the land. I appreciate that these are both sensitive issues. Nevertheless, they are very important and must be addressed. I would like to hear Mr. Thompson's views.

I welcome the ICSA delegation to the joint committee and congratulate Mr. Thompson on his recent election as president. I hope you will be forgive me being parochial, Chairman, if I welcome my countyman, Mr. Francis Cusack. I have known Francis for some time and he is an authority on sheep, especially hill sheep. In his part of the county, which is the part I represent, there are problems with REPS and with stocking.

Is it from Castlebar or from Knock?

From Castlebar over. The Chairman would not know about this. There are no hills in the royal county of Meath.

It is good to hear a farm leader talking positively for a change. We hear much negativity and many farm leaders have nothing positive to say about agriculture. I often wonder why they are in it at all. It is good to hear someone talking positively in these times.

I congratulate the ICSA on the association's presentation to the joint committee on decoupling last year. It gave us, particularly Government Deputies, plenty of ammunition when we went to the Minister to tell him that we were fully in favour of full decoupling or nothing. I am glad the ICSA supported that measure and that the Minister succeeded in having it accepted. I believe decoupling will be successful and I congratulate the ICSA on that.

Mr. Thompson has referred to the inheritance of farms by young farmers and the transfer of farms to them. The budget contained a reference to this question and also a reference to land leasing. The measure introduced by the Minister for Finance was positive. The number of years and tax credits were positive measures and I am glad to hear Mr. Thompson mention them.

I fully agree with Mr. Thompson on the question of cattle breeding. I have brought this matter to the Minister's attention on a number of occasions. It is now time for the Department of Agriculture and Food to do away with the passing of three-quarter and half-bred bred bulls at marts. Full pedigree bulls are not expensive and would improve our breeding immensely. The time is long past for half-bred and three-quarter bred bulls. I ask Mr. Thompson to emphasise this point at any meeting with the Minister or with officials of his Department who are responsible for this area, as I have done.

Deputy Upton mentioned nitrates. I have not looked at the ICSA website but I would like to hear Mr. Thompson's views on this matter. The Fianna Fáil parliamentary party is discussing this issue at present.

I, too, congratulate Mr. Thompson on his election as president of the ICSA and welcome him and his delegation to the joint committee.

It is good to hear a down-to-earth, positive presentation from any group of farmers. Perhaps there has been too much negativity from farming organisations over the years. Where the ICSA sees problems it suggests solutions. This is a marked difference from other presentations. I welcome that positivity.

The ICSA's support for decoupling was emphatic at a time when most other farming organisations were against it. Like public representatives, the association heard what farmers were saying. There is not doubt that it was in touch with farmers and knew exactly what was happening. I congratulate the association on that.

Mr. Thompson mentioned involvement in social partnership. His organisation should be involved. However, the question of a single farming organisation arises over and over again. I would like to hear Mr. Thompson's views on that. I believe his organisation should be included in social partnership.

What is the ICSA's view on the nitrates directive? I believe the storage time, as indicated, is not right. If all farmers came out after four months and began to spread slurry the country would be stifled. Considering the weather of the past winter, this issue must be examined carefully. Discussion is ongoing at present and I would welcome Mr. Thompson's views.

I would also like to hear his views on the early retirement scheme and the loss of entitlement to some categories of farmers.

I congratulate Mr. Thompson on his stance on many issues. Above all, his positivity is to be welcomed. Whatever the future holds and whether we have one or more farming organisations, the positivity of the ICSA has certainly brought a new dimension to farming and farming related matters.

Like everybody else, I welcome the delegation from the ICSA. I compliment the president and the newly elected members of its board. I must be somewhat parochial also and follow the lead of my colleague from Mayo by noting the presence in the delegation of a good west Corkman. I know all belonging to him and where he is from.

I will be brief as I missed some of the presentation. I have gone through the circulated document as quickly as I could and I have one or two points to raise. I support fully the inclusion of the ICSA among the social partners. The existence of one strong organisation raises a small doubt. The ICSA was established to fulfil a need for specialist attention to a branch of farming which was being somewhat neglected. I salute the association for taking up the cudgels on behalf of farmers in that sector. There is a question of whether that representation should be encompassed in one mainframe organisation. I do not think it could be.

How am I to interpret points 1 and 2 of Mr. Thompson's presentation? Perhaps a brief explanation can be provided. Mr. Thompson referred to closer links between the processing industry and producers. I have long advocated contract farming production on the producer side linked to processors. Without the establishment of firm links, there will never be a proper, long-term beef processing industry or production. Coupled with that absolute need must be breeding.

As I said previously when the ICSA attended the committee, a beef animal is not simply four legs and a tail. Intervention spoiled the beef industry, but we have gone past that. Mr. Thompson referred to a grant paid to a specialist Angus or Hereford breeder as identified on the cattle identity card. The days of grants for that are over. The best value is to be obtained through well-produced animals with confirmation and good quality beef which is recognised by consumers. Without that, the industry is going nowhere. The delegates may be disappointed to hear me say that, but I must be as straight with its members as they were with the committee. There is no value in grants. Value will come from good breeding of good beef animals. The consumer should be given what he or she wants.

The way to overcome problems is for producers to be linked with the processors. By and large, the processors are difficult people, whether singly or combined, and they will have to see merit in contract producing with specialist breeds and specialist characteristics in the quality beef animal. We must have that or we will lose the home market and fail to access Europe's prime markets. I would like to hear the views of delegates on those points. While they may tell me I am wrong, hopefully they will see the merit in what I am saying.

I wish the ICSA well. The association has led well thus far and I encourage it to continue to do so. It has a positive outlook which is badly needed in farming today. There is too much negativity around, as most people acknowledge. I posed the point to the last farming organisation to attend the committee that we are post-Fischler. There should be no doubt that there will be changes. We all recognise that. I ask the delegates to give some consideration to land utilisation policy at which we will all have to look in five or ten years. We need to prepare ourselves as a green net nation. There will be changes to consider against the background of producing trees and wind energy or growing commodity products for energy. Oil and gas are finite and have only another 30 or 40 years in them. There is no doubt that there will be a need for land utilisation policies which consider these directions.

I wish to be associated with the remarks of members who complimented the ICSA on its positive approach. It is very welcome. I am delighted to see an organisation like this mention two particular breeds, the Hereford and the Angus. There are not too many organisations promoting those animals. God be with the days when we were children and there was nothing else in the fields but Herefords and Angus cattle. We have gone a long way in the wrong direction since then and it is great to see people promoting those animals again. That is the type of beef which is needed. When one gets that beef at a restaurant or from a butcher, one knows the difference.

It is very important to reward farmers for producing beef of this type. In every successive committee with responsibility for agriculture it has been stated that the same premium should not be provided for poor quality beef as for good quality beef. It was a problem down the years that a farmer received the same premium for a good quality animal as for a poor one. It is great to see that there are farming organisations calling for change of this nature.

What do delegates think of the new REPS proposals which have gone to Europe? Other speakers spoke about the nitrates directive. Storage is the serious problem, as other members mentioned. Due to the weather, one could not spread slurry for most of the past six months. It is crazy. Most farmers are very sensible people and they do not intend to wreck our waterways. They will go out at sensible times of the year and spread slurry if the weather is suitable. That should continue. It is not fair to expect farmers to build extra storage facilities, as everybody here agrees.

Certain organisations have come to the committee to discuss one-off housing. I support Deputy Upton's position. I am sure the ICSA is fully supportive of our views. The committee has been united on this issue over the years. It is important that rural people are allowed to live in rural Ireland where they were bred and reared. Unfortunately, there are organisations which do not want people to live in rural areas and some of them are not from those places. There are local authority and planning officials in every county who do not want people to live in rural Ireland. As a farming organisation with representatives across the country, the ICSA will be fully supportive of the committee and everybody fighting to keep rural Ireland alive. If we do not stand together, rural Ireland will die. It is important that we continue to do so.

I ask Mr. Thompson and his colleagues to respond to the points raised. If members have supplementary questions, I will allow them to put them later.

Mr. Thompson

I ask our beef chairman, Mr. Robin Smith from Cork, to reply on the issue of nitrates.

Mr. Robin Smith

With regard to the nitrates directive, the ICSA takes a slightly different view from other farm organisations which have strongly opposed it. We do not have as great a problem with the directive because we envisage that agriculture in the post-decoupling era will be more extensive, natural and sustainable and will produce essentially what the consumer wants, which will not be animals produced in factory-type farms. Instead, it will involve promoting the green image of farming.

Our main concern with regard to the nitrates directive relates to storage. As they stand, the proposals on storage are ludicrous. If we extend the storage time in Cork from 12 or 16 weeks to 20 or 24 weeks, the net effect will be that one will have bigger barrels of nitrates. A date on which people can spread nitrates will be required. Under the current proposals, whereby one will be allowed to spread slurry from 15 January, every tanker will be in use on that date as we have the equipment to move slurry quickly. All that would be required for a catastrophe to occur would be bad weather on that day.

As has been correctly pointed out, farmers in general are responsible. The lobby which is currently pushing for a higher nitrates limit of up to 250 kg represents about 3% of the most intensive farmers in the country who have their own agenda, which does not correspond with our national interests. The greatest difficulty we have with the directive is its provision on storage. We can live with the nitrogen limit it imposes of 170 kg organic. We envisage that the future direction we will take in regard to nitrates will be extended grazing and extensive production.

Mr. Thompson

I ask our suckler chairman, Mr. Frank Kehoe from Wexford, to address the subjects of breeding and farm size.

I am delighted to learn that Deputies Brady and Carty and Senator Callanan have an interest in breeding because we believe it is the way forward. If I have time after the meeting. I will clarify a matter which Senator Callanan may have misinterpreted. We propose that €20 million of the modulation funds, which amount to approximately €34 million net, should be earmarked for suckling herds to improve breeding. The sum we have suggested would be derived solely from the modulation funds.

As members will be aware, farmers have been told for years that breeding should be improved. Unfortunately, however, under the old regime there was no incentive to improve breeding and no carrot was on offer. Members of the committee will be used to discussing large sums of money, for example the amount required to fund benchmarking. In that context, the sum of €20 million we have proposed is peanuts but could achieve significant improvements in breeding at farm level, provided it is not spread around like confetti at a wedding. For example, in conjunction with the Irish Cattle Breeders' Federation we propose that people who participate in a breeding programme should receive some of the modulation funds.

One could preach to farmers all day but their eyes will roll in their heads unless they are offered an incentive. The ICBF has massive potential to improve breeding but a carrot must be offered. Through participation in such a scheme, the ICBF will be able to gather information which it could furnish to farmers. We propose that suckler farmers who participate in such a scheme receive funding. The sums involved may be small but it is surprising what can be achieved with small amounts of money.

A question was asked about farm size and part-time farming. While part-time farming will be a feature of farming in future, as regards quality of life I know young men who should be playing hurling or football on Tuesday or Thursday nights but instead are working in factories all day and working at night on their farms. This does not offer quality of life, nor is it sustainable, and it offers no benefits to communities or the individuals in question.

While it may be sustainable for a person with a small farm of 20 suckler cows and 100 ewes to have another job, it is not sustainable for a farmer with 70 suckler cows and 100 ewes to work outside the farm. Men in such a position will have no quality of life and will be no good to the economy in 20 years. They will be broken by the age of 40 years and will become a burden on the State rather than an asset. My point, therefore, is that while part-time farming has a role, one must be careful in this respect.

Deputy Upton and Senator Callanan raised the question of having one farm organisation. I need to be careful about what I say in this regard. I understand none of the members present is from the Progressive Democrats Party. If, for example, a member of that party were to suggest that one political party would be sufficient to represent everyone, it would be construed as Stalinist. I have said enough on that issue. The cost of membership of our organisation, at approximately €100, is a lot of money for the average livestock farmer who, on average, makes about €10,000 a year.

Mr. Thompson

I will add to Mr. Kehoe's comment on the idea of having one farm organisation. I am both amused and appalled that anyone in this room should give a second thought to such an idea. The notion that one farm organisation could do a job such as that currently being done by the ICSA is incomprehensible. We are living in a time when monopolies are closely monitored and scrutinised and takeover bids deemed likely to be in breach of monopoly rules are not allowed to proceed. This would also be the case were one to have one farm organisation. Thus far, I have to state, perhaps tongue in cheek, that I have not been approached by the other organisations seeking to come under our umbrella and I do not know what kind of reception I would give them if they were to approach me.

Mr. Thompson's organisation led the other organisations anyway.

Mr. Thompson

Yes, we will certainly be the leaders because we are the organisation with originality of thought, which has interpreted the grassroots thinking of farmers. As such, we have rightly earned the place of leadership among farm organisations.

Speaking seriously, the idea of one farm organisation would be counter-productive. Cattle, sheep and suckler farmers have formed a specialist organisation, which is what we stick to and know best. There are no conflicts within our group but where one organisation represents highly diverse areas, conflicts of interests are possible between one area and another.

One need only consider any effectively run organisation or group. For example, to return to Mr. Kehoe's point, the diversity of the political parties in the Oireachtas is the lifeblood of the Houses. If we had only one party, we would be in serious trouble because there would be no one to keep it on its toes.

I will ask Robin Smith to speak briefly on mechanical grading.

Mr. Smith

As was correctly pointed out, there is an impasse in regard to mechanical grading. The factories dragged their heels until funding was put in place. The agreement has been reached but unfortunately the factories are now looking for some funding from the farmers, which is not acceptable - it is not a runner. We already paid factory levies which would have covered the graders' pay and I have not seen the Government or anyone else tell the factories that levies will be reduced. I do not see why we should have to pay on the double for something. Hardball needs to be played with the factories. There is a time limit in regard to the implementation, to which I am not sure how they are reacting. We are fully supportive of the implementation of mechanical grading but it needs to be across the board and pressure needs to be applied by the Government to ensure that happens.

Senator Callanan said he was supportive of us in the social partnership negotiation, on which I compliment him. It is important we have a voice in these matters on a regular basis. In response to the question about what is a commercial farm, it is one which changes from day to day. It depends entirely on the profitability of an enterprise. What is sustainable today may not be so tomorrow. A commercial farm is one on which a farmer works 40 hours per week for a respectable wage and earns the average industrial rate. Whether that involves 40 cows or 400 cows, it constitutes a viable commercial farm.

Mr. Thompson

I will ask our general secretary, Mr. Eddie Punch, to speak to us on the subject of social partnership.

Mr. Eddie Punch

The ICSA has been reformed for a period of ten years. Some members will know its history. It is an old organisation and it got off the ground because beef, sheep and suckler farmers felt they needed a specialist organisation for their specialist type of farming. Like any green field operation, the chances of success were quite small. However, the ICSA has succeeded in becoming a professional organisation with a national structure, with representatives coming from every county to the national executive. Today, we have here commodity chairmen from the corners of Ireland, from Mayo to Cork, to Donegal to Tipperary. It is an organisation which has come of age.

We live in an era in which social partnership is seen as very central to the decision-making process - so central that, as an organisation, it is sometimes difficult to have our say on matters because we are not social partners. As we are now a distinct representative body for cattle and sheep farmers and we cannot be hindered in any way from representing those farmers. The ICSA is here only because farmers were prepared to put their hands in their pockets and voluntarily contribute to the association to the extent that it is now able to stand on its own two feet. The organisation started with a few hundred members and now has in excess of 8,000 members, heading for 9,000. It is no longer a small organisation but one which is a serious player.

Therefore, it must have the opportunity to be represented on all the committees - everything from the committee which decides which recommendation we should have on the future of agriculture to that which decides how we might allocate single entitlements from the national reserve if such a committee is to be set up. It must be a part of the decision-making process on an ongoing basis. We are sending out a signal that the ICSA wishes to be part of the social partnership. It will make representations through the correct channels but we will be looking for the support of Oireachtas Members for that.

Mr. Thompson

On the subject of hill sheep and de-stocking, I ask our sheep chairman, Mr, Francis Cusack from Mayo, to speak to us.

Mr. Francis Cusack

De-stocking started in 1998. Some people started then and others did not because they were in the REP scheme. The people who de-stocked at that time received varied amounts of money. They actually gave the sheep away because they did not get much for them when they had to go to the factory to sell them. It was a give-away because they got practically no money for them. The money they got afterwards on account of their ewe premia and the price of their lamb varied depending on the flock size de-stocked - from €20 to €39.

When the new framework plan came into being in 2002, everybody was de-stocked, especially in the six western counties. Whether or not a farmer was in the REP scheme or was involved in good or bad farm practice he or she was de-stocked. The REP scheme was supposed to be the payment which would help farmers out - a payment for de-stocking sheep. I disagreed with that scheme because when the REP scheme first came into being, the highest one could get was a maximum of £6,200, some £5,000 of which was to put one's farm in shape in terms of pollution, to paint sheds, hang gates and so on in order that someone passing on the road could say, "That is the farm of a REP scheme farmer and that is why they got their money."

When the de-stocking of everyone came about under the new framework plan in 2002, the money was increased to a maximum of approximately €10,000. However, the numbers of stock being de-stocked against the money farmers were receiving was completely out of line. I calculated that a farmer with 300 ewes in 1998 when de-stocking began did not have to de-stock at that time. However, when the framework plan was introduced, because that farmer was in one of the six western counties, in the February of that year de-stocking for this area was set at 16.19%, about which everyone moaned at the time. The letters were not received by farmers until mid-October, which was too late in that year to sell breeding stock because everyone has already bought their breeding stock. The agreement was that farmers had a year to put their houses in order. However, when most people received those letters in October, the figures, as published on the website of the Department of Agriculture and Food, were between 29% and 70% in October when they had been 16.19% in February.

When we questioned this, we were told someone made an error because the wrong page was picked up and put on the website. However, in this area alone there were 41 different commonages, so 41 pages would have to have been picked up wrongly in order to make the mistake. Therefore, it was a completely false statement.

The farmer had to de-stock from 300 sheep to 155. When he went into REPS II, another 40 sheep were taken off him because of the 10% increase in the following year. That farmer now has a quota of 115. He has lost a great deal of money through the sale of his ewes and land and as a result of reductions in ewe premiums. He earns €16,815 for doing a reasonable job. He also gets approximately €10,000 from REPS but has to pay €1,400 to enter the new REP scheme. Many people currently involved in REPS are finding themselves in a similar situation.

REPS is not looking after those farmers who have to destock their sheep. All they are getting, in my estimation, is €8.16 per ewe. That figure has not been mentioned before. We have all heard good stories about REPS. It may be good for some but not for those in the six western counties who have been destocked. Those who did not enter REPS and remained in Dúchas are being paid €60 per sheep and that is to be welcomed. Such people do not have to incur the €1,400 expense of preparing a plan and their farmyards are not inspected. People are being misled as regards payments they might receive from REPS. Farmers living in the six western counties are not in a favourable position.

One was required to apply in November 2002 for ewe and sheep premiums. Most farmers applied for premiums at de-stock levels. They were given a year to put their house in order because nobody wanted to purchase their stock for that year and because the letters were issued too late in the year. However, it is unfair that those involved in REPS were only paid in respect of current stock levels this year. A farmer de-stocked by 100 or 150 sheep at €29 a head could earn a great deal of money. The farmers involved should have received such payments. It was not their fault the letters were not issued on time. The Department should have honoured the agreement and paid them in respect of the sheep.

Mr. John Heney

The document before me tells it all. It is the document referred to earlier in regard to part-time farming, based on a survey conducted in Galway by Dr. Pat Brogue. It is from this survey the figure of 77.4 hours comes. What is worrying is that if one combines that figure with the Teagasc annual farm survey one will find that for working those hours farmers earn an income of approximately €26,000, far short of the average industrial wage.

A system which is recognised, encouraged and looked upon as good is destroying our rural environment, infrastructure and way of life. Farmers do not work approximately 80 hours a week because they want to; most of them are advised to do so by their bank managers. Mention was made earlier of this being the remedy for small farmers. A viable farm was also mentioned. I will not take the worst possible scenario. I will give the example of a big farm, a farmer with approximately 50 to 100 hectares - 125 to 250 acres, a large farm by anybody's account. A dairy farmer earns approximately €44,300 per annum, a well earned salary on a big enterprise of approximately 200 acres. I have no problem in that regard. However, a farmer involved in cattle rearing earns approximately €19,000. He does not have the option of working part-time; he is busy taking care of a couple of hundred acres of land. There are many problems to be addressed.

Statistics from the agricultural consultants meeting last year pointed to huge problems in this area. I do not wish to be pessimistic or negative, I wish to be realistic. The figures I have are verifiable: only 16% of Irish farms are now viable. Only 16% of our farms can support a family. These are frightening figures and one might well ask how we reached this point. We spoke earlier of one farming organisation. I have given the figures in that regard. The average yearly income for dairying for 2002 was €28,000; it was €7,800 for cattle rearing. Some organisations believe they represent both sectors. I would argue they do not represent them well. There are many issues to address. There is a lack of information as regards what is happening on the ground. We are told approximately 3,000 farmers leave the industry each year. Is it surprising that is so? The figures I have given do not paint a rosy picture.

The ICSA is aware of the problems out there. We are starting from a low base and are delighted decoupling is being introduced because there was a great deal of waste involved in the old system. We are involved in the beef fattening sector. Where have all the beef fattening units built during the past ten years been located? They were built to fatten the by-product of another industry. I am very optimistic that much of that waste will be cut out. Payments will be made and nobody will be forced to produce rubbish. The market will dictate supply and demand. The farmer will do his business and his accounts. If something is worth doing he will do it; if not, he will turn away. Many of the positive markers on the horizon will eradicate the immoral waste of money in this area since 1992.

The early retirement scheme is an accompanying measure of CAP reform. ICSA recently met a large deputation of groups involved in this area. I am concerned about this issue. These people built up our industry to its current level. ICSA will not turn its back and tell them to go away. They are feeling vulnerable and believe they have no power over their future. They raised several issues with us. One such issue was the deducting of their old age pension from their early retirement payments. That is a petty. Not so petty is the fact that such deductions are not indexed linked and their entitlements are reducing year after year. ICSA would support a better early retirement scheme with increased funding. It would not require such an enormous increase. These people are vulnerable and feel they have been forgotten. ICSA is concerned for them because it is they who brought our industry to its current level.

The rural development scheme seeks to encourage young people into farming. We would support an increase in funding in this area. There have been some concessions recently by the Minister on where they can work. They can join something like the farm relief service and work on other farms. Seemingly they still cannot look at anything on their own farm. These are pretty restrictions - a bit silly.

Another worry they have is provision for their successors. This is something they should get reassurance on. There should be provisions for people who had retired and whose children were quite young and could not take over. They must receive reassurance that their children will receive entitlements, but entitlements are scarce. We obviously cannot give entitlements here, there and everywhere, but people who have retired and have successors anxious to enter farming will have to be treated very well because we will have trouble finding people to go into farming. It is not nice out there at the coal face. We look around and see our young people walking away. They are voting with their feet and not coming into the industry.

We spoke about rural areas becoming devoid of people and we need to build sustainable rural communities. Farming is an integral part of a sustainable rural community. We must have farmers. Some people think we may turn rural areas into suburbia and have lovely suburban residences for wealthy people who make all the money from the Celtic tiger economy in the cities, but it does not work like that and we need farmers. They have to earn a viable income. Many issues have to be addressed, and we must not forget about retired farmers.

Mr. Thompson

I will ask our general secretary, Mr. Punch, to talk to us on the subject of one-off rural housing.

Mr. Punch

I concur entirely with the remarks the Chairman made about the importance of housing in rural areas. If I might be so bold as to mention the little parish I come from, it is a place called Cratloe in County Clare. If the anti-rural housing brigade had its way it would decommission the entire parish of Cratloe because it is exclusively made up of one-off houses. That parish, despite the apparent badness of one-off houses, has shown a tremendous spirit of community to build its own community hall and school. It is now building a sports hall and has bought its own GAA pitch. It already has tennis courts. All of this has been put together by the tremendous spirit of community in that parish. I know this is representative of many rural communities.

We have a different type of rural society from that of the UK and elsewhere, and we should not simply follow other countries and say we should have what they have. There is not a single housing estate in the rural parish of Cratloe, but where there are housing estates attached on to towns and villages, which is apparently the model we should follow now, people in many cases do not even know their next door neighbour. In those housing estates there are many social problems.

The model of one-off rural houses is the foundation block of the rural communities in which community spirit delivers so much free of charge to the nation. We should be very wary of dismantling that. As the numbers of farmers drop, maintaining those rural communities will be no easy task. We should certainly ensure that people who come from such communities or want to live in them and have a contribution to make there are facilitated in building houses. Subjective ideas about what a nice house is or where it should be located is a very small part of the overall equation. I compliment the Members of the Oireachtas who stood up to these ideals that have been imported from abroad. The spirit of community throughout Ireland and the foundation blocks of organisations such as the Gaelic Athletic Association should not be cast aside easily.

We would also urge that one-off rural housing be supported by much more reasonable charges in terms of the development contribution scheme. It has come in at far too high a level, and I am concerned that unreasonable development contribution charges could do a lot of damage. It is all very well to talk about the desirability of rural communities but we also must ensure that people trying to build their first house are facilitated and are not taxed in extreme when they are at their most vulnerable.

Mr. Thompson

Lastly we come to the issue of hill walking, on which I will speak briefly. We encourage the pastime of hill walking. It is very healthy and has many good qualities, getting people out in the fresh air. I recently had the privilege of taking part in a discussion on the subject on our local radio station, together with Deputy Upton. It is great to walk on the hills, but we have to remember whose land one is walking over. Does one have permission to walk over that land? The point of the ICSA is that the farmer owns the land and has the right to say "yes" or "no" or refuse or grant permission as he so chooses.

We realise that there are many scenic areas that people want to gain access to, and we certainly realise that there may have to be some degree of discussion or compromise on this. The important thing is that we keep in the back of our minds at all times that the farmer owns the land. If people want access to that land to get to a point they want to visit or walk to then they will have to consult with the farmer, be it on a once-off basis as they are crossing over his gate or on a more formal basis by way of committees.

Later this afternoon we hope to meet with the Minister for Community, Rural and Gaeltacht Affairs, Deputy Éamon Ó Cuív, on this subject, and we will point out to him our very strong views. One premise we will always come back to is that before one walks one certainly must talk to the land owner. The rights of property ownership are enshrined in our Constitution. We do not want to see legislation that will in any way diminish the right to ownership of private property, but we do want to see co-operation between all of the interested parties so that agreement can be reached.

In the particular case in point, which we were very much involved in, those who walked and trespassed on the farmer's land had absolutely no interest in discussing the matter with the farmer, in recognising that he owned the land or in getting his permission or approval. They simply wanted to walk over his land with impunity. We want to knock on the head very firmly this idea that farmers who happen to live in beauty spots are just custodians of the land for city and other rural dwellers to walk over the lands at will. That is not what we are about. Most people have paid good money for their land or have inherited it. It is theirs by right, and we will stand up and protect those people.

I am not a Stalinist. When I asked the question I did not suggest any particular farming organisation should be the organisation. My view on that coincides somewhat with the Chairman's.

There is a significant issue here for small farmers. Rural Ireland must be managed, maintained and sustained to have a thriving community. Alternative farming enterprises must be developed and promoted and the ICSA's views might be important. According to Mr. Heney, some of today's small farmers are not small but medium sized ones. They find it difficult to earn a decent livelihood. The reality, which decoupling will strengthen, is that there must be alternative enterprises and we must take the long view to decide what type of alternative enterprises can be promoted and put in place.

Mr. Thompson referred to decentralisation which is to be welcomed because it creates more employment opportunity. The issue however, is much wider and requires a more detailed view of what is needed to provide alternative farming or rural enterprises in order to sustain the rural community as we would like it to be sustained.

Mr. Punch

We recognise the need for a wide range of enterprise and employment opportunities in rural areas. In recent years, particularly with EU funding, the focus has been on alternative enterprise for farmers but that has been overstated as a realistic opportunity. Many farmers do not have the capital or training to branch out. Being a farmer does not mean that one can automatically establish an alternative enterprise. In many cases reasonable employment opportunities in the locality with flexible working arrangements will probably be more suitable and beneficial to those who are available.

Decentralisation must be the beginning of a process whereby many places other than Dublin are seen as reasonable locations for all kinds of job creation. There has been too much emphasis recently on putting everything into Dublin which is undesirable. It is a mistake to expect rural Ireland to save itself by becoming some kind of entrepreneurial nirvana. We must begin with employment opportunities in rural areas. While some people may develop alternative enterprises, they will not be the majority.

I am grateful for the ICSA's answers. I am glad that it deals with specialised areas because the beef industry, the largest single industry in the country, was being sorely and sadly neglected. Land utilisation should come within the ICSA's compass sooner rather than later but I do not expect a response to my question on that today.

I also sought clarification of several points, the second of which was illuminated in the response about the modulation running to €20 million towards the grant aid, which I oppose. Can the ICSA comment please on its first point?

Mr. Thompson

Certain young farmers are not in the scheme in so far as they do not have decoupled entitlements. This involves farm inheritance and transfers. It is not exactly clear that if a father leases his farm to his son the regulations do not automatically pass on those entitlements to his son. We have serious concerns about that because leasing is safer than handing the farm over while one is still alive to a young man, with all that might entail.

There are other issues such as forestry and compulsory purchase. The land pool is shrinking and if people insist on keeping 100% of their land in order to receive 100% of payments there will be problems. We must ensure that these hardship cases, and those not envisaged under the legislation, are dealt with sympathetically. We believe that officials of the Department of Agriculture and Food will co-operate with us because they are also quite determined that each case be considered sympathetically.

The committee will write to the Taoiseach and to the Minister for Agriculture and Food supporting the ICSA's case to be included in the social partnership. Is that agreed? Agreed. A meeting with Department officials on the nitrates directive is scheduled for Thursday, 25 March. The ICSA is invited to observe the proceedings if it so wishes. On behalf of the committee, I thank Mr. Thompson and his colleagues for attending and responding to questions raised by members. This was a very positive and progressive meeting. I hope we will meet more often in the future and wish the ICSA well.

Mr. Thompson

I thank the Chairman and the committee for the valuable time we have spent here. We realise how valuable time is to the members and we are sincerely grateful to the committee for giving us its time and expertise, and for taking the time to read our document in such detail and ask appropriate questions. Exploring the various questions with the committee has been a very positive experience and we thank the committee very sincerely.

At our next meeting on Thursday, 25 March we will meet officials of the Departments of Agriculture and Food, and of the Environment, Heritage and Local Government to discuss the nitrates directive, as agreed last week. It is expected that the An Bord Bia (Amendment) Bill 2003 will be referred to the select committee for consideration, for which arrangements are under way to meet on Wednesday, 24 March at 2.30 p.m. The clerk of the committee will contact members about this.

The joint committee adjourned at 4.50 p.m. until 11.15 a.m. on Thursday, 25 March 2004.