JOINT COMMITTEE ON AGRICULTURE AND FOOD debate -
Wednesday, 23 Mar 2005

Irish Farmers Association: Presentation.

Chairman

Representatives of the Irish Farmers Association are present to discuss the problems facing farming. On behalf of the joint committee, I welcome Mr. Ruaidhri Deasy, deputy president, Mr. Michael Berkery, general secretary, Mr. Pat O'Keeffe, chairman of the national pigs and pigmeat committee, who will make a presentation on the effects of the proposed nitrates directive programme on the pig and poultry sectors, and Mr. James Brady, executive secretary. Mr. Con Lucey, chief economist, will join us soon. He is held up in traffic at present.

Before asking Mr. Deasy to commence his presentation, I draw attention to the fact that while members of the joint 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 or in such a way as to make him or her identifiable. I am sorry the president of the IFA, Mr. Dillon, could not join us today. Unfortunately, the last time a delegation from the association came before the joint committee, Mr. Dillon had to leave before the presentation. On behalf of the joint committee, I wish him a speedy recovery. I am aware he is experiencing many problems with an injured leg and hope he will be up and about soon. I call on Mr. Deasy to make his presentation.

Mr. Ruaidhri Deasy

I thank the Chairman, particularly for the good wishes extended to the president of the IFA on behalf of the joint committee. I will convey them to him later this evening.

The problems facing Irish agriculture and farming are numerous. The first problem is the single farm payment scheme. Although the scheme itself is not a problem, the cross-compliance it entails is a difficulty. Decoupling is a major issue on the national agenda for farmers. Its key attraction is that farmers are enamoured with the idea of the freedom to farm. It is the IFA's top priority to negotiate with the Minister for Agriculture and Food major improvements in the administration of the scheme to minimise bureaucracy and allow farmers to get back into the business of farming. The single farm payment scheme will account for approximately 65% of farm income nationally, although it will probably amount to total income for beef, sheep and grain farmers. Our objective is to ensure that the full €1.3 billion allocated to Ireland gets to farmers in an efficient manner.

We acknowledge that farmers must meet a range of cross-compliance conditions to receive payments. Now is the right time to agree and put in place a new charter of farmers' rights which will cover all aspects of the administration of the scheme, namely, eligibility, cross-compliance, notification of inspections and inspection procedures.

In summary, the Irish Farmers Association is proposing the maximum use of administrative checking and verification using existing information, a low level of on-farm checks - we propose 1% - except where problems are identified through the administrative process, and adequate advance notification of inspections. Many farmers, due to reasons of low income, for example, have had to earn off-farm income and are, therefore, absent from their farms. They should, in fairness, receive advance notice. Those receiving Revenue audits are given 14 days notice to get papers and so forth in order. It is vital that farmers be given some advance notice of inspections.

We propose that there be one control authority, namely, the Department of Agriculture and Food, and one farm visit in the year in which a farmer comes up for audit for inspection. We propose greater use of the CMMS computer system for cross-compliance, which should also be reformed with regard to keeping blue herd registers and so forth. We seek reasonable tolerance in the event of unintentional errors being committed by farmers. The typical problems in practical farming include fall-out of tags, mistaken identity of animals, incomplete herd registers, late CMMS registration and so forth.

The last issue we are seeking is an advance payment from 16 October. Had we not fully decoupled we would have got some payment on 16 October. Now that we have been the good boys of Europe and have fully decoupled we will have to wait another six or seven weeks until the 1 December payment.

Other important issues for Irish farming in 2005 have an international aspect. They include the WTO negotiations. Under the WTO framework agreement last August the EU is committed to further substantial cuts in import tariff and cuts in export refunds. The details have yet to be negotiated but in any event that will have to be done before the end of this year. The EU has already reformed the CAP in preparation for this WTO round. The bottom line is that Europe must not agree to cutbacks in the WTO that go beyond the CAP reform.

The EU budget is another significant constraint. It is necessary to make proposals on budget funding from 2007 to 2013 for an enlarged EU. We are very concerned about what is known as the "gang of six" countries that are proposing a much lower funding rate which would inevitably undermine the CAP and rural development funding.

The review of the disadvantaged areas scheme is an important matter that would be close to the constituents of all committee members. The two proposals from the Commission are a cause of great concern for us. It is proposed that there would be just one qualifying criterion in future; a significant natural handicap. Altitude was previously a qualifying factor but that will now come under the category of permanent pasture.

Forestry is another aspect of concern. It has been proposed to cut forestry supports from 20 years to ten and now it has gone to 15. That has significant implications for forestry as it takes away some of the incentive for farmers to become involved in forestry.

The biggest problem we will face is the famous nitrates directive. The issue is currently ongoing between the Government and the Commission. However, a related issue of national policy is the need for much higher grants for investment in slurry storage. Up to 60% or 75% grants would be required in those counties with the longest storage requirements.

Those are some of the issues which have to be addressed. I will hand over to my colleague, Mr. Con Lucey, to expand on some of the issues I may not have covered.

Mr. Con Lucey

I will try not to repeat all the things Mr. Deasy said but I will largely deal with the same issues. I propose to cover some points in more detail.

There has been very little public debate or interest in the budget issue. As committee members are aware, the budget is fixed approximately every seven years for the following period. We are now at the point where the Commission proposals are on the table. I accept it has to deal with enlargement and new issues like the Lisbon Agenda. Essentially, the Commission is proposing the same ceiling on the new budget as it has done in the past, 1.24% of GDP. It has stated that perhaps 1.14% may be adequate to operate the system. The difficulty is that this "gang of six" countries referred to by Mr. Deasy, which includes the influential countries of France, Germany and the UK, stated that the EU could be run at a budget ceiling of 1% of GDP. The Commission has rejected this proposal, as it does not believe it to be true. The Government has generally rejected it as well even though we would probably have liked to see a stronger statement in that regard.

It would be a disaster if the "gang of six" position prevails in whole or in part. Two things can go badly wrong in our sector. The budget for the CAP, which is now mainly the decoupled payment, was already fixed up to 2013 by the EU Heads of Government in October 2002. In the worst case situation that could start unravelling. The worst news one could bring to farmers at the moment would be that in the first or second year of the single payment that there was not enough money to fund it fully.

The second thing is that we will now have in the new budget period a new agricultural rural development fund, which will cover all the agricultural rural development, measures like the REPS, the early retirement scheme, the forestry scheme and the on-farm investment scheme. The significant change for Ireland is that no area in the country will be an Objective One region after 2006. If the budget works out badly in general we would envisage that EU funding for agricultural rural development measures for countries like Ireland would be under threat. It is a serious issue.

The budget could be decided any time between the summit in June 2005 and the summit in March or June in 2006. It has to be agreed by the Heads of Government of the 25 member states. As Mr. Deasy stated, all the schemes are up for review but already 75% of the country is classified as a less favoured area. That is currently based on a range of socio-economic criteria. The Commission now proposes that a single criterion would apply in future. It has referred to "a significant natural handicap" but it has not defined this in great detail. The rates of payment in future will be based on the degree of handicap. There is a potential for us to lose regions that are currently categorised as disadvantaged areas and also to get a reduced rate of payment.

It is clear that forestry requires a high level of support. The Commission proposes that the grant levels should be cut to 50% and the premium to 15 years. It is hard to see that there would be much new afforestation on that basis. Mr. Deasy referred to the grants for on-farm investment.

The key issue in regard to the WTO is that, as the Chairman is aware, Europe negotiates as a single entity and the Commission is mandated to conduct the negotiations on behalf of the 25 member states. The Commissioners for agriculture and for trade would be involved. We have two new people in those positions and we would not have as much confidence in their knowledge and expertise as in their predecessors.

Having said that, when the Doha negations started, the Council of Ministers gave a certain mandate to the Commission regarding the negotiations on agriculture. In a nutshell, that was that the CAP had been reformed twice in anticipation of the WTO, in Agenda 2000 and in Luxembourg 2003. That involved substantial cuts across the board. We shifted direct payments to a decoupled form to accommodate the WTO.

The Commission was given a mandate two or three years ago in terms of where and how far it should go in negotiations. There is a big fear that this would be lost through time and the change in Commissioners. There is a particular responsibility on the Minister for Agriculture and Food, Deputy Coughlan, to bring that back to the Council of Minister's table and make it clear to the Commission that it should not make concessions beyond the parameters already agreed in CAP reform.

Looking to the future when decoupling is up and running, we clearly have to keep an eye on the future competitiveness of the agriculture sector. The agriculture sector can continue as a sustainable commercial activity only if it can competitively supply raw material for the food industry. That will not happen automatically under the competitive structural reform policies, which is really the responsibility of national policymakers rather than that of EU policymakers. Certain steps could be taken to encourage competitiveness, particularly through the upscaling of farm size. There have been some improvements in recent budgets, particularly in terms of long-term leasing. We regard this as the main mechanism by which one can increase scale at farm level at a moderate cost.

No industry can remain viable unless young people are prepared to enter it. Young farmers are realistic enough to know that the threshold of viability will increase over time and therefore they will need some supports if they want to enter the industry and remain competitive.

When the IFA was making up its mind on the correct approach to the single farm payment, the most significant driving factor among farmers was dissatisfaction and frustration with the amount of bureaucracy and red tape in the present system, including in respect of census dates. In theory, at least, decoupling allows more freedom to farm, but obviously our objective is to ensure that this will be the case in practice.

Mr. Deasy mentioned our proposals on the new charter on farmers' rights, which I will not address in any great detail. However, we are conscious that there should be a balance between farmers' receipt of direct payments and their obligations to manage the countryside, which is now clearly one of their responsibilities. Having said that, we are starting with a low stocking density. There are 43,000 farmers in REPS and I understand from my colleague that the number of applications to join the scheme is very high. REPS will fit in very well with decoupling and farmers have invested approximately €1.5 billion in improving their farmyards. Therefore, much has been done already and the nitrates directive will be in force by the end of the year.

In case anyone believes the sector is unregulated, I have circulated a list of the regulations in place. There are 4,500 officials from the Department of Agriculture and Food keeping an eye on our members and therefore it is not true to suggest there has been no regulation until now and that we will have a lot of it in future. Although the payment is attached to land under the new regime, there are clearly two attachments to the payment, one of which concerns the 18 elements of cross-compliance. In this regard, various guidelines set out in EU legislation must be observed. There must be good agricultural and environmental conditions. A good opportunity presented itself to work out a reasonable system based on a common-sense approach. Department officials will have considerable data on their screens or desks before they consider checking a farm, thus dispensing with the need to have many checks on farms. All the land in the country is mapped and identified. The officials have the applications from every farmer. The cattle movement monitoring system is in operation and much technology is already in place. The number of on-farm checks should be kept at a low level and there should only be a higher number if the administrators indicate that there are individuals with problems.

Advance notice of farm checks is very important, not least because at least one third of all farmers are working off the farm. In the modern economy, one cannot just take a day off at short notice. We do not want many different agencies calling on farmers on different days. The Department of Agriculture and Food should be the competent authority and personnel from local authorities, Dúchas or the Department of the Environment, Heritage and Local Government should be accompanied by an official therefrom when calling to a farm.

We mentioned cross-compliance. Tolerance is a very significant issue. I received correspondence some days ago from a health official. It contained three items of information and two of them were incorrect, namely, my address and name. We all make mistakes and I presume farmers are no different in this regard. Simple issues can arise, such as tags being lost from animals.

Under the present system, the payments start from 16 October. Although the Commission has been saying the single farm payments will be made in December, we now believe it will be possible to have an advance payment made more or less from 16 October.

Let me consider the question on the overshoot in respect of the beef premium payments. Some farmers have problems in this regard. Not everybody applied for more but there is a ceiling in the system. We are setting out some suggestions. There will not be new money in the system but the Department should be as understanding as possible with regard to the making of payments and timing.

Mr. Pat O’Keeffe

I thank the committee for inviting pig farmer representatives to meet it to discuss the impact the nitrates action programme will have on the Irish pig and poultry sectors, which are valued at €1 billion. This is our first opportunity to meet the committee directly on this issue. I support the IFA's clear position on issues such as the minimum storage requirement for farms and the closed periods for application of fertilisers.

Let me focus on the impact the nitrates action programme will have on pig and poultry farmers. The pig and poultry sectors developed on small-scale holdings and the manure produced on the farms is distributed to tillage and grassland farmers locally who need it to grow their crops. These inter-farm relationships are directly threatened by the proposed nitrates action programme.

I will give an overview of the Irish pig and poultry sectors to put their significance to Irish agriculture in context. I include the poultry sector in my comments because the action programme will have a significant impact on that sector also. Both these sectors are already highly regulated as these are the only two farming sectors licensable by the EPA. Most of those involved are bound by stringent planning permission conditions while many others operate in areas where by-laws are in operation. There are 500 pig producers in Ireland, producing over 3.5 million pigs per year from 160,000 sows. Primary production and processing provides direct employment for over 6,500 people and supports many other service industry jobs. On poultry production, there are over 800 poultry farmers producing 65 million chickens, 3.5 million turkeys and 850 million eggs annually. This sector supports 3,000 jobs directly and many more indirectly.

As highlighted in a recent Irish Farmers’ Journal article, the pig and poultry sectors are key users of native Irish cereals and finished feedstuffs. The sectors use 1.5 million tonnes of finished feed annually and, based on current feed prices, this trade is estimated to be worth €330 million per year. These two sectors use diets comprising 75% cereal. This is a major market for native produced cereals as it consumes 1.1 million tonnes of cereal annually at a value of €140 million. The cereal sector consists of 16,500 tillage farmers with an average acreage of 100 acres. The three sectors account for approximately 7%, 3% and 4% of gross agricultural output, respectively, totalling approximately 14%, but they are collectively at least half as important as either the dairy sector or cattle sector and should not be undervalued or written off without consideration.

As I pointed out, pig manure is distributed locally to commercial farmers who use it in accordance with the relevant good farming practice code to produce cereals or grass. These farmers will be further subjected to cross-compliance controls in regard to the single farm payment. We estimate there are currently 15,000 to 20,000 farms that use pig or poultry manure to supply part of their annual fertiliser needs. Many of these are good commercial grassland or tillage farms with higher than average productivity. The value placed on this product in nutrient terms is in excess of €10 million.

The total amounts of nutrients available for the users of pig manure are approximately 3,000 tonnes of phosphorus and approximately 10,000 tonnes of nitrogen. In both cases, the quantities are a small fraction of the 43,000 tonnes of phosphorus and 360,000 tonnes of nitrogen imported in chemical form from outside the country. Most farms can be divided into three categories of fertiliser usage: high to medium output farms; REPS farms and low output non-REPS farms.

The high to medium output farms are those that need a large quantity of nutrients and carry a high level of livestock. Many of these are high users of pig manure and farm close to or above the proposed 170 kg organic nitrogen limit. Many of these farmers could be prevented from using pig manure or be put off using it as a fertiliser given the level of paperwork involved in using this product, with or without a derogation.

The REPS farmers of which there are more than 40,000 - a figure expected to rise to 70,000 in the next few years - are not large users of pig and poultry manure as the unnecessary paperwork involved puts most of them off even considering it. The low output non-REPS farms are generally cattle and sheep farms, many of which are in extensive farming areas, are remote from a source of pig manure, and are not significant users of pig manure at any time. Low output farms have low nitrogen and phosphorus requirements. Soil phosphorus levels can rise rapidly in response to relatively low pig manure applications due to the low productivity and nutrient demand.

A serious problem faces pig and poultry farms if the proposals are eventually implemented. As part of a submission from the pigs sector to the Minister for the Environment, Heritage and Local Government, Deputy Roche, and the Minister for Agriculture and Food, Deputy Coughlan, we have outlined some areas where relief is sought to protect these sectors. A system of preferred nutrient sources should promote the use of locally available fertilisers as far as possible. The draft nitrates action programme and guidance document refer to but do not support, and in numerous instances seriously undermine, this objective.

The action programme differentiates between "chemical", "organic fertilisers" and "livestock manures". It points out that the general limit of 170 kg per hectare applies only to livestock manure. This creates an unequal situation because any farmer using pig manure could be prevented from doing so because the organic nitrogen content of this manure is added to his or her own farm production. However, if this farmer were to use other organic fertilisers such as sewage, sludge or factory by-products, the organic nitrogen content of such products is not included in his or her overall organic nitrogen figure.

A possible alternative to this is that the general limit of 170 kg or 230 kg should apply only to livestock manure produced on-site. Livestock manures that farms acquire as a substitute for chemical fertiliser should not be accountable in the specified organic nitrogen limit on the farm using such material. The Government seeks a derogation from the Commission for some farms to exceed the 170 kg nitrogen per hectare limit. The derogation sought is for up to 250 kg nitrogen per hectare from animal manure. If granted to farms, irrespective of stock levels, it would be helpful to the pig and poultry sectors. It has been signalled, however, that a derogation is unlikely to be granted just to allow one farm to use animal manure from another farm.

The level of paper work and detail for a farmer intending to apply for a derogation as outlined in the "derogation document" would deter many tillage and grassland farmers from using pig manure. Equally, the derogation proposed on a per farm or even a per field basis as suggested will discourage the intermittent user of pig manure. It is also proposed that any farmer applying for a derogation has a 5% chance of an inspection compared to a 1% chance if no derogation is sought. This will also impede use of this product.

The Department of the Environment, Heritage and Local Government and the Department of Agriculture and Food guidance document contains a requirement to have a written contract between the exporter and importer of livestock manure if it is to be traded. This would discourage many current or potential users of pig manure and promote the use of imported chemical fertiliser instead of fertiliser locally available from pig farms.

The guidance document states that nitrogen may not be applied under any circumstances to cereal or tillage crops in autumn and winter. This should be changed as some of the pig farmer's best customers for the manure are winter cereal producers. The recommendation would prevent that trade in future, with severe implications for tillage farmers and pig and poultry farmers. Closed periods as specified will be respected.

The Department of Agriculture and Food should remain the competent authority for all farming enterprises, regardless of the source of their fertiliser. Attention must also be given to the issue of access to individual farmers' commercial information. To date the Department has not permitted any public access to an individual farmer's file. This must be preserved in the action programme.

Having considered the implications outlined above arising from the draft action plan and the draft guidance document, pig and poultry farmers expect that most of the existing grassland and tillage users of pig manure will no longer use pig manure to fill any part of their nutrient needs. The problems posed for commercial farmers by the proposed action programme are difficult to accept when the document submitted to support the request for a derogation to 250 kg emphasises that the need for a whole-country designation approach is questionable when fewer than ten Irish soils are classifiable as medium to high risk with regard to nitrogen leaching.

It is easy to predict the effect that further restrictions will have on the pig and poultry sectors and by implication their effect on the cereal sector. Pig farmers support a sustainable environmental policy for Ireland but there is a danger that a few broad strokes to solve a perceived problem will close down a large element of animal production along with dependent sectors, without any improvement in environmental standards.

If it is not possible to win special relief for these two sectors the Government needs to review its approach from the start to the implementation of this directive to take account of these sectors. I thank the Chairman and committee members for their attention.

Deputy Naughten

I welcome the deputy president of the IFA and the other members of the delegation and thank them for their presentation, which was most informative and gave us a broad outline of the situation. It is often the case in regard to agricultural matters that we look only at the immediate issues, rather than the big picture, for example, the Doha round of negotiations and the role of the World Trade Organisation, which will have major ramifications. It is also important to consider this, given that seven farmers a day leave the land. We need to look at the short and the long-term problems.

What is the IFA's position on the proposal to introduce a penalty points system? Sheep rearing is important in my part of the country and proposals for tagging are not possible. The penalty points are a farce and cannot be implemented for sheep tagging. Deputy Crawford mentioned cattle-tagging and already 90,000 double tags are lost per annum. This is not feasible.

If a farmer makes a minor error and receives penalty points these remain for three years. Minor errors should not have long-term implications. Has any progress been made with the Department of Agriculture and Food on the advance payment? This will be critically important, especially as payments are delayed in the run-up to Christmas and farmers will have repayments to make. It is important that an advance payment is in place.

Will Mr. O'Keeffe clarify the position on the inspection rate? From talking to officials in the Department of Agriculture and Food, my understanding is that there is a 5% on-farm inspection rate with regard to tagging, herd register and so forth, and that one fifth of those will also be included in the cross-compliance measures, in order that the on-farm inspection rate is 5%, rather than the 1% rate we are led to believe.

I thank Mr. O'Keeffe for his presentation. There is no doubt that the nitrates directive will have massive implications for the pig and poultry industry. Deputy Crawford is the expert in this area and he knows the huge implications the directive will have. In Mr. O'Keeffe's final comment on page nine, which relates to the Ireland derogation document, he says that less than 10% of the country is prone to leaching. What is the IFA's current position regarding the zoning of the entire country as being nitrate vulnerable? Some IFA members are questioning whether this is the approach we should have taken on this matter and suggesting that we should perhaps have looked at the nitrate vulnerable zones. Has the IFA considered the ICMSA proposal regarding the water framework directive, which would be used to zone the whole country, and then using the nitrate vulnerable zones specifically regarding the densities in particular areas, rather than the all-country approach currently being used?

The competitiveness of Irish agriculture is critically important. The ESRI report published today showed a 3.9% increase in agriculture input costs in 2004 and a 2.2% increase in output growth, representing a net income loss of around 2% to farmers in that year. In light of that, is the IFA disappointed that the Department of Agriculture and Food is not included in the enterprise strategy group action plan for the future? Is that a mistake? Has the IFA discussed this with any of the Government representatives with regard to having it changed? If we are looking at the issue of competitiveness it is important that agriculture is represented around that table.

Deputy Upton

I thank the delegation for the presentation and the background information. Regarding the WTO negotiations and the sugar reform possibilities, we could behave like ostriches, putting our heads in the sand and pretending it will not happen. Something will certainly happen and there will be some changes. Considering the background - the closure of the Carlow sugar factory and so on - I would like to hear the IFA views on how we can anticipate this kind of change, and what can be done. Are there alternatives which can be put in place? What kind of planning can we structure in order to alleviate the sort of problems which occurred in the Carlow situation, for example?

Regarding competitiveness, the IFA has noted in the submission that measures to encourage and facilitate increased scale and consolidation at farm level are necessary. That is correct, and is the way to go, but it is also true that part-time farmers are on the increase. Therefore, the IFA might comment on how those two facts mesh and relate to each other. On the one hand, we are seeking consolidation and economy of scale while at the same time the IFA is looking at the issue of part-time farming.

At the top of page four there is a comment regarding the requirement of a high level of knowledge skills management and a capacity to innovate to meet the multiple challenges of the future. I agree that will be so and that there are major challenges ahead for agriculture. What does the IFA think could be put in place to ensure that those kind of skills and knowledge base will be available, or is the IFA happy with the current progress and advances being made? Does it see a need for any changes in that area?

I agree with much of what has been said regarding cross-compliance, the level of inspection and so on. I see all kinds of difficulties with the penalty points. Does the IFA think there is a need for any sanctions if people are non-compliant? What would the IFA offer as an alternative to penalty points? How would it see such alternatives being implemented? The IFA makes the point that farming is not like collecting pieces of paper and having them ready for the Revenue Commissioners, for example. It is quite different, and events happen on farms which cannot be anticipated. It is important, therefore, that there should be advance notice, and the 14 day period suggested by the IFA seems reasonable.

What issues does the IFA see regarding the level of inspection? It has identified quite a number of them as well as all the controls already in place. The point made regarding the consolidated inspection arrangements is sensible and realistic in the sense that over-regulation should be avoided. Many professionals now want to move towards self-regulation. This is not entirely the right way to go, but for all of us to be over-regulated all the time is counter-productive. Much of the bureaucracy which everyone hoped would be removed could be right back in place. I am not saying we should have no regulation but I would like to know what elements of regulation the IFA sees as reasonable and acceptable.

Deputy Carty

I too welcome the delegation and thank the members for the presentation. Mr. Deasy outlined the costs of buildings and tanks. I have spoken to the Minister before about rising costs. A farmer in my constituency was quoted €8,600 for a building 18 months ago. That cost has now risen to €14,100 because of the price of steel. At our parliamentary party meeting we have brought this issue to the attention of the Minister and have asked that the grant be increased.

Regarding access to individual farmers' commercial information, is there any suggestion that this would be handed over, or is it just a fear which the IFA has?

Deputy Wilkinson

I too welcome the IFA delegation and I thank the members for their comments. It is early yet in the very changed farming situation to anticipate all the problems but the delegation made a number of valid points. The advance notice of inspection to farmers is of vital importance. Too often in the past, when an error was discussed, farmers were written to and treated almost like criminals. This must stop. We are in a whole new ball game and such treatment of people who made genuine errors is no longer acceptable.

Mr. O'Keeffe spoke of the nitrates directive, which creates a major problem for intensive pig and poultry farmers. In Waterford we are presently getting over it by getting mushroom growers to take away the manure but that is a dicey situation which poses enormous problems for the future for those in REPS as well as others. Many of the other areas have been covered and the points are valid. What is the IFA position on the major anomalies which have now surfaced regarding the farm retirement scheme? I refer to the 1994 scheme whereby many farmers are now being asked to repay money. I will not go into the details, of which the delegation is well aware. What is the IFA view on the matter?

Deputy Crawford

I too welcome the delegation. This reminds me of some of my former days with my colleagues across the table. I am very happy to see Deputy Ned O'Keeffe swan in here now, obviously having made his way up the ladder. That is good.

I would like to raise one or two matters that have not already been discussed, one being the issue of the severely handicapped. It is no coincidence that my home parish of Aghabog was one of the areas left out. Three of the criteria for joining that were that one had to have a certain income, population and quality of land, yet I could name townlands on the outskirts of Carrickmacross that certainly did not meet any of those. They were included and we were left out, and I make no apology for saying that. What is the up-to-date position on that? I understand that it is going to Brussels.

The forestry issue is obviously also serious since it would have provided an alternative to other commercial farming. In the middle of the 1990s, we were talking about 25,000 hectares a year, but we are now in a different situation. That has implications for those who wish to use land in alternative ways. Has the IFA examined alternative energy and how some of that land might be utilised to provide power and heat through biomass plants?

That brings me to the single major issue that we discussed with Deputy Ned O'Keeffe and others yesterday - pigs and poultry. As Deputy Naughten said, my home area of Cavan-Monaghan, given the concentration of poultry in Monaghan and pigs in Cavan, is an example of a place where there will be serious problems regarding nitrates. From talking to ordinary farmers, it seems to me that they have no idea of what we have locked ourselves into as a country. Deputy Naughten asked whether the IFA had re-examined the possibility of zoned areas rather than an all-country approach. From talking to some of the senior people in Brussels, I know that they were astounded at how we jumped so quickly for what looked like the easy issue. It will have major implications, especially for intensive poultry and pig producers and even dairy and beef ones.

There has been talk of farmers being given a few euro or an extra grant, but that will not solve the problem of the small farmer who had an intensive investigation conducted into his farm. The good news that he received was that he had to cut back the number of his cows by 10% provided he closed his piggery. That is how serious this is. As farmers and politicians, we must get to grips with the issue before we lose this intensive sector. It is well known in this House and elsewhere that I put a major effort into trying to deal with the poultry and mushroom situation in Monaghan. I was hung out to dry by my own former farming colleagues who came up with all sorts of ideas for toxins. If one does not put toxins in, one cannot get them out. They did not go to look at plants in operation elsewhere; it was media madness. Nothing has happened although promises were made.

I am concerned about imports. We must produce everything to the highest possible standards, whether it be poultry, pigs, beef or whatever. It is not so long ago that we saw the example of an extremely good operation in Dungannon that was selling an Irish product to an English supermarket. It was given two months' notice that its share of the contract was to be stopped. I have no doubt that it was filled from Brazil through a UK plant. I have no absolute proof of it, but there is no doubt that those imports were being examined.

The long-term leasing issue was also mentioned. Have we seriously considered how we might alleviate the problem in order that family leasing is included in the tax break? If we are serious about keeping young farmers on the land, and if the family wishes to hang on to some property in its own right, that must be rectified, since it is anomalous.

There are two other issues, the first being tagging. Purely by accident, I dug out the fact that there is a substantial loss of tags. Some 300,000 animals a year lose a single or double tag. However, if an individual farmer is found with an untagged animal on his farm on the day of inspection, he is penalised. Under this new inspection structure, that has serious implications. To use a system that is so unsafe against farmers is serious and we must examine alternatives. A cow can even come from Northern Ireland and have new tags put on it. Who is to prove that? It used to be that one could see if the tag had been tampered with, but now there is no proof.

The Teagasc situation appals me. Deputy Brady led a successful delegation to Poland recently, and we learned there very clearly that virtually all the farmers had their forms filled in for them free of charge by an advisory service. However, in my own constituency, in part of Cavan, a self-financing Teagasc office, a major element of which is being rented to the health service, is being closed on 1 April. It makes no sense that farmers are being asked to travel 30 miles at a time when they have to get to grips with the single payment system, the nitrates directive and everything else. I would like to hear the reaction to that since I understand that some of the IFA people are on the board. The Minister for Agriculture and Food handed back millions to the Department of Finance last year because the Department was not able to use the money for the rural environment protection scheme, farm buildings and so on. It is important to remember that only €17 million was spent on farm building grants last year as opposed to perhaps €60 million or €70 million in the middle of the 1960s. I would like to hear some comment on Teagasc and what stance the IFA is taking on it.

Senator Scanlon

It is interesting to listen to the concerns expressed. I agree with Deputy Crawford and previous speakers regarding the problems with the tagging of cattle. A cow might be tagged this morning, but that tag might be gone by the time of an inspection at lunchtime. That must definitely be examined regarding cross-compliance. It is important that several issues be addressed.

I agree that advance notice should be given to farmers, something said by other speakers. Many farmers today work part-time and may not be home when an inspector calls. We have raised this issue with the Minister for Agriculture and Food, Deputy Coughlan, ourselves, at our own party meetings, and I believe that it will be looked at favourably. The nitrates directive is a problem that has been ongoing since 1992. It will have to be faced at some time and I suppose that now is that time since the country cannot afford to wait any longer. Is it true that we import 46,000 tonnes of nitrates into the country every year? If so, could something not be done with the nitrogen produced by pig farming and so on to balance out that equation?

Chairman

I thoroughly agree with advance notice of inspections. It is something we have been emphasising to the Minister. We will see changes in that direction. There are so many part-time farmers nowadays. Anyone who has to take up a job cannot bring cattle in on an hour's notice. A farmer told me a story last January when his cows were calving. A person came in to carry out an inspection at 10 a.m. when the farmer was the only person available. The inspector left that evening at 7 p.m. It is not good enough that a farmer trying to do all the work on his own has to put up with such a situation. I made a complaint to the Minister on this issue and it is something that we all should tackle with her and her officials. That man is trying to milk 80 cows on his own and it just not acceptable.

We have been hearing about tags for years. I still think that the brass tags were better than these new ones. They may not have been suitable for reading, especially for those of us who have to wear glasses.

Deputy Naughten

The Chairman sees enough.

Chairman

I probably do. At the same time, it is not acceptable that so many tags are lost. We were told that these new tags represented the future.

Deputy Crawford

The Irish Farmers' Journal recorded my story as a good news story about how many tags stayed on.

Chairman

Another issue which was not mentioned today was the plight of the potato sector. The potato sector in Meath is sizeable. The potato growers are commercial farmers, they provide much employment and have invested great sums of money in that sector. They are going through a difficult time and the new single farm payments are an added burden. Mr. John Sheridan is chairman of the potato committee and is from my part of the country. Therefore, I am aware of the views of potato growers.

I have been mentioning the nitrates directive for quite some time. Why can we not have a situation where common sense prevails? One could not put out slurry until last Friday or Saturday. Suddenly, every farmer put out slurry this weekend and it will end up in every river across this country. We need common sense on this issue. There is a system of announcing blight warnings on the radio and in newspapers. If we had the same kind of system to advise farmers of the proper time to spread slurry, then we would not have such a problem with pollution. Finally, I compliment Mr. O'Keeffe on his excellent presentation.

Mr. Deasy

Deputy Naughten asked about the IFA position on penalty points, sheep and cattle tagging and various other matters. It was not our idea to bring in penalty points. We looked for a tolerance level, because there are many issues on cross-compliance. A piece of plastic blows across the field and is found by an inspector on a fence. That is something to note on an inspection report, but not something that should carry a financial penalty. Penalties are a function of a farmer's total income in sheep, beef and tillage. A penalty will take some of the money which a farmer earns during the year. The average farm income is something over €15,000 and the average single farm payment is €10,000. Penalising such a farmer will impact severely on his income. From those figures, one can understand why so many farmers must work off the farm for extra income.

We will be negotiating on this tomorrow at a protocol meeting. We do not agree with the points system, but we have brought it to people's attention that points should not and will not carry forward from one year to the next. We will also request at the protocol meeting that advance payment be made. No tangible progress has yet been made on that issue. According to Mr. Jim Beecher, some 25,000 inspections were carried out on Irish farms last year. We want that to be reduced to 7,000, which represents approximately 5% of 130,000 farmers. We have removed extensification, special beef and suckler cow applications and there is currently only one application based on maps and eligible hectares. A farmer either has those hectares or he does not. The cattle are traced on CMMS and there is a large paper trail out there. Many of those inspections can be done in the office with computers and so on. If something comes up, a farmer should be subject to an inspection. However, there is great potential to use technology to our advantage. That is the key issue, not that we and the Department have invested so much in technology that we must still have the same levels of inspections.

Mr. O'Keeffe will deal with the nitrates directive and the issue of the 10% prone to leaching. Mention was made of a countrywide blanket approach. The IFA does not agree with the ICMSA very often but it does on occasion. One could identify nitrate vulnerable zones and go forward, but the IFA states that the whole country is capable of a 250 kg level and this will provide an outlet for everybody concerned.

There should be a derogation to that effect because it is based on findings by the best scientists in Teagasc. We are at nought if this is not based on science. Otherwise, we would be pulling figures out of the air. This is the Government's argument as well as our own. One cannot go to Brussels with something based on science and facts and then tear it up, saying, "Sorry we are not accepting that, come up with more". It is either——

Deputy Naughten

That is happening. The Minister has stated that she is not prepared to support the Brosnan proposal and the scientific evidence behind it.

Chairman

The Deputy should come back with a supplementary question.

Mr. Deasy

Deputy Upton asked a question relating to the World Trade Organisation and sugar and how Europe proposes to negotiate the matter. The Europeans are negotiating on our behalf with the WTO. The former Minister, Deputy Walsh, went out to Cancun to bat for Ireland as Minister for Agriculture and Food, and I acknowledge that as important. The biggest problem we have with regard to the sugar regime is the C quota which relates to the surplus produced. Europe has never received full credit for accepting 1.7 million tonnes of sugar at the full European price from African, Caribbean and Pacific nations. The most fragile nations in the world have full access which is worth in excess of €750 million annually. We must acknowledge that surplus sugar is the problem. We should not just forget about producing sugar in Europe.

Other aspects, about which we would feel strongly, have not been examined within Europe. The Government must consider the issues of ethanol from sugar and green energy. I will not stray too far from the script, but we are sailing along with our eyes on the ground. We should be looking at the horizon. We must face reality with regard to our obligations.

The increase in the number of part-time farmers and the issue of farm consolidation are two divergent contradictions. There will be two or three categories of farmers in the future, including those who farm as a hobby. The first category will be commercial farmers, who will have consolidated and become bigger. They will remain commercial and continue to produce. The second category will be those with 50 or 100 acres. They will have no capacity to attain more land or quota. It is very easy to say someone should get a greater quota but one must get the land for the milk. Perhaps the parlour is not suitable and there is a greater demand. There is also an issue of nitrates. One must look at the matter logically, and we would suggest a two-way approach. Teagasc has a duty to find labour-saving methods to facilitate part-time farming. One cannot safely work 40 hours per week and then come home and work another five or six hours at night. This second category must be catered for and labour-saving devices must be considered.

Everyone will be poorer without a high degree of skills and knowledge. I will leave the issue of penalty points to Mr. Berkery. Deputy Wilkinson asked about advance notice and errors. We are clearly stating in protocol meetings that any inspector who comes to a farm must leave a copy of his or her report. It is normally easy for an inspector. Is the slurry adequate? Are there any spills? Is the fencing okay? There is a long list and the inspector must tick the box for yes or no. Members of the committee will be asked to make representations on various constituencies. It is much easier if we have a copy of the report and we will all be reading from the same page. It is not an excessive request.

Regarding pigs and poultry, the IFA believes they are an intricate part of Irish agriculture and are of good quality. Mr. O'Keeffe has already explained that they are licensed according to EPA standards which are not easily met.

On the issue of retirement, the IFA accepts that huge problems and anomalies have arisen. Deputy Wilkinson prepared a report for the committee which I read but mislaid. I have asked him for another copy. I recently met those concerned with the issue of farm retirement and there are anomalies and problems.

I walked the severely handicapped area of Aghabog, County Monaghan, and know it very well. We made a submission to Brussels, although I am unsure of where it is currently. The criteria are now changing for the whole of Ireland, and there is a delay in proceeding with the matter. Categorisation based on permanent pasture will suit Monaghan and Ireland. However, other criteria must be negotiated and we expect negotiations to intensify during April, May and June of this year. The Minister, who is from County Donegal, should have a fair knowledge of the problems. However, we must watch this space. We share Deputy Crawford's concerns about forestry and believe the forestry sector can provide an alternative source of energy and aid biodiversity. However, developments must take place over a 20-year period, otherwise the incentive will not be there.

We are subject under the WTO to imports but the big problem for us lies in standards. We have the highest standards and we have to compete against that. The Minister for Agriculture and Food should ensure there is more progress on food labelling in order that the consumer knows what he or she is buying.

I am the IFA's representative in Teagasc. I was nominated by the IFA and appointed by the Minister. Regarding Teagasc's plans to close its Bailieboro centre, the IFA's position is that it is immaterial whether the centre is owned or rented out so long as the service to farmers is not interrupted. I understand that half of the Bailieboro office has been let and there are plans to sell off the entire building. We will meet with Jim Flanagan in Oak Park, along with our IFA colleagues in Cavan. I have informed the director I will be unable to attend the meeting as I am involved in the protocol negotiations. We need to find some solution that provides a service for farmers, without travelling 30 miles.

We recognise there is a very difficult situation in the potato sector and John Sheridan has been very vocal on the problems with the single farm payment and the potato land not being eligible. The set-aside obligation is nonsense. What is the difference between growing maize or having set-aside? The freedom should be there and the situation is the same with potatoes. However, it is an issue for the European Commission. Perhaps Mr. Berkery would like to add a few comments on the penalty points system.

Mr. Michael Berkery

I welcome and note the Chairman's very helpful comments regarding the inspection process and the balance between the inspection's objective and the compliance of those being inspected. I also note Deputy Wilkinson's and Deputy Upton's very pragmatic and helpful views on the inspection process. I will elaborate on Deputy Upton's comments on the operation of the inspection process.

We believe in an inspection system that has known parameters and guidelines and that aims to root out fraud. The IFA is unconditional in its commitment to such an inspection system. The first basis of the inspection system is eligibility for the scheme. To be eligible for the scheme, a farmer must have three reference years, 2000 to 2002. That has already been done by the Department of Agriculture and Food, leaving the farmer with a certain number of premium rights. The next criterion for eligibility is the number of hectares owned by the farmer. By 15 May, the farmer will have to submit his or her maps, the area of land that he or she will be farming for the following year and his or her number of farm payments. The process so far seems very simple and straightforward. The farmer must make a declaration saying that he or she is farming the land. The IFA believes that If the farmer is found to be in breach of that declaration or is fraudulently claiming something, he or she should be penalised. The IFA will not negotiate in such a situation.

Satellite images are available four times in 24 hours in order to hone in on a particular parcel of land. As enormous amount of technology is available to weed out fraudulent applications, there is no need to have inspectors travelling around the country. It is irrelevant whether a farmer has notice of an inspection. There can be no more fraud after that. The farmer has his or her PPS number, all of his or her data and is deemed eligible. There are other conditions attached under cross-compliance.

Having some knowledge of how the audit process works, I believe it is driven by risk analysis. An assessment is made of where the most likely areas of transgression are and risk analysis is carried out. That analysis can be further honed by technology. If a points or penalty cards system is introduced, we will face the question of whether anyone will be willing to pursue a career in agriculture when he or she faces being burdened with this inspection system. The inspection system must work in a logical and sensible fashion. We need penalties for transgressions but matters like bad farming and environmental degradation are visible and can be identified. We do not need to nit-pick and spy on farmers looking for the slightest deviation. Nobody will enter farming if he or she faces such scrutiny.

We had a meeting this morning with a delegation composed of French colleagues and parliamentarians. France is beginning to face the same situation as Ireland. Ireland is the most advanced country in the EU in terms of implementing the single farm payment, including cross-compliance. We are in active negotiations with the Department and there are people within the Department who are very pragmatic and sensible about it. One or two areas of small print in the regulation from Brussels are causing problems. However, the active support and involvement of the committee has been very helpful because the Minister can go back to Brussels and raise those issues. In the autumn of this year, farmers and the rural community will come face to face with the European project in terms of the referendum. It is important to have a reason behind penalties in order that farmers are not penalised for frivolous or marginal reasons. It has an impact on how people perceive Europe, particularly in terms of whether it is an unnecessary bureaucracy or a real advantage.

I say to Deputy Upton, in particular, that where fraud or substantive issues arise, we do not stand for them in our negotiations. We are providing for this because we do not wish to return to this committee or be obliged to approach the Minister or Brussels in two or three years' time when disallowances occur in Ireland in respect of certain claims or where people are found to be in breach. That is not what we are about. If we do this, then the sustainability of the support system is brought into question. We wish to avoid this at all costs.

The balance is one where there is a sensible regime that deals with people who are clearly fraudulent or in breach in some way. There is a significant difference between intentional and unintentional errors. I do not have it with me but there is a particular document in which we stated that there should be tolerances in line with the vagaries of normal farming conditions in Ireland - no more no less. I hope this answers the question of whether we are for or against the points system. I remind one or two Deputies that we are not the Government, we are the IFA.

The issue of sugar and the WTO is huge. We are currently trying to cope with the first phase of moving sugar processing from Carlow to Mallow. We spoke with the Minister for Transport before we came here to try to put together a package that will move the beet from Carlow to Mallow. An interesting fault line is emerging in Europe. I have monthly meetings with colleagues at this level. We have not yet taken their position but the Finns, the Portuguese, the Spanish and, to some extent, even the Italians are now asking why the sugar regime in Europe should be defended if it is going to concentrate on three or four countries at the centre. Does the committee understand my point about how this industry can be sustained? There is a cross-border movement of quotas and sugar produced by the German-Dutch-Danish-French axis, Poland and the Czech Republic is shipped to the peripheral regions but there must be a type of regional balance in any European sugar regime.

We know that the everything but arms agreement has already challenged the internal regime. We know that two of the big European producers, one German and one French, are making huge investments in African cane production. That is a dollar a day economy. This is another ethical, philosophical and moral challenge. It is not moving to a like to like scenario but to a dollar a day coffee or cotton world. If sugar cane becomes the sweetener for the world and is produced in a dollar a day economy, it is good for the processor and for the four or five large European multinationals that will become refiners. Unlike prior to the First World War when the cane was brought in from the Caribbean and the tropics, mills will be sent to refine out there and bring the refined sugar back. There are developmental and access points to be made there.

The everything but arms offer from the Union, on which Commissioner Mariann Fischer Boel spoke strongly to the European Parliament on 10 March, will not have quantitative or quota limits placed on it for the countries involved. She said 47 countries will have free access despite the support of some members of the Union for the notion of a country quota at zero duty. American and European capital is already going there and it will be difficult for us to compete, even with the alternatives to which Deputy Upton referred. I am not fatalistic in any way and we are constantly trying to face the challenge.

I have a final observation on the points that have been made about the possibility of not having the nitrates directive apply in some areas. I will ask the Deputies which constituencies they would identify for those areas and which constituencies do they think should carry the load.

Deputy Naughten

The scientific evidence is there for what we are discussing.

Mr. Berkery

If that were the case, Wexford, all of Cork, Kilkenny and all other places east of the Shannon, including Monaghan and Cavan, would be gone. Counties Cavan, Monaghan, Louth, Meath, Westmeath, Kilkenny, Carlow, Wexford, Waterford, Cork and Tipperary would be left out. These represent much of the country.

Deputy Naughten

That is far more than 10% of the country and is fairly based on the IFA's submission.

Mr. Berkery

Many constituencies would have a view as to whether it would be such a good idea to allow Roscommon out. That is the only point I wish to make.

Mr. O’Keeffe

To address Deputy Naughten's comments on the derogation of the designation, we would be searching for a simple way for the derogation but if it cannot be found we must search for alternatives. I am not clear on the ICMSA's position, only that of my own organisation. Deputy Carty raised the issue of farmers' information on public file. We had a problem with this but farmers who are registered and licensed with the EPA under the new rules must only give certain information to that organisation. The farmers' names do not go to the EPA anymore, which is their right at this stage.

Deputy Wilkinson is aware that the pig and poultry industries are operations in his own constituency and I am glad that he is taking the matter of the nitrates directive as seriously as everyone else. Deputy Crawford also raised the nitrates issue. He is from the poultry and pigs heartland and is aware of the relevant areas. He mentioned imports. We have been fighting to get certain companies in Ireland to put the origins label onto their products but have been finding this to be difficult. Two leading brands, Galtee and Denny's, are not willing to do this. We are producing to the highest standards.

I must inform Senator Scanlon that we are working with the Teagasc figures in respect of imports. There are imports of approximately 360,000 tonnes per annum. The Chairman spoke about potatoes. I count myself as a pig producer and a representative, to a certain degree, of poultry farmers but we are the smaller groups of farmers in the country who are being burdened. Members of my sector do not receive a cheque in the post and must face the commercial realities of everyday life. We face the challenges posed by the WTO, to which Deputy Upton referred, such as the tariff rates on EU imports from Third World countries. We do not like these and our industry should be protected, otherwise it would be difficult to get fresh pork in Dublin. The nitrates issue is serious in terms of determining our futures.

Mr. Lucey

I will first address what Deputy Naughten said about the price-cost squeeze. We did not make a statement on the enterprise strategy plan but we have been involved in social partnership for 17 years. We are also involved with NESC, etc. As an organisation, we are in favour of policies that support low inflation, competitiveness and sound public finances. We are conscious that the single payment is fixed and that is the way it will stay. In the long term, prices will be very much influenced by what comes out of the WTO and costs are likely to go up, in line with inflation. The price-cost squeeze will be an ongoing problem for us.

Deputy Upton referred to part-time farmers. The challenge here lies in bringing jobs to rural areas. There are a number of dimensions to that. The national spatial strategy is central but since its launch, it is hard to see much happening on the ground. The multinational companies and foreign investors still seem to be calling the shots in terms of growth in the Dublin area and, to a lesser extent, in Galway and Cork, but beyond that, the imbalance is continuing. Another dimension is state supports for farmers. Generally, farmers have a certain level of secondary education, up to the intermediate or leaving certificate, though some would not even have that. Clearly, the available jobs are becoming more skilled, which presents a problem. We have met representatives of FÁS to try to alert them to the fact that people leaving farming, including their spouses, are a constituency that they should include in their sights. Such people are more widely dispersed and do not appear in, for example, town figures for high unemployment, but they do form a constituency. We have met representatives of FÁS at a high level and we will be meeting them again.

Clearly Teagasc has been the main provider of skills in farming. Teagasc is also working on the post-Fischler farming package for families who are examining the future and deciding whether they should remain in farming. We hope that Teagasc itself is moving with the times because there is no doubt that we are going to be a high income, high skills economy and farming cannot ignore that, but must embrace it, if it wants to survive.

On the issue of long-term leasing, we will look at the question of inter-family leases in the run-up to the next budget. We have made some progress in recent budgets, but we will examine the inter-family leases.

The problem with potatoes is that they are outside the single payment system and never got a direct payment. To change this requires a change in the regulations. Brussels has informed us that this is unlikely to happen in 2005 because the plan is to first get the single farm payment scheme up and running in all member states before reopening it for further negotiations. It is possible that the Council regulation will be reopened in 2006. The political reality is that it cannot be done this year, but there is scope next year. However, it does require changing very precise sections in the Council regulations to say that the direct payments can apply to land under potatoes and horticulture.

Mr. James Brady

There is a widespread understanding among the committee members of the main issues and they have made points on the impact of the nitrates directive on the pig sector. One thing that our deputy president, Mr. Ruaidhri Deasy, pointed out earlier was that farmers have bought into the idea of single farm payments and freedom to farm. It is a very important concept. Pig farmers supported the initial approach on the nitrates directive, in terms of having every part of the country in a position to use up to 250 kg of organic nitrogen. The scientific evidence is there to show that this is the case. What we are responding to now are concerns about the view in Brussels regarding the adoption of the action programme, the handling of the derogation document and the approach being taken whereby one has to come before the other. The clear position of the IFA is that both must be delivered at the same time.

Pat O'Keeffe has already pointed out the significance of the pig and poultry sector to Irish agriculture. The sector has been undervalued because it has a small number of producers relative to agriculture overall but the income and money generated has proven that it is successful. It is a challenging and well regulated part of the agriculture sector. There are people who are interested in the business, who have invested heavily in it, including two farmers who are in the Visitors Gallery. We are concerned here with hundreds of thousands of euro. They have established themselves, put a lot of money into their businesses and it is wrong that any programme would regulate them to such an extent as to put them out of business.

Mr. O'Keeffe has already pointed out that the pig and poultry sector is fairly well regulated. Nitrogen fertiliser and phosphorus, which are required to grow crops and sustain agriculture, are widely used in Ireland every year. We are not talking about using more, but about using what is available in Ireland first and foremost. We should provide a system whereby a farmer is free to choose the locally available source first. This should be written into the programme rather than left as something that may or may not happen.

There are ready solutions available in terms of the action programme and the derogation document, if the commitment and the will are there to implement them. It will take a high level of commitment to sustain the pig industry. As Mr. O'Keeffe has pointed out, if that commitment is not forthcoming, then every other option would have to be considered. From a pig farmer's point of view, no apology can be made for that. The nuts and bolts of a sensible arrangement are there, if the commitment is there to deliver.

Deputy Upton

Mr. Berkery gave a detailed reply on the question of sanctions, but I was not talking about fraud because, as was stated, the boundaries of the maps cannot be redrawn. However, there is a failure, for instance, to meet some environmental requirements. My key question is, should there be a protocol in place to deal with those kinds of issues or should they be dealt with on an ad hoc basis? A decision must be made on that, on whether there should be some process whereby one ticks boxes and financial sanctions are imposed for non-compliance.

There was a long discussion on tagging and losing tags, which seems to be a major problem. Does the IFA have a view on electronic tagging? It appears to be a more effective way of ensuring that tags will not fall off or be removed. Does it have a view on an all-island approach to animal health, particularly animal disease, given its lack of appreciation of boundaries or borders?

Deputy Hoctor

I have a question on compulsory purchase orders on farming land for proposed road developments, for example, the M7 and M8 in north Tipperary. Is the IFA happy with the outcome of the negotiations with the Department of the Environment, Heritage and Local Government, in terms of the price agreed for its members? I am aware that some farmers were very badly hit when they surrendered land for the good of the State.

Deputy Crawford

Two of the issues I wanted to raise have been raised already, but the issue of the tags is something about which I am angry, to put it mildly, because I come across some genuine cases. My county representatives are meeting the Minister directly on the poultry issue at 5 p.m.

I have raised the question of the all-Ireland approach to dealing with animal diseases on every possible occasion at the British-Irish Interparliamentary Body to try to bring it forward because such an approach is essential. While I appreciate it is difficult to move forward given the current lack of political activity in Belfast, it is something we should do.

To return to the question of imports, I was involved in the meat industry for long enough to know that if someone from Egypt was buying beef in Liffey Meats, Liffey Meats could not kill a beast without an Egyptian vet being on site, yet the European Union is importing from Brazil, Argentina and elsewhere. When we visited these countries, as did the Chairman, we saw the hormones and everything else being used, yet when we asked the Taoiseach about the regulations, he said it was all done under the regulations of the World Health Organisation. Is it fair that our farmers should be made produce to the highest possible standards, to which the consumer is entitled, yet we do not have a clue about the way the product we are competing against is being produced or administered? I feel strongly about this issue.

Deputy Naughten

I wish to make some brief points on a few issues. First, I accept the association is not the Government. The representatives have made a presentation, which I fully accept, but I want to question some of the points made. That is fair and reasonable and we have done that on numerous occasions with different organisations that come before us.

On the issue of electronic tagging, perhaps the representatives might clarify the position because a report was issued recently on the electronic tagging of sheep. It suggested that some agreement had been obtained at EU level regarding the matter but that the tags would be attached to the animal's ear, which would contradict the purpose of having an electronic tag in the first place and bring us back to square one, except that we would have a more expensive tag than we currently have. If that was the case it would be farcical. We need to have a sensible approach to this issue.

I wish to return to the two other points I raised earlier, one being the inspection rate. It appears from the representatives' presentation that they are quite confident that the level of policing required can be achieved without having on-farm inspections. It is critically important that the Minister would recognise that the technology is available to achieve much of that. Many of the anomalies can be addressed without the need for on-farm inspections and I hope the Department will take a sensible approach because there is a genuine fear among farmers that because of the number of inspectors there will still be a significant number of inspections.

On the issue of the nitrates directive, the Department of Agriculture and Food points out in the derogation document it put forward, about which the representatives spoke and from which they quoted, that we are talking about less than 10% of the country. Currently the Department appears to be backing away from the Brosnan proposals in that they were a compromise, a negotiation and our bottom line. Now the Department is saying it needs to get this agreement in order that it can negotiate on the derogation and, second, negotiate on other agri-environment proposals - forestry and so forth - that are coming up and that it cannot have all of these on the table at the one time. The impression seems to be that the Department is backing away from its scientific evidence, is not prepared to support it and make a case based on it. Is that the representatives' interpretation of the position?

Regarding the comment on adopting an all-Ireland approach to dealing with animal diseases, that issue is currently being debated by many farmers in the context of the fact that the Brosnan proposals will not be the bottom line for the Department of Agriculture and Food. Nor do they appear to be the bottom line for the Department of the Environment, Heritage and Local Government. The current indications are that there could be considerable difficulties in getting a derogation of the 250 kg proposal. I merely asked a question on that aspect and I do not believe Mr. Berkerey's outburst was justified. We have asked the other organisations about this question. Some members of the IFA delegations whom we met in recent weeks and days have raised this specific question and it would be irresponsible of me not to put the question to Mr. Berkerey. His outburst was not a fair response.

Deputy N. O’Keeffe

The directive will affect our 30,000 intensive farmers who are the real drivers of Irish agriculture. It will have a serious impact on employment in rural areas. If one excludes the peripheral enterprises in the agricultural sector, one will kill off employment because the pigmeat sector, poultry sector and sugar beet industry provide the majority of agricultural based employment in rural Ireland. Other agricultural industries do not generate much employment. Therefore, I am concerned about the impact of the nitrates directives, about which much has been said. I would not lay too much blame for its provisions on the Department of Agriculture and Food given that the lead Department for its implementation is the Department of the Environment, Heritage and Local Government where a new Minister is now in place from when we discussed this matter. I am concerned about the impact the directive will have on agriculture, particularly on the peripheral enterprises which are important to the economy. I fully agree with what Deputy Crawford said about the Egyptian or Syrian vets coming to Ireland and being on site to see Irish beef, yet when we buy beef overseas there is no Irish vet on site in the countries from where it is being exported.

Regarding the recent crisis in own brands, Cross and Blackwell was recently identified as the manufacturer of ingredients and colourings in products and four or five retailers here had to take those products off the shelves. From a farming point of view, own brand products are becoming an issue. One manufacturer can manufacture three products under an own brand name using different colours and agricultural products in respect of which there is no traceability, accountability or country of origin indicated. This anomaly must be addressed in this expanding business. The IFA has a role to play in this area in regard to all sectors of agriculture, including the dairy industry and pigmeat and other sectors.

Farmers are major contributors to Bord Bia and they will be called upon to pay levies. Can anything be done to insist that where Irish product is being used that the Bord Bia logo must appear on the packets of produce?

Is there legislation in place governing the catering trade to the effect that a customer is entitled to know the origin of the beef served in a restaurant? Is there an issue concerning it in that the Department of Agriculture and Food has failed to put in place a criterion to make the caterer identifiable? Am I correct in that?

Chairman

We will shortly get an answer to that question. Deputy Naughten and I met another farming organisation regarding the overshoot in this regard and it has severe financial consequences for a great number of farmers. I am sure the IFA will do its best like the rest of us to try to resolve this problem.

The Vice-Chairman had to take over from me as I had to take a telephone call on a matter that presents a problem throughout the country, namely, the difficulties in getting planning permission. I left the meeting briefly to argue a case for a person who is living a mile and a half from a site and is not regarded as having a local need in my constituency. There is a danger of the local school being closed in that area because of a lack of development. I am aware of the views of the IFA on this matter but I appeal to it to support such a view because we are at one regarding this problem.

In other words, I am where I am, as I was before the CPO was signed for my land. The difficulty for many farmers is that, when they re-enter farming, 20% in capital gains and 9% in stamp duty is taken out of their CPO compensation. One can claw back the stamp duty but not the 20% capital gains. That has caused significant disappointment and resentment. Nobody puts up his hand for a CPO. One does not approach one's local Deputy or councillor seeking to have a road built on one's land in order that one can benefit from a CPO. CPOs are used on behalf of society. Society must have straight roads to Cork, Galway, Waterford or Kells and we support that. It is only right, however, that those in between who lose their land gain equivalency and remain in the same position they occupied beforehand. That is our position.

We are in ongoing negotiations with the NRA and the Department of Finance, particularly on the roll-over issue. It is a tetchy subject because it is perceived as a capital gain in that it has connotations of a windfall and that one benefits. It has been dealt with in a defensive way. We have not given up on it because it must be resolved. It could become part of the claim. The Government has accepted the principle of equivalency. If one is equivalent, one cannot be equivalent less 20% for something one did not request. It should become part of the claim. If it is not part of the roll-over, one cannot be equivalent less 20%. The entire claim is constructed on the basis of land values in the area and damage to the land. One is entitled to all these claims. A reduction of 20% hinders a farmer who tries to replace his land.

I do not have anything to add to the Deputy's comments on the other issue. I am not given to outbursts before this or any other committee.

Mr. O’Keeffe

I compliment Deputy Naughten, who has a good grasp of the trouble my sector is in and I hope he will give us his full support. He knows as much as we know ourselves. He has highlighted a number of issues in recent days for us and I compliment him on what he has done.

As a pig producer, I welcome Deputy Upton's comments on disease control on an all-island basis. It is one of the greatest problems we face. An eradication programme is needed to address Aujeszky's disease. If an all-Ireland status was applied, freer trade would result with Northern Ireland and our European counterparts. Pigmeat could also be certified for the Russian and US markets and our upcoming entry into the Chinese market. I hope an all-island basis for disease status will be the way forward.

Chairman

I thank the members of the delegation for attending and for their responses to members' questions. It is always a pleasure to work with the IFA. The association's representatives should not hesitate to contact the clerk to the committee whenever they wish to appear before us.

The joint committee went into private session at 5.15 p.m. and adjourned at 5.30 p.m. until 2 p.m. on Wednesday, 6 April 2005.