JOINT COMMITTEE ON AGRICULTURE AND FOOD debate -
Wednesday, 6 Apr 2005

Farming Industry: Presentation.

Chairman

Representatives of the Irish Cattle and Sheep Farmers' Association, ICSA, are present to discuss the problems facing farming. On behalf of the joint committee, I welcome Mr. Malcolm Thompson, President and Mr. Eddie Punch to the meeting.

Before asking Mr. Thompson to commence his presentation, I draw attention to the fact that while members of the joint committee has 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 call on Mr. Thompson to make his presentation.

Mr. Malcolm Thompson

I thank the Chairman of the Joint Committee for the kind invitation to address the committee today. The Irish Cattle and Sheep Farmers' Association, ICSA, firmly believes in the importance of communicating with all members of the Oireachtas on a regular basis, thus ensuring that members are up to date on the issues that concern ICSA. Today, I intend to discuss the main problems facing Irish farming and hope we can use this opportunity to share our thoughts and ideas on this important subject. Almost all the problems facing our members can be summarised as follows: bureaucracy, more bureaucracy and bureaucracy gone mad. I firmly believe that when the history of agriculture of our time is recorded the lunacy of William Woods and his halfpence will pale into insignificance. ICSA is not against regulation or strong codes of practice but is embarrassed by regulations that are impractical and unworkable, designed by bureaucrats with little practical knowledge of farming. The emergence of such regulations is a source of deep frustration to both farmers and departmental officials, who have the job of implementing them.

Rather than trying to address all the issues, and all of them are important, I propose to deal with just a few examples of this bureaucracy in order to use the time effectively. Bureaucracy impacts on cross-compliance and penalties under the new single payment regime and the special beef premium overshoot and prescription only medicines. When we addressed the joint committee last year, we outlined the key components of a strategy to maximise the benefits of the new regime. One component was to ensure a balanced, fair and sensible regulatory environment. I am sorry to say that since then I have become more concerned that things are not moving in the right direction.

ICSA made a submission on cross-compliance, penalties and inspections, last autumn. Our key proposals are based on the belief that any farmer making a genuine and bona fide effort to farm in line with the aims and objectives of the single payment scheme and who is working to produce quality food, with appropriate standards of animal welfare and environmental care, should not be subject to sanctions, which are only appropriate to criminals. Genuine farmers should not be subjected to witch-hunts nor should their livelihood hang in the balance over a few clerical errors or minor shortcomings.

We argued that farmers were entitled to a 95% rule whereby any farmer who has 95% or better accuracy, or 90% in the case of sheep farming, in his or her paperwork, herd register, movement documents and so on should be regarded as fully compliant, provided the farmer makes an effort to sort out the remaining issues within a 21 day period after the farm inspection; a clean break rule which would mean that no penalty could be applied to errors relating to the period before the introduction of the single payment system on 1 January 2005; a yellow card system for any shortcomings relating to the other requirements of cross-compliance; 14 days notice of inspections; no more than 1% penalties for first time offenders under the single payment, except in the case of farmers who are flagrantly abusing the system — ICSA holds no torch for such farmers; the right to appeal not only the penalty but also the level of the penalty. Since then the Department has proposed a penalty points system. The system proposed is unacceptable because it is draconian. The Department approaches the implementation of cross compliance and penalties with a zeal that makes car clampers look like a bunch of altar boys. It is not acceptable to apply penalty points just because a farmer forgets to sign an animal passport. It is not acceptable to have a penalty points system where farmers will inevitably clock up 16 or 20 points with a handful of minor clerical errors. The Department even suggested points for a clerical error in registering a calf. No trade union would accept this type of abuse for clerical officers in the Department. Why should farmers have to put up with it?

ICSA has put in a counter proposal for credits for farmers. If farmers are subjected to penalty points for minor infractions, they should be entitled to credits for high standards of compliance in general. I will give three examples where farmers should get credits. They should get five points where 95% or more of calves are registered on time in the year of inspection. They should get five points where 95% accuracy is achieved on herd register. They should get five points where all relevant farm-to-farm movement documents are available. These credits could then be set against any penalty points incurred to reduce the overall penalty point score. The irony is that officials are quite proud that the CMMS system is 98% accurate, because this is the best in Europe. However, it is not 100% accurate. If this is considered an excellent achievement by an army of 4,500 professionals, with vast platoons of trained clerical officers, how can a humble farmer can be punished for only achieving the same level of accuracy?

This is not a trivial matter. Members must realise what is at stake for farmers. A farmer with a single entitlement of €25,000 could get fined €750 for a few minor shortcomings. That is not a fair penalty. If the Department of Agriculture and Food was in charge of motoring penalty points, there would be no more problems with toll bridges, because half of all motorists would be put off the road.

Beef producers have been dealt a double blow in two years following the overshoot of the 2004 special beef premium national quota. The overshoot currently stands at 29%, which could result in a 40% reduction in payments for farmers that applied on more than 25 animals. Many of these cattle farmers depend almost exclusively on special beef premium for their income, retaining only 60% as actual profit. While the final percentage is not yet known, serious financial loss will be inflicted on approximately 28,000 farmers costing the sector in excess of €I00 million. An overshoot also occurred in 2002 following the announcement that 2002 was to be a reference year for the decoupled single farm payment. This problem will only be resolved at the highest political level between the Minister and the Commissioner for Agriculture and Rural Development. ICSA will insist that no stone be left unturned in finding an equitable solution.

There are two key points the Minister must make to the Commissioner to find a solution to this problem. It must be made clear that this overshoot happened because of the transition from the old premia system to the new decoupled system. Ireland's correct decision to opt for full decoupling should not now be penalised. Last year, the former commissioner, Mr. Franz Fischler, stated that countries that introduced full decoupling would not be penalised for doing so. However, this overshoot is an example of a penalty caused by the changeover. The national quota is based on the combined number of applications for nine month and bull premiums. Why is there a corresponding cut in the 21 month premium even though no quota exists for this category? If Ireland had a 21 month national quota equivalent to the 1.077 million nine month and bull quota, we would still be under the 2004 quota by 5.5%. Implementing the regulation in this way is effectively a double penalty imposed on farmers without any just basis. This anomaly needs to be answered in the interests of fair play. It was either introduced intentionally or it was written into the regulation by eurocrats unaware of the net effect.

This premium cut is symptomatic of a premium system that was fundamentally flawed from the outset. Farmers who depended on special beef premium for their income represented the only sector not to receive an individual quota. Dairy, suckler cow, sheep and tillage farmers all had individual quotas and they knew they would not be paid for production above that level. The 28,000 affected beef producers that depend on the special beef premium for their income feel aggrieved, as the majority of them have been applying for the same number of animals in the past four years, yet they have been penalised in two of those years as a result of an increase in the level of application by other farmers. I want Members of the Oireachtas to push for fair play for these farmers. This is the last time this issue will arise, but that does not mean we can all sit on our laurels.

Prescription-only medicines represent another example of over-regulation and badly-thought-out rules. All antibiotics are already prescription only and are only available from a veterinary surgeon. ICSA has no problem with this. However, there is a need for common sense when applying routine doses, supplements and vaccines. Once again, there is a risk that Ireland will end up with an unduly rigorous system out of line with the rest of Europe. This will lead to a monopoly if only vets are allowed to prescribe all animal remedies. There already is compelling evidence that Irish farmers are paying more for routine veterinary products and doses than anyone else in Europe or worldwide. We want to see the same system that operates in Northern Ireland, whereby either a vet, a pharmacist or a licensed merchant who has undertaken a recognised training programme can prescribe low risk products such as doses for worms and fluke. This will ensure there is competition so that prices for these products are kept under control.

The Minister recently met her Northern Ireland counterpart, Ian Pearson, which is very welcome. However, it must herald a close synchronisation of rules north and south of the Border. It makes no sense to have two vastly different regimes in place, especially when it comes to veterinary medicines. Any attempt to develop two regimes will only lead to a cross-Border black market, which would be the worst of all for farmers.

I thank members of the committee for their attention. I do not want to give the impression that the Department of Agriculture and Food is responsible for all problems in Irish farming. However, a key point is that we must not allow over-zealous and unfair regulation to undo all the good work.

Deputy Naughten

I thank Mr. Thompson for his presentation and welcome him and Mr. Punch to the meeting. I have several questions on the three specific issues raised. On the issue of cross-compliance, the ICSA has made clear its position regarding the penalty points system, namely, that it does not think the system is acceptable. Mr. Thompson suggested alternatives to that system. Has the ICSA received any reaction from the Department in this regard?

Mr. Thompson seemed to suggest there would be a 5% tolerance in regard to the register and tagging, which may deal with some existing problems, the most serious of which concerns sheep tagging as it is impossible to have 100% compliance in this area. Given that the Garda Síochána admitted at an Oireachtas committee it has a tolerance level in regard to speeding offences, it would seem sensible to have a similar tolerance level in regard to the penalty points system the Department suggested.

Cross-compliance involves fulfilment of approximately 180 rules in 18 separate categories. At what stage are the ICSA's negotiations with the Department? What reaction has it received in regard to the implementation of its suggestions? When does it envisage inspections taking place on the ground?

What is the ICSA reaction to the introduction of an early instalment? At present, it is suggested one payment would issue to farmers in the first week of December. If this payment is delayed for any reason, whether for a technical reason or because a penalty is to be imposed, it will place significant financial hardship on many farmers. Will Mr. Thompson elaborate on this issue? Mr. Thompson stated that a clean break rule would mean no penalty could be applied to errors that happened prior to January 2005. Could he give an example of the type of errors that could be carried over into the new system?

The issue of overshoot has arisen because of the transitional arrangements here. It is imperative the Minister would make the case to Brussels that the situation is transitional and there is no overshoot in regard to the 22-month premium, and that farmers here should not be penalised because they have gone for full decoupling. The overshoot has arisen specifically because Ireland went for decoupling. Has the ICSA had discussions with officials in Brussels in this regard? Has it had any reaction from the Minister on the suggested arguments that should be put forward by the Department?

I recently discussed the issue of prescription only medicines with representatives of Veterinary Ireland. It made the point that an increase in fluke resistance has been caused by the manner in which fluke drenches have been used and argued that there should be greater control and rotation of fluke drenches. Will Mr. Thompson comment on this in the context of the prescription only medicines? It is critically important that we have competition across the board. It is Government policy to open up many of the sheltered areas to competition rather than creating other sheltered areas. Mr. Thompson might explain his reaction to the question of an all-Ireland approach to the animal health and animal movement regimes.

What is the ICSA's position on the nitrates directive? There was much debate on the Government position, which will be put to Brussels on 22 April. Has the ICSA a position on whether to concentrate on the nitrate vulnerable zones or take a whole country approach?

Deputy Upton

I thank Mr. Thompson for his presentation. I welcome him and Mr. Punch and thank them for preparing a concise document for us. I broadly agree with the thrust of the ICSA's alternative recommendations on the issue of penalty points. If farmers or anybody else are in breach of the regulations, there must be sanctions against them. The question is what sanctions are to be imposed and how. Unless there is an implication of fraud, which is a criminal matter and separate from a genuine error, we should take a more tolerant view.

We must be careful in regard to some issues. I like the idea of a yellow card system, which is basically a warning that gives a person an opportunity to get his or her act together within a reasonable period. There needs to be some definition of what are the important issues, some of which Mr. Thompson has identified. Farmers should not be penalised for minor clerical errors. It is clearly unfair if there is a risk of a large number of penalty points building up to the point where somebody receives a financial sanction due to a number of relatively unimportant errors.

I have concerns with the issue of tagging, which relates to traceability, which is very important to Ireland in terms of the safety and quality of our products as well as animal health. We have strong concerns about imported products that might not have ready traceability. Therefore, tagging is important. While I accept there are problems with sheep tagging, I would like to hear the views of the ICSA on electronic tagging, whereby tags are put in place, stay in place and are traceable. Broadly, the ICSA makes a good case in regard to penalty points and significant sanctions.

The question on prescription only medicines is similar to that regarding an all-island approach to having the same system in place in Northern Ireland and the Republic, which makes sense. Will Mr. Thompson expand on how this might be expanded in regard to animal health specifically and more general farming matters? Is an all-island approach the right way to go in terms of farming issues and concerns?

Deputy Wilkinson

I welcome the president of ICSA, Mr. Thompson, and Mr. Punch. We have listened to their views on many occasions. I compliment the ICSA on being the first farming organisation to come out strongly in favour of full decoupling, which showed great foresight on its part. I agree with much of Mr. Thompson's presentation, in particular that notice of inspection is vital. In the past some of the letters and documentation sent to farmers almost suggested criminality if errors were made. This must stop. I agree with Mr. Thompson's points on the overshoot.

With regard to inspection, it is important to remember that considerable sums of money will be paid to farmers and that farming would not survive without this. In the context of our position in Europe, we should be conscious of the work done in the past, which means we are seen as a clean, green island. We must do all we can to preserve this status. However, I agree with Mr. Thompson's point that there is room for common sense in regard to inspection and penalties. The problems caused by different rules and regulations, North and South, are another reason there should not be a border.

What is the ICSA's position on the nitrates directive? This is an urgent and contentious issue which may teach us that it is unwise to postpone indefinitely decisions that must be taken. I thank the delegation for its presentation and wish it well in its work.

Chairman

Would Mr. Thompson like to answer those questions first?

Mr. Thompson

I shall attempt to do so and will seek the assistance of my colleague, Mr. Punch, as required. A vast amount of money is pumped into Irish farming by the European Union. The ICSA accepts there must be proper rules and regulations governing the administration of that money to ensure it is properly spent and that farmers comply with standards of good practice. However, it is opposed to regulation for its own sake and which is unworkable and illogical. We are also opposed to regulation that does not stand up to the scrutiny of equity. For example, a person guilty of a serious motoring offence such as excessive speeding will suffer a serious penalty but nothing of the order which could be imposed on a farmer for doing nothing wrong other than failing to sign his or her name on a few cattle cards. We must remember that farmers were born to be farmers and entered the profession because it was an activity at which they excelled. They did not decide to become farmers because they were good wordsmiths or proficient in writing and paperwork. They are being penalised for what in many cases is their best effort.

Deputy Naughten asked about the reaction from the Department of Agriculture and Food to our representations. We have had an interesting meeting with the Minister, Deputy Coughlan, at which she requested that we sit on a committee to discuss the issue of cross-Border compliance. This plan, however, has not yet come to fruition. We are in the process of seeking a further meeting with her to discuss issues of concern, the beef overshoot, in particular.

In regard to fluke resistance, a survey conducted by the Department of Agriculture of Food found no evidence of residues in meat from routine remedies or medicines administered to cattle. This indicates that farmers do not spend money on unnecessary dosing of cattle for worms, fluke or other ailments. Fluke resistance is an issue that warrants further investigation. It is not merely a case of continuous dosing with one substance.

The ICSA recognises the necessity of electronic tagging and traceability, as raised by Deputy Upton. However, particularly in the case of sheep tagging, the system is incapable of being policed. It does not and never will work. Such a system is as useless as no system. At a recent meeting in Donegal, I offered €1,000 to any farmer with a flock of 100 or more sheep who could say his or her sheep were properly tagged and the flock register up-to-date. Notwithstanding that they are greedy for money in Donegal, no farmer could make such a claim. Departmental officials freely admit the system is not policeable. We are making fools of farmers and departmental inspectors by having a system in place which is unworkable.

An all-island approach in agriculture would be useful for practical purposes. Northern Ireland and the Republic have a large land boundary. Several issues present themselves in this context. Because of its nature, the extent of the smuggling problem cannot be documented. If matters proceed as planned, there will be a serious problem in terms of the existence of two regimes for prescription-only medicines. In the Republic only veterinary practitioners will have the right to write prescriptions and there will be an influx of Hiace vans into the Border counties from which animal remedies will be sold to Southern farmers.

The issue of cattle movements across the Border is another source of concern. In Donegal the shortest way to get to Dublin is through Northern Ireland. The restriction on travel across Northern Ireland places a significant extra burden on cattle as well as farmers. It is the simple and sensible way for many farmers in Border counties to drive through the North. People are turning a blind eye to it. The regulations in this regard are unworkable. I agree wholeheartedly with Deputy Upton that an all-island approach is important. Such an approach is also vital in the context of the ICSA's policy of developing a clean, green GM-free island. This is gathering momentum as time passes and is a major issue for the future.

Regarding the nitrates directive, the ICSA is concerned that concrete should be pumped into the ground in a farming system which is already heavily under pressure merely to contain slurry. Farmers have used good discretion in spreading slurry at appropriate times of the year. It is not sensible to impose on them a serious level of storage capacity which necessitates them to build huge containers at substantial cost. We are very much in favour of the Brosnan report and believe it presents a sensible compromise. As most of our members are cattle and sheep farmers, we do not have a big problem with regard to the level of organic nitrates, although it will affect a few. Our main problem is the storage of slurry and the associated costs.

Mr. Punch will address any matters which I omitted.

Mr. Eddie Punch

Deputy Naughten asked us to give an example of "clean break" as it applies to cross-compliance. It is easier to give an example of how it does not work. A farmer might have been subjected to an inspection during the past year whereby an inspector looked at his or her records during the years. He or she may have been subjected to an inspection three years ago and received a clean bill of health at the time. An inspector can come back three years later and discover a fault that properly relates to the period before the previous inspection but the farmer will still be subject to a penalty in that regard. I have examples of where this has happened.

There seems to be no limit to the timeframe. We raised this issue at a meeting in County Mayo last autumn and there was an animated response from the audience who had clearly suffered as a result of this. One cannot have a scenario whereby an inspector can look back on records of two, four or six years ago and use them in the calculation of penalties. Consider the penalty points system with regard to motoring offences. After three years, one's penalty points are wiped off the system and one moves forward on a rolling basis. Otherwise, everybody would be caught eventually. It would be nonsensical if a speeding offence was still held against a driver 17 years after it was applied. Eventually everybody would be put off the road.

A farmer may experience some shortcoming with regard to the notification of a farm-to-farm movement or an on-farm death. An animal might die in a forest, the paperwork might not be done and there may be no record of the animal going to a knackery. Let us call a spade a spade. Such shortcomings must eventually be removed from the system. If an inspection five years ago failed to notice that an animal had disappeared off the compass, it is not right or proper for an inspector to catch it now.

A clean break means that all shortcomings relating to the period before the introduction of full decoupling, namely, 1 January 2005, would no longer be used to calculate the level of non-compliance. Non-compliance should be based on what happens from that point onwards. If someone is subjected to an inspection in 2006 and there is a subsequent inspection in 2008, the inspector should be able to go back to the previous inspection but not before that date. One might say we are being pernickety. However, this is the difference between a fine of €1,000 and €500. It might be technical but this detail matters when a farmer gets caught and the inspector begins to tot up penalties.

On the issue of overshoot, a question was asked as to whether we had had discussions with officials and representatives from Brussels. We are trying to get a better handle on what the overshoot will entail. Officials are examining the matter before making their case in Brussels. It is important to build awareness of this issue, which is happening. The newspapers are showing more interest in the matter this week than one month ago. This is good but I will not make any more comments. It is a critical issue for a significant number of farmers and I welcome that committee members have taken it on board.

Senator Coonan

I welcome Mr. Thompson and Mr. Punch and thank them for their colourful presentation. It was refreshing to hear some of their comparisons and there is a wide range between them. I was struck by their reference, on the one hand, to sanctions appropriate to criminals and, on the other, the mere humble farmer. While I am one of those humble farmers, I was an agricultural contractor for years and might not totally agree with that description.

Specific questions have been asked and I do not want to reiterate them. However, I want to return to the pertinent and divisive issue of the nitrates directive. Does the ICSA favour a nitrates vulnerable zone approach or an all Ireland approach, as recommended by other farming organisations?

This issue was not raised but what is the ICSA's position on the farm retirement scheme? Farm retirement groups present difficulties in terms of their entitlements to quotas. Some of their members were caught in retirement outside the reference years which means that their next of kin will now have no quota rights. What is the ICSA's position on the matter?

Will Mr. Thompson and Mr. Punch expand a little more on the proposed yellow card system? It would be welcome and works well in one sport. However, it was recently introduced by a different sports organisation and has proved an absolute shambles and disaster. It would be interesting to hear the delegates' position.

The delegates mentioned building up credits of five points. Perhaps they will enlarge on this suggestion. Would these be offset against possible penalty points incurred, namely, one bartered against the other?

Are the delegates suggesting there should be multi-inspections because the nitrates directive and decoupling involve different Departments? Does the ICSA favour multiple inspections by each Department or would it lobby for one inspection? They spoke about bureaucracy. Do they honestly believe in the present era that there will be less bureaucracy than before? It seems to be getting worse rather than better.

With regard to rural development, how is the ICSA proposing the money should be spent? Should it go directly to farmers, as some suggest, or various organisations? I am speaking of modulation.

Governments and the European Commission will always resort to the old trick of divide and conquer. There is division among farmers in Ireland at this time.

Farming is in decline and yet we have a plethora of farm organisations representing it. What is the ICSA's position on this issue? Does it think the country is losing out because of it? Has the ICSA been in discussions with the other farming organisations to adopt a common approach on matters as serious as the nitrates directive?

Deputy Ó Fearghail

I will be brief. I join my joint committee colleagues in thanking Mr. Thompson and Mr. Punch for their presentation. As usual, it was succinct and to the point. The case they have made is eminently sensible on all fronts and the joint committee's members should support their proposals.

A forum of some kind is urgently required whereby the ICSA and the other farming bodies can engage actively with the Department of Agriculture and Food on these matters. I recollect clearly, as do other members, that as we moved towards complete decoupling, it was heralded by commitments on all sides to effect a massive reduction in bureaucracy. However, bureaucracy is self-sustaining. We must challenge the status quo and ensure that the commitments made prior to the introduction of decoupling are honoured. This can only be achieved through active engagement between all the parties concerned. Perhaps this joint committee can be of assistance by inviting the Minister or the relevant officials to appear before it in the near future to discuss what can be done. If it is in order, I propose formally that the joint committee should do so.

Chairman

The clerk to the joint committee will take the proposal on board.

Deputy Crawford

I welcome Mr. Thompson and Mr. Punch. I apologise for my absence during their presentation but I have it to hand. I also thank Deputy McGinley for deputising for me. I wish to raise some issues briefly, which have already been discussed to a degree. I was interested to hear Mr. Thompson's comments about the rampant cross-Border smuggling in the border counties. As far as his reference to vans is concerned, I must say that when I campaigned in south Tipperary during the last by-election there, I encountered more calf dealers dealing with Northern Ireland than there are in County Monaghan. The Border counties are not the only affected areas.

Senator Coonan

That was the rich Tipperary constituency, not the poor one.

Deputy Crawford

I am very angry about the tagging issue. Some time ago, I tabled a parliamentary question and as I do not have the actual figures in front of me, I do not wish to be misquoted. However, approximately 300,000 tags are lost in any given year. When one encounters a small farmer who is penalised for having one animal without tags on the day the inspector comes, it shows how ridiculous the situation is. This is why I am very angry about the plethora of inspections. Unless inspections are controlled and performed in the same fashion as inspections of departmental personnel, who also make mistakes, they will cause serious problems for farmers. Although people may have thought that all bureaucracy was to be abolished, this would be naive because, as Mr. Thompson stated earlier, there is much money involved and there must be control. However, it must be controlled with common sense.

As a representative of Cavan-Monaghan, where in addition to dairy and beef production, pig and poultry production also takes place I am extremely worried about the nitrates directive. I would like to see us present a united front on the issue because of its seriousness. At a recent meeting in Cavan, I was informed of a Donegal farmer who is leaving the pig business because he will be unable to meet the requirements proposed under the Brosnan report, never mind whatever directives will be introduced subsequently. We have very little time to get something done and need to have a strong united front on the issue. I am interested to hear the ICSA's reaction to the suggestion that we should change to nitrate zones.

On the issue of inspections, I make no apology for putting the following example on the record. The brother of one of my closest friend's wife died and the day after, the inspectors arrived at the house and refused to leave. My friend's wife could not go to her brother's wake as she performed the farm's paperwork. The inspectors refused to leave until they had gone through the entire issue. We must get away from this kind of bureaucracy. The man never had a problem with the Department in his life and yet, at the time of a tragedy, his family was treated in this way. We must ensure together that there are proper rules and advice on when inspections should take place and that common sense is applied.

Senator Callanan

I join the other joint committee members in extending a welcome and in acknowledging the excellence of the ICSA's presentation. It has its usual clarity for which I thank the ICSA. Many interesting questions have been asked. I will make some observations and also ask a question. My first observation is that currently and for some time past, young people coming into agriculture are highly trained and qualified. I make the point with reference to the issue of prescription only medicines, POMs, that young farmers are highly trained and are quite capable of discerning what is right and wrong. Otherwise, one would be obliged to admit that the training is of no value. I do not believe any members of the committee wish to admit that as the young farmers are quite competent and confident in what they do.

I was fascinated by Mr. Thompson's reference to the all-Ireland approach to GM crops as I am interested in the subject. Can he expand on the issue? I am a farmer and producer and it is in my interest and that of all farmers who produce a quality product, that the consumer wants, requires and feels safe using our products. My bottom line is that I do not know the correct approach to GM crops. However, I will go further. For certain products, one is now legally free to use GM seed here and throughout Europe. If, in ten or 20 years' time, it is found that the soil in which we grow food is corrupted or polluted, one may choose whatever term one wishes, there will be no reverting to the present position. Can Mr. Thompson spell out if the ICSA has a direct policy statement on this issue? I have stated mine.

I welcome the all-Ireland approach and have been propounding it for some time. It harks back to the outbreak of foot and mouth disease and before that. We all wish to see that bloody Border gone, but it still exists for some reasons. Although the two jurisdictions are managed differently there are still many complementary areas within which we can work. We should build on them and should encourage the Department, the Minister and everyone else to so do.

The nitrates issue is a common topic and we all have our preferred solutions to it. We all have positions beyond which we believe everyone else is wrong. Does the ICSA have a view on the earthen lined tanks and on anaerobic digestion? I have referred previously in this joint committee to a duck producing factory farm, in Deputy Crawford's county I believe, which has the methodology——

Chairman

Did Deputy Connolly know that the Senator was travelling through that county?

Senator Callanan

Deputy Connolly took me around, or perhaps it was Deputy Crawford or the Chairman, it does not matter. Throughout this country, we have a number of anaerobic digesters. As a society, we are not exploiting the advantages they will bring to us as far as the Kyoto Protocol is concerned. We must meet the Kyoto Protocol targets. We will be heavily penalised if we do not do so. As a layperson, I believe there will then be in place an anaerobic digestion system, as highlighted in a radio programme today in which it was pointed out that such a system was in place in Monaghan, which clearly demonstrates its value. Will Mr. Thompson give me his views on the subject?

Chairman

Deputy Naughten and I met a few months ago in Enfield to discuss the issue of the overshoot and noted the concern of members because it presents a serious problem for many beef producers. Deputy Naughten and I have informed the Minister about the problem. The Minister and her officials are examining it and will be meeting the ICSA soon. I hope this problem can be resolved because many farmers will suffer if it is not. Does Mr. Thompson know how many European countries are affected in the same manner as Ireland and how this will affect us when the Minister travels to Brussels to discuss the problem?

Mr. Thompson

Mr. Punch and I have divided up the questions between us. I will address the question of multiple farm organisations. This question came up last year when we had a discussion on it. At that time I stressed the importance of having alternative farm organisations rather than relying on one, in the same way as it is healthy to have a strong Opposition party.

I hope the joint committee will not think it arrogant of me to say so but two years ago I delivered a speech to our annual general meeting upon becoming president of the organisation. I recognised that, from an objective perspective, the ICSA always came up with ideas first. At the annual general meeting I said we would pilot the lead ship and not object if other farm organisations wished to follow us. The ICSA led the way on the single farm payment. It also picked up on the issue of the beef overshoot three weeks ago when people did not realise what had hit them. Now they are all following in its wake. I am not criticising farm organisations for doing so. The ICSA has led the way and has no objections if other farm organisations wish to follow it.

Somebody questioned whether the modulation money should go directly to the farmer. The ICSA believes the money should be given directly to farmers rather than siphoned off into an organisation supporting farmers. The money — 3% — came from farmers to begin with and we believe it should go back directly to them.

The ICSA submitted proposals about where the money should go. It believes it should go to the suckler cow and sheep area which has possibly received the worst deal in terms of decoupling. It is very important that the suckler cow, the base animal for producing good quality calves suitable for export, and sheep to develop breeds of sheep or breeding in sheep are targeted. We are told it is unlikely the sector will receive the modulation money in 2005. It has been suggested that it should be added to the disadvantaged area payment, to which the ICSA would not object because it would only be done for one year, the money would go directly to farmers and the bureaucracy involved would be minimal because it would not cost much out of the figure of €18 million to administer the scheme. The ICSA would have reservations about including the money with the disadvantaged area payment as it does not think it would be the right home for it in so far as it is spread very thinly and not targeted. However, it will probably support including the money in the payment for one year.

The other issue I wish to address is tagging. I am delighted to see that Deputy Crawford is annoyed with it because I certainly oppose the practice. I have extensive experience of it on the home farm and see cattle that could have two tags in place in the morning and be missing one in the evening. It is exceptionally annoying to a farmer to be penalised for something over which he or she has no control as cattle can easily lose their tags on barbed wire or bushes.

Deputy Upton raised the electronic tagging of cattle. We are certainly interested in examining such a system, although we are not completely sure it has been fully and properly investigated. There have been instances where it has not been foolproof. We are interested in new developments in this area which may provide a solution to the problem.

Neither I nor anyone else knows what the right answer is on the issue of GMOs. We spoke to scientists who took part in a recent conference at UCD and asked them whether they could guarantee there would be no problem with GMOs in 20 years time. One of them told us that there were no guarantees. I would like to look at the history of scientists' pronouncements in this regard. Meat and bone-meal were prime examples——

Senator Callanan

Regarding the issue of DDT——

Chairman

Senator Callanan must allow Mr. Thompson to continue.

Mr. Thompson

According to scientists, using meat and bone-meal was an excellent idea but they were proved wrong. What will happen if they are proved wrong about GMOs? Even at the moment, scientists do not give any guarantees regarding GMOs.

Our main reason for opposing the use of GMOs is the danger posed by them but we also think portraying Ireland as a clean, green GM-free island would give it a trading advantage. Ireland would not be part of the commodity structure selling into the commodity market in which it cannot compete with the Brazilians and Argentinians who are pumping beef into it. Ireland can compete in niche markets. It is the food island of Europe and can feed the peoples of Europe with food that we know to be safe because it is GM-free.

Like all Ulster people, I am prepared to admit I know nothing about anaerobic digestive systems.

Mr. Punch

A question was asked about whether we favour a nitrates vulnerable zone. The ICSA examined this issue for some time and is uneasy with it. We have members in every county and I cannot think of a way of telling those in Monaghan, Cavan or anywhere designated as a vulnerable zone that they will be the patsies while the rest of the country gets off the hook. Good regulation is good regulation and unfair regulation is unfair regulation. Cordoning off the problem in one part of the country is not a solution. We must stick together as a country and try to get a reasonable nitrates policy.

This will be difficult. There are concerns about the costs that will be imposed on farmers but there is no solution to be found in saying that two or three counties will carry the can for everyone else. We must have innovative ways of solving this problem. Senator Callanan's comments on earthen bank tanks are correct. Our national executive examined what was being done in this regard in Grange recently, including stand-off pads outside slatted units, for example. They are worthwhile innovations and systems and we must ensure these types of solutions are acceptable for even the REPS programme.

One concern expressed to the executive was the possibility that the earthen bank tank idea would be ruined by the requirement for civil engineers to certify them, making them so expensive and complicated that it would be easier to lay a concrete tank. This is the kind of bureaucratic nonsense we must avoid. The stand-off pads at the slatted sheds are not only a good way of getting value out of these sheds, but are more animal health-friendly and animal welfare-friendly, as animals can go outside as they like. These are the types of innovative ways around the nitrates storage problem for which we must seek.

I will comment on anaerobic digestion and broaden it to speak about bio-fuels. I recently visited a man in Oak Park who has been carrying out significant work in this area for the past 20 years, but he may soon retire before any progress has been made. These are important issues that need a little help by way of innovative excise duties and tax concessions. We know what is happening in regard to crude oil prices and the Kyoto Protocol. We must face up to these issues and others. It is an important matter on which our legislators, particularly in the Department of Finance, must show innovation to make these ideas practical realities. They are good theories but do not work in practice due to narrow-mindedness in taxation.

Where do we stand on the issue of the farm retirement scheme? I have met the people involved on several occasions and sympathise with them but the single payment is a scheme designed to help people who are farming. People who have availed of the early retirement scheme are caught out by the introduction of the single farm scheme. Having said this, the solution is not their receipt of the single farm entitlement at others' expense. Young farmers also experience problems in this area.

We must examine the rural development reform that is ongoing in Europe and put a better, updated and inflation-linked retirement scheme in place. We must also examine the inequities that are present. If one has an old age pension, this is dipped into by the early farm retirement scheme. If people are in receipt of their pensions because they have made contributions over the years or because they are entitled to it due to old age, it should be left alone. If they qualify for the early retirement scheme, it should be additional money and not set against the others. This is penny-pinching and I do not agree with it.

We were asked to expand on the issue of credits and penalty points. There are 18 potential areas on which a farmer can be audited under the single farm system and much of this auditing can go wrong. The farmer has high and exacting standards to meet. Under the Agriculture House proposals, a farmer who does well in 17 out of the 18 areas but not in the 18th will be done for. This is unfair. Even within the confines of the inspections on animal ID, registration and so on, a farmer can do a very good job on the fundamentals. The herd register could be 98% accurate and animal tagging could be 99% accurate but the farmer will be caught on the morning when one animal has no tag. This happens.

The Department proposed four penalty points for failure to sign an animal passport, for example. I have a six-month old credit card that I have not yet signed but I use it in filling stations and the like without being stopped. The farmer has to sign the white part of the passport to get it. This is, therefore, a trivial failure. One receives 15 penalty points for minor shortcomings. We suggest that, if one has 95% accuracy of herd registration or 99% animal tagging, positive points can be gained to set against the penalties. Our key point is that, if one is 97% compliant, there should not be a fine.

Senator Coonan referred to how the yellow card system did not work well in the GAA. It is important to understand the message in this. In the GAA, this system has been thrown out because it was implemented in a severe way. In soccer, if one receives a yellow card, one can proceed with the game. In GAA, the player must go off if a yellow card is received.

Senator Coonan

The farmer sin bin.

Mr. Punch

The lesson here is that, when one implements a system that is patently too severe for minor offences, it does not work.

We are examining the issue of overshoots and the systems used in other countries. Not all countries are implementing switch-overs to full decoupling in 2005. They do not share our problems. Some of the countries have had difficulties, such as Spain and France, and they will not have full decoupling. We are waiting to examine what happens in some of these countries but many of them are not making the sudden overnight switch we are making.

Deputy Naughten

Will Mr. Punch elaborate on his comments about the modulation fund? He accepts that, from a logistical point of view, it should be paid on a disadvantaged area-based payment system from the first year on. Could Mr. Punch clarify whether he wishes to have it targeted on the development of quality stock rather than on the disadvantage area-based system in the long term? What should be Ireland's negotiating position on disadvantaged area-based payments? This issue is close to my heart, as it is to Deputy Crawford's and a number of committee members.

Leaving aside the issue of how electronic sheep tagging will be paid for, by understanding is based on reports from Agrafacts that the new electronic tags will be attached to the ear, and this would defeat the purpose of having an electronic tag. Can the witnesses confirm this?

On the issue of GMOs, sadly everyone is missing the whole focus of the debate on whether GMOs are safe. That is not the issue and that is not where the debate is. We have been eating GM food for the past 15 years. Anyone who has eaten vegetarian cheese has eaten a genetically engineered product. The issue is that 85% of EU consumers do not want to consume GM products. Whether it is safe is not the issue. The consumer does not demand it. We should try to provide a product the consumer wants. We should look at this solely from an economic point of view. Brussels has already made a decision on the safety of GMOs. We should consider the potential benefit for Ireland if we follow the GMO-free route in terms of exports.

Mr. Thompson

Concerning modulation funding, for logistic reasons the best option for the first year is a scenario where it is paid out in addition to disadvantaged area payment. ICSA made a submission to the Department of Agriculture and Food on modulation funding and suggested that it be diverted. We considered that 80% of it should go to developing quality in the suckler herd. We recommended a scheme in conjunction with Córas Beostoic agus Feola, CBF, the meat and livestock board, where cattle farmers would permit scoring of their herd. Every suckler farmer in this scheme would have his cattle scored. He or she could be advised on what bull to use and what improvements he could make. If we are to provide what the market wants, particularly the Italian market and the high end of the market, we need to have quality animals for the market. Farmers can see that it pays dividends to have a good beast available for the market. To supplement the payment the suckler farmer receives is a step in the right direction.

Mr. Punch

We have accepted that this year the smartest thing to say is that modulated payments will be added on to disadvantaged area payments. There may be a better way of spending modulated payments and we would like to see this targeted. We do not want to see excessive bureaucracy. One possibility is that the payment be made to suckler farmers as an additional measure under the REPS scheme. Then there would be only one inspection, and there would not be an increase in bureaucracy.

The disadvantaged area payments are of great concern to us. We made a submission to the Department of Agriculture and Food today as it is reviewing this scheme. The committee will be aware that there is rural development reform in Europe at the moment. The Court of Auditors expressed some concern but this is misplaced. Disadvantaged area payments need to be increased and maintained in all areas where they apply, and perhaps extended to the rest of the BMW area. The changeover from socio-economic criteria to permanent handicap criteria may not be a bad thing for Ireland. Ireland will not be as disadvantaged by this change as had been expected. There may be some issues in district electoral divisions, and that could be fun. It will be as bad for the committee members as for the members of my organisation.

The Deputy is correct in saying there were two types of electronic tagging. One was ear tagging which did not overcome the problems of tag loss. It might be more useful to have a bar code for sheep. We had a meeting some years ago with officials from David Byrne's directorate when he was the Commissioner. The key problem is still that it is too expensive. It is also very difficult to get the bolus into the sheep. One has to be aware that at present electronic tagging for sheep is not an economically viable option. Technology tends to come down in price as it develops and tagging may be viable in the future but at the moment it is not.

On the GMO question, the Deputy is right, especially when one considers some of the food eaten after drinking a few pints on a Saturday night. I am not that fussy about what I eat sometimes.

Deputy Naughten

Its not premium beef anyway.

Mr. Punch

However, we are about ensuring that the European consumer sees Ireland as a place where the best food can be sourced, so that when they eat early on Saturday night when they are quite discerning, it is an Irish food product they seek. We must be smart and portray the food that comes from this island in the best way. That is our position. We are not fanatics who think that GM food is poison. We are saying we want to put the best foot forward, but also that if there is a scare in ten years time we know from bitter experience that it is the farmer who picks up the tab. That happened with bovine spongiform encephalopathy, BSE, and meat and bonemeal, and we do not want to see a repeat of that.

Chairman

I thank Mr. Thompson and Mr. Punch for attending today and for responding to the questions committee members' raised. I know this committee has met the organisation several times and we look forward to meeting it again. We will suspend the meeting for two minutes until our next delegation comes in. Is that agreed? Agreed.

Sitting suspended at 4.29 p.m. and resumed at 4.30 p.m.

Chairman

I welcome Mr. Pat O'Rourke, president of the Irish Creamery Milk Suppliers Association, ICMSA, Mr. Ciaran Dolan, general secretary, and Mr. James O'Mahoney. Before asking Mr. O'Rourke to make his presentation, I wish to draw attention to the fact that while the members of the committee have absolute privilege, the same privilege does not extend to witnesses. Mr. O'Rourke may now proceed with his presentation.

Mr. Pat O’Rourke

I thank the committee for the opportunity to address it on the nitrates directive. This is an important issue that will have a major effect on the viability of family farmers in the future. Our proposal is on the basis that we need, and must comply with, the EU directive, but at the same time we must take on board the impact it would have on the agriculture sector, and use all available flexibility in its implementation. The committee is aware that Ireland has an extension until 22 April to submit to the European Commission an action programme to implement the directive. This extension is welcome as it gives us an opportunity to examine the options available and decide what is the best option for Ireland.

We have quantified on a national basis that if an all-territory approach were adopted it would mean an additional cost to farmers of approximately €66 million. If an nitrate vulnerable zone, NVZ, approach were taken it would reduce that cost to €21 million, an annual saving of €45 million. It is important to stress the directive gives significant flexibility to a member state and is completely different to an EU regulation, which operates on the basis that one must comply with the letter of the law. With a directive, one must achieve its objective, and the objective of the nitrates directive is to remove and eliminate nitrates in water. Europe has given us the flexibility to operate an NVZ approach. While SI No. 213 of 2003 has been submitted to the Commission stating that an all-territory approach will be implemented, that is only national legislation and can be changed.

A key issue is destocking, as under an all-territory approach approximately 13,000 farmers would be required to destock, but if an NVZ approach were adopted this figure would be reduced to 3,000. The all-territory approach, and the nitrates directive as it is designed, would seriously disadvantage grass-based production. The one competitive advantage Ireland has is its ability to grow grass. What the directive entails is that farmers must reduce livestock per acre. In other words, while one can grow grass very successfully, one must reduce the number of animals that graze it.

We broke down the impact of the nitrates directive according to the effect on individual farmers on a county basis. The figures are in the appendix at the back of the document distributed to committee members. I stress that our calculations are based on livestock only and do not involve the more intensive pig and poultry sectors, which would be significantly higher. In each of the counties there are significant savings by choosing an NVZ approach.

We as farmers, and our association, are keenly aware of the environment. Under the water framework directive all other aspects of water are covered, and an action plan will be drawn up to ensure that every farmer complies with it and that we maintain and improve water quality. On the map distributed one can select any county and see that it does not make sense——

Deputy Naughten

We do not have that map.

Mr. Ciaran Dolan

We have hard copies to distribute.

Deputy Naughten

Based on the information we have, the entire country is a nitrate vulnerable zone.

Mr. O’Rourke

We will rectify that omission.

Chairman

The committee has seen those maps. They are available, perhaps not from the ICMSA.

Mr. O’Rourke

The map is a scientific EPA map, and it has identified that an NVZ approach would exempt 70% of the country from a nitrates action programme. Approximately 30% would have a nitrates issue to be addressed. In summary, it is urgent that the committee should examine the NVZ approach prior to the final submission being made at the end of April. An NVZ approach would save approximately €45 million per year, it would reduce the amount of farmers that would have to destock from 13,000 to 3,000, and it would reduce the cost burden of applying for a derogation for many farmers. From an environmental point of view, there is no scientific advantage in designating the entire country as a nitrate-vulnerable zone, whereas from an economic point of view, there are serious disadvantages.

My final point, before I hand over to the general secretary, is that we are now in a post-decoupling environment where priorities are the market and competition. We all know, and our competitors know, that the one advantage Ireland has is its ability to grow grass. The Commission has recognised that grass-based production in Ireland is crucial and has given us the option of going for an entire country one-size-fits-all approach, which is not the way forward, or an NVZ approach. It is crucial that we opt for the NVZ approach as everyone would be a winner. Farmers in the NVZs will be able to target resources and have an action plan to rectify the problem. The environment will win as where there is a problem it will be addressed. Where there is no problem it does not make sense to place an additional cost on farmers without positive advantage to the environment.

Mr. Dolan

I will briefly put a number of points before the committee. We are in the last stage of this debate because Ireland must resubmit a plan of action to the Commission before 21 April.

The State has been before the European Court regarding the implementation of this directive. Two arguments were advanced as to why Ireland opted for an all-territory approach in national legislation. The first was that it would provide a legal basis for and a convenient method of implementing the various environmental regulations. The second argument was that it would avoid dividing the country into regions. Our proposals will deliver on these two points more effectively.

The nitrates directive should be implemented on a purely scientific basis. We suggest to the committee that the other regulations and directives, particularly the water framework directive, apply to the whole State and provide an opportunity for all-territory implementation, if the Department of the Environment, Heritage and Local Government so wishes. There is no need to use the nitrates directive.

The Brosnan report, which formed the basis of Ireland's submission to the European Union, identified at least three zones in the country with differing requirements regarding winter storage of farm manure and slurry and different closing dates for the application of fertilisers and animal manures. We do not need to opt for an all-territory approach on the nitrates directive. There is no advantage from the point of view of administration or from the point of view of the environment, in terms of protecting or enhancing it. There is, however, a considerable disadvantage in terms of cost. The costs Mr. O'Rourke outlined earlier solely relate to the grazing livestock sector and do not include the considerable costs incurred as a result of reduced output in the poultry and pigmeat sectors, the additional costs of consultants and the production of nutrient management programmes to avail of the derogation.

In the event of farmers having to rely on a derogation, the requirements will be similar to the EPA licensing system that currently applies to most pig farms. There is time, though admittedly limited time, to reassess our approach at national level and to make a submission to the EU that embraces all the legal requirements, both European and national, as a total package. Within that total package, we should opt for an NVZ approach on the nitrates directive.

Deputy Naughten

There is general agreement here that the nitrates directive will have major implications, especially for intensive pig and poultry production. It has the potential to completely wipe out that sector. It is disappointing that the Minister is indicating that we may see a climb-down on the standards set in the Brosnan report, in order to expedite the issue and reach a resolution before examining the rural development fund. Can Mr. Dolan elaborate on the reasons for taking a different approach for the one adopted by the other two farming organisations? Those organisations have argued that it is in the best interests of farmers to adopt an all-territory approach. They have defended this position vigorously.

The all-territory approach has been sold to farmers on the basis that the derogation will be granted. The scientific evidence is there, the map indicates that 70% of the country is not vulnerable to nitrate leaching. The documentation the Department of the Environment, Heritage and Local Government and the Department of Agriculture and Food submitted to Brussels indicates that 8% of all land is vulnerable to nitrate leaching, while approximately 12% of the agricultural land is vulnerable, which is very different from the 30% figure claimed in Mr. Dolan's submission. This 30% figure was obtained from the EPA. Perhaps Mr. Dolan could comment on that discrepancy. Accepting the EPA figure would mean that 70% of farmers would be automatically entitled to the derogation because they are outside the nitrate vulnerable zones. Therefore, the concern is the other 30%, or 18%, depending on whose figures are used. If one takes farmers in the nitrate vulnerable zones, in County Meath, for example, what would be the impact on them of the nitrate vulnerable approach as opposed to the all-territory approach? Is there an option for those farmers to get an individual derogation under the all-territory system and is this option ruled out under the nitrate vulnerable zone system? This would appear to be the case and I would welcome clarification on this.

Mr. Dolan has argued that the nitrates directive should be implemented on a scientific basis. I would argue that the Brosnan report provides the scientific basis. All of the experts came together and Teagasc produced the statistics in the Brosnan report. The Minister stated that the scientific evidence supporting Brosnan has not been questioned in Brussels and that the report is scientifically sound.

The restrictions in storage are completely contrary to the maps Mr. Dolan provided and I would welcome clarification on this point. What is the reason behind the fact that the areas of the country that require large amounts of storage are not the areas that are designated nitrate vulnerable zones. Mr. Dolan commented to the effect that the derogation process would be similar to the EPA licensing process, but we have been led to believe otherwise. For example, County Mayo and most counties in the west, except an area around Galway, are designated as being outside the nitrate vulnerable zones and therefore farmers in those counties would receive derogation automatically. Mr. Dolan's comments on the EPA licensing process are misleading because our understanding is that derogations will be granted automatically on the basis of scientific evidence from the EPA itself.

Deputy Crawford

: I welcome our colleagues from ICMSA. In the past I have disagreed with their organisation but I agree with them on this issue. I represent counties Cavan and Monaghan and from our perspective, this is a disaster. There is no other way to describe it. Under the proposals in the Brosnan report, we are being asked to provide the highest level of storage in the country and the pig and poultry sectors are looking at closure if they do not find alternative ways to deal with the problem. The suggestion that new machinery will solve the problem is simplistic. I would appreciate clarification on the points Deputy Naughten made because D-day has arrived. The situation is critical. Farm organisations did not show their support. They raised the issue of toxins but if these do not enter the process, they will not become part of the end product. Europe views biomass plants as the best means to deal with this type of matter. Their efficacy has been demonstrated in the United Kingdom, Canada, the United States and across Europe.

Once this agreement is signed, farmers in Meath, Louth and other areas will no longer be able to accept poultry and pig manure without full documentation. While derogations may be available where waste is over-produced on one's own farm, this will not be so for farmers who accept the slurry or poultry manure of others. A farmer in Donegal has already decided that he will not be able to deal with this new state of affairs. I was informed yesterday by a Monaghan farmer with an Environmental Protection Agency licence that he will not be able to continue his current work practices. The writing is on the wall for the intensive industries of poultry and pig production. There is also trouble ahead for intensive beef and dairy farmers.

Has the ICMSA discussed with senior officials in Brussels whether they will consider a nitrate vulnerable zones approach over a nationwide one? These officials must be satisfied. This country is now in court. We have been given a reprieve but will have to mount a defence. In the context of intensive production, in the past 12 or 13 years we have been backed up against a wall and are now looking at the firing squad.

Senator Coonan

I welcome the ICMSA delegates and thank them for their specific and detailed presentation. This is a pressing issue. It is unfortunate that it has been in the pipeline for the past 12 or more years and we are now being forced into a hasty decision which may not be in the interest of farmers. Many questions have been asked and we eagerly await the ICMSA's replies.

The map supplied by the delegates does not include my constituency of north Tipperary, which has implemented restrictive agricultural by-laws partly for the protection of Lough Derg. People there contend that the problem does not arise in north Tipperary but comes down the Shannon from places such as my colleagues' counties of Roscommon and Cavan. How does the ICMSA address that issue in its approach on non-vulnerable zones? The situation in the other part of the county has been addressed through the Suir and the three rivers approach which was beneficial because it received full co-operation from the farming community. Is it the case that derogation only applies for four years and if so what happens afterward?

The map indicates an intensive tillage area. Is it correct to suggest that other farmers are being hung out to compensate the tillage farming community which contributes enormously to this problem?

Deputy Hoctor

I welcome the members of the ICMSA and thank them for their clear presentation. We have no doubt as to their proposals but I remain slightly confused with some aspects. Last October's rejection by the Commission after our efforts and consultations on the best possible management proposal was a major disappointment. We certainly now have our backs to the wall on this matter despite the extension to 22 April.

How would the ICMSA, in claiming that certain areas need to be addressed under the nitrates directive, respond to those who advocate protecting the waters? I am not the greatest environmentalist in the world but those of us who are close to the soil agree that we must maintain the existing high water quality and look after vulnerable areas with poor water quality. How is this to be done? In the context of the ICMSA's reaction to our proposal of last October as being too strict, how may we return to the Commission with these new proposals when the new instructions to the Minister are more restrictive than before? We are now being told that only a small sector of the farming community should be looking after this matter.

Mr. O’Rourke

I will endeavour to answer each of the many questions posed. Deputy Naughten asked why the whole territory approach of two other farming organisations is not being taken by the ICMSA. I believe our approach is correct. The whole territory approach in Deputy Naughten's constituency will cost farmers there €2 million and €2.6 million in Cavan and Monaghan. The NVZ approach in the Deputy's constituency will cost nothing and in Cavan and Monaghan will cost approximately €860,000. This is in the context of livestock rather than poultry or pigs. The financial impact clearly demonstrates that the NVZ approach is the correct one. Farmers in 70% of the country have difficulty in understanding why they must apply for derogation and incur costs when scientific evidence shows no nitrates problem in the water of their respective regions.

Negotiations should be conducted from a position of strength. I accept Deputy Crawford's contention that we are in court but while we are aware of technical difficulties, we ought not plead guilty. We should argue on the basis of science and use every available option to Ireland's maximum advantage.

It is believed that the derogation will automatically be received but this will not be so. Designating the whole country means that Europe and environmentalists will be given to believe that current farming activities give rise to problems. The nitrates issue is about the stocking rate per acre. It will be necessary to plead guilty and then seek permission from Europe to continue farming in the present manner.

Teagasc has advocated for years that a farmer with a stocking level of one livestock unit per acre should be efficient, focused and exploit natural advantages. Under a whole country approach, we will have to seek a derogation from the European Union for any farmer stocking above one livestock unit per acre. In practical terms, that means a farmer with a farm of 100 acres who is milking, say, 80 dairy cows and finishing 80 cattle, must now seek permission from the European Union to continue doing so. This must be done on an individual basis; that is the key message. It is not that a magic wand can be waved and everybody will get a derogation. A farmer must seek permission to continue with the same type of farming. The idea of the whole country approach was sold on the belief there would be no problem in automatically getting a derogation.

The submission sent to Brussels, referred to as the Brosnan submission, contained no reference to a derogation. The question was asked why it had been rejected. It was rejected on the basis that an action plan taking a whole country approach would not achieve the objective of improving water quality which must be achieved within four years. If it is not, we will have lost another option; flexibility will be gone; the European Union will tell us how to farm and we will not even have the opportunity to seek permission. As far as we are concerned, therefore, based on any criteria, on science, on economic impacts at county or individual farm level, it is clear that an NVZ, nitrate vulnerable zone, approach wins.

I ask the general secretary to go through some of the other issues raised in dealing with water quality in areas designated on the basis of science. It is suggested that the source of some of the water problems in Tipperary is in Roscommon, Leitrim and elsewhere.

Deputy Naughten

And Longford.

Mr. O’Rourke

It would be wrong to give the impression that we want to weave our way around water quality issues. There is no doubt there is a phosphate problem. We accept this because scientists have analysed the water and found phosphate problems throughout the country, some of which are associated with agriculture. A significant part is associated with untreated sewage from towns and villages. It is a problem that needs to be addressed. There is an action programme through by-laws and the water directive which will ensure every farmer will play his or her part in improving water quality. That can be done.

Under the phosphates directive, there is provision for longer storage and spreading periods. The directive does not interfere with the viability of a farmer. He or she can continue with the same stocking rate per acre under the directive as well as the water framework directive. The only directive that zones in on and undermines the viability of farmers in terms of stocking rate per acre is the nitrates directive. There is real annoyance that progressive, intensive farmers who are doing no harm to the environment in 70% of the country will now be forced, as Deputy Crawford outlined, to do one of two things, give up farming or destock, which is probably one step away from giving up farming.

Our general secretary will deal with some of the other technical questions.

Mr. Dolan

A number of members raised questions which I hope to address directly. I will start with the question put by Deputy Hoctor regarding how we can marry our proposal with what is mandatory and to which the Minister must respond. We have not come to the joint committee with a proposal that will not even get off the starting blocks. Essentially, we are saying that, taking the whole set of directives and regulations, there are three main directives — the nitrates directive, the water framework directive and the waste directive. Ireland should treat these as a package and submit a modified proposal based on the Brosnan submission which will adopt a whole territory approach but not in terms of nitrates. We would not suggest that the Government submit an action programme that would exclude 70% of the territory when Ireland already has difficulties. That would be an abuse of the committee's time.

There is the possibility that what we suggest can be obtained by Ireland. We have sought and obtained counsel's opinion on the interpretation of the directive. The European Court of Justice has ruled in the Commission v. France that a member state may have to take more than the nitrates directive into account. We are suggesting this approach. There is no question, therefore, of excluding any areas. That is what underlies our approach. Otherwise our proposal would be nonsense and no Minister could expect to get a hearing in Brussels.

A derogation is a temporary licence granted by the European Commission based on expert, independent legal advice at an international level to a member state to allow that member state, on condition that it follows the regulations pertaining to the derogation, to grant individual farmers permission to derogate from EU law in relation to the environment. I am sorry to give such a convoluted response but it is important that when people use the word "derogation", they know precisely what it means. So far only approximately 5% of Denmark has succeeded in obtaining a derogation. A derogation is not an administrative licence. It is based on independent technical and scientific advice submitted to the Commission on foot of a programme advanced by a member state.

Deputy Crawford asked whether we had recently met European Commission personnel. In February 2004 we were told by a senior Commission official with responsibility in this area that a derogation was similar to an EPA licence. Having regard to the legal requirement, we should not be surprised by this.

Deputy Naughten asked about the figures. The map included in our submission is an EPA map. There is a justification for the figure of 13% vis-à-vis the Department’s figure of 15%.

Deputy Naughten

I understand the figure is 12%.

Mr. Dolan

It is 12% to 15%. We will not argue over a couple of percentage points. The EPA map is based on a catchment area. It is, therefore, based on the river structure. It includes areas where there is no problem but which are contiguous with an area where there is a problem. It is based on river catchments. That is the EPA's assessment of the issue and the reason for the difference. The Brosnan report is based on science and our paragraph 9 does not contradict the Brosnan report because it addressed issues, directly and indirectly, other than nitrates. What we suggested to the committee, and what is contained in our paragraph 9, could be readily accommodated within the Brosnan approach. There will be requirements in regard to minimum storage requirements in all counties. We must have regard to the phosphorous requirements in other counties.

On the issue of the use of animal manure on other farms, at present pig farmers can spread pig manure on other farms provided the areas are identified and provided those lands have a nutrient level below the levels set by the EPA. If that is not the case that land cannot be used. The same arrangements, maybe slightly modified, or the general thrust of the derogation, will probably follow that line. The Department of the Environment, Heritage and Local Government has confirmed to us that as of now there will not be a prohibition on spreading animal manure on farms, other than the farm of origin, but it will be tightly controlled.

Grant of a permit by the local authority relates to the transport on roads of animal waste under the waste directive. That in itself is a problem. There can be no question that we are imposing unnecessary restrictions on ourselves. If the Dutch had water quality as good as we have, does the joint committee think it would declare the whole territory of the Netherlands a nitrate vulnerable zone? It is not likely. It has no alternative.

I hope I have addressed the issues. The Department of the Environment, Heritage and Local Government should have one last look to put together the various legal obligations, EU obligations and Irish obligations so that a modified action programme can be submitted to the European Union which will address the various EU directives.

Deputy Naughten

Perhaps I could get an answer to a question I asked earlier. What is the difference for a farmer within the white areas in going for an NVZ approach, compared to a countrywide approach? The example I gave was of a farmer in County Meath because I know it is close to the chairman's heart. I welcome the ICMSA and especially my constituent, Mr. O'Rourke, whom we will lose following the redrawing of the boundaries in a couple of weeks' time.

Chairman

He could stand as a candidate.

Deputy Naughten

He is welcome to stand as a candidate now as he will be in a different constituency.

Senator Callanan

Chairman, you should not allow this politician banter.

Deputy Naughten

Many have made the argument that this is too late and that we are within a couple of weeks of the submission being made on 22 April. There are substantial penalties pending for Ireland in this area. This issue should have been thrashed out earlier. Mr. Dolan made the point that he went to Brussels in January 2004 but it is only now he is coming before the joint committee to make this case. Why has it taken until now to make that submission to us? Has he made that submission to the Department and, if so, what was its reaction? Did he make this submission to Mr. Brosnan and, if so, what was his reaction to that issue?

Following on from a question Senator Coonan raised in regard to the derogation, which is an important issue, is the delegation telling me any intensive farmer in the BMW region over 0.8 livestock units to the acre will have to go for an EPA licence? Surely the Department of the Environment, Heritage and Local Government will find a way around it and zone, for example, counties Mayo and Galway as having automatic derogation in order that they will not have to go through the licence procedure. It would be a logistical nightmare if every intensive farmer had to go through this whole process. The EPA would have to process these licences from now until kingdom come if that was the case. In reality what will happen is that these areas will be exempted and those individual farmers will not have to apply for a licence.

The second question Senator Coonan asked was what will happen in four years' time in regard to this derogation? We are being sold the whole country approach on the scientific basis that the vast majority of the country will be ruled out and that we will not have a difficulty in getting this derogation. Nobody has mentioned the four year timeframe and what will happen after that.

Deputy Crawford

Mr. Dolan mentioned that he had been in Brussels in January or February. What is the more recent position there? I emphasise we are at a crossroads. Does the delegation really believe there is any chance of the Department accepting this or is it even listening?

Senator Scanlon

I welcome the delegation. It is a pity we did not have more time to study the figures before us. As Deputy Naughten said this is an issue that has been going on for the past 13 years. Unfortunately, the country's back is to the wall and something has to be done. It is a pity something had not been done much earlier. Has the delegation discussed or made a presentation to the Joint Committee on Environment and Local Government on this issue and, if so, what was its response? The issue is probably more relevant to that Department at this stage than to the Department of Agriculture and Food, although it has a serious bearing on agriculture. The Minister for Environment, Heritage and Local Government, Deputy Roche, has responsibility at this stage.

Senator Coonan

One of the other questions I asked was what is the impact on tillage farmers in regard to these vulnerable zones. Many would say vulnerable zones are unfair, like disadvantaged areas. There are excellent farms within some areas that are deemed disadvantaged. Equally, there are poor farmers within areas not zoned as disadvantaged. Farmers find it grossly unfair that their neighbours should be deemed disadvantaged while they are not when the land is equally bad. Is this not a similar situation? Where is the cut-off point for these zones?

Mr. O’Rourke

In regard to the EPA licence, the calculations for a whole country approach have already been done. Some 13,000 farmers, primarily dairy farmers, will have to apply in regard to livestock. If one goes for the NVZ approach that 13,000 farmers is reduced to 3,000. We made submissions to the Department of the Environment, Heritage and Local Government on a number of occasions. From the time this issue became a debate, we examined it. We had discussions with Teagasc and formed the view that an NVZ approach was the best one to take in terms of identifying and addressing the problem areas. There is no doubt that the EPA-type licence will apply on an individual basis. That was made clear at European level and conveyed in response to the Brosnan report. Whatever happens, farmers in regions will not be granted this status on a blanket basis. The nitrates directive is about counting livestock per acre. It is not about counting livestock per acre in a region but per individual farmer. That is where the greatest difficulty will arise.

The white zone areas are primarily associated with tillage areas. From a scientific point of view, the reasons there are significant levels of water problems in nitrates in tillage areas are simple. Over the winter period the ground is fallow, crops are not grown, the rain washes away the nitrates in the water and there is no utilisation of it over the winter period. Some scientists are adamant that nitrates leakage into the water supply never happens in grassland areas because the nitrates are utilised by the grass. It is a problem in tillage areas primarily and can be rectified by growing a crop over the winter period. Therefore, that part of the problem can be solved.

If we do not get this right within the next four years, it will develop into a major crisis because Europe will decide with little or no consultation with the Irish authorities or representatives of the agriculture sector the way we must farm. It will definitely reduce even further the stocking levels per acre.

My colleague, Mr. Dolan, will deal with the key issue of the impact of this measure on farmers in the white zone areas, the NVZ area or, for example, in Meath and will outline the advantages in opting for an NVZ approach as against an all-territory approach.

Mr. Dolan

On that question, it makes no difference whether an individual farmer in, say, County Meath opts for an all-territory approach or an NVZ approach with regard to nitrogen. If that farmer is above the 170 kg requirement, he or she will have to seek a derogation or reduce stocking rate to that level. That is clear. It is neither an advantage nor a disadvantage to that farmer.

Deputy Naughten

Could that farmer apply for a derogation, even under the NVZ approach?

Mr. Dolan

Yes. The farmer would have to do that. We estimate that even if this country was successful in securing an NVZ approach, a derogation would still be required in respect of approximately 3,000 farmers. If 1,000 farmers wanted to apply for it, they could do so.

Chairman

Yes.

Mr. Dolan

That is an important aspect. Such a derogation, however, does not ease the difficulty facing an individual farmer using an NVZ approach if we opt for an all-territory approach. It will not have a dilution effect. If anything, particularly for farms on the border in terms of an NVZ approach and a non-NVZ approach, it would be preferable if Ireland opted for an NVZ approach.

In regard to the four-year timeframe, there is no question that a derogation is viewed as permission to pollute in the minds of those in the Commission. If Ireland does not make progress within that four-year timeframe, the derogation may be withdrawn or severely modified. I occasionally hear individuals talk about a derogation as if the Minister or the Secretary General of the Department of the Environment, Heritage and Local Government could seek a derogation by fax without having to justify the need for it. If we do not make progress within the areas experiencing difficulties within the four years, a new action programme will have to be submitted by Ireland and all the derogations granted will be reviewed. We should not fool ourselves in that regard.

Of the work we have done in various Departments, the association is almost jaded on this aspect. We have raised it with Deputies, Senators, Departments and Ministers. We have got legal and scientific opinion. We made detailed written submissions to Denis Brosnan, and it is recognised on pages 3 and 4 of his report that one organisation advanced this approach. However, in fairness to the terms of reference given to Mr. Brosnan, it was in the context of the existing derogation of Ireland, which was an all-territory approach. It is important to repeat that what we are suggesting is not a different approach but a substantial modification to the Brosnan formula. It can be accommodated within the Brosnan formula.

On the European Commission, I referred to a meeting in early 2004 when we were told that an EPA licence type arrangement would be required for a derogation. Obviously we had been in contact with the Commission services since then, and the president and I will be in Brussels on Friday where we intend to put this view directly to the Commission. If there is another question I have omitted to answer——

Chairman

I think you have answered all the questions. Is it agreed that the committee will bring the submission and the concerns of the representatives and members to the attention of the Ministers, Deputies Roche and Coughlan, and their officials?

Deputy Naughten

I propose we obtain a response from both Departments on the submission.

Chairman

The clerk to the committee will request that.

Mr. Dolan

Deputy Naughten also raised the point that farmers in County Mayo, where there is no white zone area, should not have to apply for this measure on an individual basis. The position of the Commission is that if a member state does not differentiate its territory, it has a nitrates problem in all its area. The solution the Deputy suggested is effectively the adoption of an NVZ approach whereby those farmers could apply in block for the measure, but unless we designate the country in terms of adopting an NVZ or a non-NVZ approach, the same rule will apply across the board. The Minister for the Environment, Heritage and Local Government or a local authority, in this case Mayo County Council, would have no legal basis to allow farmers have a stocking rate above the equivalent of 170 kg because EU law is directly applicable to farmers in County Mayo. It would be unfair to expect Meath County Council to prohibit any stocking rate above the equivalent of 170 kg or secure a derogation while allowing farmers in County Mayo apply in block, even though the same legal framework applies equally to both groups.

Chairman

On behalf of the committee, I thank Mr. O'Rourke, Mr. Dolan and Mr. O'Mahoney for attending the meeting and the two gentlemen who responded concerns raised by members. It was a pleasure to meet them and we look forward to meeting them to discuss broader agricultural issues in future. If there is no other business to transact, the meeting stands adjourned until Tuesday, 26 April when we will meet a delegation from the Slovenian Parliament.

The joint committee adjourned at 5.30 p.m. sine die.