I welcome the representatives of the IFA National Potato Committee, Mr. John Sheridan, chairman; Mr. Kieran Leddy, secretary, and Mr. Thomas Carpenter and Mr. Anthony Sheridan, potato growers. Before I ask Mr. Sheridan to commence the presentation, I draw attention to the fact that while members of the committee have absolute privilege, the same privilege does not apply to the witnesses.
IFA National Potato Committee: Presentation.
Mr. John Sheridan
I thank the joint committee for agreeing to meet the representatives of the IFA National Potato Committee at such short notice. The potato committee has been working on this matter since January. Its officials have met their counterparts from the Department of Agriculture and Food and the Minister on many occasions. We spoke to the Commissioner for Agriculture and Rural Development, Mariann Fischer Boel, when she was in Dublin some weeks ago. Everybody is aware of the circumstances which have seriously handicapped potato and other vegetable growers, who are being penalised. I do not know how such problems have arisen, although I understand it is a legal matter at EU level. The problems have lasted for a year. The potato growers who have consolidated have done so by stopping growing potatoes. Those who have continued to grow potatoes on all the land they farm have found that their entitlements have been reduced automatically and their cheques have been smaller. That is the current position. It was reported in a newspaper last week that there has been quite widespread consolidation. The least amount of consolidation has been in counties Meath, Louth and Dublin, where the bulk of Irish potatoes are grown. It is obvious that the growers in such counties have decided not to grow potatoes because they know they will be penalised if they do so.
We have to take steps in all directions — we have already explored most of the possibilities. On behalf of the IFA National Potato Committee, I ask the joint committee to examine this issue. We will not let this matter sit. Strong feelings were expressed about it last February. Some growers considered taking a legal challenge. Growers in Northern Ireland, which is down the road from us, can draw the entitlements on potato land. That is also the case in England. When this was first being negotiated, we thought it might be better if one could not draw entitlements on potato land in case it would lead to an influx into the sector. While that happened in any event, we did not think we would be penalised for being involved in the sector in the first instance. The IFA committee has distributed some documentation about this matter to the members of the committee. If they read it, however, they will not learn much more than they already know.
If one is growing some potatoes, it is included in one's area. When one's land is divided, one's cheque is reduced by the same amount. That money is not thrown away — it goes back into the national reserve and can be put to other uses. That is all I can say about it. If members of the committee wish to ask questions or make comments, I will try to respond. Mr. Leddy will cover anything I have left out. We have spoken about this matter so often that it is going around in our heads.
Mr. Kieran Leddy
I thank the joint committee for agreeing to meet the representatives of the IFA National Potato Committee at such short notice. I assume that the members of the joint committee have received copies of the presentation that was prepared by the potato committee about the consolidation issue. The consolidation system is intended to allow farmers to reduce, in effect, the amount of land they are farming while continuing to draw their full single farm payment entitlements. The process of consolidation is impossible, however, if one is a potato grower with potato land. As Mr. John Sheridan pointed out, this issue centres on the interpretation of the rules of consolidation. The rules in that regard are listed on page 2 of our presentation. Article 7(1) of the relevant Commission regulation states that in the case of consolidation, "the farmer shall give up to the national reserve all the payment entitlement he owns or should have been allocated". Article 7(4) states that "the unit value of the payment entitlements allocated from the national reserve shall be calculated by dividing the farmer's reference amount by the number of hectares he declares". In other words, when one wants to consolidate, one's entitlements are given to the national reserve before being returned to one, spread over all the land one farms in the year of consolidation. The potato committee is concerned about Article 51 which states that "farmers may use the parcels declared according to Article 44(3) for any agricultural activity", other than the growing of "permanent crops", such as fruit and vegetables, including potatoes. In other words, one will not be able to use potato land and other horticultural land to activate an entitlement.
I wish to outline the entire process — when one consolidates or tries to consolidate, one's entitlements are given up to the national reserve. One's entitlements are then returned to one, spread evenly over all the land available to one in the year in question. In the case of a potato farmer, that will include potato land. An entitlement will be allocated in respect of the land, but the grower will be unable to activate the entitlement because it pertains to potato land. Therefore, he or she will lose that entitlement to the national reserve. This is essentially a question of how one interprets the EU rules and regulations. I understand that it is a complicated issue, but it is not right that consolidation for potato growers has been made impossible. The IFA National Potato Committee is aware of a number of cases of farmers ceasing their involvement in potato production to facilitate consolidation. It may be difficult for such farmers to resume growing potatoes because they may lose markets, etc.
The documentation supplied to the joint committee illustrates two cases. The first case relates to a cereal grower who can engage in consolidation. The second case outlines the potential losses of a potato farmer. The examples in question relate to a single farm payment of €61,000. The members of the committee are aware that the average payment is much less than that. That figure is being used because it applies to farms of 100 hectares, which are divided into sections of 60 hectares and 40 hectares. The calculations are much more straightforward in such instances. I have outlined the issue at stake.
Mr. Thomas Carpenter
The vegetable and potato sector will be affected in the long term by matters outside the consolidation process. A significant percentage of potatoes and vegetables are grown on rented lands. Entitlements attach to approximately 80% of Irish land. Those who want to rent out their lands to potato and vegetable growers have to rent out the entitlements which attach to their lands at the same time. Problems are created when the growers who are renting the lands are unable to draw down the relevant moneys, however. For example, rotational problems will arise if one concentrates the growing of vegetables and potatoes on certain portions of land. One might cause long-term problems by concentrating one's production on a small pool of one's available land. The opportunities available to those who are offering land for rent might be limited and the hands of those who want to grow potatoes and vegetables might be tied.
I thank the delegation from the IFA National Potato Committee for coming to this meeting. The members of the joint committee have just received a copy of the potato committee's presentation. We are trying to decipher its contents. I would like to clarify one matter. Are we talking about stacking?
Mr. Leddy
Yes.
We were wondering about the issue. We are talking about the ability to stack. In normal circumstances, every farmer can stack up to 50% of what he or she declared during the reference period. If a potato grower engages in stacking, however, he or she will be unable to draw the stacked entitlements on the potato land. Is that correct?
Mr. Leddy
Yes. That is exactly it.
That is where we are coming from. Does it also include vegetables? It is not just potatoes.
Mr. Leddy
It includes all of it.
Yes.
Mr. J. Sheridan
There is one exception. If one is a beet grower, one can sow beet and draw one's entitlements. The beet sector is going through a bad time.
I would like to ask a couple of quick questions about this matter. It is obvious that representatives of the IFA National Potato Committee have been involved in discussions about this matter with the Department and the Commission since last January. What kind of response has the committee received from the Department of Agriculture and Food? When it spoke to the Commissioner for Agriculture and Rural Development, Mariann Fischer Boel, what did she say? How does the potato committee envisage that the joint committee can facilitate it? What needs to be changed? How should we go about changing it? Is it feasible to put certain changes in place?
Mr. J. Sheridan
The Department is aware of the concerns. The IFA National Potato Committee believes the Department is doing its best to ensure that changes are made. When we spoke to the Commissioner some weeks ago, it was clear that she was aware of our concerns. Not only did she say that she would take our comments on board, but she also said that she would examine the matter. That is as far as we have got with her.
Has the Department given the IFA National Potato Committee a formal response in the past six months?
Mr. J. Sheridan
Representatives of the potato committee met departmental officials approximately three months ago. The officials accepted that there was a problem and pointed out that certain legal constraints needed to be overcome. They said a decision of the Council of Ministers would be needed if changes were to be made. Regardless of that belief, the potato committee is of the view that a political solution can be found at home. We have met the Minister, Deputy Coughlan, who is aware of and sympathetic to our argument. We need results as soon as possible because the acquisition of land ahead of next year's sowing will begin within the next two months.
Will Mr. Sheridan outline the changes which are required if we are to facilitate progress in this regard? The Department has said that progress needs to be made at EU level, but Mr. Sheridan believes progress can be made in Dublin.
Mr. J. Sheridan
We hope the solution to this problem lies in Dublin. If that is the case, we will be okay. I do not like to use the word "pressure", but we need to——
Negotiations.
Mr. J. Sheridan
——do as much as possible to ensure that this problem is resolved.
What changes are needed?
Mr. J. Sheridan
We need to be allowed to draw down entitlements on potato land. The Deputy can read in our documentation about the case of a grower who planted 20 acres of potatoes and lost a certain amount. If that grower plants a similar number of acres but does not lose anything, he should be covered in the same way as beet growers are covered.
Does Article 51 need to be changed?
Mr. Leddy
Yes. It is only fair to point out that Ireland initially supported Article 51. It was not apparent at that time that the stacking issue would arise as a consequence of our support of Article 51. This problem did not come to light until late last year, by which time it was too late to do anything about it. It is only fair that we should stress that Ireland supported the proposal in Article 51 that potato and horticultural land could not be used to activate entitlements. We felt at that time that the proposal would offer some level of protection to those in the unprotected sector, who were not receiving any payments under the single farm payment scheme or under the Common Agricultural Policy in general. Hindsight is a great thing — this aspect of the issue has caused bigger problems for a number of producers. Changes to Article 51 will have to be considered. Perhaps the Council of Ministers can provide that potato land is not included in the calculations at all.
If such land is included, growers should be paid in respect of it. If it is not included, they should not be paid.
Mr. Leddy
Yes.
Mr. J. Sheridan
It should not be used as a penalty.
I know.
Mr. J. Sheridan
The best thing to do would be to provide that growers can use potato land to draw down entitlements.
I have to leave the meeting at this point. I apologise.
That is okay.
I thank the representatives of the IFA National Potato Committee for coming to this meeting at short notice to discuss this important matter. In light of what the potato committee has told the joint committee, where do we stand when compared to other European countries? Irish people are probably the best potato eaters in the world. The Spanish are probably in the same position as us in this regard. They are competing with us in the Irish potato market.
Mr. J. Sheridan
We are near enough. I do not think many other countries are in the position we are in.
Mr. Leddy
The committee is aware that different systems are in operation in different countries. Very few countries have adopted the system of total decoupling that has been adopted in Ireland. Payments are made in respect of almost all land, including potato land, in England and Northern Ireland. Countries like Portugal and Belgium, which are extremely supportive of Article 51, do not want it to be changed in any way. We have to accept that we face a tricky set of circumstances in Brussels. To be fair to the Department of Agriculture and Food, it has taken the issue on board and is doing what it can about it. It is a question of interpreting the changing regulations in Brussels, which might not be that easy. As Mr. John Sheridan said, we hope that more work can be done in Dublin than in Brussels.
Mr. Sheridan mentioned that only counties Louth, Meath and Dublin are affected. I would like to know, for purely practical purposes, whether County Donegal is involved in this also.
Mr. Leddy
Yes, it is.
All politics is local. The Minister, Deputy Coughlan, comes from County Donegal. I genuinely feel she has an understanding of the seriousness of this problem. All we can do is to write to her and recommend that she should take every opportunity to try to rectify this problem. When one considers that a single farmer has lost €17,000, one appreciates that a colossal amount of money is involved. People will face difficulties if the potato industry goes into decline because they will feel they have to stay involved in the industry to get their payments. That would be one of the knock-on effects of the consolidation system. I formally propose that the joint committee should write to the Minister to ask her to deal with this matter sympathetically and to use all the means available to her to rectify the difficulties in question. I hope it can be solved at national level, but if that is not possible, action will have to be taken at EU level.
Mr. Carpenter
Farmers in Northern Ireland and England, our nearest and most immediate competitors in the marketplace, can grow potatoes on their land while continuing to attract single farm payments. That leaves us at an economic disadvantage.
There is no doubt about it. I have spoken to Mr. Sheridan and the Minister about this matter on numerous occasions. I know the Minister is anxious to resolve these difficulties. Some of the biggest potato growers in the country are from County Meath and some of them are here today. I know they are doing great work, for example by providing a great deal of employment. Many family members are involved in potato farms. Potato growers have suffered enormously in recent years, as prices have dropped, etc. This is another blow for the potato sector. The joint committee will do everything in its power to try to resolve this problem. As Deputy Crawford said, we will write to the Minister. We will invite departmental officials and the Minister to speak to the committee about the matter we considered earlier. Perhaps we can discuss this issue with officials from the potato section of the Department on the same day. The committee will impress the importance of this matter on both parties on that occasion. I will speak to the Minister in the meantime. We will certainly do all we can as a committee, which is important. I know problems are being encountered by growers in County Meath, for example. Although I am from County Meath, I am not bragging when I say the best growers in the country come from there. We know well that the best growers in the country are from County Meath.
Mr. J. Sheridan
When we were at a meeting in County Donegal earlier this week, we learned about the extent of the problem there. The growers from that county have met the Minister to put pressure on her to take action. The IFA National Potato Committee expects that the Minister will act soon. If this problem continues, it will be very hard to make plans for next year. I thank the Chairman for agreeing to hold this meeting at such short notice. I know he will do his best for the farmers.
There is no doubt about that. We were able to organise the meeting at short notice. The clerk to the committee will contact the Minister and the officials from the Department of Agriculture and Food. I thank the representatives of the IFA National Potato Committee for coming to this meeting and making their presentation. The joint committee will not be found wanting. It does not have the power to make changes in this regard, but it will talk to those who do to try to resolve this matter.
Mr. J. Sheridan
We will not go away. We will continue to try to bring about change. Our heads are on the block within the IFA. We are being asked why we did not know about this problem sooner. We should have known about it in November 2004, but we did not know about it until January 2005, for some reason or another. Perhaps it would not have mattered if we had known earlier. We have had many meetings to discuss this issue. I thank the members of the committee again. I hope we will not have to revisit this issue at this forum.
I hope not. We will do our best. I thank the delegation from the IFA National Potato Committee.
The joint committee went into private session at 4.55 p.m. and adjourned at 5 p.m. sine die.