On behalf of the joint committee, I welcome the following from Macra na Feirme: Mr. Michael Gowing, national president; Mr. Edmond Connolly, chief executive officer; Mr. Kieran McEvoy, chair of the agricultural affairs committee; and Mr. Derry Dillon, agriculture and rural affairs manager. This is the first time representatives of Macra na Feirme have come before the joint committee and we look forward to the presentation. Before it commences, I draw attention to the fact that while members of the committee have absolute privilege, the same privilege does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable. I ask Mr. Gowing to commence.
Role and Functions of Macra Na Feirme: Discussion with Macra na Feirme.
Mr. Michael Gowing
I thank members for affording Macra na Feirme an opportunity to communicate to the joint committee issues of importance to young farmers. I will discuss first current budgetary matters and ongoing issues specific to young farmers before focusing on the changes which will apply under the Common Agricultural Policy after 2013. I will also emphasise the need for the Government to take a proactive approach to young farmer issues.
Macra na Feirme is acutely aware of the importance of agriculture and the agri-food sector. Combined, they account for a gross value added figure of €12 billion and gross output of €25 billion. Given the importance of this sector, it is alarming that only 7% of primary producers are young farmers aged under 35, while 23% of farmers are over the age of 65 according to a CSO farm structures survey. Young farmers are the future lifeblood of the industry and must be supported in order to ensure the agrifood industry, our largest productive sector, has the opportunity to grow and expand, as is the case with any industry.
In the run up to CAP 2013 and beyond, new entrants and young trained farmers need to be facilitated to establish farming systems and structures that are competitive, not just from a domestic and European perspective but, most importantly, from a global one. In the context of the Government addressing the current economic challenges facing the economy by stabilising the public finances, that cannot result in an effective ban on new entrants to farming. As we have witnessed in the past any suspension or reduction in schemes and services ends up disproportionately affecting new entrants to farming who are trying to set up in the industry. Agriculture and especially young farmers were disproportionately affected in the previous budget and that is having a knock-on effect on the age profile of this country's agricultural industry. The suspension of both the young farmer installation aid and early retirement schemes is impacting on the restructuring of Irish agriculture and land fragmentation has also increased dramatically. I will deal with those schemes in due course. The structural and economic operational environment for young trained farmers must be favourable to attract them into the industry and allow them to scale up and develop their production base.
I will highlight a number of important reliefs and schemes for young farmers. Two existing reliefs that must be maintained are stock relief, which is an important instrument for farmers starting out in their first four years, and stamp duty relief, which encourages the earlier transfer of farms. Stock relief aids young farmers to build up stock numbers during their first four years in production. It is also clear that young farmers who take over a farm usually indulge in expansionary activity. Therefore, the 100% relief is of considerable benefit to them, as it allows farmers to offset increases in the value of stock against their tax liability. Stamp duty relief provides 100% exemption from stamp duty on certain transfers of agricultural property to young trained farmers. Young trained farmers who are under 35 on the date of execution of the deed of transfer of land by means of inheritance, gift or purchase are eligible for stamp duty relief. That relief for young trained farmers is vital in encouraging the early transfer of land to committed and progressive, young, trained farmers.
For the early transfer of land to young farmers, the following transfer tax reliefs are very important. Any change to the current 90% agricultural relief would have a detrimental effect on the transfer of land and the ability of some young farmers to set up in the industry. Under capital acquisition tax, CAT, agricultural relief is applicable where agricultural property is passed to a qualifying transferee. Currently, relief is given by reducing the market value on which CAT is calculated by 90%, provided that 80% of the gross assets post-transfer are agricultural assets. A recommendation by the Commission for Taxation is to reduce the rate from 90% to 75%, which equates to a 60% reduction in the tax-free allowance and would have serious implications for the transfer of some farms. The maximum farm value being acquired before liability to tax would drop from €4.34 million to €1.74 million in the case of a child or favoured nephew or niece, which is a serious downward trend that could potentially continue in future budgets. Reducing the percentage for agricultural relief has the potential to have a negative effect on revenue for the economy as certain farms would not be transferred until death and the loss in economic activity would have an effect on economic growth in the agrisector and revenue for the economy.
Retirement relief allows farmers transferring their agricultural property to a family member to be exempt from capital gains tax on certain transfers. The asset must be owned for ten years prior to transfer and qualifying assets include land, plant and machinery. Changing the retirement relief from its current unlimited relief to a ceiling of €3 million as proposed by the Commission on Taxation would, again, have a negative effect on revenue for the economy, as certain farms would not be transferred until death, where no capital tax applies but would have a negative effect on the structure of Irish agriculture.
The income levy is having a disproportionate effect on farmers as it is calculated on gross income and does not factor in items such as depreciation of farm buildings. Macra na Feirme is seeking equity in the application of the income levy for farmers. Profit assessable for the income levy should be determined after the deduction of capital allowances, trading losses carried forward and pension contributions. Income sources exempt from income tax such as forestry income and leasing income from farmland, that is, leases for more than five years with tax exempt thresholds, should also be exempt from the income levy. The differentiating factor for farmers is the quantity of produce sold by farmers may provide them with a high gross income. However, farmers' net income is well below the average industrial wage resulting in a higher tax levy compared to other sectors.
A proactive policy which the Government should develop is a young farmer land restructuring relief to allow young trained farmers restructure their holdings without being liable for transfer tax in the form of capital gains tax. Farm fragmentation is one of the main challenges facing agriculture in Ireland and it is vital that the tax code facilitates young trained farmers to restructure their holdings. Many young farmers have a number of parcels of land when they take over a farm. It can prove difficult to manage such a farm efficiently and young farmers must be facilitated to build up productive capacity and ensure that their farms have the required scale, structures and efficiency to compete effectively. It will remain increasingly difficult for some young farmers to become viable in the long term without the introduction of that relief.
Irish farms are fragmented and young farmers are best positioned to restructure their land base and should not be disadvantaged from a transfer tax perspective. According to the CSO, in 1991 the average number of parcels per farm was 1.9 but in 2005 it was 3.4. The introduction of that relief would also have a beneficial impact on the broader environment. A reduction in the quantity of farm machinery using public roads to transport livestock and crops to and from fragmented holdings would impact positively on road safety. A reduction in the usage of road transport fuel would result in fewer harmful emissions which would benefit the environment. Improved land management would be another benefit. Increased agricultural productivity and sustainability would result, in addition to improved livestock welfare and disease control. Increased labour efficiency and productivity would be further benefits.
I referred previously to the suspension of the young farmer installation aid and the early retirement schemes, which will impact on the restructuring of Irish agriculture. First, I wish to refer to a group of young farmers who were particularly affected by the timing of the suspension, namely, young farmers who were transferred land or were in the process of getting land transferred prior to the suspension of the young farmer installation aid scheme. Those young farmers have incurred the cost of transferring land and becoming established in farming on the basis that the young farmer installation aid scheme was available, as was agreed under social partnership. It was also part of Ireland's rural development plan for the period 2007 to 2013, which we have not yet reached.
The budget for the scheme was on target in terms of applicants and budget when the sudden decision was made by the Minister for Agriculture, Fisheries and Food to suspend the scheme with immediate effect on the date of the October budget 2008. The Minister, Deputy Smith, facilitated hardship cases under the early retirement scheme, which was welcome, but it is now time that he prioritised young farmers under the installation aid scheme. This is a very acute issue for Macra na Feirme. The Department of Agriculture, Fisheries and Food must accommodate farmers under the installation aid scheme who had applications progressed but not lodged with the Department prior to the suspension date of the schemes. Macra na Feirme put forward a number of recommendations to address those problem areas and to minimise the negative impact of the suspension of the schemes together with a register of young farmers that are affected.
Young farmers who were left in limbo following the suspension of the scheme include those with substantially completed applications, which were subject to delays by various arms of the State including leases awaiting stamping by the Revenue Commissioners, transfers of land undertaken by 14 October 2008 but where the conveyance was not complete, and the issuing of herd numbers by district veterinary offices. Macra na Feirme has supplied a register of farmers affected by the suspension to allow the Department to provide accurate budget information to the Department of Finance. The reintroduction of a modified installation aid scheme for young farmers is vital for attracting new entrants to farming and addressing the age imbalance in the industry. In recognition of the value for money report commissioned by the Department of Finance on the installation aid scheme, Macra will work with the Department of Agriculture, Fisheries and Food to address the concerns under the scheme and propose modifications where appropriate. The importance of the young farmer installation aid was demonstrated under the recent CAP health check review, where there was an increase in the investment limits for young farmers from €55,000 to €70,000, yet Ireland has decided to suspend the scheme.
Installation aid facilitates young agri-entrepreneurs to the sector, helps foster competitiveness and ensures that agriculture can become a guarantor of jobs and sustainable growth in rural areas. The working capital required to meet the costs associated with the transfer and establishment of the business is very significant. The installation aid scheme has proven to be effective in offsetting some of these costs for new entrants to farming. New entrants have seen the scheme as a signal from the Government that it is committed to supporting young people who choose farming as a career. Currently, there are very few ways in which the Government can assist farmers without having to get clearance from the EU to the effect that such assistance does not constitute a state aid.
The early farm retirement scheme was an important measure in promoting farm restructuring and encouraging the transfer of land to young farmers. The scheme has been an important measure in increasing land mobility. Macra believes this scheme should be reinstated as it has given many young farmers and farm families the opportunity to get control of farms at an early stage.
I am sure the committee has heard on numerous occasions about the benefits and importance of the rural environment protection scheme, REPS. This is also a very important scheme for new entrants and young farmers who are establishing in farming, to assist them to comply with stringent environmental regulation and directives. This scheme must be re-opened, especially for new entrants to agriculture. The new agri-environment scheme should not be presented as a replacement to REPS. It is merely an effective means of utilising modulation funds. Young farmers need to be high priority in this scheme and must be allowed access to it over the entire four-year period. The application should not require any third party certification by Teagasc or an agricultural consultant. The scheme should be set out in a simple straightforward manner and every effort should be made to minimise bureaucracy. Payment for the scheme should be made in advance to farmers, not in arrears.
Macra na Feirme has always been a strong advocate of the value of education. The recent increases in students attending agricultural colleges presents a great opportunity to turn the tide on the numbers entering the agricultural sector, but the incentives are being removed. We need to ensure young people see agriculture as an attractive, rewarding and financially viable career option.
Despite the recent increase in numbers attending agricultural colleges, one of the biggest challenges facing the industry is the shortage of young people willing to take up farming as a career and many of those who are interested are not willing to hang around playing second fiddle on the farm for years.
The current embargo on Teagasc, which prevents it from employing the people it requires to replace existing staff in the colleges, will seriously impact on delivery of agricultural education. The embargo by the Department of Finance on the employment of staff in Teagasc third level colleges to replace those who have retired or are on maternity leave, will affect the quality and delivery of agricultural education. The Departments of Agriculture, Fisheries and Food and Finance need to take into account the surging numbers attending agricultural colleges and give Teagasc approval for replacement staff, as is the case in all other third level colleges. Teagasc third level colleges must be in a position to replace staff who may be on maternity leave, in retirement or absent due to long-term illness on the same basis that other colleges can replace staff in such circumstances.
In summary, at a national level policy makers must take into account that Ireland is enormously dependent on trade and that economic recovery must be driven by the wealth generating export sectors, such as agri-food. Investment in agriculture and the agri-food sector provides high returns to the economy, as the multiplier effect is 1.73. Food and drink manufacturing has a multiplier of 1.76, as compared to 1.11 for the chemical and pharmaceutical industry, as reported by the Economic Forum of Irish Farming and Food Industry Leaders.
Facilitating the installation of young farmers and assisting them during their first investments is crucially important to help foster competitiveness and ensure agriculture can become a guarantor of jobs and sustainable growth in rural areas. The Government needs to deliver a young farmers' package which includes the above schemes and reliefs, to ensure that Irish agriculture has the capacity to play its part and contribute to the development of Ireland's smart economy. The Government needs to have foresight to facilitate the restructuring of agriculture to take advantage when the world enters an agricultural boom as a result of the growing world population.
I want to draw the committee's attention to the importance of getting the policies and conditions right for the mid-term development of Irish agriculture under CAP post-2013. The route to establishing and administering the single farm payment has significant implications for young Irish farmers. Following the introduction of the single farm payment, existing and well-established farmers were generally in the strongest position and those who either wanted to expand or enter farming were at a disadvantage. We have since witnessed a reduction in the number of young farmers, under 35, from 11% prior to the introduction of decoupling in 2005 to the current level of just under 7%.
The biggest flaw in the current system is that we end up with much land and entitlements being leased out, with active farmers paying those who have long since left the industry. It took us 15 years to tackle the issue as regards milk quotas, when private leasing was finally banned in 1998. At that time it was universally accepted that it was not sustainable for active farmers to subsidise those who had left the industry.
It is highly significant that the justification for the single farm payment exists as market returns for agricultural output, both within the single market and on the other international markets regularly do not justify the costs of production due to the need to maintain food security within the EU, the need to respond to consumer concerns and demands regarding food quality and safety, the need to maintain the countryside and conserve nature to ensure high animal welfare standards, the need to contribute to the vitality of rural life and the need to protect the environment.
Macra believes the following guiding principles need to be incorporated into CAP 2013: an increase in the level of single farm payment available to Ireland to reflect the fact there has been no reference to inflation since its introduction in 2005; new entrants to farming, post-2013, must be afford access to a single farm payment at a minimum equal to the average payment prevailing in their farming region; the single farm payment should be targeted exclusively at active farmers and not encourage farmers to diminish their level of productivity or under-utilise their land; and mechanisms that adequately encourage young trained farmers to establish in farming and that encourage older farmers to retire with dignity.
Macra na Feirme is current exploring mechanisms that would deliver on the above principles. It believes the historical model in its current format is problematic as it does not deliver the benefits to active farmers and trained young people wanting to enter the industry. Macra is calling for a rolling reference year model, to be researched and assessed. This could be an effective model to deliver the single farm payment to active and trained young farmers.
Payment in a given year could be related to the production activity of two years previously. Each year this reference year would move forward one year, that is, a rolling reference year, to determine the level of single farm payment for each active farmer. The effect of this model is to encourage active farmers to compete for their single farm payment on an annual basis. The overall national single farm payment level would not change, but its distribution would favour active and more progressive farmers. The benefit of such a model is to reward active farmers. Furthermore, it avoids the pitfalls of historical reference years. Within this model, Macra na Feirme is also considering the requirement for a ceiling of €100,000 on the level of single farm payment that could be paid in a year to any one farmer.
Macra na feirme believes the following scenarios should also be actively explored. All young trained farmers should receive a top up to their basic single farm payment of 20%. This could be paid post-2013 to all young trained farmers under 35 years, for a maximum of five years. The single farm payment should include a mechanism to allow older farmers to retire by allowing farmers over 60 years of age to cease farming and lease their holding to a young trained farmer and retain their single farm payment for a period of time. The single farm payment would subsequently revert to the young farmer.
Young trained farmers who set up their farm business need a coherent and stable agriculture policy, and not one that changes every few years. The CAP needs to bring substantial benefits to the young farmer. Attracting young people into farming and maintaining young farmers requires a strong European policy for setting up young farmers.
Pillar 2 measures must be supported by member states and there should be an obligation on member states to implement fully all measures under their rural development plan. Schemes such as young farmer installation aid and early retirement were contained in Ireland's rural development plan, and were well within their budget allocations but were suspended without notice or adequate reason. This uncertainty about the future of schemes and the scope for withdrawal of schemes within the rural development plan is having a very negative impact on farmer's especially young farmers who were planning to enter farming and utilising the support structures to do so.
The final issue to which I will refer has an impact on all of society, and that is climate change. The EU, and by extension Ireland, has agreed to reducing greenhouse gas emissions in an attempt to limit the negative effects of climate change. Primary agriculture is being painted as detrimentally contributing to greenhouse gas emissions, giving the impression that less farming is good for the environment. However, policy makers in Ireland need to understand that agriculture plays a strategic twin role of providing food for populations and maintaining the environment.
Commissioner Marianne Fischer Boel summed up the challenges well in May 2009 when she stated:
When it comes to food production and climate change, we are caught between the devil and the deep blue sea. But we are not forced to accept either starvation or ecological disaster. We must find a way to both feed ourselves and start to bring climate change under control.
Current measurements of greenhouse gas emissions from agriculture do not properly take into account the counterbalancing effects of the carbon sinks provided by permanent pasture and forestry. Permanent grass is an excellent carbon sink and very good for biodiversity. Irish agriculture has reduced its level of greenhouse gas emissions over the past ten years at a faster rate than other EU states while also increasing productivity. As the climate changes, food security will become more significant during the coming decades. With the world population projected by the United Nations to grow from 6.9 billion to 9.1 billion by 2050, the need for sustainable food supplies will grow considerably. Forced destocking of livestock, without behavioural change in consumption, will lead to export of greenhouse gas emissions, often to countries with far greater emissions from agriculture.
We must insist upon the true measurement of greenhouse gas emissions from agriculture, net of carbon sinks. A proactive approach to encourage farmers to take voluntary action to reduce emissions should be pursued. In tandem, Ireland needs to be marketed as "Ireland, the food island". Emissions trading for farmers is not practical and would be expensive to implement.
We need to have a policy which ensures that young people will enter every industry. We are here to deal with agriculture. It is an industry that has great opportunities, but we need youth to enter it. There are mixed messages from the powers that be, and this is something that needs to be addressed. I thank the committee members and I look forward to their questions.
I welcome Mr. Gowing and his colleagues from Macra na Feirme, and I wish him all the best in his tenure as national president. He has a hard act to follow, but I have no doubt he will be able to rely on good guidance and counselling from his predecessor and from his colleagues.
As a former member of Macra na Feirme, I was always conscious that it was more than just a young farmers' organisation. It was also a kind of rural youth club, with an important young farmer component. It is probably because its representatives do not get the opportunity to meet policy makers on a regular basis that Mr. Gowing and his colleagues took the opportunity to deal almost exclusively with agricultural and economic issues in their presentation, but we might have heard more about the social role of Macra na Feirme in rural areas, especially given the difficult economic times in which we live. It strikes me that farming is becoming an increasingly isolated, single labour unit enterprise. The rural isolation that affects many farmers, especially young farmers, is an issue that Macra na Feirme is uniquely positioned to deal with through its network. Given the current financial pressures on people, and not just those in farming, I would like to hear more about that side of agriculture. In many respects, we have a mirror image today of pre-budget submissions by the IFA, the ICMSA or the ICSA. It ticks many of the same issues, but that is not to say that they are not important.
I would like to hear about the other side of Macra na Feirme, because this has a huge role to play. The State can do so much, but there is a very significant role for voluntary organisations. The social aspect of Macra na Feirme is extremely important. Not all of its constituent members — not even a majority of them — are involved in farming, so there is another side to Macra na Feirme that has not gone away.
The opening remarks about the age profile in farming were worrying. The CSO figures showed that 7% of farmers are under 35 and 23% are over 65. These figures pre-date the abolition of the installation aid scheme. It could be argued that the installation aid scheme, as a policy instrument, did not really deliver far greater numbers of young people into agriculture. That age profile is extremely worrying, at a time when the challenges of survival in agriculture are greatest and we need young, innovative, educated people in the industry. If we were to restructure and start again with a blank sheet of paper, I am not sure that re-introducing installation aid would be the best incentive to give to young people who want to enter agriculture. The scheme has been abolished and the clarion call is to deal with those applications that were advanced in the system.
If our guests were to set about devising a structure that would incentivise young people to become involved in farming, what shape would such a structure take? The value for money report indicates that the administrative cost accruing to the Department in respect of each application processed is €3,000. This highlights inefficiency in the system and if it were removed, the resources saved could be more effectively targeted. I do not know whether the incentivised model to which I refer would take the form of a tax structure, a partnership regime or whatever.
It was relatively easy for people to obtain employment in other areas in recent years. Such individuals are probably returning to farming now because whereas in the past they had the choice of working in other areas of employment, that is no longer the case. If the same level of resources were available, what sort of structure would our guests put in place in respect of a new scheme?
There is very little in the submission with which I disagree. I do not know, however, whether it would be possible to deliver everything set out in it, particularly in light of the current climate. The greatest challenge we face now is how to retain what we already possess. I welcome the submission and I would be interested in Mr. Gowing's observations on how the age profile issue might be addressed in a different way.
I welcome the representatives from Macra na Feirme and I thank them for their cogent and well thought out presentation. Mr. Gowing indicated that a grand total of 1,088 students throughout the country are availing of higher education or further education courses provided by Teagasc. I have a serious reservation about the recruitment embargo and the fact that those retiring from teaching are not being replaced. This will have a seriously negative effect on the ability to adequately train farmers in the future.
I agree wholeheartedly with what has been put forward by Macra na Feirme in this instance. The committee should take a strong position on the issue. In light of the multiplier effect to which Mr. Gowing referred in respect of inputs and investment into the economy and the qualitative nature of teaching and how it has a positive impact on the agriculture sector, any further losses within the academic or teaching coterie will have a detrimental effect. In such circumstances, the committee should take a strong position and should base this on the figures provided by our guests.
I also have reservations in respect of tax reliefs. The time is fast approaching when "tax" and "reliefs" will be perceived as dirty words. It will be impossible to keep such reliefs at the level to which people have become used. I do not know if it will be possible to reintroduce some of the tax reliefs to which Mr. Gowing referred. I am interested in the position with regard to stamp duty relief. Does this primarily benefit those who engage in intrafamilial transfers of property or land or does it affect those who are transferring ownership to third parties? Are figures available in this regard? I understand how it provides an incentive and encourages new people to enter farming. If our guests could provide a further justification of Macra na Feirme's position in respect of this matter, I would welcome it.
What is the position on the rolling reference year in the context of the post-2013 scenario? I accept that there has been a decrease in the number of farmers under the age of 35 and Mr. Gowing indicated that the figure has fallen from 11% to 7%. The high number of people who transferred into other sectors of employment following decoupling in 2005 might account for this reduction. However, our guests may have a view that runs contrary to this.
The age barrier should be 40 rather than 35, particularly in light of the transfer of skills into other sectors in the period since decoupling. There may be many people who went into construction in recent years who are over the age of 35 but still under 40. These individuals might re-enter farming now and they might be in position to benefit from that relief, if it were retained. In the context of demographics, I am trying to educate myself with regard to the number of farmers who are under the age of 35. I accept that percentage figures have been provided but there is no actual number identified. I am in favour of lifting any barriers to entry for potential new entrants to the sector. I am not convinced that the age barrier of should be 35. I would welcome our guests' observations on this.
On carbon sinks, I am interested in the arguments put forward by Mr. Gowing in respect of permanent pasture and forestry. I do not want to see a situation developing whereby there will be a compromise in respect of production. We have an extremely good comparative advantage in the production of beef and I do not want this to be adversely affected. It has already been argued that if beef production here were reduced, desertification would occur in other areas of the world and Ireland would lose its comparative advantage. On Question Time last week I asked the Minister for Agriculture, Fisheries and Food how we would circumvent difficulties relating to production of methane without compromising agricultural production. A major dilemma exists here and the Minister has yet to provide an adequate response. I would welcome it if our guests would put forward their views on this issue.
I was impressed by Macra na Feirme's cogent and well put together presentation. As Deputy Creed said, Macra na Feirme fulfils an important social function. However, it also retains strong potential in the context of lobbying. I would like to hear more from our guests on that. I take issue with them on tax reliefs. However, I would welcome hearing their counter argument.
I welcome our guests and thank them for their presentation. I will not say how long ago it was, but I was once a member of Macra na Feirme. As Deputy Creed said, it was a social outlet for young farmers at the time and I enjoyed it.
Reference was made to the non-replacement of staff at Teagasc. I concur with the points made. It is very important for young farmers coming into the industry that training and advice personnel are in place. One of the greatest disadvantages to young farmers coming into the industry was the budget of last year and the suspension of the early retirement scheme and installation aid. This was a retrograde step in the opinion of many members. This committee completed a report on the plight of farming in the west and south west. The age profile was striking. In many areas there was no encouragement for young, active farmers to take over the industry. I cannot comprehend the reason behind the decision. It was a major blow to the attempt to encourage young people into the industry.
We attended the IFA, ICMSA and ICSA briefing sessions. The major concern at all three was the decline in farm income. Everyone is going through a difficult period but when farm income is reduced to the extent that the hours worked are paid at far less than the minimum wage it is no encouragement to young people.
Mr. Gowing made a comment on the restructuring of land and what mitigates against it in respect of taxation. I would like some elaboration on this. Mr. Gowing also made a point about the €100,000 cap on the single farm payment, which Sinn Féin has been making for some time. Macra na Feirme should not just consider it but push the point. It is to the advantage of active farmers in particular. I will fully support Macra na Feirme on that issue.
What is the position of Macra na Feirme on clean food production on this island and growing GM produce? I argue that Ireland should be a GM-free zone for food production, particularly from a marketing point of view. That will pay off in the longer term, particularly if there is a GM-free zone producing clean, marketable, healthy food to sell to the international market and the European market in particular. In time, that would be to the benefit of Macra na Feirme. I thank the delegation for its presentation and wish it well.
I welcome representatives of Macra na Feirme. There is little in the presentation that I disagree with except that, in these economic times, much of it might not be achievable. The 7% figure for farmers under 35 is alarming. I come from a farming background. Many of the young farmers I meet saw opportunities over the past ten years during the building boom. There was money to be made and it is hard to blame them for leaving farming. Whether they intended to stay away from farming or return at another time is debatable. The previous figure and the 23% of farmers over 65 years accounts for 30%, leaving 70% of farmers between the two ages. These figures are not alarming if 70% of farmers are between 35 and 65 years of age. The figures can be accounted for.
I can see a great advantage for farmers but schemes have been directed at the wrong people in the past. I want to see the schemes directed at those involved in full-time farming. We could all highlight instances of abuse, where professional people avail of schemes that were meant to help people involved in full-time farming. Many young farmers who have a get up and go attitude tell me they would prefer to get proper value for produce rather than avail of schemes. That is the way they want to go but that is another day's work. Many would rather not bother with schemes if they got a proper return for produce.
Measures on stamp duty and stock relief are important and must be examined. There is a major cost in transferring land. In the present climate we must look at easing this. Early retirement and the installation aid scheme go hand in hand. The maximum available was €15,000 and this was a major boost to a young farmer. We all recognise that. I would like to see its re-introduction, perhaps starting at €8,000. I am not aware that this will happen and I have no inside information to that effect but it is something worth examining again. Early retirement is of great importance because farmers leaving farming at 55 are in limbo before reaching pension age. A farmer cannot hand over the farm and walk away with no support. In the current climate, I cannot see a young farmer taking over being able to get money to pay the parents for that period. The early retirement scheme is of great importance and we must re-introduce it at some level.
Restructuring and consolidation must be examined. I was under the impression there was support for those who wish to consolidate their holding. Perhaps it has been removed. How many new entrants to farming were there last year or the year before? What are the numbers for the past four of five years? I can see why there is an embargo on staff. We all know that unfortunately, the number of farmers decreases by the day so how can we justify keeping the same number of staff in place? We hear that staff for most agricultural sectors are falling over each other. My view is that fewer people being involved in the industry means fewer staff.
The delegation did not mention diversification. People can be full-time farmers and diversify into other sectors, one being agri-tourism. A very fine income could be made from this which would support and help to keep many farmers in full-time farming. One could diversify into anything but I know a little about agri-tourism.
I see Macra as having a huge role with regard to rural isolation and the regeneration of rural Ireland. Macra deals mostly with young people and they will be the key to the regeneration of rural Ireland. The only way I see it happening is through an organisation such as Macra which deals with younger people. It will not happen overnight but it must happen over a period. Whether people are young or old, sometimes they feel very isolated in the country. They cannot continue to socialise as perhaps they did, by having a pint at the pub at the crossroads. A member of the delegation made comments in support of the reduction in the drink-driving limit.
That issue should not be discussed today.
It has a bearing on what we are discussing.
I remind members that we finish by 1.30 p.m., many members must attend other meetings, and we have four more speakers and replies.
I am finished in any case; that was my final comment.
I ask the delegation to be brief in replying.
Mr. Michael Gowing
There was much cross-over in the questions and, to keep in with the committee members, we have another meeting at 2 p.m. We all realise what deadlines are.
Several members touched on the second side of Macra and wondered why it was not discussed. The reason we did not mention it was because this is a meeting with the Oireachtas Joint Committee on Agriculture, Fisheries and Food so we discussed agricultural matters. That said, all areas are important to Macra and we make representations on other policy streams that are not connected with agriculture, such as rural transport and drink driving.
A number of comments were made on these being difficult times. We are the first organisation to recognise that and my members continually remind me of it. However, some state that we do not want to face up to the difficult times and that we should not do it through taxation. Taxation also makes times very difficult and will push out the recovery time. While changes have to be made to the taxation system, they should be done in a manner that will not over-penalise the youth who are the future and the workforce who will support the older generation. Young people have to be allowed to survive. At present, it is survival of the fittest.
Questions were asked on whether installation aid addressed the issue, was value for money or should be brought back at a lower rate. I can name people who did not go into farming because installation aid was removed last year. Some of them are included in the hardship cases and are supported by the State through social welfare because they did not have an opportunity to go into agriculture. To state that installation aid did not work would be a fallacy. It worked and two members of our delegation benefitted from installation aid. I and Mr. Kieran McEvoy benefitted from it as did many other members of Macra. Agriculture is an unusual industry as it is capital intensive. We have huge capital assets from which we earn nothing. The transfer of capital assets is very costly and time consuming. Installation aid went some way down the road to contributing towards the costs which could not be met from the family industry of farming. Installation aid is important and should be brought back as a matter of priority. The hardship cases must be dealt with.
We would like to see a new installation aid scheme which would be more target driven as many schemes will have to be in the future. It should not be the case that because one fills certain criteria one automatically receives it. Perhaps it should be incentive-driven. The new entrants to dairy farming scheme was introduced in recent years and was well-supported by the Department when it was launched. It is very much targeted towards young productive people entering the industry. Perhaps something similar should be introduced with regard to installation aid.
It is a fairly consistent view across the board that we are in difficult times and tax reliefs can be very difficult to change or re-introduce. I do not accept that "tax relief" are dirty words. They are very important for individuals and I would not like it to leave this gathering that they are dirty words. Tax relief is not evil, it is a necessity. We all have tax reliefs and just because various sectors get various reliefs it does not make a particular sector dirty or the relief for that sector dirty.
That is not what I said. Mr. Gowing may be misinterpreting me slightly. In the overall context of tax reliefs on property and construction, from a political point of view the idea of applying further reliefs is dirty and that is the context in which I meant it.
Mr. Michael Gowing
The income levy grates with all farmers and Macra members are no different. An income levy implies that a levy will be placed on one's income. A farmer from the same county as me rang me this morning to explain that he will have to pay an income levy but he will have to borrow to pay it as he has no taxable income. He will have to go on his hands and knees to obtain credit, which, as we all know cannot be got too handily at present. It is very awkward for one to go to one's bank, which is finding it difficult to lend money for good propositions, and it is not a good business proposition to pay a tax because I am aware of very little direct return on it for the business. An income levy without taking account of capital allowances and pension contributions is not equitable for the agricultural sector. One can call it a discrepancy or an anomaly but we call it incorrect and it should not be continued. That is one very practical taxation suggestion. The budget provides a good opportunity to deal with this. I know this gathering does not have direct input into the budget but all Dáil Members have voting rights and it is very important that they exercise them the right way. If the income levy stands in the budget they should make the same suggestions as we have done today.
As to whether the people in question should be 35 years of age or older, there would little be benefit in increasing the age profile to 40, 55 or 65 years if nothing was to be gained from it. This is generally accepted, obviously by our organisation which is for young people and in the European Union. One could argue for an age profile of 35 years, but a line must be drawn in the sand somewhere. I acknowledge the remark to the effect that people had the opportunity to leave the industry and earn money elsewhere. Fair play to those who did, but younger people in the 35 years age bracket did not have such opportunities because they were still in school and so on. They should be afforded similar opportunities. Past schemes for those under 35 years of age should be reintroduced as a matter of urgency.
A common trend in statements across the board is that we cannot afford these schemes. Macra has proposed a novel measure, the young farmer land restructuring relief scheme that would be cost neutral which would be important from the Exchequer's perspective. If I wanted to exaggerate, I could claim the relief would benefit the Exchequer, but we will go with it being cost neutral. If it is not introduced, consolidation will not occur. From a tax point of view, it will not occur, as any accountant or economist would tell members. Under the current taxation system, farms will increasingly become fragmented, which will have associated problems. We all need good news stories in hard times and this is a good news story. I am not having a dig at Deputy Sherlock, but it does not have a dirty side. The measure would be cost neutral and benefit the industry. It could be done.
We were asked about GM crops. Mr. McEvoy will probably address this matter, but there is no doubt it is a complicated one. We fundamentally believe the GM debate should be decided by science only, not innuendo. The nitrates directive issue was another that was not decided by science primarily. The climate change debate is advancing and the issue should be discussed in a constructive atmosphere with the backing of science. People should not approach the GM or nitrates directive issue with their perceptions of what it means. It should be dictated by science, but that has not always been the case.
Mr. Kieran McEvoy
Regarding GM crops, Macra is innovative and has always embraced science. We want to know the facts, details and how the debate stands. We have always taken on new ideas and innovations. The GM crops issue should be no different. If it would benefit the country and the agriculture sector, we should embrace it, but only if it was based on proper research and science.
Mr. Michael Gowing
Another novel idea developed by Macra is the concept of rolling reference years for the single farm payment. Historically, the concept of reference years served a purpose, but we have moved on. Those who farmed in the period in question are still farming which is fair enough, but a large percentage have left and are still benefiting having been active in that period. Two groups are being left out, the first being young people who want to enter the system after the end of the reference period. One can say a lump sum was set aside that people could access, but the system has proved to be inefficient in terms of the levels derived from it and the low cap in place. While a method was provided, whereby people could enter the system, it has not served adequately. For this reason, we have a problem with the concept of reference years. If we are to have new reference years, the system will still be based on an historic model. No matter how one introduces them, they will essentially link with the original reference years. Some agricultural production will be based on reference periods up to 20 years ago. How is this fair or equitable for young people who want to enter the industry? Of equal importance are the young people who will want to enter.
We are not saying a rolling reference years scheme would be perfect, but it is an idea that needs and deserves to be researched on its own merits. Under such a scheme, under which payments and supports would be deferred for two years, one would have to farm within one's own market. As such, one would not just be farming for the sake of the premia payable, nor would one's premia be linked on an annual basis. This would allow young people to enter the industry and farm for their markets. It would also allow farmers currently farming to farm for their markets in a given year. They could make business decisions during it, farm and move forward. If someone decided to leave the industry, he or she would have no right to the single farm payment. The money would remain for those actively farming. It must be driven at them no matter which part of the country they live in. We are all farming to different levels, but it is important that the people in question be required to farm actively.
Our agricultural affairs committee has spent considerable time considering the rolling reference years scheme. The terms are not refined, but the idea deserves to receive interest and and be the subject of discussion. That it is different does not mean it is wrong.
I am taken by the idea. If there were rolling reference years, could external shocks that cause major fluctuations in income lead to a negative situation? Perhaps I am wrong. I would like to tease out the matter further with our guests.
Mr. Michael Gowing
I understand what the Deputy is asking. Currently, farmers have it at the back of their mind that, come the end of the year, they will receive a lump sum. They are not making business decisions purely on market determinants. Everyone will need to deal with world market prices. Like it or lump it, that is the reality on the ground. We need to create a scenario in which people view agriculture as a business. By itself, it is an important industry for the economy, as highlighted by our figures, but it also supports the extraordinarily important food sector. We must be set up in such a way that when the upturn starts, we will be able to take advantage of it. We are not saying the rolling reference years idea is perfect and there are grey areas, but considering is important.
Deputy O'Sullivan is not overly alarmed by the fact that 7% of farmers are young and that 23% are over 65 years of age. For external reasons, this might be the way it should be. Am I quoting the Deputy reasonably well?
I was referring to the reasons for the trend.
Mr. Michael Gowing
The reasons for it are known. One of the reasons for things going downhill is the removal of supports, but it is not sufficient to say we know why the reasons. Knowing them is great, but we must be proactive and ensure we first stabilise the trend and then improve it. I would be happier if more young people were entering the industry. Agriculture is a sector like any other in the economy and the future of any industry, including the Dáil, lies in attracting young blood. Although we understand the reasons for the trend, we must be proactive in tackling it.
The schemes might have a part to play in it, but——
Mr. Gowing should continue.
The main reason is we are not getting enough for what we are producing.
A question, please.
I am addressing the matter.
Has Mr. Gowing finished?
Mr. Michael Gowing
Macra has spent much time considering the matter of methane. This debate must also be based on science and encompass agriculture, carbon sinks and so on. Some elements of the media portray agriculture as being a big polluter, but it is one of the largest recycling sectors. The use of slurry is a recycling activity. Forestry, a significant carbon sink, takes place on farm land. There is a huge carbon sink and the science is there. Grass based industry, or permanent grass pastures, are a carbon sink. Regarding the amount of methane produced from those areas, we are set up much better than other countries that have very intensive cereal-based production. Mr. Connelly will comment on that point.
Mr. Edmond Connolly
In response to Deputy Sherlock's question about high levels of methane, Irish livestock does not produce levels of methane higher than livestock elsewhere. We have the lowest level of methane output per unit of food produced. The misconception propagated in the media is that because we have a very significant agricultural industry, with a low population, per head of population our output is high. However, per unit of food produced our methane output is very low and we are way ahead. New Zealand is tarnished with the same brush but I think there is a great story to tell concerning Irish agriculture being environmentally friendly, with low carbon emissions and based on very sustainable agriculture. That message must be communicated.
Mr. Michael Gowing
Deputy O'Sullivan asked about the number of entrants to agriculture on an annual basis. In very broad terms, between 600 and 700 people applied for installation aid on an annual basis up to the time the scheme was suspended. As we stated, that came well within the budget. Next week, there will be a training course for new entrants to dairy farming. These are the people who were successful in their applications for the scheme I referred to, who have come into the industry for the first time since the milk quota was brought into place. Young people will be allowed access to milk quota, which is a positive step.
The people are there and they want the opportunity and they should be facilitated in a meaningful manner and shown support. To broaden the matter, around my council table which concerns itself a little beyond matters agricultural, there would be general consensus that young people must be supported. Farmers are by no means the cause for the downturn. The downturn in the economy is very hard to pin down to any one factor but cannot be attributed to young people. They need to be supported and if given the opportunity to go forward they are willing to show this can be a productive country.
I will be brief. I congratulate Mr. Gowing and the group he brought to the meeting. They gave a very interesting and informative address. For the past generation Macra na Feirme has served a major purpose with regard to the revitalisation of agriculture. The delegates played their part in expounding the shortcomings in the industry and have spared no effort in implementing the policy of the organisation. I approve of this and admire it.
Macra na Feirme also plays its part in social occasions and over the years it has introduced many couples who married and became successful farmers. It took over the business from the matchmakers of old and brought social life to rural Ireland. That was a step in the right direction.
I agree with the speakers about the embargo on central staff who are needed in colleges and Teagasc offices throughout the country due to retirements of senior officers in that area. When I began as a member of the Cork county committee of agriculture in 1962 — a hell of a long time ago — we had power. As a young committee member I used that power to the best of my ability at every monthly meeting of the committee when there was a vacancy for a temporary agricultural instructor or farm home management instructor. We had power to advertise and fill these positions and we built a policy of advice for farmers that was second to none. As the delegates will know, down the years that power was taken away from us and given to the appointments commission in Dublin.
Many good agricultural instructors who qualified at that time were appointed to the most remote districts to build up the vitality and quantity of the land. They sent the lime lorries rolling into the fields of Ireland and increased the fertility of the land. They created a very sound background for agriculture in this country. They had the same idea as the first Minister for Agriculture, namely, one more cow, one more sow and one more acre under the plough. That policy has been long forgotten and therein lies the kernel of the trouble. We must remember that when the last litre of gas is extracted from the gas fields around our coast agriculture will still play its dominant role as the main industry in this country.
When we entered the EU 35 years ago we were told by advisors at the time that we would become the breadbasket of Europe. I do not know what happened because this did not happen. Wrong policies were adopted by successive Department officers and advisors to Governments of the day. Therein lies the kernel of the trouble.
People say that in 50 years time the population of the globe will be so great that we will not be able to feed it from the land. Where will people get food? That is the kernel of the trouble and it is a very important question. We must build up a proper policy on agriculture. Macra na Feirme has played its heart out in that respect. The address by the delegates today was very educational and clearly emphasised the need for the people concerned to wake up before it is too late. These people are those in the Department of Agriculture, Fisheries and Food who are responsible for the future for agriculture in Ireland — if they want one.
We have a climate second to none that is very amenable to agricultural development. We can grow the best forests in Europe but our policy for forestry is a drop in the ocean. As was stated, forestry could play a vital role in making this country exempt from carbon emissions but this has fallen on deaf ears. It is our duty now, as a joint committee, to air the views Macra na Feirme submitted to us. We must do that.
There was reference to the early farm retirement and farm installation schemes, two of the best schemes ever introduced in this country. For some unknown reason they were suspended 12 months ago and have not been brought back. If there cannot be some incentive for the young farmer to go into agriculture today he or she will not be there in 20 years time. That is the situation as I see it. As a policy, suspending those schemes was robbing Peter to pay Paul. Unfortunately, the young farmer is the victim in these circumstances. Everything in the submission from Macra na Feirme should be argued in Dáil Éireann at the proper time in a debate on agriculture. I advise every member of the committee to keep safe and use the time available to speak on the agriculture Estimates to elaborate and expound on the policies submitted. I thank the delegation for its wonderful suggestions and for the work it continues to do to maintain the status of Macra na Feirme and the young farmers of Ireland.
I thank Mr. Gowing and his colleagues. I will not repeat what has been said already. Macra na Feirme is in an ideal position to advocate that agriculture is seen in two ways. It is a cornerstone of economic recovery. It is our largest native indigenous industry, as others have remarked. The perspective and background of Macra na Feirme, which is not totally farming based, affords it an opportunity to advocate for sustainable, dispersed rural communities. This is important because the organisation's role in the past has been to develop self confidence in people from such communities such that they can carry out their work, and the work of the organisation is testament to that. There is at least one person on this side of the House who was in receipt of installation aid, although it was a good deal less than it would have amounted to one year ago.
I refer to the matter of climate change. Deputy Aylward and I sit on the Joint Committee on Climate Change and Energy Security. A climate change Bill has been presented. The delegation may be unaware of the fact but I reassure it that the points made by Mr. Connolly have been made ad nauseam by us and the context has been built into the Bill.
We are up there with anyone else in the world in terms of unit food production efficiency. However, we have no standard of equivalence and we cannot measure where we stand against New Zealand, for example, which used kilograms of butter fat rather than litres of milk. Such a standard of equivalence does not exist. We must work in this area and there are ways in which we can improve. I refer to the areas of education and research in science. They may provide a way in which we can reduce greenhouse gas emissions. The methane harvest should be examined further before we consider reducing the size of the herd. We must try to get forest sinks recognised as a storage area as well. At present any post-1990 area is not considered a sink although it may be different for pre-1990 areas. It is important to bear that in mind.
I refer to the number of people aged under 35 years in farming. The young farmer installation aid and the early retirement scheme should be seen as an investment in an industry that can be a pillar. They are important people, but these are not the only matters to consider. Above all, the tax code will be important. The tax code does not take account of share farming and does not recognise certain factors. Let us consider the rolling reference and certain leasing arrangements that may be in place. It could be rolled into a very useful scheme along with a tax code. Let us suppose there is a diminishing single farm payment that has not been used because a farmer is retiring or leasing. There could be some tax incentive to move the payment over in a accelerated manner. My only caveat relates to the case of a farmer aged 55 with a son or daughter aged 18 who intends to continue working on the farm. If the older person wishes to retire the single farm payment for that holding should continue. A suitable tax code could indicate that one does not wish to avail of the payment but wishes to hold on to it for five or seven years until a successor comes along. A good deal of work should be done in this area. That is the only point I wish to make about the rolling reference.
I welcome the straight response provided on genetically modified foods. We must follow science, international patent law and biodiversity protection. These are the three arguments upon which the matter of genetically modified foods should be decided.
I disagree with the points made on world market prices. The world market price is the dumping price at the cheapest time of the year in any given year. As with climate change equivalence, we do not have a standard of equivalence for production. I am surprised Macra na Feirme did not consider labelling as a means of levelling the playing pitch. Production in this part of the world demands higher standards and costs more. If there is to be a world market price it should be graduated. Food should be labelled as having been produced in grade one circumstances, grade two circumstances and so on and there should be prices associated with each grade. Otherwise, it will not be sustainable, especially if the supply of food is determined by futures commodities trading. Recently, someone remarked in a newspaper that young geeks in Chicago decide the price of food. They may not know a cow from a heifer but they know the future price of food. That is not realistic in an environment in which the population is increasing at the rate predicted. I thank the Chairman for bearing with me; I do not normally go on.
There are two sides to this matter. The first is training and research and the other is the tax code. I agree fully that there should be tax incentives. Let us consider the cost of creating a job by way of an IDA incentive rather than creating a job in agriculture or the associated agri-food sector. I carried out a comparison but I do not have the figure to hand today. There is no comparison and the figures speak for themselves.
Deputy Doyle does not "go on".
I welcome the delegation. We live in difficult times. Agriculture has always been the driver of the Irish economy and it is a very capital intensive industry. We have no wish to see the IMF coming here. Concessions and so on may be required. Agricultural relief and all other historical reliefs should be retained and we must consider the position very seriously.
The delegation referred to the targets. One target of concern to me is the scaling down of the advisory service. Let us consider the present state of the economy and the difficulties that have arisen in agriculture last year and this year because of the pricing structure of milk. There are many socio-economic problems that must be addressed. We must retain a strong advisory service. If there is no relevant advisory service it is no use and we will be too dependent on other people. We would not be independent and would be required to take advice from consultants in a private capacity. Private consultants may have a different agenda and may not have the independence of Teagasc. There is too much emphasis on research and development by Teagasc at the production or grass based level in dairying and beef farming. It must be scaled down and the matter should be examined. I am surprised someone is not pressing this point and I know the farming business very well.
I refer to the single payment. I disagree with the delegation on this matter. The single payment is historical and is based on what has been produced in the past. The man who generated the income should be entitled to carry it forward and keep it rather than hand it back to someone else. I do not believe we would get away with that proposal. Deputy Ferris made the point that it should be capped. However, there are many farmers in my area who were conacre farmers and who leased land and paid a vast price for it. The payment is the only pay back they have and that must be considered.
I wonder about climate change; I cannot understand it and I am ignorant of the facts. There are more animals than people in Ireland but the reverse in the case in many other parts of the world. There must be something in that for us and we should consider the matter rather than considering the reverse. The possibility of fines play a major role in this regard. Macra na Feirme does a good deal of work. In some ways its submissions are identical to those of the ICMSA, which we have all received, but they are different in certain respects as well.
Another area of concern to young farmers is that of animal disease. Many diseases exist in the country. I have no great confidence in the animal health committee set up, because there has been too much emphasis on the private checks, many of which would have an independent bias. I would prefer to see regional veterinary officers providing such services as blood tests and so on for farmers to address BVR, bovine viral diarrhea, IBR, infectious bovine rhinotracheitis and so on. This area is being neglected. The private sector has taken over and farmers are being ripped off. Young farmers are the most vulnerable because they are stocking up for the first time. They will inherit those problems by accident rather than by design. They might buy the wrong stock. The issue is not being addressed.
On GM food, we will not be at the races if we do not identify and assign space to it. Europe is currently suffering and we can see what is happening across the world. GM food such as soybeans has been backed up by science. If this area is not addressed quickly livestock farmers are the ones who will suffer. I do not understand what is going on. The committee knows climate change is science-based. The issue of GM has to be addressed in a realistic and commonsense way. If it is not, our costs of production for soybeans and maize will be outrageous. I am glad the Chairman agrees with me on that issue.
I do not know how we can address this issue but I would like to hear the views of Mr. Gowing. It is a very important area for the farmers of the future. Historically, farmers young or old do not change. It is a very conservative business. I hope, as it is a productive sector, that the budget will not affect farming. It is a very difficult area of the economy. Milk and cattle prices are currently on their knees. There will not be a major improvement in farm incomes and pricing in the years ahead, based on world production and the significant imports into our country, many of which are unrealistic and should not be tolerated. They are happening and I cannot do anything about it.
I sympathise with the delegation in many areas. Much of the first four pages of its presentation has to be addressed and I hope the Government and the Minister for Finance, Deputy Lenihan, agree with it.
Everything has been said. I apologise for being late for the meeting. I was attending a meeting with the Minister. I received the report from the delegation's members in Sligo some time ago. I have read it and there is nothing in it with which one could not agree. The statistic which jumps out is that 7% of farmers in Ireland today are under the age of 35, which means that 93% of farmers are over 35. Something will have to be done to encourage young people. There is now a trend for people to return to farming but they will need help and encouragement to ensure such people are able to re-enter farming and survive in it. There is a great deal of sense in the delegation's presentation. I support most of what it contains and agree with many of the previous speakers.
Mr. Michael Gowing
In regard to the IDA and support for jobs for agriculture, I have a reasonable memory and head for figures. One figure which comes to mind is that the support of a farm job through installation aid cost €15,000, which was co-funded by the European Union. The support of an IDA job is in the region of €70,000. That is not to say that IDA-supported jobs are not important for this economy. They are extremely important. However, I assure the committee that every job in agriculture is as important, in particular to individuals in the rural economy.
On the GM issue, we wholeheartedly agree with Deputy O'Keeffe that it has to be based on science. It is very important that the science issue is discussed and that the general population, rather than being ignored and just told that the science is right, are educated about the reality. The impending rise in the cost of production would be a cause for concern for livestock producers who are members of Macra na Feirme if the issue of GM is ignored. Many tillage farmers are also concerned about the issue and their costs of production must be taken account of. We should leave the issue of the costs of production aside because we do not have to use GM production. We should examine the science and base our decisions on it. We do not want to confuse the two issues.
The issue of young people has been well covered. They are in short supply in this industry. There has been an increase in the number of people entering the industry through education. Every sector currently needs to be supported and agriculture is no different. Young people, because they are trying to enter such a capital-intensive industry need support to get on to the first rung of the ladder but do not need to be propped up indefinitely.
I take exception to the comments of Deputy O'Keeffe regarding Teagasc. It has three prongs. One of which is education, which we support wholeheartedly. Another is the advisory service which is extremely important to young and old farmers, especially in difficult times created by weather or commodity prices falling. I take grievous exception to the Deputy's comment that research is not important. It is through active research that we ensure an industry does not remain in the dark ages. We have to have research and innovation. Research and innovation is carried through and supports a very competent advisory and education sector, which is important.
The three sections support each other and an industry which is extremely important.
I referred to production research in a grassland-based product. It is over the top in Teagasc. It is studying the milk from thousands of cattle and I do not see much information coming from the project. Much more cannot come out of it. We must also consider the issue of New Zealand. We will have research at the expense of advice. There is a socioeconomic problem in the country and many farmers are in difficulty. They are giving good service. We will sell out to private consultants, who put many farmers in real difficulty in recent years as a result of the advice they gave on investments. Teagasc would not have gone down that road. In buying a machine it has an agenda. I want an independent advisory service and to retain what we have.
Mr. Michael Gowing
We agree but we would argue that——
Nobody is making the case for it.
Mr. Michael Gowing
We would argue that the research supports the good advisory service. There is a huge amount of research, as the Deputy said, on grass-based produce. However, there is a great deal of other research in areas such as product development. Teagasc supports the industry. We are agreed that it has a role to play but each area supports the other. I am sorry if the Deputy does not agree but it is our belief and we will have to differ on this.
It may be a contentious point but it is important that we are clear. Education is something this country has been very good at across all sectors. It is recognised throughout the world that we are a good country in terms of educating our young people. Numerous Deputies have said today that young people need to be supported and educated, and that we need to have a vibrant sector. If that is the case, we need good agricultural education. One follows the other. I hope I have covered all the questions asked.
In the past five years very few farmers attended agricultural colleges, but now there is an influx of people because of we are in a recession. There are fewer than 140,000 farmers in Ireland. Many people are attending agricultural colleges who are not going into farming and agricultural production.
Mr. Michael Gowing
There is no doubt there was a reduction in the number of people availing of education in agriculture. Macra na Feirme strove very hard to ensure that education standards increased rather than remained the same and access has improved. The industry should not be punished because people are going back into education. It is a good thing. A Deputy commented that many incentives should only be paid to active full-time farmers. Part-time farming, by its very nature, has a role to play. Such people need an education.
The vast majority of the part-time farmers I know aspire to be full-time farmers. The reality on the ground at the moment is that the return to the farmer is so low for numerous reasons, such as the extremely low commodity prices and returns from agriculture, the power of the retailer and the EU, world market prices, climate change and regulations, that many farmers have to work part time to be able to exist. Such farmers have an equal entitlement to education and to the various schemes. I do not think we should say that the increase in the number of people going back into education is a bad thing. I think it is a bloody good thing.
On behalf of the committee, I thank the Mr. Gowing and his colleagues for their presentation and for answering members' questions.