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Joint Committee on Agriculture, Food and the Marine debate -
Tuesday, 12 May 2015

Report on Developments in EU: Department of Agriculture, Food and the Marine

I welcome from the Department of Agriculture, Food and the Marine, Mr. Aidan O'Driscoll, Secretary General, Ms Brid Cannon, principal officer, Mr. Paul Savage, principal officer, Ms Karen Hanlon, assistant principal officer, Mr. Thomas Harty, assistant agricultural inspector, and Mr. Lorcan O'Shea, higher executive officer. I thank the witnesses for appearing before the joint committee to brief members on the Department's six monthly report on developments in the European Union in the period from July to December 2014. While Mr. O'Driscoll accompanied the Minister to a previous meeting of the joint committee, this is the first time he will address the committee in his role as Secretary General. I extend my best wishes to him and his team in their role.

I advise witnesses that they are protected by absolute privilege in respect of their evidence to the committee. If, however, they are directed by the committee to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity outside the House by name or in such a way as to make him, her or it identifiable. 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 House or an official by name or in such a way as to make him or her identifiable.

Mr. O'Shea and Mr. Harty attended our meeting of 28 April last at which we discussed the issue of land eligibility. A number of issues raised at the meeting were clarified subsequently in correspondence received from Dr. Kevin Smyth. I also thank Dr. Smyth for the revised eligibility guide he submitted. I invite Mr. O'Driscoll to make his opening statement.

Mr. Aidan O'Driscoll

I thank the Chairman for his good wishes on my appointment. I will convey his comments to Dr. Kevin Smyth and his colleagues.

I thank the joint committee for the opportunity to address it on EU developments in the agriculture sector in the latter half of 2014.

CAP simplification was an issue that arose towards the end of that period and I will cover this also in my opening statement.

The committee has in front of it the six monthly report on EU developments for the period July to December 2014, which shows the number of dossiers progressed during the Italian Presidency. Given the significant EU institutional changes in 2014, the European Parliament elections and the appointment of the new Commission, policy developments in the period in question were fewer than in other years.

Before I begin, I want to correct a typographical error on page 2 of the report, relating to the schools’ schemes. The Commission is recorded in the report as seeking to ensure that aid rates for these schemes would be set exclusively by the Council. In fact, it is the Council that is seeking this. The Commission’s proposal provided for co-decision.

One of the most significant developments in the past six months of 2014 was the set of conclusions adopted by the European Council on climate change. The Council acknowledged the low mitigation potential in the agriculture and land use sector. It asked the Commission to consider how best to encourage the sustainable intensification of food production, while optimising the sector’s contribution to greenhouse gas mitigation and sequestration, including through afforestation. The detailed policy on how to include land use and forestry in the 2030 framework will be agreed before 2020. The inclusion of this text, largely drafted by Ireland, was highly significant for future policy on agriculture, forestry and climate change in the EU, particularly with regard to the 2030 emission reduction targets. It was the first time that EU leaders acknowledged the specific challenges involved in ensuring coherence between the EU’s food security and climate change objectives. This text also broadly reflects the views expressed when agriculture Ministers previously discussed this matter, again at the prompting of Ireland.

The impact of the Russian ban on EU agriculture products was discussed at several Council meetings during the course of the Italian Presidency. The dairy and fruit and vegetable sectors across the EU were most affected by the ban and the Commission introduced a number of market support measures to assist producers in these sectors, including an aid to private storage scheme that was extensively used by Irish operators. A special compensation package was introduced for dairy producers in the Baltic states and Finland who were severely impacted by the ban.

The funding of these measures was an issue, with the Commission proposing the use of the agriculture crisis reserve fund. The Commission subsequently withdrew its proposal following strong objections from a number of member states, including Ireland. We took the view that EU farmers were disproportionately affected by a decision that was taken from a political and security policy perspective, and that, in these circumstances, expenditure should not be confined to EU agriculture budget lines only.

The EU Commission has continued to provide updates on the market situation consequential to the ban and information on the measures that it has taken to address the situation. From an Irish perspective, our dairy and seafood sectors were most affected but with significant impacts also on our pigmeat sector. Until the imposition of the ban, Russia had been seen as a priority market for growth of exports, with our agrifood exports having increased exponentially, by some 460%, in the years leading up to the ban.

The next main topic dominating discussions during the Italian Presidency was the future of the dairy sector, in preparation for the abolition of milk quotas in 2015. Ireland strongly supported the abolition of the milk quota regime and along with other member states continued to call on the Commission to introduce support measures to ensure a “soft landing”, to mitigate the impact of superlevy fines, in the run up to the expiry of milk quotas on 31 March 2015. Unfortunately, agreement between member states could not be reached and Irish dairy producers are now faced with a superlevy bill of approximately €69 million euro. The Commission has introduced a facility which will enable farmers to pay the superlevy bill in instalments. Department officials are currently finalising the implementation details and the Minister will make a further announcement on this in due course.

As to legislative dossiers, the organics dossier was comprehensively examined in 2014 during both the Greek and Italian Presidencies. This is a proposal to revise the EU rules on organic production with a view to generating further growth in the EU organic sector and to reinforcing consumer confidence in the area. This dossier has continued into 2015 under the Latvian Presidency. It has re-examined the proposal at both political and technical level and has produced a substantially revised text covering areas such as the scope of the proposal, rules governing the conversion period, the presence of unauthorised substances in organic products, the co-existence of organic and conventional farming on the same holding, the import regime and controls. The Latvian Presidency hoped to achieve a general approach at Council yesterday, that is, an agreement on the Council's position, and, while good progress was made, further meetings of the Council will be required to secure agreement, which they hope to achieve in June.

The Italian Presidency discussed a number of other legislative proposals during its tenure, including the four part animal and plant health package and the school fruit and milk scheme. On the animal and health package, there was good progress on the animal health dossier, which updates and consolidates European Union law on animal health. The Italian Presidency secured a general approach from Council on this dossier and we expect the successful conclusion of an agreement with the European Parliament by the end of May.

Work is continuing under the Latvian Presidency on the plant health and official controls dossiers. Again, the objective of these proposals is to modernise and consolidate the existing legislation in these areas. The fourth part of the package, the plant reproductive material proposal, was withdrawn by the Commission for redrafting, following the European Parliament’s rejection of it last year, and no further progress has been made on this proposal to date.

There was disagreement too within the Council on the proposal to merge the rules covering the school fruit and school milk schemes. Further discussion on this dossier has been suspended pending the outcome of the Commission’s evaluation of the state of play as part of the Common Agricultural Policy, CAP, simplification exercise.

The Council also discussed ways of strengthening EU policies for young farmers and the position regarding error rates in agriculture expenditure. The Council adopted a series of conclusions concerning the latter, while Presidency conclusions were adopted regarding the former.

There were a number of developments in trade negotiations in the period covered by the report. Some of these negotiations, including those with Japan, the United States and the MERCOSUR group of South American countries, are very important for EU and Irish agriculture and I would be happy to provide the committee with further information on the current state of play. At present there is much attention on the Transatlantic Trade and Investment Partnership, TTIP, negotiations between the EU and US. The ninth round of these negotiations took place last month and a tenth round is scheduled for July. There are high-level commitments from both sides to conclude substantive negotiations by the end of 2015 but opinion is divided on whether this deadline will be met.

Turning to CAP simplification, the background is that, following his appointment last November, EU Commission President Juncker set simplification of the CAP as a priority for the incoming Agriculture Commissioner, with an instruction that, in the first year, he should concentrate on direct payments and greening, in particular, rural development, quality policy and the fruit and vegetables regime. Thus, in January last Commissioner Hogan launched a screening exercise within the Commission of agricultural legislation to identify elements that could either be simplified or left to member states. The Commission initiative is ongoing and was guided by three principles - first, maintaining the basic political decisions taken under CAP reform; second, no weakening of sound financial management or increase in error rates; and, third, prioritisation of areas of greatest concern to farmers and other beneficiaries.

The Commission then wrote to all member states inviting their suggestions for CAP simplification. Over 500 pages of suggestions were submitted by member states and these are currently being examined by the Commission.

The Latvian Presidency has pursued this initiative actively and has scheduled a number of debates at the EU Council of Agriculture Ministers. Yesterday, the Council adopted a series of conclusions, the main thrust of which are to identify the areas of the CAP most in need of simplification and to maintain pressure on the Commission to come up with simplification initiatives later this year to address these issues.

Turning to the content of the simplification, Ireland has contributed actively to the simplification initiative. We have made a written submission to the Presidency and have participated actively in the debates at Council. The main focus of Ireland’s submission is to ensure stability, certainty and subsidiarity in the application of the rules in place. This means ensuring that the Commission does not issue revised interpretations with retroactive effect or create new conditions and requirements by means of interpretative notes and implementing regulations, where no specific provisions already exist. We have provided a number of examples of specific instances where improvements could be made. These relate to interpretations taken by the Commission on equivalent greening measures, the definition of catch crops and the adjacency of landscape features and buffer strips to land parcels. We have also identified a number of elements in the Commission delegated and implementing acts that should be simplified. These relate largely to greening requirements and controls. In particular, we have drawn attention to the disproportionate impact on smaller farmers of the formula for deductions and sanctions for over-declarations and to the complicated formula for reductions and penalties for breaches of greening requirements.

I would be happy to provide further detail to the committee, if the members wish. I understand they have already have received a copy of our submission.

Our essential point is that the adoption of Commission acts, as well as delegated and implementing acts, was rushed, and the outcome is a very complicated set of rules which is a prime candidate for simplification.

We have also drawn attention to the need to streamline and simplify the approval process for rural development programmes. This is an extremely cumbersome and complicated process which is very resource-intensive and can ultimately give rise to delays in the implementation of rural development programmes. This is a key issue for us, which will, of course, also affect future amendments to programmes.

We will continue to interact with the Commission and with other member states to ensure that our proposals are followed up. The Commission has engaged positively in the process to date, and yesterday put forward a number of initial suggestions, which we are examining. A number of member states have called for a mid-term review by 2017 of the basic legislation on the CAP. We are wary of such a review so soon into the implementation process, as we believe it would not be confined to simplification but would result in an unpicking of the CAP reform agreement reached in 2013, less than two years into its implementation. Nevertheless, there will be continued pressure to sort out anomalies in this basic legislation, and this could lead eventually to more wide-ranging CAP reform.

It should be remembered that the Commission had already made a commitment to the European Parliament in April of last year that it would have another look at the greening provisions after the first year of implementation. Of course, the 2013 CAP reform agreement already provides for an evaluation of the ecological focus areas provisions by the end of March 2017. Moreover, the current multi-annual financial framework, MFF, for the EU budget will expire in 2020, and the debate on the MFF for the next period will inevitably generate a discussion on the future of the CAP after 2020, either in late 2017 or in 2018.

My first question concerns climate, agriculture and the targets for reducing the carbon footprint. From negotiations to date, how much is the Irish cattle herd at risk because of climate change proposals? Is the Council of agriculture Ministers working to ensure that we continue to produce beef in the countries that can do it most carbon-efficiently and that there is a rebalancing of the carbon targets to take this into account?

Could Mr. O'Driscoll give us some measure of the impact of the Russian ban on EU agricultural products? Has he any idea of the potential risk of agriculture being used in other international disputes? Could the EU get retaliatory action from other important countries involved in foreign policy issues that we do not agree with? If China was to do something we did not like, is there a risk that we could get into an agriculture war because of Tibet or something similar? Has any risk analysis been done in developing all these new markets? How much are we now at risk of these retaliatory wars, particularly with regard to countries such as China, whose human rights record is not exactly perfect, or the Middle East countries?

Mr. O'Driscoll discussed the milk quota and the superlevy. Has he any idea how this is going to work? Can we take it that there will be no interest charged to farmers? Can he give us some detail on how this will work in layman's terms? Maybe he could also outline the logic of the European Union imposing this superlevy when it knew that forever-and-a-day quotas were gone. How is it that common sense did not prevail and that the countries who at least wanted the superlevy ameliorated this year made zero ground on the issue? Deferring a debt does not reduce the debt; it will just be there as a debt on the balance sheet.

With regard to the agricultural trade negotiations, we are talking about the end of 2015. The impression given, particularly by the Government, seems to be that in the TTIP negotiations, agriculture might be an unfortunate consequence of getting this much greater deal. I do not understand the logic of saying that when we bring down the barriers, we will get extra trade because that means the consumer is spending more money, unless we are taking the trade from other countries. The normal logic of free trade is that everyone consumes more but, of course, that is not very good from an ecological point of view. I am always a little puzzled that on the one hand, we are talking about climate change while on the other hand, we are saying we need consumers to buy more, even if they do not really need these things.

To focus on agriculture, how certain is the Department that it can defend small-scale European and Irish agriculture from the mega-scale, much less regulated American agriculture, and that the "industrial interest" will not trump the Irish agricultural interest in these TTIP negotiations? It would seem that even within this country - we are not the biggest industrial country in the world - the industrial interest just wants to steamroll this through and there is a brushing aside of the agricultural interest. I would be very interested in what might happen in that regard.

Unfortunately, I did not get the chance to print this document sent to us yesterday until today as Monday is always a busy day. It refers to the simplification of CAP. My God. When the single farm payment came in, it was meant to be a simplification in the sense that the farmer would get the payment and there would be a disadvantaged area payment and a REP scheme and life would be simple forever. Now a suckler cow farmer would want to be in six schemes to try to get money out of it. Who is at fault? It is the farm organisations, the Department and Europe. We never seem to get it into our heads that if there is a finite pot, creating more schemes does not increase the pot; it just means one has to apply for more schemes to get the same money.

That is a universal rule people seem to ignore. It is like creating and destroying matter. The pot from Europe is finite. We had a brilliant example of this in the last week. This CAP, in particular, has an element to it which means an awful lot of the money will actually go to consultants, professionals and vets and not to farmers. We saw that with the beef schemes, where €500 was going to the planner and €750 to the farmer.

With regard to the genomics scheme, the witnesses might explain to us how and why a payment per animal suddenly become a payment per hectare. Why is it that, if one joins for six years, one cannot get out of it? Why is it that, irrespective of anything, it has to involve four-star or five-star bulls? Why is it this and why is it that? An awful lot of farmers have looked at this and said: " It is six years of this and if anything goes wrong, I cannot reduce my herd or change anything." We know a lot of farmers are older and they are being told to please keep away. It is a classic example of how complicated we are making everything.

I think this is quite simple. If the factories were consistently paying premium prices for premium cattle, the farmers would do whatever needed to be done in order to get the premium cattle at the premium prices and they would find their own way to do it. They would not need all of these regulated schemes, with paperwork and penalties, to achieve it.

What is happening is that many of these schemes are based on a false market. The Department cannot get the factories to deliver on the price so it tries to get the improvements even though the factories are paying a flat rate, because it thinks it would be a good idea if there were better cattle and it knows the factories are not willing to pay the premium price for the premium animals all the time. However, we who are dealing with farmers have found out that all it does is fill up our clinics with all sorts of weird and wonderful situations where people are penalised.

With regard to the LPIS, twice in the last week farmers came to me with maps produced by the Department in the last year under the LPIS where there was no, or a very minor, penalty. In both cases the Department has reviewed some of the land again on a Bing map and there are now 100% penalties. Again, farmers find that they do not know what will arrive in the post from one day to another. They think they are in the clear, they have the map and the map states what is the reference area, but suddenly they get another map. I favour simplification, but the programme of simplification here does not appear to be farmer-centred. It appears to be bureaucrat-centred and does not deal with the issues of simplification which the farmers I deal with require. They are getting caught on the rules all of the time and a genuine error is mortally penalised.

I welcome the reference to examining the issue of small discrepancies in areas for small farmers. I hope there is a quick fix on that.

I welcome Mr. O'Driscoll and his officials, and I congratulate him on his appointment as Secretary General. He has always been very informative when he appeared before the committee with Mr. Moran on other occasions. Deputy Ó Cuív has dealt with many of the issues I intended to raise, one of which was the Russian ban.

The other matter is trade agreements. The TTIP and South American agreement will affect us. I note with regard to South America that no real movement on negotiations is envisaged for the first half of 2015. What is the situation with the disease status of the herds in South America at present? Must that be resolved before negotiations can take place? Are the US, Japan, Australia and other countries negotiating trade agreements with the South American countries as well?

I must agree with Deputy Ó Cuív on the genomics scheme. The scheme and its concept will improve the herd, but there is too much red tape involved. The requirement to sign up for six years is not feasible because people might have to drop out of the scheme due to circumstances. There must be clarification. The penalties are that one must pay back all of the money. People might decide to change their farming practice; somebody could decide to go into tillage after two or three years. It is unfair and the six year tie to the scheme must be examined. We accept the requirement that one must use a five star bull. However, after two or three years, when the progeny is being tested, the bull's status might drop to a three star bull, so suddenly the farmer is out of the scheme in that way. Also, trying to source three and four star heifers could push prices up at the marts and perhaps make the scheme unviable because of the price people will have to pay for replacements. Being obliged to have so many replacements in the herds will make the scheme unviable.

Deputy Ó Cuív mentioned the superlevy and the €69 million we are facing. Will Mr. O'Driscoll clarify how many years the instalments will be paid? He also mentioned interest rates. Is an interest rate being charged on the superlevy bill?

I welcome and congratulate Mr. O'Driscoll and wish him the best of luck in the remainder of his career. I will start with the simplification of the CAP.

I completely agree with Deputy Ó Cuív in his analysis of the situation. Simplification, in my view, means simplifying everything and making it less bureaucratic but this has not happened. It has become even more bureaucratic over the past number of years. Will the mid-term review put a plan in place for simplification to make it less bureaucratic, more farmer-friendly and also more official-friendly? It has gone the opposite way. What are the plans to make it more farmer-friendly as well as more consumer-friendly?

On the superlevy situation, we have highlighted the issue and asked questions about milk and the superlevy. However, post quota, what is the current market outlook for dairy products? This time last year there were fears about where we might be going in that situation. What is the current situation?

I refer to the provision of fruit and milk to schools. Is there scope to utilise increased milk production and milk supplies post quota? The Secretary General referred to the TTIP negotiations in his opening statement. I am interested in the time scale for the negotiations. Mr. O'Driscoll mentioned the end of the year as a possible date but he was not overly-optimistic about that date. Is there an advantage from our point of view if negotiations dragged on a bit longer? From a political point of view, the American elections will be held in 2016. Would this have an effect on negotiations? Is there an advantage to have the negotiations continue beyond that date?

Mr. O'Driscoll referred to issues concerning the rural development programme. A number of sticking points arose. I ask Mr. O'Driscoll to elaborate. I agree with Mr. O'Driscoll's analysis that 2017 is a very short time span before the new programme. He is focused on where we need to be going in advance of the mid-term review. The main idea of the mid-term review has to be to make the process as simple as possible and more consumer and farmer-friendly. The same applies to the rural development programme. What were the main sticking points in negotiations with the Commission? Will there be a change of emphasis in that regard? What is the plan for the future?

I congratulate the Secretary General and wish him well in his very important position in terms of the development of agriculture in this country. I refer to the Russian ban. Can Mr. O'Driscoll give an outline as to the impact to date of the ban on the various Irish agricultural sectors and on the particular sectors affected? It appears to me that the agricultural component of the TTIP negotiations appears to be played down to its detriment. It appears to be regarded as small beer in the context of the Americans and everyone else. The powerful industrial lobbies and advocates appear to be making progress and agriculture is being relegated somewhat. That is my opinion as I look in from the outside. It is important that there is not total capitulation or capitulation to the detriment of the agricultural sector.

The industrial element of the negotiations clearly offers important and positive advantages, but there must be a balancing act, with due cognisance given to the role of agriculture.

I agree with Deputy Ó Cuív that CAP simplification is like a Benny Hill joke at this stage. I was very supportive of the idea of decoupling. In fact, I recall proposing it and being devoured by farming organisations. That is going back a while. The farming organisations did not like me for it but I took that as a badge of honour. If they liked me, I probably would lose my seat. The very essence of the notion of decoupling was that it would simplify the whole process by moving away from headage and all of that. I am very disappointed with what we have ended up with. We have seen all the consequences of the single farm payment system. The remodelled scheme that has emerged from a bureaucratic gestation evaluation is the very antithesis of simplicity.

I am particularly concerned that there is too much focus on subjectivity. I discovered all about that on 28 April when a delegation from the Department last appeared before the committee. I have a background in agriculture and am not a total gobdaw. I knew some of the witnesses' departmental colleagues back in the 1980s and am glad to see them now at the very top of the tree. Michael Hanley, managing director of Lakeland Dairies, is a former colleague of mine. Those guys are all doing a lot better than I am, thank God. In that context, I am absolutely perplexed by what has been done. It would try the patience of anybody, let alone test one's professional competence in trying to figure out the impact of such and such a thing, depending on coverage and everything else. That level of subjectivity is a recipe for further penalisation down the line. I know a bit about this from a courts perspective. When one allows that type of subjectivity into a system, it creates a range of difficulties. It is very important to have objectivity in order to prevent people from being punished.

The beef genome project is very important for the midlands and I am very supportive of the intention behind it. Twelve or 15 years ago, only one in four of our cattle was capable of penetrating the very high end of markets in Europe. I remember it well because I did a study of it. It was a disaster because we had too much of a milk breed, Holstein crosses and everything else. Coming from a beef area, I could see the disaster that was coming and could not understand how it was allowed to persist for so long. We eventually changed tack and put some shape on it. This system has put the final cap on it but, Lord save us and bless us, there is a great deal of confusion. I have a brother working in this area who will have to employ another person if he is to ensure there are no slip-ups on this thing. Senator O'Neill asked whether the six-year term is fixed and immutable. Getting the breeding right is important; I have no hang-ups about that. However, Senator O'Neill is in the game and he understands the impact of going from five-star back to three-star or whatever.

I am deeply concerned that things are hedged in bureaucracy and there is only one outcome, namely, bureaucratic evaluation down the road and penalties arising. It is the consumer who suffers in that and, in this case, the consumer is the farmer. The Department has sent out information about re-evaluations - the eye in the sky, as I call it - whereby ordinary farmers down the country are obliged to make submissions to the Department.

These can be submitted to Portlaoise for review. How many of these reviews have been successful? I appreciate Mr. O'Driscoll may not have the exact number but I would like a rough estimate or a percentage. Is it 20%, 30% or 40%? I understand significant progress is being made on the replies. One farmer told me the reply did not tally with what he was looking at. It is important people are given fair wind and are given an opportunity to reject what may well have come from the eye in the sky. No matter how fine technology is there is nothing better than being on the ground. A farmer knows every blade of grass and rock outcrop. I am concerned that they get fair wind and an opportunity to deal with the review. Retroactivity was mentioned. From a constitutional perspective, laws should only act prospectively. European law is great, with legitimate expectation and everything else, but it has allowed this measure to sneak in whereby the authorities can go back for as long as they like. There does not even seem to be a statute of limitations.

I want to ask about GLAS but I am not sure whether it is appropriate. There are restrictions, particularly on the number of hectares in respect of which farmers can apply to the scheme. How were these received in Brussels, particularly where the restriction is applied to Natura lands? It seems unreasonable that farmers who have faced the constraints of having to farm decimated lands under special protection areas, SPAs, or special areas of conservation, SACs, can only get GLAS payments in respect of the same number of hectares as farmers anywhere else in the country. It seems to fly in the face of the purpose of much of the Common Agricultural Policy and requirements that farmers be compensated for farming Natura lands. This decision has been made solely by Ireland, but was there much opposition to it at Commission level?

I congratulate Mr. O'Driscoll on his appointment and we look forward to working with him. Many of the issues I want to raise have already been covered. We have much work to do. The genomics scheme has given us greatest pain in recent days, particularly since the forms came out. Having to sign up for six years is a serious problem and the star system is another. Who will draw up the carbon footprint for farms and how much will it cost? When one considers all of the costs one wonders whether it is worthwhile going into the scheme. I agree it is a positive scheme and we must all breed better stock, but the amount of red tape involved is putting off many farmers. At a meeting in Leitrim last Thursday, which I did not attend, many farmers decided not to bother applying for it. We have a good bit of work to do to sort out the problems.

With regard to young farmers applying for top-ups to their entitlements, will it be possible to pay the top-ups to 90 ha? Provision was made for this but will the Department be able to live up to it? Young farmers who have been farming since 2002 have no entitlements but provisions for them were tied in. They have the necessary green certificates but are excluded because they were in farming before 2008. What is the situation for them?

The report includes several measures to do with the fishing sector and I ask Mr. O'Driscoll to give us a brief outline of this in his general response. Last Friday week the committee dealt with the land use report.

It has been suggested that the food security and climate change objectives are potentially at loggerheads. That was the precise motivation behind our report. We hope the recommendations in our report will be helpful during the policy-framing stage. It should be mentioned, following on from the superlevy and milk simplification issues, that some of the schemes seem to get less simple as time goes on. Deputy Ó Cuív has reiterated a point I made just before we started, which is that the more one tries to broaden a scheme to encompass as many people as possible, the more it seems that simplification goes out the window. I invite Mr. O'Driscoll and his colleagues to respond.

Mr. Aidan O'Driscoll

I thank the Chairman and the members of the joint committee for raising a range of issues. I will take them as they came up. Various points were made about the same issues. The first issue to be raised was climate. It is no secret to people in this room that for five or six years now, Ireland has been pursuing a fairly lonely road within the EU in drawing attention to the conflict between the EU's food security and climate change objectives. We have also emphasised the need to evolve or develop a coherent policy covering climate change, agriculture and forestry. That whole thing is known in EU-speak as agricultural land use, land use change and forestry. The conclusions reached at last October's meeting of the European Council are enormously significant because the EU has taken that logic on board for the first time.

I repeat the point that we wrote the relevant paragraph. I do not want to blow it into something it is not, as it is just one paragraph. However, it is significant that it is one paragraph in the conclusions of the European Council - that is to say, the council of prime ministers - and therefore carries a great deal of weight and is binding on legislators as they go forward to develop the proposals for the implementation of the EU's 2030 target. The EU has decided to pursue a target of a 40% reduction in emissions by 2030. The detail of that has yet to be worked out. A decision has to be made on whether we will have national targets. If there are such targets, they will have to be worked out and decisions will have to be made on how they will apply in the various sectors. It will be hugely important in those negotiations to have the conclusions that were reached last October there to guide us. That is why we were so pleased about those conclusions.

The second important aspect of this issue, following on from the general point about reconciling agriculture and climate change, is that the inclusion of the sequestration value of afforestation in the system of accounting would have enormous significance for us. It is not included at present. Our agriculture sector emits between 19 and 20 megatonnes of carbon dioxide equivalent each year. Between now and 2030, our forestry sector will sequester approximately 4.85 megatonnes of carbon dioxide, or 25% of the emissions from agriculture, each year. If that is accepted as a mitigation measure, we will be on course to achieve a 25% reduction in those terms. That would be an enormous thing. The way afforestation is referred to in the text of the conclusions of the Council points in the direction we want to go, although it is not in the bag. I should say an attempt to unpick that was made at a meeting of the Environment Council in March, but we think we saw that attempt off.

I would not say, in response to a question asked by Deputy Ó Cuív, that we have achieved everything we want in terms of getting the balanced approach to agricultural targets that we are seeking. However, I think we have taken a large step in that direction. That is where we are. The important point is that we are going into the detailed negotiations armed with that achievement, which strongly underpins the importance of our afforestation programme. If we get what we are seeking to achieve in terms of recognition of afforestation, it is very important that we continue fully with our afforestation programme.

As the committee knows, it is quite expensive. We think it will cost about €3 billion between 1990 and 2030, which is the relevant period. I will come back to any of the points if members wish.

On the issue of Russia, Deputy Ó Cuív asked an interesting strategic question about the implications for other areas at other times. It is very fair to say that we were taken by surprise by this. In terms of Russia and the Irish dairy industry, various Irish companies, including the Irish Dairy Board, had very developed plans for significant expansion in Russia which were pushed sideways by an event that had nothing to do with the agriculture sector. It is a fair point. We have to be capable of dealing with, and be ready for, events that may arise from other sectors. In terms of the impact on Ireland, the total agrifood trade to Russia in 2013 was €235 million. However, prior to the presidential decree in retaliation for EU sanctions, the Russians had already taken a series of measures banning various products. They had undertaken, in January 2014, an EU-wide ban on pork due to African swine fever. In May 2014, they undertook an audit in Ireland and temporary restrictions were placed on a range of plants in the beef, dairy powder, seafood and other sectors. In June 2014, there was an EU-wide ban on beef trimming imports. All of this was prior to the main ban.

There has been a process of escalation. When one asks about the impact of the ban, it depends on whether one takes all of those things into account. The terms of the ban affect up to 42% of the trade that we undertook but most of that trade was already affected by the previous measures, to which I referred. A equally important effect from an Irish perspective was the fact we had very significant growth opportunities and plans in Russia, which have been significantly derailed. There is no doubt that is a problem.

Measures were taken by the Commission, as I said, and Ireland took up some of them, in particular private storage aid. We used it for 7,000 tonnes of cheese, 8,000 tonnes of butter and 2,000 tonnes of skimmed milk powder during the worst of the impact. One of the difficulties in the dairy sector is that for other reasons, dairy prices have been moving. It is a little difficult to measure the specific impact of the Russian ban.

On the question of the superlevy, the intention is that payments will be made in instalments over a period of up to three years. That is for what the provision allows. The question of interest is a policy decision so I will leave that aside. We will make announcements on it in due course. I was asked about the logic and common sense of it by Deputy Ó Cuív and a number of other members. We would agree completely and we repeatedly made the point that imposing superlevies in the last year of a quota regime makes absolutely no sense.

The truth is that the previous Commission had options open to it, but the previous Commissioner said he would only act if there was a qualified majority in Council. We made significant efforts to get that qualified majority but unfortunately a minority of member states would not play ball and we could not get that qualified majority. That happens in a community of 28 member states, in particular when there is at least one large member state on the other side of the fence.

One must remember that some member states are not happy with the end of quotas, so they were not particularly inclined to make it easier. That is really why it did not happen - they felt they could not explain it to their own people.

There were a number of questions on trade issues and TTIP. I cannot really say whether there will be a deal in 2015. There is very strong commitment on the EU side to doing a deal and there is also evident commitment on the American side. One difficulty is that the Americans are very focused on the Trans-Pacific Partnership, TPP, on their other coast at the moment and until that has been agreed, one could ask whether they are fully focused on the TTIP negotiations. Will agriculture be treated as an unfortunate consequence or side-event in these negotiations? I do not think so. Agriculture is very important for both sides in these negotiations. It is a very big deal and promises very significant economic benefits. All studies have shown that a good TTIP deal could deliver significant economic benefits to both Europe and the United States, and to Ireland specifically. However, there are both offensive and defensive interests on both sides. On the agriculture side, we have very significant offensive interests in dairy, for example. We see significant possibilities for increasing our dairy food ingredients exports, for example, infant formula and so on, into America. Other subsectors are also very positive about America. One need only look at the export of Irish oats to America, which is an extraordinary growth story in recent years and which still seems to have a great deal of potential. Irish oats have become the badge of quality in the US oats market and that is something that can be exploited.

The complication arises in the beef question. If I had been asked this question three or four years ago, I would have said the benefits are on the dairy side while the costs to us would be on the beef side of the deal. The calculation has become a little more complicated because beef prices in the United States have risen to very high levels and have now exceeded EU levels. We now have access to the American beef market and are looking to widen that access to include beef for grinding, as they call it, which is mincing. The prices for many of those cuts of beef are far higher in the US than in Europe. The potential for Irish beef exports to the US is significant but at the moment, it is constrained by an overall quota of 64,000 tonnes, which applies across a range of countries. In the context of a TTIP deal, one would probably get a larger quota for the EU itself. It would widen the exports we could make to the US. At the same time, we remain very defensive on the question of the export of high-value cuts of beef from the US to Europe. That is an extremely sensitive market. It is only about 6% or 7% of the total beef market and, therefore, relatively small shipments of those high-value cuts of beef from America could have a disproportionate effect. In other words, we take a very balanced approach. We see significant benefits for the agrifood sector but we also recognise that we have a major defensive issue. I should also mention poultry in that space.

The question of small-scale producers versus large-scale producers is relevant in the poultry sector. It is true that the US beef production system is based on very large-scale feedlot production and it is very different, therefore, from our system. However, it comes down to prices, trade and supply and demand. If we can compete in a market, we should compete in it. There is no doubt that we can compete in the high-value food service market in the US and also for beef for grinding, at the very least.

Moving on to simplification of CAP, Deputies Penrose, Ó Cuív, Deering and several others expressed - I do not know if they used the word but I use the word - exasperation, and it is fully shared here. As a person who has been involved with the CAP for a long time, I have been through quite a few pushes for simplification and I know that previous exercises have failed. We must be more hopeful this time, partly because I believe the Commissioner is seriously committed to simplification and because there is no doubt that a large number of member states are at the end of their tether on this issue and are determined to get real simplification this time. I think the same mood is in the European Parliament. There is an alignment at the moment which makes real simplification more likely. There would still be differences.

We highlighted in our opening statement the fact that there is a danger of this simplification exercise tipping over into CAP reform which is not a sensible outcome and creates more uncertainty for farmers. It is a beguiling idea to go back to the basic text and try to simplify it. What happens if one goes back to the basic text, however, is that one would kick off a whole new CAP reform. We must be very careful in this area. We are pointing more at Commission implementing acts and Commission guidelines. We see a huge amount of the complication coming from Commission interpretation of the basic acts and, therefore, we see a significant possibility to get simplification in that area. There is some support for that view although I have to say there are also others who want to open up the whole basic acts. We will see where that discussion leads in the coming period.

At the Council yesterday, Commissioner Hogan announced a number of proposals, some of which are definitely helpful to us. I took it as an indication of good faith. He was showing that he was putting practical real proposals on the table but I am sure he will go much further.

May we have copies of those proposals?

Mr. Aidan O'Driscoll

Absolutely, we can forward to the committee what he said. There was no formal document. On the beef data and genomics programme, BDGP, as an example of a complex scheme, which is the way some members presented it, one has to sign up for six years. This is not quite what we wanted. It came from discussions with the Commission as a necessary part of the scheme. To be honest, we can see why. It is to ensure the scheme delivers, but it is also because it is pitched as an agri-environment scheme. That is where it is being placed in the legal framework where the norm is multi-year schemes. One has to use four or five-star bulls and there are many other conditions, all of which is true, but these are all things that deliver real benefits to the farmer. There is nothing put into this scheme that is a waste of time, that should not be done or that will not deliver real benefits. We have major challenges in our beef sector. We have a serious problem with farm level profitability in beef and we have to move the sector on. We also have a significant climate change challenge in beef. Frankly, we saw an opportunity to address both issues simultaneously through a scientifically cutting edge scheme. That is what we are doing. It will deliver almost €300 million to beef farmers but they will have to do a lot for it. I do not deny that and I would not describe it as a simple scheme.

There was welcome for the indication that we are pushing for a more proportionate approach to small discrepancies for small farmers in the outposts. That is something we will push very hard. It makes absolute sense. The current provision does not make sense. We think we can stand up that proposal very well.

Deputy Deering referred to the school milk scheme. The scale in terms of the amount of milk it would absorb is small. The scheme operates in 1,061 schools serving 51,000 students. Therefore, it delivers many benefits in social and health terms.

However, in terms of absorption of quantities of milk, it would not really be in that kind league.

Deputy Penrose referred to Russia. I dealt with the scale of the impact on Ireland. That is where I dealt with that.

It is interesting Deputy Penrose should say that he was an advocate of decoupling and saw it as a simplification opportunity. I can claim to have been in the same boat. I also would agree with him in expressing disappointment. One of our regrets about CAP reform was the splitting of the payment. Ireland advocated that we should not set up a separate greening payment. That was our national position. As holders of the Presidency, we eventually delivered one, but that was our job as holders of the Presidency. Our national position was that there should not be a separate one. We appealed to colleagues to look at a different route, asking that we talk about additional environmental conditionality, if they wanted to talk about that, but that we use the existing good agricultural and environmental condition, GAEC, and cross-compliance provisions as the basis for that. Ireland and Austria advocated that and the other 26 countries did not step up to the plate. Ever since, representatives from those countries have been coming to me saying that we were right, but it is a little late. I have some sympathy with the argument that we have ended up splitting schemes a lot across the place. Certainly, with the greening, there is a real level of truth in that regard.

There was a question about appeals.

Are any of them successful?

Mr. Aidan O'Driscoll

I understand that 25% of appeals are successful on land parcel identification system, LPIS, review on-the-ground checks.

It is difficult to get across the line. That means three out of four are dead, as it were.

Mr. Aidan O'Driscoll

The independent appeals system and the other appeal systems we have in the Department work well. They act as a check on our other systems. From time to time, there are questions because the systems are internal to the Department, but they work independently. They have officials in charge of them who are independent-minded. They work as a check on the system. One gets a percentage of decisions changing but, obviously, where they do not change, it indicates the original decision was correct in the first place.

Deputy Deering has an interjection.

The timescale for the appeals seems long. If one wants to submit an appeal, one has 14 days to lodge documentation, but is it the case that one may not hear anything for six months?

Bearing in mind two weeks ago we addressed land eligibility and everything else seems to be applied retrospectively, can the new land eligibility be applied retrospectively?

Mr. Aidan O'Driscoll

I do not have the exact timing on the appeals. It is true there is a backlog of appeals in the system and it is a fairly large backlog. Although I do not want to add to public sector whinging that one gets about this, there are staffing limits within the Department, as everywhere else. The Department is 35% smaller than it was in 2005 and it is doing many more jobs. That affects all of our offices and out-offices and our appeal system. There is a backlog and we try to move it along.

I accept that. I suppose the point that would irritate many farmers is, for example, that the Department gives a tight timescale to submit the application and documentation and if these are five minutes late, it is bye-bye.

I remember this being introduced in 2005. I was not happy with the system that was set up. I might as well be honest with Mr. O'Driscoll. It is no use being dishonest in here. My experience with it is as Mr. O'Driscoll says. In fairness, one gets a good run. However, one would have to fight hard to get a good run. It is not mandatory that it be 14 days. Surely, there is a flexibility allowing for it within seven days. There must be that.

Why not have a special unit to deal with the reviews in the context of those who are being visited upon by the eye-in-the-sky detections? Why not have a special section dealing with the reviews in that context? Farmers are extremely stressed and worried as a result of this. Most of the Deputies and Senators present say this involves thousands of euro that farmers may have to pay back. That is the worry. If one adds all of this to the milk money that has to be paid back and everything else, it gets farmers down. Why not lessen that level of trauma, distress and anxiety for farmers?

I wish to deal with the LPIS. The Department of Agriculture, Food and the Marine writes to the farmer setting out that he or she has over-claimed for a parcel of land, stating the range of penalties that apply depending on the extent of the over-claim. In other words, the farmer gets a lot of paper but very little information.

When the farmer gets the letter, unless he or she can pull out the original application and check the number of hectares and do the sums, he or she will not know the penalty. The farmer will come to the clinic run by the public representative, but without the area aid application, the Deputy is at sea.

The public representative will table a parliamentary question asking what the penalty is and it is nearly impossible to find out from the Department what it is. I am fairly good at reading the material that comes from the Civil Service but it is difficult enough to figure out what the Department is trying to tell the farmer and what the penalty is. At the end of the day, the farmer wants to know why he is being hit and the extent of it. In most cases, the Department does not tell him or her what he or she is being hit for, and the person must do the calculation. While he Department has a computer, the farmer does not have one.

There are two questions. The first deals with the issue of 14 days and the second is the nature and extent of the penalty that will be imposed in pounds, shillings and pence, to use the old-fashioned terms. My question was on the retrospective approach, given the new land eligibility rules.

Mr. Aidan O'Driscoll

I will deal with the last question now. We have had internal discussions on this and the area where there may be an issue is the application of the pro rata and its impact on some farmers. The great majority of farmers who are affected by pro rata will benefit from it, but there could be some farmers whose area will reduce. They will have been informed of their eligible area and now as a result of the pro rata, it may reduce somewhat. Obviously in those cases, we will have to take a reasonable view. We do not try to be unreasonable, presuming we can be reasonable within the terms of the regulation, which I think we can. In that case, I take the Chairman's point.

In respect of the 14 days, while my understanding is that there is no limit on LPIS reviews, I will have it double-checked and will confirm it to the Deputy.

On the question of the over-claims and the amount of the penalty, these issues are complicated for the Department as well as the farmer. We all find it really complicated. I take the Deputy's fundamental point that the farmer wants to know something very simple and we should, as best we can, tell him as clearly as possible. There is one aspect of the Department's communication that I have asked people to consider, that is, to use plain English. Sometimes some of the letters that issue are complicated. There is virtue in expressing them in more straightforward ways. That is something we can do. In all cases, it is not necessarily the case that we can provide the farmer with precisely what he needs to know, given the complexity of what is involved and information that may only be available to him at that point.

I am taking the essence of the point, which is the communication of as clear a message as possible to farmers as to the size and nature of penalties. What I am saying is that this applies not only to penalties but also more widely to communications with individual farmers.

If I may ask one other question, the Department has a habit of posting letters to farmers about over-payments where it is looking for a refund of money. Most of those letters say the money must be paid back in seven days. The reality to those of us who know is that farmers will always do a deal with the Department that the money is recouped out of future grants. However, there are some very innocent people who take fright at a seven-day demand from the Department and they just go to the bank and get a cheque and send back the money. Then they come to me and I say to them not to be worrying about it, that as long as they continue farming, any overpayment will be taken out of next year's disadvantaged area or area of natural constraint or whatever single farm payment, and that they will not have to come up with a big lump sum to repay the Department. These letters are quite intimidating. Why does the Department not say that, if the farmer enters into an agreement within a fixed period, the money will be taken out of future grants? That is what the Department inevitably does in practice.

Mr. Aidan O'Driscoll

We do that in cases where there is clear demonstration of a need for it. We do not do it in all cases. We also have to show a degree of form with the EU and the Commission. Usually what we are recovering are EU moneys. We have to show we are doing that properly. One of the areas for which we have been most criticised by the certifying body and auditors who act for the EU here is what they call the recovery of debts. This is the kind of thing where they would regard that as a debt owing to the EU. We have to be careful here. Although the Deputy is right that we try to be reasonable whenever we can be, we also have to show clearly that we are making every effort to recover these funds. Frankly, we would be in big trouble if we did not show that.

There was a question from Deputy McNamara.

Mr. Aidan O'Driscoll

Yes, on Natura and the limit. In the course of the approval of the rural development plan, there was a long discussion with the Commission on limits generally in GLAS - the €5,000 and €7,000 limits. It was quite a difficult and protracted discussion which ended up with the EU agreeing to an approach that is now encapsulated in the proposal. The way the EU views it is that we are offering the farmer a €5,000 or €7,000 package rather than a limit as such. In practical terms it comes to the same thing but the way they are seeing it is we put €7,000 on the table and say a farmer can have it if he or she does certain things. That includes Natura farmers and what they have to do. The EU does not look at it as a limit on the number of hectares. On that basis, it was able to accept it.

What other compensation is available for farmers who have to forgo profits because of designations under the Irish regime?

Mr. Aidan O'Driscoll

I am not quite sure what the Deputy is referring to.

If someone is farming on special area of conservation, SAC, or special protection area, SPA, lands and cannot engage in certain practices because of that, what compensation is available other than GLAS?

Mr. Aidan O'Driscoll

What we have done is put GLAS in place and not only given priority access to it but also given the €7,000 GLAS+ provision. We have said there may be farmers who have very large areas beyond that and that we will look at it in the future to see if anything can be done. I do not want to make a specific promise in this area.

Is it the case that the Burren, the freshwater pearl mussel and the hen harrier are being prioritised for the locally led environment schemes, the €72 million pot and, one hopes, others?

Mr. Aidan O'Driscoll

That is right.

The Burren is one example. We are expanding the Burren scheme, but it is hoped other schemes will emerge under the locally led initiative and deliver similar benefits. The Burren scheme is very highly regarded in Europe and we think it can be replicated in other parts of the country. However, that is in specific patches, in fairness to Deputy McNamara's question.

It would not cover all SACs.

Mr. Thomas Harty

No, it would not cover all areas.

We asked a question on which Dr. Smyth sought a response in regard to clarifying the issue of NHAs, which will again be raised directly with the European Commission. I think Mr. O'Shea and Mr. Harty were present for that.

Mr. Aidan O'Driscoll

We have said we will raise that with them. It is a national provision. What we are doing is covering the SACs and SPAs and we also included the water framework directive. While that might have limited impact, it is nevertheless an EU designation. However, NHAs are not.

Was there a European Court ruling on NHAs that said we had to enforce them and that it was not totally at our discretion? That is where the whole issue arose. The witnesses might remember the issue of not cutting the NHA bogs. The Government could not just have dropped that because Europe said we could not. Could I ask-----

The Department said it would look at it at some point in the future.

Look at what?

Compensating farmers for losses related to farming in NHAs. I am fairly certain there is a requirement under EU law that they be compensated, and that this be done per hectare, not capped at €5,000 or €7,000.

Mr. Aidan O'Driscoll

There is not. It is not a question of compensation for the designation.

No, it is compensation for loss of profit as a result of the designation. It is not a flat compensatory scheme per hectare but, rather, compensation for any requirement to forgo farming practices as a result of it.

Mr. Aidan O'Driscoll

In some cases, designations do lead to specific farming practices that the farmer can no longer pursue, but in the great majority of cases, that is not the case. There may be practices that the farmer has not pursued in the past that he would not be allowed to pursue in the future, and forestry is an example that is often quoted, because, by definition, the farmer has not done it in the past. We need to be clear on what we are talking about here.

The issue perhaps arises in regard to some of the bird designations. For example, the hen harrier designations can be over very large areas of land, as we know. Therefore, we have committed to looking at the possibilities. Nonetheless, we have not made any commitment on this other than to say that, when we have experience of operating GLAS, we will look at what cases exist where there are very large areas affected by hen harrier designation and so on that might be deemed not to be sufficiently covered by the €7,000. However, I do not want to promise anything we cannot deliver.

The GLAS programme was negotiated in great detail with the Commission and has been agreed with the Commission. There are a number of things we will look at in the future. It is possible to make amendments to the rural development programme. As we go forward, what typically happens is that we find that some measures in a rural development programme underperform while others over-perform, and one wants to reallocate money and look at new priorities that emerge. This would be among the types of issue we would look at in the future.

Therefore, the message to farmers in hen harrier areas is: "Live horse, get grass."

As I said earlier, that is not true, because there is an obligation under the locally led environment schemes, the freshwater pearl mussel scheme and the Burren scheme. Those are the three priority areas that have to be addressed under the locally led environment initiative. That funding is additional to GLAS, the areas of natural constraint payment and other payments.

With regard to the EU birds and habitats directive, the European Commission has launched a public consultation with a closing date of 24 July. Is the Department going to make a submission on that?

Mr. Aidan O'Driscoll

Yes, we will certainly take part in the public consultation. Of course, it is open to everybody.

We might do it as well.

I have two questions. In regard to the Burren-type schemes, my understanding is that this time around, under the principle that one cannot get paid twice for the same thing, a farmer cannot get payments under GLAS for the hen harrier scheme and a Burren-type scheme because it is considered to be paying the person twice for the same thing.

I am sure Deputy McNamara can correct me if I am wrong, but my understanding of what happened the last time is that farmers in the Burren were able to get REPS and the Burren scheme on top of it and nobody really queried the overlap of the two schemes. I understand that on this occasion, this is strongly prohibited under EU regulations. If one's GLAS area already incorporates or encapsulates hen harriers, pearl mussels or whatever, how will that operate? Will one be allowed to amend one's plan in such circumstances?

Maybe I am wrong, but I understand that the environmental advantage of genomics is that it involves bulls of a better quality that produce beef more efficiently with a better conversion rate, etc. I do not know whether the beef is better to eat. I understand the argument in favour of the environmental approach is that more beef is produced from less grass, and with fewer carbon emissions at the end of it. Has the Department quantified how much of a reduction in carbon or methane there will be if this programme is successful? Will there be a reduction of 5%, 10% or 30% as a result of this scheme? I presume something has been worked out with the European Union to measure the carbon benefit of this genomic scheme.

It is not for me to answer the Deputy's query, but I assume he is aware of the carbon navigator.

I am not an expert on the carbon navigator. The Chairman might explain it. I do not doubt that a global figure for what the carbon navigator will give us under this scheme has been given. I do not know how it is calculated.

The Deputy has asked two relevant questions.

Mr. Aidan O'Driscoll

I will begin by responding to the Deputy's second question, which relates to beef genomics. I cannot give him an exact figure for the impact of the scheme. The statement we have made in this respect is regarded at EU level as very significant. We have said we think we can achieve the Food Harvest 2020 targets in this country while maintaining our emissions at approximately the same level as 2005. We will achieve that largely through measures such as beef genomics. We are trying to urge other measures through the carbon navigator, including activities such as lengthening the grazing season, improving cow fertility and slaughtering at an earlier age. The quality of the animal is crucial to that.

The Deputy is absolutely right in his characterisation of this when he says it is about converting grass into beef more efficiently and therefore being able to slaughter the animal at an earlier stage. That is exactly what it is about. The happy coincidence in this regard is that there is an absolute correlation here between economic efficiency and environmental efficiency. That is why we see this as a major thing to pursue. The committee will be well aware of the criticism we get from some environmental groups in this country and elsewhere regarding the emissions from our population of beef cattle. We have to show we are doing the absolute best we can on that. At the same time, our beef industry has the problem of profitability at farm level. We can kill two birds with one stone by doing what we are doing.

The Deputy also raised the question of double funding. We can never double fund, as such. The change made as part of the new CAP is that the requirement not to double fund has been included in several places all over the regulations. I remember well that this was done at the insistence of the European Parliament. It insisted during the regulations that we include this in each of the regulations even though it was already contained in the overarching financial regulation and therefore was not needed.

They insisted that we include it in every regulation. It is now much more explicit, but a ban on double funding has always been in place. The original Burren project was the BurrenLife project, which was a bit different. The current Burren project will be under the programme. It is caught by the provision.

When we compiled a commonage report, we said that any additional measures would need to include 80% of active farmers. I wish to qualify what is being said. I refer to those doing something under a basic GLAS scheme who happen to be in a designated hen harrier zone while the area next to them is not. Measures have to be taken into account for those in such designated zones which are additional and, by the nature of the restriction, one can be paid for. Such farmers are being paid for the restriction in that sense. That is the differential for those in GLAS.

The argument has been made that in cases in which a farmer is in a designated restricted area, particularly a hen harrier zone, that is beside an unrestricted area, both farmers should be allowed to enter GLAS, and such farmers might be able to get €2,000 extra. The nature of the restriction means things can take place that may lead to the locally led agri-environment scheme being applicable.

Mr. Aidan O'Driscoll

The key element is additionality, as against what is required under the other scheme with which there is an overlap. The double funding rules prevent double funding for what is deemed to be the same thing. If one can prove that it is additional and so on, it is a different context.

I have two or three discrete questions.

Deputy Eamon Ó Cuív

At the end of the day, farmers want to know what will happen to hen harrier schemes if additional measures are introduced. If they are already receiving €7,000 under GLAS for hen harrier designations, will they receive more money? Will they be told they are receiving money for hen harriers and therefore cannot be given more? How is additionality measured? It is a very simple question.

If part of what farmers are claiming for under GLAS is a hen harrier designation and a locally led agri-environment scheme comes on stream that deals with being in a hen harrier zone, can the GLAS scheme be changed so that farmers can choose alternative measures within GLAS so as to retain the full amount and get payments under the locally led agri-environment scheme on top of that?

The €2,000 additional priority might be the payment that is under question.

Mr. Aidan O'Driscoll

To be honest, the Chairman is asking me about the detailed design of a scheme that does not exist. I cannot answer those questions. They are hypothetical. There is a danger of something being lost.

The €7,000 GLAS provision is very generous and applies to a large number of hen harrier farmers who are currently not being paid at all. There are hundreds of farmers in the hen harrier programme run by the other Department. Thousands of farmers will receive €7,000 each under this programme. That needs to be put in the balance. If there are people in very large areas, that is a different question, and I have answered it as best I can. I cannot deal with the details of locally led schemes which do not yet exist.

My other two questions were entirely separate. I refer to Directive 65/432/EC on inter-community trade in bovines and swine. The Department is concerned about it because a lot of our beef is traded. Department policy is to prevent cattle from staying in lairage or in marts overnight where possible. It is a good policy, but sometimes such things are unavoidable because of the nature of the cattle trade in Ireland. It seems to be that the directive, as consolidated, clearly envisages cattle staying for up to three or four days.

I am not proposing that that should be entertained, although it seems to be envisaged by EU law in what are called assembly areas and marts. The definitions in the directives do not seem to differentiate between the two. Will the Department look into that and give me a written response? It is basically a situation in which there are smaller marts in peripheral areas of Ireland and there are buyers who come down from Meath or wherever. They are not really interested in going to a mart in Connemara or west Clare to buy four cattle, so they go to Ennis, Loughrea or one of the bigger marts and they can buy 50 the next day. Their preference would be to pick 54 up, because they are not going to send down a lorry to buy four. It is driving smaller marts out of business, or is at least threatening their business.

The difficulty in obtaining licences for boats to carry live exports out of Ireland has long been a bugbear of mine. I have had meetings with officials in the Department who talk about the importance of animal welfare, particularly for our reputation. The animal welfare lobby is powerful, wherever it is funded from. There are suspicions that it is funded from within the beef business, but they are only suspicions.

Remember privilege.

I did not name anyone. If the Chairman wishes, I could name somebody who is supposed to be funding them.

We are straying outside the six-monthly report.

There are movements towards uniformity within the EU. I was told proudly by departmental officials that they were looking to Ireland as the standard to be achieved by other states, yet when I asked whether Ireland is in favour of agreeing these uniform standards, I was told we were not at all, because we might have to accept boats that are licensed in Greece, Spain or other major maritime nations picking up cattle. That would make it difficult for those beef processors, who might then be operating in a less restricted market and might have to pay more for the premium product they are buying. Why does Ireland not want to move towards uniform standards in shipping across Europe and, most importantly, why will it not accept boats licensed in other member states to come and collect cattle in Ireland? Is it solely to protect beef processors so that they can continue to drive down the prices that Irish farmers get?

We are straying outside the remit of this meeting.

We are, but it is the EU law-----

The Deputy has his tongue in his cheek. I have given latitude, but he cannot accuse the Department of trying to protect the interests of the processors.

I would like to hear the officials say it is not and that the move towards uniformity in standards-----

Do not try to run the meeting. I have given latitude. A question has been raised. I would like the Deputy to rephrase the question without the implication of any intent on the part of the Department.

Will the Department move towards accepting boats that are licensed in other EU member states and, if not, in the short term, will it move towards accepting harmonised standards? If those harmonised standards are achieved across the EU, will it then accept boats licensed by other EU member states?

That is a reasonable question.

Going back to one of the issues spoken about a while back regarding the super-levy situation, I accept Mr. O'Driscoll's point that there was not support among the 28 states for our position at the time. How did we fare compared to the other 28? In the overall scheme of things, was the EU under or over quota? How many of the 28 states were under or over the quota?

I am sorry to be going back to mechanical things all the time, but I want to go back to what Mr. O'Driscoll said about locally led agri-environment schemes and the GLAS interface. If I were a farmer with a lot of designated land and if that was the easy way of getting my €7,000 without having to have low-input pastures and meadows, the walls and God knows what else, measures for hen harriers and so on would be out the window. When the locally led agri-environment scheme comes in, will the farmer be able to look at all the choices he could have made if he had known the locally led agri-environment scheme would be there and what its terms would be? Will he be able to go back and say he wants to change his plan and now wants to put in stone walls, low-input pasture, meadows, bat boxes and God knows what else and make up the €7,000 that way?

Will he be able to take out the measure he was availing of, which was the lazy man's measure of just having a designated SPA, re-jig his plan and then claim the SPA or hen harrier payment under the new scheme? Will people be allowed to do that? It is very important that they be allowed to. It is unfair to farmers that they were meant to have foreseen the rules of a programme that had not yet been published - they were not published at the same time. Therefore, will there be an allowance for the amendment of the plans in order that they can re-jig all the measures in order to avail of both schemes? In that way, they will not be breaking any EU regulation, but they will maximise their cash.

I do not agree with Mr. O'Driscoll about mountain land. I refer particularly to what happened to these farmers with regard to the single farm payment, whereby they were offered €250 but it was all taken back off them, and they were left with a mountain that they could not use for forestry, wind turbines or anything else. In Deputy Deering's country, where there is a great deal of milk and so on, farmers would be laughing at €7,000 being regarded as big money. They would say it was only petty cash compared to a single farm payment of €70,000, €100,000 or €200,000, and €7,000 is only the change they would give to the gasúr.

I am surprised that fisheries was not mentioned in the presentation; it was included in the documentation but not in the presentation.

In regard to the rural development programme, planners are complaining that a new rule was introduced last week whereby 16.5 points have to be achieved under tier 3 to enter GLAS, so they had to revisit all the plans and re-jig all the measures to try to arrive at the 16.5 points. I do not know whether 16.5 is a high or a low target, but apparently it has caused quite some consternation. If that is a condition, why was it not in place at the beginning and how has it become a condition at this late stage? I understand that the closing date is Friday week. I have not yet heard from the Minister about an extension to the closing date, which no doubt will happen in the next week or ten days, but as of now I understand it is Friday week. I think planners have had a bellyful of it. They are under awful pressure from their clients, and I understand that some, including Teagasc, have told 2,000 farmers that they cannot do it on time - and that was before the 16.5 target.

Mr. Aidan O'Driscoll

I will try to answer as many of those questions as I can. Deputy Michael McNamara talked about the cattle and the marts. I will have a look at the provision in the directive as he requested and see what significance it has. In regard to the question about boats, since the Chairman has removed the implication, I will not rise to it.

Will Mr. O'Driscoll please answer the question about live exports?

Mr. Aidan O'Driscoll

I will, of course, answer the question; I always answer questions. In regard to boats for live exports, in relatively recent times a number of boats have been approved for live exports and a number of others are under examination. We have answered parliamentary questions on this a number of times recently. If harmonised standards were introduced in the way the Deputy has described, we would certainly engage in that debate. We have a particular exposure and a unique one. This is very relevant here. At Council after Council there is an attempt to raise the issue of an eight-hour limit on the transport of animals by a group of member states, including some very significant and influential member states. Ireland is uniquely exposed on that. One of the main defences we raise is the standards of our boats and the standards of veterinary supervision of those boats. That is a very important issue to us. We regularly say that we apply standards above the EU minimum. It is a strong defensive point that we made on this issue. This particular issue is one that annoys me quite a bit, because some of these countries actually implement systems of confinement-based beef production.

Frankly, it is a bit rich that they do this but they do it regularly. It is an issue where we are uniquely exposed because of our location and the size of our beef sector. We need to be defensive of it. That is all I would say to the Deputy but we would, of course, engage with it.

The other implication is only-----

It has that result, even if it is entirely inadvertent.

By implication, the Secretary General has said if we were to accept at some stage harmonisation which, hypothetically, involved an eight-hour restriction, it would do more to restrict the number of animals that could leave this country.

I am not proposing-----

Sorry, Deputy McNamara made an implication earlier. It could feed into the meat processors, theoretically, if one draws that line of argument, far more substantially than anything the Department is doing. Let Mr. O'Driscoll finish. That is the point.

In fairness, I never proposed that Ireland should accept an eight-hour limit in shipping. I am well aware Ireland must ship through the Bay of Biscay, which poses considerable difficulties.

Deputy McNamara's earlier point-----

My earlier point was that the only way the cattle can leave Ireland is dead means, inadvertently or otherwise, that beef processors have rich pickings in Ireland.

If one were to adopt an eight-hour restriction, it would leave-----

I am not proposing an eight-hour restriction.

Would Deputy McNamara leave it lie? That is not what I meant and Deputy McNamara knows well what I meant.

I am not proposing an eight-hour restriction.

I ask Mr. O'Driscoll to continue.

What I am proposing is that we move towards uniformity in shipping standards in Europe.

If that involves an eight-hour restriction, then we will see what happens.

Who said it should involve an eight-hour restriction?

That is what Mr. O'Driscoll just said.

It is not what he said. He said they are two separate issues, and they are.

Mr. Aidan O'Driscoll

Since we are back on the point, let me make it explicit that I absolutely reject any implication that the Department, in licensing boats, takes account of anything other than the interests of the country and the sector, including the farmers.

Let me move on to some of the other issues raised. A question was asked by Deputy Deering about the number of countries over quota and how that fed into the decision not to do anything about the soft landing. My colleague, Ms Cannon, who has done a quick tot, says there are 12 countries over quota. It would be some number like that. Offhand, I cannot remember the size of the blocking minority that prevented the measures being taken. It was definitely a minority of the 28 member states. The great majority of the 28, even those which did not have a direct interest, were willing to go along with it. The ones which blocked it did so, frankly, because of political sensitivities in their own member states. These were countries that would have significant farmer groups or others who are against quota abolition and where they felt there would be political repercussions if their Ministers agreed to what was seen as a measure to ease the abolition. That was the issue.

Does the EU as a whole have a quota or is it broken down on an individual basis? If there is an overall quota, was the EU over or under quota?

Mr. Aidan O'Driscoll

The EU is usually under quota, which is one logic that we used for putting forward the proposal. We made the point that some of the measures we were looking for, such as adjusting the fat coefficient, are technical but their effect is to allow one to produce more milk. Adjusting the fat coefficient would have allowed us, for example, to produce 2% more milk. We made the point that applying that across the countries that were likely to use it would not have led to an excess of the EU quota. We had very good arguments. There is no doubt who won the argument on logic and with the majority of member states. Unfortunately, the rules are that one needs a qualified majority. As it happens, the Commission could have chosen to make a proposal in its own right on the fat correction but the then Commissioner stated he would not make that proposal unless he saw a qualified majority asking for it.

We could not get that, so he would not make the proposal.

I was asked if we would allow amendments to GLAS if locally led schemes have overlapping provisions. I cannot answer these questions about the locally led schemes. I think there would be some difficulty from a Commission point of view. I am not impugning the logic but I think we would have a difficulty. In terms of how the locally led schemes operate, we have had to take them out of the rural development programme, RDP, and run a process outside it. When we select the winners from that process, we put them into the RDP. This is what we have agreed with the Commission. That means it will be done through an amendment of the RDP, which obviously creates certain possibilities that surrounding measures could also be amended, but I do not want to promise something we cannot deliver.

In regard to tier 3, I understand they are looking for a €1,700 payment under those measures. Some of the commentary in the media on GLAS has been extraordinary because this scheme has been extraordinarily successful so far in that we have had 28,000 applicants, some 20,000 with measures. The system has worked very well. I know members would not think that if they have read the media coverage and some of the public comments, which have been quite self-serving. It is clear that advisers who prepared well for this and have engaged properly with it have loaded lots of clients and are using the system well. Of course, with a new system, one will get glitches. However, one of the major difficulties is not IT issues but that it is new to people. The advisers are having to deal with something new and they have had to go on the learning curve as well. Some of them are improving their clients' applications to increase the amount of money they will be able to get. The Minister has urged farmers who are in tier 3 to look at what would be required to become tier 2 farmers and to consider whether they could make that leap. The Minister has made that point on a number of occasions. We are anxious to facilitate people and not to block them in any way.

Will Mr. O'Driscoll deal with fishing?

Mr. Aidan O'Driscoll

I should have included fishing in my opening statement. The report refers to a number of items that were under preparation. It refers to the omnibus regulation in 2014, essentially the process through which the existing legislative framework for fisheries was brought into line with the new provisions of the Common Fisheries Policy. In the second half of 2014, they were working on the omnibus regulation and that is what it refers to.

The section on the Latvian Presidency talks about the landing obligations regulation. This is the process through which the discards ban is being implemented. As members may know, this is being implemented initially through a voluntary regional process. We take part in the north western waters fisheries group and negotiations are ongoing at present, mainly in respect of demersal fisheries, to develop the detailed rules and regulations around the discards ban. If the group can reach agreement and if it passes muster with the Commission, the Commission will include that in a delegated Act regulation that it will make. If we cannot reach agreement in the north western waters fisheries group, the Commission will act of its own right in proposing a delegated Act. The intention is that the discards ban will commence by 1 January 2016.

The aim of the north west fisheries group is to get agreement in the group by the end of May. A huge amount of effort is being put in by my colleagues on the fisheries side at present.

I seek clarification on one point that has been made. The Department has asked farmers to consider how they can move from tier 3 to tier 2. Farmers with bird breeding grounds on their lands are tier 1. As I live near Lough Derg, I know there are a lot of areas around it, and also in east Clare lakelands and across Clare, that are bird habitats. The habitats have been noted as such by the National Parks and Wildlife Service. It is proposed to make some of the habitats natural heritage areas, NHAs, which are not included in the scheme. I have been told by a representative of the National Parks and Wildlife Service that it was told by the Department that the Department was uninterested and did not want to hear about any more bird nesting habitats. A certain number of habitats have been named, designated and included, but a whole lot of other areas, which clearly are and can be verifiably demonstrated by the NPWS through reports by rangers, etc., to be nesting areas, are not included in the scheme. As suggested in the media, a new scheme will open in the autumn. If so, will the Department accept new information on nesting and bird habitats? This would enable farmers to move from tier 3 to tier 2 and even from tier 3 to tier 1 status.

Mr. Aidan O'Driscoll

In designing the GLAS scheme, which is comprised of a complex three-tier structure, there was a huge amount of consultation with the NPWS, the environmental organisations, BirdWatch Ireland and many other people who are expert in this area. The design of the scheme reflects the outcome of the consultation. The birds included in tier 1 are included because the best advice available to us was that these were the birds for which action was needed most urgently. That aspect of the GLAS scheme has been widely welcomed by people who are interested in biodiversity, and they were positively disposed to same.

As I have said already, we have embarked on a programme that will last until 2020. As we go on through the process, amendments will be made to the Red Data Book, and I can say so with certainty. I do not know what the amendments will be but, as always, there will be amendments to the book. Therefore, schemes may be further improved as we go on. I cannot say whether in the future some of-----

Is Mr. O'Driscoll saying this may happen in the very near future?

Mr. Aidan O'Driscoll

No. I was about to reach the subject. The Deputy mentioned a possible new scheme in the autumn. There will be a new tranche of applications made to the existing GLAS scheme in the autumn, as announced by the Minister, but it will be the same scheme.

To be clear, a farmer can step from tier 3 to tier 2 by embracing a number of different elements, including by using minimum tillage, growing catch crops, availing of low-emission slurry spreading and providing wild bird cover. These measures are available to a significant number of farmers, but not every farmer. The Minister has asked that farmers in tier 3 who could do one of those things consider pursuing the matter and see if it makes sense. If it does, then it would promote them to tier 2.

What about quid pro quo? The NPWS is quite happy to verify that habitats are nesting grounds for birds that are already included in the birds directive because they are an endangered species, yet some have not been included, I presume inadvertently. There have been a raft of proposals to zone these areas as national heritage areas because they are habitats for these birds, which I presume was done by the NPWS using objective criteria. It just did not dream this up. If the service has cited the birds in these areas since, will the Department consider including the areas as part of the new applications that will be made in the autumn? These areas should be able to attract tier 1 status because preserving such habitats is its primary objective.

Mr. Aidan O'Driscoll

In order to be absolutely clear, the autumn tranche is a new tranche of the scheme, as it stands.

I take it "No" is the answer.

Mr. Aidan O'Driscoll

It would be completely impossible to put through an amendment of the RDP in that timeframe. That option just does not arise. In fact, the first amendment to the RDP could be done after about a year.

I repeat that farmland birds such as breeding waders, chough, corncrake, geese, swans, grey partridge, hen harrier and twite are all covered by tier 1.

The Deputy has not gone through the Chair. I want to make a point.

Mr. Aidan O'Driscoll

Those birds were chosen through a process of consultation with the best experts in this country, and it has been widely welcomed by environmental interests working in this area. Of course, bird boxes and so on are also covered. The generally environment-friendly farming that is supported and encouraged by GLAS will facilitate farmland birds.

Returning to the NHAs - this may cover some of the points Deputy McNamara made - Mr. Smith's response was that the issue would be raised with the Commission. Due to the way the NHAs have been left out, is it possible to fine-tune the designations so that some of those areas could qualify for the scheme?

Could I ask a question? I am not asking about extending the number of species. I agree entirely with the objectives, but there are parcels-----

Which have-----

-----which are not NHAs. I cited the example of proposed NHAs, but there are other parcels of land beyond that which were never proposed as NHAs but which NPWS personnel can verify are important areas for the very birds that were named by Mr. O'Driscoll but are not included in the mapping. The current approach is very much a case of "Computer says no". Although BirdWatch Ireland or the NPWS, which are, after all, the bodies that should have expertise in this field, can say that they have observed geese or swans in a particular field and it is an important habitat for them, this does not appear to be included in the Department's mapping exercise. Can they be included for new applications? I am not talking about extending it to new species or doing anything else.

The Deputy has made his point.

Mr. Aidan O'Driscoll

This is based on a complete misapprehension. The maps we use are from the NPWS. We do not produce them. We take what we call the shape files from the NPWS. The Department does not go out counting hen harriers. The NPWS does this, and we use its maps, so the issue does not arise.

Can I get an answer to my question?

What is the Deputy's question?

Where the NPWS is willing to say that there are species on these particular lands that are not included in the maps, will the Department amend them to include these parcels of land?

Is the Deputy saying that where the NPWS omitted or did not include these maps at the initial stage when this was being designed-----

Mr. Aidan O'Driscoll

We have used the NPWS maps and are completely in its hands in respect of this.

So if it agrees to update maps, the Department will include them?

In other words, the Department depends on the NPWS to supply it with the maps to inform the areas.

Mr. Aidan O'Driscoll

Totally.

We should ask the NPWS whether it is prepared to send in maps. Is that not exactly what the Deputy said?

I am told that it is prepared to send in maps-----

I have just said-----

I am asking that if the NPWS sends the Department a new map-----

Sorry, Deputy. I have said that we should contact the NPWS to see if it is prepared to-----

The Department's representatives are here. Will the Chairman ask them whether they will accept those maps?

The Department has said that.

Mr. Aidan O'Driscoll

The maps we received from the NPWS are the most up-to-date and recent ones. They are the ones we are implementing.

More up-to-date-----

The Deputy has not-----

Mr. Aidan O'Driscoll

We have taken the most recent ones from the NPWS that are available.

If it produces ones that are more recent-----

Through the Chair.

Through the Chair, if the NPWS is willing to provide more recent and up-to-date maps that include more areas-----

Will we ask it why it did not include them in the first place?

We can ask this, but representatives from the Department are here now. Will the Department accept more recent and up-to-date maps for the October applications? It is that simple.

Does Mr. O'Driscoll wish to respond? It is up to the NPWS to have done its job in the first place.

Mr. Aidan O'Driscoll

I have every trust that the NPWS did its job properly and has given us the correct maps and that we are using the correct maps. In any case, I can only rely on the NPWS to give those maps.

Perhaps it would be helpful-----

Mr. Aidan O'Driscoll

If Deputy McNamara knows of some other areas that have not been included in the maps and he believes officials from the National Parks and Wildlife Service have got it wrong, I will gladly talk to them about it but I would need to know what areas he is talking about.

That is fair enough. It is a simple way of getting the question answered.

I will conclude the meeting by thanking members and the witnesses for a comprehensive update. Mr. O'Driscoll, with the assistance of his officials, answered every question and query comprehensively and I thank him for that. We look forward to engaging further. Perhaps at some stage, we could get an update on how the various schemes are working. I am very interested in seeing the locally led environment scheme come into action. Additional measures could further support people who are restricted because of the nature of the land they operate and farm on.

The joint committee adjourned at 4.40 p.m. until 2.30 p.m. on Wednesday, 27 May 2015.
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