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JOINT COMMITTEE ON COMMUNICATIONS, NATURAL RESOURCES AND AGRICULTURE debate -
Tuesday, 18 Oct 2011

Priority Issues: Discussion with Minister of State

Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House, or any official by name or in such a way as to make him or her identifiable. This is the Minister of State's first appearance before the committee. The purpose of the meeting is to hear from the Minister of State about his policy priorities. I welcome him and his officials and invite him to make his opening statement.

This is my first time to do this. I am like the man who went in for an operation who told the doctor he was very nervous because it was his first operation. The doctor told him not to worry, it was his first operation too. It is a pleasure to be here and I look forward to hearing the views of the committee and answering their questions. I am delighted to have assistant secretary general Mr. Kevin Smith with me, Mr. Paul Dillon, principal officer, and Mr. Liam Cahill who works with me in my office in an advisory capacity.

I am pleased to be here this afternoon and to have the opportunity to address this committee about my Department's commitment to developing the Irish agriculture, agrifood and related sectors and, in particular, to deal with the specific areas for which I have ministerial responsibility. Together with the Minister, I am determined to ensure that the sector fully realises its potential and maximises its economic and social contribution to the country. In my first few months in office, I have travelled widely throughout the country and have met thousands of stakeholders and I have been very impressed by their enthusiasm and optimism.

The Government has fully embraced the Food Harvest 2020 strategy and we intend to drive that strategy to grow the sector significantly over the next ten years. We are all aware of the headline targets set out in that strategy and the Government believes that these are achievable. There is increasing recognition that our economic recovery will be export-led and, in that regard, agriculture and the agrifood sector have a particularly important part to play.

Just recently, we saw that the value of agricultural and agrifood exports increased to €8 billion in 2010 and recent CSO figures suggest that this trend will continue this year. The Food Harvest 2020 strategy targets an increase in dairy production of 50% by 2020. When one considers that 90% of Irish dairy produce is exported, an increasing proportion to emerging markets in the Middle and Far East, one can see the enormous contribution that the Irish dairy sector can make to a significant increase in exports.

Similarly, the Food Harvest 2020 strategy targeted an increase in the output value of Irish beef of 20% by the end of this decade. However, the beef activation group revised this figure upward to 40%. Given the sector's strong export focus, with around 98% of Irish beef exports going to high-value EU markets, and the fact that it is employment-intensive, this is vitally important in terms both of economic recovery and job retention and creation.

Irish agriculture and the wider agrifood sector are uniquely positioned to benefit from a rapidly increasing global population, increasing urbanisation and the westernisation of diets in developing economies. These factors will lead to an increase of 50% in demand for food globally by 2030, rising to 70% by 2050. Given that background, I welcome the new, ambitious growth target for the Irish beef sector and, with my colleague, the Minister for Agriculture, Food and the Marine, I want to work with all the stakeholders in the Irish agriculture and agrifood sector to ensure that these targets are met and that sector delivers on its undoubted potential.

Another important sector within my area of responsibility is forestry. Forestry provides a welcome income stream for owners, the majority of whom are farmers. However, the importance of forestry, like other enterprises under the remit of this Department, extends beyond this. Forestry, as an indigenous industry, also provides a wider ranging, long-term economic return in that it provides jobs, both directly and indirectly, and contributes to our export performance. It also provides benefits to the environment and recreation and amenity value to society in general.

The Government has made a significant investment in the development of forestry over the years to ensure that there is a critical mass of timber coming on-stream to sustain the timber and timber products sector. For example, to date the Department has paid grants in respect of just over 5,000 ha of new plantations while just over €72 million has also been paid in premiums to both farmer and non-farmer forestry owners, which gives a good idea of the ongoing investment in this area. The outcome from this investment, and sustained work by all elements within the sector including growers, sawmills and processors, is a vibrant and export-oriented forest products sector.

My Department will shortly commence issuing financial approvals for a further 1,500 ha of new forestry planting for the current autumn planting season. While a number of applications have received technical approvals, this decision means that those applicants may now apply for financial approval and, if granted, they can proceed with their planting in the coming season. The roll-out of these financial approvals is further evidence of the ongoing commitment of the Government to the afforestation programme.

In outlining my priorities for forestry, it is useful to look at the current supply chain. While Coillte is currently the main supplier to sawmills and the processing sector, the private timber resource is becoming a significant element of that supply, with privately-owned forests now accounting for about 46% of Ireland's forest resource. Significantly, these are mainly owned by farmers and the afforestation programme is driven largely by farm forestry, with farmers now responsible for more than 90% of new forestry. An issue that arises in that context is the mobilisation of the private timber resource, that is, to get it onto the market. Teagasc, through its forestry development department, with support from my Department, seeks to address this by highlighting the importance of thinning and assisting in the formation of forest producer groups. The underlying principle of the groups is that forest owners come together to pool knowledge and resources and to market their produce.

While one of the priorities in this area is to mobilise the private timber resource, another priority is a sustained afforestation programme. The upward trend in the level of new forest planting over the last number of years, with grants for new planting of 8,314 ha paid in 2010 compared to 6,249 hectares in 2008, is a welcome development in this regard. We must be conscious that there are many factors which affect the rate of afforestation of which the availability of funding is one. As members will be aware, funding for forestry in 2012 is, like every other item in my Department's budget, subject to the outcome of the comprehensive review of expenditure and will be determined in the context of ongoing discussions on the framing of the 2012 budget. I am committed to achieving the highest possible level of funding for forestry, to ensure a sustainable and viable industry.

In addition to the supply of timber, forestry also makes a significant contribution to Ireland's renewable energy targets and to reducing Ireland's dependence on imported fossil fuels, particularly in the generation of heat in industrial, commercial, domestic and institutional markets. The increasing focus on renewable energy highlights the potential of wood energy for heat and power generation. Forestry also makes a significant contribution to Ireland's climate change mitigation strategy. The projected contribution to climate change by Irish Kyoto-eligible forests - new forests planted since 1990 - absorbing carbon dioxide from the atmosphere is 4.7 million tonnes of carbon dioxide annually by 2020, or about 6% of total greenhouse gas emissions. In terms of complying with Kyoto targets, in 2010 the contribution from the eligible forests was 2.6 million tonnes of carbon dioxide. This represents a saving to the taxpayer of €39 million, assuming a market value of €15 per tonne of carbon dioxide. A sustained afforestation programme over the next 20 years is required to enable Ireland's forests to continue contributing in a sustainable way to meeting our climate change and renewable energy commitments, and indeed to contribute to job creation and growth in the forest sector.

Another priority within the forestry sector is to address the problem of forest fires and to minimise the risk of the extensive losses experienced in 2010 and earlier this year. In response to a spate of forest fires in 2010, my Department rolled out an information campaign early this year, as recommended by the land and forest fires working group. It was deeply regrettable and indeed distressing, therefore, to see the devastating impact during 2011 of a series of forest fires, which cost millions of euro in damage to the national forestry estate. Coillte lost approximately 900 ha, while around 600 ha of private forests were destroyed, with Donegal accounting for about 60% of the total. While the losses were extensive, which can be ill afforded in the current economic situation, we should be thankful that no deaths or serious injuries resulted. I want to take this opportunity to again condemn in the strongest terms those, albeit a small minority, who showed such flagrant disregard for the law, property and people's lives, due to their highly irresponsible and criminal behaviour in maliciously setting fires around the country. I reiterate my appreciation and that of the Government to all those who were involved in fighting these forest and land fires.

My Department is making considerable progress in implementing the agreed recommendations from the land and forest fires working group. Work is well advanced on the production of a set of guidelines to inform and assist those landowners who engage in the traditional practice of burning vegetation each spring as a means of improving upland grasslands. The emphasis will be on the proper methods of controlled and legal burning. An advertising campaign has highlighted the dangers of uncontrolled burning and the possible penalties that farmers may face if such fires are permitted to burn out of control. I have also written to some of my colleagues, the Minister for the Environment, Community and Local Government and the Minister for Arts, Heritage and the Gaeltacht, on some of the working group's other recommendations, where the issues raised are outside the remit of my Department.

My Department will continue to focus on the forest fires issue with an ongoing information campaign, including publication of the burning guidelines over the coming months. There is a corresponding onus on landowners to exercise compliance with the law and respect for their neighbours and their property, as well as for all rural dwellers to continue in their vigilance by reporting any suspicious activity to the Garda and reporting any uncontrolled or unattended fires to their local fire service. It is through such action that the scourge of malicious fire damage to both forests and land can be tackled and brought under control.

The preparation of a new forestry Bill to update and consolidate the current legislation continues to be a priority. The current regulatory regime for forestry, the Forestry Act 1946, has been in place for 65 years and it has served the sector well in that time. One benefit of the proposed legislation is the provision for a regulatory framework that will support the development of a modern, multifunctional, sustainable and high quality forestry sector which enshrines the principles of sustainable forest management and protection of the environment.

Coillte, the State forestry company, was one of the commercial State bodies reviewed by the review group on State assets and liabilities, chaired by Colm McCarthy, which reported in April 2011. There were three recommendations in the section dealing with Coillte, one of which was that the State should initiate the disposal of Coillte's forest and non-forest assets but not its forestland. Analysis of the recommendations will be considered by the Government, along with the future of other State assets, in the context of the work of NewERA. As the Minister, Deputy Coveney, has pointed out, it is essential to maximise the information available to the Government to make an informed, sensible, well-thought out decision which will not compromise the State's core asset, which is the land Coillte manages on behalf of its shareholders, amounting to some 7% of our land mass.

As recently advised by the Government, to assist in its examination of options for the possible disposal of State assets, the Government has requested the Department of Public Expenditure and Reform, in consultation with relevant line Departments and NewERA, to consider several possible assets for disposal. NewERA will also play a key advisory role in determining the appropriate valuations to be placed on the assets in question and on the most appropriate method of disposal to inform any further decisions the Government may wish to make in this regard.

A critical part of Irish agriculture and agrifood is the horticulture and potato sector which has an output value at farm gate of approximately €350 million. This figure includes both the food and amenity sectors of horticulture which make up 80% and 20%, respectively, of the output value. A Bord Bia review of labour in the horticulture sector in 2007 showed that full-time employment in primary production activity was estimated at 6,000. This did not include employment upstream or downstream of the primary production process on which the horticultural sector impacts such as preparing, packing produce, garden design and landscaping, and retail. This generates upwards of a further 10,000 jobs.

The domestic market is the key one for the horticultural industry. The two main areas of export are mushrooms to the UK, worth about €100 million annually, and amenity horticultural products, worth about €10 million annually. The majority of horticultural production is sold on the home market and the key outlets are the retail market which is valued at €1.2 billion per annum. The other important outlet for produce is the food service or catering sector.

Since my appointment, I have visited a large number of producers and marketing companies. I have been most impressed by the knowledge and professionalism of growers and the consumer-oriented focus of their business. Growers are much attuned to the changes in the markets and have responded accordingly.

The Food Harvest 2020 strategy identified potential for further development in the sector which I want to ensure is fully realised. Despite short-term difficulties, it is vital for the industry to continue investment to meet the competitive pressures the industry currently faces. These pressures arise, in particular, from high input costs, competitively priced imports and lack of scale.

Earlier this year, I announced a grant-aid package of €4.1 million under the 2011 scheme of investment aid for the development of the commercial horticulture sector. This package will provide grants for 157 horticultural producers to assist in funding capital investments in specialist new equipment and facilities. The grant aid covers all areas of the horticultural industry, including field vegetables, mushrooms, protected crops, nursery crops, soft fruits, cut foliage and bee-keeping, and will hopefully assist in funding investments of approximately €10.2 million by the end of the year.

Over the past decade, the industry has consolidated with fewer but significantly larger producers. Growers have become more specialised and have invested considerably over the years, thanks in no small way to grant aid from my Department, under the national development plan. Over the past decade, the Department has provided grant aid of just under €30 million to horticulture projects, which supported investment of almost €78 million by the industry itself.

The extent of the competitive environment in which the Irish horticulture industry operates was illustrated in a report from the horticulture action group which pointed out that the cost of hiring labour in this country is 26% higher than in the UK. Given the highly labour-intensive nature of picking and harvesting fresh produce, this issue needs to be addressed.

The report also emphasised that the Irish retail and catering markets are the most important outlets for fresh Irish horticulture produce. Growers of potatoes, vegetables and fruit are extremely concerned at the dominant role supermarkets have in controlling the price and quantities of produce marketed. On the group's recommendation to create a more level playing field in the retail sector, I have written to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, to emphasise the importance of greater statutory oversight on retail multiples because of their negative impact on the industry. I have asked him to consider the issues raised by the action group in this area. I am also meeting senior officials of the supermarkets to impress on them the need to support the Irish horticultural industry and to support the local productive economy.

I am also supportive of the group's emphasis on the urgency of promoting and facilitating more collaborative initiatives in horticulture. I feel strongly about this issue and will be working to promote it. Collaboration and co-operation between producers increases their purchasing power for inputs as well as their selling power to the big supermarket chains. In addition, growers who come together have the opportunity to form EU-recognised producer organisations. We currently have three such organisations which received almost €6 million of funding from the EU in 2010. I am anxious to see further developments in this regard. Bord Bia and officials from my Department are talking to producers on this issue to see whether growers can come together to strengthen their marketing capability while fulfilling all the other requirements of the EU legislation.

While the organic sector is relatively small, it also represents an opportunity for growth. Organic production, unlike the industry as a whole, is particularly suited to small-scale production. The Food Harvest 2020 strategy identified the potential for significant growth by focusing on both import substitution in areas where Ireland is under-producing and large export markets such as the UK and Germany. Common Agricultural Policy reform proposals are positive for the organic sector as it supports our plans for smart, green growth in Irish agriculture.

The proposals presented by the European Commission also refer to provisions for innovative actions promoting a resource-efficient, productive and low-emission agricultural sector. We must, therefore, continue to promote organic farming which is compatible with the protection and improvement of the environment and animal welfare. The organic farming scheme, which provides for payments for the conversion to or maintenance of organic farming, is a viable scheme in operation in my Department. This scheme can continue to answer society's increasing demand for the use of environmental-friendly farm practices.

I therefore welcome the proposal for a new organic farming measure, which clearly indicates the importance attached to the development of the organic sector. I again emphasise my positive impressions of the horticulture sector and my belief that if we can successfully address the issues I have highlighted, horticulture operators will expand and contribute to the ambitious targets set for the agricultural industry as a whole in Food Harvest 2020.

Ireland rightly has an international reputation as a clean, green, high-quality, innovative producer of excellent food and drink and a critical part of this reputation arises from the emphasis we continue to place on food safety. Food safety is the cornerstone of our international reputation for food production. The production of food to the highest standards of safety in sustainable farming systems is the foundation on which our agri food sector is built and is one of the major goals and objectives of the Department which it pursues through monitoring, surveillance and inspection services along the links of the food chain in its area of responsibility.

The Department works under contract with the Food Safety Authority of Ireland, FSAI, and has a close working relationship with it at operational level. The FSAI also has contracts with the HSE, local authority veterinary services and the Sea Fisheries Protection Authority. It provides independent, science-based food regulation, central to assuring consumer confidence in the safety of food from farm gate to table. Its operation continues to demonstrate to trading partners the investment by Ireland in a food safety control infrastructure which underpins the quality of our food at home and abroad.

Safety of the food chain can never be taken for granted as food production continues to evolve, with new processes and products rapidly emerging. Major food incidents, both here and abroad, have brought home in no uncertain manner the importance of being prepared to deal swiftly and effectively with new challenges. Ireland has established a reputation as a producer of safe food but there is no room for complacency. Food and feed hygiene legislation clearly places responsibility on food and feed business operators, whether as producers, processors, distributors, retailers or caterers, to ensure the food chain is safe. At the end of the day, a chain is only as strong as its weakest link.

My Department has responsibility for the food safety standards for 650 food premises, primary producers of milk, dairy and eggs, large meat producers and premises producing food of non-animal origin. It is also responsible for the safety of imports of food of animal origin from outside the EU and for residue monitoring. Standards across the food production sector are subject to regulation under the hygiene package for food and feed, a system introduced to regulate food business operatives. Primary responsibility for the safety of food for consumers continues to rest with the individual food business operator. My Department also enforces food safety controls under the single payments scheme, through cross-compliance with environmental, animal welfare and food and feed hygiene regulations. With such attributes as animal welfare and traceability, Irish food products have a valuable edge in the international marketplace.

I am particularly pleased to have responsibility for the Irish greyhound industry, which is responsible for sustaining 11,000 full and part-time jobs and providing an estimated €500 million into local economies throughout the country. The greyhound breeding industry has also been very successful with more than 75% of the greyhounds now running in the UK being Irish-bred. There is considerable scope for further developing the industry, particularly in encouraging tourists to enjoy a night at the dogs. I want to work with all the stakeholders to ensure the industry continues to develop and its full potential is realised.

Of course, the greyhound industry, like most other industries, has not been immune from the effects of the economic downturn and I want to work to ensure the industry has a sustainable funding model. As people will be aware, in 2011 the then Minister for Finance announced in the budget that he would make the necessary arrangements to ensure all forms of betting, including remote telephone, Internet and exchange betting, would be subject to betting tax and provision was made in the Finance Act to deal with the taxation issues. The next step will be the publication by the Minister for Finance of legislation amending the Betting Act 1931 to deal with issues relating to the regulation of remote betting.

Central to the success and reputation of the greyhound industry has been long-standing and genuine concern for greyhound welfare. The Dáil has already debated and passed the Welfare of Greyhounds Bill and I acknowledge the constructive and positive approach adopted on all sides during its passage through the House. I look forward to further constructive debate when the Bill is presented to Seanad Éireann. I appreciate the concerns of those who advocate the need for robust animal welfare legislation and I want to reassure them, and all those interested in this issue, that the Welfare of Greyhounds Bill is a rigorous piece of legislation and contains a number of provisions that are, in fact, more onerous than those contained in the Dog Breeding Establishments Act 2010.

With 17 racing tracks throughout the country, and greyhound owners, breeders and trainers in every county in the country, the economic benefit of the industry is well spread and, quite often, employment is provided in rural areas where alternative employment opportunities are, at best, in short supply. It is important, therefore, that the industry is further developed and this is my firm ambition and intention. When I stated I wanted to work with all stakeholders, this includes the Members of the Houses. All of us, as legislators, are stakeholders in the industry and I invite committee members to contribute fully in whatever way they consider appropriate to the debate on the future direction of the Irish greyhound industry.

The funding available to the Department in the 2012 budget will be determined by the Government in the context of the prevailing economic and budgetary situation while having regard to the outcome of the comprehensive expenditure review which is under way and the discussions on the 2012 Estimates process. The National Recovery Plan 2011-2014 requires the Department to reduce total expenditure from €1.647 billion in 2011 to €1.286 billion in 2012. The reduced level of funding provided will inevitably mean substantial cuts in expenditure in 2012 and subsequent years, and will impact on the schemes and services delivered by the Department.

Arising from the budgetary constraints as set out in the national recovery plan and the on-going difficulties in the national finances, the Government requested all Departments to undertake a comprehensive expenditure review for the purposes of ensuring the best use of resources and that the Government's public service reform objectives of achieving new goals with lower levels of resources will be realised.

The Department has carried out a comprehensive review of all areas of activities and expenditure and has submitted a report to the Minister for Public Expenditure and Reform which provides for cost reductions and a comprehensive set of options to meet the funding constraints. The review will be considered as part of the Government's overall pre-budget deliberations and the 2012 Estimates process.

I am acutely aware of the financial pressures on many farm families and of the importance of grant and scheme payments to their incomes and cash-flow. I have given the highest priority to the processing and payment of all scheme payments and to the elimination of all unnecessary delays. Payments under the disadvantaged areas scheme and the agri-environment options scheme commenced in recent weeks and will continue as queries are resolved. I can also confirm that very substantial payments will issue between now and year end under the single payment scheme and the rural environment protection scheme. Grant payments in respect of on-farm investments are dependent on the completion of the project concerned and submission of a valid documented claim. I am also committed to ensuring that all such claims are processed and paid without delay.

My overall objective is to ensure that funding is directed to priority schemes and services in accordance with Government policy and that the most cost-effective and efficient service is delivered by the Department. In this context, I aim to maintain support for the most vulnerable farm families while attempting to focus the remaining available resources in favour of investment opportunities in the Food Harvest 2020 strategy and the Government's programme for recovery.

I must make some general points on the CAP proposals. The proposals are complex and detailed. We will need time to digest them in full and there are points of detail on which clarification will be required. Thus the reaction I will give today is my initial reaction. At this stage they are proposals only, not final texts. Negotiations will take place at political and technical level over the next year or more and it is highly likely that the current texts will be significantly altered before final agreement is reached.

It is assumed we will keep the same level of national funding. As to the distribution of funds between member states,I am pleased the Commission has adopted the pragmatic approach to redistribution - at least in respect of direct income supports - which had been advocated by Ireland and a number of other member states.

Turning to the single payment scheme, the Commission is proposing that the current scheme will be replaced by a new payment model made up of a number of different elements and moving eventually to a uniform national or regional rate of payment. The proposals envisage that the individual historic reference model will be replaced by a model based on regional or national averages. There is a target date of 2019 for achieving a uniform value of all basic payment entitlements in a member state or region of a member state.

I acknowledge there is very little support among other member states for the retention of the historic model as used by Ireland. In those circumstances, our priority will be to seek as much flexibility as possible for member states to determine the payment models best suited to their conditions and to the development of their farming systems. Ireland will also be looking for appropriate transitional arrangements and I am not happy with the front-loaded transition process in the Commission proposals.

My Department is already engaged with stakeholders on this issue and will now intensify consultations on appropriate payment models for Ireland. We need to look at all possibilities in an open-minded way in order to determine what is best to support our ambitions for the sector as set out in our recent report Food Harvest 2020 Milestones for Success. Under the proposal, new payment entitlements will be allocated in 2014 to active farmers who used at least one payment entitlement in 2011. Entitlements will be established for the farmer who declares the land in 2014 and will be based on the eligible area declared by the farmer for that year.

I am aware of concern that the proposals could lead to land market distortions and will not be in the best interests of productive farmers. The provisions surrounding establishment of entitlements are very complex and will require a great deal of clarification. Moreover, it is likely that they will be altered significantly during the course of the negotiations. Against that background, I strongly urge farmers not to prejudge the situation and not to rush into decisions now that they may later have cause to regret.

The Commission proposal is to confine payments to active farmers. These are defined as farmers whose annual direct payments are greater than or equal to 5% of the total receipts obtained from all non-agricultural activities or, in the case of certain areas, those who carry out a minimum level of agricultural activity as established by the member state. This proposed definition may give rise to unnecessary bureaucracy and in the negotiations I will seek to have some changes made. The key point is to give member states sufficient room to define an active farmer in a way suitable to their own conditions.

As expected, the Commission is proposing that 30% of the national ceiling be set aside for greening, that is, a new payment per hectare payable to farmers for following agricultural practices beneficial to the climate and the environment. The Government supports the idea of encouraging sustainable forms of agriculture, which is at the heart of the Food Harvest 2020 strategy. However, we have considerable difficulty with the proposals as they stand. The existence of a separate greening measure will complicate our existing single payment scheme. It will also hasten the movement towards uniform national or regional payment rates. I am conscious that the CAP already delivers considerable greening. Thus, in order to avoid excessive bureaucracy, we should consider alternative approaches that achieve the same ends but with less red tape. We also take issue with some aspects of the three greening criteria proposed but these are details that may be best left to another day and to the detailed negotiations. There are many issues here that need clarification in the first place and then detailed consideration by experts before final political decisions are made.

I welcome the proposal on young farmers, which mandates member states to use up to 2% of the national ceiling to make top-up payments to young farmers for a five-year period. Ireland was particularly active in pressing this proposal with the Commission. We are all aware that there is a need to improve the age structure of our agricultural workforce and to support well-educated young farmers who will be the platform for further innovation and growth in our agriculture industry. It is sensible to provide for support to young farmers in both pillar 1 and pillar 2 of the CAP.

There is also a proposed scheme for small scale farmers who, as an alternative to tiered direct payments, may opt for lump sum payments of between €500 and €1,000. At first sight this seems more geared to the subsistence type holdings found in some of the new member states than to the size of holdings we would consider small in Irish terms. For that reason, I am not sure whether there is much of interest to us in this proposal but we will consider it in consultation with the farming organisations and other stakeholders. There are further options for member states to use part of their national ceilings to support areas of natural handicap and for coupled payments. Overall, there is merit in having a series of flexible and voluntary options available to member states to gear their payments best to their own farming conditions.

On the proposals for direct payments, progressive capping is foreseen in respect of payments over €150,000, with reductions ranging from 20% up to 100% for amounts in excess of €300,000. Capping would have very little impact in Ireland. Most of our farms are small family farms and would not come close to the capping threshold proposed.

With regard to rural development and aside from the allocation of funding I spoke about earlier, changes are proposed both to the process for approval of rural development plans and to the objectives and measures themselves. I will defer detailed comment on the processes proposed until another day. The process proposed for co-ordination of priorities and spending between the various EU funds is very cumbersome and in the negotiations I will seek for it to be streamlined and simplified.

I welcome the fact that the three current objectives of competitiveness, sustainable management of natural resources and the wider rural economy are retained. I am also pleased that the requirement to maintain an axis balance between the three objectives has been abolished because it added unnecessary rigidity to the current regime. The axis balance system has been replaced by six priorities for rural development which are broad ranging and will allow us more flexibility in how we spend our funding.

With regard to the menu of measures now proposed, I note that many of the measures available under the existing regulation have been retained although there are changes to the details. There are some interesting new options available that we will have to look at carefully. These include new measures for farm and business development that provide start-up aid for young farmers, small farms and non-agricultural activities. The latter provide considerable scope as they are directed at farmers, farm households and SMEs and micro enterprises. The new options to facilitate co-operative projects and to address risk management may also be of interest. Producer groups also feature in the menu of measures available. Support for Leader activities will also be a part of our next programme. My priority for rural development is to maintain support for on-farm investment, including appropriate support for afforestation, to assist the restructuring necessary to improve competitiveness and to help in delivering the Food Harvest 2020 strategy.

The draft rural development regulation also contains the Commission's latest proposals for the delineation of less favoured areas or disadvantaged areas as we know them. In that respect, I am pleased that the Commission has finally accepted soil moisture balance as one of the bio-physical criteria to be used to determine inclusion in less favoured areas. This was a point pressed repeatedly by Ireland with a view to ensuring that proper account was taken of the cool damp climate in Ireland and its effect of trafficability of the soil.

An agri-environment measure is also provided for and, in this round, the measure will be compulsory and includes a reference to climate. We have no difficulty with this as agri-environment has always been an important part of our programmes over the years and considerable expenditure has been dedicated to this area under the current programme. Funding for Natura areas is also proposed under the draft regulation. A new stand-alone organic measure for farmers who convert to or maintain organic farming practices is also of interest with rates of support similar to those proposed for agri-environment.

Turning to the draft regulation on market supports, the majority of the existing rules will continue unchanged and the proposal incorporates some dossiers already under discussion in the Council on quality policy, marketing standards, contractual relations in the milk sector and alignment of legislation with the Lisbon treaty. It is proposed to abolish sugar quotas by 30 September 2015. We support this objective. It is the best approach from an Irish perspective and would allow commercial interests to look at the possibilities for sugar production in this country in the future. That said, I foresee that there will be a great deal of controversy about this proposal in the negotiations to come.

Some of the existing aid schemes in the milk sector are set to be abolished. However, the schemes in question have not been used in practice in many years.

There are useful proposals to address emergencies and serious disturbances of the market. The limitations of the existing regime were borne out during the recent E. coli and dioxin crises and the proposals to hand aim to provide more flexibility for prompt action. My priority in regard to market supports is to ensure we retain the possibility to intervene in the market when necessary to maintain prices at least at safety net level. There will be more price volatility in the years to come, and we need to remember the lessons we learned in 2009 about the value of market supports in the dairy sector at that time. We must also ensure that there are adequate funds available and accessible for these measures.

Many other changes to the regulations are proposed but I do not have time to list them. There will be many other debates before this dossier is finalised and many more opportunities to discuss all of the detailed issues. I refer members to my Department's website where they will find some useful additional material on the proposals. It is my intention to keep an open flow of information as the CAP negotiations proceed in order that we can have a fully informed debate in this country on this vital policy for the future of our agrifood sector.

I am heartened to report that confidence in agriculture and the agrifood sector continues to grow. There is also a recognised realisation of the critical role it will play in the country's economic recovery. The Minister and I lead a team in our Department that wants to develop and grow the sector and ensure that it becomes a core economic Department and that its vitality is fully recognised. I have detected from my engagement throughout the sectors for which I have responsibility a great energy, enthusiasm and positivity and I want to harness that to ensure it is properly focused. I very much welcome this opportunity to discuss the particular areas for which I have responsibility.

When agriculture and the agrifood sector are discussed, much of the debate tends to focus on the large dairy and livestock sectors. That is entirely understandable, given the enormous economic contribution they make, both nationally and locally, in rural communities throughout the country. I am particularly pleased to have had the opportunity to discuss areas which, though perhaps less prominent in the debate, are no less important. Three of those areas - horticulture, forestry and the greyhound industry - are, directly and indirectly responsible for sustaining more than 40,000 full and part-time jobs and are worth almost €2.5 billion to the economy.

The Minister and I, together with the officials in the Department and their expertise, will work hard to negotiate the best outcome for Ireland under the CAP reform. This, along with the budgetary constraints within which we have to work will prove challenging. However, we intend to put all our energy into achieving the best outcome. As the Taoiseach said recently, "Ireland's success depends on our ability to develop and grow in areas where we have real and tangible competitive advantages. The food industry is one such area." I want to work with the industry and other policymakers to ensure that we build on and improve those competitive advantages and I want to share the commitment of the Taoiseach and the Government to work with and to help the industry meet the ambitious goals it has set for itself.

I thank members for their patience and I look forward to hearing their views. Last night I attended a full-blooded IFA meeting in Navan and I welcomed the views expressed. We have a long road to go before CAP reform is finalised.

I thank the Minister of State for a comprehensive review. I hope he will come back some day for a debate on the potential on the forestry industry. We can do much more with this industry, particularly in terms of added value from the processing. The Minister of State mentioned fires. One of the issues the committee has discussed is the regulations laid down by the Department of the Environment, Community and Local Government on destocking. They have led to wooded growth adjacent to forests and this is causing a problem when fires break out. In other words, they start in the land adjacent to the forest. Has the Minister of State had discussions with his colleagues in that Department regarding this issue? We pointed this out as a big danger when they started destocking dramatically.

What percentages of the timber processed in timber mills comes from Coillte and the private sector? While there is growth in the private sector, many of the plots farmers planted are relatively small and the industry is hugely dependent on Coillte for commercial quantities of timber.

Another issue raised by representatives of the industry is the request by county councils for bonds in case of road damage when operators are extracting timber from a site. As long as the haulier draws within the legal limit, it is his business to negotiate the road as best he can and get the timber out. I was a co-operative manager in this industry and I do not see why the extractor should be subject to penalty if he is carrying a legal load. It will be impossible for forestry operators to extract timber. I often boasted that we had knocked every bridge in the area in which I lived and got them replaced because they were not up to the requirements of modern industry. We would not have secured new bridges otherwise.

These regulations are not fair. If a new multinational comes into the country, motorways and flyovers are built. If bog roads are not good enough to extract timber, the industry should not have to pay. Under the CLÁR programme, we had a good initiative through which money was given on a 50:50 basis to the Department of Transport to repair roads following extraction work. It was a more positive and sensible way to address this issue than expecting somebody on a narrow margin to repair roads damaged through wear and tear.

On the sale of State assets, I do not like this idea of selling the crop. As somebody who has been on both sides of the table in the context of the timber industry and rural recreation in discussing this issue, I know 45% of the marked ways in the country go through Coillte land. People underestimate how much our rural recreation industry, which has gone from attracting 200,000 visitors a year to 600,000 and, therefore, is heading towards 1 million a year, depends on access to forestry. Coillte manages the crop and the rural recreation element in harmony with little discommoding. I do not favour selling the land but selling the crop separate to the land will create many downsides which may not be visible before it is done, particularly in the context of the rural recreation sector. This initiative would return little money to the State and it would have significant negative aspects. I hope the Minister of State will attend the committee to go through the forestry brief in detail because there is a great deal in it and there are many possibilities.

With regard to the CAP, Brussels is proposing the transfer of resources from good land to bad land and making payments in a different way. An outstanding rearguard action is being fought by those on the east and south costs and by the strong farming organisations to make sure there is no transfer of resources to the poor land. Representatives of the farming organisations will not say that when they visit Connemara. Perhaps I am wrong - I would be interested in how the Minister of State can show I am not - but it is important that the farmers on the poor land do not get codded again by the big farming organisations that they are representing their interests when they are in fact undermining what the EU is trying to do for them.

I welcome the Minister of State. Unfortunately, our spokesperson, Deputy Michael Moynihan, could not attend as he has other engagements and he asked me to fill in for him. At a time the agriculture industry has a spring in its step, the impact of the CAP reform proposals has yet to be quantified. I accept the point that they are merely proposals at this point that must be teased out but I understand the Commissioner sees a framework evolving and we will have to live with whatever modifications are made within that framework. For instance, the original proposal that payments would be based on the position in 2014 was extraordinary. I will not ask the Minister to criticise the Commissioner here on that issue but to bring forward a proposal at this point in time, given the high dependence in the agricultural industry on the leasing of land and the importance of that in the overall context of maximising production across the country, was extraordinary. I accept that since then 2011 will be part and parcel of the arithmetic, so to speak, in that if individual farmers did not have a claim in this year they will not be able to submit a claim in 2014. That provides some solace for those who depend on leased land to maintain and expand their level of production but nonetheless it will have an impact in the marketplace. It will have a distorting impact on the prices demanded under 11.1 of the EU Parliamentary Assembly policy guidelines or on leases when they come up for review. The Minister should not give up on the possibility of rowing back from the original decision that it should be 2014. If we could get back to the 2011 requirement it would be very useful.

On some of the other elements of the proposal announced last week, the greening support provision is a new one as far as Ireland is concerned, certainly on this scale. While there has been no quantification of the way it will work, it appears there is a need to take account of the existing mainstream enterprises in the industry to ensure that any greening proposal or any dependence on grant aid coming from that element of a farm operation will not raise the bar in terms of performance on individual farms, which in its own way will increase costs at a time when milk prices are reasonably good. We should never lose sight of the underlying cost structure on many farms.

While set-aside has been retitled, in reality the proposal is a 7% effective set-aside. At a time when there is a growing world population and a need to reintroduce the food security consideration at Community level, that should be phased out as quickly as possible, although I do not know whether that will happen.

Another issue is that there has been a consolidation of entitlements on many farms throughout the country and many farmers will find that the single farm payment or the new payments structure will be reduced considerably from what it was in recent years. It is important to bear in mind that individual farm plans are based on a particular cash flow coming from the single farm payment in addition to the flow coming in from the payment for their dairy plant, creamery or whatever. Having spoken to a number of farmers, I was surprised to hear of the entitlements they had established per hectare. It will have a dramatic impact on their cash flow position and that must be borne in mind in the ongoing discussions.

I note the Minister of State referred to the active farmer and the definition of the active farmer as the process moves forward. That may need to change somewhat. We must retain a certain flexibility in regard to it because if we are to operate a scheme with grant support involved, there is a need for a clear definition. However, rather than come down firmly on the definition of an active farmer now considerable consultation must be engaged in with the farm organisations in particular that would have first-hand information from their membership on what would be the best option.

On the production of energy crops, I am aware that the Sustainable Energy Authority of Ireland, SEAI, and other agencies are actively encouraging that and there are a number of pilot projects around the country on the growing of willows, miscanthus and whatever. However, we must flesh out where they will exist in the context of these proposals because like everything else there is a need for forward planning, and individual farmers must know where they are going with it.

On rural development, there is a need to review the range of grant aidable projects. My understanding is that food type projects have not been grant aidable recently and I seek clarification as to whether that provision will change under these new proposals. For instance, will grant aid be payable where an on-farm project complements the primary production on the individual farm?

Food Harvest 2020, which the Minister of State's predecessor, Brendan Smith, introduced, in many ways sets out the signpost for the development of the industry and is making a significant contribution by way of increased exports that are helping this country's economy to recover. When it comes to creating national wealth in a tangible way, it is hard to beat the products that come out of mainstream agriculture. For a nation dependent on what comes from individual farms, it is important to bear that in mind in every decision, and particularly budgetary decisions. I read a document recently commissioned by the Irish Farmers' Association, IFA, and prepared by Professor Jim Phelan and a colleague of his in University College Dublin which should be required reading for the Minister for Finance before he makes any decision on budget day or in the lead up to budgets because the importance of the enterprises in agriculture to economic recovery cannot be overstated. It would be a wrong move on the part of the Minister if particular budgetary decisions are taken next December that will have a detrimental impact on individual farms. He should read that document, which I am sure his officials in the Department of Agriculture, Food and the Marine have read already because it underlines the importance of agricultural production to the economy.

On the need to incentivise farm consolidation, it is clear that if the targets in Food Harvest 2020 are to be realised there will be a need for an expansion in the size of our dairy herds. The biggest single structural problem in this area is farm fragmentation. We are told that only 7% of individual farmers are under the age of 35. That means a significant percentage of them are well into pension age and therefore the opportunity for farm consolidation must be examined with a view to having a separate policy, although the form it should take may come down to individual budget decisions on budget day. I am aware there are existing tax incentives for somebody who leases land to a non-relative but the policy in this area must go much further because to facilitate the maximising of the utilisation of grass consumption, which is the cornerstone of the viability of the dairy herd sector in particular but also the beef industry, there is a need to introduce specific schemes to allow for farm consolidation and to address the issue of fragmentation.

As far as I can recollect the Minister of State did not refer to the issue of the superlevy. I am aware that in his constituency of Meath and neighbouring areas in Louth it is a major worry for individual farmers who have increased production considerably. The senior Minister, in replies to questions, has indicated that there is huge resistance to modifying the existing position. Quotas will be phased out by 2015 and there is a need to examine the transitional arrangements between now and then because if there is to be expansion through the transitional period we must facilitate the steady increase in production.

At a time when milk quota in the North will not be utilised by its production base, the possibility of a bilateral arrangement at least deserves consideration. I do not know what attitude the Secretary of State for Environment, Food and Rural Affairs in Whitehall takes to it, but it seem to me to use this surplus quota to allow the dairy farmers to expand and not have the threat of a superlevy coming down the tracks on 31 March 2012 is a tangible way of helping the recovery of our economy.

I am conscious that other members may wish to speak but I wish to make a number of points. I used to have some responsibility for horticulture. I always held the view that there was a potential to develop a large scale protected crop sector. One would require a site on which to scale up production and reap the benefits of economies of scale. Contemplating such a project needs to be looked at politically.

In north County Dublin, which is not far from where the Minister of State and I live, the protected crop sector was a significant industry. Unfortunately, much of the crops grown under glass have gone out of the area. This is related to the cost of energy but a strong case must be made in terms of employment and wealth creation, as well as import substitution to do a model of the economic scale required to have a protected crop industry. Is it possible for example, to grow a tomato crop to meet the requirements of the larger players in the import business, in particular those who import tomatoes? I accept that energy costs are tied to the marketplace but at a minimum it needs closer examination.

People in the sugar beet industry are looking at the potential to revitalise it in Ireland, when the quota is phased out. Clearly it would be great if it were possible to revitalise it. Sugar beet was not a crop that was grown extensively in my county. However, some people are enthusiastic about it, others are less so as they do not think it is possible to grow sugar beet and compete economically with the sugar cane imports. I accept that there is a significant demand in the marketplace and food companies are paying over the limit for sugar used in the manufacture of their products.

There is a need to bring clarity to this debate as quickly as possible. A number of economic studies were prepared by the commercial interests. An examination document by the economic unit in the Department of Agriculture, Food and the Marine would help to bring some balance to the debate.

We must welcome the significant proposals in the CAP to bring young farmers into agricultural industry. There is a need to frontload their entry. If just 7% of those employed in agriculture in Ireland are under 35 years, there is clearly a problem. This at a time when 450,000 are unemployed. There was a rush for places in the agricultural colleges around the country but unfortunately, Warrenstown horticultural college, and other similar colleges are no longer operational. Teagasc may need to re-examine the accommodation for agricultural education. If we are to expand the sector, we need properly qualified young people coming into the industry. More importantly it helps to alleviate the unemployment statistics.

There is also the possibility of looking at existing schemes along the lines which the Minister's colleague, the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, has been doing in respect of job placement. There is a need to harmonise schemes in this area with the CAP proposal coming down the tracks, so that young people contemplating a career in agriculture will know there is some support for them at the early stages of their career.

I thank the Minister for his delivery of a detailed, well structured and lengthy report. Whatever about our patience, he has very good vocal chords.

That comes from being in the dressing room before a match.

I will not focus on the areas that I fully support but will concentrate on the areas I wish to query. Since I started to consider the draft CAP proposals, it sometimes feels that I am looking at a less than complete picture. The proposals are feeding two sets of documents, the world trade talks and trying to influence agricultural strategy and priorities in EU member states. Does the Department of Agriculture, Food and the Marine have any document which outlines the EU Commission's current view of the food world in terms of the food trade talks? We need to be aware of that in order to influence our choices and decisions and how to lobby the EU in order to ensure our case is put forward.

When looking at the draft CAP proposals I could not glean the end view. The Department, the farm organisations and members make the case for the value of agriculture, food and the marine to the economy. We correctly point out that it has the potential to help lift this country out of the economic mess we are in. We must bear in mind in all the talk about how well agriculture is doing that the income generated on the average farm is less than half the average industrial wage. In the west and north west, the area I represent, income is at less than one third of the average industrial wage. Most of the farmers require second incomes. In many cases the second income has disappeared and they are now in receipt of farm assist. We need to bear in mind in reaching decisions that while the industry is doing well for the country, those who are building it must be looked after because without them the growth will stop.

The Minister addressed the competitive environment in which the horticulture industry operates. The report from the horticulture action group pointed out that the cost of hiring labour in this country is 26% higher than it is in the UK. I find that extraordinary. There were several reports into the horticulture industry and the State agencies found that the workers engaged in horticulture were paid well below the average industrial wage and that mechanisms were being used to try to cover the fact that they were being paid less than the minimum wage. It is extraordinary. I would not like to be a worker in the horticulture industry in England if I was being paid 26% less than the average wage of people in horticulture here. When were those figures supplied and analysed, as the wages in Ireland have been reduced in recent times?

The CAP proposals are very positive in regard to the organic sector, which I welcome. There is an excellent organic centre in north Leitrim and I hope the Minister will visit it in the near future. He would be most welcome there. It is an excellent facility which does a great deal more than just produce food. It trains people, attracts visitors and encourages people to use organic produce.

With regard to food safety, the aspirations are laudable and necessary. I realise it is not its responsibility but the Department of Agriculture, Food and the Marine must be concerned, and closely liaise with the Departments of the Environment, Community and Local Government and Communications, Energy and Natural Resources about hydraulic fracturing if it is to become reality in this country. I believe it has the potential to do untold damage to agriculture. If we poison our water, we can forget about food production. The Minister for Communications, Energy and Natural Resources says this will be assessed and studies will be carried out but the Department of Agriculture, Food and the Marine must protect this industry and work closely on the issue with the two Departments. We also need to work in close co-operation with the Northern Ireland Minister for Agriculture because cattle, sheep, pigs and the consequences of fracking do not recognise borders.

The Minister referred to payments and the elimination of unnecessary delays. The Minister's view is not shared by members of the public. Some people are suspicious that delays in payment are being deliberately introduced to tackle a cashflow problem. I do not know if that is right or wrong but while €4,000 or €5,000 might not be a huge amount of money for some people, it is often the main source of income for small farming families. A huge number of people are in desperate circumstances and in many cases the banks are putting severe pressure on these people because they will not accept that the grants have been delayed. Unless delays in the payment of grants are sorted out soon, I will ask the Department to issue a letter to the farmers whose grants are being delayed so they can show it to their banks as evidence that the claims are still being processed. This would stop the banks harassing these people.

I agree with the Minister's statement that this nation needs as much flexibility as possible to determine the models that best suit our conditions. Our targets are clearly set out in Food Harvest 2020. We know where the significant gaps exist and we should have that discretion, because those closest to the decision will make the best decision. An Irish Government that is aware of the conditions and of the gaps will make better-informed decisions than anybody in Brussels ever could.

On the proposals on greening, everybody would support a ceiling being set aside for greening. However, everything in the CAP reform must be proof-read against not just the agriculture, food and fisheries industry but also the retention of sustainable communities in rural areas. We will have to be careful that we do not sign up to something that will make it more difficult or impossible for people to live sustainably in rural areas.

I agree with the previous speaker on the milk quota. The Government, in conjunction with the Northern Ireland Minister for Agriculture, should prepare a proposal for an interim relaxation of the milk quotas. I do not understand why we cannot convince our fellow EU member states and the European Commission that the rigidity of the milk quotas, which serves no purpose at this point, is not only unnecessary but is counterproductive. We should be able to convince them of that. If we cannot, I would worry about the wider negotiations. I thank the Minister.

I will call Deputy McNamara and Deputy Deering next. I will probably have to vacate the Chair at 3.30 p.m. If that is necessary, I hope the members will excuse me. We had a discussion on the CAP last week and there are issues that require discussion on another occasion. There are questions I would like to have asked on forestry, horticulture and food safety. It probably would have been better to focus on the areas of CAP reform that are relevant to the Minister of State's remit but I have given everybody the benefit of speaking to the Minister's address to the committee. When Deputy McNamara and Deputy Deering make their contributions, the Chair will revert to the Minister.

I thank the Minister. A large proportion of the Minister's presentation was about forestry, which I greatly welcome. I am from County Clare, which is the third most afforested county in Ireland both in terms of actual area and the percentage of the county that is afforested. I join Deputy Ó Cuív in calling for a greater focus on processing and the value that can be obtained from processing. I am from Scarriff in County Clare, which was put on the map as a result of the forest processing plant there, Finsa Forest Products. Deputy Ó Cuív will be aware that it was one of the cornerstones of Seán Lemass's industrialisation policy. He will also be aware that it stopped processing during his tenure in Government and it badly needs to be replaced, given that all of Slieve Aughty, Slieve Bernagh and large parts of Mount Callan in Clare are now covered in relatively young forestry. Something will have to be done with it, and it must be something of value to the economy. There is considerable value to be obtained from the processing of the maturing woods on those slopes. I call on the Minister to examine that.

I am encouraged by the Minister's references to Teagasc and its forestry development department which, in conjunction with the Department, is seeking to address problems by highlighting the importance of thinning and assisting in the formation of forest producer groups. The Minister will be aware that Teagasc is proposing to close its office in Scarriff, which is located on the foothills of that very large plantation which stretches from Scarriff across to Gort and over to Loughrea. It is one of the biggest plantations in the country yet the office is closing. There is a proposal that clinics will continue to be carried out in Scarriff, which I greatly welcome. One of them is to be addressed by Professor Boyle. I realise that Teagasc operates at arm's length from the Department but I would welcome any input the Minister might be able to make towards ensuring there are clinics both in agriculture and in forestry and that as great a presence as possible is maintained in this important area for forestry. It is a priority and I urge the Minister to work on it.

The Minister reiterated his appreciation and that of the Government to all those involved in fighting forest and land fires. I realise this falls outside the remit of the Department but, with respect, that appreciation will ring somewhat hollow with firefighters because appeals officers throughout the country are increasingly deciding that firefighters cannot obtain jobseeker's allowance, due to the fact that they are on call. All firefighters involved in fighting forest fires are not in Dublin, Cork or Limerick but from small rural stations throughout Ireland. It is basically retained firefighters who are involved, and because they are retained and on call, social welfare appeals officers are determining that they are not genuinely available for work. They are putting their lives on the line and protecting a very important State asset, but they are being penalised for it. There is a review group in place in the Department of Social Protection, under the Minister, Deputy Joan Burton, but it would be useful if the Government could speak with one voice on this. Any input the Minister could make in that regard on the important service provided by these firefighters to the State would be greatly appreciated.

Finally, it would be remiss to finish without voicing my concerns, which are shared by the IFA, about suggestions that forestry premia might be reduced in the forthcoming budget. I realise these are difficult times and that Ministers are required almost to perform the miracle of the loaves and fishes when divvying out decreasing funds. However, the Minister has stressed the importance of forestry. In that regard, the forestry premium should be maintained to the greatest extent possible.

Deputy John O'Mahony took the Chair.

The importance of agriculture should not be underestimated. We have all spoken about its contribution to getting the country up off its knees. As we move on, that importance will be re-emphasised time and again. Every sector of agriculture is playing a key role in getting us going again. This should not be lost sight of.

Deputy Kirk mentioned the sugarbeet industry. The Minister of State said he foresees a great deal of controversy about the sugarbeet proposals in the forthcoming negotiations. Controversy is a big word. I come from Carlow, which is seen as the spiritual home of the sugar industry. We were shocked and dismayed by the closure of the Carlow sugar factory and the industry being sold out of the country. Several efforts have been made to get the industry up and running again. I would be disappointed if the entire community did not support this great means of getting another industry back into the country. We are looking for stimulus. This is an ideal stimulus to industry.

I would welcome the Minister of State's opinion as to the best course of action. Two studies are currently with the Minister for Agriculture, Food and the Marine. September 2015 is the date for the abolition of sugar quotas. It will not be long coming. If we are to get back into the system we need a factory, and that will take a number of years. If we are to be ready for spring 2016, we must set the ball rolling very soon. I would welcome the Minister of State's opinions on that matter.

Deputy Ó Cuív mentioned the east-west divide. We must not lose sight of the fact that the biggest area of production is in the east of the country and that is how things will be. That is where the majority of the industry is situated. It needs to be encouraged in the future.

I welcome the publication of the CAP reform proposals last week, putting an end to speculation. I expect last week's proposals will look very different when the final deliberations are complete. A number of points need to be emphasised. I am glad to see young farmers mentioned very strongly. We are aware of the high age profile of Irish farmers, whether east or west. It must be reduced in order to restore credibility to farming. The definition of "active farmer" needs to be emphasised, and this ties in with the east/west divide. The vast majority of active farmers are in the east of the country. That needs to be clarified.

There are more active farmers in the west than in the east because the farms are smaller.

Are they full-time active farmers? That is the issue.

They are active.

Everybody is active.

It is Deputy Deering who is talking about active farmers.

We need to clarify what is meant by an active farmer.

Every local authority employs a veterinary surgeon to look after certain areas. This is a waste of money. There is too much duplication. Vets are employed by the Department and in regional offices. Why not use some of the vets who are in private practice in every part of the country to do some of this work? Some of the vets who are employed by county councils are looking for work. If we are trying to make savings we should investigate this area.

The greyhound industry plays a key part in the sector. I see it playing an even bigger role in the future. I would like to hear the Minister of State's opinion of what that role might be.

Deputy Colreavy mentioned the superlevy. Milk production will be a key part in achieving the 2020 targets. A large number of farmers may be hit with a superlevy bill next March or April. This will mean a serious setback to our reaching the 2020 targets. We should be actively lobbying on this issue. I know the Minister of State is doing so. We need to ensure a soft landing in this regard. Deputy Colreavy mentioned some North-South issues and the possibility of creating a working relationship in that regard. That could be investigated further.

I do not know how we will win the east-west argument, as there are four members from the west and only two from the east.

We are very active.

Deputy Ó Cuív made a far-reaching statement about moving subsidies from the east to the west. I remind him that his Government was part of the Harvest 2020 strategy to increase milk production by 50% and beef production by 40% by 2020. I do not believe that is going to happen if we move subsidies from the east to the west.

I do not see a connection.

There is a connection. If the value of subsidies are left in the east the production will be there.

They will have to make up for the lack of subsidies by producing more.

That is not true.

I am alarmed by a statement made by Deputy Colreavy that the Department is holding money back because of the cash-flow situation. Such a statement in a public forum like this does no good. If Deputy Colreavy thinks that suspicion exists his statement will give rise to even more suspicion.

I simply asked a question.

The Minister of State referred to the horticulture industry. Deputy Colreavy mentioned that horticulture labour costs are 26% dearer in Ireland than in the United Kingdom. The Department should be in contact with the Department of Foreign Affairs and Trade and the Home Secretary in the United Kingdom in this regard. The vast majority of people working in the horticulture industry in England are illegal immigrants. Some use this country as a gateway to England, where they are paid 50% of the minimum wage. That may be a reason our labour costs are 26% higher. UK practices may not be affecting us directly but the Department of Agriculture, Food and the Marine should liaise with the Home Secretary in Britain. There must be more inspections. In England, horticulture is a massive industry. A huge number of people must be fed in the United Kingdom and there are farms of between 7,000 and 8,000 acres under horticulture. Much of the work is being done by illegal immigrants and this must be looked into.

Last May, the Minister of State said Bord na gCon was exploring possible business opportunities in China, not in terms of exporting greyhounds, but in assisting the management of greyhound racing. Could he expand on how this had progressed?

The Minister of State mentioned young farmers, as did other members of the committee. Youth is needed in order to make progress. I welcome that the Minister for Agriculture, Food and the Marine with the Minister for Education and Skills has created more places in the agricultural colleges. A lifting of the moratorium allowed for the taking on of more teachers and tutors. This must continue because if we are to encourage more young people into agriculture, we will need to be able to educate them. There are currently not enough places in our agricultural colleges. I ask that the Minister raise with the relevant Departments the continued increase in the number of teachers and tutors so that more places in agriculture colleges can be created. It is important that young people wishing to get into agriculture are properly educated. As stated, the industry is going well at present but that can only continue with the energy of young people.

I thank the Minister of State for his excellent presentation.

I welcome the Minister of State and his officials to the meeting. The Minister of State has given us a great deal of food for thought. On Deputy Colreavy's point in regard to visiting Leitrim, we will shortly be in a position to bring the Minister of State on a tour of north Leitrim, including the organic centre there.

Most of the points I wished to raise have already been covered. On the issue of forest fires, a number of private farmers' fences were damaged in the springtime wood forest fires. A number of them have contacted me about whether State aid is available to assist them replace those fences as they were not insured and this was outside of their control. Perhaps the Minister of State will undertake to look into that in the future.

As regards people involved in organic farming who were previously involved in REPS, it is important an AEO scheme is put in place to assist them. I welcome the CAP proposals in regard to young farmer issues. However, as I have stated previously, it is important, if we want to encourage older farmers to retire, that we consider giving them a little pension and so on. This will ensure more land is released and available to younger active farmers. It is disappointing to hear that a number of farmers have not been paid their disadvantaged area payments. The figure in respect of Leitrim is approximately 1,000. We will be working to ensure speedy work in that regard. I believe the figure for Roscommon is 1,500.

Most of my questions were addressed by the Minister, Deputy Coveney, at our last meeting. Two areas of interest are the CAP proposals and budget, which is of immediate concern to farming communities, east, west, north and south. It is important we get the balance right. There has been some debate about the savings to be achieved in the budget and the calculation of same. That issue was addressed by the Minister. However, the Minister of State might set out the position in regard to moneys from Europe. While the issue of forestry has been covered it is important to state that forestry is an important industry in Ireland. It is important we preserve as far as possible payments in this area.

I welcome the Minister of State's comments on the horticulture area, including the dialogue with the supermarkets on controlling its too dominant role in certain areas in terms of price and quantity and, therefore, production of horticultural products. I commend the Minister of State on his work in that regard. It is important we get that right.

I thank members for their comments. I will try not to be political. On Deputy Ó Cuív's question in regard to forestry, I would welcome two or three hours of discussion on that issue. It is an industry which, since taking up office, I have tried to learn about from the bottom up. During my visit last week to Cork I visited a mill and received a detailed account of the reason the demand for timber is so high, the price is so good and the need to ensure we have a yearly programme to ensure growth in this area. It is a topic which should be discussed further. There are many issues that could scuttle growth in that industry. We will shortly come under pressure in that from 2014 all other lands will be dealt with by way of a reference year. However, the announcement of the 1,500 ha autumn-winter programme is a clear message that we intend to grow the industry. Given budgetary constraints we must fight for every euro we can get to ensure funding for planting to annual payments remain as high as possible. We will do that.

Mention was made of Coillte and so on. There has been a demand during the past six or eight months for private industry to get involved in the proper management of forests. During the early 1990s people simply planted forests and sought their premiums. They now realise that because of thinning there is more money available to them. The demand from the industry, be it for paling posts or alternative energy, is massive. It is creating a great buzz within the industry. We intend trying to set up discussion groups within each area. Also, our annual leaflet, usually sent out in January, will be sent out during the next couple of weeks to, in particular, encourage people to get together. People should realise that what they have is worth minding. It is far better than bank shares and so on. The more times one thins it, the more valuable it becomes. I welcome members' remarks in that regard. I have no doubt that members will agree that the potential for forestry is massive.

I attended an IFA meeting last night. Given the proposals for 2020, everyone should grow a few acres, be it dairy farming and so on. Deputy Kirk mentioned that many people are involved in the willow industry, which Bord na Móna and others want to purchase. In this regard, we are dependent on introduction of the REFIT tariff. It was hoped it would be introduced in September but, unfortunately, for no other reason than an act of treachery, Coillte objected to implementation of the REFIT tariff. The quicker this issue is resolved the better. People in all sectors are waiting for money to come through. I regret I am unable to respond to all the issues raised. Forestry is a great industry, one which I will support for as long as I am in my current position.

Deputy Kirk raised the issue of 2014 and the reference year. This is causing problems but everything must be addressed. We must discuss every aspect of the CAP proposals. I believe 2011 was thrown in to prevent people going mad renting land. People in my area are getting letters telling them to quit the land immediately because of the 2014 reference year. There is no doubt this will cause a problem. However, we are trying to renegotiate that. Everyone in my Department will be working on the matter to ensure it does not run for eight, ten or 12 months. We must get a hold on it if problems in terms of the letting of land are not to be caused, although I accept the person letting the land will not feel the same.

On quotas, I have been involved with a milk producers group for years. All 33 members of the group are under pressure. I know that our MEPs are working in Europe to get other countries interested in ensuring a soft landing in this regard. We cannot make arrangements between ourselves and Northern Ireland or the UK. Much as we would like that, whatever is agreed must be recognised by the EU. We must be realistic on that one. We should all urge our MEPs to get on board other countries wishing to get into production. We have the manufacturing capacity.

Everyone supports getting the superlevy out of the way but it is in place and people must be encouraged. Last weekend, I met the chief executives of most of the co-ops. They will have a problem. People must dry up their cows and they will not get 30,000 or 40,000 litres this year. Instead, we must plan for next year.

The matter of active farmers is a forgone conclusion. All of our pre-budget discussions where CAP is concerned have related to this matter. I come from a strong farming and IFA background. The budget and CAP have the potential to split the country. This will not help anyone. We are a small country with the world at our feet in terms of our food productivity. Given the manner in which we spent money on ensuring we have safe food, we are globally recognised and it would be stupid to get involved in an east-west debate. All of us, from the farming organisations to those with rural backgrounds, must put their heads together to ensure everyone is treated fairly. Irrespective of whether they come from Nobber in County Meath or somewhere in County Donegal, people are the same and should be paid for what they produce. This is our aim and we cannot be divided.

Deputy Colreavy raised a point on horticulture. I am trying to do something about this matter. I spent my first days as Minister of State with the growers. I was not encouraged by the number who were afraid to talk. They told me their stories but did not want me to name them. They are being divided by the multinationals buying their products.

I am disgusted by a weekly television ad for the half price sale of leading Irish vegetables. I have made this clear to each individual supermarket chain. I told them that, while I respected what they needed to do, there would be no horticulture to discuss if they continued as they had been. We made it clear to a number of the supermarkets that the Government is committed to grant-aiding people involved in horticulture to try to reduce the cost of production in Ireland, which is high. It is cheaper for material to leave north County Dublin and be packaged across the Border for sale in the Republic. These issues must be addressed. We are committed to helping small businesses in the horticultural industry so that they might be better equipped to handle their produce.

We will not say that Monaghan mushrooms are better, as we must be careful, but the mushroom industry was nearly extinct two years ago. The large and small producers got together and formed a producer organisation, PO. They were completely grant aided by Europe and have near total control of the English market. Every day, nine articulated lorries leave the Monaghan area. Some of the mushrooms are from County Tipperary. Seven of those lorries go to England while two stay in the Republic. This is the way to go in horticulture. The potato industry is difficult to handle but it, the strawberry industry and all other horticultural industries should join together. Those I met were clear. They do not want strawberries or cabbages today and none tomorrow. They need a continuous process. This must be worked out. I will continue to fight the battle. Selling leading Irish products at half price in supermarkets is a shame and should not be allowed to continue.

People are waiting for payment. Between now and December, some €1 billion will be paid out in single farm payments. Some €450 million will be paid this week. Prior to this week, we were €80 million ahead of where we were this time last year. There will always be people who, for various reasons, are under pressure and whose applications are slightly out of line. Earlier this year, I sent a letter to every Deputy to the effect that individuals should contact the Department to have issues examined and addressed quickly. Our counterparts in Northern Ireland will make no payments until December. In England, it will be June or July 2012. Irrespective of what anyone says, we are first.

The point on the CAP and the world market was a good one. The global population is growing daily. All of us, particularly food producing countries, have a responsibility to increase production. According to my officials, the impact of the new CAP proposals on the world's food chain will be analysed and that analysis will be published. People have complained about the Irish beef industry and Brazilian and Argentinian beef imports. It is for us to ensure there is no room for those imports. This is where Harvest 2020 comes into play. The more we read and discuss that outstanding document, the more we realise its objectives need to be achieved.

We have discussed greening, although one would need to be fully alert to understand it. Much of this proposal might be scrapped, for example, the 7.5% set-aside on the ecological side. There will be no room for a set-aside. Ireland need never worry about hedgerows being factored into the equation, as we have plenty of hedgerows and wet areas. The French and Germans have massive tillage areas and will not allow the proposal through. I hope the figure will be reduced to 3.5% or lower and that it will not affect Ireland.

Nothing can be done about the closing of forestries. An arrangement was been made and Teagasc is doing it. However, I like the idea of clinics wherein one could discuss a matter once per month, for example. People want information.

This is not a political jibe at Deputy Kirk. I attended last night's IFA meeting. The IFA gave a presentation on the upcoming budget. Our Department will see a 20% cut. I did not need to say it because it was clear. People asked why they had not known. None of them knew that these cuts had been signed up to by the previous Government under the EU-IMF agreement. Information is important. Our leaflet to everyone in the forestry industry will be full of information on getting together.

Forestry is a significant industry with great potential. It was not handled at the outset and people in Coillte and the private sector know that mistakes were made but one learns from mistakes. Not every piece of land is capable of growing forests.

The roads issue applies to the forestry in every county. I visited County Leitrim because people were having trouble getting out of their plantations. I had made arrangements that on my way back from the Galway Races I would visit the county council and meet the people involved in the private end of the industry in Leitrim where there would be road blockages while timber was being taken out of the forests. I was brought on a good trip of the area and I saw the places where it would be nearly impossible to take the timber out of the forests without some destruction of the roads. We made an agreement and I went back to the council and we discussed it. What we did worked out well and members will receive a document on this. We forward planned. Seamus Dunne and Kevin in the Department worked on this. We informed Leitrim County Council of the state of all the forests in County Leitrim, their stage of developments and when they would be due to be thinned. From that they were able to forward plan the upgrading of the roads. What Deputy Ó Cuív said about this is right. I cite the example of a person with 18 ha who needs to get the timber out of his plantation and has to pay a lump sum or whatever. We got a great response back from Leitrim County Council to say that it was happy with what we proposed. I understand it was a councillor who was involved in the objection to this, but it was pointed out to him how much forestry was worth to County Leitrim and that there would be forward planning to upgrade the roads.

We have started the process in the Department of ensuring that every county council gets a detailed plan of the stage of development of the forests in their country and then the county councils can forward plan with their councillors. We all know when it comes to local elections all councillors want to upgrade the roads in their area. That is the way the system works and it will not change in that respect. We can forward plan road upgrades if we have a 20 year plan of those roads that carry the heaviest traffic. The letter we received from Leitrim County Council was a great help in encouraging us to continue that programme.

Deputy Deering spoke about the food safety and the employment of vets. There is no doubt we can all find fault with everything. The Department is examining every aspect of that area in regard to the Croke Park agreement and streamlining processes a little more. We will do nothing that would do any damage to the good name of the Irish food industry. I state again my position on a matter that will continue to be raised, that is, the sale of raw milk. I have had a discussion on it with the people involved. I back the Department's position on it, based on the advice we were given by the Food Safety Authority of Ireland, to make sure that banning of the sale of raw milk is implemented because we cannot take any chances. I want to make that clear because the issue will continue to be highlighted. We had a good discussion with some of the producers on that and it is a case of sometimes one wins and sometimes one loses. The Food Safety Authority of Ireland is an independent body.

It operated outside its remit-----

-----in giving advice outside its remit to this committee-----

I am only giving the members my view.

-----with apparent bias, which is a cause for concern.

The one thing we will not do is put the industry at risk.

Nobody is questioning that any industry should be put at risk but one would have to question the Food Safety Authority of Ireland in the agenda it is following in going into areas outside its remit.

I know this is a contentious issue.

I want to make my position clear on it because it will keep coming up. I went to Darina Allen's place and met people there and when I returned I organised a meeting with my Department and we went through all the issues with some of the suppliers and some of the PR people or spin doctors, as they are called in our game. We had a very good discussion but there are times when one wins and times when one loses. I would have to support the Food Safety Authority of Ireland on this. That is why people from other countries contact our Department on a daily basis to source food. It is because we are able to deal with emergencies and to handle a crisis as quickly as possible. We are all proud about that. It is the Department of Agriculture, Food and the Marine and everything related to agriculture will help us to get back on our feet.

The issue of jobseeker's benefit for people involved in fighting the forest fires was raised. We have a fire brigade in our area where a husband and wife, who have two children, are both crew members but they cannot get jobseeker's benefit because of their involvement in that service. I will follow up the proposal in that respect because it is a good idea.

The greyhound industry was mentioned by two members. It is an important industry and we are committed to upgrading stadiums. I have visited some of them. Many of them have been upgraded to top class facilities and they are creating great employment. They not only provide a good night out, but they can be hired for 21st birthdays and fundraising events. The quality of the stands in the stadiums are top class but many of them require funding to upgrade them. A night at the dogs is the cheapest night out, especially if one has one or two winners. It is a great night out. I am in favour of committing to continuing to fund the industry until such time as it is able to fund itself. There are a few stadiums that have roofs that are leaking and of some of them are in holiday resorts and they have beautiful tracks. We are committed to funding them. When the funding becomes available, I will insist that the smaller stadiums would be looked after first. Have I covered all the points raised?

The Minister of State did not deal with the sugar industry.

The price of sugar is fairly dear at present. If one was involved in Bulmers or in any industry, be it jam-making or another industry, that uses sugar in the manufacturing of its product, one would know that the price of sugar is a serious issue. It is a costly product. Two studies have been done in this area. They have to be examined and we would all be in favour of rebuilding the industry but we must make sure it will pay; otherwise, there is no point in doing so. Sugar beet is still grown on 2,000 ha or 3,000 ha a year for different reasons, including for fodder beet. However, we must make sure that such production would be viable against sugar cane. We know there is a problem in other countries in Europe in terms of quota; they are not willing to give it up yet. It is all to fight for and it is worth pursuing but we must make sure that the industry will pay.

I raised the issue of the education of young farmers and I ask that the Minister of State take it up with the relevant Departments to create more places.

The education of young farmers is crucial. Warrenstown has closed and it has now been taken over by some other organisation and is fully utilised. One good story about it is that a farmer in our area who is a Meath footballer was going to go abroad but he went back into milk production. He planted four acres of rhubarb and employed young fellows to harvest it during the summer, which has kept them at home and they were there to play football. He is planting another two acres of rhubarb this year. All those little initiatives add up.

One good aspect of the CAP proposals, on which the Minister and his officials have worked, is the fact that young farmers up to under the age of 40 - nearly close to my age - would get extra grant aid of about 25% for five years. I could be mistaken about that but I will correct it if I am wrong. This is where senior farmers, farming organisations and Deputies of every description must be prepared to let go a little for their grandchildren. I know that will be hard because of the age of farmers in the community, but if we do not look after the young farmers and give them that gift in terms of funding to build a milking parlour or in terms of horticulture or forestry, progress will not happen and the young farmers will all leave. There is great enthusiasm in the industry but they will need that grant aid. We must compliment the work done which has ensured that we will get the same amount of money over the next number of years as we have had. It is crucial that we do not split the country, our political parties or the IFA over this because there is room for everybody.

As the members would all agree, we must pay the fellow who is prepared to work, who is prepared to produce. There is one negative aspect to this that annoys me and we talked about wages. Jobs have been created in the horticulture industry and the processing end of it, in the beef industry and in the selling of food. There were 70 jobs on offer in north county Dublin a few months ago but only 63 people applied for them. There were 70 jobs in another place in north county Dublin in the spring and three Irish people applied for them. Some 67 people had to be brought in from outside the State. There were 20 jobs going in a meat factory in the midlands because 5% more is being taken off the carcass, but 17 persons had to come in from outside the State. Three from Ireland walked out of the job on the first day.

We must look at it because there is something wrong. It is annoying, if we are to create jobs, that we do not encourage our young people to take up these jobs. Those are facts. Almost 50,000 persons have come into the State since 1 January and acquired PPS numbers. Since 2007, some 555,000 persons have come in to this country from outside the State and acquired PPS numbers. I will finish on that.

I thank the Minister of State and his officials for an informative and wide-ranging contribution. Obviously, he has an in-depth knowledge of his brief.

The joint committee adjourned at 4.10 p.m. until 1.30 p.m. on Tuesday, 25 October 2011.
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