The Chairman need not worry about the delay as we are delighted to be here anyway. He is also correct that it is my first time before this new committee. I wish him and his new committee every success and the Department will naturally be as helpful and co-operative as it has been in the past. I will introduce the people accompanying me and I have brought a fairly hefty team with me. Mr. Kevin Smyth is the assistant secretary in charge of single payment and Portlaoise and forestry operations. Mr. Philip Carroll is the assistant secretary in charge of our human resources management services function, as well as our animal health and welfare. Mr. Tony Burke is the assistant secretary in charge of our finances and environmental payment systems based in Wexford. Mr. Paul Dillon is head of corporate affairs and Ms Ann Derwin is our chief economist.
This follows from the meetings between the committee and the Minister for the Agriculture, Food and the Marine, Deputy Coveney, and the Minister of State, Deputy McEntee, who provided a comprehensive overview of the policy priorities within the Department and the current state of the agriculture, food and the marine sectors. As I gather that is what the committee wants to consider, I will explain how the Department operates in the formulation and implementation of policy objectives as well as in achieving operational targets.
The newly named Department of Agriculture, Food and the Marine is a multifunctional organisation which provides a wide range of services directly and through specialist State agencies operating under its aegis. The Department has a wide and diverse customer base which includes farmers, taxpayers, consumers, food processors and other commercial operators, those involved in sea fishing, forestry, bio-energy, research as well as diverse EU institutions, other State bodies and special interest groups. The Department will shortly publish a new statement of strategy, and our mission statement is "To lead the sustainable development of the agri-food and marine sector and to optimise its contribution to national development and the natural environment".
Within this there are four high-level goals, the first of which is the agri-food and marine policy, development and trade. This is "Progressing, in collaboration with relevant sectors and State bodies, the further development of the agri-food and marine sector, including the achievement of Food Harvest 2020 targets." The second goal is food safety, animal health and welfare, as well as plant health, which is "Maintaining the highest standards of food safety, consumer protection, animal health and welfare and plant health." The third goal is the rural and marine economy and environment, which takes in "Promoting economic, social and environmentally sustainable farming, fishing and forestry." The fourth goal is the effective delivery of schemes and services, which "Further enhance our human and technological capabilities to provide effective and responsive services for all clients, and to also deliver public service reform."
Over recent years, this Department has worked with the Department of Finance and, more recently, the Department of Public Expenditure and Reform to improve financial reporting. The intention is to show a clearer alignment between resources voted by the Oireachtas and the outputs achieved for these resources. Last year, we participated in a pilot programme to more closely align the goals of the Department into four programmes which formed the basis of our 2011 Estimates. Our new strategy statement is now aligned to these four goals, which have a greater focus on performance and delivery. Each year, the Vote, subheads and administrative costs are allocated on a programme basis and each programme identifies outputs and outcomes which it expects to achieve in the year in question. As Accounting Officer, I then report annually to the Oireachtas on the outcomes achieved.
Three corporate policy documents, with common themes of competitiveness, innovation, sustainability and quality service, underpin the mission statement. These are the Programme for Government 2011 to 2016, the national recovery plan and the Food Harvest 2020 report. A key element of the work in the Department will be to ensure the full implementation of the Food Harvest 2020 report. As the Minister has already pointed out, this document was drawn up by key stakeholders in the agri-food sector last year and was endorsed by the previous Government. It was clearly driven by the Department, as is very evident, and it has been fully embraced by the current Government, with the Minister chairing the high level implementation group. A further report entitled Food Harvest: Milestones for Success was produced in July and it sets out the significant progress made in the first year as well as elaborating on the path ahead and interim milestones to our 2020 goals.
The Department's priorities are to pursue the implementation of the programme for Government, Food Harvest and the Milestones for Success reportto maximise the contribution of the sector to the national export-led economic recovery. It will also optimise the development of the agri-food and marine sector, ensure the maintenance of the highest standards in food safety and consumer protection, seek to implement further efficiencies and improvements in service delivery in the context of budgetary constraints, steer a successful EU presidency during the first six months of 2013 and work collaboratively with other member states to maintain a supportive and well resourced Common Agricultural Policy and Common Fisheries Policy. Addressing these priorities will be challenging in the current climate and at a minimum will require strategic re-prioritisation of resources.
The committee might like to know a little about the structure of the Department. My role as Secretary General of the Department is clearly defined in the Ministers and Secretaries Act and the Public Services Management Act. My job is effectively similar to that of the CEO of a large organisation but working within the parameters of that legislation. On an operational level, the staff ultimately report to me as the Accounting Officer and the management advisory committee, MAC. There are eight members of this committee, comprised of assistant secretaries, the chief veterinary officer and the chief inspector. That committee meets on a fortnightly basis and periodically meets in a different formation with Ministers. That is now on a quarterly basis but can be more often as issues require it.
This level of close co-operation and commitment between officials and Ministers is no more than one would expect. In my experience it has always been excellent in the Department. The recent example of the Food Harvest 2020 report was born out of the work of the Department's management advisory committee, and the Department facilitated the industry in drawing up the report. It drove it fairly hard and it was endorsed by the previous and current Governments. The Minister, Deputy Coveney, has taken a hands-on approach towards the implementation of the recommendations as evidenced by the publication of the recent Milestones for Success document.
It is a big Department and has been engaged in major reorganisation at all levels. This has been facilitated by changes in the way Department schemes are managed, reductions in disease levels, advanced use of information technology and by a programme of internal reviews of business units, including major reviews of the local office network. As a result of this reorganisation, the Department has been able to reduce its staffing levels from 4,800 in 2005 to some 3,600 currently, a reduction of 25%. The cost of running the Department has fallen substantially since 2008 by some €60 million or approximately 20%. Staff are located in the six major offices in Dublin, Cavan, Portlaoise, Backweston near Celbridge, Clonakilty and Johnstown Castle, as well as in a wide geographical spread of regional offices, laboratories and other premises.
Over the coming years, further changes will continue as the local office reorganisation programme evolves, operations are consolidated to improve efficiency, service delivery and further budgetary constraints are introduced following the comprehensive expenditure review.
The Department has been undergoing major changes in its operating environment in recent years, mainly due to the impact of the single farm payment, the benefits derived from a substantial investment in IT, significant reductions in disease incidence and the ongoing implementation of internal reviews of the structure and staffing of key business units of the Department. That is an ongoing dynamic. In 2009, when the decision was taken to rationalise local offices, the Department had 58 offices providing services to our clients and analysis then showed that this number of offices was not sustainable. The analysis also showed that these local offices were carrying a surplus of more than 400 staff when resource availability was compared to business activity. I stress it is not that the staff were at the time doing nothing or redundant. It is that the change in the nature of the way in which we were working, and the IT capacity and the shift in disease activity, allowed us to do this.
It was decided to move towards a network of 16 offices evenly spread throughout the country, the key advantage being that any customer could visit any office in the network and not only the parent or county office, thus providing enhanced coverage of the country from fewer locations. This decision was facilitated by technological processes within the Department and by the national roads infrastructure.
Since 20 May last, local services are now being provided to our customers from 16 enhanced offices: Castlebar, Cavan, Clonakilty, Cork city, Drumshambo, Enniscorthy, Galway, Naas, Navan, Limerick, Raphoe, Roscommon town, Tipperary town, Tralee, Tullamore and Waterford city. Each enhanced office has a full complement of skilled staff across the full spectrum of business activities.
Staff numbers continue to decline in the Department's local offices. Since July 2009 there has been a reduction of 300 local office staff through retirement without replacement and redeployment across the Department and, indeed, into the wider public service where there are particular needs which we were trying to meet. The reductions in offices and staff are already yielding savings in the order of some €20 million for 2011 and when fully implemented and operational, will yield savings in the region of €30 million each year while continuing to provide an effective and efficient level of service.
Departmental expenditure is a topical issue. The gross Vote for 2011 is €1.647 billion. In 2008, this figure was €2.1 billion. In addition, the Department is responsible for administering EU funds of just under €1.3 billion on the single farm payment, which is €1.2 billion, and market supports such as intervention and export refunds. This latter expenditure takes place outside of the Department's Vote. Total gross Exchequer and EU estimated expenditure in 2011 will be €2.9 billion. The structure and the make-up of the Department must handle, control and operate expenditure of the guts of €3 billion.
There is a list of semi-State agencies which all operate in their various areas. Twelve in all, they come within the aegis of the Department. I will not read them out, but they are included in the script in front of the committee. As the members will see, there is a wide range of semi-State bodies which reflect the reach and spread of the Department.
I will elaborate on the Department's operational environment. On the economic environment, the global recession and downturn in the Irish economy has brought a new set of challenges. The current constraints on public finances, including the commitments and responsibilities under the ED-IMF programme, will apply for the next few years. Consequently, to achieve the most effective outcomes, the Department must target its reduced resources at key priorities. Greater collaboration with other agencies will also help to position the agrifood, fisheries and forestry sector as a strategic component of the export-led growth.
The public service reform programme envisages a smaller, leaner, more integrated and technology driven Civil Service. This citizen focused service will operate with a reduced cost base and with fewer staff. Achieving these intended results will mean that the working environment for all staff of the Department will change. The transformation programme will mean more flexible work practices, continued redeployment arrangements, delivery of targeted quality services with fewer resources and reconfiguration of services and structures.
As I mentioned earlier, previous experience has demonstrated the capacity of this Department and its staff to deal effectively with challenges and pressures. Recognising that there is, and has always been, a genuine commitment to productivity and change, management in the Department will foster this capability by improving its own leadership and communication skills, by facilitating more structured on the job development and ensuring greater responsiveness and personal interaction with staff. Management will also take whatever further steps are necessary to effect the cultural and organisational changes recommended under the Organisational Review Programme, ORP.
The effective implementation of Food Harvest 2020 and Milestones for Success, which was published this summer, is core to the future development of the sector. The compelling vision of these reports is the belief in the underlying growth potential of the sector and the need to realise the targets set through a co-ordinated and collaborative response from Government-State agencies and a parallel commercial commitment from industry. There are over 40 key actions in Milestones for Success to be completed this year and these are good examples of a co-ordinated interagency approach.
The EU and international context is crucial. The national strategic direction of the Department is influenced by international developments, global trading patterns and EU policy. Issues such as world population growth and increasing affluence in emerging economies offer significant growth potential for the sector. On the other hand, the increased volatility of international commodity prices and supply shocks in scarce resources can endanger market stability, cause uncertainty and threaten growth for European farmers and fishermen. It is important that the EU 2020 Strategy and the reform of the Common Agricultural Policy, CAP, and the Common Fisheries Policy, CFP, reflect these issues. In that context, the Department is working to ensure a properly resourced CAP and CFP which will underpin a sustainable and profitable European agricultural, fisheries and food production base in harmony with environmental best practice.
The environment is the catch-all global context in which we operate. The global challenges of food security, climate change, biodiversity and conservation of scarce resources - oil, soil, water, fish stocks, etc. - have influenced our relationship with the environment. The result is a growing consumer concern for the protection of the environment, interest in the provision of public goods, and demand for food products which can be verified as being ethically and sustainably produced. Furthermore, rising global food demand affords growth potential for the Irish food and drinks industry. Realising the potential opportunities and meeting the challenges involved are central to our policy response and to the future direction of the agrifood and marine sector.
The interaction with the EU is crucial in all of this also. The committee will appreciate that the Department has many dealings with the European Commission, Ministers and officials of other member states and, increasingly, the European Parliament. As well as officials' and Ministers' attendance at Commission and Council meetings, we also have a team of officials from the Department in the Irish permanent representation in Brussels. To strengthen our trade and policy links with certain areas, we also have agriculture attachés in the embassies of London, Paris, Berlin, Rome, Warsaw, Geneva and Washington. These are staff from the Department who are seconded to the Department of Foreign Affairs and Trade for the duration but who work on agriculture and food.
The Lisbon treaty introduced significant changes in legislative procedures in the area of agriculture and fisheries. The European Parliament now has full co-decision powers with the Council on most legislative matters in these areas. This has an impact on how the Department conducts its business. I am aware that the committee and both Houses have also received additional powers under the treaty with the introduction of the "subsidiarity check" provisions. I am also aware that consideration of EU matters will now be a standing item on the agenda for the committee with which we will be delighted to co-operate.
Proposals are generally published by the Commission following consultation and are adopted by the Council and the Parliament. At Council level, the proposal is considered by expert officials from each member state and at Parliament level, by the Committee on Agriculture and Rural Development. My Department's officials in the permanent representation in Brussels maintain constant contact with Irish MEPs on proposals of importance to Ireland and they, along with senior officials from Dublin, provide regular briefings for MEPs on key issues. A proposal must be agreed by the Council and the Parliament before it can be enacted.
When the proposal is initially published, my officials submit the proposal along with an explanatory note to the committee. I or my officials are happy to meet with the committee at any time to discuss any aspect of a proposal.
In general, I feel that we work well at European level. We have an excellent reputation in that particular arena. An example of this is on CAP reform. For up to two years prior to the legal proposals emerging from the Commission, we have been active lobbying the Commission and seeking allies in other member states and in the Parliament. The formal negotiations have now begun. In fact, last week's session in the Council in Luxembourg was the first formal session on the new CAP. They will continue at least until 2013. It is possible that the Irish Presidency in the first half of 2013 will have a key role in this process. We will continue to commit a huge amount of effort to influencing the shape of the final agreement, both through the formal negotiation and through informal contacts. We very much welcome the enhanced role the committee will play in this process, and we will be happy to support it in any way we can.
There are a number of points to be made with regard to the Common Agricultural Policy and the Common Fisheries Policy, but I will not go into them in great detail. We have set out the key points with regard to the CAP as bullet points in our written presentation. With regard to fisheries, we have spelled out the key issues in greater textual detail. I know these were discussed at length with the Ministers when they were here. We will be delighted to provide any details that are required.
The last issue is that of payments. The Department is very conscious of the importance of getting direct payments processed and paid to farmers as quickly as possible, and we devote considerable resources to this task. Members will have seen recent media reports of severe disallowances suffered by some member states for failing to have proper mapping and measuring systems. This underlines the importance of receiving accurate material from the participating farmers in the first instance. An important publication that the committee probably receives, AgriFacts, recently gave a fairly graphic list of the disallowances, as they are called, that were suffered by other member states, mostly due to this. Thankfully, on that occasion we did not feature. However, it was noticeable that Sweden, for example, appeared right at the top, with a disallowance of €76 million based specifically on mapping issues.
The single farm payments began issuing directly to farmers' bank accounts on Monday, 17 October. These advance payments, worth in excess of €487 million, are initially issuing to almost 101,000 farmers whose applications are cleared for payment at this stage. Further ongoing payments will continue to issue as individual cases are cleared. The payments are issuing six weeks ahead of the payment date laid down in the governing EU regulations, directly as a result of the case the Minister made to the Commissioner earlier this year to allow earlier payment. This is the earliest date that could be agreed because it is the start of the EU financial year.
It is important to note that payments will continue to be made under the single farm payment scheme as applications are cleared for payment. We always encourage farmers who have outstanding correspondence with the Department to respond immediately in order that their applications can be cleared. Additional payments will continue to be made up to 1 December, when the 50% balancing payments are scheduled to commence issuing. I am confident that by the year end, the vast bulk of single farm payments will have been paid, with a total value of more than €1.2 billion.
Payments under the disadvantaged areas scheme also continue to issue as cases are confirmed eligible. While DAS payments only started issuing five weeks ago, more than €185 million has already been paid to more than 84,000 farmers, and the necessary arrangements are in place to ensure the remaining payments issue as soon as possible. There are numerous other schemes, all of which are equally important, and we place a high priority on dealing with these efficiently.
On food safety, I will explain the relationship between the Department and the Food Safety Authority of Ireland, whose representatives attended a meeting of the committee recently. The Department operates under a service contract with the FSAI. This arrangement started in 2000 and is subject to audit by the FSAI. The sectors included in the contract - basically, all our product areas - are listed in the written presentation. The Department, along with the Department of Health, is examining legislation to consider how the list can be extended to include animal feed.
The State has invested heavily over the years in food safety controls and infrastructure. The establishment of the FSAI provided an independent, science-based oversight of food safety controls, and this, together with the successful animal disease eradication programmes, our sophisticated animal traceability systems and a sustainable approach to production of food has led to our current position of being able to provide a very high level of reassurance to consumers at home and abroad, which is crucial due to our dependence on exports.
I am sorry that this has taken a little longer than I would have liked. To wrap up, the Department is a very large one with a huge reach and spread of activities. It is deep into a reorganisation that continues to make it more efficient and better adjusted to the demands and the resources available. We regard that reorganisation as an ongoing project and we have a strong reputation for our ability to reform. As well as doing that, we continue to carry out our day-to-day activities, and we have been benchmarked at a very high level against other member states in terms of the way we pay and the standards we maintain.
The challenges ahead include driving through the recommendations of Food Harvest 2020, which is a key element of our national recovery. We also need to protect what we already have under the CAP and the CFP and adapt these policies in a positive way for the sustainable development of our agrifood and fisheries sectors. We need to maintain our international reputation for high standards of food safety and similar standards for animal health and welfare. That is a sine qua non for an exporting country such as Ireland. We have invested in that and we cannot take chances with it. We are fully engaged in the process of making difficult adjustments in our costs and spending, as is every other Department, and that process continues.
