Seanad Éireann debate -
Thursday, 16 Nov 2006

Vol. 185 No. 5

Partnership Agreement with the Farming Pillar: Statements.

Minister for Agriculture and Food (Mary Coughlan)

Tá lúcháir orm a bheith anseo idTithe an Oireachtais le cur os comhair na Seanadóirí cad atá ceadaithe anois. Tá súil agam go mbeidh díospóireacht bhreá againn.

I thank the Cathaoirleach for the invitation to address this House on the agricultural chapter of the social partnership agreement, which I am happy to say the farming pillar recently endorsed.

We often hear talk of the demise of farming or that agrifood is felt to be waning as an industry. I fail to see how that sector, of which farming is such a vital component, delivering 9% of gross domestic product, GDP, and employing, directly and indirectly, almost 9% of the labour force, could be seen in such a light. The lesson to be learnt from Irish economic expansion and growth in the last decade is that the health of the economy is not measured by the strength of one industry or segment. It is that mix and balance, with no over-reliance on one area or product, that has allowed our country to continue to grow and develop and to succeed even in more difficult economic circumstances. Farming and food have a vital role to play in that regard, not only economically but also in a social context. Agriculture will always have a special place in the life of this country.

An important factor in the growth of the economy and in our development as a society has been the existence of the partnership process. Together, the various pillars of society have, since 1987, worked by consensus to form a series of focused and strategic agreements contributing to lower taxes, the slashing of the unemployment rate, a sharp reduction in inflation and interest rates, and the achievement of sectoral harmony. The farming pillar has been there from the beginning and has contributed positively. The partnership process and the economic stability it has fostered have in turn served farming well.

I acknowledge the contribution of the farm organisations to farming and to the wider nation. These organisations give the farming community a voice and a presence in national life, and have shown themselves to be both resilient and resourceful in protecting the interests of farmers, the agriculture sector and rural areas. They have also been able, through the partnership process, to look beyond their own interests in taking a wider view of the economy and society.

The partnership process is designed as a framework where the well-being of the country can be reviewed and where common goals can be agreed. The stability of the overall economy is as important to farming as any other sector. I know that farmers have the same interest in, for example, the health services, education and infrastructure as other economic groups. The partnership process provides us with a mechanism that avoids a return to the days where each sectional group fought alone in an adversarial system under which pay increases were secured without regard for their inflationary consequences. The past 19 years have shown that a consensual system, where regard is paid to the national good, competitiveness, social inclusion and the maximum level of employment, has resulted in gains to all sectors of society.

The new social partnership agreement, Towards 2016, is the most ambitious and complex yet and has taken a considerable time to negotiate. This is not surprising. Each of the social partnership agreements has had a particular focus and has contained significant innovations. In this respect, Towards 2016 develops a framework to address key social challenges that individuals face at each stage of life. This means a greater focus on the needs of children, young adults, people of working age, older people and people with disabilities. To allow for long-term policies to be put in place, Towards 2016 has a unique ten-year framework.

The shared overall goal of Towards 2016 is to realise its objectives by enhancing the complementary relationship between social and economic prosperity and by developing a vibrant, knowledge-based economy where economic development is environmentally sustainable and internationally competitive. The major economic, infrastructural, social and environmental issues require a longer-term focus and a coherent and joined-up policy approach.

The approach to which I refer is very much in line with the commitments laid out in the agriculture chapter of Towards 2016, where the overriding objective is the sustainable development of a competitive farming and consumer focused agrifood business that contributes to a vibrant rural economy and society. A large range of actions are set out, including enhancement of the sector's research and development capacity, broadening agricultural activity in the area of alternative enterprises, the production of public goods and the promotion of structural change. All these are linked to the overarching need for the development of competitive capacity.

One of the key elements of the agreement of the agricultural element of the partnership agreement has been the Government's willingness to provide a major increase in funding for agriculture from Exchequer resources. This has not only made up for the inevitable decline in EU funding due to Ireland's enormous economic performance, but has also provided the finance for the very significant enhancement of some major schemes which support the development of the sector.

National Exchequer funding for the farm schemes under the rural development programme will be €4.7 billion for the period 2007 to 2013. To put the figure in perspective, this is an increase of 135% from the €2 billion in Exchequer funds provided for the same schemes in the current round, 2000 to 2006. The total funding for the agricultural measures is €6.8 billion, including €2.1 billion from the EU and modulation.

The new draft rural development programme reflects the commitments contained in the partnership agreement and will cover both agricultural and non-agricultural measures. In line with the EU rural development framework, the measures in the programme will address competitiveness and sustainability.

The main features and expected outcomes are that the numbers in the rural environment protection scheme are expected to increase from 54,500 to 64,000 and the average payment to each eligible participant will increase from €6,170 in 2006 to €7,220 in 2007, a rise of 17%. The average compensatory allowance payment will increase from €2,297 — excluding modulation — to €2,481 and 102,000 applicants will benefit from this 8% increase. The average forestry premium will rise from €332 per hectare to €382, an increase of 15%. A total of €250 million is being allocated for a new measure to encourage quality breeding and high welfare standards in the suckler herd. This will help to ensure high quality input for the beef industry and enhance marketability on the increasingly discerning European market. There will be enhanced support for the structural reform measures, namely, early retirement and installation aid. In the case of early retirement, the maximum pension will rise to €15,000 per annum while the installation aid will also be at this level, an increase of 55%. These measures will assist improvement in the age structure and size of farms, which will assist considerably in restructuring the agricultural sector to allow our youngest, most ambitious and productive farmers to increase their levels of efficiency and output. The changes to the early retirement scheme will benefit both current and future participants. As regards the last point, more than 2,800 participants in the current scheme will receive an average increase of 12% or €1,485 per annum. Under the new scheme, the expected average payment will be €13,500 as against €12,733 now.

On-farm investment support will cover energy crops, general farm modernisation and specific areas such as dairy hygiene and horticulture. Such support will assist investments aimed at market orientation and competitiveness.

Public consultation and a strategic environmental assessment are in progress on the proposed programme. The aim is to have it with the European Commission before the end of the year.

The question that is often asked is how this funding will link with the goals and aims of agricultural policy. I recall not so long ago, at the launch of the agri-vision action plan, that people asked from where the money to implement the plan would come. The short and simple answer is that interlinking of the action plan with the commitments in the partnership agreement and the massive funding provided for the rural development plan means that the Government will deliver on the actions set out in the agri-vision plan.

The commitments on the agrifood sector set out in the partnership agreement are part of the Government's positive vision for the future of the sector. The vision underlines the fact that delivering safe, high quality, nutritious food, produced in a sustainable manner, to well-informed consumers in high-value markets is the optimum road for the future of the Irish food industry and, therefore, for our farmers.

The agri-vision plan states that we must focus on three key points, namely, competitiveness, innovation and consumer-focused marketing. I emphasise competitiveness because the agrifood sector exports the majority of that which it produces. Competitiveness is not optional for such an export-oriented sector. It is the primary objective on which this plan is based.

Closely related to that is the importance of innovation. The modern food industry is a highly sophisticated knowledge-based sector in which technological progress and product innovation is unremitting. Crucially, meeting the consumer’s expectations on product, presentation and price is critical to continuing success.

Our vision for success, as articulated in the agri-vision action plan, is, therefore, focused on the objective of ensuring that the Irish agrifood sector compares with the best in the EU and in the world in terms of knowledge base, competitiveness, innovation and marketing. It is very important that this same vision should be clearly reflected in the partnership agreement, underlining the commitment of all sections of the industry to this forward looking agenda.

A major purpose of this approach is to respond to the changed agenda for agriculture brought about by an altered EU policy environment. The need for market responsiveness is now top of the agenda, with an increased emphasis on competitiveness and innovation. However, the plan and the partnership agreement also set out the specific policies needed to move further away from the simple production-led system of the past to one which has an increasingly competitive, market-driven approach and which respects the need for sustainability. I will now outline some examples of the type of policies and schemes that will help encourage the drive for greater levels of competitiveness.

A new animal welfare, recording and breeding scheme for suckler herds is included in the recently published draft rural development programme, which will be submitted for EU approval later this year. The objective of this scheme is to encourage and underpin the adoption of high standards of animal welfare and to improve the quality of breeding cattle in our beef sector. A budget of €250 million has been allocated to the scheme with annual payments of €80 per cow, payable over five years, available to suckler cow farmers who undertake to comply with the animal welfare measures set out.

A capital investment support scheme was also announced last week, directed towards improving efficiency and competitiveness in both the beef and sheepmeat primary processing sectors. The support package, amounting to €50 million, should trigger overall investment of some €120 million. Enterprise Ireland will manage the scheme and evaluate the suitability of investment projects submitted for grant assistance. Specific details will be announced shortly. This is additional to the €300 million dairy processing capital investment programme which is referred to in the partnership agreement, and to which I will return presently.

Limitations in the ability of the milk quota restructuring scheme to meet the demands of active milk producers around the country led me to announce, in March of this year, my intention to change the means through which milk quota is transferred. Following a six-month consultation process with the farm organisations, including discussions in partnership, I announced details of the new milk quota trading scheme which will operate for the 2007-08 milk quota year.

The new trading scheme is composed of two elements — a priority pool and a market pool. The priority pool, comprising 30% of the quota offered for sale, will be made available to priority categories — successors, lost leases, young farmers and category 1 producers with quota of up to 350,000 litres — at a maximum price of 12 cent per litre. The market pool, through which the remaining 70% of quota will be traded, will run as an exchange. Market cooling measures are an important feature of the new scheme. Two schemes will be run in the first year, the first as early as possible in January and the second in March 2007. A review of all aspects of the scheme, involving all stakeholders, will be carried out after each exchange.

Surprisingly, some sellers appear to believe their freedom to trade quota is being restricted as a result of this new trading scheme. The new system will afford buyers and sellers far greater freedom to determine the volume and price of quota they wish to buy and sell than was the case under the old milk quota restructuring scheme. Rather than being restricted, sellers are being provided with the opportunity to obtain a better price for their quota than would have been the case had I continued to implement the milk quota restructuring scheme for a further year. Part of the rationale of the scheme was to encourage those wishing to exit the sector for personal or family reasons to do so while securing a market return rather than the fixed price available in the old scheme.

The objective of the new dairy processing investment fund is to support capital investment related to the processing of dairy products. It is stimulating the necessary investment in the Irish dairy sector to ensure the long-term competitiveness and viability of the dairy industry in Ireland. The fund, consisting of some €300 million in the next three years, will include €100 million of Government grant assistance and is dedicated exclusively to investment in dairy processing. I have done so because I believe fundamentally that this sector needs a confidence boost at this time, which is a period of great adjustment and an appropriate time for the Government to extend its support in the most pragmatic and tangible way. The closing date for applications to the fund is 23 November next. I hope the dairy industry will take the opportunities presented by the fund in an innovative and modern way. We must move together in building a new future for the dairy processing industry.

Efficiency and innovation, driven by sound scientific knowledge, will be essential to enable the food industry to meet future consumer demands in an increasingly competitive global market. With this in mind, the Department and related State agencies are investing considerable resources in agriculture and food research with a view to considerably enhancing our research and development capability.

I have referred to just a few of the measures contained in the agriculture chapter of the partnership agreement, which is a very comprehensive document and includes actions on all the main farming sectors, as well as on the development of the food industry. It also includes important measures on animal health, including a 50% reduction in disease levies, and includes commitments to continuing high levels of service to farmers by the Department. The strong focus on the future in the document is further underlined in the sections on "renewable energy", "enhancing the environment" and "measures to encourage structural change".

People have asked about the continuing relevance of social partnership and what it actually achieves. We should reflect on the words of the Taoiseach when he stated:

Social partnership has helped to maintain a strategic focus on key national priorities, and has created and sustained the conditions for remarkable employment growth, fiscal stability, restructuring of the economy to respond to new challenges and opportunities, a dramatic improvement in living standards through both lower taxes and lower inflation, and a culture of dialogue, which has served the social partners, but more importantly, the people of this country very well.

This is what partnership is about.

The agricultural undertakings set out in partnership are clear evidence of the Government's commitment to farmers and rural life in Ireland. The unprecedented increase in Exchequer funding has the dual aim of improving the levels of competitiveness in the agriculture, food and forestry sectors and helping to ensure increasing levels of respect and enhancement for the environment. It is fully in line with the EU rural development framework and is consistent with the Government's vision for the future of farming and the agri-food sector in Ireland, as set out in the Agri Vision 2015 action plan. The huge Exchequer commitment contained in the partnership agreement is concrete recognition of the need to fully resource and implement the action points set out in that plan. That should be acknowledged by all.

Mr. Coonan

I welcome the Minister to the House and welcome the opportunity to debate the farm partnership package. While I welcome elements of the package, my complaint is that it does not go far enough. The package reminds me of the "Off the Rails" programme. If the programme makers picked out a fellow like me on Grafton Street, dolled me up, gave me a makeover and then put me out in weather conditions such as we experienced yesterday, after half an hour one would begin to see the real package emerge.

Mary Coughlan

The Senator would still look gorgeous.

Mr. Coonan

The farm package is well produced, polished and presented and will run over a lifetime of seven years. However, when one divides the package among the many thousands of farmers who are hoping to survive as a result of it, the Minister will be seen to be talking in small monetary terms.

I agree with the Minister that farming and food have a vital role to play, not only economically but also in a social context. Farming is the lifeblood of rural Ireland. We are all obliged to do our best to keep rural Ireland alive and to ensure that the agricultural industry prospers and flourishes. Numerous reforms are continually challenging the agricultural sector — I refer to a Teagasc report which states that the reform of the WTO means Irish agricultural income will fall by in excess of €200 million per annum. When that figure is multiplied by seven years, the Minister's figures of billions of euro become much smaller. We must remember that the modulation fund is provided by farmers themselves. They earned it and it is part of the agreement to which they signed up.

Elements of the package are undoubtedly welcome. I appeal to the Minister to improve the package and I intend to suggest ways by which she can achieve this. Why is the package not index linked? The Minister has not dealt with the issue of inflation in any way. When inflation is taken into account, the grant increases are minimal in key farm schemes such as REPS, the installation aid for the elderly scheme and the farm retirement scheme. The crisis in farming is worse than ever. In 2005, according to Teagasc, average farm income was €15,557, taking into account the impact of the initial single farm payment, which had an effect on incomes. According to Teagasc, in 1995 the average industrial wage was €30,000 while the average farming wage was half that amount. Government stealth taxes that year amounted to €4,000 while input costs for farmers amounted to approximately €15,000, meaning farmers lost almost €4,000.

Worse still, the figures for 2004 are shocking. The average income for farmers that year was €6,500. The harsh reality is that farmers' income will be wiped out by record increases in inflation between 2006 and 2013 because the Minister has failed to index agricultural schemes. The Ulster Bank predicts inflation of approximately 4% this year compared with 2.5% last year, which is the highest rate since 2002. The partnership deal contains no mechanism to counter the effect of prolonged and increased inflation. On the basis of my dealings with farmers, banks and co-operatives, debt has built up secretly within the farming community. Further increases in interest rates and production costs will have a serious impact on farmers. Charges for services essential to the farming community have increased significantly. I refer to the increases in the cost of electricity, water, interest rates and health insurance.

I am disappointed the Minister failed to address the issue of farm consolidation in this package, given there is an urgent need to attract young people into farming. Recent figures issued by the Central Statistics Office confirm that, on average, our farmers are the oldest in Europe, with only 13% under the age of 35. While the increase in installation aid is welcome, it is not enough because it falls well short of the money being spent by the State on creating jobs sponsored by IDA Ireland.

A level playing pitch should be provided. Young persons must be encouraged to stay in farming to prevent rural depopulation, maintain jobs and increase standards. The Government and the Minister have failed miserably to address land purchases by farmers, especially where they must consolidate their holdings as a result of CPOs. They must pay 20% capital gains tax on top of 9% stamp duty and that is not fair. Farmers lose almost one-third of the cost of the land in tax. I have no problem with CGT but it is a problem for farmers who are forced to sell their land. It is particularly crippling for young farmers who wish to consolidate their holdings and the Minister has continued to ignore this issue.

The drift from the land is proceeding at an alarming rate. In 1994, 141,000 people were employed in the agriculture industry, which represented 12% of the workforce, but by 2004 this number had fallen to 113,000 or 6% of the workforce. That does not include beet growers, whom the Minister did not mention. Normally, at this time of the year, they look forward to the disposal of their crop and collecting their cash but this year they will have no cash, no crop and no compensation.

The 3,800 growers have been treated disgracefully by the Government. The assistant director of Teagasc states in today's edition of The Irish Times that, “Many serious farmers, along with career guidance teachers, are discouraging their sons and daughters from planning a full-time career in farming and encouraging them to pursue a non-agricultural qualification”. This is very serious.

The Minister takes pride in the early retirement scheme but it is also not index linked. She stated farmers receive approximately €15,000 per annum. The Minister for Finance stated he will make provision for an increase of up to €250 in the old age pension in the budget but even if the pension only exceeds €200 per week following the increase, the proposed increase by the Minister for Agriculture and Food under the farm retirement scheme will only match that and, in the years ahead, it will fall behind, again because it is not index linked. This major problem with the farm retirement scheme has been articulated over a number of years but it has fallen on deaf ears.

The Minister stated she will deliver on the REPS action plan but she did not deliver under REPS 3. The Government failed to reach its target of 70,000 participants under REPS 3 with only 48,000 farmers taking the scheme up. The scheme has presented many problems, for example, how it affects those entering milk partnerships. The milk quota system broke down last March when the Minister dangled a carrot of big money in front of the farming community. This had a negative effect, as farmers held out, but there is no guarantee her new system will work.

Turning to the nitrates directive, many farmers face significant capital costs because of the cross compliance requirements under the directive. The partnership package does not go far enough. When local authorities undertook various sewerage schemes, they received at least 75% of the cost in grants and, in many cases, they received 100% funding. Farmers should be given similar grants. They are being forced to bury money in concrete but where will they generate repayment capacity?

Farming income is declining at an alarming rate and hidden debt is a major problem. In addition, wintering systems have not been approved under the Minister's programme. For example, farmers in north Tipperary cannot secure planning permission for such systems because the Department of the Environment, Heritage and Local Government has not laid down adequate guidelines to enable the planners to grant permission. A recent conference outlined how effective and worthwhile these systems can be.

The aim should be to ensure a farmer's income matches the average industrial wage but, unfortunately, the current package means farmers' incomes will continue to decline. Under the farm charter, the Minister made a commitment that no notice inspections would not take place and farmers would receive a minimum of 14 days notice.

Mary Coughlan

I did not. The Senator should have the read the charter. I will give him a copy.

Mr. Coonan

That is what I read.

Mary Coughlan

Departmental officials attended a meeting of the Oireachtas Joint Committee on Agriculture and Food recently and they agreed this should not happen. It is grossly unfair to the farming community and such inspections would not take place in any other walk of life. Recently a farmer attended a hospital in Dublin for an appointment, for which he had to wait more than 12 months, and while he was in the waiting room, he received a telephone call from an inspector who said he would be at his farm within half an hour. Is that good enough?

The Minister made little comment on the sheep sector. Has she heard of a farmer called Tom Parlon? He brought ewes into the office occupied by the Minister a number of years ago. However, he recently decided to get out of the sheep business.

Mr. Moylan

He is expanding his suckler herd.

Mr. Coonan

If that does not ring alarm bells among those in the sheep sector——

Mr. Moylan

The Senator should read the whole document.

Mary Coughlan

It is all about choice.

Mr. Coonan

Unfortunately, many farmers are left without choices.

Mary Coughlan

They had every choice in June.

Mr. Coonan

They do not have a choice anymore.

Over the years, the Government has missed out on a glorious opportunity in terms of bio-fuels. We could have been leaders in the field, but we are playing catch-up. Imagine an incentive of €18 per acre for the production of bio-fuels.

Mary Coughlan

Some €45.

Mr. Coonan

That is per hectare, which works out at approximately €18 per acre. While the beet industry was being decimated in recent years, we had an opportunity to promote the production of bio-fuels and to help tillage farmers, but the Government dithered and has displayed a lack of confidence in the system.

Many elements in the package are welcome, but it needs fine tuning and a more positive approach and presentation, namely, it must be examined from the farmers' point of view. When the farming partners sat down with the Minister to negotiate the package, the deal succeeded in driving a wedge between farming organisations. Those who stayed in the talks are disappointed with what they got. It seems that to get most of what one wanted, the best tactic would have been to get up and leave. From a farming point of view, this is negative.

Of everything outlined in the package, the most welcome element is the increase in the suckler herd allocation, but the matter of suckler herds creates another difficulty for farmers that the Minister undertook to address, that is, bureaucratic red tape. The amount of documentation involved has driven farmers mad. Senator Moylan is laughing, but he agrees with me in his heart. Similar to a Deputy, a farmer needs not just a secretary, but also a researcher because of this form-filling bureaucracy. For the sake of farmers and to keep them in rural Ireland, the Minister must deal with some of these issues and, by taking on board our suggestions, make this a great package.

Dr. Mansergh

I welcome the Minister and her report. One County Tipperary Senator succeeds another, but while I appreciate that Senator Coonan was playing devil's advocate, it should be pointed out that the farming organisations backed the package. I accept they did not do so easily, but they are satisfied with what they have been given.

I congratulate the Minister on her widely praised stewardship of the Department of Agriculture and Food. Since 1997 and previous periods when the Government parties were in office, there has been a consistently supportive framework for farmers. They are confident that the Government is basically on their side and will cope with problems that arise, some of which are unforeseen.

The key backdrop to this situation is the European funding until 2013, negotiated in 2003. The World Trade Organisation negotiations were of concern, particularly in light of the distrust of EU Commissioner Mandelson, given the well known hostility of Britain and its Labour Party to the agricultural sector. That battle was fought and won by the Minister and her European allies and the issue will not return to the agenda in the near future. The notion that European agriculture should be sacrificed for the sake of clerical jobs in London was offensive.

The Minister outlined the benefits of social partnership. While one organisation was involved in 1987, others have since come on board. Previously, the stark divisions between trade unions and farming organisations were not to the benefit or credit of either grouping. The Minister stated that farmers "have also been able, through the partnership process, to look beyond their own interests in taking a wider view of the economy and society". The same could be said of trade unionists, employers and the voluntary sector.

Apart from long-term plans and commitments, partnership is a way of working through difficult problems. An obvious example this year was the nitrates directive, a matter that has reached a satisfactory conclusion. This week, the required derogation was confirmed. This is not to say that there will be no other problems to work through, particularly in respect of pig farmers. In the Minister's speech, she mentioned the restructuring of milk quotas and how the matter will be worked through with farming organisations.

The farming, agrifood and agricultural services sectors are important to our economy and large tracts of the country outside the main cities. While its relevant importance may have declined due to the strong expansion of other sectors of the economy, this does not imply an absolute decline. If one examines the statistics, there is no evidence of such.

I am sometimes asked on doorsteps about whether farmers still have political clout, my answer to which is an emphatic "Yes". Farmers have lobbying organisations that are second to none, a fact brought home to me when I was a member of the delegation to the European Council in Berlin in 1999. Only one organisation was present in force, namely, the Irish Farmers' Association. It is not entirely coincidental that the issue on which the Taoiseach battled through the night was funding for farming until 2006. The trade unions, employers and the Construction Industry Federation were not present. If we had slipped and lost €5 billion in Structural and Cohesion Funds, would anyone have noticed? The farmers would have noticed if we had dropped that amount and there would have been a huge row.

In connection with the sometimes discussed topic of Seanad reform, I hope that the agricultural panel will continue to exist with its nominating bodies after any reshaping. It is part of the legitimate influence over the political system exercised by the farming sector.

The single farm payment is fixed, as Senator Coonan pointed out. Therefore, ways and means had to be found to further boost farm incomes and they are in this package. Inflation, in the low single figures, is a fraction of what it used to be. Once upon a time farmers complained about the enormous interest rates they had to pay, 10% to 14%. Thanks to being in the euro zone, even interest rate rises will leave rates very low.

The increase in funding which the Minister is providing is very impressive. One of the differences between now and ten or 20 years ago is that in the 1970s and 1980s, we were almost entirely dependent on European funding for farming and the Exchequer could not afford to do very much. Now, because of the good management of the economy and social partnership the Exchequer is able to provide substantial funding additional to what comes from Europe. There is no question of our not availing of European schemes because we cannot afford to increase our input.

There are some interesting and exciting schemes, such as REPS 4, which is now being discussed. I am very attracted by the idea of a provision of €25,000 to conserve old farm buildings, of which there are some very attractive examples around the country. They are not commercial or economically viable but add to the appearance of the countryside and are environmentally sustainable.

Everything nowadays, not just farming and industry but household waste, must be done on an environmentally sustainable basis. REPS is a very good way of boosting farm income, providing money for investment and engendering acceptable environmental standards. I plead with the Minister to do what she can to facilitate earth and slurry lagoons because they are economically beneficial from the point of view of farming and, in most parts of the country if not all, are environmentally sustainable. The suckler cow premium is very welcome and I look forward to the further enhancement of the biomass sector which is both energy efficient and environmentally friendly and also has relevance for agriculture.

The Minister's predecessor, Deputy Walsh, has just become chairman of Horse Racing Ireland and that is a very important industry. I hope the budget will clarify what will replace the stallion fee exemption.

Senator Coonan chose to mention the 2004 farm income figures rather than those for 2005.

Mr. Coonan

On a point of information, I did mention the 2005 farm incomes.

An Leas-Chathaoirleach

That is not a point of information.

Dr. Mansergh

He did not do so with sufficient emphasis that it caught my attention. The figure arose for a one-off reason.

Mr. Coonan

Does Senator Mansergh disagree with the 2004 figures? His party was in power in both years.

Dr. Mansergh

Senator Coonan has made his point. I will make mine now. I accept the figures but there was a one-off reason. Beef prices are good this autumn.

There is a problem with relative income and the fact that larger scale production is necessary to provide an income comparable to other sectors. However, a distinction must be made between farm income and farm household income. There are relatively few younger farmers whose spouses do not also work and provide income. There is nothing wrong with small and medium-sized farmers supplementing their income by taking up part-time work. Indeed, it may help to make their farms more viable. I agree that rollover relief for capital gains tax should be considered in the budget, both for consolidation and road projects. I would also like the social welfare system be more inclusive from the point of view of farmers.

When farmers come to decide which way they will vote next year they will look at worrying policies such the Green Party's total opposition to live exports. Deputy Boyle suggested an individual tax on carbon emissions for every household. I am sure that will be greeted with delight by the electorate. The Labour Party continues to attack the idea of third level grants for farmers by taking into account land, an idea which has been rejected firmly by the Minister for Education and Science, Deputy Hanafin.

Mr. Coonan

Do not misquote members of the Labour Party.

Dr. Mansergh

I do not misquote them. I am a member of the Joint Committee on Finance and the Public Service and listen to Deputy Burton, the Labour Party finance spokesperson, saying such things.

Mr. Coonan

She does not say that. The Senator should not indulge in scaremongering.

Dr. Mansergh

Senator Coonan is not the Labour Party spokesperson on finance.

Mr. J. Phelan

I am also a member of the Joint Committee on Finance and the Public Service.

Dr. Mansergh

I appreciate that the proposals of the Senators' potential partners might cause distress and that is why they try to shout me down.

Mr. Coonan

Do not worry about our partners. The Senator should worry about his own if he can find any.

Dr. Mansergh

If farmers want a supportive framework then this Government, and this partnership deal, provides it for them.

Mr. J. Phelan

If the farmers of Ireland want support they will want Fianna Fáil and the Progressive Democrats out of Government, and Fine Gael and the Labour Party back in Government.

Dr. Mansergh

That is not what I find.

Mr. J. Phelan

The last Government of which Fine Gael and the Labour Party were members was very supportive of agriculture, which is acknowledged by virtually everyone involved in the industry. The former Deputy, Mr. Ivan Yates, was the best Minister for Agriculture there has been in a number of years. Notwithstanding that, the current Minister is doing a reasonable job and I am pleased she is present today. She is as good a Minister for Agriculture as Fianna Fáil has ever produced, which is about as high a compliment as I am able to pay her.

I am pleased the Minister is present to discuss the national agreement, in particular the emphasis on the farming pillar. We debated a Private Members' motion at the time the other pillars to the national agreement had been agreed. I remember making the point that it was premature to debate the national agreement when the agriculture end had not been finalised. Nevertheless, we are present today to discuss the agreement that has been reached. There is much good news in the agreement but a number of outstanding areas where serious problems for farmers still reside. The reason for the delay was the fact that a number of organisations left the talks because of the nitrates directive and an attempt, not so much by the Minister for Agriculture and Food herself but her colleague, the Minister for the Environment, Heritage and Local Government, Deputy Roche, to bully farmers into a particular course of action. That situation is not as fraught as it was when the farming organisations walked out.

I do not accept Senator Mansergh assertion that the problems with the nitrates directive have been resolved. The deadline for slurry-spreading under the directive was 16 October and the farmers spent that week spreading slurry. It was a dreadful week for that activity but in the following two weeks there were perfect weather conditions. The problems forecast by everyone who said one could not farm by dates but only by following weather and ground conditions came to pass. Far from being sorted, the problems still exist.

Senator Coonan and others mentioned the failure of the agreement to take account of inflation. They are correct; there is no index linking. Senator Mansergh and the Minister referred to the farm retirement scheme. I wrote to the Minister about this recently. A number of people who joined that scheme several years now find themselves with severely reduced pensions in real terms due to the huge increase in the cost of living in the intervening years. These people will not get any succour from this agreement, in terms of their farm retirement pension being index linked in future. That is unacceptable, particularly at a time when the Government takes every opportunity to crow about how much it is putting into pensions.

This is a significant body of people who entered in good faith into an agreement a number of years ago to retire. Everybody involved in agriculture wanted such an agreement to be put in place. A large number of older people were involved in farming and the objective was to get more young people involved. However, these retired farmers have been put at a severe disadvantage because their pensions are not index linked.

Other speakers have mentioned the issue of land purchase and farm consolidation. It is interesting that the changes announced in the budget two years ago have been a spectacular failure. Only two farmers in the first year and 12 last year took advantage of the changes announced by the Minister for Finance, Deputy Cowen. Those changes should be loosened up in the forthcoming budget so more people who need to consolidate their holdings will be able to avail of that scheme. A total of 14 farmers taking it up over the course of two years is most unsatisfactory.

Reference has been made to the compulsory purchase of land and the issue of capital gains tax. This affects my constituency as the Dublin to Waterford road goes through Carlow and Kilkenny and the Cork to Dublin route goes through part of the constituency. Effectively, if a farmer is forced to sell ten acres of land, the Government is robbing two acres of it. The farmer is an unwilling vendor but must pay 20% of whatever he receives in capital gains tax. That is the real effect of the policy. In addition there is 9% stamp duty on it.

The Minister of State at the Department of Finance was the leader of one of the farming organisations at the time the agreement on roll-over relief was reached. It is disgraceful that, as soon as he got his feet under the table in the Department of Finance, in the next budget the roll-over relief scheme was dropped. I have stated in the debates on every budget since then and in every discussion the House has had on agriculture that a new and improved version of the roll-over relief scheme must be introduced. These major roads are being built throughout the country. Farmers who are determined to stay in the industry and want a future in farming will be interested in purchasing land that is put up for sale. However, because a huge number of farmers are affected by the building of the new roads, the cost of land that is put up for sale in their area will go through the roof. It is necessary to re-examine roll-over relief, particularly with regard to people who are unwilling vendors of land for public infrastructure.

Dairy quota reform has also been raised in this debate. The Government has made a mess of this issue. In fact, it was the Minister's initial, ill-informed rumblings about quota when she was appointed that led to the cost of quota, particularly in my constituency, rising dramatically. Many people spent a great deal of money on milk quota as a result. The Minister and Senator Mansergh referred to working through the problems with the farming organisations. Perhaps that will happen but a considerable number of people have been burnt due to the bungling on this issue. In fairness, this bungling was not just by the Minister but also by her predecessor. Nothing has yet been resolved on this issue.

I agree with Senator Mansergh with regard to stallion fees. There is a need for the introduction of a new scheme to ensure the importance and value of the horse breeding industry are protected into the future. I would support such a measure.

The sugar industry should be mentioned. There is little solace in this agreement for farmers who were affected by the effective wipe-out of this farming sector, something that has never previously happened in this country. The Government and, more significantly, Greencore had a part to play in the downfall of the industry. The amount of the compensation package for producers is not sufficient. Greencore is also unhappy about the share it received but it will reap a rich dividend in terms of the value of the sites that were effectively handed over to it by the State when the sugar industry was privatised.

I am not particularly worried about Greencore. However, the value of the compensation awarded to the producers is not enough. It is also unacceptable that the producers' compensation will be taxed and I urge the Minister to do something about that. The initial allocation of compensation to the growers should have been far more significant.

Mr. Scanlon

I welcome the ratification of the new social partnership agreement, Towards 2016, by the farming organisations represented in the social partnership process. We should acknowledge the work done on this by the Minister and by farming organisations such as the IFA, the ICMSA, ICOS and Macra na Feirme. The outcome of several months of negotiations is a package of measures which aims to ensure a strong, viable and competitive agriculture sector in Ireland in the future. This is particularly important in the context of a ten year social partnership framework.

The conclusion of Towards 2016 once again demonstrates the value of the partnership process in securing consensus. While it was inevitable in the negotiations that not every demand would be met, the package of measures agreed on shows that participation in social partnership is the best way to secure an outcome that takes account of everybody's interests. A few days ago the Taoiseach spoke about the benefits of social partnership. He described how 400,000 working days were lost in 1990 due to strikes and disputes in this country in a workforce of 1 million. Last year, in a workforce of over 2 million, 27,000 working days were lost as a result of disputes. That demonstrates the benefit of social partnership and what it has done for this country.

The agriculture chapter of Towards 2016 envisages building on the Government's AgriVision 2015 plan for the sector. Recognising the significant challenges currently facing the sector, it aims to secure the sustainable development of a competitive farming and consumer focused agri-food sector which contributes to a vibrant rural economy and society. In this regard, it contains significant commitments regarding the next phase of the agricultural elements of the rural development programme.

I welcome the announcement of a package of measures worth €6.8 billion for farmers for the period 2007-13. These measures relate to the agricultural elements of the rural development programme, which has been central to the partnership negotiations on agriculture over the past few months. The Minister set out the final position of the Government on the funding of these measures at a meeting with the four social partner farming organisations. Funding for the rural development proposals involves a major commitment on the part of the Government. Of the €6.8 billion, Exchequer funding for the farming measures in the next seven years will be €4.7 billion. That is a substantial contribution. Compared with the €2 billion in the current round, it equates to a 135% increase. The proposals will also attract €2.1 billion from European Union and modulation funding.

The major elements of these proposals include a 17% increase in payments under the rural environmental protection scheme, which will be very beneficial. The announcement on the nitrates directive in the past few days means many more farmers will be able to avail of REPS, which is to be welcomed. An 8% increase in disadvantaged area scheme payments will benefit 100,000 farmers. There will be a 15% increase in forestry premium rates. A 55% increase in installation aid rates brings that figure to €15,000 a year but, as we said last night, young farmers who want to qualify for the farm pollution grant have to apply before the end of this year. If they do it might exclude them from the extra installation aid, which comes on stream after 1 January 2007. The Minister might examine that area. There is also a new scheme for the suckler herd, which is welcome.

The €6.8 billion package is clear evidence of this Government's commitment to farmers and to rural life in Ireland. This unprecedented increase in Exchequer funding has a dual aim. It will assist competitiveness in the agricultural food and forestry sector and it will help to ensure respect and enhancement of the environment. It is fully in line with the EU rural development framework and is fully consistent with its vision for the future of farming and the agri-food sector here as set out in the Agri-Vision 2015 action plan. The additional Exchequer funding is concrete recognition of the pledges set out in that plan. It is important we all work together to ensure that plan gets the requisite EU approval and is implemented early in 2007.

On the beef sector, people often ask about the relevance of farming to this economy but figures I read last night indicate that beef production in the overall Irish economy continues to be extremely valuable, with 2005 exports valued at almost €1.4 billion, or nearly one fifth of total agri-food exports. Total slaughterings to the end of last month are up 100,000 a head, representing an 8% increase on the same period last year. Cattle prices for the period up to the end of October 2006 were up 12% on average relative to the same period in 2005. That is an increase in incomes, which is welcome but also needed.

The growth in exports of beef to EU markets continues with shipments in 2006 expected to reach almost 490,000 tonnes, which builds on the previous record of 450,000 tonnes set last year. That will leave more than 90% of total exports going into the high value EU markets compared to just 50% as recently as 2000.

Live cattle exports for the first ten months were at 220,000, an increase of 43% on the same period last year. I agree with Senator Mansergh's statement that the attitude of the Green Party to live exports is worrying because exporting those cattle is an important issue for farmers, particularly those in the north west who produce these weanlings. We must not let anything happen to that trade and we must support it. I recognise the work done by the Minister to ensure those exporters get all the help they require to export those cattle. What will we do with 250,000 cattle every year over the next seven or eight years if we cannot export them?

On the beef quality assurance scheme, the Government allocated €1.9 million to fund up to 14,000 farm audits this year to add to the 5,000 audits funded by the industry last year. One of the most important aspects is the introduction of a mandatory country of origin labelling on beef in the restaurant and catering sector in July 2006. This represents a major step forward in improving transparency for the consumer.

The Food Safety Authority is in the process of enforcing this important legislation by regulations, which are being drafted, to extend these labelling rules to all meat and it is hoped these can be submitted for EU approval in the near future. That is very important because there is no doubt beef from questionable sources was coming into the country on an increasingly larger scale. I understand the Food Safety Authority is carrying out checks and it is important checks are done. I was told by an official at a meeting of the Oireachtas Joint Committee on Agriculture and Food that a test can now be done on cooked meat to indicate whether it is from Ireland. More work should be done in that regard and restaurant owners and caterers should be told beef can be traced even if it is cooked.

I wish the Minister well and thank her for the job she is doing. There is no doubt farmers are satisfied with the job she is doing on their behalf.

Mr. Moylan

I welcome the Minister, Deputy Coughlan, and her officials to the House. I want to tell her how pleased the farming community is with her as Minister for Agriculture and Food. That has been recognised by all sides of this House. I am of the opinion that many of the farming organisations and farmers did not realise how much the Minister has delivered for them since she came to office. That is genuinely felt by the farming community.

The number of announcements that have been delivered through the post in the past three or four months on improvements the Minister has made for farmers and farming organisations speaks volumes about her work and that of her officials. I am aware the Minster depends on her officials to help her and work with her, and that is welcome.

On grant aid for farmers, in the past I worked with farmers on farm developments throughout the country. They strove to put in place proper housing with very little grant aid. Many of them developed their farms at that time without any grant aid. In some parts of the country the Minister is now giving 70% grant aid and 60% in other parts. From talking to farmers I am aware they are concerned about getting the work done and getting planning permission. I know the Minister has worked extremely hard to help them in every way possible but some problems may require her direct intervention in the coming months.

Animal housing is very important in terms of animal welfare. In the past, many farmers thought they had done a good job in putting up their slatted housing and getting their cattle indoors but they are now in a position to provide rubber matting on those slats for even greater comfort. As one travels the country one can see that farm housing is now on a par or better than what some of the residents of rural Ireland lived in during the 1960s.

I have strong view on slurry storage tanks, which I believe should be covered. Senator Mansergh commented earlier on lagoons but I do not agree with him. In the 1960s and early 1970s, many farmers built similar types of lagoons but in the 1980s and 1990s they covered many of them and provided housing for their stock. They were not a success because unless one takes on a huge cost, there is a risk to underground water sources. I have strong views on that.

There has been much talk about rural development and REPS. Many improvements in farming practice have resulted from REPS. The Minister spoke recently about spending €3 billion on these schemes and a 17% increase in payments, which must be a major encouragement for the 1.8 million farmers from disadvantaged areas involved.

Mr. Coonan

That is 17% of what? The base is too low.

Mr. Moylan

I listened carefully to what the Opposition had to say on the developments that have taken place and Senator Coonan spoke about the Minister not doing enough. I remember well when the previous coalition was in Government, the Minister at the time, Mr. Yates, made promises about what he would deliver and described how hard he fought and how he was on his knees at Dublin Airport. It was discovered afterwards he was somewhere else.

Mr. Coonan

It does not matter where he was, he delivered. The Government has failed to deliver on REPS and the farmers can testify to that.

Acting Chairman (Mr. Cummins)

Senator Moylan, without interruption.

Mr. Moylan

I wish to mention improvements. I recognise the grant aid provided by the Minister for Agriculture and Food and the Minister for the Environment, Heritage and Local Government for the farmers in the Shannon basin area, the callows, who are protecting the corncrake. The Ministers came to an agreement with the IFA on aid for that area which shows we are prepared to protect our environment and wildlife.

We must welcome grant aid for the suckler herd, which encourages proper farming practice and conditions. There may well be some areas on which people disagree, for example, dehorning or debudding of calves. Some farmers say the three-week period is too short and it should be extended to five or six weeks. However, the job must be done within a fixed timeframe.

I also commend the grant aid for the replacement of breeding stock which will encourage farmers to develop proper breeding stock. Many farmers have stock they would like to replace and the grant aid will be welcome. Aid for training is also welcome as training in the farming area must be ongoing.

With regard to dry stock, I hope the Minister will give attention to the sheep sector. There may well be a need for assistance in this area. Unless farmers were very early with their lambs over recent years, their gains were trimmed.

Mr. Coonan

They will go the way of the beet farmer and are next for the chop — not a lamb chop.

Mr. Moylan

I disagree. Some help should be provided.

The Minister mentioned the transport regulations which are welcome. We must have regulations in this area. It is right and proper that farmers should use proper trailers with slurry control tanks and properly weigh loading stock. For too long farmers queued up for marts with inadequate trailers which destroyed streets in our towns and villages. The new transport regulations should work well.

The Minister deserves credit on the nitrates derogation. Not too long ago, people said it would not nor could not happen, but she has delivered on it. The agreement will help and allow more farmers to go into REPS. With regard to slurry spreading, I have sympathy with farmers on the closing date. We mentioned wet weather, but the weather could have stayed wet for longer and farmers could have had full tanks that they could not have spread. This would have left them without the option of taking in extra stock or of keeping their stock indoors. When farmers get used to the new dates, they will make a better effort and contractors will ensure they spread the slurry when the silage is cut. Over the next year or so, farmers should come on side in this regard, although over the first year or two there may be some problems. In the event of a farmer erring by a day or two, the heavy hand should not be used.

I support the retirement scheme. There was a problem with the first retirement scheme introduced because after a few years, it was of little use to farmers. With regard to the farmers who took up that scheme and allowed their sons or daughters to take over the running of their farms, they are now at a stage where their holding is due to transfer to their sons or daughters. It is very important that some tax incentive is put in place to assist in these transfers. I compliment farmers who took the decision to allow their sons or daughters to take over their farms. Great credit is due to them. More farmers will now take this option because of the improved pensions. Land values have gone through the roof and this may lead to some capital gains problems. We should look at this issue carefully where a transfer is being made directly to a son, daughter or relative.

On the issue of the beet growers, they now have the opportunity to go into tillage. Those who sowed corn, barley or wheat this year did well as nothing has been left unused. Prices are high and anybody who went into grain this year could have made good money. I believe the beet farmers will move into this area.

We welcome the improvements in grant aid for agriculture. Farming must be competitive and we must encourage more young farmers into the industry. The production of top quality produce is essential for development and a continued future for farming.

Mr. Daly

I wish to record the appreciation of the farming community in my area for the work the Minister has done since she took up office. I recall occasions we stayed up all night debating agriculture issues in the House because agriculture is such a controversial and involved area that occupies the minds of politicians and farmers. It is strange to see so little attention being paid to the agriculture industry in the Oireachtas now. This is an indication of the success of the Minister and her Department in dealing with farming issues.

The proposals put forward by the Minister, which have been recently endorsed by farming organisations, are a good package for the agriculture industry and the farming community in particular. At a meeting in my area of some of the leaders of farming organisations, farmers and some Members of the European Parliament recently, the focus was more on World Trade Organisation discussions and such issues than on local issues in this country.

There are some issues to which I would like to draw the Minister's attention and I have written to her about some of them. Some representations have been made to me about difficulties in getting planners to undertake REPS 3 forms. Some people had not applied before the deadline of the end of October and there was a belief that the deadline would be extended to the end of November. I am aware of the problems that exist in that regard but I ask that a degree of latitude would be allowed to applicants who encountered difficulties in finding planners who would undertake the necessary work. I am unsure whether that matter can be addressed on a national basis. The problem has been raised with me by two people but its extent may be greater.

Small dairy farmers in west County Clare increasingly have to work outside the farm because they no longer have the capacity to earn sufficient income from milk. Many derive the bulk of their income from employment in places such as the Moneypoint electricity generation station and combine that work with farming as a sideline activity. Nevertheless, a number of farmers in the area remain heavily involved in milk production and are concerned about falling prices. I have been told that substantial quantities of Northern Irish milk is being dumped here, thereby depressing the market and putting further pressure on small dairy farmers, many of whom are my constituents. I am unsure of the extent of the dumping and, while I would presume it should not occur within the common market, the Minister might shed light on the matter. Milk imported from Northern Ireland is cheaper by approximately 20 cent per litre.

I will not rehearse the list of measures, the agreement is an excellent arrangement for the farming community and has been endorsed by its leadership. However, certain minor issues continue to affect people, such as capital gains tax on lands sold for road widening or other purposes. Recently, we received a delegation from farming organisations regarding changes pertaining to retirement. On behalf of the farming community in my constituency, I commend the Minister and her staff on the magnificent work they are doing. I wish her well in future negotiations and offer my support as she defends farmers' interests in the WTO.

Minister for Agriculture and Food (Mary Coughlan)

I thank the Senators who have spoken on this debate and wish to reflect on some of the key issues raised. A number of schemes are not permitted to be index linked under EU rules, including the single farm payment and the farm retirement scheme. I gave my consideration to the issues raised in a report on early retirement produced by Deputy Wilkinson on behalf of the Joint Committee on Agriculture and Food. The report recommended greater involvement at a technical level between the Departments of Social and Family Affairs and Agriculture and Food, so that we could avoid overpayments where people reached pension aged and qualified for State pensions. It also recommended that we increase the amounts available under the early retirement schemes and increase the new early retirement scheme in order to balance it with the installation aid increase, a measure which younger farmers have vociferously supported.

The issue of farm consolidation has been of major concern and I thank the Minister of Finance for his support in committing a significant level of Exchequer funding to this agreement. He has worked with me to examine the issues which have arisen from farm consolidation, long-term leasing and taxation policies. Measures have already been introduced in this regard in the previous budget and we will continue to work towards our targets through the forthcoming budget. I am sure the Estimates announced by the Minister this afternoon will be music the ears of the Opposition. I can predict, without a shadow of a doubt, further increases in my own Vote for the farming sector. These increases are indicative of the esteem which this Government has for farming.

Fine Gael Senators spoke about crises such as a drift from farming and a lack of interest in the sector. The European Commissioner for Agriculture and Rural Development gave an answer to this in the Dáil when she said that if we continued to use this type of language, it would not be surprising that people will continue to lose interest in farming because we are being negative rather than supportive.

Mr. Coonan

The Minister should direct her remarks to the assistant director of Teagasc and read a report on the matter in The Irish Times today.

Mary Coughlan

I am glad to learn the Senator reads The Irish Times. According to Teagasc, the average farm income in 2005 was €18,000 rather than €15,000. The average age of Irish farmers is 11% below the EU average of 35 years. Although there has been a move away from land in the European farming sector in general, we have done comparatively well in this country.

I did not refer in particular to the sheep sector because it is difficult to focus in every sector. Under the stewardship of the former Secretary General of my Department, I established a group to consider and make recommendations on the needs of the sector. I have accepted the recommendations put forward and the implementation group is now making proposals on developing the sector. I acknowledge that the sector is undergoing difficulties but farmers appreciate the importance of REPS and the fact that we renegotiated arrangements for designated areas. The sector needs to look for new markets and qualities. We must ascertain why we are superb in the summer months but cannot compete in shoulder areas, even though our competitors in Scotland and Wales can do so. I intend to drive reforms in that respect.

The issues of roll-over relief taxation, CPO, land consolidation and long-term leasing are being addressed on an ongoing basis. However, as with many other tax incentives, some have abused the opportunities afforded to them. The Minister for Finance has undertaken a review of tax incentives and reliefs, including those obtaining in the farming sector. While he has expressed concerns on abuses, he has also acknowledged the difficulties that arise in terms of land prices, the need to facilitate young people and the transfer of activity from older members of society to the next generation.

The ongoing WTO negotiations will become more difficult in the context of the outcome of the recent elections in the United States of America. Before the election, I met the Democratic Party spokesman on agriculture and found his views to be more trenchant than those of the Republican Party, which leads me to believe that any legislation on farming will be watered down and that it will be difficult to reach an agreement under the WTO. We are also concerned that a Mercosur agreement will be reached which would not be beneficial to Ireland and, therefore, we will be expressing our worries in the context of a move towards such an agreement. As Senators will be aware, former Commissioner Fischler did not agree to the Mercosur deal which was on the table previously. The current proposals are also totally unacceptable.

Perhaps we should have all ensured that the nitrates directive and the associated plan were brought to fruition much earlier. That said, there was much consultation and hard work, not only involving departmental officials and the Commission, but also me and the Minister for the Environment, Heritage and Local Government, Deputy Roche. We have achieved as satisfactory an outcome as could have been obtained.

I have reflected on the farm waste management scheme, which recognises the relevant costs. We have introduced standard costings and the Minister for Finance has supported me in ensuring there is a roll-over clause in the scheme. The scheme must close on the last day of this year, no matter what happens. However, I have stipulated that a letter of intent for planning permission is sufficient to allow people continue in the scheme. They can forward their plans and planning permission in March 2007.

Our work on the farm waste management scheme has reflected the needs of the farmer on the basis of economic cost. The derogation is very beneficial and included among REPS farmers will be those who have obtained one. This will be very important to the farmers, including the dairy farmers in County Clare and elsewhere. The current approach to farming encompasses environmental issues and recognises the cost of addressing them. This is why the package is so important. The 17% increase in the REPS allocation is a seismic support for farmers and will result in a great increase in the number involved in the farming enterprises.

I am legally curtailed from speaking on the sugar beet issue because, as Senators will know, the issue is sub judice. However, we must look towards bio-fuels. Much work has been done on addressing our energy needs and a new Green Paper on energy has been produced by the Minister for the Environment, Heritage and Local Government. The Cabinet is working to ensure that we put together a package in this regard. I, as Minister for Agriculture and Food, must acknowledge the reduction in grain production in Ireland and that a balance must be struck between producing crops for energy and for food. This will cause a great deal of anxiety for some and ensure higher prices for the farmer. It may result in consequential increases in the cost of food which will, in itself, cause difficulties for some of our competitors. Our feedstock requirement for livestock will increase, thus causing a rotation effect. We must therefore be very careful about how we approach the production of food crops and energy crops. I am working towards a new incentive and initiative in this regard.

It is unlike me to be political but, lest I forget I am a politician, I must say, without a doubt, that Fianna Fáil and the Government, including me as Minister, have taken on board a vision for agriculture based on innovation, the consumer and quality. We have increased our market share and have centres of excellence, including Teagasc and Bord Bia. I have increased funding for research and development to €100 million. This is the current position on food and food quality.

The Minister of State, Deputy Brendan Smith, is considering innovative ways of working with the food sector, the State agencies and the chief executives of small and large companies and of linking this work to research and development to produce a roadmap for the agrifood and drinks sector for the coming 15 years. He secured an increase of 15% in forestry grants and is considering new opportunities pertaining to biomass and wood products. He is working with farmers to develop a sector that will be very important. This process is not without its difficulties and concerns but is vital to rural economies. It is linked to real rural policy, rural employment and the question of addressing global warming.

As a team, we are working very closely with the farmers and have seen results. We have implemented the agri-vision programme, which I launched some months ago. We have invested in farming and are working to achieve quality and put in place support mechanisms. When people have to make choices, they will note that the Government has delivered. It will continue to develop the sector and produce a roadmap for successful farming in the agrifood sector. Perhaps people should reflect on what Fine Gael did when in Government. It stopped live export whereas I allowed it again, and it abolished the farm waste management scheme whereas I quadrupled the money being made available in this regard. There was a crisis concerning the suckler cow herd but Fianna Fáil, while Deputy Walsh was Minister for Agriculture and Food, increased the herd to 1 million. I will sustain the quality of the herd.

I have outlined Fine Gael's record. If it gets into power and works with the Labour Party, God help us.

Mr. Coonan

What did Fianna Fáil do with the beet farmers?

Mary Coughlan

It will work with a Minister for Finance from the Labour Party who will not be of the same calibre as the present Minister, who has been wholly supportive of the farming sector and rural life. How will Fine Gael work with the Green Party's agenda, some aspects of which I agree are good? I agree in respect of organic food, labelling and consumer foods but not in respect of the proposals that would destroy rural life. Farming would not be a part of economic development if people chose that agenda.

Partnership has worked. I have worked very closely will all members of the farming community. My officials have given of their time over a considerable period to work with the Department of Finance and other Departments. We have been successful and I look forward to the full implementation of the partnership agreement. At approximately 2 p.m. today, one will see that I will definitely put my money where my mouth is.

Sitting suspended at 1.05 p.m. and resumed at 2.30 p.m.