Irish Agriculture: Motion.

Senator Paul Bradford

I move:

That Seanad Éireann,

in view of:—

the challenges facing Irish agriculture and the need to encourage the maximum transfer of farms into the ownership of young, qualified farmers;

the demographic challenge the current age profile of Irish agriculture presents;

the Programme for Government commitment to ‘Continue to offer a range of supports to young farmers entering agriculture — including education, taxation measures and direct start-up aid';

the commitment in the Rural Development Programme 2007-2013 to the rejuvenation of the Irish farming sector as a continued priority of Irish agricultural policy;

the disproportionate impact changes to the Disadvantaged Areas Scheme will have on farmers and their future viability;

condemns the Government's decision to suspend the Young Farmer's Installation Aid Scheme, the Early Retirement Scheme and to reduce the payments under the Disadvantage Areas Scheme;

and calls on the Government to:—

immediately restore the Young Farmer's Installation Aid Scheme;

immediately restore the Early Retirement Scheme and;

immediately reverse cutbacks to the Disadvantaged Areas Scheme.".

I welcome the Minister of State, Deputy Trevor Sargent, to the House.

This motion expresses the disappointment, anger, upset and outrage of thousands of farming families throughout the country arising from the budgetary announcement some weeks ago. If there had not been an October budget and if we were still awaiting the Minister's annual financial statement, we could be addressing many of the other valid and pressing matters of concern to the farming community this afternoon. We could, for example, discuss the drop in farm incomes, the collapse in milk prices, the problems facing the sheep sector, the problem with regard to farm pollution grants and the deadline imposed by the Department which will cause many farmers not to obtain badly needed grant aid. These pressing issues concerning farmers and the agricultural community have been to the fore in all public debates on agriculture in recent months.

We then had budget day when the Minister for Finance and the Minister for Agriculture, Fisheries and Food combined to introduce a series of budgetary measures that are devastating for the farming community. We must all recognise that the country faces a genuine economic crisis. This side of the House would point out that the problems we face have arisen as a result of incorrect budgetary decisions taken in the past five or six years. Notwithstanding that, we are where we are and must work together to make progress and get out of this situation. The general economic view is that we should try to spread the burden in a fair and equitable fashion so that where there must be pain, it will be shared. All sectors of society recognise this, none more than the farming community.

Farming families throughout the country take weekly, monthly and annual budgetary decisions with regard to their family farms, their businesses, cutbacks, expansion and whatever. Farmers recognise the financial crisis as much as, if not more than, most. However, as a result of the budget, severe and unfair penalties are being imposed across the board. The income levy, for example, and its failure to take into account such matters as capital allowances may be a matter for another day, but it is a big burden on farming families.

The Fine Gael motion refers to a number of the budgetary measures causing such disquiet to farming families, young farmers in particular. I refer first to the young farmers' installation aid scheme. It must be a political aspiration of the Minister of State and his departmental colleagues to ensure a new generation of farmers and farming families emerge and that land is transferred to trained young farmers who will continue the proud record of Irish agriculture.

In the past 30 or 40 years, significant moneys have been invested in agriculture research, farm training facilities and Teagasc and its predecessor ACOT. We encouraged young farmers to take up agriculture courses, beginning with the 80-hour courses, followed by 120-hour courses and green certificate courses and now training has become more formal. At the end of training there was a possibility for young farmers to get a farm installation grant. That was welcome and was a genuine financial incentive which paid bills and enabled land and farms to be transferred to young trained people and a new era in agriculture to happen. The budgetary decision to discontinue the installation aid scheme was a bolt from the blue.

The same applies to the early retirement scheme. This scheme was introduced some time ago and has been very successful. It allowed retiring farmers to make financial arrangements to allow their lands to be leased or transferred into the hands of the new generation, something that should be encouraged. In a sense, the installation aid grant and the retirement scheme went hand in hand. Therefore, it is a double blow to unsuspecting families to have two significant income schemes withdrawn in a single budgetary announcement.

The final part of the Fine Gael motion refers to the cutbacks in the disadvantaged areas scheme. Since the entry of Ireland into the European Union in 1973, one of the most successful agri-schemes has been the scheme of support for disadvantaged areas. We all recall the campaigns in the 1980s and 1990s to extend the disadvantaged areas. No scheme is ever 100% successful, but from the agricultural perspective, the disadvantaged areas scheme gave help, support and financial assistance to those with the least opportunity, because of the quality of their lands, to generate sufficient income to keep their families farming. The significant cutbacks in the disadvantaged areas scheme is a bitter blow.

The Minister of State is attempting to chart a way forward in the horticultural area, the section for which he has departmental responsibility. We have debated horticulture previously and the Minister of State is the first to acknowledge that, for better or worse, it always will be only a small part of the broader agriculture budget and policy.

It is ironic that the Minister of State at the Department of Agriculture, Fisheries and Food, Deputy Sargent, is taking this debate given his role as a representative of the Green Party. My Fine Gael colleagues and I recall the megaphone campaign conducted during the previous general election to warn farming families that voting for Fine Gael would result in the Green Party entering Government by the back door. As it turned out, the Green Party was introduced to Government by Fianna Fáil, and good luck to it.

The Minister of State is present because the Minister for Agriculture, Fisheries and Food, Deputy Smith, is away on Government business. The Minister and Fianna Fáil wing, rather than the Green Party or Independent wings, of Government must take the blame for selling farming down the river in last month's budget. I appeal to the Minister of State to ask the Minister to reflect on his actions. The proposed cuts are minimal in the context of the overall savings required in the budget but the signals they send are devastating to the younger generation of farmers because they imply that Government policy will not guarantee certainty or long-term support. This is causing young farmers to question their futures in the industry. Last Thursday a meeting organised by Macra na Feirme was attended by hundreds of young farmers who expressed feelings of outrage. Crowds of 800 and more were attracted to public meetings organised by the IFA over the past several weeks and, again, feelings of despair and anger were widely aired.

While farmers are willing to take their fair share of the hardships required under the new economic dispensation, they are not prepared to lie down in the face of these unjust cuts. Notwithstanding that the Green Party is the junior party in Government, I hope the Minister of State will ask the Minister and his colleagues to reflect on what they have done. My party recognises that the nation's financial plight has to be alleviated. In advance of the Budget Statement, the Fine Gael Party spokesperson on finance, Deputy Bruton, presented an alternative economic analysis which accepted the need for financial restraint and pointed out the savings that could be made in terms of public service job cuts and salary caps. These were realistic proposals. We did not table this motion to seek money that does not exist or because we are unwilling to recognise the financial crisis facing the country. Agriculture is an important part of the economy but its future depends on young farmers being able to take over their family farms with the aid of installation grants and retirement schemes for their parents.

Over the past fortnight, my colleague, Deputy Creed, has consistently raised the issue of legitimate expectations. This issue deserves to be addressed in a legal analysis by the Department. Farmers who signed contracts to lease land and completed the appropriate training were in some cases unable to submit their application forms because the Revenue Commissioners failed to stamp their deeds. These people had a legitimate and genuine expectation of obtaining an installation grant for themselves and pensions for their parents but they have been left in the lurch. Their plight must be addressed in the near future.

Senator John Paul Phelan

I second the Fine Gael motion that has been proposed by Senator Bradford and welcome the Minister of State to the House.

On Monday night I attended a meeting organised by the IFA in my area of Carlow-Kilkenny at which approximately 700 farmers from counties Kilkenny and Carlow gathered to express their frustration and anger at the cutbacks in agriculture announced in the budget. I know from that and other meetings throughout the country that several Government backbenchers have indicated their support for the issues raised by farming organisations with regard to the cutbacks, which leads me to hope that Senators on the Government side will consider supporting this motion.

The motion refers in particular to the suspension of the installation aid and early retirement schemes. It is being suggested in Government circles that they may be reintroduced next year but I do not buy that argument. Anybody who looks at the economic situation which the country faces would have to question whether we will be in a position to reverse these decisions by next year. I am also wary of the word "suspension" given that Fianna Fáil suspended rates on housing in 1977. Although I hope the suspension of rates is never lifted, I would like to see a reconsideration of the suspension of the farming grants.

It is not long ago that I was in school with people who are now transferring lands or taking out leases to establish themselves as farmers in their own right. I have received a number of inquiries from people regarding the installation aid scheme and the early retirement scheme which provides a level of financial security to retiring farmers. The decision to suspend these schemes is strange given the small amount of money that will be saved. The European Union provided 42 cent in every euro paid into the farm retirement scheme.

The Government has rightly stated its intention to spread the burden to every sector of society as we try to return to economic growth. However, it is clear that the budget has singled out agriculture for unfair treatment. Farmers will be particularly affected by the 1% income levy because it is taken from gross income. Anybody with an understanding of agriculture will be aware that farms may have substantial levels of gross income but, because of depreciation and the high costs incurred by farmers, the net income is relatively small. I understand that Fianna Fáil backbenchers are exploring ways of changing that requirement in advance of the introduction of the Finance Bill 2008. I hope that can happen.

I refer to the point made by Senator Bradford about the legitimate expectation in respect of the installation aid scheme. He is correct. I have come across a number of cases involving the transfer of land or property, which is a lengthy process and can take up to 12 months when solicitors and the Land Registry are involved. A neighbour and friend, who I went to school with, received final transference on 10 October. He did not submit his installation aid application because the budget announcement was a bolt from the blue, as Senator Bradford pointed out. Like hundreds of others, he finds himself in an awkward and uncertain situation because no guidelines have been issued by the Department of Agriculture, Fisheries and Food on where the cut-off point will apply. Usually, when a scheme is suspended we are told it will apply from 1 January and that there will be a lead-in time for people to get their applications in. That is not the case in this suspension, which took effect at 12 midnight after the budget announcement. Perhaps the Minister of State will clarify that.

The suckler welfare scheme is a particular issue in my part of the world, where many farmers are involved in suckler and sheep farming. These two sectors have not been doing well over the past few years, particularly the sheep sector. The suckler welfare scheme was designed to give a payment of €80 per cow to suckler farmers. Many farmers entered the scheme in good faith and made financial commitments on the basis that this payment would be made. These promises were made in advance of the last general election. I am not trying to be overly political but these were two more election gimmicks held out to the electorate. As soon as the election is over and the economy goes through a rocky patch, the schemes are drastically cut in the case of the suckler welfare scheme and possibly never will be implemented in the case of the proposed sheep scheme. Farmers made investments and commitments on the back of the suckler welfare scheme being introduced. For the Government to cut the funding in half before making the first payment is particularly wrong and unjustifiable. I hope the Government reviews that.

I have much empathy for young farmers. I urge the Government to reintroduce the installation aid scheme and the early retirement scheme. We were told that every sector would have to share the burden in order for us to return to economic success. It is clear that farmers are being asked to shoulder a disproportionately large part of the burden. A number of discussions have outlined the areas affected in the budget and I hope the Minister of State and Government Senators are in a position to support the Fine Gael motion to ensure these schemes are reintroduced. Only 9% of the farming population is under 35 years of age. I have two brothers who are farmers and all my life I have heard people saying we should be encouraging young people to get involved in agriculture. These two schemes were specifically aimed at encouraging more young people into agriculture at a time when agricultural colleges are bursting at the seams with people applying for places on courses and when the only safe jobs in rural Ireland over the past few years were in farming and construction. Construction jobs are disappearing and young people from farming backgrounds are looking at agriculture as a viable future. At such a time, the Government has the bare-faced cheek to remove the two schemes that would give the most benefit to people to get into agriculture and would provide an incentive to older people to transfer land to younger people. It is an absolute disgrace and I hope the Government will reconsider it as soon as possible.

Senator John Carty

I move amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

"notes that:

having regard to the objectives of budget 2009, including the objective of ensuring that Ireland has a solid basis for economic recovery when world economic conditions improve, the Minister for Agriculture, Fisheries and Food has protected the most productive elements of the Irish agrifood sector;

total expenditure in 2009 by the Department of Agriculture, Fisheries and Food, including EU funding, in support of the agriculture, fisheries, food and forestry sectors, will be €3.26 billion, in recognition of the role the sector has to play and the enormous contribution it makes to the Irish economy;

the Minister for Finance has confirmed the extension of a number of tax reliefs worth €65 million annually to Irish farmers;

a record level of funding of €355 million is being provided for the rural environmental protection scheme in 2009, bringing to €2.5 billion the amount provided for REPS this decade;

the Minister has ensured that the commitment, entered into with the farm organisations in partnership, to provide €250 million for a suckler welfare scheme is being honoured in full;

the Government is currently funding the most ambitious and generous on-farm investment scheme in the history of the State, through which €615 million of taxpayers' money is being provided for the farm waste management scheme between 2007 and 2009;

expenditure on forestry will increase next year by 6%, to €127.7 million, which recognises the importance of forestry in contributing to meeting the challenge of climate change;

the provision of €118 million for the seafood industry in 2009 demonstrates the Government's commitment to this important sector;

that the Government continues to negotiate the most favourable CAP framework for Irish agriculture and food, including at next week's CAP health check negotiations; and

that given the background of a significant tax shortfall and continuing pressures on public finances, it was necessary to make choices between competing demands and that, accordingly, the Minister

has reduced expenditure on area-based compensation payments in a targeted way that

ensures that the majority of farmers participating in the scheme will experience no reduction in their payments;

the average participant in the scheme will not be affected; and

that notwithstanding the economic pressures, the Department will still pay €220 million to over 100,000 farmers in 2009

has temporarily suspended entry for new entrants to the early retirement and young farmers' installation aid schemes, though the Department will still pay €48 million in pensions and €9 million in grants under the respective schemes in 2009;

has indicated that issues in relation to the disadvantaged areas payments as well as the installation aid and early retirement schemes can be reviewed as soon as the current budgetary constraints allow; and

acknowledges

that the Government recognises fully the role of the Irish agrifood and drink sector, which accounts for 9.7% of the country's exports and 8.2% of total employment and remains absolutely committed to the continued support and development of the sector as the most important indigenous sector in the Irish economy.''

I welcome the Minister of State, Deputy Sargent, in the absence of the Minister for Agriculture, Fisheries and Food, who is on important business in the US. I welcome the opportunity to speak in this important debate.

We are living in turbulent times, which is having an extremely negative effect all over the world. Our public finances are in rapid deterioration and, in budget 2009, necessary changes were made to try to stabilise our economy. Every section of society and every Department had to make reductions because, if not, our economy would go down and we would revert to a worse situation than in the 1980s. This is a world recession, involving every place, not just Ireland or Europe. This week, China pumped €600 billion dollars into the economy to try to avert disaster. The sum in the USA was $170 billion and in Japan, it was $50 billion.

It is unfortunate that agriculture had to bear a proportionate amount of the burden. The Minister, Deputy Smith, went about this in a fair way that would not have a hugely adverse effect on the farming community. It is important to remember that €3.2 billion will be spent in 2009 supporting the agricultural sector.

There is much criticism of the suckler cow welfare scheme, suggesting there will be a shortfall in payments in the next couple of years. That is not exactly true. Some €250 million was ring-fenced for the scheme over a five-year period. This amount will be paid. Some €77 million will be paid in the next week to 54,000 farmers, working out at approximately €80 per cow. There will be less next year but more the year after, up to the total amount of €250 million.

The young farmers installation scheme and the early retirement scheme are being suspended, to be brought back in 2010 and 2011. The schemes are being suspended for new applicants but have not been stopped. Some €9 million has been provided to ensure payment is made to applicants whose applications were received before 14 October. Some €48 million is provided to pay pensions in 2009. The Minister has assured me that the schemes will be reintroduced after a period of time.

Senator Joe O’Toole

Did Senator Carty believe him?

Senator John Carty

I did.

Senator Joe O’Toole

Senator Carty is a soft man.

Senator John Carty

Some €355 million has been provided for REPS in 2009, a 17% increase for farmers joining REPS 4 as new entrants and transferees from REPS 2 and 3. This is a major increase and is most welcome. The Minister is to be complimented on retaining this important contribution to farmers' income. Great work was done with this money, particularly in my part of the country where farms are small. Farmers have upgraded their premises and have them looking well. They are doing a good job with the moneys they receive.

The disadvantaged areas payment for 2009 has taken a hit and the Minister had to take that action reluctantly. In so doing, of 102,000 participants in the scheme, 65,000 will experience no reduction in their payments, while 37,000 participants will. The farmers affected will be those with more than 34 ha or 82 statute acres. Those with acreage under this will not be affected. Some €220 million will be paid to farmers in 2009 under this scheme. Farmers with commonage, that is large acreage along the west coast where the land is bad, will be affected most. The 17% increase in REPS will help to offset this. I and my colleagues have asked the Minister to revisit this issue to establish if something can be done for the farmers who have commonages and poor land.

The former and current Ministers for Agriculture, Fisheries and Food have funded an ambitious and most generous scheme under the farm waste management scheme. A total of €615 million from the Exchequer has been provided for this scheme between 2007 and 2009. In this year alone €377 million will be paid to participants in the scheme. The Minister, Deputy Smith, must be thanked for securing €195 million as an exceptional Supplementary Estimate this year, his Department being the only one to secure that. It shows the Government's commitment to the Irish farmer.

Agriculture is important to Ireland and its economy. As we know, 90% of our produce is exported and this accounts for nearly 10% of our total exports.

I stated that I would much prefer if there was no suspension of schemes and no reduction of payments to the farming sector, but in the current climate that is not possible. The Minister did a good job in getting the balance right thereby ensuring that the least number of farmers would be affected. It is not many years ago, in better financial times, that a Minister for Agriculture, not from this side of the House, I hasten to add, suspended the control of farmyard pollution scheme. Not alone from April 1995 were no new applications accepted with immediate effect but approvals of the 12,000 applications then on hand also ceased on that date due to, as the then Minister of State said, "the unprecedented demand from farmers for aid under the scheme".

Acting Chairman (Senator Fiona O’Malley)

I invite Senator O'Toole to speak.

It is also clear from the expenditure Estimates that the schemes allowing the sector to meet emerging demands have been protected. For example, a record level of funding of €355 million has been provided for the rural environment protection scheme. This amount allows the increase of 17% in rates announced by the Minister, Deputy Smith, to be paid and will bring the total amount spent on the scheme since 2000 to €2.5 billion. Through successive REP schemes, my Department is contributing to the reduction of greenhouse gas emissions by promoting specific measures, including willow plantations, establishment of farm woodlands and the protection of the carbon storage potential of Ireland's wetlands. This matter was debated at a meeting of a committee earlier, a debate to which some Members may have listened or in which some may have participated.

Organic farming, a particular interest of mine, which is less energy intensive than non-organic methods because of the non-use of nitrogenous fertiliser and other agrichemicals, is supported by REPS and the ongoing conversion grant supports. Organic farming further advances the battle against climate change, which was discussed at that committee meeting, as well as taking advantage of new and emerging market opportunities. There has been an 82% growth in organic purchases during the past two years, an area with huge potential for growth.

In addition, forestry will also play a major role in combating the urgent issue of climate change. There is an increase of 6% per cent in the forestry provision, bringing funding up to almost €128 million while €118 million is being provided for fisheries.

The commitment, entered into in partnership by the Government and the farm organisations, to provide €250 million over a five-year period for the suckler cow welfare scheme is being honoured in full. This is a new stream of farm income and the first year's payment of €77 million to approximately 54,000 farmers will be made in the next few months. There will, however, be an impact on the level of premium in future years due to the exceptional level of participation in the scheme. The limited amount of funding means that it must be spread proportionately.

My Department is also funding the most ambitious and generous on-farm investment scheme in the history of the State, through which €615 million of taxpayers' money is provided for the farm waste management scheme between last year and next year. This year alone, my Department will pay €377 million in grant-aid to thousands of farmers. This includes an exceptional Supplementary Estimate of €195 million for my Department, as an indication of the Government's commitment to the sector and to ensure that thousands of Irish farmers receive this grant promptly. Again, this is a measure that protects the productive capacity of the sector.

For reasons I have outlined, we had to restrict expenditure in certain areas. We still managed to provide €57 million for the young farmers installation aid scheme and the early retirement scheme for farmers. This allows us to meet current commitments but, unfortunately, we had to temporarily suspend — I hope that word means what is stated in the dictionary — new applications for both schemes. As the Minister, Deputy Smith, pointed out, this will be kept under review in the context of the budgetary situation.

There were a number of positive measures for young farmers in the budget. Most important, stamp duty relief for young trained farmers was renewed for four years until 31 December 2012. This means that, in combination with capital acquisitions tax — agricultural relief — and capital gains tax — retirement relief — the vast majority of early farm transfers are exempt from tax. This helps to reduce significantly the cost of early farm transfer. In addition to these measures, stamp duty relief for farm consolidation was extended for two years from 1 July 2009 to 31 June 2011. Both the general and young trained farmers' rates of stock relief were renewed for two years and the accelerated capital allowance for necessary farm pollution control facilities was extended in the budget from 31 December 2008 to 31 December 2010.

When combined the renewed agricultural tax reliefs in the budget are estimated to be worth more than €65 million to the farming community. Furthermore, the top rate of stamp duty on agricultural land transactions was reduced from 9% to 6% on amounts in excess of €80,000 with effect from 15 October. This should make agricultural land more affordable and encourage a higher number of transactions.

We have provided more than €220 million for the 2009 disadvantaged areas scheme. Unfortunately, this represents a reduction in expenditure under the scheme for 2009. We are effecting this reduction by limiting the maximum area to 34 hectares, 84 acres, and by a small increase in the minimum stocking density requirement. This means that almost 67,000 of the 102,000 participating farmers will not suffer any reduction in their payments. Furthermore, all claimants under the scheme will continue to benefit from the substantial increase of 8% in the rate of aid introduced by the Government in 2007.

In addition, of the 102,500 farmers who benefit under the disadvantaged areas scheme, in excess of 50,000 of these also benefit under REPS, while in excess of 47,000 also benefit under the suckler welfare scheme, which as I said introduces a new stream of payments to farmers in 2008. In addition to the payments under these schemes, payments to farmers with disadvantaged area lands under the single payment scheme amount to a further €920 million. The total amount payable therefore represents very substantial payment to farmers situated in the designated areas. Notwithstanding the reduced provision, the reality is that the disadvantaged areas scheme continues to be one of the best funded schemes of its type in the European Union.

Since the publication of the budget, some comments have been made which seek to misrepresent the factual position on expenditure by the Government on the agricultural sector. I wish to use the opportunity this evening to clarify some of these matters. It has been suggested that the sector has borne a disproportionate reduction, but the facts do not bear that out. I accept that at first glance, based on the figures that appeared in the budget documentation, it appears that the Department will experience cuts of 13% in spending in 2009. However, the figure given for 2008 includes, as I mentioned, an additional one-off allocation of €195 million to what was originally allocated for the Department in 2008. When this figure is correctly removed from the mix, the 13% cut being reported widely is in the order of 2.5%, which is in line with reductions in other Departments, and to suggest otherwise is just not honest.

When account is taken of EU funding, a total of €3.2 billion will be spent by the Department of Agriculture, Fisheries and Food in support of the agriculture, fisheries, food and forestry sectors. By anyone's standards, that is a very substantial commitment by the Government and the EU to the Irish agrifood sector for the coming year in the face of a very serious global economic downturn.

The long-term prospects for agricultural commodities on world markets are good at this time. In this House and the other House, we regularly talk about the need for the market to drive growth in the sector. Now, perhaps more than ever, we have an opportunity to play to our strengths, particularly in quality foods such as grass-based beef and dairy production. Global demand for both is forecasted to double in the next 40 years. It is imperative that Ireland makes every effort to develop at the premium end of such markets. As I said, the Minister, Deputy Smith, is in the United States of America working with Enterprise Ireland and Bord Bia to maximise our export markets for the future.

While prudent fiscal decisions needed to be taken in recent times, I am confident, as is the Minister, Deputy Smith, that farmers and the wider rural community are willing to play their part in accepting certain revisions in spending, which will allow the economy to come through this extremely difficult period. Agriculture and the food sector represent one of the most important indigenous elements of our economy. Its long-term success is due primarily to its exceptional resilience and adaptability when it comes to facing challenges. The Minister, Deputy Smith, and I look forward to working constructively with all stakeholders to achieve the best possible outcome for them and the economy as a whole.

Senator Joe O’Toole

Go raibh míle maith agat a Aire as an méid sin ach caithfidh mé a rá nach raibh morán ann chun dóchas a thabhairt d'fheirmeoirí na tíre i ndáiríre. Tá cúpla rud sa mhéid a dúirt an tAire atá tábhachtach agus tiocfaidh mé ar ais chucu go luath. I begin by congratulating Senators Bradford and John Paul Phelan on tabling this excellent and timely motion. I feel sorry for my colleagues on the other side of the House, including my friend, Senator Carty, who I know is probably as worried about these issues as I am and is under a party whip on the issue.

There is no hope in this. I had intended to speak at some length on installation aid, early retirement and the other related issues addressed by the proposer and the seconder, but the Minister of State raised some issues in his speech to which I want to return. They are absolutely contradictory, do not sit with the position coming from the Department of Agriculture, Fisheries and Food and raise major questions for me. I will come to those shortly.

Following the announcement of the budget I met some of the farmers' groups. What they have faced is appalling. They are the quieter victims of the budget. I do not argue with the Minister of State's statistics, but farmers have taken a reduction in income. The amount they have been getting for their commodities over the past ten to 15 years has been reducing. That is not the fault of the Minister of State or the Government, but it relates to global issues. However, the provisions in the budget will make it more difficult for farmers to get a sustainable livelihood from their lands. The reduction in the disadvantaged areas scheme from 45 ha to 34 ha was particularly difficult. That is absolutely unfair given that we are talking about places such as boglands and the sides of hills.

I support the motion and had considerably more to say on those issues. Suffice to say that I concur completely with the points made by the proposer and the seconder. I believe farmers individually will take an average income reduction of approximately 11%. I do not argue with the point made by the Minister of State that the effect on the agriculture budget is different. However, there is a reduction in what farmers are earning. In addition, like everybody else, they will also be hit by the levy, which is fine for those earning a decent income.

The Minister of State took my breath away in some of the things he said in his speech. Towards the end of his speech he said that despite the current global economic situation, "the long-term prospects for agricultural commodities on world markets are good at this time." He went on to say that the demand for dairy and beef products is forecasted to double. Let us consider this in the context of what he said earlier about climate change. Europe is demanding a 20% reduction in agricultural emissions. While I stand to be corrected, I believe there is no way — this is why I am disappointed in the Minister of State's speech — that Irish farmers will be able to double output and at the same time comply with a 20% reduction in emissions. It cannot be done, as I have been advised by the Department of Agriculture, Fisheries and Food. The only way to comply with a 20% reduction is by decimating the size of the national herd. There is no other way it can be done. Unless we put nappies on cows or keep them in tents, there is absolutely no way that we can sort out the emissions from cattle in fields given that the Minister of State talked about them being grass-based. This cannot be done. It is a conundrum and there is no way the Minister of State can match his two points. One of the reasons I wished to speak tonight is that there is a long-term issue for Irish agriculture, which will be decimated on that basis.

The Minister of State also stated forestry will play a major role in combating climate change. The Minister of State's Department has indicated the Government had previously proposed that total land use would be taken into consideration in dealing with agricultural emissions but this is not being allowed. The forestry element will not be taken into consideration. That is what we have been told on the climate change committee by the Department. The Acting Chairman heard that today, along with Senator Coffey and me. We questioned the representatives from the Department and got a very clear and fair presentation, but it is at odds with what the Minister of State told us this morning. Alternatively, we are not being told all of what we need to hear tonight.

I believe the Minister of State and agree that the world demand for beef, for example, will double. Arising from Europe's direction, we must reduce the emissions from agriculture here, which means herds must be reduced. Therefore we will not be able to supply the demand for beef in Europe from Europe. I am not making this up as I go along; these are incontrovertible facts. Irish farmers will see a growing market — as the Minister of State rightly indicated — but will be unable to participate. They will not even be able to hold their own position in the market. The gap will be filled by Argentinian and Brazilian beef coming to Ireland at the cost of the rain-forests in South America, food miles and inefficient farming habits in South America. That is the future being faced by Irish farmers currently.

As well as being hit by the budget, these farmers are not even being told what is coming down the line. They face eradication and need a champion. I know the Minister of State's own views on these issues and he must speak for them. The hits taken in the budget should and must be reversed, although this would only be a stepping stone. We must then consider the greater good. I know the Minister, Deputy Brendan Smith, has indicated he cannot see how we can meet the 20% reduction in emissions. He is 100% correct, as it cannot be done if we are to take advantage of the demand for dairy products and beef.

When the commodities market is finally coming right after 20 years going the wrong way for the Irish farmer and agriculture industry, they will not be there to take advantage of it. They will be halving their herds and shooting the cows. If the Minister of State finds a solution to this, he will be promoted immediately to a senior position in Europe. What I have said is correct or else I have been misled by all the experts appearing before us in dealing with the issue.

I agree that we are in a position to produce green clean island food in many ways. On the previous occasion the Minister of State was in the House I asked him to ensure farmers' markets got greater recognition and support, and he agreed with me on the issue. I also asked him about the nonsense of sorting vegetables by their shape. I told him that in the middle of his constituency we were dumping misshapen tomatoes that French housewives would be dying to buy. I am glad the European Union has reversed that daft decision today and I hope the Minister of State will claim some credit for that. He is entitled to do so.

Deputy Trevor Sargent

Thanks.

Senator Joe O’Toole

I support this motion. I urge my friends on the Government side of the House to think again before voting against a superb vindication of Irish agriculture and farmers and the support to which they are entitled. We should stand with them and invest in agriculture rather than cutting back.

Senator Dan Boyle

It is difficult to follow a contribution in praise of misshapen vegetables but I agree with some of what Senator O'Toole has said. He has made an argument which has little to do with this debate.

Senator Joe O’Toole

The Minister of State's speech had even less to do with this debate. We learned that one a long time ago.

Senator Dan Boyle

I am familiar with the Minister of State's speech.

Senator John Paul Phelan

It had nothing to do with the motion.

Senator Dan Boyle

There are two issues at hand, one of which is the effect of the spending curbs in the 2009 budget, with another being the wider debate alluded to by the Senator. I am sure we will have many contributions in that respect. It is a debate which takes in international negotiations and a common position within the European Union. We will have to consider how Irish agriculture fits into that and I am confident Ministers will address that in the proper context.

The Opposition is presenting a second motion after the 2009 budget and I am sure we will see a plethora of related motions for the rest of this session and probably early into the next session.

I wonder.

Senator Dan Boyle

It is very fine agricultural land and there are some very fine farmers there. With regard to the unfortunate levels of cuts proposed in this year's budget and their likely effect, there is no doubt there will be consequences. The role of the Department of Agriculture, Fisheries and Food and the Government in general is to try to lessen that effect.

I hope those on the Opposition benches will be impressed with my figures. Taking the example of the disadvantaged areas scheme, 65,000 of the 102,000 farmers will get the same payment.

Senator Joe O’Reilly

It is the use of the figures.

Senator Boyle should be allowed to speak without interruption.

Senator Joe O’Reilly

That is deflecting from reality.

Senator Dan Boyle

I acknowledge that Fine Gael has a particular interest in rural and farming communities in terms of its voter base and its political history.

I respectfully suggest to my good friend Senator Boyle that he spend some time with farmers.

Senator Paudie Coffey

Hear, hear.

Senator Joe O’Reilly

The backdrop to any discussion of the farming cuts must be a recognition that in addition to farmers, the entire rural economy is affected. I refer to the towns and villages of rural Ireland which are essentially dependent on agriculture. We are not just discussing cuts to farmers; we are discussing cuts in the viability of towns of 5,000, 10,000 and 15,000 people.

The savage cuts that affect farmers are characterised by an absence of parity, justice and fair play. Farmers will be affected by the income levy of 1% on gross income. That is the sinister part, as farmers will also have to pay the increased registration fee for their children in college and the increased cost of admission to hospitals. Farmers are liable to be affected by all the regular hits of the budget, such as the 1% levy, and they are prepared to pay their due. It would be fair game if the matter stopped there, but in addition to the normal imposition people accept in difficult budgetary circumstances there is the savage attack on the disadvantaged areas scheme, the suckler cow welfare scheme and mobility in agriculture to which I will return.

Farmers are being attacked from every possible angle. I will refer in due course to the legal challenge to the cuts to the installation aid scheme. One would get a sense that under the Constitution farmers are to be pilloried, separated and treated differently from other sectors. Why do they have to put up with other impositions in addition to the normal income levy? Why are they being treated differently? The implications of the cuts to the disadvantaged areas scheme will amount to €950 to €1,500 for an average farmer, which is a significant drop in income. The implications of the reduction in the suckler cow welfare payment from €80 to €40 will amount to €2,000 to €3,000 for an average farmer. One medium-sized farmer told me recently that he will lose €3,400. We are talking about a serious income hit.

The constraints of time make it important that we get the salient points across. I deplore the ivory tower nonsense of Senator Boyle who must live on another planet. I meet real farmers every day who are affected by the cuts. The change in the installation aid scheme gives rise to serious concern. Some people are in no man's land. Perhaps that is not an appropriate term in this week of remembrance. Certain individuals have spent, on average, two years in agricultural college where they have spent money on legal teams for the transfer of farms.

I will outline one case that will serve to illustrate the multitude of cases. One young man I know attended Ballyhaise agricultural college in County Cavan for two years. He spent €8,500 between practical work on his farm and legal fees in preparation for the transfer of the farm from his father to him. That young man is a current applicant. He is one of the group that is especially affected and who has what in legal terms is referred to as legitimate expectation. I understand he will take a court case. Farming organisations, specifically the ICMSA, the IFA and others, will take legal cases in this regard, and rightly so because young farmers have acted in good faith, given of their time and invested in the transfer of farms.

Let us examine the money that is rightly spent on supporting IDA Ireland to secure foreign direct investment to create jobs in this country. Previously, young farmers received €15,000 to set themselves up in business. That was the sole investment in that one job, and possibly other jobs would be created on each farm. That was very good economics as it provided secure, long-term employment, especially in the context of international food shortages. If jobs created through foreign direct investment had similar longevity we would say they were worth €80,000 each. Much of the €15,000 would be invested anyway in VAT and other forms of taxation. That cut was a mistake.

Senator Carty will empathise with what I have to say and that may change his view on supporting our motion when the time comes to vote. The only time money came to a farm household was when people got the farm retirement pension. That was Valhalla and Nirvana. It was their special time in life and people were very happy with it. It was wonderful for people to get a few extra euro at that time in their lives. In some cases it was the only time real money — cash — ever came into the house. It was a lovely lift for people and it is wrong to suspend that payment.

Recently, Senator Boyle has made almost a career out of posing the question, "What would Fine Gael do?" Historically, Fine Gael has always done the right thing in budgetary terms.

Senator John Carty

That was not too often.

Senator Joe O’Reilly

Populist politics would not have supported it but we did produce an alternative budget and we have produced alternative ways of accumulating the same money. We say the cuts are misdirected and misplaced. They are a mistake in that the extent of the income reduction will make it unviable to continue to farm in many instances, thus affecting the numbers. It is a also a mistake not to allow older farmers to move off their farms such that they can be replaced by younger ones.

This matter requires serious reflection and I appeal to the Minister to address it, even at this stage, because change has been made in respect of other budgetary provisions. The principle has been conceded that the budget is not written in stone. It would be more courageous, patriotic and visionary to change the provision and say a farmer must have a viable income and that a young farmer is worthy of some support for his initiative on starting up. Older farmers who have fought the good fight, tilled the land, put up with the vagaries of weather and the associated hardship, who have been very patriotic rocks of society who have not cost too much in terms of security — there are not too many Garda calls to farms — and who have represented a cost to the State only in terms of what they did positively should be applauded, supported and given the pension. I ask the Minister of State to reflect on the matter, change the budget and seek the savings elsewhere.

No sane, rational person is suggesting we should not trim the economic sails. We should have done it long ago. The fundamental difficulty is that we have not been doing so for eight years. It is a question of how one should trim the sails. Does one do so such that there will be nobody left to pay tax?

Senator Denis O’Donovan

I welcome this debate. I spoke earlier on rural Ireland and the fishing industry. I welcome the Minister of State, Deputy Sargent, who has strong links with Drimoleague in west Cork, where I believe he joined the Green Party. I would have encouraged him to join another party but he slipped through the net.

The allocation committed by the Department of Agriculture, Fisheries and Food in 2000 amounted to €147 million and this was increased significantly to €257 million this year. Over the course of eight years, the allocation for the rural environment protection scheme increased from €205 million to €331 million, and it is to rise to €355 million next year. We must acknowledge the expenditure on agriculture, amounting to €14.5 billion, which sum has increased significantly over the past year, and the EU funding of €1.4 billion. I am disappointed we are no longer the popular green giants we were in the European Union and am concerned that our decision in the Lisbon treaty referendum will affect the farming community adversely.

There have been many positive developments in farming in recent years. I am not here to be adversarial but I have a few issues to put to the Minister of State, the first of which concerns the suckler cow scheme. This was a wonderful scheme introduced during the lifetime of the last Government and €250 million has been ring-fenced for it. I am glad the first instalment of the €80 payment is to be paid in the next week or ten days. I am sure most farmers will welcome this. I ask the Minister of State to consider sincerely the possibility of putting a ceiling on the number of suckler cows required for eligibility, say 35. If it were 35, everybody with 35 suckler cows or fewer would be paid the €80 per head. Alternatively, as a member of a farming organisation put it, the total sum could be paid over four years. The majority of farmers, certainly those I represent in west Cork, would be quite happy if the number of cows in respect of which the payment was made was restricted, let us say to 35. Some might argue for 30 or 40. I ask the Minister of State to consider this seriously bearing in mind that there is wriggle room.

I was born on a mountainous farm on the Sheep's Head peninsula, a disadvantaged area. I was disappointed that there has been a reduction, from 45 to 34, in the number of hectares for which the disadvantaged area payment can be made. This affects the most disadvantaged, not only because of the type of land involved, much of which consists of rocks, stones, mountains, bogs and valleys, but also because the land in question is distant from the main centres of commerce, irrespective of whether one is in west Cork, Dingle or Connemara. If one must purchase goods, one is miles away from the centres of commerce. I often see people drawing lorryloads of straw from locations close to Cork city all the way to the Beara peninsula or Mizen. This has not been recognised. I am seriously concerned that, in making this move, the Minister is not saving a significant sum of money. I am concerned that the most disadvantaged members of the farming community are being hit. I would like the Minister of State to consider this further. Although he said the effect is minimal, the stocking density requirement also affects the most severely disadvantaged.

The suspension of the early retirement scheme is regrettable. I understand that under the farm waste management scheme, the Minister introduced a supplementary budget amounting to €190 million. This broke the bank as far as he was concerned. I am concerned that approximately €650 million was spent in the three years of the farm waste management scheme. Did we achieve value for money? Did the Department or Minister underestimate the number of applications? The €190 million has dented his hopes.

I am concerned about the suspension of the early retirement and installation aid schemes. I appeal to the Minister of State to consider the case of those farmers who, over the past 15 months, prepared their leases and transfer documentation with their solicitors. In many cases these leases are stamped and registered. I called a solicitor today who represents a farmer in west Cork and he told me that, in one instance, the stamping of a deed took four months. Subsequently, the farmer had to submit his documents to the Property Registration Authority and faced a six or seven-month delay. In the meantime, the farmer had built his retirement home and had taken all the steps to retire. His son obtained all the necessary qualifications and had advisers in place, from Teagasc or another body, to submit the documentation, to Wexford I believe. It was at this stage that the scheme was pulled. This is a real case of force majeure and farmers in this position should be dealt with sympathetically.

Reference was made to the legal consequences of the abolition of the scheme. An old common law doctrine, that of part performance, concerns what should occur if one goes so far in good faith. It has been recognised by Lord Chancellors in the United Kingdom. We inherited the common law system. The young farmers taking over should receive their installation aid.

The IFA provided figures that show approximately 300 people are caught in the circumstances I describe but I believe the number is much lower. If the Department were to analyse the cases of those who have proceeded as far as I have described, it would realise they must be looked after. I have ten clients in difficulty and another ten who are due to retire next November and whose sons and daughters are doing agriculture courses. I would suggest to them, with all respect, to hold back. A case was mentioned to me that involves a farmer who has taken all the necessary steps with his solicitor and has transferred his farm to his son, who is married and living in an adjacent house. As it stands, the farmer, who is roughly 56 or 57, is in impossible circumstances in that his land is gone and he will be entitled to no pension when be reaches the age of 66. His son will receive no installation aid. Such cases should be considered very sympathetically. This is one of the strongest points I want to make in this debate.

I would like to speak for half an hour on another few issues but must respect the time constraints. I know the Opposition is present to do a job and is slating the Government and various aspects of the budget but I would like to praise Mr. Liam Aylward, MEP, on what he has achieved, especially for the sheep sector. We cannot forget this. In recent days he received an award in Paris and has been recognised by the French President, Mr. Nicolas Sarkozy. The farmers will benefit in the very near future and I hope that the sheep farmers concerned will reap the benefits of Liam Aylward's efforts in Europe. We have should have more people like Liam Aylward.

Senator Nicky McFadden

Ì welcome the Minister. I am delighted to hear Senator O'Donovan singing from the same hymn sheet and supporting our motion. It is not about politics but about supporting our constituents. With deference to Senator Boyle, that is what we are doing. Fine Gael certainly has come up with an alternative budget.

Along with the rest of the population, farmers realise there is a global downturn and they are more prepared than anyone to play their part in getting the economy back on track. We know there must be painful choices but farmers bitterly resent the fact that, compared with other sectors, they have been targeted with such excessive cuts. The bones of our motion concern the cuts to the installation aid and early retirement schemes which will bring catastrophic effects on young and old farmers alike. As other Senators have remarked, over long periods farm families have phased and carefully planned their retirement and the handover whereby the young person comes in to take over the farm. It is morally wrong to close these schemes overnight. I am aware there are hundreds of farmers in the process of dealing with their solicitors. I do not like the threat of legal action but am aware that people are about to take legal action because of this measure.

In light of previous tax amnesties for developers and all the Fianna Fáil cohorts, the least we can do is provide an amnesty for these unfortunate people who were to get €15,000 each, be they the young person or the retiring person. It is incumbent on us to look after these people by providing €15,000 for the person who will retire between the ages of 55 and 65 and the installation aid grant for the young farmer who wishes to take over the farm. That was a good incentive for the young person to buy the necessary farm equipment or to pay the legal costs which could have been significant during the changeover.

Senator John Paul Phelan has pointed out that only 8% of our farmers are under the age of 35. That makes for a very lonely countryside. I raised this issue before with regard to the number of older farmers who are trying to run their farms on their own without the physical help of a young person to pull an animal or do the heavy work around the farm. It is frightening that such a small percentage of young people are involved in farming. It is cruel to remove the installation aid scheme, especially from well-educated young farmers who spent time going to college to bring themselves up to speed with new techniques.

I was shocked to read yesterday what the Minister for the Environment, Heritage and Local Government, Deputy John Gormley, said concerning greenhouse gas emissions and this nation's targets in that regard. He said we must reduce our emissions by 2020 but it is an absolute outrage that he expects the agricultural sector to cull the dairy herd to reach these targets. It is bad enough that farming was doing so badly before the budget as a result of the global and economic downturn. We then had a dreadful budget and now, to add insult to injury, the Minister comes up with this notion that we must cull the nation's dairy herd in order that we reach our quota of greenhouse gas emissions.

Perhaps the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, might talk to the Green Party and encourage the Minister, Deputy Gormley, not to come out with such extraordinary statements. Such talk is most harmful to an already disabled sector. I would describe farming in that way because it is suffering enough. I have had many representations from farmers who are suffering. We all know that the price of milk is the lowest it has been in 20 years owing to competition. Farmers will lose thousands this year. What do we do then? We impose all these extraordinary cuts that affect them.

I am surprised that the 1% levy is based on gross rather than net income. Farmers who would have invested in farm machinery such as a tractor might have expected to be able to write off the depreciation of that tractor or invest in their pension. The levy would then have been imposed on their net income. This imposition is not the case for other sectors and it is cruel and mean to penalise the farmers in this way. As Senator O'Reilly said, they must pay inflation costs, the increases in VAT, medical expenses, fuel, etc. The Government then imposes this levy on them on top of the other cuts.

Up to now €80 per suckler cow was available to qualifying farmers but next year that amount will be €40. I have serious concerns about the quality of our beef industry. We already saw the suffering and heartache farmers endured with the importation of Brazilian beef. I believe this decrease will affect the quality of our beef. As a person who likes to cook beautiful red meat, I do not like the idea that I am not assured of its quality. This is something we must seriously consider.

Another cut was made in respect of dead animals. It will now cost €70 to remove a dead animal from a field where it used to cost €35, or €30 for a small calf. Farmers are affected at every turn. I ask the Minister of State to reverse immediately these dreadful budgetary cuts.

Senator Brian Ó Domhnaill

I was listening to some of the debate on farming and agriculture, a very important industry in Ireland, especially in rural Ireland among farm families. I come from a very small farm in a rural part of County Donegal. My father was a sheep farmer and I know all too well the importance of farming to rural Ireland. I know, in particular, the significant benefits that have derived to farm families from the increased investment by this Government and the previous one.

This year obviously has been a very difficult year economically, not only in Ireland but globally. As a result, each Department, including the Department of Agriculture, Fisheries and Food, has had to take a close look at the money available to its Minister. The Minister, Deputy Smith, has not wavered in his commitment to allow farm families deliver on the capital investment programme by means of the farm waste management scheme. Every farmer will welcome that initiative because, ultimately, farming is about the land and about protecting animals. To do both those things a farmer must have the necessary facilities to hand. That is why the Government is committed to providing €615 million to the farm waste management scheme. I welcome the commitment given to that scheme and the fact that, despite the current budgetary climate, there will be no reduction of payments in the scheme.

Concerning the Estimates published on 14 October, some people suggest that agriculture took a disproportionate cut. That is not the case. The figure of €195 million included in the Supplementary Estimate for the farm waste management scheme marks an increase in investment in the scheme.

The Department's budget for 2009 is 2.56% less than in 2008. This decline is comparable to reductions across other Departments made in response to the current economic climate. The Department's budget for 2009 compares favourably with the budgets of other Departments. The reduction arises primarily on the capital side and current spending on the rural environment protection scheme, disadvantaged area payments, suckler welfare scheme payments, etc. will continue. As the Minister of State outlined, the overall budget available to the Department next year will be €3.2 billion.

I come from a disadvantaged area. While the Minister reduced total expenditure on area-based compensation or disadvantaged area payments by 14%, in doing so he reduced the maximum hectarage limit on which payments are made from 45 hectares to 34 hectares and introduced a small increase in the stocking density. This decision ensures the majority of the 102,000 participants in the scheme will not experience a reduction in their payments. Without wishing to take undue issue with the IFA figures, it indicated that 40,000 farmers would be affected by this budgetary measure when the precise figure is 35,000. Given that the average size of holdings is 31 hectares, the average participant in the scheme will not be affected. This includes many farmers in my constituency, especially in its disadvantaged areas, where the average farm size is, perhaps, slightly less than 31 hectares.

The Minister indicated that the decision to reduce disadvantaged area payments was taken reluctantly. When faced with difficult choices, he decided to prioritise expenditure on schemes such as REPS. Would the Opposition prefer to have a reduction in REPS rather than disadvantaged area payments?

Senator Jerry Buttimer

Senator Ó Domhnaill should look at the whole package in the budget.

I welcome this debate. Agriculture is an indigenous industry of essential economic importance to the future, as it has been in the past. Despite what Senators on the Government side may believe, the Opposition is not being political but reflecting the views and concerns of the farming community. Ireland has more than 131,300 farm holdings and according to 2006 figures, primary agriculture employed 109,100 people, while the agrifood sector employed 163,200 people. These sectors make a vast contribution to the economy and must be proactively supported in every possible way by the Government to deliver economic investment in the country.

We all agree that serious economic challenges lie ahead. The budget attacked farming. I remind Senator Ó Domhnaill who referred to events in 1995 that for the past ten years, Ireland has enjoyed an unprecedented economic boom. A major budget deficit has arisen in the past 12 months and the Government has cut funding for sectors across the economy. It has attacked the old and young and is now attacking the farming sector.

I acknowledge that the Green Party Minister of State, Deputy Sargent, has a genuine interest in the food sector, vegetables such as Brussels sprouts, allotments and greener organic food products. While his interest is commendable, the wider commercial farming sector urgently needs the Government's assistance. Government policies and the funding available to implement them will determine how sustainable the farming sector will be in future. If we cannot incentivise farming and encourage young farmers by giving them a belief they can sustain viable livelihoods for themselves and their families, what is the point? Farming must remain sustainable. We must create a demand for food production.

The challenge facing the Government is to create incentives for farmers. What incentives did it introduce in the budget? It disincentivised young people from entering agriculture. In recent years, young farmers have been forced to subsidise their incomes by working in other sectors such as construction. These opportunities have vanished and income from jobs in the building sector is no longer available for young people who also helped their parents on the farm. This calls into question the viability of such farms, whether in the dairy industry, tillage, beef or sheep farming. This has made the budget cuts in agriculture especially savage, especially when one considers the introduction of a 1% levy on gross income.

The installation aid and early retirement schemes provided significant incentives to young people to become involved in the running of their families' farms. As Senators are aware, credit has dried up. If these schemes were still available, young farmers engaged in the farming practice for which they are qualified would have €30,000 at their disposal. This benefit has been swept from under their feet and they must face the problem of securing credit to support their farming work.

Senators referred to the reduction in the suckler cow welfare scheme. This welcome scheme has been undermined and the budgetary measure removes another incentive for young people to enter sustainable farming. Senator Ó Domhnaill referred to the disadvantaged areas scheme. Of 100,000 farmers eligible under the scheme, almost 40,000 will lose almost €1,500 per annum. This is real life where real money is going down the tubes. The loss of so many layers of income to family farms affects their viability and sustainability. We are either real about how we support this indigenous industry or we are not. Senators Boyle and Ó Domhnaill mentioned previously that the cuts in farming were essential owing to the current economic climate. I would argue that had we not splurged and blown the boom as we did, we would have had a great deal more money with which to sustain the schemes for helping young farmers.

They question Fine Gael policies and proposals. Be assured that if Fine Gael were in power, we would not impose these cuts affecting the early entry into farming of young farmers. In our alternative budgetary announcements we talked about recovery through reform. We proposed a pay freeze on public sector workers earning €50,000 a year and over. We understand that this is neither a popular nor palliative proposal. However, it is a reality proposal that we believe would help sustain areas right across the board.

For example, if that proposal were adopted by the Department of Agriculture, Fisheries and Food, it would save €12 million alone that could be reinvested in farming. Some €37 million has been set aside in 2009 for research and training. It is welcome, but that is on top of a Teagasc budget of €122 million. Has the Government looked at Teagasc and that area of the public sector to see whether it is delivering in an efficient and proactive manner without adding expenditure to those areas? We should be investing at the farm gate and on farm lands rather than in the public sector.

I want to mention the elephant in the room, to which some Senators have referred, namely, a 20% reduction in emissions by 2020. That will have serious implications for the future of Irish agriculture and there is no point in denying it. The Minister of State said that we have a future in the beef and dairy sectors. If we take the climate change targets seriously, however, it is a fact of life that the future of the national herd will be called into question if there are to be reductions in what is already being emitted. We all know how dependent we are on the national herd and on the dairy and beef industries. If we have to comply with these targets, there will be problems because the projections are that the national herd should actually increase. That is a niche area of which Ireland and agriculture in general can take advantage, namely, the production of beef on our home soil and exporting that to other markets. If that future viability is called into question by climate change targets, then we are just transferring dairy and beef production across the world and, as some Senators have said, increasing the carbon footprint.

This is a clarion call to politicians on all sides as well as to the farming organisations to the effect that if we do not get to grips with this conundrum and square the circle, the future of farming will be in serious trouble. This is the biggest issue that needs to be addressed. I certainly hope the Department is negotiating as best it can in Europe and other places to try to ensure Irish agriculture and its future as fare as the national herd is concerned is protected. I ask the Minister of State to give this matter his special focus and attention because it has serious implications for the future of agriculture in Ireland.

Senator Diarmuid Wilson

I welcome the Minister of State, Deputy Sargent, to the House. I apologise again for the absence of my colleague, the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, who is in America on important Government business. He, like all other Ministers, had to make difficult decisions because of the budgetary constraints. However, he has prioritised a number of schemes, notably the suckler welfare scheme and the rural environment protection scheme. Regarding the former, the Minister has asked me to assure the House that the commitment entered into in partnership with the Government and the farm organisations to provide €250 million over five years is being honoured in full. This is a new stream of farm income and the first year's payment of €77 million to approximately 54,000 farmers will be paid over the next few months. While the rate of payment will have to be reduced for the remainder of the scheme given the exceptional levels of participation, the €250 million has been protected and will be paid in full.

The Minister has also provided record funding of €355 million for REPS in 2009. This ensures that those joining REPS 4 as either new entrants or transferees from REPS 2 and REPS 3 will benefit from a 17% increase on the level of payments under REPS 4.

Having prioritised certain schemes, reductions have to be made in others and, very reluctantly, the Minister reduced expenditure under the disadvantaged area payments scheme for 2009. Of the 102,000 participants in the scheme, the reduced expenditure will affect only those with more than 34 hectares or 82 acres. It is estimated that approximately 65,000 farmers will experience no reduction in their payments and given that the average holding is 31 hectares, the average participant in the scheme will not be affected at all. Significantly, the Department will still pay €220 million to more than 100,000 farmers in 2009.

The young farmers' installation aid scheme and the early retirement package have been suspended, not terminated, and it is important to make that point. In 2009, as the Minister of State outlined, €3.2 billion will be spent by the Department of Agriculture, Fisheries and Food in support of the agricultural industry. By any standard this is a substantial commitment by the Government and the EU to the Irish agrifood sector for the coming year. The Government is funding the most ambitious and generous on-farm investment scheme in the history of the State, through which €615 million of taxpayers' money will have been paid for the farm waste management scheme between 2007 and 2009. There have been calls to extend the scheme and Members of the Oireachtas on all sides have been contacted in this regard by various interest groups, including farmers, builders, etc. However, the Minister reluctantly cannot extend the scheme, he told me, because he does not have the money to do so. It is important to put that on the record of the House.

The Minister has also assured me that disadvantaged area payments, installation aid and early retirement schemes will be reviewed at a very early date. I want it on the record of the House that I met representatives of the county executive of the Irish Farmers Association in Cavan. They put their case very calmly and coolly to me and I have made representations to the Minister in that regard. I want to state also that a public meeting for five counties was held in Cootehill, County Cavan, some weeks ago, at which I could not attend at such short notice and I sent my apologies. I regret that those apologies were not conveyed to the public meeting and I want to put it on the record of the House that I am disappointed with that fact.

I thank the Minister of State for coming to the House and outlining in great detail the situation regarding agriculture. I thank my colleagues in Fine Gael for tabling this very important motion.

Senator Liam Twomey

Mine is a brief contribution. I expected more from the Government representatives. They might have given the House some idea as to how they see agriculture going forward under the present Administration. There was a great deal of attacking in respect of what Fine Gael might or might not do. Matters have changed in agriculture. Many alterations that would have come about over the years were postponed because many young farmers were involved in the construction industry. Now that industry has evaporated in rural areas, those jobs have disappeared and there is no alternative for many younger farmers. It means there will be enormous change within agriculture in the next four to five years. The Government representatives, when they presented the wider picture of what will happen over the next four or five years, should have been talking about this and not just taking cheap shots.

As for the small issues that were discussed during this debate, for example, early retirement pensions, these might have been small from our viewpoint but certainly not for those involved. It is fatuous for Government representatives to say this area is cast in stone and that we should forget about it. When the Finance Bill was discussed in this House last February, we changed legislation so a Government Deputy who was a former Minister could draw his pension. The pension was substantially more than the pension for early retirement for farmers. The annual pension for the farmers we are discussing is still less than one month's pay for most Government Ministers. These are small sums of money in the grand scheme of things, and to penalise farmers like that shows a mean-spiritedness on the part of the Government in making simplistic savings in the budget. It is similar to what we are doing in schools and with the medical card for those over 70.

The Minister of State should look again at these small things and the dramatic effects they have on individuals and present us with a bigger picture of what he sees happening to agriculture in the future. Some of the cuts, which I cannot go into in detail in the time available to me, are not cancellations or postponements and will have a dramatic effect on agriculture and the broader economy in rural Ireland if we do not do something about them.

Senator Jerry Buttimer

It has become the norm for Government Members to call on people to play their part in accepting budgetary measures. I found some of the remarks of the Minister of State extraordinary. I listened to Senator Boyle and I have never seen a party become so assimilated into Fianna Fáil like the Green Party has. It is appalling and they should be ashamed of themselves, especially regarding agriculture.

Let us look at the picture and be honest about it. Irish agriculture has faced great challenges in the past three decades, and every single farmer, and the farming unions, have lined up and negotiated, bargained, adapted and evolved. The area needs the Government to support and enhance its role and not decimate it. The 2009 budget, in the context of agriculture, has killed off rural Ireland and, more importantly, has told young farmers to stay off the land. That is the message. If the Minister of State talks to members of Macra na Feirme and young farmers — my own relations and brother-law — they will tell him this Government more than any other Government has made it difficult to farm.

If those on the Government side want a debate on Fine Gael in Government, we can line up former Deputies Mark Clinton and Ivan Yates, and Deputies Mary Coughlan and Brendan Smith, and I will tell them how the voting will go. We do not need the "X-Factor" for it because Fine Gael's agriculture policy has always been pro-farmer. We have been tough but fair with farmers, unlike the Government. I will defend our Ministers every step of the way because they have always been proactive on farming.

Has the Government a plan for agriculture? Where is its vision or strategic plan? They do not exist. This is a series of cutbacks which took place before the budget and that have been cobbled together. We are sending the wrong message to those in agriculture. What were the early retirement and installation aid schemes about? They were about telling farmers there could be change and progression, but now we have none. As Senator Coffey said, it is an indigenous industry which is important to Ireland, but under Fianna Fáil over the past 11 years there has been a flight from the land. There has been movement, and increasing numbers of people have had to take a second income to sustain their employment on the land.

Is the Minister of State serious about agriculture? If he is, why has the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, been abandoned at the Cabinet table and left on his own? If he is telling me that the other members of Cabinet support these cuts in agriculture, then they have no interest in farming and rural Ireland.

Yesterday we had a debate in this House on the rural development programme. Of that money, 55% came from Europe. Let us be realistic about farming in this country and have a debate about what is best for rural life. This budget does nothing but quench the candle of Irish agriculture.

Senator Paul Bradford

I thank my colleagues for their contributions and I welcome Senator O'Toole's strong words of support. I hope the contributions from the members of Fine Gael demonstrate our long-standing, clear and unequivocal support for the bedrock of society that is agriculture.

I welcome that the Minister of State has stayed for two hours to listen to the debate. I recognise that in the overall scheme of things he is a Minister of State in the Department and as I said at the outset of my contribution, it was a Fianna Fáil Minister, not a Green Party Minister, who imposed this budget on agriculture. The blame rests not with the Minister of State but with the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, and his ministerial colleagues.

Senator David Norris

What about Cabinet responsibility?

Senator Paul Bradford

The Cabinet is dominated by Fianna Fáil and this is a Fianna Fáil budget. There is a new mantra in the lexicon of politics over recent months: "international factors". Every problem is now blamed on international factors. It trips easily and merrily from the tongues of Cabinet members who took all of the credit for the Celtic tiger. Everything good stemmed from Fianna Fáil, and everything bad is a result of international factors. I ask my Fianna Fáil colleagues to drop that mantra because no one believes it any longer. They were in charge, they took all the budgetary decisions over the past ten years to prop up a false property market, they built an economy on false foundations, increased borrowing, massively increased the public sector to a level that is now out of control, and left this country in the financial mess in which it finds itself. I recognise from the Minister of State's comments that he is acutely aware of the grave financial crisis we are in, but the blame, sadly but firmly, lies with decisions taken over the past seven or eight years.

On the motion before the House, the Minister of State's colleagues on the Government side went down all manner of culs-de-sac. I refer to the three issues before the House for immediate consideration: the installation aid scheme, the retirement scheme and the disadvantaged areas scheme. The Minister of State knows as well as I do that if agriculture is to thrive and survive, we need to get young people into farming from a management perspective. That is why we have invested so much in training and development over the past 20 or 30 years. With one stroke of a budgetary pen last month all the good work was undone and there is now doubt rather than certainty and fear instead of hope.

I did not refer to the partnership process earlier. For many months farming organisations, along with the social partners, tried, through the different pillars of the partnership process, to chart the way forward out of the current economic difficulties. It is grossly unfair that at the end of the partnership process, to which the farming organisations to the best of my knowledge fully signed up, the budgetary measures made a mockery of the word "partnership". They represented nothing that partnership should be about.

I appreciate that budgetary matters are confidential and are announced on the day of the budget but these types of measure pull the rug from under a future generation of farmers and breach the understanding of the word "partnership". If there is one small degree of consolation to be taken from the Minister of State's contribution, it is that he said the suspension of the installation aid and early retirement schemes is temporary. We can look at all manner of definitions of temporary, but the crux of the matter and the reason it is so urgent, as the Minister of State and I know, is that under the rules of the scheme, people who were eligible to be successful applicants a few months ago may not be if the scheme is reintroduced in six, 12 or 18 months' time. I appreciate it is not the Minister of State who will make the decision, but I urge him to ensure that if the provision is to be only temporary and the scheme is to be reintroduced, it will be done in a retrospective fashion in order that people eligible for the scheme today will be still eligible in 12 months' time.

Fine Gael's aspiration is for the schemes to be reintroduced immediately. I am, however, a realist who knows the Government has the majority to push through whatever it wishes. If the schemes are to be brought back, they must be brought back with a retrospective provision in order that people who have invested thousands of euro will not see their money go down the tubes.

I thank my colleagues for supporting this motion, which reflects the strong support of the Fine Gael Party for Irish agriculture. We realise that society needs a rural Ireland and that our rural economy needs farming families. These types of measures are part of the range of supports, much of which come from Europe, that we need to maintain if Irish agriculture is to thrive and prosper in the years ahead.

Amendment put.

The Seanad divided: Tá, 26; Níl, 19.

Tá

Boyle, Dan.
Brady, Martin.
Butler, Larry.
Callely, Ivor.
Carty, John.
Cassidy, Donie.
Corrigan, Maria.
Daly, Mark.
de Búrca, Déirdre.
Ellis, John.
Feeney, Geraldine.
Glynn, Camillus.
Hanafin, John.
Keaveney, Cecilia.
Leyden, Terry.
MacSharry, Marc.
McDonald, Lisa.
Ó Domhnaill, Brian.
Ó Murchú, Labhrás.
O’Donovan, Denis.
O’Malley, Fiona.
O’Sullivan, Ned.
Ormonde, Ann.
Walsh, Jim.
White, Mary M.
Wilson, Diarmuid.

Níl

Bacik, Ivana.
Bradford, Paul.
Buttimer, Jerry.
Coffey, Paudie.
Coghlan, Paul.
Cummins, Maurice.
Donohoe, Paschal.
Fitzgerald, Frances.
Hannigan, Dominic.
McFadden, Nicky.
Mullen, Rónán.
Norris, David.
O’Reilly, Joe.
O’Toole, Joe.
Phelan, John Paul.
Prendergast, Phil.
Regan, Eugene.
Ross, Shane.
Twomey, Liam.

Tellers: Tá, Senators Déirdre de Búrca and Diarmuid Wilson; Níl, Senators Paul Bradford and Maurice Cummins.

Amendment declared carried.

Question put: "That the motion, as amended, be agreed to."

The Seanad divided: Tá, 25; Níl, 19.

Tá

Boyle, Dan.
Brady, Martin.
Butler, Larry.
Callely, Ivor.
Carty, John.
Cassidy, Donie.
Corrigan, Maria.
Daly, Mark.
de Búrca, Déirdre.
Ellis, John.
Glynn, Camillus.
Hanafin, John.
Keaveney, Cecilia.
Leyden, Terry.
MacSharry, Marc.
McDonald, Lisa.
Ó Domhnaill, Brian.
Ó Murchú, Labhrás.
O’Donovan, Denis.
O’Malley, Fiona.
O’Sullivan, Ned.
Ormonde, Ann.
Walsh, Jim.
White, Mary M.
Wilson, Diarmuid.

Níl

Bacik, Ivana.
Bradford, Paul.
Buttimer, Jerry.
Coffey, Paudie.
Coghlan, Paul.
Cummins, Maurice.
Donohoe, Paschal.
Fitzgerald, Frances.
Hannigan, Dominic.
McFadden, Nicky.
Mullen, Rónán.
Norris, David.
O’Reilly, Joe.
O’Toole, Joe.
Phelan, John Paul.
Prendergast, Phil.
Regan, Eugene.
Ross, Shane.
Twomey, Liam.

Tellers: Tá, Senators Déirdre de Búrca and Diarmuid Wilson; Níl, Senators Paul Bradford and Maurice Cummins.

Question declared carried.

An Cathaoirleach

When is it proposed to sit again?

Senator Donie Cassidy

Ag 10.30 maidin amárach.

Seanad Éireann debate - Wednesday, 12 Nov 2008

Irish Agriculture: Motion.

Tá

Níl

Tá

Níl

Seanad Éireann debate -
Wednesday, 12 Nov 2008