Common Agricultural Policy and Rural Development Programme: Statements

I apologise for keeping Members waiting for five minutes. We had to deal with something in the Department. I thank Members for the opportunity to say a few words about the complete picture in terms of the reform of the Common Agricultural Policy, Pillar 1 and the rural development programme. Last week, we announced a funding package of about €12.5 billion for agrifood and farming for the next seven years. This is a very strong package. We also announced the detail of the rural development programme that will spend about €4 billion of that over that period.

We have been involved for the past two years in trying to shape the CAP at European and now Irish levels. The process has essentially involved finding agreement during the Irish Presidency on an overall CAP deal across 28 member states. We then built enough flexibility into that agreement to allow countries to design a CAP that would suit their own ambitions, farming structures, land use, crop types and so on. Our plan for the agrifood sector is very clear. It is called Food Harvest 2020 and was put in place by the previous Government in terms of setting the ambition. It is certainly being implemented and built upon by this Government. It was in that context that we approached the CAP reform process. We wanted to essentially deliver smart green growth for Irish agriculture. This is about implementing technology and innovation and helping people to improve their productivity, which is about real and measurable sustainability in terms of how we produce food. Ireland has now become a world leader in this area. It is also about delivering growth. We want to increase the volume of output from our agrifood sector by one-third between now and 2020 and to increase the value of that output by about 40%. We have a series of other targets.

The CAP package that was originally proposed by the Commission would have posed real problems but the final agreement with the Commission, the European Parliament and other member states is a good package from an Irish perspective. We as a Government have delivered everything we promised to deliver during that process in terms of a fair and reasonable redistribution of direct payments, some of the other strategic things we wanted to do like extra supports for young farmers and having a real green element to the CAP in terms of undertaking new and expansive things relating to environmental controls and sustainability. We have the flexibility we need to ensure that Cyprus, Sweden and every other country in between can shape a CAP for their own purposes.

I will speak on some of the details and then take questions and comments from Members.

It is clear that agrifood is the most important indigenous industry in the Irish economy. Including the services and food retail side, the food and drinks sector in its entirety employs approximately 200,000 people. It has seen dramatic growth even in the very difficult economic period of the past four years. In that time there has been a 40% growth in the value of food and drinks exports. Some of the companies and brands delivering that growth will continue to grow and expand for the next five to ten years. We need to ensure that these industries and processors are supported by food producers which will provide quality, safe, sustainable products and that they are provided with innovative and sustainable supports.

The Government has agreed funding of €12.5 billion in CAP and Exchequer funding to agriculture up to 2020. A total of €8.5 billion - Pillar 1 moneys - will be in direct payment to farmers. We had a number of priorities for direct payments such as a fair redistribution of that money. There had been a significant disparity between the levels of payment per hectare paid to farmers with some farmers getting €1,300 or €1,400 per hectare while other farmers received €20 or €40 per hectare. In some cases they were living down the road from each other. This happened because up to now the single farm payment and headage payments and so on, were linked to past productivity. It has been decided to move everyone towards an average payment. However, everyone would not be forced onto the same payment because in my view that would have been devastating for Irish agriculture. It would have been a statement that all farmers had the same capacity to produce food. This is not the case as it depends on the individual farm structure, the location and soil type, whether a farmer is part time or full time and other considerations. The capacity to produce food differs between farm holdings. There is a correlation between past and current productivity. While we agree there needs to be some level of redistribution, that needs to happen over time and gradually over seven years. It needs to prioritise, where possible, full-time farmers and farmers who are as productive as they can be, given their land.

In order to achieve fairness we have introduced a minimum guaranteed payment for everyone which will be 60% of the average payment. Every farmer will receive approximately €150 per hectare. Farmers who would have been getting €30 or €40 per hectare in the past will be brought up to a guaranteed minimum payment over the seven-year period. The highest payments will be brought down to a ceiling payment of a maximum of €700 per hectare. Any farmer who was being paid €800 to €1,200 per hectare will receive a reduced payment per hectare of a maximum of €700 per hectare. The number of farmers earning more than €1,000 per hectare is very small. The approximation model, designed by Ireland, will be used to achieve a fair redistribution process to move everyone towards an average payment. Everyone is moved by one third towards 90% of the average national payment. This is paid for by farmers with above average payments. In other words, everyone is squeezed towards the middle without forcing everyone to an average payment. We had many debates on that issue in this House and in the other House. The vast majority of farmers in Ireland agree with this approach.

The sheep grassland scheme has been in place for a number of years. This is an important scheme in the west of Ireland in particular and for sheep farmers generally. It has varied in value between €13 million to €15 million. We have decided that instead of introducing a form of coupled payment for sheep which would have distorted market forces, that payment will be decoupled and included in a sheep farmer's single farm payment. It is similar to the decoupling of cattle headage payments for inclusion in the single farm payment. The sheep sector will benefit from that value of €13 million or €14 million in the single farm payments. The sheep sector is doing very well out of this reform. Most sheep farmers in the country will gain from this redistribution and from the decoupled additional payment to the single farm payment linked to the sheep grassland scheme. This is a positive result for sheep farmers under Pillar 1.

We have decided to take strategic action with regard to protein crops. We import a lot of protein for animal feed and I would like to see an increase in the amount of protein being grown here. We are requiring arable farmers to have crop diversity and we want to encourage them to grow peas and beans or other similar protein crops. We will give a protein crop payment which is the only coupled payment. It will be a very small payment in actual terms but it will be a strategic incentive for arable farmers to consider growing protein crops because we need more protein crops.

A total of 30% of a farmer's single farm payment will be held back until he or she can demonstrate that basic environmental benchmarks have been met in the production of food. This is an initiative in the Common Agricultural Policy because it introduces a requirement for sustainability as part of a single farm payment, apart from cross-compliance issues. The greening initiative will require farmers to protect permanent pasture within reason - there is some flexibility in this regard. It will require them to have crop diversity, with at least two crops up to a certain threshold and three crops thereafter. They will be required to plan for having an ecological focus area on their farms which will represent initially 5% and moving up to 7% of the holding. They will be permitted to grow certain qualifying crops in that ecological focus area. This is not a set-aside as farmers would have seen it in the past; it is an area of the farm which will add to the biodiversity on the farm and make a positive contribution towards encouraging wildlife.

The new aspects of Pillar 1 are a greening initiative and the decoupling of the sheep grassland scheme. We are taking strategic action with regard to generational change and using CAP funding to do it. We do not have enough young farmers in Ireland. Only 6% of young farmers in Ireland are under the age of 35. That is no basis for taking this industry forward to match our level of ambition for growth, expansion, sustainability and scientific auditing of how food is produced. It has been agreed that every country will be mandated to positively discriminate in favour of young farmers as part of Pillar 1 payments. This means that in Ireland a young farmer under the age of 40 who has come to farming in the past three years will get a top-up of 25% on his or her single farm payment. This will be 25% of the national average single farm payment. As an example, I refer to a young farmer taking over a farm who is fortunate to take over a high single farm payment per hectare compared to a neighbour who is taking over a farm with a much lower single farm payment per hectare.

We think it would be unfair to make the top-up 25% of the payment. Instead, we want every young farmer to get the same extra lump sum. For some farmers, who live in parts of the country with a low average single farm payment, the young farmer's payment may be higher than the single farm payment, but it will allow young farmers to invest in their farms in the way we need them to.

In Ireland, in terms of a figure for the maximum amount young farmers may be getting, a lot of people expected us to limit the young farmer's top-up to the average farm size. That means they would receive it for the first 32 hectares and nothing after that, but we have raised it to the first 50 hectares. Therefore, a farmer who takes over a farm of 50 hectares will receive a payment of €16,000 over five years. That is a sizeable amount of money in terms of a top-up payment for young farmers. It will force a conversation to take place in families, between parents and their sons and daughters, on handing over the farm and the decision-making that goes with it, which is exactly what we need. A very strategic policy is being delivered through Pillar 1 and it will involve up to 2% of the total Pillar 1 money of €1.21 billion.

As people will probably know, a national reserve of 3% will be taken from the Pillar 1 money in the first year for new entrants to farming who do not have any entitlements but who need to be given them as part of coming into farming. That is a very strong support for young farmers. I am confident that Pillar 1 has been designed in a way that suits Ireland and Irish farming.

In terms of the greening of the Common Agricultural Policy, 80% of Irish farmers will automatically qualify. If more than 75% of one's land is in permanent pasture, one will automatically qualify under what is called the green by definition rule, as long as one does not have more than 30 hectares of arable land on one's farm, which most mixed farms would not have. The vast majority of Irish farmers will automatically qualify for the greening payment. On top of that, the young farmer's payment is very much designed with Ireland in mind given the dramatic increases we have seen in the number of young farmers going to agricultural college and to university to study agriculture.

We pushed hard for an overall cap. I have had conversations with Deputy Martin Ferris on the issue. He suggested to me that we should have an overall cap of €100,000 and that nobody should receive a single farm payment of more than €100,000. I agreed with his suggestion in principle, but we have not been able to deliver on it in full. We had a vote with the Parliament and other member states where many member states fought hard for no cap because some countries have much larger farms. We secured a compromise whereby countries would be allowed to introduce a cap at or above €150,000 and we will introduce a cap at that rate. However, we were not allowed to make it any lower. If we could have secured a lower figure, I probably would have considered a figure of €100,000. The lowest we can go is €150,000, and we will introduce the cap at that rate unless I hear some compelling reasons not to do so. We are in the final consultation process at this stage.

That covers Pillar 1, which involves a huge chunk of money which will be more fairly redistributed than before. It guarantees a basic standard of environmental protections and it positively discriminates in favour of young farmers. It gives top-ups to sheep farmers and we are taking a national reserve for new entrants. Each year 1% will be taken for a crisis reserve fund in case there is a dramatic collapse in any one of the markets to which we contribute at a European level whereby we can invoke a crisis response from the Commission. If the money is not spent, it will be given back to farmers the next year. In other words, this money does not disappear into a pot and we will never see it again if it is not used.

Pillar 2 was a complex process. First, we had to decide how much money we had to spend. I pay tribute to my colleague, Deputy Brendan Howlin, on this issue. He has a difficult job to do to manage Government expenditure in a very difficult period. My Department negotiated with the Department of Public Expenditure and Reform in trying to maximise the amount of co-funding that Ireland would provide as a Government and country to match EU funds contributed towards the rural development programme. Many people predicted that the Irish Government would spend the bare minimum to draw down the full EU funds available. That was not the approach and was never the approach. Instead, we have designed an ambitious and proactive rural development programme to try to achieve the strategic things we want to achieve between now and 2020 to fulfil the potential of Food Harvest 2020. To do that, we need a certain amount of money.

I am delighted to say that the result is we will spend as much money in the next seven years as we have spent in the past seven years on rural development. That represents a significant achievement when one considers the EU's contribution has reduced by about 13%. The average spend by my Department, excluding the Leader programme, which is part of rural development, will be about €563 million a year over the next seven years. Considering that this year my Department will spend €405 million, we are talking about the average figure being €160 million more than we will spend this year on rural development, increasing year on year for the next seven years. That is a very positive story.

We have committed to providing 46% and the EU providing 54% of the rural development programme. We could have agreed a figure of about 35% or maybe even less and still being able to draw down the full amount of EU money. However, it is a signal of real commitment towards this sector and a signal that we believe in investing public money in agrifood and agriculture because we think this is a sector that can perform, grow and create jobs, wealth and stimulus in parts of the country that badly need it. The negotiations have been very successful. Both parties in Government have shown a real commitment to rural Ireland. Both I and the Minister, Deputy Brendan Howlin, worked hard on that with the same objectives in mind.

In terms of how we will spend that €4 billion, first, we have announced that we will have a new environmental scheme to replace the rural environment protection scheme and the agri-environment options scheme over a period. It will be called GLAS, which is the green low carbon agri-environment scheme. In essence it will build on previous schemes, but it will be more focused and targeted, and it will deliver better results. We have worked hard with stakeholders who are interested in this area to get it right. Perhaps Members might have questions on the scheme later.

The basic GLAS scheme will provide a maximum payment of €5,000 for up to 50,000 farmers, which is what we have budgeted for. It will target specific environmental challenges and will focus on biodiversity, water quality, climate change issues and emissions, and it will require specific actions by farmers in these areas. It will also, for the first time, certainly in my lifetime as a Minister, give to farmers who farm in Natura areas and special areas of conservation, SACs, and who are required to do certain things on their land to protect water courses, biodiversity and so on, payments for what they are currently required to do but are not being paid for in some cases. Again that is a positive development.

There will also be what is called a GLAS+ programme.

Farmers will be able to top up that €5,000 with an additional €2,000, thereby getting a €7,000 maximum payment. This will be a demanding scheme for farmers. A farmer wishing to farm in a manner that is focused on the promotion of bio-diversity and the development of an environmentally friendly farming system which goes above and beyond what is demanded by the basic green low-carbon agri-environment scheme, GLAS, will have the option of doing so and to be paid extra for doing it. I suspect most farmers will not be in this category. This scheme is currently being designed.

In regard to the disadvantaged area scheme, DAS, payments, the new term will be areas of natural constraint, ANCs. The level of funding provided in the past for this programme is being maintained. In this regard, €195 million is allocated in the Estimates for this year, which €195 million will remain in tact for the lifetime of the next rural development programme, RDP. In other words, even though farmers in disadvantaged areas will, by and large, be gaining from the redistribution process in Pillar 1, many will also be gaining because they will be entering a new GLAS scheme and some of them will also be gaining in terms of their sheep payments becoming permanent. They will also maintain their full DAS supports, although I recognise that those payments have decreased in recent years. The €195 million allocation is factored into the numbers and will not change.

In regard to on-farm capital investment, this is an important issue, particularly for the dairy industry. We are planning for pretty dramatic growth following the abolition in April 2015 of dairy quotas. As such, we need an incentive for farmers to invest, to plan for growth and expansion, to put in place proper infrastructure in terms of their farmyards and to manage everything from water to slurry to increased storage for milk volumes and so on. A strong TAMS programme is being put in place, targeted specifically around dairy for the first couple of years but also involving other sectors.

In regard to young farmers, a special capital investment support programme will positively discriminate in favour of young farmers. In other words, while a farmer applying for capital grant aid under the normal TAM scheme will receive 40% of the cost of doing the works, a young farmer under the age of 40 years will receive 60% of the cost. As the capital expense of some of the investment needed is considerable, this represents a significant capital support for young farmers. We are giving young farmers a top-up under Pillar 1 to encourage them to invest and we are also giving them a significant increase in terms of grant aid support for that investment when they decide to make it. This applies not only to the dairy sector, but to other sectors also. We could have introduced an installation aid-type scheme for young farmers but I did not believe that would be good value for money spend. The problem with the installation aid scheme, even though it was hugely popular among young farmers, was that there was no requirement on a young farmer in terms of how the money was spent. While young farmers were given a lump sum to help them start up as farmers, they were permitted to spend that money on anything they wanted, including outside of agriculture. We no longer have that luxury. We are providing now that where a young farmer wants to invest in his or her farm, which we are encouraging them to do, the State will help them do so by giving them a very significant capital support in terms of infrastructure and build but not stock.

On knowledge transfer and innovation, we remain strongly committed to the discussion groups model, which has worked really well. It has worked really well for the dairy sector and is working well for the beef and sheep sectors. Farmers like it. It is a reason for them to come together to discuss their businesses and to talk about how to do things better and in a more efficient way than in the past. It is about sharing knowledge and information that helps farmers to become better business people as well as more sustainable food producers and so on. We propose to take the best of that discussion group model and build on it. We have committed approximately €22 million per annum to the knowledge transfer and innovation programme, which again in my view is an important initiative.

On beef, I wanted to do something particularly targeted in this area, particularly around suckler beef. The problem in Ireland in regard to suckler beef is that many suckler beef farmers are not profitable in terms of what they make in the marketplace. They rely heavily on schemes and supports and so on because suckler beef is a tough industry in which to make money. We want to do two things in this area. First, we want to support the income of farmers producing good quality, sustainable beef in suckler herds. Second, in introducing a support scheme we want to encourage farmers to change their behaviour and to become more efficient in terms of how they produce beef, their breeding programmes and so on. We are building on the beef genomics scheme and the beef technology adoption programme and introducing a new beef data and genomics measure-scheme whereby we will be requiring farmers farming suckler beef to provide DNA samples from their calves and to provide data in regard to how their animals are performing. Issues on which information will be required include ease of calving, confirmation, pace of growth and all the other measures in place in terms of the measurement of the performance of animals in terms of how they behave and respond. This will allow us to build up a national database through ICPF not only of the location of animals in terms of traceability, but of their DNA and how they perform linked to that DNA. This means that in the future - we will be the first country to be able to do this - we will be take the DNA of a calf and predict accurately how it will perform and grow on the basis of what we know about that DNA. We will also be able to give farmers much more accurate and informed information in terms of breeding programmes and the types of bulls they should be using because we will know what DNA crosses well with other DNA to produce better results and so on.

Essentially, we propose to introduce a scheme that will pay farmers approximately €80 per calf in return for which they will have to supply us with DNA samples and other information. We are budgeting on the basis of 650,000 participating calved cows at €80 per animal. This estimate is based on the number of farmers who wanted to get involved in the suckler cow welfare scheme when introduced. In other words, beef farmers who are interested in getting involved in progressive programmes will be interested in this new beef genomics scheme. That is a reasonable estimate given the numbers that entered the previous scheme.

We are also introducing supports for collaborative and quality focused measures. For example, we will give capital grant aid of up to €2,500 to assist in the setting up of a partnership or a small artisan food business and so on. We are also maintaining and building on supports for the organic farming sector. We have a problem in Ireland in that only 1.5% of our land is dedicated to organic farming while the average across Europe is approximately 5%. We would like to see an increase on that 1.5% and have put in place supports in this regard.

I know that some Senators represent coastal and island communities. I propose to do something specific to support people who are farming on the islands, particularly those who continued to do so during the past couple of weeks. Keeping animals, be they suckler cows or sheep, on the islands is a tough business. It is an area from which it is also difficult to make money. I am looking at putting in place a generous scheme that recognises the difficulty of farming on islands. This will ensure that stock is maintained on the islands and that people there remain active in farming.

That is the package, which I believe is a reasonably good package. I look forward to hearing Senators' questions so that I can provide some clarity.

I welcome the Minister, Deputy Coveney, to the House and I thank him for his comprehensive overview of what has been achieved with the new Common Agricultural Policy. I acknowledge the work particularly over the past six months the Minister and his officials put into providing a new CAP, both Pillar 1 and Pillar 2, for the period up to 2020.

Before coming to the CAP, I wish to touch on another issue affecting many farmers. Senator O'Donovan has particular concerns in the Cork-Kerry area. I refer to on-farm inspections and the continuance of the clawbacks over four or five years for payments which farmers would have achieved. Even though the land parcels provided by the farmers would have been accepted by the Department in the past, due to the digitisation of these maps farmers are now being penalised not only for this year but for a number of years. It is very unfair and is causing financial hardship. It is becoming very burdensome on many farmers and needs to be addressed.

Obviously the new CAP is being introduced at a time of economic difficulties across the European Union, which is acknowledged in the reduction in payments provided under the overall CAP framework. In Pillar 1 there is a reduction of 3% or 10% if inflation is taken into consideration. I welcome the move to redistribute payments on a fairer basis. Given that 70% of farmers are getting less than €10,000 in their single farm payment, it means that 30% of farmers are getting more than €10,000. My party always believed that there had to be a fairer way to distribute the single farm payment because if it was left on the historical basis of the production activity in 2000, 2001 and 2002, by 2020 some farmers would be receiving a payment based on what they were doing 20 years previously which simply was not fair. I supported the Commission's view which would have provided a more level playing field. However, perhaps the deal on the table, as the Minister has outlined, might be a fairer deal depending on where the cut-off comes to provide the additional €70 million that will bring the people on the lower single farm payment per hectare to 60% of the average. I understand the Minister has defined a cut-off of approximately €600 where-----

Sorry, it is €700 per hectare so that the redistribution would occur there and between the average and the €700 and there would be a cut-off above €700. Deputy Ó Cuív has raised this in the Dáil and at the Oireachtas Joint Committee on Agriculture, Food and Marine. There is a question over whether productivity increases over a certain hectarage. The Department's figures above the €400 have been debated at committee and I do not want to dwell on them too long today. I believe that the cut-off should be lower than €700 per hectare because nothing supports additional productivity above payments of €400 per hectare because the productivity does not increase between €400 and €700 or between €400 and €1,000. If that were done the people who are productive between the average and €400 per hectare would not have to meet some of the moneys required to raise the additional €70 million.

Some 55% of farmers have less than 32 ha and 78% of farms are less than 50 ha, which is approximately 120 acres. Therefore, the vast majority of Irish farms are relatively small. Most of those are small productive units that are relatively intensive but are providing the animals for larger farms or for factory production and are critical to the future of Irish agriculture. They include farms in the west of Ireland that are producing young lambs and calves that are sent on for secondary production before going on to be slaughtered or for live export.

While I acknowledge that the Minister has done excellent work on Pillar 1, I believe the €700 cap is too high. I agree with the Minister that the cap of €150,000 per farm in the CAP proposals is also too high come 2020. When 70% of Irish farmers are receiving relatively small payments it is unfair to have a cap of €150,000. The cap should have been reduced to €100,000 or below, which would allow for a redistribution of funds by 2019.

In the past six months there has been a concentration on agreeing Pillar 1 after which we could get a deal for small farmers under Pillar 2. Many people bought into that, including the IFA. However, I never bought into it because one could never have an agreed Pillar 1 without knowing what would be in Pillar 2. While I acknowledge what the Minister has said on the Pillar 2 allocation, regardless of how we dress it up there is a substantial reduction in Pillar 2 money to Irish farmers, going from €4.825 billion under the 2001 to 2013 scheme down to €3.77 billion in the period from 2014 to 2020.

That is misleading and the Senator knows it. The overall spend in the past seven years has been less than €4 billion.

I am about to come to that.

The spend for the next seven years will be over €4 billion.

The Minister is quite correct. The figures up to the end of November show that there is an underspend on Pillar 2 of approximately €800 million. I can point to many of the schemes that-----

Did the Senator say €800 million?

Senator Ó Domhnaill without interruption.

I have a copy of a reply to a parliamentary question that gave the figures up to the end of November. There was an underspend of €800 million. In one particular scheme where approximately 75% of the funding was coming from EU sources, not one cent of the moneys was drawn down. It was a scheme that came under Pillar 2 for rural broadband. Some schemes that could have been used were closed, including TAMS. Obviously 50% of the €800 million was Exchequer money, but approximately €400 million of it was EU-sourced money. I believe it is misleading for the Minister to make the comparison he has.

The available funding under the last Pillar 2 was €4.825 billion. The available funding under the next pillar will be €3.77 billion. I suggest that if there is an underspend in the next Pillar 2 allocation, then there will be approximately half the money that was available under the last Pillar 2. Let us consider the cuts. There is a 40% cut to the disadvantaged areas scheme and the Leader programme has been cut by 55%.

Senator Ó Domhnaill does not even know what the Leader funding is. It has not been decided yet.

I must ask you to conclude, Senator.

I am going by the figures that have been presented to me by the Fianna Fáil spokesperson on agriculture in the Dáil.

Maybe Senator Ó Domhnaill should question them, with respect.

Senator Ó Domhnaill to conclude.

The figures were compiled in replies to parliamentary questions.

We have the Minister in the House.

I have two final points. I plead with the Minister to consider the position on the genomics scheme. Funding of €80 per head is available. Perhaps the Minister could clarify the position, but it is my understanding that the charge is €50 per animal tested. Therefore, the farmer will only gain €30.

Senator, I have to ask you to conclude.

My final point is on the green low-carbon agri-environment scheme, GLAS. Is it a condition of the GLAS that 80% of the commonage farmers will have to agree before the scheme can be drawn down on the commonages? If that is the case, it is unworkable. Perhaps the Minister will clarify that.

I welcome the Minister to the House and I thank him for his usual generosity, which he has always shown, in being amenable to come to the House. I appreciate that after every stage of the negotiation process leading to the reformed Common Agricultural Policy, the Minister has kept Senators updated on the process. I know that the negotiation process was a long procedure, with the added element of having to wait for the EU budget to be decided upon first. I understand that more than 40 discussions took place between the Council, the Commission and the European Parliament before political agreement was reached. I realise the Minister and his Department invested considerable amounts of time and resources before and during the term of the Irish Presidency. These efforts have resulted in a fairer agreement that will provide certainty and security for farmers up to 2020.

The CAP has always coupled a system of direct payments with rules governing rural development policies aimed at improving the environment and the countryside. These policies have improved the quality of life in rural areas and encouraged diversification of the rural economy. The new agreement will continue to build upon these principles while modernising their application. The new Common Agricultural Policy allows for unprecedented flexibility for member states in implementing the provisions. This is a positive development and will allow member states to tailor the policy to the particular needs of their country or regions. In an expanding and changing European Union this is a welcome decision. The new programme will set a basis of continued growth of the agriculture, forestry and fishing sectors. This is especially important since research has shown that investment in agriculture produces far greater returns than investment in other sectors. This is because agriculture sources 71% of raw materials and services from Irish suppliers, compared to 44% for all other manufacturing sectors. The potential spin-off effects for communities from agriculture is positive and we can see this in our towns and villages. When farmers have money, they spend it locally and this makes a major difference to the towns and villages in rural Ireland.

The Minister outlined how the single payment scheme is moving from a single model to a basic one, resulting in a redistribution of funds between farmers. This will be of benefit to farmers in all sectors of the industry. The direct payment scheme has allowed many to remain on the land at a time when emigration and urbanisation are becoming the norm. I believe these changes will continue to support our producers. The phased introduction of these changes is fair and avoids a sudden shock to the payment system. This new model also opens up the system of entitlements to many who were previously ineligible and this will assist in maintaining growth in the sector.

A particular focus of the reformed programme has been on encouraging new and young entrants to farming. This will be a challenge for the sector, as demonstrated by the Central Statistics Office data highlighted by the Minister this week showing that the average age of farmers rose from 50 to 54 years between 2000 and 2010. Considering the importance of farming to the Irish economy, this trend is rather concerning.

Both Pillars have included specific programmes for young farmers and provided top-up payments. A percentage of the funds have been allocated to this demographic and I am pleased that Ireland has committed to the full allowable amount for 2015. I welcome the fact that the allocation of these payments is linked to the success of applicants in completing a recognised educational course in agriculture. Like all industries, the future success and sustainability of agriculture will be driven by improved technologies and methods of production. Worldwide consumers are demanding higher standards of quality and traceability in food production. Agriculture is a vast industry and just as we can boast of a well-educated workforce in the technological and pharmaceutical industries, Ireland must have high levels of knowledge within the agriculture sector all the way down to farm level.

The new programme contains key measures aimed at supporting and encouraging the transfer of knowledge and promoting innovation in the sector. By the application of these new methods of production and the sharing of knowledge we can improve the quality of farming, reduce disease, increase competitiveness and make farming more sustainable. The incentives for on-farm capital investment contained in both pillars will be important in driving the industry forward and some of the funds allocated for this will be ring-fenced for young farmers establishing a holding for themselves. These incentives compare favourably to capital investment schemes available for entrepreneurs in other sectors of the economy and will ensure that the agriculture sector is a desirable option for people to build a business in.

Budget 2014 included an adjustment to capital gains tax making it more attractive for farmers to transfer land to younger farmers. Coupled with the measures included in CAP schemes, this will be important in seeking a reverse of the age trends in the sector.

Following last week's announcement in respect of Pillar 2, I welcome the level of investment in the rural development scheme and the allocation of €1.9 billion in funds from the Exchequer, especially at a time when demand is rather high on resources. It is a significant achievement. This level of funding coupled with €2.2 billion of EU funds is an acknowledgement of the importance of the sector to the Irish economy and demonstrates a commitment by the Government to improving the competitiveness of the agriculture sector. This will also be used to encourage a diversification of industry in rural areas, which is vital in maintaining rural communities.

I know the Minister is involved in a consultation process with various stakeholders before the finalisation of the programme. The willingness of the Minister to engage in a broad consultation process will ensure that economic recovery is felt throughout rural as well as urban areas. Two thirds of Irish farmers are classified as rural. Therefore, it is important that effective measures targeted at the needs of farms are put in place.

The fundamental principle of schemes under Pillar 2 are voluntary and therefore payments must be maintained at a level which is attractive to farmers given the commitments which they undertake to fulfil and the costs associated with doing so. I believe the new environment scheme, GLAS, included in Pillar 2 will be an attractive measure for farmers. There are many benefits which can be gained from participation in this agri-environmental scheme which can lead to better farm practices and a better quality of life. It is through participation that a greater appreciation of biodiversity and wildlife can be developed resulting in a better environment for all. I welcome the continued support for disadvantaged areas with payments again amounting to €195 million per year for the length of the programme. I understand a minimum of 5% must be spent on Leader programmes. I call on the Minister to outline whether a timeframe has been established for making this funding available. Leader companies have been at the forefront of supporting employment, entrepreneurs and community groups to establish businesses and services in rural areas. Continued support for the Leader programme and employment in rural areas is vital to maintain rural populations.

I thank the Minister for coming to the House this afternoon. The reform programme will build upon previous programmes and its implementation will be important as we continue to achieve our Harvest 2020 targets, and to seek to attain the critical mass of Irish products in key international markets. I would like to acknowledge the work that the Minister and his Department have put in place in developing the programme, and I look forward to further details about Pillar 2 in the coming weeks.

I am disappointed with the amount of time allocated, but that is not the Minister's fault. We do not have an important debate like this on agriculture too often, and since there are not too many in this House who have a keen interest in agriculture, the rest of us should have been given a minimum of ten minutes, but that is the ruling of the House.

I welcome the Minister and I know that his heart is in the right place. I broadly welcome the result of the CAP negotiations. I know the devil is in the detail and some aspects must still be worked out. I also welcome the special provision for island communities. The Minister should be thanked for doing that, because living on an island is difficult enough, but farming on an island is very difficult.

I would like to mention something that is not directly linked to the CAP, but it is an issue that is very prevalent in my area. I was at a public meeting a week ago at which about 400 farmers turned up, and they were deeply concerned about the cuts in the single farm payment. There is a perception in west Cork and south Kerry that this is more prevalent in these counties than in the west of Ireland. I am not talking about a couple of hundred quid, because if that was the case, "they would suck it up and forget about it", as one farmer said to me. However, there are instances where farmers have lost €3,000, €5,000, €7,000 and €8,000. Some of these guys were depending on this money. It is not just one or two here and there; it seems to be widespread. These guys were not being inspected, but the "eye in the sky" or the "man on Mars" who took these photographs has deemed that their forage hectares are less than what they were claiming. In some instances, they never got any prior notice. If there had been a yellow card or a warning, they might have been able to do something. What concerned me at this meeting was the number of farmers who said that when the burning season is open in March - I would not agree with this - they are going to burn all the bushes and natural flora to ensure that if the man in Mars photographs them again, the place will be green rather than be covered, which is anti-greening in my view. It was a very frightening scenario. I have a son involved in the fire brigade service and sometimes in the month of March, most of his time is spent out quenching gorse fires and so on, which I think is a waste of effort. That is a threat which concerns me.

In these instances, one man who lost over €6,000 said he had half the money committed to paying back the credit union, from which he borrowed last year due to a very harsh spring which lasted almost until 1 June. The other half was supposed to pay for foodstuff. When we hear these stories, we know there is something radically wrong. Perhaps the Minister could get the figures per county.

The people who are being hit by these cuts are the severely disadvantaged farmers. Somebody with 70 or 80 acres of good land who is an intensive dairy farmer will not be affected at all. The people who suffer are the guys in the peninsulas and in places like Dunmanway and parts of west Cork who have a lot of cropping rock, natural bushes and firs growing, which we should be trying to preserve anyway as much as we can.

I welcome the minimum of €150 per hectare. The Minister said the maximum is €700 and that the minimum should be an average of €150. I would like to see the gap closed. Perhaps the maximum should be €500 and the minimum should be €250, which I think should be a help. There is new AOS scheme, which the Minister called the GLAS scheme. A big commitment from the Minister's party in the last election was that there was too much red tape attached to these schemes. Farmers and farming organisations are now worried that this new scheme will be laden down with red tape. Some are wondering whether it is worth their while getting into these schemes at all. Many of them would love to see the old REPS come back, or see a REPS 5 introduced.

We hear much talk about the agrifood success, which the Minister built on from our Food Harvest 2020 vision. The likes of Glanbia, Dairygold and the Kerry Group would not exist were it not for the small farmers throughout Ireland. We should never forget that two thirds of the farmers in my constituency that get disadvantaged areas scheme and single farm payments are getting less than €10,000, which I think is a small amount.

I am also concerned about the current price for beef, particularly those who were encouraged to raise bully beef for export. Many farmers who put much effort into that are now lost. My colleague mentioned the suckler cow scheme and the new genomics. If it is correct that the veterinary costs of that will be €50 per animal and the farmer will end up getting €30, then there is something radically wrong. I would prefer the farmer to be getting more money than the vet, with all due respect to vets.

I do not think those figures are accurate. I will answer that question.

In due course the Minister can answer that question. He spoke about what will replace the disadvantaged areas scheme, namely, the areas of natural constraint, or ANCs. While that is very welcome, the farmers of all persuasions who came out to Bantry on a stormy Monday night - I saw active Fine Gael farmers in there and it was chaired by a Sinn Féin member ------

You must conclude to give everyone a chance.

I accept that. I have been looking for a debate on this issue for six months, and it is a pity I am constrained to five minutes.

You are at seven minutes now.

It flies in the face of conservation if farmers in remote parts of Ireland have to put away scrub and burn turf to destroy natural areas.

In fairness to everyone else, you have had seven minutes, as opposed to five. I call on Senator O'Keeffe, who has ten minutes.

I welcome the Minister to the House. Credit is due to him and his officials for a huge body of work done over the last few months. A person who is under the age of 40, lives on an island and owns sheep is probably very happy indeed, because such a person will qualify for all manner of things.

I wish to concentrate most of my remarks on the rural development side. The Minister has been in here many times talking about protecting and building rural communities and investing in young farmers, which is part and parcel of that kind of building. We know that almost half the population live in rural communities, and they have an enormous variation in their energy, wealth and their traditions. I hear people use the wild language of farmers struggling and that way of life dying, but it is true that there is a genuine struggle for smaller, poorer farmers. I particularly welcome the maintenance of the disadvantaged areas scheme for the 100,000 farmers who are crucial to the survival of those communities, and to the continued success story that is Irish food. One of our colleagues on the other side made that point. The increase in exports that and the multimillion euro investments that have been in recent years by certain agrifood companies has driven the success of the sector, but I would not like to see them drive on and abandon the very reason that Irish agriculture has succeeded. There seems to be a sort of division opening up between those large companies that behave as multinationals, because that is what they are, and the very small struggling farmers. I do not know what the language is between them, but increasingly it feels like they are not on the same page. I do not quite know how to qualify that, but it feels like it. As we talk about Harvest 2020 and as we talk about the need to increase the volume and the value, which we do for many reasons, some of the language about this and the way we approach small rural communities and smaller farmers still feels rooted in the last century, rather than being rooted in this century, taking cognisance of the real gap between those very wealthy multinationals.

They were all born as co-operatives owned by those farmers and their ancestors. They seem to have taken a great leap and I worry about what that might mean.

I congratulate those who came up with the name GLAS, which must have been a bit of an exercise. It is a good name. The Minister said most farmers would stick with GLAS as opposed to GLAS+. He described it as promoting bio-diversity and that GLAS+ would be very demanding. Is there any more detail on that at this point? Should we not encourage all farmers to be GLAS+? Why are we allowing a gap between the two? Are we looking to drive all of them to GLAS+ in the future?

In regard to the 50,000 availing of those payments of €5,000, what is the origin of that figure? It is obviously based, to some extent, on REPS figures. Is it a European figure or an Irish target? Did it come from Teagasc? How confident is the Minister that figure will be reached unless the language around farming changes quite significantly to being the guardians of the environment in a real sense? Ultimately, that is what that money is being paid for; it is to our benefit and that of farmers that we do that. Does the Minister believe we are beginning to change that culture and language? There are many terrific farmers who really have engaged with that, there are many who have not yet quite engaged with it and there are some who do not want to engage with it at all.

I share that concern about the 80% of farmers in each commonage having to sign up. The Minister might provide some clarity on that. It is something some commentators have called into question. Some 80% in each commonage would be difficult. Is that accurate or has there been an error there?

In regard to the target of 5% for organic farming, I appreciate that is the figure in Food Harvest 2020 and I think Irish farming is at 1.1%. Where and how can we reach that figure? Although we are not looking for 100% of farmers to be organic farmers, we have acknowledged, as Food Harvest has, that there are genuine economic opportunities. How does that fit with GLAS and this rural development programme?

In regard the disadvantaged areas payment, or areas of natural constraint payments, as we have now been told to call them, the Minister said there will be a review of that scheme in the next few years. When people read that and see the words "redesignation" and "new biophysical criteria", they will immediately wonder if this is some class of an excluding device. I do not jump to that conclusion necessarily but is it to reduce the overall fund ultimately or to make it more targeted, which the Minister already discussed in regard to other matters, targeting it at young farmers investment, for example? Clearly, there are areas of Ireland which are disadvantaged and will remain disadvantaged, and I do not care what nomenclature the EU officials come up with. I worry that changing the name of that is a step towards changing how they will be treated in the future.

In regard to beef farmers and the genetic improvement, I do not know what the baseline is for the current genetic capability or capacity of the herd as it is. Is this one step or two steps up or is it a massive change? Much work has been done, in particular by Teagasc, and some of the farmers have obviously engaged. How close or how far away are we from achieving this? How much of that fund of €52 million is destined for Teagasc and for training in that regard?

I refer the language of this sort of smart green growth which Harvest 2020 uses all the time. Does the Minister believe this is heading towards that smart green growth? I still believe the green thing is on one side and farming is on the other and they are not converging at a rate at which they might. I have no doubt that is a huge challenge. How far down the road are Irish farmers? How do we measure up to and compare with our European neighbours in regard to our capacity to be smart and green? As we know, everyone is using the same language.

I refer to the milk quota. I do not know what the Minister's views are on the smuggling matter but, obviously, that is a current issue. Some farmers are now supplying across the Border. Has the Minister any observations on that?

I refer to artisan foods and small and medium-sized enterprises. I particularly welcome the support. There is a very healthy artisan food sector and it has been great to see it grow over the past ten to 15 years, supported by the many supermarkets which see there is a benefit to selling Irish foods. It is great for local employment, for enhancing the restaurant and hotel sector and for tourism. It would be great if the Minister had more detail on that.

Teagasc does great work and its website is the first point of entry for many people to Teagasc but I would like to see it express the kind of future looking element the Minister outlined and the many programmes he spoke about. Again, it does not feel like it belongs or is joined up with this even though it is in many places. That is just a suggestion.

On a completely separate matter, I had asked for the Minister to come to the House at some point to discuss the forestry policy review group, the proposed merger of Coillte and Bord na Móna and the Forestry Bill. The Minister will have heard last week some discomfort and lack of trust expressed at the Oireachtas Joint Committee on Agriculture, Food and the Marine. Will he address that now or tell us when he will do so?

I welcome the Minister and his achievements on the CAP negotiations. He has obviously done well as it was an extremely tough job and not an easy task. I could commend the efforts of the agriculture sector, of which everybody is well aware, but instead I would like to raise a couple of issues which do not often get enough attention. I agree some farmers rely on the payments to survive but there is a real need to question CAP more closely given issues such as the success of some farmers in Ireland and the fact that it breeds inequality. We have a situation where CAP is paying €60 billion per year to European farmers and yet European countries will not buy fruit and vegetables from their neighbours in north Africa.

On the issue of food security and the supply chain, I understand CAP is vital in attempting to give Europe much greater food security. Members should consider the situation in Africa where the Chinese are buying up millions of hectares simply to grow food. In the coming decades, we will face changing and accelerated demand worldwide, caused by a growing population. Currently, the world population is a little over 6 billion and it is estimated to increase to 9 billion by 2050. Demand will also be influenced by changing diets in emerging countries and the massive uptake in the consumption of milk and dairy products. China is a good example of the success we have had.

Another factor is the risks caused by climate change, in particular in other parts of the world. Even in Europe, Cyprus is suffering from water scarcity and farmers there produce tomatoes by using massive amounts of water. Should the European Union pay more attention to issues such as this? Perhaps the Minister will comment on that.

It was interesting to consider the findings of the UK All-Party Parliamentary Group for European Reform that if, hypothetically, CAP and other EU measures to protect farming, such as tariffs, were fully liberalised and if the money freed up was rechannelled to more productive areas of the economy, it could be a boost in output equivalent to around 1.1% of European GDP. It is an argument I had never heard before. We are sold the argument that cash payouts are essential, and perhaps they are for certain farmers, but it may hurt the wider economy. Of course, Ireland must be very careful in this respect given our reliance on agriculture. Looking back at what happened in New Zealand some years ago, 1% of farmers went out of business following liberalisation but the remaining farmers became much more efficient.

Now they do not have any subsidies and New Zealand seems to be doing very well, particularly in milk production and dairy products. The Minister has done a very good job. I wish him well but there are questions and queries in that area.

Before I call the next speaker, I ask the Acting Leader, Senator O'Keeffe, to propose an amendment to the Order of Business.

I propose an amendment to the Order of Business that we be allowed to continue this debate and that the Minister reply no later than 3.35 p.m.

I also welcome the Minister to the House and congratulate him on his hard work and negotiations on Pillar 2 and the rural development programme. There is much to be welcomed. I note the provision of €80 per suckler cow and many other things that will make a difference in particular to small farmers. The last time the Minister addressed this House he pointed out that the CAP was not just a gravy train for farmers and that it represented a contract with farmers in Europe to produce in certain conditions and to a certain standard, with a particular focus on environmental protection, and to provide all sorts of non-economic goods in exchange for the benefits they were getting. I absolutely agree with him.

I know he would share my view that it also entails contributing to the quality of rural life and maintaining our way of life. I come from a small farm. The average annual income of a suckler farmer is €10,000 whereas that of the dairy farmer is €50,000, which is quite a dramatic disparity. Many farmers in the Border areas depend on Pillar 2 funding to make that difference so that they can earn a livelihood of sorts.

We are aware of the pressure on farmers in the past five years, with the loss of approximately one third of off-farm jobs on which many farmers depend. Although there are good aspects of the story, this is a time of pressure for farmers and they have been coming off the land. We should commit to maintaining a certain number of people on the land. We must not go from having family farms to farm factories. Public policy should state that we want to keep a certain number of people on the land. I would be grateful for the Minister’s thoughts on that. I am sure he would sympathise with it.

I thank Senator Quinn for sharing his time. Cuirim fáilte roimh an Aire. Sinn Féin has always argued that CAP funding should be distributed on a fair and equitable basis and should direct supports to those who need them within the farming sector. We want to see an end to a situation whereby a few individuals at the top of the farming pile receive the lion’s share of the payments. We propose radical redistribution of the payments to increase the viability of low income households. The latest figures available, for 2011, show that this is not happening. A total of 243 farmers received €32 million. In other words, they got an average payment of over €130,000 each. Meanwhile, over 52,000 farmers received payments of less than €5,000 each. The defence of the methods and criteria for the current single farm payment was that it would reward the more productive farmers but this claim does not stand up when stocking density is examined. Those with an average stocking density of 1.47 were getting a payment of around €282 per hectare while those with 1.92 received average payments of €1,180 per hectare. This cannot be justified under any claim of higher productivity.

We agree with the definition of active farmer that would exclude non-agricultural land such as airports, golf courses and so on for payment and support the exclusion of agribusinesses whose main activity is not farm production. We called for an immediate cap of €100,000 and I take on board the Minister’s comments in that regard. We support the allocation of payments to farmers who had no single farm payment but can produce evidence of active farm production in the reference year. Under the agreed framework, we support the maximum possible redistribution of payments. We believe that the minimum payment ought to be the national average per hectare payment. We support the application of the lowest maximum per hectare payment allowed under the agreed framework.

Sinn Féin does not support the reintroduction of coupled support schemes. We support the introduction of a small farmers scheme with the inclusion of all farmers with annual payments of less than €1,250. The reduction of Pillar 2 payments sends the wrong message to a sector that has contributed favourably in extreme circumstances to the economy. When the reductions in Pillar 1 payments were first suggested, farmers were told that the payback would come in Pillar 2. Farmers are being asked to do more for less under environment schemes, and with REPS 4 coming to an end without replacement until 2015, many will suffer unacceptable drops in income.

Up and down the State in the most disadvantaged areas, farmers are suffering cuts to their single farm payment, SFP, due to land eligibility issues. I have already pointed to those who receive less than €5,000 in SFP who are severely hit by the latest measures. I echo the concerns about the use of technology which makes land on which payment was previously made ineligible because new satellite imagery is being employed. The Department adopted the new technology with great speed after the EU decision to change from the old digital system which is still in use in many member states. Member states were given four years, I understand, to implement the changes but this State has rushed ahead and completed the changeover in four months.

The cuts to payments for farmers in disadvantaged areas are causing more hardship and money taken out of farmers’ pockets is money taken from the rural community. The penalties being imposed are harsh in the extreme, for example, if one fifth of a holding is deemed ineligible there is no SFP at all. Others less extreme but none the less drastic for a farm family are having their payments halved. Farmers are telling Sinn Féin public representatives that inspectors who do not know the area and are relying on this imagery can make big mistakes.

The industrial action by IMPACT in the Minister’s Department will affect much of this. I call on him to intervene where 600 or so technical officers are in dispute. This needs to be resolved because much of what will be done in the coming months is important.

I welcome the scheme he has mentioned to maintain island farmers. I agree that they are a particularly important group of people who are often left out.

Will the Minister comment on the effect of the storm damage to some farms along the coast and how it affects their payments? What supports can the Minister put in place for them? I note that the ICSA has asked for more support for sheep farming and that the GLAS be aimed more at low income farmers. The Irish Local Development Network, ILDN, the Leader network has asked that 10% of the RDP for Leader be set aside. Will the Minister comment on that? The farm inspections under way and the digitisation of the maps are causing huge problems. Will the Minister comment on that?

Senator Naughten is sharing time with Senator O’Neill, is that agreed? Agreed. Senator Naughten has two minutes and Senator O’Neill has three minutes.

I welcome the Minister to the House and congratulate him on his work to date, particularly on the success of his negotiations on CAP which took place during a difficult economic period.

The sheep grassland scheme which has been subsumed into Pillar 1 will mean a loss for many farmers in the west. Are there proposals to compensate them for that loss?

In 2009, farmers lost €1,000 in the disadvantaged areas scheme. Is there any possibility of regaining the funding for the severely disadvantaged counties along the west coast? I am focusing in particular on their proximity to the Wild Atlantic Way and its potential for job creation. Farmers could make a link between agriculture and tourism. This could be done through Leader. There is great potential to compensate these farmers for losses they may have suffered. I welcome the special provision for island communities which is critical for the sustainability of farming and the populations on our islands off the west coast.

Will the Minister expand on the proposals in this regard? He mentioned sustainability and the maintenance of stock levels on the islands, which is to be welcomed.

I congratulate the Minister once again on the good news he has outlined today. These developments are critical for Ireland's economic recovery and the continued success of the agrifood sector.

I welcome the Minister to the House to discuss these important issues for people in rural areas. I congratulate him on his guidance of his fellow European Ministers, the Commission and the Parliament during the Irish Presidency in securing what is a very good deal for Ireland. In the Celtic tiger years there was something of a loss of interest in farming, including on the part of successive governments. Under this Minister and this Government, however, agriculture has been restored as a priority. It is a sector that has contributed significantly to our exit from the bailout given the more than €10 billion in exports it has contributed in the past year. The confidence of major companies like Glanbia and the Kerry Group in our farming industry is clear. The innovation centre the Kerry Group is building in Kildare will create more than 800 jobs, while Glanbia's large milk processing plant in south Kilkenny will provide some 2,000 ancillary jobs. It is important that funding is maintained for rural areas; after all, we are still largely a rural country. For every €1 that is allocated to farming, €4 is spent in the local economy, which is an excellent return.

In regard to what has been referred to variously as the suckler scheme, genomics scheme and beef data scheme, people are already inquiring as to how they might avail of it, whether by way of an application form or by participation in a discussion group. Will the Minister provide clarification in that regard?

In respect of the green low-carbon agri-environment scheme, GLAS, which is effectively a new REP scheme, the Minister has indicated that farmers will be asked to fence off water courses and similar features. Some farmers are on meters and are supplied with water from local authorities. Where there is no water on farms, however, I ask the Minister to consider whether a grant might be made available under the targeted agricultural modernisation scheme, TAMS, to provide water in cases farmers are obliged to fence off water courses and so on.

I welcome the top-up for young farmers in a context where 60% of farmers in this country are aged under 35 years. The Minister indicated that a young farmer may, over five years, receive up to €16,000 under this scheme. A young person setting up business as a farmer may not have a tax liability in the first few years, but where there is such a liability, a difficulty arises in that one's single farm payment is included in one's income and is, as such, taxable. I am asking that a measure be put in place whereby the top-up payment would not be taxable, which would give a boost to young farmers. Giving them a grant of €16,000 and requiring that 50% be returnable via taxation leads to a much smaller benefit. Will the Minister undertake to liaise with the Revenue Commissioners on this issue?

Recognition has been given to partnerships, but what is the situation in regard to partnerships between father and son? How will such arrangements work in respect of the 60% grant for buildings? If, say, a young man goes into partnership with his father, even where land is transferred, any building will have to be done on the existing farmyard. Will the Minister comment on that?

I will try to answer as many questions as I can in the time available. Even though it is not directly related to the issue we are discussing, I will begin by addressing the points raised on the mapping and eligibility issue. It is important to be clear that this has nothing to do with digitisation. Last July we introduced new technology to provide for a much more accurate way of photographing from satellite. Previously, the maps farmers would have used as the basis for their single farm payment applications were taken from high-flying aircraft. Now we have very precise and accurate maps which allow us to see exactly what is in particular fields and which land is and is not eligible for the drawing down of payments. Every member state is required to introduce this system. It is not a question of choice and we do not have four years to do it. We are putting a new, much more accurate system in place to ensure that land which is not eligible to draw down funding will not be eligible for such drawdowns. After all, we are talking about the provision of public moneys.

We are also required to examine instances where, over the past four years, money was drawn down on lands which were not eligible for same. The Commission is insisting that this money be given back. In most cases no penalty is being attached, but the money that was paid in such cases must be returned. We are in the process of managing that process. In the case of 72% of farmers, there is no issue in this regard. For up to 93% of farmers, there is an over-claim of less than 3%, which amounts to a relatively small sum of money to be repaid. As I said, no penalties are applicable, but farmers in that situation may have to return retrospective payments they would have drawn down in the past four years. The calculation for farmers with less than 3% of an over-claim is that the retrospective payment will be €400 on average in the context of an average payment per year of €11,000. It is not a huge deal for those farmers.

Where farmers have an over-claim of between 3% and 20% of their land, we will work with them to address the situation. There is an appeals process within the Department and externally, so that farmers can be sure they will receive fair treatment in terms of the assessments. Where there is an over-claim of more than 20%, farmers will not have received any payment last year and must now rectify their situation. They will receive a payment in respect of the eligible portion of their land this year, but there is also a retrospective issue. Only 400 farmers in the country are in this category. We will work with them on a case-by-case basis to devise a repayment schedule that is realistic and fair. We do not want to put anybody out of business and will help farmers with any cash-flow difficulties.

The notion that we can simply ignore this problem because it is awkward and difficult is not an option. Representatives of the Commission are coming to Ireland in the second week of February to assess how we are dealing with it. The Commission has already fined other member states, including large countries such as Britain, France and Italy. In France, as I understand it, the disallowance was some €248 million in terms of discrepancies around payments. Either we deal with this issue, including the retrospective element of it, by finding a way for farmers who have over-claimed, whether by mistake or otherwise, to make the repayments in a way that is sensible and does not cause them undue hardship, or the Commission representatives will come here, make an estimate of the overpayments and multiply that figure by five or so, resulting in a disallowance and fine for the State which will be payable by all taxpayers. I am not prepared to allow that scenario to arise. We are trying to work out this over-claim issue, in as fair a way as possible and with multiple appeals mechanisms. It is about facing up to instances where payments were made in respect of land that was not eligible to draw down payments because it is not agricultural land, and convincing the Commission we have dealt with the issue in a thorough and fair manner.

I understand the Minister has to leave now.

I can stay still until 3.45 p.m. if Members are willing to listen to me for that long. On the beef genomics scheme, Members should not confuse the current scheme, which was announced at budget time to commence in 2014, with the new beef genomics and data scheme that is to be introduced under the rural development programme. We are devising a public consultation process to help us in finalising the details of these schemes. We want feedback, including from the Seanad, in terms of the final shape of the schemes.

The current beef genomics scheme requires farmers to take DNA samples from 15% of their animals. We estimate that this will cost approximately €30 per animal. Farmers are being paid €40 in respect of each of their animals but they are only obliged to pay for the cost of taking DNA samples from 15% of them.

Is that a once-off requirement?

No, farmers will be obliged to provide DNA samples each year. We cannot provide money for nothing.

That is okay. I just wanted to-----

We are trying to build up a picture of the national herd in terms of the DNA and performance of the animals in it. We will pay farmers to assist us in doing that. We are increasing the payment involved significantly up to €80 per animal.

We need to ensure matters are managed in the context of the green low carbon agri-environment scheme, GLAS, and commonage areas. GLAS is quite different from REPS because it involves paying farmers for doing specific things on their properties. I refer, for example, to dry stone wall maintenance, setting aside areas for nature and wildlife habitation, protecting watercourses or whatever.

Will that include recreational walkways?

There will have to be a commitment from those who farm in commonage areas to do the jobs to which I refer because otherwise we will not be able to pay them. This is not about income support, rather it relates to people being paid for doing something positive with regard to the environment and sustainability. The idea that we should focus GLAS payments on low income farmers misses the point totally. This is an environmental scheme. We already have a disadvantaged areas payment scheme to support low income farmers. There are also other supports for farmers on low incomes. I take the point the Senator made about too much red tape. We are going to try to keep matters as simple as possible.

Senator O'Keeffe referred to areas of natural constraint, ANCs. We are required to carry out new assessments in respect of such areas. We must take a much more scientific approach to this matter. Up to now we essentially drew a line down the middle of the country and stated that, with some obvious exceptions, everything to the west of it is disadvantaged and everything to the east is not. That is not a good enough explanation with regard to why we are giving farmers extra payments for farming in disadvantaged areas. There are some very good farms in Galway and there are some very disadvantaged ones in Kilkenny and Cork. The latter are not necessarily to be found in disadvantaged areas. There is a need for a more biological and science-based approach to assessing soil type, depth and all the other measures that can be used to benchmark what is disadvantaged and what is not to ensure we assist and support those who are farming in genuine situations of disadvantage. It is not about reducing or increasing budgets, rather it is about accuracy in the context of who gets supports and who does not.

The Senator asked why all farmers cannot just be given GLAS plus payments. If that was the case, there would just be a maximum of €7,000 for everyone. I was anxious to put in place an environment scheme to which most farmers, that is, approximately 50,000, would be attracted. These are the same individuals who would have been attracted to REPS. If people want to go beyond that and do something above and beyond what they are required to do under GLAS, I would like to give them recognition for doing so. However, that is not the primary focus of many commercial farmers. Their primary focus is food production. If a person's primary focus relates to creating habitats and increasing biodiversity and if he or she is essentially replacing a commercial dividend with that, we want to give him or her a top-up payment. I am of the view that the numbers involved will be relatively small.

Ireland is going more in the area of smart green growth than any other country. I am delighted Senator Quinn raised the issue of food security, climate change and water security. I recently spoke on that very issue in Boston and Oxford and on why the Common Agricultural Policy has been changed to focus on it. In my view, our original approach in respect of the CAP was to focus on sustainability and environmental management of food production. In essence, the view was that the best way to produce was to reduce the intensity of food production on land and thereby increase sustainability. Anyone could do that. If one wants to reduce the level of one's greenhouse gas emissions, one just reduces one's herd size. The challenge we face is how the world is going to produce 50% more food in volume terms - which is what we will be obliged to do in the next 25 years - in a sustainable fashion without destroying water quality or causing further climate change while also responding and adapting to existing climate change. How can we do this when water supplies are limited in many parts of the world? It must be remembered that one third of countries are experiencing serious water shortages at present. Those happen to be the countries which are experiencing the most significant increases in population, particularly among their middle classes.

There are an extra 80 million people on the planet each year and an additional 150 million middle class consumers. These individuals all want more food and energy and demand the kind of lifestyle we enjoy in this country. This is a challenge which the CAP cannot ignore and is not ignoring. We are moving away from dairy quotas in terms of supply controls because we recognise that Europe needs to make a significant contribution towards meeting the demand for supply globally. That demand is increasing by approximately 2% per year. We are doing away with sugar quotas for the same reason. We are also examining other ways of producing more food within a sustainable intensification framework. That is a major part of my motivation in respect of generational change and introducing a new generation of farmers who understand climate change, food security and the need to measure both when producing food. The members of this new generation also understand that the value of slaughtering an animal after 18 or 20 months rather than after 28 or 30 months is significant in terms of greenhouse gas emissions as well as in the context of efficiency and profitability from a farming point of view. That is why, more than any other reason, we need such a new generation.

Senator O'Keeffe referred to milk smuggling. If there is any evidence of people smuggling milk illegally, it needs to be brought to our attention in order that we might follow up on it immediately and, where possible, pursue prosecutions. I take the point on Teagasc and I will pass it on. The Senator also referred to forestry. Perhaps I will return and discuss that matter on another occasion because I do not have time to do so now. I will be bringing recommendations to Government - hopefully in the next month or so - in respect of Bord na Móna and Coillte.

In the context of maximum distribution, Senator Ó Clochartaigh stated that the Sinn Féin approach is that the maximum should be the average. In other words, that everybody should be paid the same amount. That was the Commission's proposal but there was a very strong reaction against it among those in the farming community in Ireland. I agreed with them and that is why we are moving away from the policy in question. We are doing a great deal to move towards an average payment with everybody, but we are not going the full distance because that would be wrong and would undermine the productivity of many farmers.

Senator Naughton referred to the sheep grassland scheme. Perhaps I was not clear earlier but sheep farmers are not going to lose out. We are not taking the €13 million or €14 million from the sheep grassland scheme and just putting it in the general pool to which everyone has access. Those who were on the sheep grassland scheme will retain the amounts they were paid under that scheme and this will be included in their single farm payments. If a farmer was receiving €1,000 from the sheep grassland scheme last year, then €1,000 will be added to his or her single farm payment. Individuals who were benefiting from the sheep grassland scheme will receive the same benefit as part of their single farm payments in the form of a decoupled payment. This is a very positive story for sheep farmers but perhaps I did not explain the position very well earlier.

On the opportunity for farming communities to do something special collectively, such as, for example, in the context, of the Wild Atlantic Way, I must point out that there is a really successful scheme in the Burren which was put in place by farmers and local communities in association with environmental NGOs and people involved in agri-tourism. We support this scheme and we will continue to do so.

We will also replicate the model for similar schemes, particularly in areas of scenic amenity. We are, for example, considering a similar proposal in respect of the Wicklow Mountains, which I would like to accommodate.

The Sheep's Head Peninsula is another possibility.

Yes, absolutely, sheep are doing well. The island communities are another case in point. I wanted to include this issue in the programme but it needs a little more thought. I suspect that the way in which we support island communities will be similar to the way in which we support disadvantaged areas. We have what one could describe as a disadvantaged "plus" payment, under which a set payment per hectare would be made to farmers on the islands. While we have not yet agreed on a figure, I want the payment to be generous. The numbers and money involved are relatively small but it will make a massive difference to island communities. In terms of policy, island communities have frequently been bypassed in the past and I will not allow that to happen in this case. I do not want to be responsible for a scenario in which there are no longer any sheep or suckler cattle on some of the islands off the west coast. We will provide supports to ensure island farming remains intact.

If I failed to answer any questions, I will try to respond to Senators in writing if they send me an e-mail outlining their query.

Sitting suspended at 3.50 p.m. and resumed at 4 p.m.