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SELECT COMMITTEE ON AGRICULTURE, FISHERIES AND FOOD debate -
Thursday, 1 May 2008

2008 Annual Output Statement.

Our purpose today is to consider the Revised Estimate for Vote 31 and the annual output statement for 2008 for the Department of Agriculture, Fisheries and Food. On behalf of the committee, I welcome the Minister, Deputy Coughlan, and the Minister of State, Deputy Wallace, who will present the revised Estimate and the output statement. I also welcome the officials of the Department. The Minister will make an opening statement, to which Opposition spokespersons may make brief responses. I propose that we then go through each programme and the corresponding subheads and invite comments as appropriate. It is important that we place an emphasis on the output statement, which is additional to previous practice. Is that agreed? Agreed.

I welcome the opportunity to present the revised Estimate and annual output statement, AOS, for my Department for 2008 to the committee.

The Revised Estimate includes provision for certain fisheries measures for which responsibility was transferred to my Department on 19 October 2007. For ease of comparison, the 2007 provisional outturns, other than those for the administrative budget, refer to fisheries expenditure for the full year. The administrative budget outturns for fisheries cover the period 19 October to 31 December 2007 only. In the AOS, fisheries outturns and outputs for 2007 are shown separately from those for agriculture and food because those expenditures took place, in the main, under programme headings in the statement of strategy of the then Department of Communications, Marine and Natural Resources. The comparison of expenditure and Estimates will be greatly simplified next year when my Department will have had responsibility for fisheries matters for a full financial year.

In line with the Government decision of September 2007, responsibility for coastal protection and coastal flooding lies with my Department and is included in the 2008 Vote but will become the responsibility of the Department of the Environment, Heritage and Local Government in due course. Arrangements are in train to effect the transfer.

The revised Estimate for my Department is determined within a well-defined strategic policy framework. The development approach for the agrifood sector is based on the Agri-Vision 2015 action plan, which is reflected in the National Development Plan 2007-2013, the rural development programme and the programme for Government. The overall objective is to develop a consumer-focused, competitive and sustainable industry capable of meeting the challenges of more liberalised markets and broader societal demands. The delivery of safe, high-quality, nutritious food, produced in a sustainable manner for high value markets is the optimum road for the future of the Irish food industry.

These underlying objectives are reflected in the approach to the development of the fisheries sector. The strategy for a restructured sustainable and profitable Irish seafood industry focuses on rebalancing fishing capacity with stocks and on developing strong and vibrant fish processing and aquaculture sectors.

My Department's AOS summarises the activities required to implement these strategies under five strategic programmes. It links the resources required for these programmes with the key outputs to be achieved in 2008. It also includes information on the outcomes achieved in 2007. The financial data in the AOS dovetail with those in the Vote.

The Revised Estimate for my Department for 2008 is consistent with the strategy framework I have outlined. A gross total of €1.899 billion is provided, when savings on capital expenditure programmes from 2007, amounting to €31.4 million, are included. This provision is 14% higher than the provisional outturn for 2007 and, by any standards, represents a major programme of investment by Government in the agriculture, food, fisheries and forestry sectors.

My Department is also responsible as paying agency for Common Agricultural Policy expenditure under the European agricultural guarantee funded measures. This includes the single farm payment and market supports such as intervention and export refunds. Expenditure under these headings takes place off Vote and amounts to approximately €1.4 billion. This will bring total estimated expenditure by my Department in 2008 to approximately €3.3 billion. The annual output statement also covers these non-voted expenditures. I will outline how the high level programmes in the AOS dovetail with the Estimates provision for 2008.

Administrative budget costs are allocated across all of the main programme costs in the AOS. These amount to €311 million in 2008, 4.8% higher than the 2007 outturn in the Revised Book of Estimates. This increase arises primarily as a result of the inclusion of provision for fisheries matters for a full year, increases in salaries under Towards 2016 and in costs relating to laboratory equipment and staff training and development.

Programme 1 in the AOS focuses on establishing the policy framework to develop an internationally competitive, innovative and consumer focussed agrifood and fishing sector. It also includes a number of concrete actions to support this policy objective. On innovation, the provision for research and training in subhead B1 has increased by 10% to €42.5 million in 2008. Among other things, this includes a record €16 million in funding for FIRM, my Department's food research programme, and €10 million for the research stimulus fund, which funds research in production agriculture, environment, rural economy and policy development areas. The Government's strategy for science, technology and innovation explicitly recognises the development of a sustainable agriculture and food sector and bioeconomy as vital to our national economic well-being, and investment in research, development and innovation is a critical component of this. Subhead B1 also includes €12 million for Teagasc training and covers a number of other activities aimed at improving quality in the cereal, potato and cattle sectors and conserving genetic resources in plants and animals. In addition to this, my Department will provide more than €132 million in grant-in-aid to Teagasc, to fund its research, training and advisory activities.

On competitiveness, this programme also includes €40.7 million in funding for capital investments in the food processing sector, of which €27.7 million has been earmarked for the dairy processing sector, as part of a package involving overall investment of €300 million aimed at securing the long-term viability of the processing sector. A further €8 million is earmarked for the beef and sheep-meat processing sectors, with the remaining €5 million involving smaller projects under way in the horticulture, potato, eggs, grain and livestock marketing and processing sectors. It is essential these measures are underpinned by the promotion of high quality Irish food products at home and abroad. To support these efforts, I have provided €27.5 million in grant-in-aid to Bord Bia in its vital promotional work, as well as €2.5 million for quality assurance initiatives in the beef and sheep sectors and more than €4 million for the healthy eating initiative in schools. Taken together, this expenditure in research and development and capital investment represent a massive vote of confidence in the future of our industry.

Programme 2 in the AOS relates to the maintenance of the highest possible standards of food safety, consumer protection, animal health and welfare and fish and plant health. This is the bedrock on which consumer confidence in the agrifood and fisheries sectors, at home and abroad, is built and its importance is increasing, as consumers become ever more discerning and demanding.

A provision of €185 million is made in subhead C for food safety and public health, animal health and welfare and plant health. This includes €33 million for the animal welfare and breeding scheme for suckler sows, for which €250 million is committed over five years. The scheme is designed to secure the future of our beef production. The benefits accruing from higher welfare standards, improved breeding information and, as a result, improved quality across the national beef herd will be reflected in higher returns to the producer. The scheme offers farmers the opportunity to increase the return on all their cows, thus contributing to the continued sustainability of the national suckler herd and the underpinning of our export focused beef industry.

On the disease eradication front, the news is largely positive. The progress made in recent years on brucellosis has been consolidated. In 2007, for the first time in many years, no herd was depopulated and only 32 herds were restricted at year end. The ultimate goal of eradication is at last a realistic prospect. Numbers of BSE cases fell again last year and affected mainly older cows that were born before the new measures introduced in 1996-97 became fully effective. This improvement and other factors made it possible to replace the entire herd depopulation policy with a partial depopulation regime earlier this year. I am confident that the improved position can be maintained. Bovine tuberculosis is a much more intractable disease, particularly in view of presence of infection in wildlife. Nevertheless, while there was a slight increase in the incidence of the disease in 2007, the medium term trends have been on a downward trajectory. I am also acutely conscious of the need for continued vigilance in regard to exotic diseases from abroad. My Department has comprehensive contingency plans in place to deal with outbreaks and it closely monitors the progress of such diseases globally. Elements of these contingency plans were successfully tested in our response to outbreaks of FMD, blue tongue and avian influenza in the UK in 2007 and I am confident our control systems are efficient and robust.

Programme 3 in the AOS relates to the promotion of economic, social and environmental sustainability, and appropriate structural change in the agriculture, forestry, fisheries, bioenergy and food production sectors. This programme includes almost €200 million under subhead H for investment in capital infrastructure at farm level, through the farm waste management scheme, the farm improvement scheme and a range of other investment schemes to assist the horticulture, organics and potato sectors. This support will help to improve efficiency, reduce costs and allow farmers to adhere to the stringent environmental requirements to which their activities are subject.

In keeping with this environmental theme, the REP scheme also features prominently in this programme area, and the provision in 2008 is €331 million. This scheme has been a tremendous success in Ireland, and apart from being an attractive opportunity for supplementing farm incomes, reinforces the modern role of the farmer as custodian of the environment. It also makes farming more sustainable both from an environmental point of view and by ensuring primary production methods are consistent with the wider expectations of society as a whole. This programme also includes €66 million for installation aid and early retirement schemes designed to encourage young educated people into farming. A further €125 million is provided for a comprehensive range of measures to support forestry and €5.6 million is provided for bioenergy initiatives.

On the fisheries side, the programme includes a range of measures to develop a sustainable, consumer oriented fishing sector. The new decommissioning scheme, which I launched on 20 February, is a key element in the strategy for the fishing industry. I have secured a €21 million budget for the scheme in 2008, with a further €21 million committed in 2009. Responsibility for administering the scheme has been delegated to BIM and the funding is provided in grant-in-aid for BIM in subhead N. This scheme, which is voluntary, represents a very substantial commitment from the Government in bringing the fishing fleet into balance with available resources and ensuring that those remaining in the industry can be assured of a profitable future.

The second strand of this rebalancing of quotas with fishing capacity is enforcement, and I have provided more than €14 million for the Sea-Fisheries Protection Authority to ensure that fish stocks are managed sensibly for the benefit of all fishermen. This will help to ensure the future viability of the fishing industry. I have also provided more than €19 million for fisheries harbours development in 2008 to bring the fishery harbour centres up to international standards, reduce congestion and improve safety for the fisheries sector. These measures are complemented by a provision of more than €6 million for the development of fish processing and aquaculture sectors, in an effort to increase value added in Ireland, promote diversification and secure the future of the fisheries sector. A sum of €32 million is included to support the Marine Institute in its activities in the field of research and development, which are vital for the promotion of economic development, the protection of employment and the safeguarding of the future of the fishing sector.

Programme 4 relates to the provision of a quality customer service in the operation of major schemes such as the disadvantaged areas scheme, for which €257 million is provided in subhead E of the Vote, and the single farm payment scheme, which is financed off Vote through the European agriculture guarantee fund.

In 2007 more than 97% of single farm payment applicants received payment in December and within the target dates in the charter of rights for farmers. More than 100,000 farmers also received payments under the disadvantaged areas scheme. There was a 100% achievement of customer service action plan targets for issuing licences and export refunds under market support schemes. I am determined to continue with best practice and the highest possible standards of customer service. I will also be pressing for the further simplification of the bureaucracy associated with schemes and measures in the context of the CAP health check.

Programme 5 relates to the development of internal systems of corporate governance, the implementation of public service modernisation proposals and the management of the decentralisation programme in a manner that ensures continuity of service and minimises operational risk. Costs in this area relate entirely to the administrative budget.

As will be evident from this statement, my Department has a broad and complex remit. The agriculture, food, fisheries and forestry sector remains of central economic importance nationally and is our largest indigenous employer. High net export earnings, retention of earnings within the economy, the economic and social contribution to rural areas, in particular, and linkages with other economic sectors ensure that the industry will continue to play a vital role in national development into the future. I am determined that the resources will be provided to enable the sector to achieve its full potential and I am satisfied that the Estimate for my Department is an appropriate framework to provide that continuing level of support.

I will be happy to deal with any questions from committee members in due course.

I welcome the Minister, the Minister of State and departmental officials. The output statement is a new departure since my previous time in the House. It is very welcome to be able to go through in a more forensic manner the planned expenditure and the actual achievement over the previous year. It might be beneficial if the estimated provision for 2007 and the Estimates for 2008 and the actual output were also given in percentage terms to ascertain whether they missed. The increases are given, for example programme 1 increased by 19%. That is a 19% increase on the outturn. We should also have the figure compared with the Estimate for 2007 as it might be beneficial for interpretation. While I know the larger document was debated in the House, to be considering the Estimates for 2008 in May is akin to closing the stable door after the horse has bolted.

While the document is titled the output statement for 2008, it is the output for 2007, which also causes confusion. We should have clarity of presentation. I grappled to come to terms with the documents in recent days. It took some time for me to get my head around them. Perhaps we should consider this Estimate in committee simultaneous to the House having the larger debate when the Book of Estimates is published. I do not intend to say any more at this stage. I look forward to going through the output statement in particular.

Regarding the Department's projections for 2008, will it live within its budget? Will it require a supplementary budget? Will it fail to spend its budget in 2008? What are the programmes that may overrun? What are the programmes that may underachieve? In recent years there has been a tendency for the Department to underachieve in terms of its expenditure. One cannot blame the Department in some respects. What is the capacity to reallocate from one subhead to another within a financial year? I am thinking in particular of the FIS which has been suspended. It is difficult for farmers to understand that a programme has been suspended and the Department hands back €150 million. I appreciate the draw-down for FIS would not be until 2008. I would like to get advice on the financial management of issues within the Department. What is the scope for reallocation within the Department's budget across various subheads?

I too welcome the Minister, the Minister of State and departmental officials to today's meeting. I share some of the concerns of Deputy Creed. I am a novice in this process. It would have been very beneficial for someone like me to have had a pre-briefing on the mechanism, without necessarily having had sight of the figures. That would have provided some assistance in understanding the process. That is not a criticism but an observation.

I have a number of issues of concern from a global perspective regarding the state of play vis-à-vis global agriculture. There is an increase in food prices. There are issues regarding food safety and there are serious issues on where Irish agribusiness will be in 20 years. I am not satisfied, notwithstanding the increases in output, that there is enough of a political imperative with regard to food labelling. Nothing in the Minister’s statement gives me solace in that regard, given that those involved in Irish agriculture are operating at the highest standards. There has still been no substantive political movement towards ensuring the labelling regime. Ultimately that has a bearing on agricultural output and should have been provided for in today’s statement.

I know I am jumping from a very general point to a very specific one. Regarding installation aid to bring more younger farmers into the loop, the fact that land needs to be owned or leased for a maximum of ten years is very restrictive and should be considered in one of the specific programmes mentioned by the Minister. As we go through the programme, these issues will become more apparent and I hope we will have an opportunity to address specific issues in that regard. There is major potential for Irish agriculture. More than 230,000 people are employed, whether through agrifood or directly in production. It represents approximately 11% of total employment in the State. It is a vital component of the economy. While I am glad that output is increasing, I would like to see more forward planning or long-term strategic thinking. I would like the Minister to address some of those issues.

Only the two party spokespersons are allowed to speak at this time. The Deputy will be allowed to contribute under the individual subheads.

I will now call the individual programmes and corresponding subheads. The first is programme 1, agrifood and fisheries policy, trade and development, subheads A1 to A10, B, H, J, K, Q and R.

Which document is the Chairman using? I should use the same one.

The Estimates of expenditure 2008.

Will we also discuss the annual output statements?

We will deal with both the Estimates and output statments.

We will deal with the output statement thematically and the Estimate in the usual manner.

The process is new to the select committee.

On administration, subheads A1 to A10, I note the Department will have 155 additional staff.

They are working in fisheries.

Fisheries has moved into the Department.

I could not leave it outside.

Does the figure for salaries and wages provide for the forthcoming ministerial pay increases?

Deputy Sheahan is an awful rogue.

Does the Minister's budget include the operational costs of the Sea-Fisheries Protection Authority?

No, the administrative budget covers only staff paid directly by the Department and does not refer to agencies such as Bord Bia or the Sea-Fisheries Protection Authority. The 155 staff who transferred into my Department are based in Clonakilty. The administrative costs associated with these staff for three months of last year were included in my Vote, whereas this year the full costs for 12 months are included in the Vote. The costs of the salaries of 155 civil servants transferred from one Department to another.

The subhead provides for an increase of approximately €40,000 for the Minister and Minister of State.

Perhaps we should also examine the salaries subhead of the Vote for the Houses of the Oireachtas Commission.

On subhead A10, value for money and policy reviews, the allocation increased from €210,000 in 2007 to €349,000 in 2008. For what purpose will this sum be used?

The Department of Finance correctly decided a number of years ago that particular projects or schemes administered by each Department should be constantly reviewed. My Department has reviewed a number of schemes, including the installation aid, early retirement and dairy hygiene schemes. We evaluate the value for money aspects of expenditure on these schemes and examine whether new policies should be introduced or changes should be made. The findings are then published and laid before the Houses of the Oireachtas. We also discuss them at our MAC meetings and assess whether changes should be made or new or alternative approaches taken to schemes. The outcome of the reviews are available to the House. Value for money and policy reviews form part of the policy framework of the Minister for Finance who correctly believes it is a management function of Departments to examine schemes and determine if they provide value for money for taxpayers.

The schemes are examined separately during the year.

We are given a number of schemes to examine and the outcome is made publicly available to the Oireachtas.

The findings could also come before the committee.

Yes, if the committee wishes to examine them, they are published and laid before the Houses.

I note a dramatic decrease in the allocation for consultancies, which is probably welcome. Are specific consultant contracts envisaged or is the provision a contingency fund that may or may not be used?

The vast majority of consultancies contracted by the Department — 99% of them — are in the area of information technology. We are tied into paying certain licences, fees and so forth for the IT systems we use. As Deputies will be aware, IT is a major issue for the Department as it needs to source a great deal of IT expertise. For example, if a programme or scheme is changed, the computer systems must also change. Higher expenditure on consultancies was needed arising from the significant investment made in the single farm payment scheme. This is the reason the current allocation is lower than in 2007. Every time a change is made in the Department it must be reflected in the computer systems to ensure everyone is paid. I regularly meet senior officials to review this expenditure line for line.

What is the output in respect of consultancy for 2007?

It was €242,000.

The output corresponds exactly to the allocation in the 2007 Vote.

It was a case of tight management.

Is the Minister considering upgrading the IT system in Johnstown Castle? I submitted a parliamentary question on the reason payments under the farm retirement scheme are the only payments that cannot be made to credit unions. The single farm payment and all other payments can be issued to credit unions. I understand it is an IT issue.

There are two reasons. The European Union wants all payments made by electronic funds transfer. The credit unions, rather than the Department, do not have an EFT capacity. We have had discussions with the credit unions on the matter.

Deputies from rural constituencies, including me, are aware that some people still do not like or understand banks. They do not have a bank account because they are afraid to use such facilities. The Department and some of the farming organisations have engaged in discussions with An Post, which has a new banking facility, to ascertain whether we can complement the current service it provides and enable people to deal with the post office.

The credit unions do not have the financial wherewithal to introduce a new system. The Department will have further discussions with them to identify what can be done in this regard. It is inevitable, however, that one or two elderly people will not want to use electronic funds transfer, irrespective of what measures the Department takes. Nevertheless, our surveys show a large increase in the number of people who have opted to use EFT. The Department is seeking further discussions on these matters.

A local manager of a credit union informed me on Monday that the institution in question was in a position to accept funds using electronic funds transfer. It is upgrading.

If credit unions are in a position to facilitate EFT, the Department would have no hesitation to make the relevant changes because many people conduct their business in credit unions. We are also working with the post offices.

I do not want to have a question time on policy issues, but I must ask about compulsory electronic payments.

It is derived from an EU proposal.

I know it derives from the EU but it will leave some people with serious problems. Electronic payment became the method of choice before it became obligatory. What will happen to the people who will not have made alternative arrangements next October? Will the Department withhold cheques?

People will be paid.

If they do not give bank account details——

It is almost a case of the pot calling the kettle black because we are not too fond of such methods ourselves as politicians. We are trying to provide a framework in which the majority of people will be facilitated. There have always been people who have had to have a cheque written for them. In some cases, they lost it or put it away in a drawer or a press. We cannot detract from the social aspects that are critical to people. If people have an entitlement, they must be paid. In fairness, the farming organisations are trying to facilitate the proposal. I could give all the money to the IFA and it could administer the system. In eastern European countries, the co-operatives are paid and they pay the farmer.

The bill would be smaller.

They used to take a few quid for the service. Everybody has a right to receive the full amount to which he or she is entitled and therefore the practice in Europe had to be changed. The current account for the post office will be launched next month and it will facilitate some of the people we all represent.

Is the Minister giving me some solace to the effect that the remainder who will not budge will be paid?

Legally, I have a requirement——

I understand that.

Under all the laws, including secretaries Acts and the legislation pertaining to the paymaster general, the people must be paid by electronic fund transfer. We are trying to facilitate them to the best of our ability. To be fair to An Post, we could facilitate the majority, especially if the credit unions are in a position to assist.

There will always be one or two——

There are more than one or two.

It will be up to the Deputy to facilitate them. I am sure he will do so in his clinics.

Could one pay through a third party's bank account?

We are getting bogged down in a matter that is really very small. A small percentage of people will be affected but I am delighted the post offices and credit unions are now being considered. Every farmer goes to a post office if he does not go to a bank. If the post offices will have the appropriate facility, the matter will be sorted. Only a very small number of people cannot handle some kind of banking system or open an account.

There will always be the few.

Some procedure is required because we are going all over the place.

We have it; it is in front of the Deputy.

There is a legal requirement that people be paid by electronic fund transfer. We are responsible to ensure that those we represent get paid. It is my responsibility to ensure they are paid what they are entitled to. It is realised that not everybody has a bank account. An Post will provide a current account scheme and has linked up with the Department to ensure complementary IT facilities. We have had discussions with the credit union movement and if the credit unions are in a position to dovetail with the Department, there will be no problem in facilitating it. Thus, the vast majority of people will be facilitated. All we are doing is allowing people to get paid through the process of electronic fund transfer. We must accept that the European taxpayer — we are included — wishes to see this process. We can facilitate the majority of people to the best of our ability.

I welcome Deputy Sheahan's view, on which we will follow through immediately with the credit unions.

Are the outputs noted? Noted.

We will proceed to subheads A1 to A10, and C, H and R, which pertain to food safety, consumer protection, animal health and welfare, and fish and plant health.

What is the state of play on expenditure on TB and brucellosis eradication? Are the results as desired by the Minister? Will she comment on the effects of expenditure to promote animal welfare in general?

On the overall disease issue, we are quite happy with progress on brucellosis. We would like to reach a stage at which we could say it is eradicated. One must be very careful about what one says. Progress is achieved through the all-island approach to animal health. As members know, this committee discussed the North-South aspect of animal health some time ago. One issue that arose was the poor result obtained in brucellosis eradication in the North. We met the Minister, Ms Gildernew yesterday and noted that the Northern Ireland Administration is trying to complement our work.

I am still not happy with the position on TB because there is still too much of it. The eradication scheme has been in place for a considerable number of years. It is hoped there will be field trials this year, after which we might see a better outcome. We would like this because we are spending large sums of money. It is very disconcerting for a farmer to have a herd with TB because all sorts of issues arise. We are working very much on the complementary side.

The figures on BSE are good. We are glad of this and want it to remain the case. Sometimes when one establishes a contingency fund for a disease, one hopes the disease levels will be so low it will not have to be spent. One must bear in mind that other diseases could have an impact on the Vote in question. Overall, we are striving to make progress.

If we can reduce the disease levels, we can, in some way, consider the burden on the farmer. We have done so. In respect of BSE, for example, we got rid of the idea of full depopulation. Such measures can complement each other and this is the way in which we would like to proceed with our disease eradication programmes.

I welcome the Minister's contribution on animal health and the co-operation between the Six Counties and the Twenty-six Counties. Would it be fair to state TB and, to a lesser extent, brucellosis are most concentrated along the Border?

I hate to tell the Deputy the level was highest in the Deputy's county. Our veterinary people say brucellosis was worst in the South. In the North, where brucellosis was widespread, it used to be worst in Fermanagh.

Is there an all-Ireland structure dealing with it?

We are proceeding to that but we must be careful because we are dealing with another administration. Considerable progress has been made in the work. Following on from yesterday's meeting, we will be examining the tackling of Aujeszky's disease and others. The Minister for Agriculture and Rural Development, Michelle Gildernew, MP, MLA, wants to achieve the same levels we have in tackling brucellosis. Then, we could move on an all-island aspect.

From our experience, full herd culling rather than individual culling is probably the best way in tackling the problem.

We would like to see their efforts to tackle brucellosis progress more quickly. To be fair, they are seeking to complement that.

On the TB compensation package, the outturn for 2007 shows an increase in spending which was not anticipated. I hope the increase in incidents does not continue.

There has been a significant increase in the cost to dairy farmers for replacement animals. Prices have sky-rocketed in the past 12 months. Take the example of a farmer losing a fifth lactation cow through TB. Such an animal will not normally be accepted at a mart except at dairy disposal sales. Instead a farmer is forced to buy younger animals but pay up to €2,500 when only getting a fraction of that in compensation. Some farmers who lost dairy cows in the middle of 2007 could not get back into milk production until spring 2008. Is the Department aware of these price differences and prepared to match this discrepancy with an appropriate compensation package?

A 7% increase has been factored into the Estimate. Up to €18 million was spent in 2007 on compensation in the package — a considerable amount. The package and valuation method were reviewed two years ago with the farming organisations. The valuation is based on the value of the animal at the time the TB is diagnosed. I accept some farmers got caught out. The valuations take into consideration changes in the markets. There has been a 38% increase in the valuation of dairy cattle.

Some members were in touch with me about individual cases where the valuation was at a particular time but the prices for replacement animals went up six weeks later. Under the regulation it is based on the valuation at the time. The compensation to the dairy farmers has been increased by approximately 40%.

There were cases of farmers whose herds were depopulated and they could not get back into dairying. The valuation may have been done at the time of diagnosis but they could not get back into dairy production until the following spring. I have instances of where the prices doubled in that period. Has the Department the flexibility to deal with those cases individually?

We do not have the flexibility as we are precluded by a regulation. The valuers have taken into consideration the increased cost in the purchase. I am very tied to the regulation. If I change it, I will have the same with the BSE situation and it will come down like a house of cards. There is a process where the valuation can be appealed.

That does not work because they are tied to the regulation.

It can be appealed if it is not fair. A considerable number of appeals have been allowed and consideration has been given.

I had an instance in Cork North-West of a farmer whose herd was depopulated last year and he could not get back into dairy production until this year. The difference between the compensation he received and what he paid for replacement animals was 50%.

I appreciate it but in the case of a particular hardship we try our utmost to assist through an appeal. It can also go the other way where the compensation is more than the cost of replacement.

The price of dairy replacement cattle has gone in only one direction in the past year.

Other people have been caught in a different way.

I agree with Deputy Michael Creed that the cost of replacement is out of proportion and does not keep up with inflation. I am happy to see the improvement in disease control, especially brucellosis and BSE. While TB is still a problem, savings must have been made compared with the bad times when TB was more common.

What is the approach to dealing with outbreaks of scrapie among sheep flocks? Does the Department depopulate whole flocks or just the infected sheep? I know of one sheep farmer who must blood-test his whole flock when only several of the sheep are infected.

On the basis of the savings made over recent years, I got permission from the Minister for Finance to reduce the bovine diseases levy. It is all about keeping everyone happy. The levies charged to farmers were reduced from €20 million to €5 million on the basis of the reduction in the disease outcomes. That was the result the committee was seeking two years ago.

Whole flock depopulation is not carried out in scrapie occurrences. We have been arguing that genotyping is important in addressing some of the issues raised by scrapie outbreaks. The Minister of State, Deputy John Browne, is the expert on scrapie. Farmers in counties Carlow and Wexford drove me to distraction about it last year.

County Meath had its first occurrence of scrapie last year.

How common is scrapie?

It is more prevalent in the south east.

Does the Minister have a figure for the TB compensation for 2007 as opposed to what was provided or estimated?

We made a small saving. We had an Estimate of €19 million and we spent €18 million.

The Minister should spend the other million. One would not buy many cows for €1 million.

It is tight enough. We are talking about last year.

Under subhead B the only increase, 23% or 24%, is for seed potatoes.

We have moved on, and perhaps it was my fault.

There is a 23% or 24% increase in expenditure for seed potatoes.

We have gone through that and I asked whether there were any other questions.

It is all right.

We cannot be going back over what we have already discussed or we will be here until this evening. Does the Deputy see where we are at with the subheads? We have moved on——

I see it all right.

It is programme 2, subheads A1 to A10, C, H and R.

That was the small scheme which was introduced for seed potato growers. We changed our approach. We got out of that and to allow the farmer to get through the interregnum, we introduced a small scheme specifically for seed potato people, and this accounts for that expenditure. It was for tuber ones. The Department moved out of the production of seed potatoes and facilitated the farmers with equipment and facilities to allow them to take over in the interregnum. That is where that money was spent.

Has Deputy Sheahan another question?

Are there any other questions on programme 2, subheads A1 to A10, C, H and R?

The Chairman will tell me if I am in the wrong programme. Am I still entitled to ask about animal welfare, research and training?

I am somewhat confused. This is designed to confuse poor Wicklow men.

That will never happen.

Are any initiatives being taken — the Féile Bia one I know is Bord Bia — as regards labelling and country of origin or is that outside the remit of this Estimate? It seems simple but it is actually expensive to have the ingredients of each product labelled and the carbon content indicated. Some producers and outlets are now labelling their food as low carbon produced as opposed to organic, and there is a debate as to which is the more appropriate. I was at a climate change committee yesterday and agriculture is being nailed on the head at every meeting. It is the big bad wolf in the room. On the question of country of origin, labelling and ingredients, is this provided for in the Estimate?

We beg the Chairman's indulgence, but it is not. The Department of Health and Children deals with labelling, which is what the Deputy's question referred to. On the Bord Bia labelling, it arose here in a discussion some time ago that we could not see the "Guaranteed Irish" label as it was too small. We gave resources to Bord Bia to do that part of it, so we have factored in expenditure for the Bord Bia labelling, within the board's Vote which will be dealt with later. Responsibility for policy on labelling lies with the Minister of State at the Department of Health and Children, Deputy Pat the Cope Gallagher. We work closely with him on this and with the Food Safety Authority of Ireland. The issue is at present before the European Union. However, it is not a financial prerequisite. The other aspects filter through Bord Bia's Vote, which is at the end of this process.

While not directly a money issue, what about the country of origin aspect?

That is a matter for the Department of Health and Children and the responsibility of the Minister of State, Deputy Pat the Cope Gallagher.

If we are talking about the ultimate output for agriculture, it could be argued that that will be affected by country of original labelling.

That ties in with the Deputy's initial remarks on food safety and food security. We have been trying to deal with the issue of substantial transformation on that basis. Many ministerial colleagues in Europe are not necessarily enthused about this. More recently they have begun to become more enthusiastic about it, but the country of origin labelling is something we have been pursuing. The European Commission is looking at a country of origin European label, but we want to go further than that by replicating what has been done with beef and having a country of origin subheading under that label. That process is still ongoing with the European Commission and the Minister of State, Deputy Pat the Cope Gallagher, is dealing with it on my behalf. That is what is called joined-up Government.

It may be joined-up Government but I understand the initial proposal was made in January.

It is still there.

It is a major political imperative and someone needs to grasp the nettle, so to speak.

To be fair, the Commissioner agrees and DG-Agriculture would like to pursue it.

It makes total sense.

I do not disagree with the Deputy.

There is a creative way around it. It is not cheap to put such labelling on a package, however, and that is where the picture and the name of the individual producers appear. Some co-operatives and food outlet places are doing it with some of their products. It is not in breach of any EU rules but it is expensive.

The poultry industry does that very well.

We could be supporting it by putting more money into the system and breaking no rules.

We will talk to the new Minister for Finance about it.

We could be talking to her.

I think I shall go home, thanks very much.

That is not for discussion today.

We could assist——

Or give her a vote of confidence.

Are the outputs noted and is everyone happy with programme 2? We shall move on to programme 3, the sustainable development of rural and coastal economies and the natural environment, subheads A1 to A10, F to J, M to P and R, incorporating rural environment, land mobility (early retirement/installation aid), development of agriculture and food (part), forestry and bioenergy, fisheries (part), Marine Institute grant-in-aid, Bord Iascaigh Mhara grant-in-aid, Sea-Fisheries Protection Authority, Aquaculture Licences Appeals Board, and other services (part). Are there any comments?

The farm waste management and farm improvement schemes, FIS, are very attractive, as was evidenced by the level of take-up. I want to flag an issue for the Minister. A serious problem will present in getting these works completed. The haste to meet the end of the year deadline may well give rise to health and safety issues in work practices. While I understand there is an EU aspect to this as well, I have the most serious reservations about the deadline being met safely. A letter issued recently to farmers telling them they had to have all their receipts and documentation and not just evidence of the work being completed. The Minister should be aware that this will be a serious problem in the autumn of next year and I do not believe the deadline can be met. Farmers are committing significant sums of money to this and obviously EU money and our own Exchequer will contribute to it as well. However, I do not believe we can meet that deadline, and it may affect output for the year if the deadline has to be extended, as I believe it should be.

The suspension of the farm improvement scheme for ten days at the end of October and the backdating of the suspension to 20 October is an issue that needs to be cleared up. That is not fair and it is a view shared across the board. We can argue that the scheme was supposed to run for five or six years and was gone in five or six months, but people had their applications in and stamped by the Department, only to be told that the suspension was to be backdated to 20 October. That is indefensible. Has the Minister quantified the number of applicants and the expenditure? If she has looked at how to make savings elsewhere, she should approve the applicants for those ten days.

In a reply to my Dáil question on 22 November 2007, the Minister stated that 12,675 applications were received up until the suspension of the scheme on 31 October 2007. Can she confirm the total applied for under the farm improvement scheme grant? Can she confirm that applications received by 31 October will be processed? Nearly six months have passed since she suspended the scheme. Can she indicate if she will be able to source any additional funds to reopen the scheme in the near future? Will she honour the applications up until 31 October?

I have the same concern. Many people got caught in these ten days. I know the Minister analysed it and her Department officials are going through it. When will we get an answer? I am continuously getting representations from people who are caught in the ten day period. They sent their applications in but they do not know where they stand. We returned money last year under different headings in the Estimates. It seems a shame to return money to the Exchequer when people in this situation did not receive grant aid. We could move the money from one heading to another and try to complete the scheme as we had advertised until 31 October. When will the decision be made for the 12,000 people who were caught in this ten-day period?

This year €151 million has been allocated for farm waste management. We got an additional resource from the Minister for Finance during the budget. The issue is that State aid approval finishes on the last day of this year. We are all aware that there are pressures on farmers to get the work done. We reminded them to do as much work as they could over the past two years. They are all aware of the current pressures. Knowing the psyche of the farming fraternity for some years, it is still very important to state clearly that I do not have approval after 31 December 2008. We will look at the number of applications. The signing off has been considerable in the Department. There is serious expenditure every week, not to mention every month, on this scheme.

A deal was made under partnership that €79 million would be allocated under the farm improvement scheme. Over a ten day period there was an avalanche of applications. The cut-off point is 21 October. If I was to pay up until the last day of October, I would have to add another €30 million. Contrary to what happened last year, the Estimate for this Department will be very tight. Farm waste management is coming at us fast and furious.

If the Minister extended the deadline, she could extend the payment period.

No. There is an official from the Department of Finance at the back of the room, and he would advise me——

He got €150 million from the Minister at the end of last year.

He will advise me that I may not do this. However, if there are savings within the subheads, the current Tánaiste accepts that we can reconfigure from one subhead to another to manage the Vote. If it was an appropriation-in-aid to Bord Bia, I would have to come before the House, which we did last year. Therefore, it is possible to transfer from one scheme to another.

There are two very big schemes in the Department at the moment, namely, farm waste management and suckler cows. REPS is also a big spender at €311 million. With big spending programmes, I must make sure that priorities are dealt with. If somebody spends money to build a shed, then he must be paid. We have commitments to those people and they will have to be paid. I also have to pay people who bought under the farm improvement scheme. That is my problem. At this point I do not have the €30 million extra to look at it.

Could the Minister make a request in Brussels for the extra money?

Unfortunately we are now net contributors to the European Union, so it is a different scenario. We all know that people threw in applications even though they may never go ahead with the scheme. Anything approved that is not drawn down will be transferred for some type of flexibility within the scheme. There may well be some of those 12,000 people who will not go ahead with the scheme, or threw in the application because they heard the closing date was upcoming. If I can find the flexible arrangements, I will transfer money within the Vote. It will be a while before that happens. I doubt it will be this year. I must pay up before the deadline on farm waste management and the suckler cow. There are two years to do that work.

That is cold comfort to the farmers not being considered. Their applications were accepted.

I am not being too political because I understand where everybody is coming from, but if the Deputy can find an area where I can cut €30 million from this Vote, then he is more than welcome to facilitate me in making that decision. However, there are other things out there that are very important to people this year. They just have to get paid the money for farm waste management.

Can we be sure that the Minister will not hand back €30 million?

She will not hand back money.

It is highly unlikely that I will return one cent to the Department of Finance, as I will be under great pressure in two or three big spending programmes. I would not contemplate opening the door to tell the Minister for Finance that I was returning €150 million.

I have flexibility to transfer within the Vote and I have received much support from this committee to do that. However, the flexibility is very tight this year due to the expenditure involved at the moment. The suckler cow scheme is very important to the beef farmer. If I was asked to reduce that scheme in favour of the farm improvement scheme, then we would have to think about it. It would be more beneficial for farmers to obtain their suckler cow, farm waste management and REPS payments. Some people are experiencing difficulties. If flexibility arises in due course, sheep farmers should be allowed another chance to avail of the scheme. They were late in applying because there was a delay in regard to the criteria set down for the programme. They did not get as much of an opportunity as others to submit the documentation and so on. There is no point in claiming otherwise.

I understood some €6 million was to be ring-fenced for them.

Many of them did not get their applications in. They undoubtedly have a bona fide case. I reiterate that if flexibility arises that makes it possible, we will transfer moneys within the Vote. At this point I cannot give a commitment to reopen the scheme.

Perhaps my best option is to buy a ticket in the European lottery and hope that I win €30 million or even €50 million.

Will the Deputy share that with me?

I will give the Minister half my winnings.

I do not like to be parochial but I have a question on the farm waste management scheme in my constituency. The Department's office in Wicklow has experienced difficulties in regard to staff numbers and the processing of applications. I put down a parliamentary question to the Minister on this matter last year. Applicants are under pressure in seeking to meet the deadline of November this year. I noted what the Minister said about having no authority to go beyond 31 December. These people's applications have been delayed through no fault of their own. They cannot commence work until they obtain approval. Will the Minister clarify this situation? I understand there was an undertaking to process all the applications by the end of March.

There were issues in regard to planning. In an effort to facilitate applicants in view of the tight deadline, I contacted all the planning authorities. I also ensured support was available to local offices to ensure they got through the applications as quickly as possible. For example, temporary staff were appointed for a period of six or seven weeks to assist in processing applications locally. We managed to get through most of them but there are still people caught in the quagmire. If Deputy Doyle is concerned about a particular case, he should contact my officials and we will look into it for him.

I have some questions on fisheries. There is an allocation of €20 million in 2008 and again in 2009 in respect of the decommissioning scheme.

The figure is €21 million.

Yes. This is an issue of considerable concern to me as a representative of a coastal community. The Minister mentioned that responsibility for administering the decommissioning scheme has been delegated to BIM and that funding is provided to BIM in grant-in-aid for this purpose. Will this grant-in-aid be applicable to new vessels coming into the fishing fleet?

Will it apply only to the refurbishment of old vessels to bring them up to standard?

I apologise but I cannot hear the Deputy well. Does his question relate to the decommissioning scheme?

My question is whether the grant-in-aid is applicable to new vessels or relates only to the refurbishment of existing vessels.

Does the Deputy refer to the grant-in-aid administered by BIM?

There is no scheme applicable to new vessels.

Has this to do with the code of compliance?

A small scheme has been in place for some years relating to the minor safety measures that must be in place from a compliance perspective. The BIM scheme is not for the purpose of bringing new vessels into the fleet. There is no scheme for that purpose.

A figure of €14 million is allocated for the Sea-Fisheries Protection Authority, SFPA. I understand this is an increase on last year's allocation.

Yes, the increase relates mainly to staff costs.

It is my understanding that the SFPA is statutorily bound to reply to queries from us, as members of the committee, and to the Minister. However, I have put down several questions to the authority and cannot get any answers.

The SFPA is an independent body established by an Act of the Oireachtas. I have encouraged the ongoing process of interaction between the SFPA and the fishermen's representatives in the social inclusion forum. The authority is not answerable to me because it is an independent body. All I do is facilitate the provision of the grant-in-aid which it administers. If the Deputy has particular questions for the authority, I will communicate them to the chief executive officer.

Representatives of the SFPA will attend a meeting of the committee on 28 May.

I seek clarity on this issue because we must vote on the Estimates today. It is of some concern that €14 million is being allocated to an organisation from which we cannot get answers to our queries.

I agree that is totally inappropriate.

I cannot recall how many such parliamentary questions I submitted to the Minister. The reply in each case was that it was a matter for the SFPA.

That is the problem. I will speak to the chief executive officer with a view perhaps to devising a system whereby parliamentary questions would be dealt with by a designated person.

I am loth to support an allocation of €14 million in these circumstances.

We can put these questions to the delegation from the SFPA at our meeting on 28 May.

The point is that we must approve this allocation today. I have serious reservations that a body established by the Oireachtas should be entirely unaccountable.

I understand it is accountable to this committee under the legislation.

Yes, it is accountable to the committee, as representative of the Oireachtas, rather than to me.

Yes, it is comparable to bodies such as the National Roads Authority.

Yes. In the interim, I will ask the Secretary General to communicate with the chief executive officer with a view to establishing a special facility within the SFPA for dealing with parliamentary questions.

Part of the problem may be that the SFPA is not aware of these requests because it has been shielded from them by the Ceann Comhairle's office.

All my questions went directly to the Minister. When a question to the Minister for Health and Children is referred to the Health Service Executive, one eventually receives a reply from that body. However, that is not the case in this instance.

We will work something out.

There is an increase in the allocation from €10 million to €14 million. Will the Minister provide a breakdown of that?

It mainly relates to staff costs. There is also the introduction of the electronic logbook, the integration of the IFIS Lirguard data gathering service for the Naval Service — which would be a capital expenditure — and the introduction of a new non-corruptible vessel monitoring system, which cost more than €2 million. We were not satisfied with the European outcome in regard to the electronic logbook but at least it was a céad chéim. We sought to ensure, for example, that vessels entering our waters would have to provide us with information on quota and so on. However, faced with the prospect of the provision falling, we agreed to it on the basis that we would come back to the Commission after reviewing the outcome. If the review is unsatisfactory, we have flagged our intention to the Commission to raise this issue again. In addition to the staff, the additional capital investment for the Sea-Fisheries Protection Authority was made on the basis of the setting up of that new system.

On subhead H, I refer to horticulture, organic capital expenditure and organic current expenditure. There have been dramatic increases under these headings and I assume the Minister of State at the Department of Agriculture, Fisheries and Food with responsibility for food and horticulture, Deputy Trevor Sargent, has been influential in this regard. The Minister should explain exactly what these increases relate to, particularly in respect of organic capital expenditure and horticulture. While everyone welcomes increases in this regard, I seek a breakdown in terms of the expenditure for the aforementioned three items.

On the same issue, I mentioned the question of carbon and organics earlier. I am a member of the Joint Committee on Climate Change and Energy Security, as is Deputy Aylward, and it is my duty to bring this issue to the attention of members. While I do not wish to be a killjoy in respect of organic farming, organically-produced food should be carbon-proofed and should be measured in this regard against food produced under REPS, a nutrients management plan under the nitrates directive, or both. I would like to see the results of an independent assessment in this respect. I have my own opinion and everyone might be surprised at the results, especially the Minister of State with responsibility for food.

The target of 5% is attainable without doing any serious damage to the agrifood sector. However, it will not feed families on lower or moderate incomes and certainly will not sustain the level of employment the agrifood sector produces from mainstream farming. Organically produced food should be carbon-proofed and the results should be examined.

On the horticulture side, a scheme exists under the NDP for horticulture development, for which €7 million has been provided this year. In the main, it is for specialist plant and equipment, upgrading new production facilities and similar items. The scheme has attracted massive interest and while no amount of money would match the degree of interest, the sum of €7 million was allocated in 2008. As the Deputy will have noted, interest in horticulture has been growing for a considerable time.

The organic sector was included in both the NDP and the programme for Government, lest the Deputy thinks otherwise.

I acknowledge that.

While we have had organics for a considerable time, I might add that my Minister of State is anxious that Ireland should reach the 5% target. Two schemes are in operation, €1.5 million has been allocated and the organic strategy was launched yesterday by the Minister of State. The schemes are for on-farm and off-farm activities, respectively. They mainly are for the grading, storage, packing and similar activities, of organic food, as well as for equipment and facilities for production. Moreover, a specific part of REPS is for organics.

On the other issue, I appeared before the Joint Committee on Climate Change and Energy Security and discussed carbon-proofing there. Organics is a particular type of food production and in many ways, Irish farmers are not far from it. The natural expectation is that those who go organic will receive a better return and the Department must seek to replace our imports in this regard because a considerable amount of organic food is imported, which is highly expensive.

There are food miles on the imported food.

That is the case. This is the reason the Department is considering its replacement. I seek a balanced approach in this regard. There is the commercial sector——

That is the key industry.

—— what I would call the natural sector and the organic sector. I still believe there is a complementary opportunity for everyone engaged in food production, from artisan level all the way up to the big players. While this is a small scheme, the Department is anxious to achieve the 5% target because it is included in the programme for Government. In the not too-distant future, members will haul me before the select committee to ask me what have I done in respect of the programme for Government and whether I have reached my targets. Consequently, the Department is striving to reach those targets.

Members appreciate the target and I do not believe anyone would oppose the setting of a target in the first instance. However, I refer to the current climate in which the price of staples for ordinary working people, such as potatoes and bread, is increasing year on year as food inflation increases. As for the Department's thinking, will a point be reached at which the focus of spending would be towards ensuring the staples are maintained at affordable levels? I appreciate the Minister is seeking to strike a balance——

One must be careful in that regard.

I appreciate there is an organic market and a local food economy that must be supported. However, a balance also must be struck to ensure the great majority of the population can have staples at an affordable price.

The Minister should note that a couple of other members wish to contribute.

In fairness, the sum of €1.5 million out of a total of €3.3 billion does not constitute a seismic policy change on the part of the Department.

I appreciate that.

The Deputy is correct in that there are opportunities in the organic sector. Some people wish to purchase organic food and others wish to participate in its production. It should be acknowledged that Ireland, as a food producing nation, should produce it as well as anyone else. While it is a small niche, it can grow and develop and the Department sees opportunities in this regard for smaller producers.

As for the large commercial side, the Deputy's point is correct, as highly significant discussions on food security will take place. Farmers will assert that they are getting some return for their investments at last as their input costs have been rising and their output costs are only now beginning to increase and level out. I agree that another issue arises in respect of poverty, which will take a considerable amount of consideration on subjects such as the role of supermarkets, etc. Consequently, this will not be achieved under my budget Estimate today. It is a policy matter that must be considered.

I wish to make a comment on the non-farming sector. The Minister has noted that in many instances, we are not too far removed from organic production. However, we are at a sufficient remove from that. A commitment has been received to ring-fence some grant aid for small abattoirs.

That is correct. The Deputy is referring to the marketing scheme.

The Minister mentioned packaging and similar facilities for the organic sector. Were similar initiatives developed for local producer groups and locally produced products, one would cut down on carbon miles and be more efficient. This would be closer to the mainstream without being intensive. It would allow people to produce food for local co-operatives on a smaller scale. The emphasis should be on doing so. While I welcome the initiative on horticulture and am not being a killjoy in this regard, one should attack——

The Deputy had better not be, as a lot of his boys would be looking for money.

We must focus on this aspect because it is far more productive. Models of local producer groups, be they in west Cork or wherever, demonstrate the possibilities in that vein without being under the constraint of organic production in its fullest sense.

A specific grant has been introduced for marketing and processing for the smaller abattoirs.

I wish to raise an issue with the Minister regarding disadvantaged areas.

The Deputy should wait for a moment. I thought he wished to make a contribution on this subject.

It does not pertain to the carbon issue.

I must call Deputy Tom Sheahan first, followed by Deputy P.J. Sheehan.

Forestry comes first. I would like to give the girl from County Donegal the chance to——

The Minister of State is from County Meath.

I know. I would like to give the girl from County Donegal a break. She has been at it for the past two hours.

Members will be giving me a break in a few minutes as I must make a speech at 1.30 p.m.

Deputy Tom Sheahan first, please.

I will be as brief as possible. On fisheries, I believe that when the decommissioning scheme was initially announced, the sum of €63 million was mentioned. The Minister has made allocation over two years for €42 million. Will the scheme last for three years as €42 million constitutes two thirds of the original sum?

The issue is that the Cawley report based the figure on a guesstimate. The Department now is obliged to base the figures on the closing date, which was yesterday, to ascertain the number of applications that have been received. This analysis has not been completed. There appears to have been a considerable amount of interest although as not everyone necessarily will be eligible, the Department must be careful. However, the Minister of State at the Department of Agriculture, Fisheries and Food with responsibility for fisheries, Deputy John Browne, has had a long meeting with the industry. It is appropriate to state that the scheme should address the issues adequately and remove the desired capacity. These matters must be reviewed but I assure the Deputy that adequate resources have been provided.

Regarding the €14 million for the Sea-Fisheries Protection Authority, four fishery officers arrived on a pier recently in four separate SUVs. Some €19 million has been allocated to fishery harbours to reduce congestion, but there is no congestion. No one is fishing because there are no boats to fish.

The Deputy should tell the fishermen in Dunmore East that there is no congestion.

More fishery officers than boats leave Dingle.

Is that Dingle or An Daingean?

We are still dangling. I welcome a number of aspects. For example, there is a sizable increase from €372,000 to €1.25 million under the fish processing heading. There is considerable value-added potential in terms of processing fish and import substitution. It is widely known that Cork Port is the busiest importing fish port in Ireland.

Something must be done. We are an island nation, yet only €3 million has been allocated to coastal protection. Last year, emergency work carried out at Inch cost €4 million.

It cost my Vote €900,000.

The Minister must be thanked.

County Kerry will never see another bob.

The figure of €3 million is for a year, but it is insufficient given how much a single job at Inch cost. I congratulate the county manager for driving the emergency work. The Minister will ask from where the money will come.

I do not disagree. The number of applications to the Department is large, equating to approximately €200 million or €300 million. The matter will move to another Department in due course.

There are considerable issues. For example, the problem with coastal erosion is that even small works cost a significant amount. Gabions and the retention of walls are expensive.

Some €3 million nationally is not half enough.

Were I the Deputy, I would be thankful for the €900,000.

Kerry got in on a wing and a prayer. A number of the Deputy's colleagues might not be as pleased.

The Minister of State, Deputy Browne, stated that he would do something in respect of aquaculture licensing, the budget of which has received a significant increase. I hope this will expedite aquaculture licensing.

That is what we are trying to do.

We will give the girl from County Donegal a rest and take on the girl from County Meath.

The Deputy cannot pick on her.

On the question of forestry, will the Minister of State implement the 18 recommendations of the Malone report, Factors Affecting Afforestation in Ireland in Recent Years? What progress has been made with the new forestry Bill? In light of the OECD report on the number of quangos operating in Ireland, is the Minister of State considering merging some of the bodies and committees that have mushroomed under her Department's control? I am referring specifically to the forestry, sea fishing and marine areas.

The national forest covers 10% of our total land area. The target is to reach 17% during the national development plan, but the immediate objective is for an annual planting of 10,000 hectares per annum. How many hectares were planted in 2006 and 2007? Does the Minister of State agree that if she removed the replanting obligations, the figures would show a dramatic improvement, as they are affecting the area that could be planted? Hundreds of acres lie desolate after the felling of trees.

In 2006 and 2007, 8,000 hectares and 6,946 hectares, respectively, were planted. We are not happy with these figures and are doing everything we can to encourage people to plant. Our greatest difficulty is that the State is no longer planting. We are depending on farmers to take the decision to plant. We did everything we could, particularly in terms of making planting attractive for REPS farmers by introducing the new REPS scheme and tweaking its pilot scheme this year.

The Deputy is correct in that we want a minimum rate of 10,000 hectares per annum. It is an important issue. While 10% of our land is under forestry cover, the average across Europe is 30%. Increasing the amount of land under forestry cover is a priority, for which reason we have been running radio advertisements in recent months. It is interesting that of the applications to plant forestry received by the Department, many do not go ahead with planting after receiving approval. We are testing the reason for this gap. People have the initial idea to convert to forestry. The Chairman and I know of people in County Meath who have taken the decision to convert because, after planting half of their land, they can retain their single farm payments and receive the 100% planting grant and the premia for 20 years. Other benefits in recent years include the increasing price of timber due to wood energy needs and so on. It is an attractive time to enter the forestry sector and we hope that more people will consider doing so.

The Deputy's point on the replanting obligation was important. We are considering the obligation in terms of legislation and we hope to have the Government's approval to take it to the parliamentary draftsman soon. I do not want to give false hope, as we will not remove the obligation to replant. To do so would be a bad idea. However, we will relax the obligation, which might encourage people to consider forestry. If they have a real reason to leave the scheme, they can make a case to the Minister.

The Deputy asked about the 18 recommendations in the Malone report, which we commissioned before Christmas. We requested that we be reverted to as quickly as possible. We are addressing a number of factors. We have met the Minister for the Environment, Heritage and Local Government — many of the factors are on the environmental side — and established a working group in that respect to report back to us. We are considering each recommendation daily to move matters along. We will report on progress.

The only forestry quangos are Coillte and COFORD. The former took over State lands and is running them on behalf of the Government. The latter, primarily the research body in this area, has been given an increased role in development. While we do not have any quangos to merge, the main target is to increase planting levels.

I am impressed by the Minister of State's reply and I hope that she lives up to her obligations. There is an old saying: "Poems are made by fools like me, but only God can make a tree".

We must proceed, as the Minister has an engagement at 2 p.m.

The Exchequer's contribution to forestry in 2008 is €113 million, if I am reading the capital output figures correctly. A sum of €98 million of that will cover the afforestation grants. There is a provision of €10 million for structural initiatives and €5.6 million for bio-fuels, including willow and miscanthus, and the bio-fuel national top-up grant, as well as biomass. Is there scope for increasing the provisions for biomass and bio-fuels to encourage greater growth in that sector? Given the Kyoto targets and the scope for forestry to reduce carbon emissions, should we be doing more in terms of marketing initiatives to get more people into the forestry sector? I am not convinced that enough is being done in that regard. Forestry is potentially a major growth industry.

I am not clear on the specifics of the bio-fuel national top-up grant. Has a review been carried out on the incentives for growing oil seed rape and other bio-fuel crops in terms of the net gain on energy? The information to date suggests that a multiple of losses are incurred in terms of energy by virtue of the fact that more energy goes into the growing process than is yielded at the end. If that is the case, a review of policy is necessary. I presume commitments have been made which is why the provision is in place for 2008, but is a review of the environmental benefits under way or planned?

Obviously, the jury is out on some of these issues. The bio-fuels heading which we are currently examining relates to the willow and miscanthus and the top-up grant to which the Deputy refers is an €80 top-up on the €45 premium, which the EU decided was insufficient. The top-up grant brings the premium to €125 to make it more attractive for farmers to get involved in energy crops such as willow and miscanthus. We have seen success in this area. We drove it last March and again this year, and we have seen further success. More and more people are taking an interest in energy crops.

On the issue of marketing, we went to Clare last week to visit the Clare wood energy project and are trying to encourage more such projects. In Donegal, we have the Donegal links project and others are developing in Kerry, Limerick and Wicklow. The spread of such projects around the country is important because we have found that only a very small amount of the wood chip available is being used. An enormous amount of wood chip could be used locally and we are encouraging people to take up the grants available from the Department of Communications, Energy and Natural Resources to install wood chip burners. Hotels and businesses in particular are being encouraged to avail of locally produced, indigenous wood chip. The more commercial entities that convert to wood energy, the better for everyone. It is important, from our perspective, that they become involved in projects such as the Clare wood energy project or the Donegal links project which use locally produced wood chip rather than pellets. That type of promotion is the way forward, as we see it.

On this issue, very briefly, what steps is the Minister of State taking to promote the production of copus willow for wood chippings? It is apparently an ideal tree for such purposes because it comes to maturity in two and a half to three years.

The copus willow is included in the €5 million under this subhead. That is what we describe as energy crops — the willow, the copus willow and the miscanthus. We are encouraging people to plant them. That links in with the question raised by Deputy Creed earlier regarding the top-up grant. There are planting grants for those involved in growing copus willow, the €45 EU premium and our own top-up grant of €80.

It is a step in the right direction.

When I referred earlier to biomass I was not talking about woody biomass, I was talking about the biomass that was blended in with petrol. We paid farmers to grow that. Are we still involved in that?

Is that the oilseed rape?

Are we still involved in that?

Has a review been carried out on the innate energy benefits?

We undertook a three-year programme on the basis of an EU directive, which requires that we produce a certain percentage of renewable energy. The issue now is that cereal farmers will grow crops for cereal sale, not for the energy sector.

The click-off point was considered to be $100 for a barrel of oil. It was believed that once the price hit that level, alternative opportunities would arise. Oil is now approximately $120 a barrel so there seems to be a net opportunity. The position will have to level out because more people are growing crops for food production in Ireland. There is a need to examine the issue of alternative energy opportunities. A conference on alternative energy was held in Dublin recently and participation was massively enthusiastic.

The point I am making——

It is being facilitated by now on the basis of the tax issue. The issue of connectivity to the grid has precipitated some of the current difficulties.

Alternative energy initiatives must be of benefit to our farmers, not to those who import oil seed rape or ethanol from other parts of the world. There is still massive enthusiasm among farmers to get involved

We need to put resources into second-generation harvests. That is the key.

That is where the research and development money is going.

That is where the money needs to go because we are not competing with the food supply then.

I wish to make a brief point on forestry, pertaining to my corner of the universe. We are at a severe disadvantage because of soil acidity. Is there any opportunities in that type of ground for acid-sensitive crops? It has been put to me by some forestry advisers that perhaps the native broadleaf trees would work in that area. Agents have argued to me that some of the applications for forestry grants from people in my area should be accompanied by an appeal form at the same time. There appears to be no window there. I am referring to thousands of hectares of land in south Kerry.

Just before the Minister replies, I wish to ask her to examine why her officials are rejecting a lot of land for the growing of willow. It is causing great difficulty and I have had numerous complaints about it. It is very unfair. We should be encouraging people instead of rejecting them and their land.

Tell them to send in the appeal with the application.

Inspectors are concerned about crop harvesting, which can be very difficult in mountainous and hilly areas. We have asked officials in the Department to examine the issue again because we are trying to encourage people to plant energy crops. We do not want to turn down those who are eager to do so. We are not negative towards such people. We have asked officials to reassess the situation. Deputies should note, however, that the rejection of applications was generally based on concerns about harvesting.

The issue of acid-sensitive areas, raised by Deputy Sheahan, is an enormous problem that is particularly acute in Kerry. Following the publication of the Malone report in March, we met the Minister for the Environment, Heritage and Local Government, Deputy Gormley, to determine how environmental problems can be overcome.

We have had some great successes in the past year and a half with issues relating to the hen harrier, which also affected Kerry and Limerick, and with the pearl mussel. These were the environmental issues that prevented us from planting forests. Acid-sensitive areas comprise the third issue. In respect of the hen harrier and the pearl mussel, we achieved regimes within which we could plant and, with regard to Deputy Sheahan's question on whether we could achieve a regime within which we can plant in acid sensitive areas, that is exactly where we are trying to go. As we work through the issue with the Department of the Environment, Heritage and Local Government, the National Parks and Wildlife Service and the EPA, we will overcome the challenge, as we did with the other two issues, to devise a regime within which to plant. That is important for the Deputy's county.

It is very important for our side.

The marginal increase in the disadvantaged areas scheme reflects the current status quo. However, concerns have been expressed about the review of disadvantaged areas being initiated at European level. The prospect of losing classification frightens the living daylights out of farmers. The new criteria may go into greater scientific detail while ignoring socioeconomic factors so I want the Minister’s assurance that what we have we will hold. The approach should be to classify currently unclassified areas under new criteria.

My colleague, Senator O'Donovan, brought our attention to the rural development initiative, Axis 4.

That pertains to fisheries.

That is a nice pass.

He wrote to me about the matter.

I also put a number of parliamentary questions to the Minister on it. I understand the funding which may have been available at European level is being channelled through the decommissioning programme. We have sacrificed an opportunity to co-finance rural development in coastal communities by failing to pursue the proposal under Axis 4. We took the money for decommissioning and decided against a rural development co-funded operation. We are effectively doing the decommissioning on the cheap at the expense of coastal communities. It appears to be a missed opportunity, particularly in respect of rural communities along the coast. Fishing is concentrated in the most marginalised areas of the country so turning our backs on a rural development funding opportunity seems a mistake. I would like the Minister to comment on that.

Regarding the disadvantaged areas payments——

Can the Minister give a timeframe on the disadvantaged areas?

While member states were negotiating the rural development programme, we collectively decided against proceeding on the basis of our political impact analysis. It was not necessarily my problem.

Is the Minister telling us she is going somewhere?

I do not mean that. The Council of Ministers decided not to proceed on the basis of the seismic impact this would have on several member states, including Luxembourg and Belgium. There would have been absolute consternation so the Council completely rejected the Commission's proposal and it has been off the table for some time. In the interim, we will hold bilateral meetings with the Commission. On that basis, I made the judgment call not to proceed with an application to the Commission to expand the disadvantaged areas scheme for a particular region because doing so might initiate a return to the review.

From our perspective and based on the last analysis we conducted, it would not have had a significant impact on us. It would have seen an increase in disadvantaged areas because of the many bits and corners that do not fit in and the disadvantaged counties which are divided by mountain ranges that are not disadvantaged. The matter will, however, have a massive impact on other member states and on that basis the Council of Ministers unanimously rejected the process. Movements in income will be flexible in cases where, for example, somebody forgot to fill in a form or made a mistake two years ago.

On the issue of Axis 4, I will deal with the Chairman's letter in due course. I do not have a brief before me on the subject because it is not relevant to the Estimate. Axis 4 is mainly a Leader project for fisheries, although two parts which are not part of Leader are being considered. The Minister of State, Deputy Browne, my officials and I had a discussion on the matter but we face a bigger problem in that the operational programme for the fish industry was rejected by the Commission.

Does that include decommissioning?

Decommissioning is not included. The programme comprises everything to which Europe will contribute. I am paying for decommissioning so that is straight money with State aid approval. Other small schemes, such as REPS, which are co-funded or exclusively funded by the European Commission, will be affected. The reasons for the decision, which have nothing to do with my Department, were that problems were encountered by the Department of the Environment, Heritage and Local Government in regard to the water framework directive and other matters. To be fair to the previous Minister for the Environment, Heritage and Local Government, Deputy Roche, he negotiated several of the issues and changes have occurred. For example, we have had designation on aquaculture. I have instructed the Minister of State, Deputy Browne, and my officials to renegotiate with the Commission. We will also meet the Department of the Environment, Heritage and Local Government. It is unfair that my operational programme will be stopped on the basis of another person's watch.

What is the crossover on the water framework directive?

The crossover pertains to the water framework and natural habitats directives. My operational programme is being scuppered because of minor issues. The big issues, such as designation, have been addressed. There will be significant cost implications for the State but it has happened and we will proceed on that basis. We should have undertaken the operational programme on the basis of the bona fides of the Government that the issues were being addressed. We received a letter this week informing us that the operational plan has been rejected but we are going back to fight the decision. I need the operational programme so Bord Iascaigh Mhara can implement policy on my behalf within the overall programme.

Can we get a detailed brief from the Department regarding the sums involved?

We can because the Chairman wrote to me on the matter.

In respect of rural development, it is disappointing CLÁR and Leader are getting nothing.

I do not deal with them.

They are listed under rural development.

They are under rural development because the Minister for Community, Rural and Gaeltacht Affairs and I have overarching responsibility. I have to include them but the Minister, Deputy Ó Cuív, does all the work.

Is the Minister's Department not spending money on them?

Area-based development and rural development are more than halved.

It goes through me. I get the money and give it to the Minister, Deputy Ó Cuív. Because it is the EU rural development programme, it has to go through me. We both negotiate and I transfer the money to him.

Funding for the area-based rural development programme has been more than halved, from €14 million to €6 million.

That also comes from the budget of the Department of Community, Rural and Gaeltacht Affairs.

What figures are affected in the operational programme about which the Minister spoke?

We will not have the opportunity to bring in the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, to discuss this issue.

I cannot answer for the Minister, Deputy Ó Cuív.

It is included in the Minister's budget.

It is not included in my budget. I only facilitate the throughput of the money. That is all I do. It is not included in the Estimate.

It comes to the Department of Agriculture, Fisheries and Food and has to be transferred to his Department.

We can invite the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, if we want to. That is not a problem.

Of course, the committee can do so.

We will certainly ask him to respond. We will ask the clerk to the committee to write to him. Is that agreed? Agreed.

I will have to get back to Deputy Sheahan because I do not have the numbers.

On programme 3, subheads A1 to A10, the outputs are noted. Are there any comments on programme 4, direct payments and customer services, subheads A1 to A10, D, E, J and R, income and market supports, income supports in disadvantaged areas, fisheries (part), other (part) and non-voted EU expenditure?

Was my disgust that only €3 million was allocated for coastal protection works noted?

Yes. That was referred to.

It was noted. The outputs on programme 4 are noted. Programme 5, operational capabilities of public service authorisation, relates to the administration subhead already covered in programmes 1 and 4. The outputs are noted. That concludes our consideration of Vote 31. I ask the Minister to make her closing statement.

I thank the committee for this exchange of views, the Chairman and staff. I thank my officials who prepared the briefing documents for everybody. I apologise for the absence of two of my Ministers of State. Deputy Browne had a previous commitment and is discussing aquaculture, while Deputy Sargent had a public commitment and was not in a position to be here.

I thank the Minister but I raised a point on——

I will chat to the Deputy.

I do not want to go through it now. I can talk to one of the officials at some stage. I would welcome the opportunity to have the Minister visit the committee to discuss the state of the aquaculture sector.

The Deputy will be an expert after this afternoon.

We will leave that matter in the hands of the clerk to the committee.

I should have raised this issue before the Minister came in. Coillte published its annual report recently. Can we include it in the list of organisations we will invite to appear before us?

We invite Coillte to appear before us every year.

On behalf of the committee, I thank the Minister, the Minister of State and their officials for attending.

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