I welcome the Minister and his officials. We have to deal with Revised Estimates for the year ending 31 December 1998 - Vote 31, Department of Agriculture and Food. I remind Members that the committee is only empowered to consider the Estimates. There can be no vote on the matter as this is the sole prerogative of the Dáil. I propose to follow the identical procedure to that of this morning, allowing the Minister to make an opening statement for 15 minutes and then Opposition spokespersons have ten minutes for their contributions. The meeting will then be open to all Members. Is that agreed? Agreed. The Minister will have to go to the Seanad at 7 p.m. so we hope to be concluded by then.
Estimates for Public Servies, 1998.
Vote 31 - Agriculture and Food.
I hope to inform Deputies on any matters they are interested in, and if I do not cover something in my opening remarks I will take questions later.
I am pleased to present the 1998 Estimates for the Department of Agriculture and Food. I propose first to set out the background against which these Estimates were framed and then comment on measures, which I think are of most interest to the Deputies, before commending the Estimate to the committee.
Primary agriculture is still three times more significant to us than in the EU generally and together with the food industry will remain the backbone of the rural economy. However, the diversity of manufacturing and service activity in the rural and national economy has had an impact on Irish farming families. The household budget survey shows half of farm household income coming from non-farming activities and rural development policies need to take this into account.
The international market is still difficult enough and were it not for increases in direct income payments to farmers which, in 1997, reached a record £940 million, or 47 per cent of farm income, the situation would be much worse. That international market was made worse by the impact of the BSE crisis which has had an effect since March 1996. The role of the agri-food sector in the Irish economy is also much greater proportionally than the EU average. The sector accounts for an estimated 14.2 per cent of GDP, 13.4 per cent of employment and 13.2 per cent of exports.
The Estimate provides for gross expenditure for the Agriculture and Food Vote for 1998 of £741.056 million. Taking into account appropriations-in-aid, the net expenditure for 1998 is estimated at £379.025 million. The 1997 outturn is slightly higher. It includes forestry payments up to July, agrimonetary compensation and a Supplementary Estimate for animal health and structural measures, which improved the opening 1998 position.
My Department's total expenditure in 1998, including non-voted FEOGA guarantee and intervention payments will, as in 1997, exceed £2 billion. The broad areas of financial support will be similar to that in 1997 when £941 million was spent on direct payments to farmers, £783 million was spent on market supports and £196 million was spent on farm investment grants and disease controls. The cost of administration of the Department and including administration of the more than 80 schemes that the Department runs to support the farm and food sectors will be around £122 million or only 6 per cent.
Guiding and spurring on my Department will be its new statement of strategy and customer service Initiative, copies of which I have given to Members.. These provide the framework for the modernisation of my Department, particularly in the IT area, to ensure that we exploit to the full the most modern technology and management techniques in achieving our strategic goals in the farming, food and rural development areas. For 1998, the emphasis within the areas of expenditure will be on improving in every way possible delivery of services, particularly payments to farmers, injecting further multi-annual support through the rural environment protection scheme - REPS - to support farmers and farming in an environmental way, promoting safe food from farm to table and developing markets at home and abroad through the national beef assurance scheme and rigorous protection of animal health, as well as promoting wider rural development through Leader.
I will also be promoting restructuring through enhanced allocation for the early retirement scheme and the introduction of a new targeted and focused scheme of installation aid. Looking ahead, I will have proposals I considered in relation to on farm investment schemes. This will have to be done within the Government's overall financial limits and a limited budget for administration. I will be aiming for an integrated approach to the Department's numerous support and development activities so that we obtain and provide to the farming and food sectors and to all concerned with food safety the greatest value from our efforts. In managing schemes my Department will continue to adhere to its EU obligations in terms of protecting EU financial interests and credibility with the European Commission services. We are expediting payments with control systems so that both our and EU audit systems are adhered to.
These are ambitious targets. Review mechanisms will be in place to ensure that if there are difficulties meeting them, these are spotted early and the necessary remedial action taken to ensure quality service at all times. It is not possible to discuss in detail all aspects of the Estimates before the committee, so I will focus on a number of core measures and will deal later with any specific items Deputies may wish to raise.
The beef assurance scheme is necessary to retain existing markets and to gain access to new markets. It arises because of a lack of consumer confidence in food products and beef and red meat generally following the adverse publicity surrounding the BSE outbreak.
I am providing £6.5 million under a new subhead B5 for the national beef assurance scheme. This scheme was launched in 1997 to guarantee the safety of Irish beef products and to restore consumer confidence, at home and abroad, in the wake of food scares and in particular BSE. This major input of financial and official resources demonstrates Government commitment to the provision of safe food and to the beef industry's contribution to the national economy. The main elements of the scheme are development of integrated production and processing protocols for the beef industry, enforcement of these protocols through a process of approval and development of an effective animal identification and monitoring system. There has been considerable renationalisation of the food industries of many EU countries and we must satisfy the specific requirements of our customers in those countries to regain markets we have lost.
The great majority in the industry already operate to high standards. They have nothing to fear and much to gain from the process of providing assurance to consumers at home and abroad.
A comprehensive system of identification is already in place for Irish cattle. Many events in the animal's life are already recorded on a central database. The national beef assurance scheme will enhance this system by the creation of a fully computerised system for identifying all cattle and for monitoring all cattle movements. Information will be collected on a central database and used to validate origin and movement of animals before entry to the food chain and when presented for slaughter.
The traceability programme is a huge exercise. It involves collecting and recording details of 7.4 million animals from over 150,000 herds and registering ten million cattle movements per year. Good progress is being made in implementing this ambitious project and I am confident the main elements will be operational by the end of the year.
As Deputies are aware, the incidence of bovine brucellosis has increased in recent years. Following discussions at the national forum I introduced remedial measures, including a statutory pre-movement blood test for all female animals and bulls over 12 months of age. There were some delays in the return of test results to farmers but these have been resolved with the assignment of additional staff and increased monitoring of the delivery of samples from herd owners and veterinary practitioners to laboratories in Cork and Sligo. As I stated in the Dáil yesterday, there was an increase of over one million samples which were being submitted to the Cork laboratory at a rate of approximately 150,000 per week. There were delays which have been addressed and the laboratory shelves are clear every morning. An Post has also improved delivery. Previously it did not sort deliveries which were dropped off at about noon; they are now delivered at 8 a.m. I wish to express appreciation to the staff of the Department who worked very late hours and over weekends, including the bank holiday weekend, to get rid of the backlog and ensure a quick turn around. We are satisfied that there will continue to be a quick turn around given the increased staff and technical support services.
I am pleased to report the continued success of the rural environment protection scheme. It now has over 33,500 participants compared to 25,000 this time last year. The scheme receives 75 per cent funding from the EU. My commitment to it is shown in the record provision of £145 million this year alone under subhead L4, a 43 per cent increase on the 1997 outturn, to cater for existing and new applicants. Even higher expenditure of £178 million is expected in 1999 and by the end of 2000 annual expenditure on this measure will be over £200 million. This is a very sizeable contribution to farmers who keep their places tidy and ensure the environment in rural areas is protected and cherished and I am pleased so many farmers are participating in the scheme.
Uptake should be further boosted during 1998 with the introduction of a new REPS package for natural heritage areas - NHAs - and commonages. This will accommodate farmers affected by new environmental guidelines under the EU habitats and birds directives. The new scheme will run for 15 years and will increase the overall value of REPS to over £200 million - I think the figure is £205 million - per annum from 2000.
Headage is an extremely important cash flow element in rural areas, particularly in disadvantaged areas where it applies. The Estimate for headage under subhead M4 includes £23 million provided in the budget. This corrects for 1998 the situation which arose from the front loading of payments under the current round of Structural Funds. Headage is the largest support measure under the structural programme for 1994-99. It significantly assists low income farmers in disadvantaged areas and the payments reflect the Government's commitment to sustaining these areas.
About £198 million has been paid out under on farm investment schemes under the operational programme 1994-99. An extremely high level of demand for these schemes in the early years of the programme led to suspension or closure of most of them. I was pleased to be able to provide an additional £15 million from national funds in the Supplementary Estimate for 1997. This was a peak year for completion of works and submission of claims. Last year the highest amount of money ever was paid in on-farm investment schemes.
With regard to the scheme of installation aid for young farmers, I secured an additional £3.5 million for subhead M2 to enable payment of the remaining valid applications received in the Department when the scheme was suspended in August 1997. A new more tightly focused scheme of installation aid to be targeted towards smaller farmers is being finalised in my Department. The new scheme will be 100 per cent financed by the Exchequer. In 1998 the necessary finance will have to be found within the Vote and will require very significant funding. Although the scheme emerged badly from a mid-term review it is important as it provides encouragement for younger farmers to stay in farming and gives them a kick start.
The current strategy for developing the food industry is reflected in the food sub-programme of the Operational Programme for Industrial Development, 1994-1999. The integrated strategy to maximise the industry's potential to create national wealth and employment involves capital investment, research and development, marketing and promotion and the development of human resources.
There has been good progress, particularly in the consumer foods and food ingredients areas. Funding is provided directly from the EU and voted funds, chiefly £8.874 million under subhead M8 relating to grants for institutional research and development. Bord Bia's grant-in-aid of £6.878 million under subhead H1 also includes funding to match EU aid obtained by it under the food sub-programme.
The food and beverage sector has been phenomenally successful and in the past decade our exports have increased. Ten years ago they amounted to £2 billion while last year they amounted to £5 billion. In the context of prepared consumer foods we are the pizza capital of Europe. They are made in Portumna, Naas and Dundalk with Goodfellas having 85 per cent of the market. We have done particularly well in the prepared consumer foods area. In the food ingredients sector Kerry Co-Op has been a pioneer and is the leading international company in the sector. Development of casein baby food ingredients and ingredients for the pharmaceutical industry have been phenomenally successful. The companies deserve great credit as they are operating in a tight international and fiercely competitive situation. From a base in Ireland, controlled by Irish farmers, they are doing a particularly good job.
In the context of subhead M7 the Leader programme is making a considerable impact on rural development and boosting rural communities. The programme gives local people an opportunity to plan the development of their areas. Expenditure is expected to accelerate in 1998, so I am providing for an increase of over £9 million which will mean total funding to £20 million this year. Some very nice projects and schemes are carried out by Leader groups in rural areas. Projects have come on stream which otherwise would have had no chance of seeing the light of day. The programme is well worth the money provided.
Subheads B3 and B4 concern Teagasc. The most comprehensive review of Teagasc's services since its establishment in 1988 is nearing completion. The review, entitled "Teagasc 2000", will provide a strategy for Teagasc services to the food and agriculture industry in the period up to 2005. In the meantime the total 1998 allocation for Teagasc shows a 4.2 per cent increase on the 1997 outturn. The grant-in-aid for general expenses and superannuation purposes together account for 62 per cent of income in 1998. It is critical and essential we have the best possible advisory and research and development service and support for our developing production and processing industry.
The Government decided recently on the arrangements for the operation of a western investment fund by the western development commission. The commission was established in 1997 to promote the economic and social development of the region and the interests of the people in it. An amount of £2 million is being provided in subhead F for the western investment fund. This will enable the commission provide funding in the form of long-term loans and equity geared to the enterprise environment in the area. Following the Government decision on the fund, the Department is proceeding as a matter of urgency with preparation of legislation to establish the commission on a statutory basis and so enable it to operate the fund.
In the context of intervention, the lower Estimate reflects reduced stock levels. We have moved substantially from intervention to the marketplace.
Under subhead J4 concerning control of horses I have provided £2.75 million to assist local authorities with projects implementing the Control of Horses Act, 1996. Where an authority is supporting and involved in such a project, I will, within budget limits, make assistance available to it.
As a consequence of the success of the early retirement scheme, expenditure will increase in 1998 by 17 per cent to over £71 million. I am confident that by the year end 7,000 people will participate in that scheme. With average payments under the scheme of the order of £9,400 per annum, it will make a significant contribution to the rural economy.
This scheme is hugely successful. As Members will know, the upper limit is £9,700 so the average of £9,400 per annum is good. There is no problem with people applying to and participating in the scheme. However, the only snag seems to be getting younger people to take over the enterprise. From my knowledge, it is difficult to get a young person to stay on the traditional family farm which has been in a family for generations.
Subheads 101 and 103 relate to international co-operation and include Ireland's contributions to the World Food Programme and the FAO. I have recently arranged for the donation of £1.806 million of out 1998 commitment to the World Food Programme to provide food aid for Sudan. This donation is a concrete representation of our belief in the importance of humanitarian aid. Ireland has been associated with the World Food Programme since 1963 and we fully support its work in responding to emergencies across the globe. Members who have read today's newspapers will have seen Mr. Tom Arnold who has an outstanding commitment to this area. We appreciate the work he is doing.
I saw his photograph as well.
All in all, the 1998 Estimates will, I am convinced, make a worthwhile contribution to the economy and the food industry. Accordingly, I commend this Estimate to the committee.
As I have only ten minutes there are but a few issues on which one may touch in a Department as large as the Minister's. If I do not mention some issues, it is not that they are unimportant. There is always a group who will say it should not have been left out. I would like to put on record that I will call a vote on the Estimates in the Dáil.
While Estimates contain many good provisions, the main problem we have is the lack of on-farm investment. There have been huge decreases in this area, which I will not list. There has been a 70 per cent cutback in on-farm investment from £67 million to £36 million. The Minister might explain the 13 per cent cut to farmers in less favoured areas from £126 million to £110 million. I do not understand that cut at a time when we were told there was an increase in headage payments all round. We do not have a dairy hygiene grant scheme and there has been a cut in alternative enterprises from £3.8 million to £1.5 million.
Everything which related to on-farm investment is non-existent in the Department of Agriculture and Food. At this stage of our agricultural development, particularly in the light of what will happen in 2000, poor planning is evident on the part of the Department and the Minister in relation to those issues. I accept such schemes cost money but, on balance, we cannot have a developing agricultural economy and phase out or remove on-farm investment schemes. As I said in the Dáil last night, we hope there will be a change in the Estimates. There is much anxiety among farmers who believe they have been let down. I hope that when next year's Estimates are published, such schemes will be reintroduced.
I agree with the Minister on the REP scheme. It is one of the best schemes ever. It has one great characteristic in that it is not confined to any part of the country and large and small farmers are involved in it. While almost 34,000 farmers are involved, a large number of farmers want and should be involved in the scheme but cannot due to a lack in the control of farmyard pollution grant.
I will not outline what I believe should be done because that is a matter for the Minister. I believe we have seen the last of the 60 per cent grants. There is an important section of farmers who will not be able to become involved in the REP scheme until they control their farmyard pollution. They are right not to enter into a contract to do so until they see the new scheme, if one is put in place.
On area aid, I accept what the Minister said in the Dáil last night that during the month Hume House was closed much good work was done. It appears there is a hard core of farmers who overclaimed, intentionally or otherwise. I am not making a case for anybody who set out to defraud the Department; they deserve to face the full rigours of the law. However, it has come to my attention that, according to staff in the Department who are very experienced, the last thing these people wanted to do was defraud the Department. Those outside the farming community will say that any man or woman who does not know how many acres they have must be very foolish. However, a number of people used the old county council rate demand notes to determine acreage rather than the digitised maps. Some of these were not correct and there was a difference of two, three or four acres. Will the Minister show some flexibility in this regard? I am not saying flexibility does not exist because I raised three or four cases with the Department this morning and it is looking into them. However, it is difficult to know where to draw the line. It is obvious that a number of people will be hit as a result of overclaiming which they did not intend to do.
On the beef assurance scheme, I am sorry I do not have the veterinary notes sent to the local DVO's. A veterinary officer must sign a certificate in relation to the supply of milk from a farm to a milk processor or otherwise. It would be difficult for a veterinary surgeon to sign the document based on one of the criteria - that milk on a particular day is fit to be used or words to that effect. This is a very technical matter. If the vet were to sign that certificate he would have to call to the farm and get the farmer to draw milk from every cow. Perhaps the Minister would look at that. All the other aspects of the document can be met by a general certificate because nobody knows the health status of a farm better than a vet.
I have a personal interest in the western development fund. I received a reply to a parliamentary question yesterday when I was advised that the legislation would not be enacted before the summer recess. This means it will not be passed by the Dáil until the autumn. I understand the £2 million cannot be spent until legislation underpins it. It may well be December before the legislation is passed by both Houses. Does this mean that the £2 million will not be used this year? I understand the western commission is very concerned about this, especially with regard to the projects they would like to have backed this year. If the money cannot be spent this year will it be added to the allocation it would expect to get in 1999?
With regard to the shipment of live cattle, I compliment the Department and the Minister in doing their best to get the ship to sail from Cork. The French ship ran into to trouble and I understand Irish Ferries is now in the market. Despite taking on some roll-on roll-off stock, the capacity is not there. Will the Minister indicate the Department's future plans to help exporters trying to get greater shipping capacity on the high seas? Once September comes there will be a huge outflow of weanlings. If there is a not an escape route out of the country there will be big problems. The Minister indicated in the Dáil yesterday that the factory price for cattle is a good deal better than it was this time last year. I stood at the ringside of a couple of marts in the south last week when appalling prices were paid for store heifers. Their owners are having a bad time. Any kind of export facility would be an encouragement.
I agree with the Minster's views on Teagasc. It is very important we keep an eye on its funding and development. We must have access to the type of advisory work and training an independent body like Teagasc can provide. Its advice has always been independent, regardless of whether it was right or wrong. Much has gone wrong with the research side in Teagasc. I do not refer to research getting cows to milk, etc. rather, I am concerned with the research on the beef side. Not enough has been done on animal breeding, nutrition, grazing, etc. More money must be invested in this area.
My failure to reflect on various aspects of agriculture and food should not be taken as a sign of a lack of interest by me or my party colleagues. Rather, it is because of the pressing matter of time. I do not wish to rehearse the views and concerns I expressed in the debate yesterday.
The question of on-farm investment is very important. Between 18,000 and 25,000 farmers participate in the dairy hygiene scheme and these have been identified by the Department. It is a costly scheme and it is difficult to get money. However, we will give the Minister every support in the bilateral meetings which are due to commence shortly.
Everything that happens in this area has a negative knock-on effect, especially in rural Ireland. The scale of development is based in urban Ireland, which continues to expand and thrive. By contrast, despite the efforts made by the Minister and his colleagues, the number of people leaving farming would be greater than 100 per week if Leader and REPS were not in place. That would be frightening. The absence of these programmes would mean a loss of 1,500 jobs in the construction industry. The Minister is aware of this from agricultural contacts. I attended a football match a fortnight ago when a contractor indicated to me that the absence of these programmes would have a significant impact, especially if funding is not provided in the forthcoming budget to try to get them restarted. One would expect contractors to be anticipate a lot of work, especially in the concrete business.
Farmers, local businesses and the Exchequer have gained from these programmes. Approximately 6,000 farmers in the beef area would take up REPS if there was CFP even in modified form, although it would be costly. REPS has been one of the Department's great successes. It would be even better with CFP backing, especially in the dry stock and the beef areas. I can vouch for that coming from the midlands, which is the heart of the beef industry.
I will not rehearse the argument on installation aid. I hope the Minister will reintroduce a targeted and focused scheme. The brother of the Minister for Finance is an agricultural adviser and he will know the crucial importance of this aid to farmers. It is a small amount in relative terms. I ask the Minster to press for this when he holds meetings with the Minister for Finance.
The Minister has grappled and done well with the problem of area aid. I have dealt with problems in this area on a professional basis. For example, farmers may believe they hold 60 acres, yet when the maps are consulted it can turn out to be only 55 acres. Some people get confused between Irish acres, statute acres and other types of measurements and it is necessary to provide for human error where possible. People do not necessarily set out to purposefully deceive but the Minister would have our support in attempting to eliminate any such practice where it occurred. A decimal point could be inserted in the wrong place and people could blame the Department for that with the result that payments could be held up. The process is two way.
I compliment the Minister on the Department's strategy statement and I would like to find out more about its objectives. The Department has evolved considerably in the past five years from a point where it merely dealt with farming to one where it deals with such issues as food quality and assurance.
What developments are being made in the area of information technology in the Department? Will the technology in departmental offices countrywide be upgraded? There would be considerable costs involved in that but the people working in those offices deserve the most up-to-date technology. It is no use having all the technology in Dublin; it must also be provided in Mullingar, Portlaoise, Tullamore and elsewhere.
I have outlined a number of points in regard to the early retirement scheme and I acknowledge that substantial progress has been made with the abolition of the enlargement clause. However, other qualifications and eligibility criteria remain in regard to income and time devoted to farming. There has been a sea change in farming and profits are relatively thin on the ground in some types of farming, such as suckler farming. This is an area in which progress could continue to be made.
I want to make a particular pitch for dry stock farmers. Of the 100,000 or more dry stock farmers in this country, 60,000 have 20 suckler cows or less. Some of those farmers are on the bread line, surviving on £80 to £100 per week net income. Under the Santer proposals, such farmers will only gain an additional £4 per cow whereas farmers in the bull beef sector may gain £160 per animal. That kind of inequality raises people's ire, particularly when some of the bigger farmers also receive maize and silage subsidies. A number of dry stock farms were completely excluded from the EU supports scheme under the 1992 CAP reform package. We must ensure that such anomalies are removed from the system in this round.
In the Dáil yesterday, the Minister referred to the appeals unit of the Department. Although progress has been made in this area, the unit needs more staff. The Minister of State stated that an average appeal takes seven months. I initiated an appeal on 24 May 1997 which has still not been finalised. I have a file on the matter. The payment was initially refused because of a human error, it was subsequently sent to Tullamore and from there to the appeals unit in Hume House where it has been for the past 11 months. That would test the patience of Job; such delays are a source of frustration for many farmers.
The Minister will have the support of all Members in his attempts to arrest the trend towards nationalisation which is occurring at European level. We have seen evidence of that particularly in France and Germany in the past six to 12 months. I welcome the £6.5 million outlined for the national beef assurance scheme. It is important that we implement an integrated assurance scheme in which animal identification and traceability would play a central role. Farmers are particularly annoyed about animal tagging as tags are easily lost. The success of any beef assurance scheme, underpinned by an animal identification and tracing system, lies in the implantation of an electronic device at birth which would feed into a central database and allow the animals' movements, changes of ownership and so on to be recorded. That would be a foolproof system in which farmers would be prepared to participate. Perhaps it is something the Minister could consider acting on.
I pay tribute to Teagasc for the work, advisory and otherwise, it carries out and I hope we can continue to support it. There is a need for more Teagasc staff on the ground.
I would like to thank the Minister and his officials for the schemes we have been discussing, from which great benefits have derived. The social welfare changes on REPS income disregard are to be welcomed. It is regrettable that such income disregard could not also apply to other schemes, particularly in the area of forestry.
The increased funding available under the early retirement scheme and the increased levels of uptake under the scheme are to be welcomed. The question of the enlargement clause was raised in the Dáil yesterday. I am aware the draft regulation is currently being discussed at EU level but when will this provision come into effect? The Minister also referred to the substitution of viability criteria and many people would welcome clarification on what that will entail. While the early farm retirement scheme is to be welcomed, there is emphasis in the western region on part-time farming. There are good schemes for early farm retirement but sometimes we forget about the people who are taking over farms. Not only is enlargement an issue, so is part-time farming. When the schemes for which we are looking are reintroduced, is there a possibility that there will be a focus on people involved in part-time farming? If it is so common now it should be made easier rather than introducing red tape for such schemes as installation aid.
The agricultural college issue was raised in the Dáil yesterday. The colleges which have made representations to me about the need for funding have already made a submission to the Minister, and I hope he will be able to respond positively to their applications.
Has the Chairman any questions?
As Chairman, I am not in a position to ask too many questions. I will leave that to a parliamentary party meeting.
I thank my colleagues for their positive and supportive contributions which highlighted some of the shortcomings in this area. This discussion is about providing information and being as helpful as possible in relation to this primary industry.
Deputy Connaughton referred to the reduction in on-farm investments and alternative enterprises. There has been a reduction in the figures, partly explained by an increase we received toward the end of last year by way of a Supplementary Estimate of £63 million. That inflated this year's figure somewhat. I have a difficulty in that this programme in 1994-99 had an allocation which I presented to the Dáil yesterday. The difficulty arose because we doled out the money in the early stage of the programme and now, in the latter end, we find that we have run out of money. A number of schemes had to be terminated or reduced. The problem for me in the bilateral talks starting tomorrow with Minister McCreevy is that at the latter end of last year we tried to secure money to ensure what Deputy Penrose called mature liabilities were met. Now this money has to come from Exchequer funds whereas before there was a percentage of it coming out of EU funds.
I have some of the figures on the on-farm investment programme. Until 1994 there was a general expenditure of £32.2 million which gradually increased to £50.4 in 1995, £60 million in 1996 and £67 million last year. For 1998 there is provision of £36 million which is a severe drop and it will my job to have that figure increased again.
The figure of £67 million is misleading because we received an extra £15 million, reducing the figure to around £50 million, although I will endeavour to bridge that gap. Similarly the structural improvement programme under subhead M2 was around £2.5 million in 1994 rising to £10.4 million in 1996. The provision for 1997 was £8 million and this year it is £4.6 million. On the farm diversification scheme there was a provision of £1.2 million in 1994, £2.3 million in 1995, £7.7 million in 1996, £7.6 million in 1997 and £7 million this year.
The headage scheme is critical for disadvantaged areas. It has been running at around £120 million per year, last year it was £126 million. Again we had to ask for an extra £23 million last year to keep the headage scheme going. This year the figure is £111 million and we will be able to meet our commitments. This does not disguise the fact that many on-farm investment schemes have been terminated. It will be my job in discussions with the Department of Finance to secure resources for those schemes.
Deputy Connaughton referred to REPS. I was pleased to have amendments accepted to the social welfare code so that the first £2,000 was disregarded along with 50 per cent of the remainder up to £5,000. This was important as farmers in the west in particular are in receipt of supplementary income and it would make no sense to give with one hand and take away with the other. We were pleased that amendment was accepted by the Department of Family, Community and Social Affairs and agreed by the European Commission.
Deputy Connaughton referred to the western development fund. I can confirm that the legislation cannot be prepared in time for this session so it will be taken in the autumn session. The Deputy asked if the £2 million provided cannot be spent this year, if it could be added to next year's figure. The Government is agreed on a western development fund of £25 million over a six year period. If the £2 million is not spent it will go on to the next year. The figure for next year is £5 million so if it is not spent we can look forward to £7 million. Appropriation for that will be adjusted as it is spent.
I was asked if there could be more flexibility in area aid. Depending on which committee we are before, we are often asked what sort of Department would have penalties imposed by the EU. We try to be as flexible as possible. I was talking to officials in Hume House today and asked how they have coped with overhangs; they have done a great job. I then asked about the 1998 applications. There are 134,000 applications, 600 of which were not signed. We may consider that an oversight but the EU might consider it an ineligible form.
It is a spoiled vote.
Six hundred votes could make a difference. The Deputies are well clear of the quota in that regard. It was estimated that, out of the roughly 134,000 last year and the year before, about 900 appeared to have deliberately over-claimed. This means 133,100 of the 134,000 were genuine and that anything else which occurred was an oversight. Farmers find it difficult to deal with paperwork and procedures but they are getting better at it. It is important they do so for the future because, unfortunately, regulations are now in force and we cannot get away from them.
Regarding traceability and the beef assurance scheme, I will examine the point made by Deputy Connaughton about signing for each animal every day. That is impossible on a practical basis. We all know that, when a bulk tank calls to a farm, a farmer receives his bulk sample and that that is the way things are done.
Shipping for live cattle is a difficult problem. In an island country, access is needed to markets and a ferry is needed for that. Pandoro treated the industry and the country very shabbily last year. I recall trying to arrange a meeting with the chairman and he would not deign to meet me. When the Purbeck was obtained for the trade, Pandoro re-entered the trade and tried to cause as much trouble as possible. It is regrettable the Purbeck was unable to continue and I held three meetings to encourage the co-ops to keep it supported with dry goods as well as cattle. It did not continue and we have been examining other vessels since. We have sent officials to ports in other parts of Europe to approve them as quickly as possible. The most recent is Irish Ferries which has been approved for carrying a number of trucks in compartments with adequate ventilation which is important for animal welfare which is a huge problem.
That will be a safety valve but it is not entirely satisfactory because Irish Ferries is more interested in people than in animals, especially in the summer months. In recent years, especially in August, it did not carry any cattle which is not too bad because there is not as much demand during those months. However, there is no way we can face into October, November and the back end of the year without having a firm position as regards the provision of a ferry service. Officials in the Department have had many meetings with farming organisations, transporters and industry people over the past four to five weeks to try to put together a package to ensure adequate ferry services to the EU and beyond. There is a degree of live trade to the Lebanon which is restricted to the bull trade but it is something. We are still in negotiation with the Libyans and the Egyptians to try to reopen the live trade to those countries. If that is successful, ferries will be needed, especially those which operate to the highest standards. If they are not up to standard, the animal welfare people will create difficulties. I am aware of the requirement and need for a shipping service and we are doing everything possible to ensure it is in place.
Deputy Penrose raised the control of farmyard pollution scheme, installation aid for younger farmers and area aid. I have dealt with those issues and have outlined our position. A number of Deputies referred to the problem of REPS and the need for the control of farmyard pollution scheme to underpin it. As well as that, there is an overall strategy by the Department relating to quality. There has to be on-farm quality and it must be encouraged to ensure the highest possible standards at production level. I appreciate the need that those standards apply.
Deputy Penrose referred to the statement of strategy and IT programmes and how we were geared for a modern industry. That is a critically important matter and we have a strong commitment to IT and its use in upgrading the Department's services. We have a tremendous number of schemes, ranging from alternative farm enterprises to headage premia to controls of various kinds to intervention support and they are ideal for IT and computer services. It is my view that the more of these transactions that can be done electronically the better and the easier it is for everyone.
Our commitment to IT will involve increasing the integration of services. For example, in traceability, there is a great deal of information on cattle. They are tagged but the tags sometimes fall off. I accept the point about having some form of electronic system from birth. I saw a programme the other evening where an implant was placed in animals' stomachs so they could be traced wherever they go. The truth is that, in Ireland, humans can now move around more easily than animals because there is a better traceability system in the animal kingdom than in our own. We want to ensure IT underpins that and that there is a connectivity between different sections in the Department. Matters such as a farmer having a herd test, an inspector calling about headage or premia and cattle going to the mart should all be integrated and should have connectivity between them to make matters easier for everyone.
Shortly after I took office a year ago, the first thing I did was to have a full resource audit to assess where we were in terms of IT and how well equipped we were for the future. Some £6.5 million was made available for the specific purpose of traceability and national beef assurance. I convinced the Department of Finance that we needed additional personnel. It acceded to our request and 30 additional programmers and technically qualified people have been provided, this has been a tremendous help.
Other Departments had a head start in the IT area. I remember when I was first elected that two things were the bane of my life. In fact, I was lonesome when they were resolved but at least they could be resolved using our clinics. One was telephones and people asking whether I could get a telephone for them - it seems as if it were years ago but it is not all that long ago - and the other was social welfare payments. The relevant Department applied to the Department of Finance for funding to deal with it and it received sizeable allocations over the past decade. We have an advantage now in that tremendous technological strides have been taken and we are able to use modern technology to leap frog a little.
I accept the point that, regardless of whether the office is in Tullamore, Letterkenny, Raphoe or Tuam, the connectivity between them should be absolute. There should be a modern convenient, nicely heated interview room to which people can be brought to have their matters dealt with and the background information should be readily available on screen. We believe it is necessary to have the most modern IT services.
When animals go to Irish marts, will it be possible to have them checked into the local DVO within a short time? I assume that they are gearing up for that. The Minister spoke of animal tracability. One should be able to know quickly the whereabouts of each of the 7 million animals. I assume that is what is meant by tracability.
Yes, that is exactly what it means. When a calf is born, it is tagged and given a passport. Every movement of that animal until it ends up on the consumer's table must be traceable. That is exactly what we mean.
As the Deputy will be aware, because he knows more about marts from experience than I, there is a tremendous amount of information available. In fact, there is more information available at marts than is necessary to this end because there is the price on the day, the weight, colour, etc. When I looked at the marts system I was surprised that one of the things not contained on its database was the herd number. The herd number is critical. What is envisaged is connectivity between the marts, the DVOs and the headage area because that will give the full information on the life of the animal concerned. The DVOs have a computer system at present and it will be modernised. Therefore, there will be full connectivity between the DVOs and the marts. That is what we seek to achieve.
Deputy Kitt asked about the retirement scheme, a good scheme. I want the retirement scheme to operate so that family farms remain in the family. There is a fair amount of leasing, letting and selling going on. With alternative employment available, younger members of families seem to leave the homestead once they are educated. If they have good jobs and are off at the weekend, it is difficult to get them to return to the farm. However, that is not the fault of the retirement scheme.
A number of improvements will be made to this scheme. One of these is the enlargement clause which caused more trouble than anything else; it was supposed to be an improvement. Part-time farming will become a feature. I said earlier that direct payments make up 47 per cent of income. Almost half the income comes from non-farming activities, without taking into account jobs in forestry, local government, the Office of Public Works and tourism related activities.
There will be improvements in both enlargement and part-time farming. The question "When will this come about?" is often asked. Commissioner Fischler has written that he will take those matters into account. That will come about as part of the Santer negotiations and proposals. It is envisaged that those negotiations will continue for the remainder of this year anyway, depending on the outcome of the German elections. Some say that if there is no change of government in Germany, those negotiations are likely to reach a conclusion between then, that is October, and the end of the year. If there is a change, the negotiations could continue until early next year. Those amendments, changes and improvements will come about as part of that package. Therefore, I would expect that those improvements will become part of the scheme from early next year.
I do not have the figures on part-time farmers which Deputy Kitt requested. If half of the income is from non-farming activities, he will appreciate that a large number is involved.
I thank the Deputies and you, Chairman, for your helpful comments and mild criticism. If I can give Deputies further information later this evening in both the Dáil and Seanad I would be glad to do so.
I thank the Minister and his officials and, indeed, all the members who contributed