We are here to consider Vote 31: Department of Agriculture and Food (Revised) 1999. Briefing material has been circulated and I propose that the Minister will make his opening statement, followed by spokespersons Deputy Connaughton for Fine Gael and Deputy Penrose for the Labour Party. This will be followed by contributions from other Members. It has been suggested that we conclude by 4.15 p.m. as some Members wish to attend in the Dáil for the Order of Business. Is that agreed? Agreed.
Estimates for the Public Services 1999.
Vote 31 - Department of Agriculture and Food (Revised).
When the 1999 Estimate was being drafted, we were in the middle of the difficult Agenda 2000 negotiations. The original Commission proposals would have cost farmers in excess of £200 million per annum when the changes had been phased in and £1,400 million over the seven year period to the end of 2006. Throughout the Agenda 2000 discussions, I emphasised the unique importance of the agricultural sector, particularly beef and milk, to the Irish economy. The final agreement reached in Berlin took account of that fact. This will mean a total gain to the Irish economy of £666 million.
The agreement meets the Government's objective of protecting fully the interests of Irish agriculture and Irish farmers. We must use the opportunity the Berlin agreement provides to take the key strategic decisions which will underpin the future development of the agriculture and food industry well into the next century. In taking these decisions about the future, it is useful to note the major progress which has been made over the past decade. For example, the Irish food industry has changed dramatically during that period with a number of first class food companies. The product mix the industry produces is more focused on higher value added and meeting consumer needs. Many new markets have been developed.
Notwithstanding this, much more needs to be done. In this context the recently published report of the food industry development group has particular relevance as an input into the national development plan. Similarly, the report of the beef task force will provide the basis for the longer term strategic development of the beef industry. The major issues it will address include the viability of production systems, the structure of the processing industry and the need for better marketing.
Another important decision on Agenda 2000 was the rationalisation of EU rules regarding Structural Funds for the rural sector. In all EU countries restrictions in mainstream agricultural production has focused attention on developing income and creating alternative enterprises. The future of rural areas is becoming increasingly dependent on integrating agriculture into the wider rural development context. The White Paper on rural development will be published shortly. It is intended to set out a vision for the future of rural communities, and the policy framework and institutional arrangements necessary to achieve this. It is another aspect of the set of strategic decisions for the future of Irish farming and rural life.
Our success in the Agenda 2000 negotiations, which has been generously acknowledged, did not happen by accident. A great deal of hard work was involved in analysing the proposals, assessing their detailed impact on Irish agriculture and preparing realistic arguments for the modulation of the proposals. We had a planned strategy of lobbying with the Commissioner and his officials and bilateral discussions and negotiations with our individual EU partners to understand their position and where we might join forces. Throughout the marathon talks, we maintained close contact with the national players in the agriculture and food sectors in Ireland. The result gives farmers, processors and the food industry a solid base for planning to produce and market our products competitively and in a form attractive to the consumer.
Vote 31 provides for record gross expenditure for 1999 of £827.5 million. Taking into account Appropriations-in-Aid, mainly EU receipts, the net expenditure for 1999 is estimated at £466 million. The priorities in this Estimate have been to support income from farming in an environmentally sensitive manner, to protect public and animal health and farm incomes, to provide targeted funding for essential farm investment and to support rural development initiatives. I will reflect these priorities in my presentation of the Estimate by commenting on groups of subheads which relate to these priorities.
There was considerable concern during late 1998 about the farm income situation. The problems arose from the serious weather problems and problems in the beef market, arising from the decline in the Russian economy. My Department and I took a number of initiatives to deal with the income problems faced by farmers, some of which are reflected in the current Estimates. The additional £20 million which has now been provided in subhead J6 brings the Government's contribution to fodder related schemes to £41 million over 1998 and 1999. Most of the provision has been paid and it is expected that payments under the special fodder hardship fund will commence before the end of this week. Headage and premium payments were brought forward. This is reflected in the high outturn under subhead M4 - headage payments of almost £125 million in 1998.
Direct payments to farmers constituted about 56 per cent of farmers' incomes in 1998. This proportion is set to increase in the coming years following the successful outcome of the Agenda 2000 negotiations. Improvements in delivery of these payments which had been achieved in recent years will be built on to ensure that the service provided to farmers is efficient, fair, friendly and transparent. EU Commission data shows that Ireland's performance in delivering payment schemes is among the best in the EU and compares very favourably with that of other member states. I will continue to work to ensure that the service which my Department provides in this area is second to none.
The provision for the rural environment protection scheme has been increased by 30 per cent to over £172 million. I have consistently supported REPS as a measure which has given a new lease of life to farming in many counties. Farmers are taking responsibility for their environment and for individual plans specific to their farms. There are now more than 40,000 participants in REPS with an expenditure to date of over £360 million. Over 1.4 million hectares of agricultural land is now being farmed in an approved environmentally friendly manner. REPS is underpinned by EU funding and under EU rules an evaluation of the scheme will be submitted to the Commission this year.
The revised REPS scheme requires a framework plan to be drawn up for all commonage lands. The preparation of the framework plans is being carried out under the supervision of my Department and the Department of Arts, Heritage, Gaeltacht and the Islands. The first plan is expected to be completed within the next couple of weeks. I will invite farmer representatives and any interested parties to look at the area designated for the first plan. It will take some time for all plans to be completed. REPS, together with the early retirement scheme under subhead L5, are known as EU Accompanying Measures. These are important schemes and will account for the large expenditure of £245 million in 1999.
The Operational Programme for Agriculture, Rural Development and Forestry provided substantial funding for on-farm investment. The programme was front-loaded, so to speak, in order to achieve maximum impact in the early years. As this measure was successful and attractive to farmers the funding was committed early on but this was a source of disappointment to those with work still to do. I am pleased to say that I have been able to provide national funding of £35 million within subhead M1 for completion of any residual works and for a new targeted national scheme. Even schemes which are nationally funded require EU approval under the state aids rules that apply within the Community. Proposals have been forwarded to the Commission and are being considered. I am committed to early introduction of the scheme and my officials, at my direction, are meeting the Commission this week to expedite the matter.
A sum of £25 million was allocated for these schemes in the budget. We submitted proposals to Brussels early this year because it is a direct aid scheme and EU approval is required. The Commission has raised questions about it. The dairy hygiene and the control of farmyard pollution schemes are virtually agreed by the Commission. I would have preferred if they had been agreed to earlier. The dairy hygiene scheme is virtually agreed to. I will attend a bilateral meeting this Friday at which I hope to finalise matters with regard to the control of farmyard pollution scheme. I have asked for application forms and other material to be ready for that meeting so that we can get to work straight away to finalise the schemes.
National funding has also been provided under a new subhead J5 for a scheme of installation aid for young farmers. This scheme had to receive Commission approval. I am pleased to say that over 50 applicants have received payment of installation aid in the past month.
These new schemes, together with the REPS and early retirement schemes and a wide range of measures funded from FEOGA, guarantee expenditure of over £1.2 billion a year. They must be managed within the Department's administrative budget. The days are long gone when additional staff could be made available for each new scheme. Constant improvements are required in deploying and managing resources to meet competing priorities and to provide the standard of service to which the Department is committed in the Charter of Rights for Farmers. When the other activities of the Department are taken into account, especially the key negotiations on Agenda 2000 on which technical implementing rules are still being fine tuned in Brussels, the challenges are extremely demanding.
In 1998 expenditure on disease control measures increased considerably in line with the increased number of brucellosis and tuberculosis outbreaks. The initial Estimate was added to with a Supplementary Estimate late in the year. Expenditure under this heading related mainly to compensation payable to farmers in respect of reactor animals and depopulations and payments to veterinary practitioners in respect of testing. Both aspects showed increases in 1998.
The committee will be aware that I introduced a series of measures in early 1998 to deal with the brucellosis problem. These measures, which were accepted by the interests represented on the Animal Health Forum, have imposed additional disciplines on all sectors but were essential to seek to curtail and reduce the incidence of brucellosis. The contribution of these measures to date will be fully assessed after this year's calving season and discussed at the upcoming Animal Health Forum.
With regard to TB, there was a worrying increase in the incidence in 1998, following two years when the disease incidence was relatively low. This increase was similar to increases experienced in both Northern Ireland and Britain. Our veterinary experts have been seeking to establish the underlying reasons for the increase. Their views and any additional measures deemed necessary to address the position will soon be discussed at the Animal Health Forum to be held within the next few weeks. I will be keeping the position, including the budgetary requirements, under review on an ongoing basis.
My Department's statement of strategy and customer service initiative provide the framework for modernisation, 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. In this context I am pleased that the national beef assurance scheme is well under way. I have provided £5.5 million for it under subhead B5.
The scheme assists the promotion of safe food from farm to table and developing markets at home and abroad. It was launched in mid-1997 with a view to guaranteeing the safety of Irish beef and beef products in line with consumer demands and to restoring consumer confidence in the wake of recent food scares, notably the BSE crisis. It has three main elements - the development of transparent, integrated production and processing protocols applicable to all parties in the food chain; the enforcement of these protocols through a registration and approval process covering the entire industry, and the provision of an effective animal identification and tracing system. The scheme will be statutory and apply to all producers and processors. It will also be under the control of the Department of Agriculture and Food.
Protocols will set out the baseline standards for all participants in the industry. These standards will be based, for the most part, on existing legislation. Where there are gaps in such legislation new measures will be introduced. The standards will cover farms, meat processors, marts and animal feed compounders. The standards will be developed into a series of integrated protocols backed by a process of registration and approval. All parties will be obliged to apply for approval under the scheme, making a commitment to comply with the standards. All holdings and premises will be inspected to assess if the standards have been met. Only parties which meet the requisite standards will be approved. Failure to adhere to the standards will attract financial penalties, prosecution by the courts and, in certain cases, a ban on trading.
The current level of animal identification is being enhanced by the creation of a fully computerised system for the identification of all cattle and the monitoring of all cattle movements. All information on identity and movement will be entered on a central database which can be used subsequently to validate the origin and movements of animals presented for slaughter or export. Maximum use is being made of electronic means to capture the data through computer links established at livestock marts, meat factories and export clearages. A paper notification system is being used where electronic transmission would be impractical.
Phase one of the animal tracing system commenced in September 1998 with the recording of private cattle sales and cattle movements through a core group of marts. To date, in excess of 800,000 individual animal movements have been recorded. Currently the system is being rolled out to meet export plants, following which it will be introduced at live export points and domestic abattoirs.
Drafting of the Bill to put the national beef assurance scheme on a statutory footing and, inter alia, to underpin the standards to be applied by farmers and meat factories etc., is proceeding. It is hoped the Bill will be finalised in the near future, when it will be presented to the Government for authorisation to present it to the Dáil and to circulate it to Deputies. I hope to be able to do that before the end of this term.
A forward looking and innovative food industry is a cornerstone of agricultural and economic development. The industry has performed well in recent years and has been assisted by the integrated developmental approach provided for in the current food subprogramme. Continued development depends on a coherent overall developmental strategy.
The challenges and opportunities facing the various sectors within the industry have been outlined in the recent report to the food industry development group. The report identifies attention to competitiveness and market orientation as key factors for future progress and, importantly, sets out what needs to be done to address capabilities in these areas. It recommends specific targets and foresees strong growth in the prepared foods, drinks and food ingredient sectors. It also recommends investment and public funding. I agree with the thrust of the report, particularly with the suggestion that support should be slanted in favour of initiatives which enhance the innovative marketing and human resources capabilities of the industry.
On the development of the food sector in 1999, the Estimate provides for grant aid of £7.061 million to An Bord Bia under subhead H1 which includes funding to match EU aid under the food subprogramme. Deputies may notice the provision of $46.025 million under market intervention. This subhead covers the pre-financing costs of funding the FEOGA guarantee scheme as well as intervention. It is difficult to forecast market conditions early in the year and the usual practice is to take a cautious view, as I have done here.
The Leader programme is mentioned under subhead M7. That programme has made a considerable impact on rural development, boosting rural communities. It gives local people the opportunity to plan the development of their own areas. I am providing for more than £39 million this year and would urge groups to complete their planned projects so that the funding committed is taken up within the deadlines set down.
Western development is under subhead F. An amount of £5.625 million is being provided under this subhead for the western investment fund. This will enable the Commission to provide funding in the form of long-term loans and equity, geared to the enterprise environment in the area.
All in all, I am convinced the 1999 Estimates make a worthwhile contribution to Irish agriculture and the Irish food industry. Accordingly, I commend this Estimate to the committee.
Overall, and this opinion will be shared by every farmer in Ireland, last year was absolutely horrid. I do not care how the figures are massaged. Any farmer will say he never went through a year like 1998. Some of the causes for that were outside the control of the Minister, but for those within his control, his reaction was not quick enough and did not meet the legitimate demands at the time. That, however, is water under the bridge.
As a result of the huge downturn in profitability last year, we will have a carry-over of all the problems. The last three or four weeks were the worst possible extension to the winter. The additional financial resources the farming community had to come up with in the past three weeks were outrageous. Farmers were not used to spending such money up to 1 May.
The Minister blows the trumpet about Agenda 2000. It is true that, compared to the original proposals, he and his officials ensured the effects were not as blunt as appeared at the time. I congratulate him on that. I was the only person, however, to say cereal farmers did not count on the day. They have huge problems. It will be a most uncompetitive environment for them. The prospects for next year are dawning on them as we speak.
Sheep farmers were ignored. I hope I am wrong, but if the price for beef takes a downward turn - it is proposed in Europe that it should - irrespective of how we market it, and if sheep meat follows with extensification and the way the ewe premium is calculated, many lowland sheep farmers will be wiped off the map. I hope I am wrong but they were done no favours in the negotiations.
We have a huge mountain to climb. I accept An Bord Bia's recent announcement that only 25 per cent of our beef cattle would qualify for the high value continental markets. Everyone agrees with that. That means 75 per cent of Irish cattle are not suitable for the continental market. We have talked about this for years but there are things which must be done this year. On breeding, I take my cap off to Dr. Wickham. I hope he will be able to put his proposals through and that the farm organisations support them. Having done that, the Government should then show cause on behalf of cattle breeders and help financially in the first two years to ensure the scheme gets off the ground. All the money should not come from the Exchequer, the farming community will get involved in this. We should ensure that within three years we have changed the figure from 25 per cent to well about 50 per cent so that, as we identify the markets, we will have the product to sell. I have been in the company of Italian and Spanish buyers who tell me that they have to scour the State to find the quality of live weanling they are seeking. Whatever else happens in Agriculture House, that must be the focus for the next two years.
There could be a collapse at the end of 2000 similar to the one which occurred last year. We do not like to talk about intervention but, over the years, we have had to rely on it. If we must accept a price of 56p per pound, the Minister's efforts in Brussels on Agenda 2000 will seem very weak. The solution is to have a high quality product and to sell it in the best places. The Department of Agriculture and Food must be geared towards that aim and whatever steps are necessary to achieve it must be taken.
With regard to the McKinsey report, we know there is overcapacity in the slaughtering industry. However, I add one proviso - any factory which gets 10,000 or 20,000 more cattle to kill as a result of a neighbouring factory closing down should pay the piper because it will gain by the closure. However it is organised, Irish farmers must not be made to pay for the rationalisation of the Irish beef industry. I hope the slaughtering industry goes through with the rationalisation programme but checks and balances must be put in place to ensure that, whoever the winners may be, farmers will not be the losers. There is a record of similar developments in the past when farmers were made to pay.
Can the Minister say why the 20 per cent top-up not been paid on the ten and 22 month special beef premium? Several farmers have told me that their cheques are four to eight weeks late this year. Why should this happen in a year when money is in such short supply?
We spoke in the Dáil last week about the control of farmyard pollution grants. I do not understand why this file appears to be going back and forth to Brussels for so long. It is surely a simple matter to present a proposal. I understand the Commission has said that no payment over 35 per cent in non-disadvantaged areas will be allowed. Could someone in the Department not have found that out before the file was submitted to the Commission? This is not a sufficient reason for the delay in introducing the scheme. Given what the Minister said in the Dáil, I assume the scheme will be announced within the next week or two. If a farmer applies for planning permission he will receive it in September; the rain will begin in October and no building will be done.
The dropping of the derogation for REPS is a retrograde step, although a shortening of the three year period might have been acceptable. Unless the planner can prove that the farmer in question has sufficient control over pollution in his first year in REPS, he will not be allowed to take part in the scheme. Many thousands of small farmers will not be able to meet that criterion. The Department should make an effort to have this ruling changed. It is the most significant change in REPS for a long time. It is accepted that derogations must come to an end but no one believed that the three year derogation would be wiped out at once. I hope a case will be made by the Department for a change to this ruling.
The Minister referred to western development. A good deal of time was spent debating the Western Development Bill in Dáil Éireann. We had sought such a Bill for many years and we welcomed it greatly. I commend the concept of the Bill and hope it will be an engine for the promotion of growth, stability and industrial and social development in the West. It took five or six months for the legislation to pass through the Dáil, despite the fact that the Western Development Commission had already identified projects for funding. I mentioned this matter at least ten times in the Dáil. When the legislation was passed, it was not possible to put it into effect because it was found that it did not have the approval of the EU Commission.
I wish to be very specific with regard to that for which Commission approval was being sought. It was put to the Minister of State at the Department of Agriculture and Food, Deputy Davern, many times that the western development fund consisted of equity, shares and loans; it involved very few direct grants. For that reason the fund could not be described as State aid. The Minister of State and his officials agreed with that. It is clear that no one in the Department of Agriculture and Food made this clear to the EU Commission and a most unfortunate thing happened. The headquarters of the new Western Development Commission will be opened in Ballaghadereen on Friday next. Many groups have been contacted and their cases evaluated but all projects are now delayed. They are now in a similar position to urban renewal projects, although the western development fund under the aegis of the Western Development Commission is entirely different. It appears that someone in the Department of Agriculture and Food took his eye off the ball. Those of us who believed that the Western Development Commission would help growth in the West have been let down.
Will installation aid for young farmers be included as a priority for EU aid under one of the headings of Agenda 2000, or will it always be paid from Exchequer funds, as the Minister says? If installation aid was believed to be reasonable at £5,600, how could the same level of aid be considered reasonable 14 years later? Farmers throughout the country tell us that young people do not want to stay on the land. This is true even in the best farming areas, including the Minister's part of the country where there are good milk quotas.
We have some small farmers too.
Even the big farmers say the same thing. I know that some young people would not be persuaded to stay whether installation aid was £5,600 or £15,600 because other factors are involved. If we wish to show young people that their enthusiasm and expertise are needed in agriculture, we must plan to do that. We must show young people that we care for them more effectively than we are doing now.
What is the possibility of re-opening the live cattle trade to Egypt and Libya this year? Has the Minister sought commitments? Has he visited these countries in recent times and can Irish farmers hope to gain access to this trade?
For 20 years I have heard about case evaluations and attempts to find the source of TB and brucellosis. Today's discussion might have taken place ten or 20 years ago.
Or 40 years ago.
We have no idea where the diseases originate, how they are transmitted and whether the badger is the culprit or not. To what extent are blood tests used for TB testing? Blood tests were used widely five or ten years ago but little has been heard of them in recent times. I understand blood tests are more accurate than those methods used currently. I have not heard much about it recently. I understand the blood test, if it could be done in that way, is more accurate than with tuberculin.
I hope the national beef assurance scheme will be of great benefit to farmers and that it will not involve a huge volume of paperwork for the farmer, particularly if there is no profitability in the cattle industry. I hope the Minister's officials can organise it in such a way that it will be sensible and that all farmers can use the system to their best advantage.
I too welcome the Minister and his officials. I am pleased to have the opportunity to discuss the Estimate on Agriculture, Food and the Marine. The Minister will be aware of the 5 per cent drop in farm incomes last year, most of which was in the dry stock sector. Whatever aids and supports are being provided should be made available to that sector given that it has suffered most in the past four years. Large segments of that sector, particularly winter fatteners, which are of critical importance to the beef industry, have suffered significant losses, as have those in suckler cow production.
Ireland has 7.8 million cattle on hand, the largest number ever. Our chances of marketing them will be enhanced by improving the quality of our beef. This will ensure they penetrate the lucrative markets of Europe as opposed to Third World markets. That is where we can get the added value, which comes through breeding.
I have always said, perhaps to my political detriment, that it is inexcusable to pay the same subsidy to every calf dropped or every breed of beef. This means the qualify beef animal is not rewarded, a matter that should be looked into. It is no advantage to a farmer to improve his beef breeds by ensuring his cows are mated with bulls of a high relative breed index if the same amount - £90 or whatever is the price - is paid to that breed as to a lesser breed. If the incentive is the same for a lesser breed as for a top quality breed there is no contest. We have to focus on that issue to get our breeding policy right. It is good to see a significant increase in some areas as mentioned by Deputy Connaughton. We hope some of the work being undertaken reaches a successful conclusion and we wish it well. The way in which we deal with subsidies may not be to our advantage in getting the best quality animals onto the markets.
About 56 or 57 per cent of farmers' income is derived from direct income support. I acknowledge the Minister's efforts in speeding up payments last year. This was helpful. By bringing forward payments one will have to do novenas to ensure this will be a good year from a weather and a marketing viewpoint. Given that the past week has been good, one tends to forget the punishment of the torturous weather of the past few months or even since the autumn. A valley period will be created again if payments are brought forward but I hope the markets will assist.
One of the problems is that conflicting signals are being sent out to beef farmers. Top quality farmers in the midlands who thought they could get 86p or 87p per lb, while the signals were that 90p was on the horizon, held out because for those cattle 2p or 3p per lb amounts to a significant sum. Lo and behold prices fell by 2p and 3p per lb. Those farmers depend on Teagasc, marketing reports, the Minister and An Bord Bia and try to interpret the signals. Given the variety of signals, including the Russian crisis last year, will the Department try to ascertain the likely outturn and send out signals to help farmers in a volatile environment? This would bring some certainty to farming.
A vast number of farmers are not eligible for farm subsidies because of simple human errors, not deliberate or fraudulent errors which nobody tolerates. Where a simple human error has been made one has a greater chance of winning the Lotto than getting an appeal. An example will illustrate the point. An elderly farmer submitted his application each year on time - the Department can check this with the office in Mullingar. His daughter went to the Department, put the application through the door but did not get a certificate of posting as it was after the close of business. The farmer did not pass any remarks until October or November when he got word from Mayo that his application was for the suckler cow quota. He said he had 20 cows, that there was no problem and that he had submitted his application. His daughter telephoned the Department's office and was told there was no record of having received the application form. He had a copy, an exact replica, of the application, which could not be produced subsequently. After sending it to the Department and to the appeals unit and after the father and daughter preparing sworn affidavits, the Department rejected the affidavit and said it was no longer acceptable. An affidavit is a sworn solemn document. They have committed perjury if the contents are wrong and if officials find that any aspect of it is wrong. There is a sad ending to this story. Not alone was the farmer refused the sucker cow premium for his 20 cows but he got a stroke some weeks following the news that his application was refused. To add insult to injury he did not qualify for the £300 hardship fund because he had not been paid his suckler cow premium.
All I can say about that case is that the disproportionality of the penalty applied is beyond my comprehension as a lawyer. If I had the opportunity I would take that case all the way to the courts in Europe. Given that the person was prepared to produce sworn evidence with a copy of the document, the circumstantial evidence should be taken into account. I am very angry that an ordinary farmer with 40 acres of land, who is struggling and not in good health, and whose record of compliance was second to none, should be denied a basic right. That is why I call for an independent appeals system where one can present evidence viva voce and the Minister’s officials will have to interpret a regulation under cross examination. I heard his officials say this is not their fault, but the fault of politicians because we allowed those regulations to be made at Europe and they are only interpreting them. That is a fair point and I accept it. We must ensure the type of case I outlined to the Minister is comprehended when it comes to the terms and ambit of the regulations to ensure justice is done.
I am extremely angry about that particular case, but is only one of many. I could outline many such cases. How many appeals are received every month? How many are on hand today? How many officials are dealing with them? A few extra officials have been assigned to this task. The timelag in getting a result is too long. A farmer cannot afford to wait three months - sometimes three weeks - for it. Enough has been said on that topic. It raises my ire every time I think of it. Perhaps that is because of my background.
It is time an independent appeals system, similar to the social welfare and Revenue appeals systems, was available to enable all those who wish to make their case face to face. They should be able to give evidence, and sworn evidence, if required. Farmers are entitled to that.
Heifer producers must be provided for in terms of the national envelope and small producers must be catered for in terms of milk quotas. A total of 47 per cent of farmers farm 20 hectares or less and 40,000 farmers have 20 suckler cows or less. I would not have a problem allocating the national envelope. If the Minister wants advice on it, he should come to me. I know he will not do that because he knows bigger fish in the sea and he will probably take their advice. I hope the domestic gain he said he fought hard for will trickle down to consumers, but I will not hold my breath. Our record in that area would not make us jump up and down in the aisles.
The Minister heard colleagues of mine last week talk about the various elements of REPs inspections. I do not want to bore him about this, but is there a problem if a ditch that has to be cut back six inches is cut back 5.5 inches only? I will say not more about that because it would only raise my blood pressure.
Farmers have contacted me to inquire when the farm investment scheme will be reopened; it is linked into the REPs. I am sure it will beannounced before the local elections, but that is neither here nor there. That does not upset me because it will not result in my gaining or losing votes.
Did French pig farmers get special aid from their Government? I recall we sought aid for our own pig producers but were told it could not be given. I understand the French Government gave £16 million in aid to their pig producers. I may be wrong but I do not believe so. If the French Government can do that, why has it taken us so long to secure approval for various schemes? There are £35 million in the pot and I congratulate the Minister on securing that amount. It is essential these matters are put through as quickly as possible as an expectation has been created. It can take a long time to get planning permission approval and so on.
Deputy Connaughton mentioned the concern of grain farmers and sheep farmers for their future. Nobody can deny that I constantly raised the need to re-establish the installation aid scheme. I put pressure on the Minister at every opportunity in public and in private and I am delighted that scheme has been re-established and is up and running. However, the £2 million provided under it will barely cover the cost of the payments that were outstanding when it was suspended. How can new applicants be catered for? Does the Minister anticipate he will have to introduce a Supplementary Estimate? I recall that payments were outstanding in respect of 600 or 700 farmers when the scheme was suspended. Assuming some of them dropped out and a payment of £5,600 - and the amount has not been increased - is outstanding in respect of only 300 or 350 farmers, the £2 million allocated will be used up without enabling one new applicant to join the scheme.
I make a special appeal for the midlands. If the Minister checks with the regional office in Tullamore or Mullingar, he will be advised that the midlands has the greatest number of participants in the installation aid scheme. I raised the case of three farmers farming on the same land in the Dáil and I brought in the file when their application was turned down. The officials dealing with the applications under this scheme are snowed under. I tabled a number of questions about the delay in dealing with these applications. The delay is not the fault of the officials but arises because of a lack of personnel. I note what the Minister said about juxtaposing personnel to deal with applications from various schemes and the problems involved. I appeal to him to address the delay in dealing with these applications. More staff is required in those regional offices as the midlands has the greatest uptake in this scheme.
I agree with Deputy Connaughton that many farmers are wondering what is happening in respect of top up payments. I got a reply to a question indicating they would not be made for a few weeks. I ask the Minister to ensure those payments are brought forward as quickly as possible.
On the Leader programme, I am glad that £5.5 million has been allocated for the national beef assurance scheme. The Minister is working to ensure there will be an effective animal identification and tracing system and he is using up to date technology and computerisation to monitor cattle movements. This is to be welcomed. That system is up and running and I am sure the Minister intends to extend it to every aspect of cattle movement, which is also to be welcomed.
A total of £39 million will be allocated this year under the Leader programme. What type of programme does the Minister envisage will replace that? He is correct in saying there is a need for the projects to be sorted out by the finalisation date.
Regarding the early retirement scheme for farmers, has the Minister sorted out the enlargement clause and income criteria with Brussels? Problems have arisen in relation to those two clauses. I was surprised about the small decrease in subhead M5 dealing with support for research projects on sustainable agriculture and rural development. Is there any reason for that decrease? I appeal to the Minister to establish an independent appeals system to facilitate famers who wish to make appeals.
I welcome the Minister and his officials. I take this opportunity to compliment them on their work on the Agenda 2000 negotiations in Brussels. That was a worrying time for Irish farming and particularly for rural Ireland. Acceptance of the original proposals would have sounded the death knell not only of rural agriculture but rural Ireland. The Minister and his officials must be complimented on the deal they got. It will keep rural Ireland alive.
This year has been a difficult one for farmers. I compliment the Minister on the initiatives he took to try to prop up farm income over the past 12 months. It was particularly difficult for farmers during the winter months.
Deputy Penrose comes from a beef producing county and I agree with him that dry stock farmers have had very difficult times in the past number of years. An enormous number of dry stock farmers have gone to the wall. Dry stock farmers buy from store producers, to whom they are very important. I know parishes where there were six to ten beef producers, but none of them is left today. It is important that producers of top quality beef get a greater return than the man producing an inferior product.
Animal tags were changed from brass to plastic tags a few years ago. I receive a huge number of complaints about these tags which is borne out by personal experience. I put my cattle, which are all tagged, into a slatted shed a few weeks ago and a number of them lost the tags from both ears. Some of my three year old cattle have brass tags and I do not have a problem with them. The two plastic tags, however, have come off cattle 18 months old. One has to check the tag numbers of every animal to see which ones are missing. This causes great inconvenience to farmers. We should devise a better system.
The REP scheme is very popular, but it has a number of downfalls. The inspectors need to use their common sense when carrying out inspections. Recently an elderly couple, whom I know well, visited my clinic to tell me what happened to them. The REPS inspector visited them in January, which was a very wet month, and found they had stored dung on the concrete base with the run off going into the tank because they could not get it out to the field. A drain that was supposed to have been cleaned, was not because they could not get a digger in to clean it. They had put two lame cows out of the slatted shed into the paddock, allowing them to eat from a round feeder on the concrete. As a result of these breaches they were thrown out of REPS. Deputy Penrose outlined a similar case. I appeal to the Minister to stress to the REPS inspectors that they should use their common sense.
I welcome the reopening of the farm investment scheme. It is very important for those in the REP scheme to have pollution control measures in place. It is important that the scheme is up and running as soon as possible and I am confident the Minister will do this.
I was going to school when I first heard about the disease eradication scheme and if I live to claim the pension at 66 years, we will probably still be talking about it. Farmers are suspicious when a first test for TB can be clear, but when it is repeated nine months later 40 or 50 cattle could have TB. I do not believe that could happen. I have heard it said that if one injects some sort of material into the lump one can put cattle down. Will the Minister have this investigated by his veterinary officers? I think it is a disgrace if this is happening with the collapse in cattle prices. Every other farmer in the locality must then have more tests carried out and face delays when selling. People from all over the country, even from Northern Ireland, take land in my constituency. There should be controls on people from Northern Ireland taking land here. It is unfair to farmers who have spent their lives in an area when the lands around them are leased to others who may bring in disease. In some cases, cowboy farmers lease ranches and in a short time every herd in the vicinity has contracted brucellosis or TB. It has been suggested to me that when 40 or 50 cattle go down with TB, they should be taken to a farm for two or more months and then retested.
I compliment the Minister on bringing a glossy copy of Agenda 2000 to the committee. The official who worked on the Minister's speech put a lot of optimism into the project. In his speech the Minister said:
The agreement will result in a much reduced loss of £14 million in the first year after all the reforms and this does not occur until 2007. Indeed in the period 2000-2006 the final agreement will actually deliver a substantial total gain of £395 million in farm income. There will, in addition, be gains to the Irish economy from lower prices.
When was there a gain to the economy from lower prices for agricultural products? The Minister also said that these gains are estimated at £271 million over the period and that when these are added to the gains to agriculture, the total gain to the economy from the agreement at Berlin is £666 million. That is wishful thinking because that money will not make its way into the pockets of the taxpayers. I do not know how the Minister can say that.
Is steak cheaper in the local supermarket or hotel since cattle prices dropped? The cheapest price one would pay for steak in a restaurant is £20. One would pay £30 or £40 for steak in a restaurant a half a mile from the Minister's home. How can the Minister say there will be a major change in the price of agricultural commodities when he fails to see it happening in his own area? The Minister lives close to the place where I was told that steak costs £30 or £40.
Does the Deputy think the Minister goes there regularly?
There are many gourmet restaurants in the area.
The Minister is not in that category. I believe he would buy the £10 steak rather than the £30 steak.
I have no doubt he would do that.
The price of beef, lamb or pork has not decreased since the drop in animal prices. There is no evidence to suggest a decrease in the price of food products since cattle prices were reduced in the market.
Only about 12 per cent of farmers are under 35 years of age. The Minister should realise that alarm bells are ringing. About 43 per cent of farmers are between 35 and 55 years of age while 45 per cent of farmers are 55 years or over. That is a sad indictment of successive Ministers for Agriculture and of the policy of the Department since the foundation of the State. It is appalling that 12 per cent of farmers are under 35 years of age and that the qualifying age for the EU farm retirement pension is 55. What implications has that for the future for agriculture? Until we address this anomaly and increase the percentage of farmers under 35 years of age from 12 to 30 per cent, it will not survive.
If we are to succeed, we must ensure that the quality of the beef and other agricultural products we export is of paramount importance. Only the best quality meat and agricultural products will survive in the market. There is no hope for the beef industry unless we improve our quality as quickly as possible. The day of the scrub bull is gone. If we want agriculture to take first place, the Minister must ensure that only the best strains of beef breeds are bred in this country. He must also ensure that headage grants are curtailed where there is evidence that the best beef bulls are not used in beef production. It is important to find out why only 27 per cent of our export beef products are of primary quality. I hope the Minister will tackle this problem as quickly as possible.
I understand moves are afoot to change the ten and 22 month beef premium schemes in Europe to nine and 21 months, respectively. Perhaps the Minister could clarify that matter as it could be of benefit to farmers, particularly small farmers throughout the country.
I understand there are also plans to introduce a new early retirement scheme for farmers in 2000 and that the qualifying age will be increased from 55 to 75 years. Farmers who entered the scheme when it was introduced were 60 years of age or over. Under the old scheme, they will retire at 70 years of age without drawing down the maximum pension, which they would be able to do if the age limit was increased to 75 years of age. When the new scheme is introduced, the Minister should include farmers, who will be compelled to retire when they reach 70 years of age, until they draw down the maximum pension from the farm retirement scheme.
I want the milk quota increase the Minister was to bring back from Brussels to go directly to small milk producers. I do not need to remind the Minister that farmers in our constituency of Cork South-West are trying to make a living on 5,000, 9,000, 15,000, 20,000 and 25,000 gallon milk quotas. The Minister knows it is impossible for farmers to survive on an income from such a low milk quota. I want him to ensure that at least 80 per cent of the extra milk quota will be earmarked for the milk producers who have a quota of less than 30,000 gallons.
The suckler cow quota from the national reserve this year is a disaster for small producers because if they have more than ten but fewer than 20 animals, they will not qualify. I have said on numerous occasions since I was elected to the Dáil that I disliked the move to eradicate small producers, which is what is happening. It is of paramount importance that the small producer, who has only a quota of three or four suckler cows, is given an opportunity to increase that to ten suckler cows and the farmer with ten to 15 suckler cows is given an opportunity to increase that to 20. By doing that, we will keep many people happy as well as keeping them in farming.
The sheep industry has been completely forgotten. It reminds me of the nursery rhyme "Baa Baa Blacksheep", which is the only way I can describe the Government's policy for sheep production. Under Agenda 2000, not one iota is being invested in sheep production. The Minister knows how valuable sheep production is in the constituency of Cork South-West, where there is a region known as Hungry Hill. It is the only constituency that has such a region. I am amazed that the Minister can sit back and relax as far as sheep farmers in that area are concerned. There are three peninsular areas in the constituency - Beara, Muintir Bháire and Mizen.
And Sheep's Head.
Sheep's Head is Muintir Bháire.
And the goats' path.
The Minister knows the goats' path well because he has been grooming a man there for the past 18 years to run against me.
He does not want him to grow too quickly.
He is obviously not too strong.
A Deputy
He is slow to mature, and will be maturing for another ten years.
I was speaking to sheep farmers in Glengarriff on the way back from the sheep fair in Kenmare last year. They were from the Beara, Mizen and Kilcrohane peninsulas. Some of them were almost prepared to commit hari-kari. They were selling culled ewes for £1 apiece in Kenmare market. At Bantry fair they were selling culled ewes for 75p each. One man from Beara took 17 culled ewes to the mart in Macroom and the only offer he got for them was 50p each. That would not pay the entry fee for them, yet he let the sheep go for that price. When I met that man in Glengarriff that evening he was in very sad circumstances. Things are so bad for the country's sheep farmers that they are driven to their wits end to try to make ends meet, yet it is impossible for them to do so. I am sad that in Agenda 2000, which covers the period from 2000 to 2007, they have been completely forgotten. There is not one word about them.
The live export of both finished and store cattle is of paramount importance. The Minister knows that competition is the life of trade because he comes from farming stock, as I do. He was not born with a silver spoon in his mouth but on a medium sized farm. I was born on a small 29-acre farm in Goleen, half way up a 1,500 ft. mountain. I am proud I still own the farm and did not sell it yet to a German, although I am making no income from it. Without competition in the marts the industry will founder completely. The only way to ensure its survival is to get the boat afloat as quickly as possible. I do not know what happened to the Minister's boat but it has been stuck in the mud for so long that I am becoming very worried about it. Its keel could be suffering from dry rot.
The time is right for the Minister to explore the possibility of reopening the live cattle trade to the Middle East. Last week, in reply to a parliamentary question, the Minister stated that some 100,000 cattle had been exported to the Lebanon during the past year. That is a step in the right direction, but is there any hope of reopening the live cattle trade to Libya, Iran, Egypt and other countries in that region? If the Minister does not create competition in the marts for the export of live cattle, farmers will be selling cattle at rock bottom prices. They are terribly dismayed at the moment.
Deputy Penrose mentioned an independent appeals procedure, of which I am in favour. Every TD has an opportunity of making representations to the Department of Agriculture and Food about irregularities that have occurred but which have not been rectified. It is hard to bring such matters to a conclusion without having an independent appeals procedure. The Minister seems to be getting the same replies as myself to the representations he makes to the various sections of his Department. Farmers who come to me a few weeks after they go to the Minister have shown me the Minister's reply. When I raise the matter with the Department I receive the same reply as the Minster did three weeks earlier. The matter goes from A to B and on to C, but the poor farmer is the loser. I would not say that the Minister's staff are in the wrong, but the regulations appertaining to certain schemes in the Department are wrong. That will have to be rectified and the Minister has a responsibility to do so.
I have seen nothing in Agenda 2000 about doubling headage payments for farmers in severely disadvantaged areas. I recall that a week before the last election, a glossy pamphlet with a photograph of the Minister and the Taoiseach, Deputy Bertie Ahern, was circulated to everyone in my constituency, stating that within six months of resuming office double headage payments would be paid to farmers in severely disadvantaged areas. The pamphlet also contained a list of things the Minister would do in office. It had an effect. I lost votes over it but I did not lose my seat. However, the day of reckoning will shortly come again. I have safely stored away that glossy pamphlet and will bring it to the attention of the electorate. I expect the Minister to live up to his promise and deliver double headage payments to farmers in severely disadvantaged areas.
Agenda 2000 is full of quagmires. The time is ripe to look at reality and make sure that if farmers are to have a future it must come from sound, solid planning. I urge the Minister to be wary of the boys in mainland Europe. They are holding out an olive branch but they could crack it just as quickly. I urge the Minister to take note of what I and my colleagues have stated. He should do his best to redress the serious anomaly whereby 12 per cent of farmers are under 35 years of age.
I call on the Minister to reply and then we will conclude.
A wide range of matters have been raised. Deputy Connaughton referred to the year that has just gone by. There is no doubt whatsoever that it was a difficult year for markets and prices. In addition, the weather played havoc with farmers' incomes. The main item on people's agendas was to try to hold on. Nonetheless, because payments were brought forward and made in such large amounts - they amounted to 56 per cent of income - farmers' income was down by about 5 per cent overall, as Deputy Penrose said. Dairy farmers, however, did quite well. The dry stock farmers, to whom Deputy Brady referred, had a severely difficult year.
I am pleased virtually all speakers referred to the fact that we have to produce our products for the most remunerative markets and that there was such emphasis on the importance of breeding. If one does not start with breeding, one has no chance later. The Irish Cattle Breeding Federation and Dr. Wickham should get every chance and every support. I am totally committed to that.
I attended a seminar in Tullamore recently, arranged by Teagasc. At 9.15 p.m. more than 500 people were still there telling the factories, Teagasc and others that they are prepared to produce the goods if they are paid. The only way they can be paid is on quality and grading. I visited the National Food Centre which is working on a mechanical or an objective grading system. It has two or three different systems and is seeking to get the best one. Farmers want a transparent system over which they can stand. The point was made that only 25 or 26 per cent of our animals qualify for the highest grades. That means, of course, three quarters are unsuited. Members will recall that when intervention was opened last year, it had to be reopened for heavier cattle because even for intervention, a small percentage qualified. I take that point on board.
On the beef task force and the fact that taxpayers and farmers, in particular, should not pay for rationalisation, that is accepted by everybody. I envisage that being in the final report. There is no way a Minister could go into the Dáil and seek a statutory levy to close down factories. That does not make sense, particularly political sense. I do not envisage that as a recommendation from the task force. I expect the task force to come up with worthwhile recommendations because it is an important industry and it is important we do things correctly and in the best interest of those who are prepared to work at it. In relation to western development, there is a difficulty in terms of approval. I am looking at it, but will renew my efforts in view of Deputy Connaughton highlighting the matter.
Young farmer installation aid has been restored at the £5,600 level. That does not compare with the payment a number of years ago but it is, nonetheless, an incentive for people. At the other end of the spectrum is the farm retirement scheme which is an incentive for farmers of 55 years of age and above to hand over the management of the farm to younger people. There is a fairly decent pension in this regard. A number of queries were raised about this matter. The requirement of additional land or additionality is gone and the requirement that farmers make at least 50 per cent of their income from the farm is also gone. There will be a new viability clause. The detailed rules in that regard are being worked out at the moment but members can take it that from next year onwards the new rules will apply.
There is also scope for member states to increase the number of years, which Deputy Sheehan raised. In our discussions with the Department of Finance, we will look to see to what extent the 15 years can apply to people who are already in the scheme. There is also provision for an increase in the amount of pension. As Members will know, the amount of pension depends on the hectares and there was an upper limit of about £9,700. There is provision for an increase. I will ask the Department of Finance about the extent to which I can get it to allow at least a recognition that there has been cost of living and inflation increases in the meantime. People who retire are entitled to some insulation against inflation and the cost of living.
As I stated in the Dáil last week, the live cattle trade is going well in terms of the export of calves and smaller cattle to Europe. A valuable market is opening up in the Lebanon about which I gave details in a Dáil reply. However, the major market is Libya. The Libyan authorities signed up to opening up that market last year but it has still not opened. We are still pressing the authorities there to honour the agreement they signed. It would be very welcome if that market opened up because it is for the more adult cattle. Some people would say the amounts going out per week over the past six months to Europe have been smaller and the cattle have been younger and of a better quality, that we are left with more inferior quality cattle and that we will be in competition with those feed lots in six or 12 months' time. I met some of the Italian and other buyers in Tullamore and they told me about the difficulty they had finding suitable cattle for their feed lots.
I visited a food fair in Egypt two weeks ago, and I also visited Jordan. I am still pushing for a resumption of the live trade there. They pointed out to me that in the past couple of months our BSE figures were bad and had increased. That did not help our cause, although the figures for the month of April were much better. The Egyptians are taking more than 110,000 tonnes of beef, which is equivalent to 300,000 head of cattle. That is the biggest market for Irish beef. They are afraid of importing live cattle if there is BSE in the country from which they come. They are still talking about quarantine arrangements. We are doing everything under the sun to reopen the live trade. I take on board the point about the importance of competition.
Iran has no plans to take live cattle but it has signed an agreement to take beef. Its financial year has just commenced and the people in the trade who I met in Cairo at the ambassador's residence are hopeful the Iranian trade will open up later in the summer. They envisage a market of about 15,000 or 20,000 tonnes of beef.
Will the Libyan trade open?
I honestly do not know because, as I said, the Libyan authorities sent a delegation to Ireland last July or August and they signed a protocol or agreement to reopen the trade. One of our main shippers went to Tripoli and said he had a verbal agreement that they would open the trade in October. That was a disaster because it did not open up and people had held cattle until that time but they became much cheaper after that. A protocol was signed between representatives of the Department of Foreign Affairs and the Libyan authorities on which the Libyan authorities reneged. Despite the fact that Ambassador Small in Rome and Mr. Beehan, the agriculture attaché, have been over and back to Tripoli on a regular basis——
Why does the Minister not go?
I debated that with others because previously Ministers have gone to Tripoli and have been given a fairly favourable story but it still did not open up the trade. I do not want to raise hopes by going to Tripoli until I have some indication that they are prepared to do business. I do not want to lead the industry astray in that regard.
Disease eradication is a difficult problem. The Animal Health Forum is in place and we had the old eradication board. Everything has been considered to try to contain the problem. The best brains in the country are involved in research and veterinary medicine. We are keeping up the pressure to see if there is a way it can be improved. I will look into Deputy Brady's concern that there may be tampering with the tests and will make sure that is not the case. I know people are prosecuted over that from time to time but I would hate to think that it is widespread. Nonetheless, I will have it followed up.
The Deputy also raised the question of tags. Brass tags are much better.
With regard to the REPS, I will talk to the senior inspector there to see if more humane action should be taken. Deputy Penrose also referred to a case to illustrate that the regulations had been interpreted strictly.
Deputy Sheehan raised the question of the 10 month and 22 month payments. I want to confirm that they will be brought back to nine months and 21 months.
Will the Minister indicate when the 20 per cent will be paid?
Those payments are to be sent out next week.
Some of the Minister's staff are telling farmers that they do not think those payments will be issued for three or four weeks. That is why I asked the question.
No. They will be sent by the end of next week.
The question of an independent appeals body has arisen a number of times around this table. I am currently having a look at that because there is a waiting time of between four and six months at present and that is unfair. Many people are of the opinion that it is difficult to get a positive outcome. At least if tht appeals body was independent, it would be more objective and people would be prepared to accept the outcome.
Up to £75 million has been put aside for early retirement. There are about 8,330 farmers who qualify for that at present.
It was stated that £2 million would not be enough for installation aid. If more apply for it, we will provide additional money. The £2 million is an indicative figure.
Will European money be added to that next year?
I am not sure about that. As I said, we are only getting the detailed rules from Brussels now. The negotiations with the Department of Finance on the national plan are on going. In fact, the ESRI published a report which was not favourably disposed to some of those schemes. We must fight our corner to see if we can get additional aid. Certainly the present scheme will pay according to demand. As I said, the £2 million is an indicative sum.
Direct aids cause an awful problem in Europe. France gave aid to its pig farmers but it was taken to the European Court and ordered by the European Commission to recover payments from French farmers. I wish them the best of luck.
That will be some job.
I think I have covered most areas raised. I thank the committee for its indulgence.
Last year every rural Deputy was damned by area aid problems. I ask that queries which arise on area aid be brought back to farmers as early as possible so that we do not end up with the same backlog of problems which arose last year. Not only did it affect the farmers themselves but it affected officials in the Department who were trying to process payments to which people were entitled; an area aid query arose and all hell broke loose. Farmers who were told in the local office that they were cleared for payment had to contact their Deputy with problems on area aid.
We know that great strides have been made and we compliment the officials for their efforts to put in place a streamlined system, but where problems are envisaged, we appeal that they be brought to the notice of farmers as early as possible and not at the time of payment.
The committee may be aware that I visited Hume House. It may have seen some record of that and big black bags of post. This year we are trying to avoid the backlog in August, when the payments are being made.